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Rane (Madras) Ltd.

BSE: 532661 Sector: Auto
NSE: RML ISIN Code: INE050H01012
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OPEN 314.95
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VOLUME 626
52-Week high 489.65
52-Week low 286.30
P/E 24.14
Mkt Cap.(Rs cr) 511
Buy Price 0.00
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Sell Price 0.00
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OPEN 314.95
CLOSE 314.90
VOLUME 626
52-Week high 489.65
52-Week low 286.30
P/E 24.14
Mkt Cap.(Rs cr) 511
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rane (Madras) Ltd. (RML) - Director Report

Company director report

Your Board of Directors hereby present to you the Seventeenth Annual Report coveringthe operational and financial performance together with the accounts for the year endedMarch 31 2021 and other prescribed particulars:

1. State of Company’s affairs

The impact of COVID-19 was felt throughout the Automotive sector of which the Companyis part in the Financial Year 2020-21. By the end of the first half of the fiscal theeconomy and industry had restarted with the new normal in place. Post lifting of lockdownrestrictions the auto industry witnessed demand recovery led by pent-up demand coupledwith other factors. The Company resumed operations across its facilities in compliancewith the guidelines issued by the Government. Adequate steps for safety and precautionarymeasures were taken across all its facilities and locations.

The Company deftly navigated the post lockdown challenges in the recovery phase throughseveral cost optimisation measures and capacity management. The Company was stronglypositioned to make up for the weak H1 performance with a quick ramp up and increase inbusiness share across customers. The Company is likely to benefit from the growthopportunities in the automotive industry and aided by the Government’s Product LinkedIncentive (PLI) and other stimulus programmes. However the second wave of COVID-19 andresultant lockdowns negatively impacted the economic activities and the auto industry.Going forward rollout of vaccines should lead to increased economic activity andincreased mobility which should help in gradual and sustainable economic revival duringFinancial Year 2021-22.

1.1. Financial Performance

The standalone financial highlights for the year under review are as follows: (Rs. inCrores)

Particulars 2020-21 2019-20
Revenue from Operations 1147.15 1100 .52
Other Income 3.90 18.71
Profit / loss before Depreciation Finance Costs Exceptional items and Tax Expense 93.22 98.50
Less: Depreciation / Amortisation 52.30 52.42
Profit / loss before Finance Costs Exceptional items and Tax Expense 40.92 46.08
Less: Finance Costs 23.46 31.95
Profit / loss before Exceptional items and Tax Expense 17.46 14.13
Add / (less): Exceptional items (62.50) (37.58)
Profit / (loss) before Tax Expense (45.04) (23.45)
Less: Tax Expense (Current & Deferred) 5.65 0.98
Profit / (loss) for the year (1) (50.69) (24.43)
Total Comprehensive Income / loss (2) 3.03 (4.41)
Total (1+2) (47.66) (28.84)
Balance of profit / loss for earlier years (13.78) 44.60
Less: Transfer to Reserves - 25.83
Less: Dividend paid on Equity Shares - 5.39
Less: Dividend Distribution Tax - 1.11
Balance carried forward (64.23) (13.78)

The Key Performance Indicators operational performance and summary on balance sheetare furnished in page no. 1 of this annual report.

The total standalone turnover of the company was Rs.1123.20 crores which is anincrease of 4% over the previous year. The revenue from Steering and Linkage Division(SLD) products was Rs. 990.00 crores an increase of 6% over the previous year. Therevenue from Light Metal Castings India (LMCI) (formerly known as Die Casting Division(DCD)) products was Rs.80.00 crores which is 12% decline over previous year. The autoparts division of the Company registered a turnover of Rs.53.20 crores as against turnoverof Rs.45.35 crores recorded during previous year. The Company has netted a Profit AfterTax (PAT) of Rs.(50.69) crores which is (4.5)% of the turnover. This resulted in anEarnings Per Share (EPS) of Rs.(39.51) for FY 2020-21 as against Rs.(24.37) in theprevious year.

The Company continues to be a subsidiary of Rane Holdings Limited (RHL / HoldingCompany). There were no material changes or commitments affecting the financial positionof the Company between the end of the financial year and the date of the report apart fromthose disclosed in the financial statements section of this Annual report. There was nochange in nature of business during the year.

1.2. Appropriation

The Company has carried forward a loss of Rs.64.23 crores and no amounts weretransferred to the General Reserves. The Board of Directors taking into considerationthe operational performance financial position of the Company and uncertainties faced bythe automotive sector and the Indian economy as a whole has decided not to declare /recommend any dividend for the year under review.

1.3. Credit rating

The Company’s financial management and its ability to service financialobligations in a timely manner has been reaffirmed by CRISIL during the year under reviewand this has been disclosed to stock exchanges and updated in the Company’s website.The Corporate Governance section of this Annual report carries the details of creditrating.

1.4. Share Capital

During the year under review the share capital of the Company stood at Rs.145653090as compared to Rs.125538910 in the previous year. This increase was due to thefollowing: a. allotment of 1161440 equity shares of Rs.10/- each on conversion ofbalance 1161440 warrants out of the 1742160 warrants issued to Rane Holdings Limited(Promoter / Holding Company). The Company had previously issued and allotted 1742160warrants convertible into equivalent number of equity shares within a period of 18 monthsfrom the date of allotment. The Company had previously on March 20 2020 converted580720 equity shares. During the year on January 05 2021 RHL remitted a sum of Rs.25Crores and exercised their right to convert the balance 1161440 warrants. The Companyconverted the warrants into equivalent equity shares of face value of Rs. 10/- each fullypaid-up ranking pari-passu in all respects with the existing equity shares includingdividend if any on the equity shares on January 07 2021. b. allotment of 849978 equityshares of Rs.10/- each on conversion of 849978 warrants out of the 2549936 warrantsissued to Rane Holdings Limited (Promoter / Holding Company) the details of which arediscussed in the below paragraphs.

1.4.1. Convertible warrants

In order to pursue capital expenditure programs meet working capital requirements ofthe Company and support the overseas subsidiaries the Board considered it desirable toincrease the equity capital base of the Company which will also help the Company inreducing the debt position and achieve an optimum debt-equity ratio. After a detailedreview of the performance and business plans of the Company and after carefulconsideration of various options of fundraising the Board of Directors had decided thatit would be in the best interest of the Company in the long-term to increase the capitalbase of the Company by about Rs.60 crores by way of preferential issue to the Promoterand Promoter Group of the company. Rane Holdings Limited (RHL) being the holding Companyand the Promoter of the Company had expressed interest to further infuse funds upto Rs.60crores into the Company by subscribing to equity shares or convertible securities of theCompany. The preferential issue of convertible warrants was approved by the shareholdersvide postal ballot on January 16 2021 and RHL was issued and allotted 2549936 warrantsat an issue price of Rs.235.30 per warrant entirely for cash convertible into equityshares in or more tranches. On January 29 2021 the Issue and Allotment Committee of theBoard (IAC) had allotted 2549936 warrants to RHL convertible into equivalent number ofequity shares within a period of 18 months from the date of allotment. On March 22 2021RHL infused a further sum of Rs.15.00 crores and thus exercised conversion of 849978warrants into equivalent equity shares of face value of Rs.10/- each fully paid-up rankingpari-passu in all respects with the existing equity shares including dividend if any andshares were allotted on March 29 2021. Thus the shareholding of RHL in the Companyincreased further by 1.95% to 68.47%. Pursuant to the above the equity share capital ofthe Company stands at 145653090 comprising of 14565309 equity shares of Rs.10/- eachfully paid-up.

1.5. Management Discussion & Analysis

The business of your Company is manufacturing and marketing of auto components fortransportation industry viz. steering and suspension systems linkage products steeringgear products and aluminium alloy based high pressure die-casting products. The analysison the performance of the industry the Company internal control systems and riskmanagement processes are presented in the Management Discussion and Analysis reportforming part of this report and provided in ‘Annexure A’.

1.6. Subsidiaries Associate and Joint Venture Companies 1.6.1. Overseas Subsidiaries

Rane Light Metal Castings Inc. USA (LMCA) is engaged in the business of manufacturinghigh pressure aluminium die casting for automotive applications like steering andcompressor related die casting components. During the FY 20-21 LMCA earned revenue ofRs.118.72 crores from its operations.

LMCA is a step down subsidiary of the Company held through Rane (Madras) InternationalHoldings B.V. The Netherlands a wholly owned subsidiary of the Company(‘RMIH’ / ‘WOS’). In RMIH the Company has till date invested uptoEuro 23.804 million for making onward capital infusions in LMCA to repay loan(s) availedfrom parent company to the tune of USD 4.485 million along with interest and to meet itsown administrative expenses and also subsequently invested Euro 1.193 Million on April 072021 increasing the total amount invested to Euro 24.997 Million. The total equityinvestments in LMCA through RMIH as on March 31 2021 stands at USD 26.86 million.Subsequently the Company has further invested an amount of USD 1.4 million on April 072021 increasing the capital to USD 28.26 million Also in order to extend financialsupport to LMCA and RMIH the Company had issued corporate guarantees in favour of banks /financial institutions and as at March 31 2021 the corporate guarantees represent a sumof USD 6.05 Million and USD 1.76 Million in respect of LMCA and RMIH respectively. TheCompany had also earlier extended financial support directly to RMIH by way of loan and ason March 31 2021 RMIH has paid the amount fully and there are no outstanding. All theinvestments and financial commitments of the Company are within the limits prescribedunder the Foreign Exchange Management Act 1999 and regulations framed thereunder for thetime being in force.

The highlights of performance of subsidiary companies and their contribution to theoverall performance of the Company during the year under review are provided in thesection ‘Management Discussion & Analysis’ forming part of this annualreport. The Company does not have any associate or joint venture. There was no Companywhich has become or ceased to be the Company’s subsidiary joint venture or associateduring the Financial Year 2020-21.

1.7. Consolidated Financial Statements

The consolidated financial statements of the Company are prepared based on thefinancial statements of the subsidiary Companies viz. Wholly Owned Subsidiary - Rane(Madras) International Holdings B.V The Netherlands a (‘RMIH’ /‘WOS’) and Step Down Subsidiary (‘SDS’) - Rane Light Metal CastingsInc. USA. The Company has followed the methodology prescribed under applicable accountingstandards for consolidation of financial statements of the subsidiary companies i.e. eachline item of income expenditure assets and liabilities have been consolidated onehundred percent. On consolidation the assets and liabilities of foreign subsidiaries aretranslated into INR at the rate of exchange prevailing at the reporting date and theirstatements of profit or loss are translated at average of daily exchange rates prevailingduring the year. The salient features of financial statements of the subsidiary companiesare provided in Form AOC-1 forming part of this annual report in terms of theprovisions of Section 129(3) of the Companies Act 2013 ("Act"). The Companywill make available a soft copy of the annual report and annual accounts of the subsidiaryCompanies to any member on request of the same in accordance with the provisions ofSection 136 of the Act. Further the annual financial statements of the subsidiaryCompanies have also been made available on the website of the Company at www.ranegroup.com.

2. Board of Directors and Management

2.1. Composition

The composition of the Board of Directors and its Committees viz. Audit CommitteeNomination and Remuneration Committee Stakeholders’ Relationship CommitteeCorporate Social Responsibility Committee and Risk Management Committee are constituted inaccordance with Companies Act 2013 and the SEBI ( Listing Obligations and DisclosureRequirements) Regulations 2015 (SEBI LODR) wherever applicable. The Board of Directorshave also constituted an Executive Committee Finance Committee Investment Committee andIssue & Allotment Committee. The Corporate Governance Report given in ‘AnnexureE’ to this report contains the composition of the Board of Directors of the Companyand its Committees.

The following are the details of change in composition of the Board of Directors andits Committees:.

Mr. Srinivasan Sandilya (DIN: 00037542) joined the Board of Directors as an AdditionalDirector (Independent category) on May 21 2021. His appointment as an IndependentDirector of the Company is subject to the approval of the shareholders of the Company atthe ensuing Annual General Meeting.

Mr. Ramesh Rajan Natarajan (DIN:01628318) joined the Board of Directors as anAdditional Director (Independent category) on May 21 2021. His appointment as anIndependent Director of the Company is subject to the approval of the shareholders of theCompany at the ensuing Annual General Meeting.

Mr. M Lakshminarayan (DIN: 00064750) Independent Director retired as per theretirementI policy of the Company effective from conclusion of the Board meeting held onMay 21 2021. Consequently he also ceases to be a member of the Audit Committee andChairman of Nomination and Remuneration Committee. The Board places on record itsappreciation for the valuable advice and guidance rendered by him during his tenureespecially on various strategic matters. The Board of Directors are of the opinion thatthe Director(s) proposed for appointment / re-appointment at the ensuing 17thAGM of the Company possess integrity necessary expertise relevant experience andproficiency and the Corporate Governance Report annexed to this report contains necessarydisclosures regarding the Director(s).

The terms and conditions of appointment of Independent Directors have been disclosed onthe website of the Company and available at http://ranegroup.com/rml_investors/terms-of-appointment-of-Independent-directors/ All theDirectors have affirmed compliance with the Code of Conduct of the Company. TheIndependent Directors have affirmed that they satisfy the criteria laid down under section149(6) of the Companies Act 2013 (Act) and Regulation 25 and other applicable regulationsof 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 2013read with Rule 6 of the Companies ( Appointment and Qualification of Directors) Rules2014

Independent Directors of the Company have confirmed that they have registeredthemselves with the databank maintained by the Indian Institute of Corporate Affairs II (CA) and have passed the proficiency test if applicable to them. The Board of Directors atits first meeting of the FY 2020-21 has taken on record the declarations and confirmationssubmitted by the Independent Directors. During the year the Board had not appointed anyperson as an Alternate Director for an Independent Director on the Board. The Company hasobtained a certificate from a Company Secretary in Practice that none of the Directors onthe Board of the Company has been debarred or disqualified from being appointed orcontinuing as Directors of Company by the SEBI / Ministry of Corporate Affairs or any suchstatutory authority.

2.2. Retirement by rotation

Mr. Harish Lakshman Director (DIN: 00012602) retires by rotation at the ensuing 17thAnnual General Meeting A ( GM) and being eligible he offers himself for reappointment.The proposal for re-appointment of Mr. Harish Lakshman as a Director is included inthe notice convening the 17thA GM.

2.3. Board and Committee Meetings

The schedule of meetings of the Board of Directors and Committees of the Board iscirculated to the Directors in advance. During the year six (6) Board Meetings were heldthe details of which are given in the Corporate Governance Report. The gap between any twoconsecutive meetings of the Board of Directors was less than 120 days. The details ofCommittee meetings are provided in the Corporate Governance Report annexed to this reportof the Board.

2.4. Meeting of Independent Directors

A meeting of Independent Directors was held to assess the quality quantity andtimeliness of the flow of information between the management and the Board. TheIndependent Directors expressed that the present flow of information was timely and ofsuperior quality and enable them to effectively perform their duties. They also reviewedthe performance of the Chairman of the Company the Non-Independent Directors and theBoard as a whole after taking into consideration the views of the Non-Executive Directors.

2.5. Board evaluation

The Board carried out an annual evaluation of its performance its committeesindividual directors including the Chairman of the Board. This exercise was implementedthrough a structured questionnaire seeking qualitative inputs and comments on the Boardand its committees including the Chairman and Independent Directors. The performanceevaluation of Chairman and Non-Independent Directors were also reviewed by IndependentDirectors at a separate meeting. The parameters considered various aspects of theBoard’s functioning such as skill set and diversity of the Board to review strategyand risk management dimensions and processes information flow on the state of affairs ofthe company talent management human capital challenges effectiveness of presentationspriorities accorded by the board particularly to cyber security and the effectiveness ofthe board’s processes of reviewing annual operating and strategic business plans.Peer assessments of directors based on parameters such as contribution to the Boarddecisions and discussions staying updated on recent trends awareness on macro leveldevelopments and networking engagements was reviewed by the Board for individualfeedback. The performance evaluation criteria for Independent Directors is determined bythe Nomination and Remuneration Committee. An indicative list of factors on whichevaluation was carried out includes commitment competency sector knowledge networkingand engagement.

The Company actioned on the feedback from the Board evaluation process. Agenda wasreorganised to allow longer time for discussion on strategy and business mattersstreamlining of content for board’s deliberation on matters of relevance likeInformation Security Management System in the wake of remote working scenario due to theCOVID-19 pandemic.

2.6. Familiarisation program for Independent Directors

The details of familiarization programmes for Independent Directors are available atthe web-link:http://ranegroup.com/rml_investors/familiarisation-programme-for-Independent-directors/.

2.7. Key Managerial Personnel

AsattheyearendedMarch312021Ms.GowriKailasam President – SLD & Manager Mr.B Gnanasambandam Chief Financial Officer (CFO) and Ms. S Subha Shree Company Secretaryhold the office of Key Managerial Personnel (KMP) respectively within the meaning ofSection 2(51) of the Companies Act 2013.

2.8. Remuneration policy

The policy contains criteria for determining positive qualifications positiveattributes independence of a Director and also covers aspects of remuneration which isreasonable and sufficient to attract retain and motivate Directors / high potentialemployees to run the Company successfully. The policy on appointment and remuneration ofDirectors KMP and Senior Management Personnel (SMP) as laid down by the NRC of the Boardis available at the web-link at https://ranegroup.com/rml_investors/policy-on-appointment-remuneration-of-directors-kmp-smp/. There has been nochange in this policy during the financial year 2020-21.

Pursuant to the approval accorded by the shareholders at the 16th AGM heldon August 07 2020 Mr. L Ganesh Chairman (Non-Executive) has been receivingcommission up to 2% of the net profits of the Company for a period commencing from April01 2018. The NRC at its meeting held on May 14 2021 has recommended payment ofRs.3894127/- as commission for the financial year 2020-21 to Mr. L Ganesh Chairman.Based on the recommendations of the NRC the Board of Directors have proposed payment ofcommission of up to 2% of net profits for a further period of three years commencing fromApril 01 2021 in accordance with Section 197 198 and other applicable provisions of theCompanies Act 2013 subject to the approval of the shareholders at the ensuing 17thAGM 2021. The details of remuneration paid / payable to the Directors during the financialyear 2020-21 is furnished in the Corporate Governance report annexed to this report of theBoard.

3. Audit and allied matters

3.1. Audit Committee

The terms of reference and meetings of the Audit Committee are disclosed in theCorporate Governance Report section of the Annual Report. The Audit Committee of the Boardacts in accordance with the above terms of reference which is in compliance with theprovisions of Section 177 of the Companies Act 2013 (the ‘Act’) and Regulation18 of SEBI LODR and other applicable provisions of SEBI LODR as amended from time totime.

3.2. Statutory Auditor

M/s BSR & Co. LLP (BSR) were appointed in their first term as Statutory Auditorsat the 16th Annual General Meeting (AGM) held on August 07 2020 for a periodof five years i.e. until the conclusion of the 21st AGM (2025). BSR haveconfirmed that they do not suffer from any disqualification under Section 141 of theCompanies Act 2013 and the rules made thereunder. BSR have also submitted the peer reviewcertificate issued to them by The Institute of Chartered Accountants of India.

BSR have not reported any matter under Section 143(12) of the Companies Act 2013requiring disclosure under Section 134(3)(ca) of the Companies Act 2013. The statutoryauditors report to the members for the year ended March 31 2021 does not contain anyqualification reservation adverse remark or disclaimer.

3.3. Cost Audit & Maintenance of Cost records

The appointment of Cost Auditor is not applicable to the Company under Companies (CostRecords and Audit) Rules 2014. Further the Company does not manufacture any specifiedproducts which necessitate the maintenance of cost records as prescribed under Section148(1) of the Act.

3.4. Secretarial Auditor

M/s. S Krishnamurthy & Co. a firm of Company Secretaries in Practice have beenappointed by the Board of Directors in terms of Section 204 of the Companies Act 2013 asSecretarial Auditors of the Company for the FY 2020-21. The Secretarial Audit report givenin ‘Annexure B’ was taken on record by the Board of Directors at its meetingheld on May 21 2021. The report does not contain any qualification reservation adverseremark or disclaimer.

The Annual Secretarial Compliance report (hereinafter referred to as ‘compliancereport’) for FY 2020-21 issued by M/s. S Krishnamurthy & Co. confirmscompliance with securities laws applicable to the Company and the same has been taken onrecord by the Board of Directors at their meeting held on May 21 2021. Thecompliance report does not contain any qualification reservation adverse remark ordisclaimer and the Board has approved filing of the same with the stock exchanges.

3.5. Internal Auditor

M/s. Capri Assurance and Advisory Servicies a firm of Independent assurance serviceprofessionals continues to be the Internal Auditor of the Company. Their scope of workincludes review of processes for safeguarding the assets of the Company review ofoperational efficiency ensure effectiveness of systems and processes review of statutoryand legal compliances with applicable statutes / laws and assessing the internal controlstrengths in all these areas. Internal Auditor findings are discussed with the processowners and suitable corrective actions taken as per the directions of the Audit Committeeon a regular basis to improve efficiency in operations. The Internal Auditor reportsdirectly to the Audit Committee. Committee while reviewing their performance scopefunctioning periodicity and methodology for conducting the internal audit has taken intoconsideration their confirmation to the effect that their infrastructure viz. internalaudit structure staffing and seniority of the officials proposed to be deployed etc. areadequate and commensurate to the scope functioning periodicity and methodology forconducting the internal audit.

For FY 2020-21 the Audit Committee has inter-alia taken on record their certificationto the effect that:

a. They have evaluated the internal control and risk management systems and reviewedthe risk management systems and the management’s process of identification andmitigation of risks and controls;

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

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

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

e. There were no significant changes in the internal control over financial reportingduring the year under review;

f. There were no instances of fraud or involvement therein of management or an employeehaving a significant role in the entity’s internal control system over financialreporting; and

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

4. Directors’ responsibility statement

In terms of Section 134(3)(c) read with section 134(5) of the Companies Act 2013 theDirectors to the best of their knowledge and belief based on the information andexplanations obtained by them confirm that:

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed and there were no material departures;

b. they had selected such accounting policies and applied them consistently and madejudgements and estimates that were reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for the year under review;

c. they had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany preventing and detecting fraud and other irregularities;

d. they had prepared the financial statements for the financial year on a ‘goingconcern’ basis; e. they had laid down internal financial controls to be followed bythe Company and such internal financial controls were adequate and were operatingeffectively; and f. they had devised proper systems to ensure compliance with theprovisions of all applicable laws and such systems were adequate and operatingeffectively.

5. Related Party Transactions

All Related Party Transactions (RPT) that were entered into during the financial yearwere on an arm’s length basis and were in the ordinary course of business. TheCompany has not entered into any transaction of material nature with any of the promotersDirectors management or relatives or subsidiaries etc. except for those disclosed inAOC-2 in ‘Annexure G’ of this report. There are no materially significantrelated party transactions entered into by the Company with Related Parties which may havepotential conflict with the interest of the Company at large.

All RPTs are placed before the Audit Committee as also before the Board for approval.Prior omnibus approval of the Audit Committee is obtained for the transactions which areentered into in the ordinary course of business and are repetitive in nature. Thetransactions entered into pursuant to the omnibus approval so granted are reviewed by theAudit Committee on a quarterly basis. The Company has put in place a proper system foridentification and monitoring of such transactions. Save as disclosed in this report noneof the Directors or Key Managerial Personnel has any pecuniary relationships ortransactions with the Company. The policy on Related Party Transactions as approved by theBoard is uploaded on the Company’s website and is available at the web- link:http://ranegroup.com/rml_investors/ policy-on-related-party-transactions/.

None of the Directors or Key Managerial Personnel or Senior Management Personnel hasany material financial and commercial transactions (except payment receipt of theirremuneration as applicable) which may have potential conflict with interest of theCompany at large.

6. Corporate Social Responsibility (CSR)

The Rane Group’s vision on Corporate Social Responsibility (CSR) is: "To besocially and environmentally responsible corporate citizen". The CSR activities ofRane 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 andactivities to the Board in line with the CSR policy. The CSR Committee monitors andreviews the implementation of CSR activities periodically. The CSR activities undertakenby the Company are in line with the CSR Policy and recommendations of the CSR Committeecomprising Mr. L Lakshman Committee Chairman Mr. L Ganesh Chairman of the Board and Ms.Anita Ramachandran Independent Director as its members. During the year the Company hascontributed a sum of Rs.0.99 crores on various CSR activities as per the CSR policy andrecommendations of the CSR Committee. The ‘Annexure C’ to this report containsthe annual report on CSR activities of the Company for FY 2020-21.

The CSR policy of the Company amended in line with Companies (Corporate SocialResponsibility Policy) Amendment Rules 2021 is posted on the Company’s website andis available at the web-link:http://ranegroup.com/rmlinvestors/corporate-social-responsibility-policy/.

7. Energy conservation technology absorption and foreign exchange earnings and outgo

The ‘Annexure D’ to this report contains the information on conservation ofenergy technology absorption and foreign exchange earnings and outgo as required underSection 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 governanceand effective compliance with the regulatory norms under the SEBI regulations and otherlaws and regulations applicable to the Company. The Corporate Governance report and thecertificate issued by the Statutory Auditors are available in ‘Annexure E’ tothis report.

9. Business Responsibility Report

The Business Responsibility Report as applicable to the Company in terms of Regulation34(2) of SEBI LODR for the FY 2020-21 is as provided in ‘A nnexure F’ to thisreport. The Company practices various business responsibility initiatives as per theBusiness Responsibility framework of the Rane Group.

This framework is developed and steered at Rane group under the able leadership andguidance of Mr. L Ganesh Chairman who is also responsible for the implementationof the Business Responsibility initiatives.

10. Particulars of Directors Key Managerial Personnel and Employees

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofDirectors KMP and employees of the Company are provided as Annexure to this report.

11. Risk Management

The Company has laid down well-structured procedures for monitoring the risk managementplan and implementing risk mitigation measures and it has been elaborately discussed underthe Management Discussion and Analysis Report which forms part of the annual report. Inaccordance with amended SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 effective from May 05 2021 the Company falls in the top 1000 companiesbased on market capitalization as on March 31 2021. Accordingly the Board hasconstituted a Risk Management Committee effective from June 01 2021 and has alsoframed a Risk Management Committee Charter. The details of composition of the Committeeare provided in ‘Annexure E’ to this report.

12. Other disclosures

a. The details of loan guarantees and investments under the provisions of Section 186of 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 ManagementDiscussion and Analysis annexed to the Annual Report.

c. There was no significant / material order passed by the Regulators / Courts whichwould 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 theCorporate Governance section of the Investor page on the website of the Company atwww.ranegroup.com.

e. The copy of the Annual Return is available on the website of the Company atwww.ranegroup.com.

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

g. The Company does not accept any deposits falling under the provisions of Section 73of the Companies Act 2013 and the rules framed thereunder.

h. The Company has established a formal vigil mechanism named ‘Rane Whistle BlowerPolicy’ for reporting improper or unethical practices or actions which are violativeof the code of conduct of the Company.

i. The Company has always provided a congenial atmosphere for work that is free fromdiscrimination and harassment and has provided equal opportunities of employment to allirrespective of their caste religion colour marital status and sex. The Companybelieves that women should be able to do their work in a safe and respectful environmentthat encourages maximum productivity. The Company has a zero tolerance towards sexualharassment. The Company has adopted a policy on prevention of sexual harassment of womenat work place and put in place proper dissemination mechanism across the Company. TheCompany has carried out awareness programmes / sessions on the mechanism established underthis policy across its various locations. The Company has complied with the provisionsrelating to the constitution of Internal Complaints Committee (ICC) under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 (POSH)comprising of Presiding Officers and members with an appropriate mix of employees andexternal subject matter experts. During the period the details of complaints received /resolved or pending are as under: No. of complaints received during the FY – Nil No.of complaints disposed during the FY – Nil No. of complaints pending as of end of theFY – Nil

j. The Company has not printed physical copies of the Annual Report for distribution inview of the exemptions available vide General circular 02/2021 dated January 13 2021issued by the Ministry of Corporate Affairs ("MCA") and read with circular no.SEBI/HO/CFD/CMD2/ CIR/P/2021/11 dated January 15 2021 issued by the Securities ExchangeBoard of India ("SEBI"). The full Annual Report will be made available on thewebsite of the Company and will also be disseminated to the stock exchanges where sharesof the Company are listed. The electronic copies of the annual report and the noticeconvening the 17th AGM would be sent to all the members whose e-mail addresseswere registered with the Company or their respective Depository Participants (DP).

k. Annual General Meeting

In view of the Covid-19 pandemic and in the interest of all stakeholders the 17thAGM would be conducted through video conferencing or other audio visual means on July 202021 at 15:00 hrs (IST) as per the framework notified by the Ministry of CorporateAffairs. The notice convening the 17th AGM contains detailed instructions andnotes in this regard.

Acknowledgement

We thank our Customers Investors Suppliers Vendors Bankers Government RegulatoryAuthorities and other Business Associates for their continued support in successfulperformance of the Company. We place on record our appreciation for the committed servicesof all our employees.

For and on behalf of the Board

Harish Lakshman Ganesh Lakshminarayan

Vice-Chairman Chairman
DIN: 00012602 DIN: 00012583

Chennai

May 21 2021

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