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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of Rane Brake Lining Ltd.

Mar 31, 2024

Rights, preferences and restrictions attached to equity shares

The Company has one class of equity share having a par value of ''10 per share. Each holder of equity share is entitled to one vote per share. The dividend when proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General meeting, In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. Repayment of capital on liquidation will be in proportion to the number of equity shares held.

17.5. Information regarding issue of shares in the last five years

The Board of Directors at its meeting held on October 15, 2020, approved a proposal to buy-back upto 266,667 number of equity shares of the Company for an aggregate amount not exceeding INR 22 Crores, being less than 10% of total paid up equity share capital and free reserves as on March 31,2020 at '' 825/- per equity share. The buy back was from the open market through the stock exchanges. The Company bought back 185,109 number of equity shares out of the shares that were tendered by eligible shareholders and extinguished during the immediately preceeding five years. The Company has not issued any shares without payment being received in cash / any bonus shares during the immediately preceeding five years.

17.6. Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital and equity reserves attributable to the equity holders of the Company. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and its capital requirements. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder

value. There are no externally imposed capital requirements. In order to maintain / achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

Note 18 : Other Equitya. General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss except to the extent permitted as per Companies Act, 2013 and rules made thereunder.

b. Capital redemption reserve

The Companies Act, 2013 requires that where a Company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such transfer shall be disclosed in the balance sheet. The capital redemption reserve account may be applied by the Company, in paying up unissued shares of the Company to be issued to shareholders of the Company as fully paid bonus shares. The Company established this reserve pursuant to buy-back of equity shares in FY 2020-21 and FY 2021-22.

c. Retained earnings

Retained earnings represents profits generated and retained by the Company post distribution of dividends to the equity shareholders in the respective years. The balance in retained earnings can be utilized for distribution of dividend by the Company considering the requirements of the Companies Act, 2013.

In respect of the year ended March 31,2024, the directors proposed a dividend of INR 30 per share be paid to all holders of fully paid equity shares. This equity dividend is subject to approval by shareholders at the ensuing Annual General Meeting and has not been included as a liability in these financial statements. The total estimated equity dividend to be paid is INR 23.19.

d. Remeasurement of defined benefit obligations

Remeasurement of defined benefit obligations comprises of actuarial gain or losses and return on plan assets (excluding interest income).

21.1. Dues to micro enterprises and small enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated August 28, 2008, which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after fling of the Memorandum in accordance with the Micro, Small and Medium Enterprise Development Act, 2006 (''the MSMED Act''). In view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet dates.

31.3. Other statutory information

a. The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

b. The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

c. The Company does not have any transactions with struck off companies under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 during the year.

d. The Company has not advanced or loaned or invested funds to any persons or entities, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

1) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

2) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

e. The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

f. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

g. The Company does not have any borrowings from banks or financial institutions. The Company has not been declared as a wilful defaulter by any bank or financial institution or other lenders.

h. The Company does not have any subsidiaries. Hence, compliance with the number of layers prescribed under clause 87 of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017, is not applicable.

i. The Company has not entered into any scheme of arrangement as per sections 230 to 237 of the Companies Act, 2013. Also refer note 35.

j. The Company does not have any charges or satisfaction which is yet to be registered with Registar of Companies beyond the statutory period.

k. Quarterly returns or statements of current assets filed by the Company for the sanction of working capital loans with banks or financial institutions are in agreement with the books of accounts.

In addition to the above, the Company from time to time is also engaged in proceedings pending with various authorities in the ordinary course of business. Judgement is required in assessing the range of possible outcomes for some of these matters, which could change substantially over time as each of the matters progresses depending on experience on actual assessment proceedings by the respective authorities and other judicial precedents. Based on its internal assessment supported by external legal counsel views, as considered necessary, the Company believes that it will be able to sustain its positions if challenged by the authorities and accordingly no additional provision / disclosures are required for these matters.

Management is of the view that above matters will not have any material adverse effect on the Company''s financial position and results of operations.

The Board of Directors of the Company in their meeting held on February 09, 2024, considered and approved the proposed scheme of amalgamation ("schemeâ) of the Company and Rane Engine Valve Limited with and into Rane (Madras) Limited, with effect from April 01, 2024 (''the appointed date'') under sections 230 to 232 of the Companies Act, 2013, and other applicable sections and provisions of the Companies Act, 2013 read together with the rules made thereunder.

The aforesaid scheme is subject to the approval of shareholders and creditors of the respective companies, Stock Exchanges, National Company Law Tribunal and such other approvals as may be required.

Exceptional item represents the amount of INR 1.22 during the year ended March 31,2024, relating to proposed scheme of amalgamation.

Note 37 : Employee Benefit Plans

A. Defined contribution plans

The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognised in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior months contributions that were not due to be paid until after the end of the reporting period.

(a) Provident fund

I n accordance with the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees salary.

The contributions, as specified under the law, are made to the Government.

(b) Superannuation fund

The Company has a superannuation plan for the benefit of its employees. Employees who are members of the superannuation plan are entitled to benefits depending on the years of service and salary drawn.

The Company contributes up to 15% of the eligible employees'' salary to Life Insurance Corporation of India (''LIC'') every year. Such contributions are recognised as an expense as and when incurred. The Company does not have any further obligation beyond this contribution.

The total expense recognised in profit or loss of INR 4.59 (for the year ended March 31, 2023 : INR 3.85) represents contributions payable to these plans by the company at rates specified in the rules of the plans. As at March 31,2024, contributions of INR 0.78 (as at March 31,2023 : INR 0.65) had not been paid. The amounts were paid subsequent to the end of the respective reporting periods.

B. Defined benefit plans

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees upon resignation, retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to Life Insurance

The current service cost and the net interest expense for the year are included in the ''Employee benefits expense'' line item in the statement of profit and loss.

The remeasurement of the net defined benefit liability is included in other comprehensive income.

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase. The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

Defined benefit liability and employer contributions

The Company expects to contribute an amount of INR 2.19 towards defined benefit plan obligations funds for year ending March 31,2025 in view of deficit in plan assets as at March 31,2024. The weighted average duration of the defined benefit obligation is 8.6 years (March 31,2023 - 9.4 years). The expected maturity analysis of undiscounted gratuity is as follows:

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. All operating segments'' operating results are reviewed regularly by the Company''s Board of Directors who are considered to be Chief Operating Decision Maker (''CODM'') to make decisions about resources to be allocated to the segments and assess their performance.

The Company is engaged in manufacture of brake linings, discpads, clutch facings, clutch buttons, brake shoes and railway brake blocks for transportation industry and CODM reviews the operating results as a whole for the purpose of making decision about resources to be allocated and assess its performance. The entire business operations are classified as a single business segment, namely components for transportation industry.

Entity wide disclosures:

The Company''s revenues are attributed to the Company''s country of domicile and other countries from where the Company derives revenues. Revenues have been disclosed based on the geographical location of customers. The Company has only one geographical location based on location of assets and hence information relating to carrying amount of segment assets and cost to acquire property, plant and equipment and other intangible assets based on location of assets have not been disclosed.

Note 1: The Company has not disclosed fair values of financial instruments such as investments in equity instruments, trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets, trade payables and other financial liabilities, since their carrying amounts are a reasonable approximation of their fair values.

Note 2: Fair value of investment in mutual fund is determined based on Net Assets Value published by respective funds (Level 2 - Fair value hierarchy).

Note 3: Fair value of derivative instruments (forward contracts) is determined using quoted forward exchange rates at the reporting date and present value calculations based on high credit quality yield curves in the respective currencies.

There has been no transfers between level 1, level 2 and level 3 for the year ended March 31,2024 and March 31,2023.

Fair value measurement hierarchy

The company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

a) Credit risk (see (ii) below);

b) Liquidity risk (see (iii) below); and

c) Market risk (see (iv) below).

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the risk management committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

ii. Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily from trade receivables, investments and other financial assets.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of the Company''s trade receivables and other financial assets. The Company enters into long term contracts with its customers whereby it mitigates the risk exposure on high risk customers. Outstanding customer receivables are regularly monitored and reviewed by the Audit committee periodically.

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate. The Company''s trade receivables consists of a large number of customers, across geographies, hence the Company is not exposed to concentration risk.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. The Company has adopted a practical measure of computing the expected credit loss allowance for trade receivable which comprise large number of small balances, based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information including consideration for increased likelihood of credit risk. Further, the Company also makes an allowance for doubtful debts on a case to case basis.

(b) Investments

Investments include investments in power generation companies and mutual funds. The company maintains its investment in mutual funds with reputed banks. The credit risk on these instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

The Company holds cash and cash equivalents and bank balances other than cash and cash equivalents with credit worthy banks and financial institutions as at the reporting dates. The credit risk on these instruments is limited because the counterparties are banks and financial institutions with high credit ratings assigned by international credit rating agencies.

(d) Other financial assets

Other financial assets comprises of deposits with statutory authorities, interest receivables, long term deposits, advances recoverable in cash and security deposits. The credit risk on these instruments is limited because the counterparties are predominantly Government.

iii. Liquidity risks

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

iv. Market risks

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity, and other market changes. The Company''s exposure to market risk is primarily on account of foreign currency risk.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily towards import payments and receipt of trade receivables.

Interest rate risk

The Company has only fixed rate financial assets (refer note 15). There are no variable rate instruments held by the Company. Offsetting financial assets and financial liabilities

The Company does not have any financial instruments that offset or are subject to enforceable master netting arrangements and other similar agreements.

Note 42 : Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors on May 03, 2024. Material accounting policies 2

See accompanying notes forming part of the financial statements 2 - 42

Mar 31, 2023

Rights, preferences and restrictions attached to equity shares
The Company has one class of equity share having a par value of ''10 per share. Each holder of equity share is entitled to one vote per share. The dividend when proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General meeting, In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. Repayment of capital on liquidation will be in proportion to the number of equity shares held.

17.5. Information regarding issue of shares in the last five years
The Board of Directors at its meeting held on October 15, 2020, approved a proposal to buy-back upto 266,667 number of equity shares of the Company for an aggregate amount not exceeding INR 22 Crores, being less than 10% of total paid up equity share capital and free reserves as on March 31,2020 at ''825/- per equity share. The buy back was from the open market through the stock exchanges. The Company bought back 185,109 number of equity shares out of the shares that were tendered by eligible shareholders and extinguished during the immediately preceeding five years. The Company has not issued any shares without payment being received in cash / any bonus shares during the immediately preceeding five years.

17.6. Capital management
For the purpose of the Company''s capital management, capital includes issued equity capital and equity reserves attributable to the equity holders of the Company. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and its capital requirements. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. There are no externally imposed capital requirements. In order to maintain / achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

Note 18 : Other Equitya. General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss except to the extent permitted as per Companies Act 2013 and rules made thereunder.

b. Capital redemption reserve

The Companies Act 2013 requires that where a Company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such transfer shall be disclosed in the balance sheet. The capital redemption reserve account may be applied by the Company, in paying up unissued shares of the Company to be issued to shareholders of the Company as fully paid bonus shares. The Company established this reserve pursuant to buy-back of equity shares in FY 2020-21 and FY 2021-22.

c. Retained earnings

In respect of the year ended March 31,2023, the directors proposed a dividend of INR 25 per share be paid to all holders of fully paid equity shares. This equity dividend is subject to approval by shareholders at the ensuing Annual General Meeting and has not been included as a liability in these financial statements. The total estimated equity dividend to be paid is INR 19.32.

d. Remeasurement of defined benefit obligations

Remeasurement of defined benefit obligations comprises of actuarial gain or losses and return on plan assets (excluding interest income).

21.1. Dues to micro enterprises and small enterprises :
The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated August 28, 2008, which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after fling of the Memorandum in accordance with the Micro, Small and Medium Enterprise Development Act, 2006 (''the MSMED Act''). In view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet dates.

31.3. Other statutory information
a. The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

c. The Company does not have any transactions with struck off companies under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 during the year.

d. The Company has not advanced or loaned or invested funds to any persons or entities including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

1) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

2) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

f. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

g. The Company does not have any borrowings from banks or financial institutions. The Company has not been declared as a wilful defaulter by any bank or financial institution or other lenders.

i. The Company has not entered into any scheme of arrangement as per sections 230 to 237 of the Companies Act, 2013.

j. The Company does not have any charges or satisfaction which is yet to be registered with Registar of Companies beyond the statutory period.

k. Quarterly returns or statements of current assets filed by the Company for the sanction of working capital loans with banks or financial institutions are in agreement with the books of accounts.

Management is of the view that above matters will not have any material adverse effect on the Company''s financial position and results of operations.

Note 37 : Employee Benefit Plans
A. Defined contribution plans

(a) Provident fund
I n accordance with the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees salary.

The contributions, as specified under the law, are made to the Government.

(b) Superannuation fund

The Company contributes up to 15% of the eligible employees'' salary to LIC every year. Such contributions are recognised as an expense as and when incurred. The Company does not have any further obligation beyond this contribution.

The total expense recognised in profit or loss of INR 3.85 (for the year ended March 31, 2022 : INR 3.70) represents contributions payable to these plans by the Company at rates specified in the rules of the plans. As at March 31, 2023, contributions of INR 0.65 (as at March 31,2022 : INR 0.59) had not been paid. The amounts were paid subsequent to the end of the respective reporting periods.

B. Defined benefit plans

The defined benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk and salary risk.

Investment risk The present value of the defined benefit plan liability is calculated using a discount rate determined

by reference to government/high quality bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially

offset by an increase in the return on the plan''s debt investments

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future

salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

The current service cost and the net interest expense for the year are included in the ''Employee benefits expense'' line item in the statement of profit and loss.

The remeasurement of the net defined benefit liability is included in other comprehensive income.

(i) The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

(ii) The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

(iii) The entire plan assets are managed by Life Insurance Corporation of India (LIC).

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

NOTE 38 SEGMENT REPORTING
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. All operating segments'' operating results are reviewed regularly by the Company''s Board of Directors who are considered to be Chief Operating Decision Maker (''CODM'') to make decisions about resources to be allocated to the segments and assess their performance.

Entity wide disclosures:

Note 2: Fair value of investment in mutual fund is determined based on Net Assets Value published by respective funds (Level 2 - Fair value hierarchy).

There has been no transfers between level 1, level 2 and level 3 for the year ended March 31,2023 and March 31,2022.

Fair value measurement hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

a) Credit risk (see (ii) below);

b) Liquidity risk (see (iii) below); and

c) Market risk (see (iv) below).

i. Risk management framework

ii. Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily from trade receivables, investments and other financial assets.

(b) Investments
Investments include investments in power generation companies and mutual funds. The company maintains its investment in mutual funds with reputed banks. The credit risk on these instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

(d) Other financial assets
Other financial assets comprises of deposits with statutory authorities, interest receivables, long term deposits, advances recoverable in cash and security deposits. The credit risk on these instruments is limited because the counterparties are predominantly Government.

iii. Liquidity risks

iv. Market risks
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity, and other market changes. The Company''s exposure to market risk is primarily on account of foreign currency risk.

Interest rate risk
The Company has only fixed rate financial assets (refer note 15). There are no variable rate instruments held by the Company. Offsetting financial assets and financial liabilities

The Company does not have any financial instruments that offset or are subject to enforceable master netting arrangements and other similar agreements.

Note 42 : Approval of Financial Statements
The financial statements were approved for issue by the Board of Directors on May 03, 2023.

Mar 31, 2019

1. General Information

Rane Brake Lining Limited (The âCompanyâ) is engaged in manufacture of brake linings, disc pads, clutch facings, clutch buttons, brake shoes and railway brake blocks and as such operates in a single reportable business segment of âAuto components for transportation industryâ. The Company is having four manufacturing facilities at Chennai, Hyderabad, Puducherry and Trichy. The Company is a Public Limited Company and listed on Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai.

2. Critical accounting judgements, assumptions and key sources of estimation uncertainty

The following are the critical judgements, assumptions concerning the future, and key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

2.1. Useful lives of property, plant and equipment

As described at Note 2.3 above, the charge in respect of periodic depreciation for the year is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Companyâs assets are determined by the management at the time the asset is acquired and reviewed annually. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

2.2. Employee Benefits

The cost of defined benefit plans are determined using actuarial valuation, which involves making assumptions about discount rates, expected rates of return on assets, future salary increases, and mortality rates. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.

2.3. Taxation

Significant assumptions and judgements are involved in determining the provision for tax based on tax enactments, relevant judicial pronouncements and tax expert opinions, including an estimation of the likely outcome of any open tax assessments / litigations. Deferred income tax assets are recognized to the extent that it is probable that future taxable income will be available, based on estimates thereof.

2.4 Provisions and contingencies

Critical judgements are involved in measurement of provisions and contingencies and estimation of the likelihood of occurrence thereof based on factors such as expert opinion, past experience etc.

3. Recent accounting pronouncements Standards issued but not yet effective

3.1. Amendments to Ind AS 12 - Income Taxes

Appendix C to Ind AS 12, Uncertainty over Income Tax Treatments: On March 30, 2019, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2019 containing Appendix C to Ind AS 12, Uncertainty over Income Tax Treatments which clarifies the application and measurement requirements in Ind AS 12 when there is uncertainty over income tax treatments. The current and deferred tax asset or liability shall be recognized and measured by applying the requirements in Ind AS 12 based on the taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates determined by applying this appendix. The amendment is effective for annual periods beginning on or after April 1, 2019.

On March 30, 2019, the Ministry of Corporate Affairs has notified limited amendments to Ind AS 12 - Income Taxes. The amendments require an entity to recognise the income tax consequences of dividends as defined in Ind AS 109 when it recognises a liability to pay a dividend. The income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity shall recognize the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events. The amendment will come into force for accounting periods beginning on or after April 1, 2019.

3.2 Amendment to Ind AS 19 - Employee Benefits

On March 30, 2019, the Ministry of Corporate Affairs has notified limited amendments to Ind AS 19 -Employee Benefits in connection with accounting for plan amendments, curtailments and settlements. The amendments require an entity to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement and to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognised because of the impact of the asset ceiling. The amendment will come into force for accounting periods beginning on or after April 1, 2019, though early application is permitted.

3.3 New Accounting Standard : Ind AS 116 - Leases

On March 30, 2019, the Ministry of Corporate Affairs notified the Companies (Indian Accounting Standards) Amendment Rules, 2019 containing Ind AS 116 - Leases and related amendments to other Ind ASs. Ind AS 116 replaces Ind AS 17 - Leases and related interpretation and guidance. The standard sets out principles for recognition, measurement, presentation and disclosure of leases for both parties to a contract i.e., the lessee and the lessor. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the statement of profit and loss. The Standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements as per Ind AS 17. Ind AS 116 is effective for annual periods beginning on or after April 1, 2019.

The Company is currently evaluating the effect of the above on its standalone financial statements.

4.1 Rights, preferences and restrictions attached to shares

The Company has one class of equity share having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in general reserve will not be reclassified subsequently to profit or loss.

The terms of repayment of term loans are given below:

Working capital facilities from banks are secured on paripassu basis by way of hypothecation of all inventories, book debts and other current assets of the Company.

Note 5 (i): The deferred revenue arises as a result of the benefit received from EPCG on account of purchase of capital goods. The revenue was offset against the depreciation costs incurred in 2018-19 Rs.0.24 Cr (2017-2018 Rs.0.23 Cr)

6.1 Revenue from major products and services

The following is the Companyâs revenue from the continuing operations from its major products and services.

6.2 Consequent to introduction of Goods and Services Tax (GST) w.e.f July 2017, revenue for the year ended March 31, 2018 is presented net of GST in compliance with Indian Accounting Standard (Ind AS) 115 - âRevenue from contracts with customersâ.

The tax rate used for the FY 2018-19 reconciliations above is the corporate tax rate of 34.944% (FY 2017-18: 34.608%) payable by corporate entities in India on taxable profits under the Indian tax law.

Note 7. Segment Reporting

The Company is engaged in the activities related to manufacture and supply of auto components for transportation industry and the Chief Operating Decision Maker (Board of Directors) review the operating results as a whole for purposes of making decisions about resources to be allocated and assess its performance, the entire operations are to be classified as a single business segment, namely components for transportation industry. The geographical segments considered for disclosure are - India and Rest of the World. All the manufacturing facilities are located in India:

7.1 Information about major customers

Revenue from sale of Products to largest customers (greater than 10% of total sales) is Rs.218.30 Crores (March 31, 2018, Rs.172.07 Crores)

NOTE 8 Employee Benefit Plans

A. Defined contribution plans

The major defined contribution plans operated by the Company are as below:

(a) Provident fund and pension

I n accordance with the Employeeâs Provident Fund and Miscellaneous Provisions Act, 1952, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employeesâ salary.

The contributions, as specified under the law, are made to Employee Provident Fund Organisation.

(b) Superannuation fund

The Company has a superannuation plan for the benefit of its employees. Employees who are members of the defined benefit superannuation plan are entitled to benefits depending on the years of service and salary drawn.

The Company contributes up to 15% of the eligible employeesâ salary to Superannuation Fund administered by Life Insurance Corporation of India (LIC). Such contributions are recognised as an expense as and when incurred. The Company does not have any further obligation beyond this contribution.

The total expense recognised in profit or loss of Rs.3.32 Crores (for the year ended March 31,2018: Rs.3.21 Crores) represents contributions payable to these plans by the company at rates specified in the rules of the plans. As at March 31, 2019, contributions of Rs.0.54 Crores (as at March 31, 2018: Rs.0.33 Crores) due in respect to 2018-19 (2017-18) reporting period had not been paid over to the plans. The amounts were paid subsequent to the end of the respective reporting periods.

B. Defined benefit plans

The defined benefit plans operated by the Company are as below:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to gratuity funds administered by Life Insurance Corporation of India (LIC). The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

The defined benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

C. Details of defined benefit obligation and plan assets:

Leave obligations

The leave obligations cover the Companyâs liability for earned leave.

The amount of provision of Rs.1.82 (March 31, 2018 - Rs.1.52) is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations. However based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months.

The key assumptions used for the calculation of provision for long term compensated absences are as under:

(v) Risk Exposure

The Company has invested the plan assets with the insurer managed funds. The insurance company has invested the plan assets in Government Securities, Debt Funds, Equity shares, Mutual Funds, Money Market Instruments and Time Deposits. The expected rate of return on plan asset is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligation.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The expected rate of return on plan assets is based on the composition of plan assets held (through LIC), historical results of the return on plan assets, the companyâs policy for plan asset management and other relevant factors.

Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

Defined benefit liability and employer contributions

The weighted average duration of the defined benefit obligation is 12.1 years (2018 - 12.3 years). The expected maturity analysis of undiscounted gratuity is as follows:

NOTE 9 FINANCIAL INSTRUMENTS

9.1 Capital management

For the purpose of the Companyâs capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. As at 31st March, 2019, the Company has only one class of equity shares and has low debt. There are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

The Company carries equity investment as described in Note-4 to the financial statements. The fair value of the same is based on price of prior transactions. The said investment has subsequently been transferred at its carrying value during the financial year 2018-19. Accordingly, disclosure of the sensitivity of fair value measurement in unobservable inputs is considered not relevant. Other than the effect of disposal as stated above, there are no other changes in the fair value of such investments.

In the opinion of the management, the carrying amounts of financial assets and financial liabilities recognised in the financial statements are, a resonable approximation of their fair values. Hence no separate disclosures of fair value has been made.

9.2 Financial risk management

The Company is exposed to Market risk, Credit risk and Liquidity risk. The Board of Directors (âBoardâ) oversee the management of these financial risks through its Risk Management Committee. The Company monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks.

The following disclosures summarize the Companyâs exposure to financial risks and information regarding use of derivatives employed to manage exposures to such risks. Quantitative sensitivity analysis have been provided to reflect the impact of reasonably possible changes in market rates on the financial results, cash flows and financial position of the Company.

9.2.1 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market conditions. Market risk mainly comprises of interest rate risk, currency risk . Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables and derivative financial instruments. The Companyâs activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest rates and other price risk.

There has been no change to the Companyâs exposure to market risks or the manner in which these risks are being managed and measured.

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has insignificant interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal.

(b) Foreign Currency risk

The company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising derivative contracts. The risk management objective of the company is to hedge risk of change in the foreign currency exchange rates associated with itâs direct & indirect transactions denominated in foreign currency. Since most of the transactions of the company are denominated in its functional currency (INR), any foreign exchange fluctuation affects the profitability of the Company and its financial position. Hedging provides stability to the financial performance by estimating the amount of future cash flows and reducing volatility. The Company does not enter into a foreign exchange transaction for speculative purposes i.e. without any actual / anticipated underlying exposures.

The carrying amounts of the companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows -

Foreign Currency sensitivity analysis

The below table demonstrates the sensitivity to a 5% increase or decrease in the relevant foreign currency against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents managementâs assessment of reasonable possible change in foreign exchange rate.

In managementâs opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Forward foreign exchange contracts

I t is the policy of the Company to enter into forward exchange contracts to cover specific foreign currency risk in accordance with the Board approved policy. The following table details the forward foreign currency (FC) contracts outstanding at the end of the reporting period:

The line-items in the balancesheet that include the above hedging instruments are âother financial assetsâ and âother financial liabilitiesâ.

9.2.2 Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The companyâs exposure of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management.

Trade receivables consist of a large number of customers, ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee insurance cover is purchased. Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.

The Companyâs trade and other receivables consists of a large number of customers, across geographies, hence the Company is not exposed to concentration risk.

9.2.3 Liquidity risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the companyâs short-term, medium-term and long-term funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the companyâs remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

10. Related Party Disclosures

(a) Names of related parties and nature of relationship:

(i) Holding Company Rane Holdings Limited (RHL)

(ii) Associate Nisshinbo Holdings Inc. Japan Other related parties where transactions have taken place during the year

(iii) Fellow Subsidiaries Rane Madras Limited (RML)

Rane Engine Valve Limited (REVL)

Rane Holding America Inc (RHAI)

Rane Holding Europe GmbH (RHEG)

Rane Precision Deicasting Inc., USA (RPDC)

(iv) Key Management Personnel (KMP) Mr. L Ganesh, Chairman

Mr. Vinay Lakshman, Managing Director

(v) Relatives of KMP Mr. L Lakshman

Mr. Harish Lakshman

(vi) Subsidiaries, Associate or Joint venture of other entities in Group Rane TRW Steering Systems Private Limited (RTSS)

JMA Rane Marketing Limited (Upto 13.11.2018)

Nisshinbo Automotive Manufacturing Inc; USA

Nisshinbo Brake Inc; Japan

Nisshintoa Iwao Inc; Japan

Saeron Automotive Corporation; Korea

Shijiazhuang TMD Friction Ltd.Co.; China

TMD Friction GmbH, Germany

TMD Friction Esco GmbH, Germany

(vii) Entities significantly influenced by Key Management Rane Foundation (RF)

Personnel

(viii) Post employment benefit plan of the entity Rane Brake Lining Limited Employees Gratuity Fund

Rane Brake Lining Limited Senior Executives Pension Fund

(b) The above information regarding related parties have been determined to the extent such parties have been identified on the basis of information available with the Company.

Note 11 Dues to micro and small enterprises

Dues to Micro Small & Medium Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the company. This has been relied upon by the auditors. According to the records available with the Company certain amount have been identified as dues to suppliers registerd under Micro, Small and Medium Enterprises Development Act, 2006 (âMSMED Actâ). The disclosure pursuant to the said MSMED Act are as follows:

Note 12. Approval of financial statements

The financial statements were approved for issued by the Board of Directors on May 22, 2019

The figures for the previous year have been regrouped wherever necessary to conform to current yearâs classification. Figures have also been rounded off to Crores of rupees.

Mar 31, 2018

NOTE 1: Financial Instruments

32.1 Capital management

For the purpose of the Companyâs capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. As at 31 March, 2018, the Company has only one class of equity shares and has low debt. There are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

The Company carries equity investment in TCW energy Private Limited as on the date of transition. The fair value of the same is based on price of prior transactions. The said investment has subsequently been transferred at its carrying value during the financial year 2017-18. Accordingly, disclosure of the sensitivity of fair value measurement in unobservable inputs is considered not relevant. Other than the effect of disposal as stated above, there are no other changes in the fair value of such investments.

In the opinion of the management, the carrying amounts of financial assets and financial liabilities recognized in the financial statements are a reasonable approximation of their fair values. Hence no separate disclosures of fair value has been made.

32.3 Financial Risk Management

The company is exposed to Market risk, Credit risk and Liquidity risk. The Board of Directors (âBoardâ) oversee the management of these financial risks through its Risk Management Committee. The company monitors and manages the financial risks relating to the operations of the company through internal risk reports which analyses exposures by degree and magnitude of risks.

The following disclosures summarize the companyâs exposure to financial risks and information regarding use of derivatives employed to manage exposures to such risks. Quantitative sensitivity analysis have been provided to reflect the impact of reasonably possible changes in market rates on the financial results, cash flows and financial position of the company.

2 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market conditions. Market risk mainly comprises of interest rate risk, currency risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables and derivative financial instruments. The company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest rates and other price risk.

There has been no change to the company''s exposure to market risks or the manner in which these risks are being managed and measured.

(a) Interest Rate Risk

(b) Foreign Currency Risk

The company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilizing derivative contracts. The risk management objective of the company is to hedge risk of change in the foreign currency exchange rates associated with its direct & indirect transactions denominated in foreign currency. Since most of the transactions of the company are denominated in its functional currency (INR), any foreign exchange fluctuation affects the profitability of the company and its financial position. Hedging provides stability to the financial performance by estimating the amount of future cash flows and reducing volatility.

The Company does not enter into a foreign exchange transaction for speculative purposes i.e. without any actual / anticipated underlying exposures.

3 Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the company. The company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The company''s exposure of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management.

Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by the international credit rating agencies.

The companyâs trade and other receivables consists of a large number of customers, across geographies, hence the company is not exposed to concentration risk.

4 Liquidity Risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company''s short-term, medium-term and long-term funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay.

Note 33 : Related Party Disclosures

(a) Names of Related Parties and nature of relationship :

List of related parties where control exists

(i) Holding company Rane Holdings Limited (RHL)

(ii) Associate Nisshinbo Holdings Inc., Japan Other related parties where transactions have taken place during the year

^{(iii) Fellow Subsidiaries} Rane Madras Limited (RML)

Rane Engine Valve Limited (REVL)

Rane Holding America Inc (RHAI)

Rane Holding Europe GmbH (RHEG)

(iv) Key Management Personnel Mr. L Ganesh, Chairman

Mr. Vinay Lakshman, Managing Director

(v) Relative of Key Management Personnel Mr. L Lakshman, Director

Mr. Harish Lakshman, Director Mr. Aditya Ganesh L Ganesh (HUF)

^{(vi) Subsidiaries}, ^{Associate or joint venture of} Rane NSK Steering Systems Private Limited (RNSSPL) other entities in Group

Rane TRW Steering Systems Private Limited (RTSSPL)

JMA Rane Marketing Limited

Nisshinbo Brake Inc., Japan

Nisshinbo Somboon Automotive Co.Ltd., Thailand

Nisshintoa Iwao Inc., Japan

Saeron Automotive Inc., Korea

Shijiazhuang TMD Friction Ltd.Co.; China

TMD Friction GmbH, Germany

(vii) Entities significantly influenced by Key

Rane Foundation (RF)

Management Personnel

(viii) Post employment benefit plan of the Entity Rane Brake Lining Limited Employees Gratuity Fund (RBLLEGF)

Rane Brake Lining Limited Senior Executives Pension Fund (RBLLSEPF)

(b) The above information regarding related parties have been determined to the extent such parties have been identified on the basis of information available with the Company.

Note 5 : First-time Ind AS adoption reconciliations

The company has prepared the opening balance sheet as per Ind AS as of 01 April 2016 (the transition date) by recognizing, derecognising, re-classifying and re-measuring all assets and liabilities in accordance with the requirements of Ind AS. However, this principle is subject to certain mandatory exceptions and optional exemptions availed by the company as detailed below:

6 Deemed cost for property, plant and equipment and intangible assets

The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets as of 01 April, 2016 (transition date) measured as per the previous GAAP as its deemed cost as of the transition date.

7 Impairment of financial assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the

(a) Under the previous GAAP, Export promotion capital goods (EPCG) benefit received was netted off with the value of related property, plant & equipment (PPE). Under Ind AS, the value of PPE has been grossed up and the EPCG benefit is treated as grant and recognized by way of setting up as deferred income.

As a result of this change, carrying value of property, plant and equipment as on 31st March, 2017 is higher by Rs, 0.71 crores and depreciation for the year 2016-17 is higher by Rs, 0.00 crores (figure is below the rounding off norm adopted by the company). Further, grant income recognized in the Statement of Profit and Loss during the year 2016-17 is Rs, 0.02 crores and deferred government grant as at the end of the year is Rs, 0.69 crores.

The above transition has resulted in an increase in equity by Rs, 0.02 crores as at 31 March, 2017.

(b) Reclassification of Loans and Advances and other current / non-current assets/liabilities presented under previous GAAP to Financial assets, Financial liabilities and current tax asset / Liability (Net) as per Ind AS requirements.

(c) Under previous GAAP, provision for bad and doubtful debts was recognized as per the internal policy of the Company based on ageing of Trade Receivables. Under Ind AS, the impairment loss allowance on account of Trade receivables is created based on a provision matrix computed under the Expected credit loss method.

As a result of the above change, net carrying value of Trade Receivables as at the transition date and March 31, 2017 is lower by Rs, 0.48 crores and Rs, 0.38 crores respectively with corresponding decrease in the opening balance of retained earnings (as at the transition date) by Rs, 0.31 crores (net of deferred tax impact of Rs, 0.17 crores) and increase in the profit for the year 2016-17 by Rs, 0.07 crores (net of deferred tax impact of Rs, 0.03 crores).

The above transition has also resulted in an increase in equity by Rs, 0.31 crores as at the transition date and by Rs, 0.24 crores as at 31 March, 2017.

(d) Reclassification of other bank balances as required under Ind AS

(e) Under previous GAAP, liabilities were recorded at their transaction value. Under Ind AS, financial liabilities are initially measured at fair value and subsequently measured at amortized cost. As a result of the above, carrying value of certain financial liabilities as on the transition date is lower by Rs, 0.09 crores with corresponding increase in the opening balance of retained earnings as on the said date. Further, profit for the year 2016-17 is lower by Rs, 0.02 crores on account of recognition of finance cost on such liabilities.

The above transition has also resulted in an increase in equity by Rs, 0.09 crores as at transition date and by Rs, 0.07 crores as at 31 March, 2017.

(f) Under Previous GAAP, foreign currency loans in respect of which the rupee equivalent (including interest) has been firmly fixed by way of derivative contracts were not being reinstated since there is no impact in the Statement of Profit & Loss arising out of exchange fluctuations during the loan tenure. Under Ind AS, such loans are measured at exchange rate as on the reporting date. The Marked to Market position on the corresponding derivate are also recognized as an asset/liability on the reporting date.

As a result of this change, borrowings is higher by Rs, 1.61 crores and other financial assets (on account of recognition of Asset on MTM position as above) is higher by Rs, 1.64 crores as at the transition date. The net difference of Rs, 0.03 crores has been reflected in the opening balance of retained earnings (as at the transition date)

(g) Under previous GAAP, minimum alternate tax entitlements were classified under other non-current assets. Under Ind AS, the same is classified as unused tax credits under deferred tax. The movement in MAT Credit entitlement also forms part of deferred tax expense in the Statement of Profit and loss.

(h) Under previous GAAP, cash discounts and rebates passed on to customers were recorded in other expenses under the head selling expenses. Under Ind AS, these are reflected as adjustments to revenue for sale of products. Under previous GAAP, excise duty on sale of goods was adjusted in revenue from sale of products whereas under Ind AS, it is considered as a production cost and hence, disclosed separately as an expense in the statement of profit and loss. As a result of the above changes, revenue from sale of products has increased by Rs, 45.29 crores with corresponding increase in excise duty by Rs, 66.66 crores and decrease in other expenses by Rs, 21.37 crores in the Statement of Profit and Loss for the year ended March 31, 2017.

(i) Under Previous GAAP, actuarial gains / losses arising out of measurement of defined benefit obligation were recognized as employee benefits expense in the statement of profit and loss. Under Ind AS, such re-measurement of gains / losses are recognized in OCI. Consequently, the tax effect of the same has also been recognized in OCI. The above change has resulted in increase in employee benefits expense and loss in OCI by Rs, 0.28 crores for year ended March 31, 2017; net tax effect thereon is Rs, 0.10 crores.

(j) There are no changes to the cash flows from operating, financing and investing activities as reported in the cash flow statement for the year ended March 31, 2017 drawn up under the previous GAAP on account of transition to Ind AS ,other than arising due to reclassification of the previous year figures to confirm to the current year''s layout.

8. The figures for the previous year have been regrouped wherever necessary to conform to current yearâs classification. Figures have also been rounded off to crores of rupees.

Mar 31, 2017

1. Rights, preferences and restrictions attached to Shares

Equity Shares : The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

2. The Board of Directors, in the meeting held on May 17, 2017, have recommended a final dividend of Rs.9 Per Share amounting to Rs.7.12 Crores on Equity Shares of Rs.10/- each for the year 2016-17, subject to the approval of the Shareholders. Dividend Distribution Tax on the same amounts to Rs.1.45 Crores. This final dividend on shares will be recorded as a liability on the date of approval by the Shareholders.

(a) Working Capital Loans, Buyers credit and PCFC, from 6 (March 31, 2016 - 6) banks, are secured on pari passu basis by way of hypothecation of all inventories, book debts and other current assets of the Company. Amount outstanding is Rs.40,000 which is below the rounding off norms adopted by the company

(b) Short term loan from banks are secured on a pari passu basis by way of hypothecation of inventories, book debts and other current assets of the Company..

(a) Net of provision for taxes Rs.91.05 Crs (March 31, 2016 : Rs.81.25 Crs)

(b) Includes rent deposit paid to a director - Rs.0.12 Crs (March 31, 2016 : Rs.0.12 Crs)

(a) Represents deposit held by Electricity Department - for Puducherry Plant towards Security Deposit

(b) Amount is Rs..Nil (March 31 2016 : Rs.21,627) below the rounding off norm adopted by the Company

(a) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings. Future cash outflows in respect of the above are determinable only on receipt of the judgements / decisions pending with various forums / authorities..

(b) The Company does not expect any reimbursements from third parties in respect of the above contingent liabilities.

(a) Defined Contribution Plans

During the year the following amounts have been recognized in the Profit and Loss Statement on account of defined contribution plans:

(b) Defined benefit Plans (Funded)

Gratuity : Every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.

The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotions and other relevant factors, such as demand and supply in the employment market

The above disclosures are based on information furnished by the independent actuary and relied upon by the auditors.

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensation.

(a) Excise Duty on Sale of products has been deducted from sales revenue and Excise Duty shown under Other Expense represents the difference between Excise Duty on opening and closing stock of finished goods.

3. The company has incurred an amount of Rs.0.51 Crs (March 31, 2016 : Rs. 0.35 Crs) towards corporate social responsibility activities, during the current year ended March 31, 2017.

(a) Exceptional item represents the amount paid to 107 employees who have opted for early retirement in terms of a Voluntary Retirement Scheme introduced by the Company during the year

4. Dues to micro and small enterprises

Dues to Micro Small & Medium Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Company. This has been relied upon by the auditors. According to the records available with the Company certain amount have been identified as dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED Act''). The disclosure pursuant to the said MSMED Act are as follows:

5. Segment Reporting

The Company is engaged in the business of manufacture of "Components for Transportation Industryâ which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

6. Derivative Instrument and hedge accounting

As per Accounting Standard AS 30 "Financial Instruments : Recognition and Measurementâ, adopted with effect from 1st April 2014 the Company has provided for the effective portion amounting to Rs. Nil of the changes in the fair values of forward contracts designated as cash flow hedges directly in âHedge Reserve Account'' being part of the shareholders'' funds the changes in fair value relating to the ineffective portion amounting to Rs. Nil of the cash flow hedges and forward contracts are recognized in the Profit and Loss Statement,

7. The figures for the previous year have been regrouped wherever necessary to conform to current yearâs classification. Figures have also been rounded off to Crores of rupees.

Mar 31, 2016

1. Segment Reporting

The Company is engaged in the business of manufacture of "Components for Transportation Industry" which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

2. Pursuant to the provisions of Section 197 of Companies Act 2013, Mr. Vinay Lakshman was appointed as Managing Director by the Board with effect from October 1, 2015 for a period of three years. The terms and conditions of his appointment and remuneration payable are being proposed for approval of the shareholders at the ensuing annual general meeting.

3. Derivative Instrument and hedge accounting

As per Accounting Standard AS 30 "Financial Instruments: Recognition and Measurement''; adopted with effect from 1st April 2014 the Company has provided for the effective portion amounting to Rs. Nil of the changes in the fair values of forward contracts designated as cash flow hedges directly in ''Hedge Reserve Account'' being part of the shareholders'' funds the changes in fair value relating to the ineffective portion amounting to Rs. Nil of the cash flow hedges and forward contracts are recognised in the Profit and Loss Statement.

4. The figures for the previous year have been regrouped wherever necessary to conform to current year''s classification. Figures have also been rounded off to Crores of rupees.

Mar 31, 2014

1. General Information

Rane Brake Lining Limited (The "Company") is engaged in manufacture of brake linings, disc pads, clutch facings, clutch buttons, brake shoes and railway brake blocks and as such operates in a single reportable business segment of ''components for transportation industry''. The Company is having four manufacturing facilities at Chennai, Hyderabad, Puducherry and Trichy. The Company is a Public Limited Company and listed on The Madras Stock Exchange Limited, Chennai, Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai.

(Rupees in Crores)

As at As at 31 March 2014 31 March 2013

2 Contingent Liabilities

Claims against the company not acknowledged as debt

Income Tax matters 6.41 4.01

Sales Tax matters 1.79 1.31

Excise Duty matters 0.74 1.73

Service Tax matters 1.87 1.70

10.81 8.75

(a) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings. Future cash outflows in respect of the above are determinable only on receipt of the judgements / decisions pending with various forums / authorities.

(b) The Company does not expect any reimbursements from third parties in respect of the above contingent liabilities.

(c) Compensated Absences (Vesting and Non-vesting unfunded)

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

The Company accounts its liability for long term compensated absences based on actuarial valuation, as at the balance sheet date, determined every year by an independent actuary using the Projected Unit Credit method. Actuarial gains and losses are recognised in the profit and loss account in the year in which they occur.

3 Segment Reporting

The Company is engaged in the business of manufacture of "components for Transportation Industry" which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

4 The figures for the previous year have been regrouped wherever necessary to conform to current year''s classification. Figures have also been rounded off to Crores of rupees.

Mar 31, 2013

1. General Information

Rane Brake Lining Limited (The "Company") is engaged in manufacture of brake linings, disc pads, clutch facings, clutch buttons, brake shoes and railway brake blocks and as such operates in a single reportable business segment of ''components for transportation industry''. The Company is having four manufacturing facilities at Chennai, Hyderabad, Puducherry and Trichy. The Company is a Public Limited Company and listed on The Madras Stock Exchange Limited, Chennai, Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai.

2.1.a In respect of foreign currency loans availed, the Company has entered into derivative contracts to hedge the loans including interest. This has the effect of freezing the rupee equivalent of these liabilities as reflected under the Borrowings. Thus there is no impact in the Profit & Loss Statement, arising out of exchange fluctuations for the duration of the loans. Consequently, there is no restatement of the loan taken in foreign currency. The interest payable in Indian Rupees on the borrowings are accounted for in the Profit & Loss Statement.

(Rupees in Crores)

As at As at 31 March 2013 31 March 2012

3 Contingent Liabilities

Claims against the company not acknowledged as debt

Income Tax matters 4.01 5.43

Sales Tax matters 1.31 0.85

Excise Duty matters 1.73 1.69

Service Tax matters 1.70 1.56

Labour Cases 0.01

8.75 9.54

4 Segment Reporting

The Company is engaged in the business of manufacture of "components for Transportation Industry" which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

5 The figures for the previous year have been regrouped wherever necessary to conform to current year''s classification. Figures have also been rounded off to Crores of rupees.

Mar 31, 2012

1. Fully hedged foreign currency transactions

Year end balance of foreign currency External Commercial Borrowings (ECBs) and Buyers Credit facility amounting to Rs. 51.20 Crores are fully hedged through related swap contracts and are accounted as INR loan. The Company has been consistent in treating the ECBs and the associated swap contracts as composite transaction.

Consequently, there are no foreign currency translation requirements as evidenced by repayment made to date.

The Company has applied the principle of substance over form as set out in paragraph 17(b) of Accounting Standard 1 notified in the Companies (Accounting Standards) Rules, 2006 to reflect a true and fair view of the performance and financial position of the Company.

(Rupees in Crores)

As at As at

31 March 2012 31 March 2011

Claims against the company not acknowledged as debt

Income Tax matters 5.43 5.45

Sales Tax matters 0.85 0.76

Excise Duty matters 1.69 1.24 Service Tax matters 1.56 1.28

Labour Cases 0.01 0.01

9.54 8.74

(a) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements from third parties in respect of the above contingent liabilities.

(a) Defined benefit Plans

Gratuity : Every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.

(b) Compensated Absence

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

The Company accounts its liability for long term compensated absences based on actuarial valuation, as at the balance sheet date, determined every year by an independent actuary using the Projected Unit Credit method. Actuarial gains and losses are recognised in the profit and loss account in the year in which they occur.

2 Segment Reporting

The Company is engaged in the business of manufacture of "components for Transportation Industry" which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

3 Previous Year Figures

The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

Mar 31, 2011

1. Contingent Liabilities

Claims against the Company not acknowledged as debts 87,448 70,519

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The expected rate of return on plan assets is based on the composition of plan assets held (through Life Insurance Corporation of India), historical results of the return on plan assets, the Companys policy for plan asset management and other relevant factors.

2. Segment Reporting

The Company is engaged in the business of manufacture of "components for Transportation Industry" which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

3. Related Party Disclosures

(a) List of Related Parties

(i) Holding Company Rane Holdings Limited (RHL) (ii) Fellow subsidiaries Rane (Madras) Limited (RML) Rane Diecast Limited (RDL) Rane Engine Valve Limited (REVL) (iii) Significant influence Nisshinbo Holdings Inc., (iv) Key Management Personnel Mr P S Rao, Manager (till May 31, 2009) under the Companies Act, 1956 Mr.L Lakshman Manager (with effect from June 1, 2009) under the Companies Act, 1956 without remuneration Mr. L Ganesh, Chairman (v) Relatives of Key Management Personnel Mrs. Pushpa Lakshman, Mr. Harish Lakshman, (L.Lakshman and L.Ganesh) Mrs. Hema C Kumar, Mrs.Vanaja Aghoram, Mrs. Shanthi Narayan, Mr. Vinay Lakshman, Ms. Meenakshi Ganesh, Mr. Aditya Ganesh and Ms. Aparna Ganesh (vi) Enterprise over which Key Rane TRW Steering Systems Limited (RTSSL) Management Personnel Kar Mobiles Limited (KML) exercise significant Rane Foundation (RF) influence

(b) The above information regarding related parties have been determined to the extent such parties have been identified on the basis of information available with the Company.

4. Previous years figures have been regrouped wherever necessary.

Mar 31, 2010

1. Change in Accounting Estimates

Based on the reassessment of the provisioning norms for debtors and inventory, all debts in excess of 180 days have been provided as doubtful debts as against 270 days in the previous year. In respect of raw materials and finished goods inventory ageing more than one year (18 months in case of imported raw materials) and semi-finished goods inventory ageing more than three months have been provided as non-moving inventory as against two years for raw materials, one year for finished goods inventory and one year for semi-finished goods inventory in the previous year. As a result of this change, the provision for doubtful debts and non-moving inventory has increased by Rs. 1,959 thousands and Rs.3,074 thousands respectively and the profit for the year ended March 31, 2010 has decreased by Rs.5,033 thousands.

2. Secured Loans

2.1 Term loans other than short term loan are secured on a pari passu basis by way of hypothecation of all the movable fixed assets of the Company.

2.2 Short term loan from a bank is secured on a pari passu basis by a first charge by way of hypothecation of inventories, book debts and all the movable fixed assets of the Company.

2.3 Cash credit and packing credit facilities are secured on a pari passu basis by a first charge created by way of hypothecation of inventories and book debts.

3. Unsecured Loans

Government of Andhra Pradesh, Commissionerate of Industries had issued to the company Eligibility Certificate No.20/2/8/1551 dated 27th January 1999 for deferral of sales tax beyond the base sales turnover of Rs.21 crores for a period of 14 years i.e. from 01.07.1998 to 30.06.2012 which would be treated as interest free loan subject to execution of agreement and other documents with the Commercial Taxes Department as per terms and conditions stipulated by the Department.

Andhra Pradesh Commercial Taxes Department. However, pending creation of a charge / mortgage on all immovable properties situated at Pregnapur Village, Hyderabad, the sales tax deferred for the period from 1st January 1999 to 31st March 2010 aggregating Rs. 48,086 thousands (Rs. 43,451 thousands) has been classified under Unsecured Loans.

4. Cash and Bank Balances

Current Accounts include Interest Warrant Account Rs.559 thousands (Rs. 206 thousands) and Unpaid Dividend Account Rs. 1,207 thousands (Rs. 1,365 thousands)

5. Current Liabilities

Disclosure relating to Micro and Small enterprises

Particulars 31 March 2010 31 March 2009 Rs. 000 Rs. 000 Total amount outstanding 20,598 664 Total amount outstanding beyond the appointed date Nil Nil Amount of Interest accrued and due as on March 31 on the balance outstanding beyond the appointed date Nil Nil Total amount paid during the year beyond the appointed date 106,012 7,645 Amount of interest accrued and due as on March 31 on amount paid during the year beyond the appointed date 432 122

The above information and that given in Schedule L Ã LiabilitiesÃ regarding Micro and Small enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company.

6. Deferred Tax

The net deferred tax liability is on account of

7. Segment Reporting

The company is engaged in the business of manufacture of Ãcomponents for Transportation IndustryÃ which is considered to be the only reportable business segment as per the Accounting Standard 17. As the exports are predominantly to developed countries, geographical risk is not different from domestic market and hence no separate secondary segment disclosure is required.

8. Previous years figures have been regrouped wherever necessary.

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