Rane (Madras) Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS

1. Company Overview

Rane (Madras) Limited (RML) manufactures steering and suspension linkage products, steering gear products and specialized aluminum high pressure die-casting products. The Company is a significant supplier to major manufacturers of Passenger Vehicles (PV), Commercial Vehicles, Utility Vehicles (UV) and Farm Tractors (FT) in India and globally. The Company operates in a single reportable segment viz., components for the transportation industry.

2. Economic Review 2.1. Global Economy

The global economic growth is estimated to have slowed to 3.1% in 2023 mainly due to the negative impact of monetary policy tightening to curb inflationary pressures. The Eurozone grappled with diminished economic activity due to elevated interest rates aimed at curbing high inflation. China too witnessed economic headwinds due to stress in its real estate markets which exerted downward pressure on its growth trajectory. However, the emerging and developing economies as well as the US economy experienced better-than-expected growth led by resilient consumption, strong government spending and business investments. There was significant contraction in both manufacturing activity and international trade amidst sluggish global demand, largely influenced by tighter credit conditions that weighed on housing markets, investments, and overall economic activity. Despite these challenges, the concerted efforts to tighten policies led to steady decline in global inflation from its multi decade peak in 2022. Global economic activity is expected to improve in the second half of 2024 after stagnating in the first half of the year resulting in flattish growth of 3.1% for the full year. US economy is expected to remain resilient on the back of decline in inflation and possibility of rate cuts, while Europe could face a period of stagnant growth. China is also expected to witness slower growth in 2024 due to ongoing real estate crisis placing additional drag on global growth. Global inflation is expected to moderate further on the back of tighter monetary policy and lower commodity prices. Central bank policy rates appear to have peaked in all major economies and the focus has shifted to expected rate cuts during the year. Key downside risks include the possibility of persistence of high inflation led by resilient demand and upward pressure on wages due to labour shortages which could mean fewer interest rate cuts and continuance of tighter monetary policy. Moreover, risk of higher commodity prices emanating from geo-political conflict including continued attacks in the Red Sea could also weigh on growth prospects. As such, policymakers find themselves confronted with the dual challenge of bringing down inflation while simultaneously reviving growth. Nevertheless, the commitment of policymakers towards global economic stability through effective policy coordination, including monetary and fiscal measures is likely to accelerate growth prospects over the long term.

2.2. Indian Economy

The Indian economy has made notable strides over the past few years and in the process, it has overtaken the U.K. to become the worlds fifth-largest economy. The local economy displayed remarkable resilience despite tighter monetary policy and global headwinds and emerged as the fastest-growing large economy witnessing growth of 7.8% in FY24 on the back of strong domestic demand and pick up in fixed investment driven by increased capital spending by the central and state governments. The country has managed to emerge stronger from global shocks led by flourishing consumer base and burgeoning middle class. Moreover, demographic dividend, improved financial access and investment in physical and digital infrastructure acted as catalyst for its resilience. Inflation continued its downward trajectory allowing policymakers to hold on to interest rates. Manufacturing, mining, and construction activity remained buoyant amidst decline in input costs and robust demand environment. Despite elevated interest rates, leading indicators such as Goods and Services Tax (GST) collection, e-way bills, Index of Industrial Production (IIP), credit growth, electricity consumption, automobile sales, etc. pointed to robust economic activity.

The Indian economy seems poised to continue its upward trajectory into the coming year, potentially maintaining its position as the fastest-growing major economy led by robust demand environment supported by strength in corporate and financial sector balance sheets, government spending in infrastructure, and the ongoing implementation of well-structured policy reforms. According to International Monetary Fund (IMF), growth rate in the Indian economy is expected to normalize at 6.8% in FY25 on the back of expectations of a normal monsoon and sustained momentum in manufacturing and services sector. Moreover, moderating inflation is likely to result in interest rate cuts providing further fillip to growth. Private consumption is expected to gather pace and private capex is likely to pick up in a sustained manner. India is also negotiating free trade agreements with the European Union, the UK, and the Gulf Cooperation Council which will enable the country to diversify its trade relations. However, persistent inflationary pressure resulting in higher interest rates, supply side disruptions due to geo-political tensions, higher oil prices, slowdown in public capex, and sluggishness in rural demand on the back of deficient monsoon could dampen growth prospects.

3. Industry Review

3.1. Global Automobile Industry

The U.S. auto industry rebounded in 2023 and witnessed strong pick up in sales with many car companies reporting double-digit sales gains, marking a return to normalcy for a sector that has been on a roller coaster since the start of the pandemic. New-light vehicle sales increased by 12.4% YoY to 15.5 million units despite higher borrowing costs on the back of improving supply levels and higher incentives. Crossovers were once again the most popular segment in 2023, representing 47.9% of all new light vehicles sold. In 2023, Battery Electric Vehicle (BEV) sales topped 1.1 million units for the first time and made up 7.2% of all new light vehicles sold. The National Automobile Dealers Association (NADA) expects the U.S. new-vehicle sales to increase slightly to 15.9 million in 2024 as elevated interest rates and high price is expected to be offset somewhat by higher incentive spending by OEMs.

According to European Automobile Manufacturers Association (ACEA), the European Unions (EU) car market experienced a robust growth of 13.9% over the previous year, resulting in a total annual volume of 10.5 million units, with the majority of markets witnessing significant double-digit increases. Petrol vehicles maintained their dominance with a market share of 35.3%, while hybrid-electric cars secured the second position, accounting for 25.8% of the market, followed by electric cars with 14.6% market share. The EU car sales growth is expected to slow to 2.5% reaching 10.7 million units in 2024 as constraints on household budgets on the back of high interest rates and tapering EV subsidies is likely to curtail meaningful demand, according to ACEA. The global automotive industry reflected a complex interplay of innovation, resilience, and adaptation to a changing world and witnessed strong growth led by resilient demand and improving supply chain conditions. While the industry continued to pivot towards electrification, traditional Internal Combustion Engine (ICE) vehicles witnessed strong growth across all major geographies. Traditional automakers continued to accelerate their transition towards electric and autonomous vehicles, investing heavily in research and development to stay competitive in a rapidly evolving landscape. The global automotive industry could face minor challenges in the form of sluggish consumer spending amidst tighter credit conditions, high car prices and weak global economic growth. EV sales could experience muted growth despite supportive government policies relating to tightening of emission due to tapering government incentives, limited charging infrastructure, and the saturation of early adopters. The growth of the sector is likely to be shaped by a multitude of factors, including the adoption of electric vehicles, advancements in the production of high-capacity batteries, ramp up in installation of fast and ultra-fast charging infrastructure, introduction of autonomous vehicles, and deployment of 5G connectivity which is expected to unlock advanced connected car capabilities. Collaborations between Original Equipment Manufacturers (OEMs) and technology companies are poised to foster innovation and drive further growth in the automotive sector. However, ongoing geopolitical tensions, trade disputes, and environmental regulations could pose challenges, underscoring the industrys need for agility and adaptation in the face of evolving market dynamics.

3.2. Indian Automobile Industry

Despite external headwinds in the form of high interest rate environment, Indias automotive sector remained resilient and displayed positive momentum marked by growth across all the segments, offtake in EVs, safety trends and a shift towards digitalisation. Stabilization in commodity prices, improving chip availability, robust economic activity and new model launches resulted in robust growth in the industry.

The Passenger Vehicle (PV) segment witnessed steady resurgence and growth on the back improving supplies of semiconductors, new models launches and positive customer and economy sentiment. Robust demand, easing semiconductor supply issues and strong offtake in the festive season led to volume growth of 7% in the PV segment. Utility vehicle (UV) segment saw significant migration of demand from entry level segment on the back of changing consumer preferences and flurry of new launches and continued to power the overall UV segment resulting in volume growth of 23% whereas the Passenger Car (PC) segment volume fell by 9% despite high discounts. Electric passenger vehicles continued to scale new highs as a result of increased product availability and reducing price parity.

Commercial Vehicle (CV) segment witnessed sluggish volume growth of 3% despite elevated freight rates and sustained freight demand supported by strong economic activity and growth in the manufacturing and infrastructure sector. The Medium and Heavy Commercial Vehicles (M&HCV) segment registered a growth of 3% supported by continued government infrastructure push and growth in core sectors. The Light Commercial Vehicles (LCV) segment reported volume growth of 3% led by growth in e-commerce and strong capital inflow in other end-user industries to improve logistics and last-mile connectivity pushing need for last mile connectivity. Tractors volume declined by 8% on last years high base due to erratic monsoon and weaker rural sentiment.

Industry Segment	Growth in %
(Production figures)	(YoY change)
Vehicles	FY24	FY23
Passenger Cars (PC)	(9)	18
Utility Vehicles (UV)	23	33
Multi-Purpose Vans (MPV)	3	23
Passenger Vehicles (PV)	7	25
Light Commercial Vehicles (LCV)	3	23
Medium & Heavy Commercial	3	37
Vehicles (M&HCV)
Commercial Vehicles (CV)	3	28
Farm Tractors (FT)	(8)	11

Source: Society of Indian Automobile Manufacturers (SIAM)

4. Business Review 4.1. Domestic Market

During the year FY24, the Company had a negative growth of 3.1 % over previous financial year in the domestic market. The market demand had a major shift from Small Passenger Car segment to Utility Vehicle Segment. This pushed up the sales of Small, Mid and Big size SUVs by over 20% compared to last year. The company had a major market share in the Passenger Car segment compared to Utility Vehicle models and hence the degrowth of our domestic sales. The order backlog on Utility Vehicles had come down considerably due to various new models being introduced. The company has won many of those high volume new models which will ensure a robust growth in years to come. The company also secured new orders from existing customers and acquired new customers too. For the first time ever, Company achieved a new business order book of over INR 500 Crores. After Market segment, throughout the year, suffered lower orders due to various factors including cash flow crunch, competitor products from China etc.

The Light Metal Casting Products had a negative growth of 3.6% over the previous financial year in the domestic market.

The break-up of the domestic sales by products is given below:

(in crores)

Products	FY 24	FY 23	Growth in %
Steering Gear Products	722.05	747.60	(3.4)%
Suspension and Linkage Products	446.12	448.88	(0.6)%
Hydraulic Products	95.49	107.94	(11.5)%
Light Metal Casting Products	123.82	128.41	(3.6)%
Other Automotive Parts	72.90	74.51	(2.2)%
Total	1,460.38	1,507.34	(3.1)%

The break-up of domestic sales between Original Equipment Manufacturers (OEMs) and Aftermarket is given below:

(in crores)

Market	FY 24	FY 23	Growth in %
OEM & OES	1,202.96	1,236.31	(2.7)%
Aftermarket	257.42	271.03	(5.0)%
Total	1,460.38	1,507.34	(3.1)%

4.2. Exports

Exports sales continued the momentum with a growth of 11.5% over the previous year. While the China and Brazil sales was lesser due to lower off take (EV Vehicles) from Customers, the company had a strong growth in US, Mexico along with new businesses introduced in Europe. Entry into Linkage business exports to Europe is paving way for more new businesses in this product line. The dominance, as a global leader, in ATV mechanical steering business is sustained and are aggressively growing in all product lines.

LMCI witnessed a growth in exports of 14.3% due to ramp up of volumes in new businesses.

The break-up of the export sales (including deemed export) is given below:

Products	FY 24	FY 23	Growth in %
Steering Gear Products	382.35	364.59	4.9%
Suspension Linkage Products	152.35	119.76	27.2%
Hydraulic Products	2.90	1.99	45.7%
Light Metal Casting Products	102.89	90.01	14.3%
Other Automotive Parts	4.86	2.69	80.8%
Total	645.35	579.04	11.5%

4.3. Operational and Financial Performance 4.3.1. Financial Review Standalone Financial Highlights

The Company registered sales of 2,105.73 crores, an increase of 0.9% over last year, mainly because of the moderate demand in the Indian_ Automotive sector especially in the served segment of PVs._The inflationary pressure in both variable and fixed costs caused reduction in the operating profits.

• Revenue from sale of products increased to 2,105.73 Crores in FY24 from 2,086.38 crores in FY23.

• EBITDA decreased to 182.75 crores in FY24 from 228.42 crores in FY23.

• Net Profit of 14.88 crores in FY24 as against a Net loss of 126.54 crores in FY23. The Net profit 14.88 crores was arrived after considering deferred tax income of 105.53 crores recognized on account of overseas investment write off and the exceptional expense of 141.91 crores consisting of 121.56 crores on account of write off of overseas investment, warranty expense of 18.60, voluntary retirement expenditure of 0.15 crores and merger related expenses of 1.60 crores for the year ended March 31, 2024.

Consolidated Financial Highlights

• Revenue from sale of products decreased to 2,200.94 crores in FY24 from 2,313.75 crores in FY23. For FY 24, LMCA sales recognized for 95.22 crores till the divestment date September_14,_2023.

• EBITDA decreased to 150.70 crores in FY 24 from 200.36 crores in FY 23.

• Net profit of_3.02 crores in FY24 as against a Net profit 30.02 crores in FY23. The Net profit of 3.02 crores was arrived after considering deferred tax income of 105.53 crores recognized on account of the overseas investment write off and an exceptional expense of 105.81 crores consisting of loss of 85.46 crores on account of divestment of step down subsidiary (LMCA), warranty expense of 18.60 crores, voluntary retirement expenditure of 0.15 crores and merger related expenses of 1.60 crores for the year ended March 31, 2024.

Standalone

Key Ratios	March 31, 2024	March 31, 2023	Reason for change in FY 24
Interest Coverage Ratio (turns)	2.02	5.62	Due to increase in interest rate and reduced Profit on account of cost pressure
Operating Profit Margin (%)	4.8%	7.4%	Reduced operating profit due to Cost pressure
Net Profit Margin (%)	0.7%	(6.0)%	Due to significant fair value loss recognised in previous year
Return on Net worth (%)	5.9%	(40.7)%
Debt-Equity Ratio	2.68	2.12	Due to incremental borrowings during the year
Net capital turnover ratio	(17.92)	(39.71)	Due to higher term loan repayment in next 12_months and increase in working capital loan
Return on Capital Employed (%)	10.6%	20.1%	Due to incremental borrowing during the year

The other ratios as required under Schedule III are disclosed in note no. 32 to the Standalone Financial Statements.

Consolidated

Key Ratios	March 31, 2024	March 31, 2023	Reason for change in FY 24
Interest Coverage Ratio (turns)	1.06	3.09	Due to increase in interest rate and reduced Profit on account of cost pressure
Operating Profit Margin (%)	2.7%	4.4%	Reduced operating profit due to Cost pressure
Net Profit Margin (%)	0.1%	1.3%	Reduced on account of loss in overseas
Return on Net worth (%)	1.2%	12.8%	subsidiaries
Debt Service Coverage	2.31	1.62	Due to higher revenues and profits
Net capital turnover ratio	(19.38)	(38.17)	Due to higher term loan repayment in next 12 months and increase in working capital loan
Return on Capital Employed (%)	6.2%	11.5%	Due to incremental borrowing during the year
Inventory Turnover Ratio (turns)	6.57	5.19	Due to effective inventory control measures and divestment of overseas subsidiary

4.3.2.Operations and Manufacturing Review

Demand for the Steering and Linkages business was similar to last year across all the segments / product lines. Plants contributed by working on all cost elements and kept them under control helping the Company to protect its profit margins. Capacity additions were made to cater to the increased demand of customers both in domestic and exports. Manufacturing facilities were also upgraded on par with global standards, as planned, to enhance the Companys capabilites to meet the stringent Quality and Delivery expectations. The plants also operated effectively by optimising the capacity and working through various productivity improvement projects. Various improvements were carried out in automating the process to improve the productivity levels. Industry 4.0 techniques with IoT sensors, AI cameras were added in the manufacturing process to capture the data towards smart manufacturing. The supply chain was also developed through various technical assistance initiatives to make them suitable for the global market.

The Companys focus on new technologies continued during the year with good progress on the development of several new products which will pave the way for future growth aspirations.

In the Light Metal Casting business, successfully ramped up various new products for customers in India, North America, and Europe in FY 23-24._ Added HPDC capacities to meet the demand of the new programs.

4.4. Rane Light Metal Castings Inc., USA (LMCA)

The management focused in the last couple of years on business development and operational improvements. The former initiative had reasonable success. The latter helped improvement in Q, C and D metrics. However, the recovery post covid in the US market did not happen. While the semiconductor_shortage somewhat eased, the US auto industry entered_into a phase of slowdown. This resulted in poor offtake in the new business developed and even existing products. Consequent to the above, and considering the future operational and financial performance of the company, the LMCA was divested on 14^th September 2023.

4.4.1 Rane Automotive Components Mexico S. de R.L. de C.V. (RACM)

Rane Automotive Components Mexico S. de R.L. de C.V. (RACM) was established during the year as a wholly owned subsidiary in the state of Aguascalientes, Mexico to cater to the customers in the North American region. Considering various factors including commercial advantages, customs duty benefits under the prevailing United States Mexico Canada Agreement (USMCA) and after performing requisite feasibility studies, a green field manufacturing-cum-assembly plant is being set up by RACM in this location to manufacture steering and linkage auto components and it is expected to commence commercial production by mid of FY 25.

4.5. Pursuit of Business Excellence

The Company continued to follow and practice TQM initiatives and principles which has given the Company immense benefits over the years. The Companys strong performance and results can be largely attributed to the TQM practices that the Company has imbibed as its way of work. This has helped us to identify our strengths and areas of improvement and guide the Company towards a sustainable and measurable success. At fixed intervals, processes and systems across functions are reviewed for its adequacy, relevance and sustenance to achieve overall organizational / self-development goals. As a recognition for such efforts, the Company won the following awards during the year:

• Supplier of excellence award from Polaris

• Quality Excellence award from Tata Motors Commercial Vehicle

• Quality Excellence award from Daimler

• Extra Mile award from Tata Motors Passenger Vehicle

• Kaizen awards from Tata Motors Limited

• External awards from ACMA, QCFI, CII & ABKAOTS

• "Great place to work" for the 6^th consecutive year

4.6. Opportunities and Threats

The automotive industry in India is poised for significant growth, driven by a multitude of factors. Accessible, affordable, and transparent financing options, improving road infrastructure and increasing disposable income have been the major factors catapulting the growth of the auto industry in India. Indias increasing adoption of electric vehicles is set to enhance the industrys influence, further establishing the nation as a prominent global automotive centre. Shifting consumer preferences, increasing exports, and government support will be pivotal in shaping the future of the industry. The emerging trends and growing focus of automakers on integrating cutting-edge technologies in car manufacturing has opened up massive investment opportunities in the India auto sector. Significant technological strides in electric vehicles, autonomous driving, connectivity, the adoption of digital sales, and a strong emphasis on safety measures are anticipated to unlock vast opportunities for the industry.

Despite significant growth prospects, the industry is also confronted with a range of issues including logistics and supply chain disruptions, escalating energy costs, shortages in skilled labour, complex economic and political landscape, and growing expectations of an increasingly discerning and demanding consumer base, among others. Persisting high interest rate environment could impact affordability to some extent for potential buyers. These economic challenges present formidable obstacles for the automotive industry, necessitating strategic adaptation and resilience to navigate through turbulent times.

4.7. Outlook

The automotive industry is poised for significant growth driven by several key factors. Foremost among these is the rapid adoption of new technologies, coupled with robust government support policies. With increasing awareness about environmental issues, theres a notable shift towards alternate fuel vehicles like CNG and EVs, which is expected to further boost sector growth. Moreover, factors such as rising per capita incomes, evolving demographic profiles, low vehicle penetration rates, and favourable policy environments, including infrastructure development, are all contributing to a steady rise in industry demand. However, potential challenges such as a global economic slowdown and higher interest rates could temporarily impact demand. Yet, the industrys ability to innovate and adapt will be pivotal as it continues to evolve, ensuring its resilience and sustained growth in the long run.

Light Metal Casting business in India is in the process of launching several new programs to SOP in the FY 24-25 which will further improve its capacity utilization.

4.8. Scheme of Amalgamation

The Board of Directors of the Company at the meeting held on February 09, 2024 considered and approved the proposed scheme of amalgamation ("Scheme") of the Rane Engine Valve Limited (REVL) and Rane Brake Lining Limited (RBL) with and into Rane (Madras) Limited (RML) with effect from April 01, 2024. As per the Scheme, 9 (Nine) equity shares of Rs.10/- each of the Company will be issued for every 20 (Twenty) equity shares of Rs.10/- each held in REVL and 21 (Twenty-One) equity shares of Rs.10/- each of the Company will be issued for every 20 (Twenty) equity shares of Rs.10/- each held in RBL. The Scheme is subject to the approval of shareholders and creditors of the respective companies, BSE Limited and The National Stock Exchange of India Limited, National Company Law Tribunal and such other approvals as may be required.

The proposed Scheme of amalgamation aims to simplify the group structure, align shareholder interests, enhance operational efficiency, and diversify product offerings. Consolidating under a single listed entity will facilitate coordinated business management, achieve synergies in revenue and costs, optimize resources, and improve access to capital for growth opportunities. Additionally, it will enable a unified approach in customer engagement, supply chain management, and administration functions, while leveraging combined human capital for improved organizational capability and leadership.

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.

	Risk	Nature of Risk	Risk Mitigation Strategies
	Quality	Risk of International business	a) Product liability coverage ensured in line with international sales.
		– Product recall or launch delay or brand image getting affected due to quality issues.	b) Automated assembly line with inbuilt quality controls, traceability system for high volume projects.
	Growth	High dependency on one product (R&P) for future growth	a) New range product expansion in FT, SCV, LCV applications – gear pump, EPS.
Strategic			b) Focused new business development in ball joint – Export.
		High dependence on existing customers for International business growth.	c) Domestic market opportunity in Hydraulic products (with unserved customers).
			d) Target business development with Global Steering gear suppliers like ZF, RFQs generated and technical reviews in progress.
			e) Expand new businesses with Global Tier 1s.
	Quality / Processes	Quality and delivery are sacrosanct for safety critical products supplied by the Group.	Skilled workforce, imparting job skill enhancement training, enhancing supplier capabilities and robust manufacturing processes help the Company mitigate quality and delivery risks.
Operational	People Risk	Attrition of key personnel could impact business operations and growth.	The Companys HR processes are constantly upgraded to attract, retain and develop talent. The performance management system and other employee engagement initiatives help develop and retain talent. Further employee feedback is obtained and improvements in People Process are made to sustain the Great Place to Work (GPTW) Certification.
	Currency Risk	Exposed to foreign currency exchange risk as the Company exports its products to various countries and import raw materials.	The Company uses a multi-pronged approach as suitable to the scenarios. This approach includes:
			a) Optimally balancing the import and export to create natural hedge.
			b) Working with customer to index prices to mitigate currency fluctuations.
			c) Taking forwards on a rolling basis to protect its export realization.
	Interest	Use of borrowings to fund expansion exposes the Company to interest rate risk.	The Company manages interest rate risk on the following basis:
Financial	Rate Risk		a) Maintaining optimal debt-equity levels.
			b) Using internal accruals to fund expansion.
			c) Ensuring a competitive interest rate by leveraging multiple banking relationship and mix of public sector, private sector and MNC bankers
			d) Constantly optimizing export packing credit to reduce interest costs.

6. Human Resource Development and Industrial Relations 6.1. Talent Development Initiatives

In FY 2023-24, the Company focused on the following talent development initiatives:

Leadership Development 6.1.1. Leadership Boot Camp (LBC)

Group level mandatory internship scheme was introduced wherein the identified entry level graduates were onboarded as interns before joining as trainees in order to provide real work experiences. 60 entry level graduates (GET/MT/PGET) joined us as part of our entry level talent hunt and underwent the LBC journey. LBC focuses on supporting the transition from campus to corporate and has a blend of technical and soft skills programs, plant visits, on-the-job training, cross functional exposures and interactions with business leaders.

6.1.2. 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 seventh batch with 9 participants underwent 5 days of classroom sessions across 3 modules facilitated by Shri Dharmasthala Manjunatheshwara Institute for Management Development (SDMIMD). They also had interactive session with business leaders who shared their insights and experiences on leadership effectiveness. As part of the ongoing learning engagement journey, YLD participants from earlier batches underwent a two-day workshop on strategy and finance facilitated by a reputed B school in Chennai. The workshop was curated with the objective of enhancing their business understanding through Rane specific case studies. Participants presented their solutions to the case studies by drawing insights from various modules to a panel of business leaders and interacted with them on the approach and strategy for the case study.

6.1.3.High Potential Leadership Development (HPLD)

The objective of HPLD is to build leadership competencies of high potential talent and strengthen the leadership pipeline. 18 participants underwent a customised residential program titled TOP GEAR (Transforming Organization and Profitability through Growth, Engagement, Actions, Results) at Great Lakes Institute of Management (GLIM), Chennai TOP GEAR enables participants to understand their potential and the shifts required to be future ready. The participants showcased their action learning projects to the panel comprising Professors and Business Leaders.

As part of the HPLD design, the participants underwent an outbound experiential assessment and development centre at Pegasus Institute, Pondicherry. The outbound had continuous feedback assessments that helped them to have easy acceptance of feedback and concrete developmental takeaways.

6.1.4.Rane Manufacturing Systems Professionals (RMSP)

RMSP was originally launched in June 2017 to ‘Build Manufacturing Capability among junior & middle managers in Manufacturing, Manufacturing Engineering, Quality Assurance and Plant Engineering functions. RMSP 4.0 was refreshed and rolled out in June 2023 with the objective of "enhancing manufacturing capability through technical proficiency for significant improvement in plant performance". The enhanced version of the program has two streams, Basic stream and Advance stream and places emphasis on learners, enabling role-based development for significant improvement in plant performance.

6.2. Learning digital journey

To enable anytime anywhere access, the Learning Management System (LMS) was refreshed and transitioned to cloud and the Rane LMS app was rolled out. Some of the salient features of the app include workflows to self-enroll for programs, track and review Individual Learning and Development Plan progress and view real time dashboards. Further the L&D leaderboard was introduced to elevate learner engagement by recognising individuals as learning champion(s) and managers as enabling champion(s) based on milestones and metrics. The ‘Digital Library was enhanced with over 100 resources in the form of articles, E-books, podcasts, videos on self-leadership, people leadership, wellness, office productivity and technical processes. e-learning courses were rolled out in the mobile platform including course on governance and road safety awareness. Employees were also encouraged to pursue online courses through the SWAYAM platform, a ministry of HRD initiative with a sponsorship for certification for up to 3 courses in a year.

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. Rane Group has been participating in the survey for over 15 years and using the findings to elevate the employee engagement and experiences. RML was proud to be GPTW certified for 6^th year in a row.

6.4. Wellness at Rane

Rane Group is committed to promoting a healthy and positive work environment for its employees. A wellness app was launched in partnership with The Wellness Corner which provides holistic wellness solutions to prioritize the health and well-being of the employees. Through this initiative, employees are encouraged to participate in multiple challenges and that help in adopting healthy habits like regular exercise and mindful eating. Through various initiatives such as wellness workshops, mental health support and financial wellness programs, we aim to empower our employees to lead balanced and fulfilling lives. Wellbeing of our employees are prioritized through robust HSE (Health, Safety and Environment) practices, including ergonomic assessments, to ensure that the workspaces are optimized for comfort and productivity. Rane Premier League (RPL) is one such event to celebrate the togetherness and also craft a workplace wellness. RPL, a cricket tournament was held among the group entities of Rane. Companies nominated best cricketers who were enthusiastic to bring home the trophy. RPL 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, 144 employees from the Rane Group participated in the Chennai Marathon.

6.5. Women empowerment at Rane

Towards our commitment to empower women in the workplace, Rane Group launched Women at Work (W@W) Group. This group aims to build a community of "Engaged, Enthused and Empowered" women in supporting their career aspirations while effectively managing the demands of their evolving life circumstances. W@W group will be mentored by an executive coach. The format will be one-on-one and group sessions that will serve as a valuable platform for women within the organization to connect, share experiences, and access resources aimed at advancing their professional development.

6.6. 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 2023-24, the Group implemented several projects by primarily focusing on Education, Healthcare and Community Development.

The Company contributed to Rane Foundation (RF), the CSR arm of Rane Group, which primarily focused on Education during the FY 2023-24.

7.1. Education

The Rane Polytechnic, established at Trichy in the year 2011 under the aegis of Rane Foundation has stepped into its thirteenth academic year. The institution is accredited by the National Board of Accreditation (NBA) for its Diploma in Mechanical Engineering program. So far 1831 students have completed their diploma program and 137 students have completed the program in the academic year 2023-24. Out of 137 students, 105 opted for placements and 100% placement was achieved for the FY 2023-24 batch.

The Rane Vidyalaya, established at Trichy in the year 2018 under the aegis of Rane Foundation has stepped into its sixth 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 2023-24, it reached a student strength of 841 in its sixth year of operations, operating from LKG to IX standard proving the need for a quality school in rural area.

• Rane Foundation in association with various educational institutions carried out the following:

• Organized pre-vocational training with Maithree to support 10 special children in_ the age group between 14 and 18.

• Extended support to the Gopalapuram Educational Society towards running & maintenance of Boys & Girls Schools.

• Supported in setting up of 15 Single Teacher Schools in association with Swami Vivekananda Development Society.

• Provided 50 web-cameras to Ramakrishna Mission Students Home.

7.2. Healthcare:

• Rane Foundation through strategic partnerships with established organisations contributed medical equipment to not for profit hospitals of repute, making a significant impact on society across various specialties such as Ophthalmology,

Dialysis, and Public Health Care at an affordable cost, as outlined below.

• Enhanced the infrastructure at Sringeri Sharada Equitas Cancer cum Multispeciality Hospital, a charitable hospital, with equipments such as 32 paramount 5 function motorized beds with mattress, 9 single nurse control motorized ICU beds with 5 functions and 43 semiflower beds with mattress.

• Supported Apollo Hospitals Enterprise Limited in conducting Tele-Ophthalmology Camp at Trichy including delivery of spectacles.

• Donated_ Photo_ Slit_ Lamp_ equipment to Sankara Nethralaya. to enhance the ophthalmic care

• Supported Voluntary Health Services, a muliti-speciality hospital with drager fabius plus anaesthesia work station and vamos plus

• Supported Tamilnadu Kidney Research Foundation (TANKER Foundation), a non-profit charitable trust with 8 automatic external defibrillator.

7.3. Community Development:

Rane Foundation in association with Swami Vivekananda Rural Development Society supported in providing skill training for motor car driving for 25 women including obtaining license and facilitating employment opportunities.

Other major CSR activities carried out by the Company during FY 2023-24 are as follows:

• Contribution for purchase of Green Buggy for Mysuru Zoo for use of elderly citizens and visitors with children and persons with disabilities.

• Installation of interactive digital board at Government Middle School, Thirubhuvanai, Pondicherry to improve the learning effectiveness. The school has students up to standard 8 and 150 students are benefited through this project.

• Facility improvement in Govt. Primary School in Thirubuvanai - a civil work to renovate the existing structure is carried out to elevate infrastructure standards and it benefited near about 150 students.

• Contribution towards purchase of CCTV cameras for Police Department and installed in the Varanavasi highway which will help to protect the local community from potential crimes.

• Sponsorship towards 22 solar street lights and 6 high intensity lights, in the Varanavasi Village. This project lighted up near about 500 villagers. This project not only illuminated the present but paved the way for future generations to come. We are proud to play a part in illuminating the path towards a greener and sustainable world.

• Installation of 2 RO water plants at Varanavasi village thus enabling 600 people to have access to clean drinking water.

• Contribution towards 2 Desktops to Sri Sankara Arts and Science College, Kanchipuram. This initiative is targeted towards helping future generations to pursue more streamlined studies and acquire necessary technical skills.

CSR Monitoring mechanism – To ensure continued service of all of Companys CSR initiatives, it monitors the previous two-year projects through regular visits and extend its support in maintaining the facilities.

8. Internal Control Systems

The Company has set up 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, resources are utilized 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 auditors, statutory auditors and operating management, approve 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 meeting for review. The managements responses and counter measures are discussed in the Audit Committee meetings. This process ensures robustness of internal control system 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.

For and on behalf of the Board

	Ganesh Lakshminarayan	Harish Lakshman
Chennai	Director	Chairman
May 09, 2024	DIN:00012583	DIN:00012602