Rane Brake Lin. Management Discussions

1. Company Overview

The Company manufactures and markets auto components viz., safety critical friction material products such as brake linings, disc pads, clutch facings, clutch buttons, brake shoes and railway brake blocks for passenger cars, utility vehicles, commercial vehicles, two wheelers and railways. The Company operates in a single reportable segment viz., components for the transportation industry.

2. Economic Review 2.1. Global Economy

The global economy is estimated to have grown by 3.4% in 2022 on the back of slowdown in the US and European economy and lockdowns in China due to zero Covid policy adopted by the government. Global manufacturing and trade activity weakened amidst slowing demand due to aggressive global rate hiking cycle adopted by central banks to curb inflation. U.S. manufacturing activity grew at a slow pace as new orders contracted amid increase in interest rate by the Federal Reserve to tame inflation. Europe grappled with high energy prices resulting in slowdown in economic activity and led to decline in business and consumer confidence. Covid-19 outbreaks and subsequent lockdowns hurt consumer spending in China and disrupted global supply chains.

The global economic activity is witnessing downturn amidst high inflation and resulting tighter monetary policy, geopolitical tensions which have disrupted supply chain and led to unprecedented rise in prices. The global growth is estimated to slow to 2.8% in 2023. The growth in the US economy is expected to decelerate to 1.6% in 2023 on the back of declining real disposable income and subdued demand amid tighter policy environment. Growth in China is expected to revive to 5.2% in 2023 due to the easing of stringent pandemic related restrictions, favourable policy support from the government and benefit of a low base in 2022. While the historic global tightening could rein in inflation it could also restrict economic growth in US and Europe.

2.2. Indian Economy

Indian economy continued to be one of the fastest-growing major economies despite growing at an estimated 7.2% in FY23 and has shown higher resilience to global shocks on the back of strong government capital spending and private demand. The growth momentum was supported by recovery in the labour market and increasing credit to the private sector. However, the growth was slightly impacted due to ongoing policy tightening to curb high inflation. Weakening of the rupee and high oil prices continued to exert upward pressures on inflation and along with geopolitical uncertainty, dampened growth momentum in the manufacturing and mining sectors. However, agriculture, electricity, construction, and services sector witnessed robust growth amid persistent global headwinds and business sentiment and consumer demand remained relatively strong.

According to International Monetary Fund (IMF), Indias GDP growth is expected to moderate to 5.9% in FY24 on the back of weaker external demand and tighter financial conditions. The RBI is likely to shift its stance from policy tightening to growth considerations once inflation cools off. The growth dynamics remain strong and economic growth momentum is likely to be boosted by growth in services activity, uptick in government capital expenditure and pick up in manufacturing activity. India continues to remain a bright spot amidst global uncertainties and the domestic demand-led economy is less likely to be impacted by the global slowdown. Moreover, increased infrastructure spending along with various supportive measures by the government is likely to support private investment and increase in manufacturing activities. However, a sharp slowdown in global growth along with supply chain disruptions due to intensifying war in Ukraine could disrupt global food and energy prices and weigh on export and investment growth thereby impacting Indian economy.

3. Industry Review

3.1. Global Automobile Industry

The U.S. auto industry posted its worst sales in more than a decade with new-light vehicle sales declining by 8.2% YoY to 13.7 million units due to semiconductor shortage and other supply chain related issues which impacted production volumes. Electric-vehicle sales accounted for nearly 6% of the retail market in the U.S. in 2022, up from about 3% in the prior year. The National Automobile Dealers Association (NADA) expects the U.S. new-vehicle sales to increase by 6.6% to 14.6 million units in 2023 despite higher borrowing costs on the back of resolution of supply chain constraints and considerable pent-up demand in the market. According to European Automobile Manufacturers Association (ACEA), the European Union passenger car market contracted by 4.6% to 9.3 million units in 2022 on the back of ongoing supply chain pressures amidst geopolitical conflicts between Russia and Ukraine. Production constraint due to semiconductor shortage impacted supply side during the first half of the year while slowdown in the economy and rising interest rates impacted consumer confidence thereby slowing down demand. The auto volume is expected to pick up in 2023 on the back of easing of supply bottlenecks. However, the demand side could face headwinds in the form of slowdown in economic activity, high interest rate and fuel cost leading to decline in consumer confidence.

The global automotive industry faced headwinds in the form of weakening macroeconomic environment, supply chain disruptions, tighter monetary policy and diminishing consumer demand. Pressures due to elevated energy prices, high cost of production and slowing demand impacted the industry. Amidst these challenges, adoption of electric vehicles accelerated during the year on the back of various stimulus measures by policymakers globally to meet decarbonisation targets. The industry is at a crossroad and is witnessing disruptions across technology, vehicle connectivity and consumer preferences. Aggressive EU policy to cut emissions from cars and vans is likely to lead to quick transition to electric vehicles. Shift towards greener transportation medium and increasing adoption of technology such as integration of autonomous features across safety, driving and parking will play an increasingly important role in paving the way to the future for the industry.

3.2. Indian Automobile Industry

The Indian automobile industry witnessed robust growth during the financial year after having faced slight hiccups in the previous year due to pandemic induced supply chain disruption and higher commodity cost. The Passenger Vehicles (PV) segment achieved a new peak volume due to the launch of new models, continuous supply improvement, and robust demand for UVs, resulting in healthy bookings. The PV segment registered a volume increase of 25%. Utility vehicles (UV) segment continued to witness strong demand led by new launches and better technologies resulting in volume growth of 33% whereas the Passenger Cars (PC) segment volume increased by 18%. Rising cost of ownership for entry segment cars has been a major deterrent for pick-up in demand despite higher discount levels.

Pick-up in economic activities and infra push by the government led to improved demand in the infrastructure and construction sectors resulting in improved freight availability, better fleet utilization, pick up in replacement demand and increasing demand for e-commerce and last-mile delivery. As a result, Commercial Vehicle (CV) segment witnessed volume growth of 28%. In addition, opening of school and offices also supported the demand in the bus segment. The Medium and Heavy Commercial Vehicles (M&HCV) segment continued to experience positive momentum and registered an increase of 37% due to improving fleet operators profitability and better fleet utilization levels on the back of pick up in infrastructure activities. Demand for M&HCVs also benefitted from the rise in construction activity, especially in the residential housing segment. The Light Commercial Vehicles (LCV) segment reported volume growth of 29% on the back of surge in e-commerce and better last mile connectivity. The Small Commercial Vehicles (SCV) segment reported volume growth of 11%.

Despite price hikes taken by OEMs and increase in interest rates, Tractors experienced 11% growth owing to better crop realization and reached all-time high volumes. Although weak exports along with elevated cost of ownership impacted off-take in volumes, the two-wheelers segment witnessed 10% growth on the low base supported by a good festive season and increasing consumer interest in EVs.

Industry Segment

Growth in %

(Production figures)

(YoY change)
Vehicle Segment FY23 FY22
Passenger Cars (PC) 18 4
Utility Vehicles (UV) 33 43
Multi-Purpose Vans (MPV) 23 7
Passenger Vehicles (PV) 25 19
Small Commercial Vehicles (SCV) 11 24
Light Commercial Vehicles (LCV) 29 18
Medium & Heavy Commercial
37 50
Vehicles (M&HCV)
Commercial Vehicles (CV) 28 29
Farm Tractors (FT) 11 (3)
Two Wheelers (2W) 10 (0)

Source: Society of Indian Automobile Manufacturers (SIAM)

4. Business Review 4.1. Domestic Market

The Company reported a 19.20% increase in the domestic sales. The Company witnessed a sales growth across all product categories, 14.67% in Brake Linings, 21.16% in Disc Pads and 34.92% in other automotive parts. The break-up of the domestic sales by products is given below:

(in Crores)


2022-23 2021-22


in %
Brake linings 221.64 193.29 14.67%
Disc Pads 317.74 262.24 21.16%
Other Automotive Parts 30.87 22.88 34.92%


570.25 478.41 19.20%

The sales to Original Equipment Manufacturer (OEM) and Aftermarket (AM) improved by 21.03% and 16.39% respectively. In OEM segment, the sales growth was driven by increase in volumes across all major segments and entry into new models in Passenger Car and Two wheeler segments.

( in Crores)


2022-23 2021-22 Growth in %
OEM 350.68 289.75 21.03%
Aftermarket 219.57 188.66 16.39%


570.25 478.41 19.20%

4.2. Exports

The export for the year was 26.68 Crores, an increase of 6.55% compared to the previous year. The conventional markets in the region, particularly Sri Lanka, had economic difficulties affecting the exports. The Company continues the initiatives taken to enhance the export turnover through the overseas distribution network and entering into new geographies in Africa and Middle East countries. The enhancement of the product range, development of new grades and the product certifications as stipulated by the respective regulatory bodies will sustain the growth momentum in the export market.

4.3. Operational and Financial Performance

4.3.1. Financial Review

The Company registered a turnover of 598.80 Crores which was 18.45% higher than the turnover reported for fiscal 2022. The new products accounted for 4.34% of the total revenues. The profit before tax was 44.58 Crores registering an increase of 28.58% over

Sl. Key Ratios No.

March 31, 2023 March 31,2022 Reason for change in FY 23

1. Operating profit

7.44% 6.99%
Margin (%)

2. Net Profit Margin (%)

5.59% 5.35% Not Applicable

3. Return on Net worth (%)

13.32% 11.32%

4.3.2. Operations and Manufacturing Review

The Company bagged new business worth 25.29 Crores during the financial year and the growth in two wheeler disc pad business was 22.85% against previous year.

The manufacturing operations being energy intensive, energy conservation continued to be a key focus area. The initiatives undertaken by all manufacturing plants to minimize the power consumption and the contractual arrangements with the third party service providers for utilizing wind energy under Captive Generation Plant (CGP) scheme yielded desired results. During the year, 1MW Solar Plant was installed at Hyderabad Plant. The Company created own generation of overall renewable energy of 4.2 MW. Further, it is proposed to add another 1 MW Solar capacity in-house at the Trichy plant during the next financial year.

Some of the key operations and manufacturing highlights include:

• Conveyorized grinding process for Passenger Car Brake Disc Pads.

• Automation of Mixing and Compaction process.

• Direct charging in Commercial Vehicle Brake Lining and Two Wheeler Brake Shoe.

• Direct charging and Dry vibro barreling for Two Wheeler Disc Pad.

• Capacity enhancement through various automation projects across all manufacturing locations.

• Implementation of various productivity improvement projects resulting in cost optimization and enhanced assets utilization.

4.4. Pursuit of business excellence

The ‘Business Excellence Model through enhanced practice of Total Quality Management (TQM) enabled the Company to win customer accolades. The following are the awards won during the year:

• Excellence in Manufacturing, New Product & Localization – Gold award from ACMA.

• Excellence in Health, Safety & Sustainability – Gold award from ACMA

• Energy Efficient Unit – Certification from CII for Puducherry Plant

• Various Platinum / Rhodium / Gold awards from QCFI, CII; ABK - AOTS in different categories.

4.5. Opportunities and Threats

The Indian automotive industry remains well poised to ride strong growth momentum as the industry focuses on reducing reliance on imported products and working towards developing a strong domestic supplier ecosystem. In order to remain relevant and stay ahead of the curve and establish the country as a global auto component manufacturing hub, it is equally important to make investments in technology and work towards fully digitalising manufacturing and non-manufacturing operations.

Although, there are positive factors driving the demand environment, supply chain constraints leading to shortage of chips, high cost of raw material, increase in logistics cost and rising fuel prices could impact growth for the industry. Moreover, implementation of new regulations to meet the stringent second phase of BS VI emission norms has resulted in increase in the cost of the vehicles, and this coupled with global recessionary trend and elevated geopolitical tensions could impact growth of the industry.

4.6. Outlook

The Indian automotive industry is likely to witness sustained growth momentum going forward despite minor headwinds in the form of rising interest rates and cost increases due to new emission and safety norms. Introduction of vehicle scrapping policy for scrapping and replacing old vehicles is likely to aid growth of the industry. Adoption of Electric Vehicles (EVs) is expected to accelerate in the coming years as EV becomes more cost competitive backed by supportive government policies, enhanced charging infrastructure and consumer willingness to move towards clean and sustainable mobility solution.

5. Risk Management

The Company has laid down well-structured procedures for monitoring the risk management plan and implementing risk mitigation measures. The risks are broadly classified into strategic risks, operational risks, financial risks and statutory compliance risks. These risks are rated based on factors such as past year experience, probability of occurrence, probability of non-detection and their impact on the business. The top management reviews the strategic risks, and the risks with high probability and high impact every quarter and presents its report along with a risk mitigation plan to the Board of Directors on a half-yearly basis. The strategic risks are taken into consideration in the annual planning process with their mitigation plan. Other risks are covered as part of the internal audit process and presented to the Audit Committee every quarter. The business process risks, and the related controls are subjected to internal audit and reviewed on a quarterly basis. The risk ratings are revalidated with the top management as part of the internal audit process every quarter. The overall re-assessment of risks at the Company level is carried out and presented to the Board of Directors once in two years for their review.


Nature of Risk

Risk Mitigation Strategies

Industry / Market risk

Around 90% of revenue is derived from Indian Automotive sector. Hence, any drop in vehicle production will have a significant impact on Companys business.

The Company constantly strives to:


a) Improve its presence in Aftermarket segment which is sizeable portion of the revenue and presents opportunity to compensate for any drop in OE segment. b) Increase revenue from international markets (outside of India). c) Add new products to increase organic revenue and diversify customers across vehicle segments.

Auto Industry and customer preference undergoes changes resulting in technology obsolescence.

The Company has consistently delivered cutting edge technology products with:

Technology Obsolescence Risk

a) Technical collaboration with the global majors.

b) Enhanced R&D capabilities, localization of testing and validation capabilities.


Maintaining market share in Competitive markets and availability of unorganized players further pose challenges.

The Companys long standing relationship with OEMs, state-of-the-art facilities and best-in-class processes help deliver superior Value. The Company periodically conducts customer survey to understand customer feedback and work in furthering its relationship.



Nature of Risk

Risk Mitigation Strategies


Quality / Processes

Quality and Delivery are sacrosanct for safety of critical products supplied by the Group.

Skilled workforce, imparting job skill enhancement training, enhancing supplier capabilities and robust manufacturing processes helps the Company to mitigate quality and delivery risk. The Companys HR processes are constantly upgraded

People Risk

Attrition of key personnel could impact business operations and growth.

to attract, retain and develop talent. The policies are people-centric and industry accolades on HR practices help attract talent. The dedicated training center supports to build functional capabilities and develop strong leadership pipeline. The performance management system and other employee engagement initiatives help to develop and retain talent.

Raw Material (Input) Price Risk

Material cost is a significant part of the cost and volatility in the price of raw material costs will erode margin.

The Company constantly strives to mitigate the input cost increase. a) Procurement function will work on cost reduction initiatives through alternate sourcing, localization, etc. b) Further, negotiating to pass through specific input cost increases suitably to the customers. c) Work on process improvements, yield improvements, etc.


Currency Risk

Exposed to foreign currency exchange risk as the Company exports its products to various countries and import raw materials.

The Company uses multi-pronged approach as suitable to the scenarios. a) Optimally balance the import and export to create natural hedge. b) Work with customer to index prices to mitigate currency fluctuations. c) Taking simple forwards on a rolling basis to protect its export realization.

Interest Rate Risk

Use of borrowings to fund expansion exposes to interest rate risk

The Company manages interest rate risk on the following basis: a) Use of internal accruals to fund expansion b) Constantly optimize working capital to reduce interest costs

6. Human Resource Development and Industrial Relations

6.1. Talent Development Initiatives

In FY 2022-23, the Company focused on the following talent development initiatives:

Leadership Development

6.1.1. Young Leadership Development (YLD)

The objective of YLD is to facilitate the development of leadership competencies of first time managers and to provide young leaders relevant exposures and high quality learning experiences thereby strengthening the leadership bandwidth at middle management. The fifth and sixth batch with 5 participants underwent 5 days of classroom sessions across 3 modules facilitated by Shri Dharmasthala Manjunatheshwara Institute for Management Development (SDMIMD).

6.1.2. High Potential Leadership Development (HPLD)

The objective of HPLD is to build leadership competencies of high potential talent and strengthen the leadership pipeline. Overall 5 employees were engaged in HPLD intervention. Employees from the seventh batch completed their one-year development journey and worked on Action Learning Projects (ALP) in teams to address critical organizational challenges. Participants worked on the projects under the guidance of Prof. Suresh Srinivasan from Great Lakes Institute of Management and made project presentations to business leaders for their inputs.

HiPos from the eighth and ninth batch began their leadership development journey through a Development Center. The developmental inputs focussed on Rane leadership competencies to facilitate career transitions to leadership roles.

6.1.3. Leader as Coach

The objective of "Leader as Coach" is to cultivate appreciation of behavioural change and encourage the culture of development. The leaders were provided with insights on the elements of individual development through the concept of breakdown, skill, practices & reflection and four different dimensions of individual development as part of facilitator led sessions. Participants have periodic one-on-one conversations with coach on using these coaching techniques for team and self-development. 2 leaders underwent the third batch of "Leader as Coach" intervention.

6.1.4. Rane Manufacturing Systems Professionals (RMSP)

RMSP was introduced as a Professional Course in 2017 with the objective of ‘Building Manufacturing Capability". The Gemba based intervention is for junior and middle management employees in Manufacturing, Manufacturing Engineering, Quality Assurance and Plant Engineering functions.

Having seen five years of implementation a need was felt to link the initiative to plant level performance and focus on depth of coverage in addition to breadth of coverage. In August 2022, it was decided to conduct an in-depth study on repurposing RMSP to analyze the impact and make improvements as necessary by taking inputs of all stakeholders. The repurposed version RMSP 4.0 was designed with the objective to "Enhance Manufacturing Capability through Technical proficiency for Significant improvement in Plant Performance". RMSP 4.0 will be rolled out in April 2023 and region wise awareness sessions were organised for highlighting the importance and impact of RMSP 4.0 across the group.

6.2. Performance Assessment & Development System (PADS) Refresh

As a process, the Company looks at revamping its performance management system, PADS every 5 years understanding the value the present system brings to the organization. With an intention to discover on how it enables the employees to perform, the Company had multiple rounds of focus group discussions across various locations and assimilated points for its process enhancement. Along with points that came out of focus group discussions the Company also did a benchmark study of various practices across industry to design a refreshed process, PADS 7.0 with effect from April 2023, for FY 24.

PADS 7.0 is a transformation from an event based performance management to a continuous performance management. The intervals between the manager/employee conversations is shortened by adding of 5 conversations consisting of 2 performance conversations and 3 development conversations in a year which was earlier limited to only one conversation. This will enable frequent conversation on performance and development between manager / employees. Thus, the Company is transforming from managing performance to enabling performance of employees.

This also gave the Company an opportunity to look at how it can simplify the system which enables the performance management process. The Company has redesigned the forms and competencies such that it becomes easy for employees to access it and enter details. The system is also designed to track and measure completion of development milestones.

6.3. Great Place to Work (GPTW)

The Rane Group believes in continuous improvement in all aspects of its operations. Employee satisfaction and engagement are as key to its growth as business performance. Therefore, to give the employees a platform to express their views in a free and open manner, Rane has been conducting an Employee Opinion Survey for almost a decade. An external consultant would administer the survey, share the findings, and help in identifying the strengths and areas of opportunity. As the organisation grew, there was a need to find other models that accurately and efficiently captured employee views and helped to benchmark against the best in keeping the employees happy. GPTW is a globally recognized body that helps businesses create a sustainable, high trust, high-performance culture. Since 2008-2009, Rane Group has been participating in the survey and using the findings to fine-tune the employee engagement and development programs. Subsequently, individual Rane companies have been participating in the survey. RBL was certified with GPTW for 6th year in a row.

6.4. Wellness at Rane

Rane Group is committed to promoting a healthy and positive work environment for its employees. The Company has partnered with The Wellness Corner which provides holistic wellness solutions to prioritize the health and well-being of the employees. With the launch of its wellness initiative, the Company is taking a proactive approach in improving the employee well-being and creating a supportive work environment. The employees are encouraged to participate in challenge circles to reinforce adoption of healthy habits such as regular exercise, mindful eating etc.

Rane Premier League is one such event to celebrate the togetherness and also craft a workplace wellness. Rane Premier League (RPL), a first of its kind cricket tournament was held among the group entities of Rane. They nominated their best cricketers who were enthusiastic to bring home the trophy. The Company had a total of 9 teams who fought for winner and runner up awards.

Chennai Marathon is yet another event which saw good participation from Rane Group as part of wellness initiative. The Chennai Marathon is the largest sporting event in Chennai. This year, 146 employees from the Rane Group participated in the Chennai Marathon.

6.5. Industrial Relations

The industrial relations were generally cordial in all the plants. The group level industrial relations council works towards the objective of creating a healthy working environment by promoting peace and harmony amongst all segments of employees. The focus areas for the council includes interpretation and implementation of legislations, workforce mix planning for optimal deployment and sharing of best practices.

7. Corporate Social Responsibility (CSR)

Rane Foundation, a public charitable trust founded in the year 1967, is the lead for implementing Rane Groups CSR initiatives. The Companys CSR vision is ‘to be a socially and environmentally responsible corporate citizen. The Company continues to focus on four thrust areas for its CSR activities – Education, Healthcare, Environment and Community Development. In FY 2022-23, the Group implemented several projects by primarily focusing on Education and Healthcare. The Company contributed to Rane Foundation (RF), the CSR arm of Rane Group, which primarily focusesd on Education and Healthcare during the FY 2022-23.

7.1. Education:

The Rane Polytechnic, established at Trichy in the year 2011 under the aegis of Rane Foundation has stepped into its twelfth academic year. The institution is accredited by the National Board of Accreditation (NBA) for its Diploma in Mechanical Engineering program. So far 1694 students have completed their diploma program and 167 students have completed the program in the academic year 2022-23. Out of 167 students, 127 opted for placements and 100% placement was achieved for the FY 2022-23 batch. Rane Vidyalaya, established at Trichy in the year 2018 under the aegis of Rane Foundation has stepped into its fifth academic year. Rane Vidyalaya was recognized by Directorate of School Education, Tamil Nadu in 2018 and is affiliated to the Central Board of Secondary Education, New Delhi. In 2022-23, it reached a student strength of 634 in its fifth year of operations, operating from LKG to VIII standard fulfilling the need for a quality school in rural area.

Rane Foundation in association with Maithree organized pre-vocational training to 10 special children between the age group of 14 to 18.

Rane Foundation made a contribution to TN Arya Samaj Educational Society towards DAV School project at Pallikaranai in the Chennai outskirts.

Rane Foundation extended support to the Gopalapuram Educational Society towards running & maintenance of Boys & Girls Schools.

7.2. Healthcare, Community Development and Environment

Other major CSR activities carried out by the Company during FY 2022-23 are as follows:

• Supporting education for children at SOS Childrens Village of India.

• Sustainability and contribution to a Registered Trust which adopted 23 Government Middle Schools for infrastructure development and education of students.

• Continuing green initiatives such as greenery development, lake restoration, etc.

• High Mass Street Light at Sanyasikuppam Village Junction, Puducherry for the safety of local public.

• 5,000 Litres capacity RCC Water tank constructed at Kumbakurichi Village.

• Signal Lights installed in the junction nearer to the Companys Chennai Ambattur manufacturing facility.

8. Internal Control Systems

The Company has put in place a robust internal control system to prevent operational risks through a framework of internal controls and processes.

These controls ensure that the business transactions are recorded in a timely and complete manner in the financial records, the resources are utilised effectively and the assets are safeguarded.

The internal audit function is outsourced to a professional firm of independent assurance service providers.The Audit Committee and the Board in consultation with the internal auditor, statutory auditor and operating management approve the annual internal audit plan. The scope also covers the internal financial controls and internal controls over financial reporting. The internal audit findings are placed before the Audit Committee at each of its quarterly meetings for review. The managements responses and counter measures are discussed in the Audit Committee meetings. This process ensures robustness of the internal control systems and compliance with laws and regulations including resource utilization and system efficacy.

9. 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.

Annexure B to the Report of the Board of Directors


for the Financial Year ended March 31, 2023 Form No. MR-3

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, read with Regulation 24A(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]

To the Members of

Rane Brake Lining Limited

[CIN: L63011TN2004PLC054948] "Maithri", No.132, Cathedral Road, Chennai – 600 086.

We have conducted a Secretarial Audit of the compliance of applicable statutory provisions and adherence to good corporate practices by RANE BRAKE LINING LIMITED (the Company) during the financial year from April 01, 2022 to March 31, 2023 (the year/ audit period/ period under review).

We conducted the Secretarial Audit in a manner that provided us a reasonable basis for evaluating the Companys corporate conducts / statutory compliances and expressing our opinion thereon.

We are issuing this report based on:

(i) Our examination / verification of the books, papers, Minute books and other records maintained by the Company and furnished to us in electronic mode through file sharing mechanism, forms and returns filed with statutory / regulatory authorities, and compliance related actions taken by the Company, during the year as well as after March 31, 2023, but before the issue of this report; (ii) Certificates confirming compliance with all laws applicable to the Company, given by the key managerial personnel of the Company, and noted by the Board of Directors; (iii) Report regarding compliance with certain factory related laws, given by the Internal Auditors and noted by the Audit Committee; and (iv) Representations made and information provided by the Company, its officers, agents and authorised representatives during our conduct of the Secretarial Audit.

We hereby report that, in our opinion, during the audit period covering the financial year ended on March 31, 2023, the Company has complied with the statutory provisions listed hereunder and has Board processes and compliance mechanism in place, to the extent, in the manner and subject to the reporting made hereinafter.

The members are requested to read this report along with our letter of even date annexed to this report as Annexure – A.

1. Compliance with specific statutory provisions

We further report that:

1.1 We have examined the books, papers, Minute books and other records maintained by the Company, the forms, returns, reports, disclosures and information filed, submitted or disseminated during the year, according to the applicable provisions / clauses of: (i) The Companies Act, 2013, and the rules made thereunder.

(ii) The Securities Contracts (Regulation) Act, 1956, and the rules made thereunder.

(iii) The Depositories Act, 1996, and the regulations and bye-laws framed thereunder, to the extent applicable to an Issuer Company.

(iv) The Foreign Exchange Management Act, 1999, and the rules and regulations made thereunder, to the extent of Foreign Direct Investment (‘FEMA). (v) The following Regulations prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Regulations): (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; and (c) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR).

(vi) The listing agreements entered into by the Company with the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE), in relation to listing of Equity shares of the Company (‘Listing Agreements).

(vii) Secretarial Standards issued by The Institute of Company Secretaries of India (‘Secretarial Standards).

1.2 During the period under review, and also considering the compliance related action taken by the Company after March 31, 2023, but before the issue of this report, to the best of our knowledge and belief and based on the records, information, explanations and representations furnished to us:

(i) The Company has complied with the applicable provisions of the Act, Rules and Regulations mentioned in paragraph 1.1 (i) to (iv) above. (ii) The Company has generally complied with the applicable provisions of the SEBI Regulations and Listing Agreements, mentioned in paragraph 1.1 (v) and (vi) above.

(iii) The Company has generally complied with the Secretarial Standards on ‘Meetings of the Board of Directors (SS-1) (to the extent applicable to Board meetings), and Secretarial Standards on ‘General Meetings (SS-2) (to the extent applicable to General meetings), mentioned in paragraph 1.1 (vii) above.

1.3 We are informed that, on account of non-applicability / non-occurrence of any relevant event, during / in respect of the year: (i) The Company was not required to comply with the following laws / rules / regulations, and consequently was not required to maintain any books, papers, Minute books or other records or file any forms or returns under: (a) Foreign Exchange Management Act, 1999, and the rules and regulations made thereunder, to the extent of Overseas Direct Investment and External Commercial Borrowings; (b) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, regarding the Companies Act, 2013, and dealing with clients; (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (d) The Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018; (e) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021; (f) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2021.

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021; (h) Secretarial Standards on ‘Dividend (SS-3) and Secretarial Standards – 4 (SS-4) on ‘Report of the Board of Directors (non-mandatory). (ii) There was no other law that was specifically applicable to the Company, considering the nature of its business. Hence, the requirement to report on compliance with specific laws under paragraphs 1.1 and 1.2 above did not arise.

2. Board processes

We further report that:

2.1 Board constitution and balance

(i) The constitution of the Board of directors of the Company during the year was in compliance with the applicable provisions of the Companies Act, 2013, and SEBI LODR.

(ii) As on March 31, 2023, the Board of Directors of the Company comprises of: (a) 3 (three) Non-Executive Non-Independent Directors; and (b) 3 (three) Independent Directors, including 1 (one) Independent Woman Director.

(iii) The Company is not required to appoint an Executive Director, since it has appointed whole-time key managerial personnel in the position of Manager, under Section 203(1)(i) of the Companies Act, 2013 (the Act).

(iv) The processes relating to the following changes in the Board of Directors during the year, were carried out in compliance with the applicable provisions of the Act and SEBI LODR: (a) Re-appointment of Mr. Harish Lakshman (DIN:00012602) as a Director, upon retirement by rotation at the 17th Annual General Meeting held on June 28, 2022.

(b) Appointment of Mr. Srivatsan Coimbatore Natarajan (DIN:00002194), as an Independent Director, not liable to retire by rotation, at the 17th Annual General Meeting held on June 28, 2022, by way of a Special resolution, to hold office 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) Appointment of Mr. Ashok Malhotra (DIN:00029017) as an Independent Director, not liable to retire by rotation, at the 17th Annual General Meeting held on June 28, 2022, by way of a Special resolution, to hold office with effect from June 28, 2022, upto October 08, 2024.

(d) Retirement of Mr. Srinivasan Sandilya (DIN:00037542) as an Independent Director, at the conclusion of the 17th Annual General Meeting held on June 28, 2022, on completion of second term as an Independent Director.

(e) Retirement of Mr. Anil Kumar Venkat Epur (DIN:00202454) as an Independent Director, at the conclusion of the 17th Annual General Meeting held on June 28, 2022, on completion of second term as an Independent Director.

2.2 Board meetings

(i) Adequate notice was given to all the directors to enable them to plan their schedule for the Board Meetings.

(ii) Notice of Board meetings was sent to all the directors atleast 7 (seven) days in advance.

(iii) Agenda and detailed notes on agenda were sent to the directors atleast 7 (seven) days before the Board meetings, with the exception of the following items, which were either circulated separately or at the Board meetings, with the requisite consent from the Board of directors as required under SS-1: (a) Supplementary agenda notes and annexures in respect of unpublished price sensitive information such as audited accounts / results, unaudited financial results and connected papers; and (b) Additional subjects / information / presentations and supplementary notes. 2.3 A system exists for directors to seek and obtain further information and clarifications on the agenda items before the meetings and for their meaningful participation at the meetings.

2.4 We are informed that, at the Board meetings held during the year: (i) Majority decisions were carried through; and (ii) No dissenting views were expressed by any Board member on any of the subject matters discussed, that were required to be captured and recorded as part of the Minutes.

3. Compliance mechanism

We further report that:

There are adequate systems and processes in the Company commensurate with its size and operations, to monitor and ensure compliance with the applicable laws, rules, regulations and guidelines.

4. Specific events / actions

We further report that:

During the audit period, the following specific events / actions having a major bearing on the Companys affairs, took place in pursuance of the above referred laws, rules, regulations and standards.

Change in Statutory Auditors of the Company

M/s. Varma & Varma, Chartered Accountants (Firm Registration Number: 004532S), who were re-appointed as the Statutory Auditors for a second term of 5 (five) consecutive years, at the 12th Annual General Meeting held on August 23, 2017, completed their second term of appointment, and ceased as the Statutory Auditors of the Company at the conclusion of the 17th Annual General Meeting held on June 28, 2022, in terms of Section 139(2) of the Companies Act, 2013 (the Act).

Based on the recommendation of the Audit Committee andtheBoardofDirectors,themembersoftheCompany, atthe17thAnnualGeneralMeetingheldonJune28,2022, appointed M/s. BSR & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022), as the Statutory Auditors of the Company, in the place of M/s. Varma & Varma Chartered Accountants (Firm Registration Number: 004532S), to hold office for the first term of 5 (five) consecutive years, from the conclusion of the 17th AGM (2022) till the conclusion of the 22nd AGM (2027), in terms of Section 139(1), 141, 142 and other applicable provisions of the Act.

For S. Krishnamurthy & Co.
Company Secretaries

[Firm Unique Identification No. P1994TN045300]

[Peer Review Certificate No.739/2020]
Sharanya Sriram
Membership No.: F10252
Place : Chennai Certificate of Practice No.: 12731
Date : May 03, 2023 UDIN:F010252E000246466