Rane Engine Valve Ltd. 38th Annual Report 2010
1
Rane Engine Valve Limited
DirectorsL GANESHChairman & Managing DirectorL LAKSHMANC PRABHAKAR (upto March 23, 2010)R JAGANNATHHARISH LAKSHMANASHOK MALHOTRAC N SRIVATSANR V RAGHAVAN
Audit Committee
C N SRIVATSAN
R JAGANNATH
L LAKSHMAN
Investors’ Service Committee
L LAKSHMANChairman
L GANESHASHOK MALHOTRA
President
G RAMKUMAR
General Manager - Finance & Secretary
K SANKARANARAYANAN
Statutory Auditors
BRAHMAYYA & CO.Chartered Accountants,48, Masilamani Road,Balaji Nagar, Royapettah,Chennai - 600 014.
Listing of Shares withThe Madras Stock Exchange Limited, ChennaiBombay Stock Exchange Limited, MumbaiNational Stock Exchange of India Limited, Mumbai
Our Bankers
Bank of Baroda, Chennai
The Hongkong and Shanghai Banking Corporation Ltd.,Chennai
IDBI Bank Ltd., Chennai
HDFC Bank Ltd., ChennaiStandard Chartered Bank, ChennaiSouth Indian Bank, Chennai
Registered Office
“MAITHRI”, 132, Cathedral Road,Chennai - 600 086.Phone : (044) 28112472Fax : (044) 28112449E-Mail : [email protected]
Head Office“ANMOL PALANI”Level 5, 88, G.N. Chetty RoadP.B. No. 4964,T. Nagar, Chennai 600 017.
Plants
1. ‘Glendale’, 5, Noble Street, Post Box No. 1305,Alandur, Chennai - 600 016, Tamilnadu.
2. Plot Nos. 68 to 77, Industrial Estate,Medchal - 501 401, R.R. District, Andhra Pradesh.
3. Post Box No. 4, Redhills Road, Madhavaram,Ponneri - 601 204, Tamilnadu.
4. Survey No. 177/20, Hyderbad-Vikarabad Road,Aziz Nagar - 500 075, R.R. District,Andhra Pradesh.
5. Survey Nos. 109, 111 & 121, Seniapatti,Kasavanur Village, Viralimalai Union - 621 316Pudukottai District, Tamilnadu.
Registrar and Transfer Agents
Integrated Enterprises (India) LimitedII Floor, “Kences Towers”, No 1 Ramakrishna Street,North Usman Road, T.Nagar, Chennai 600 017.Phone: (044) 28140801, Fax: (044) 28142479Email: [email protected]
CONTENTS PAGE
Notice to Shareholders 2
Report of the Directors 6
Auditors’ Report 18
Balance Sheet 22
Profit & Loss Account 23
Schedules to Balance Sheet 24
Schedules to Profit & Loss Account 28
Accounting Policies & Notes 32
Cash Flow Statement 43
Highlights 44
2
Rane Engine Valve Limited
NOTICE TO SHAREHOLDERS
of the Articles of Association of the company andbeing eligible offers himself for re-election.
To consider adoption of the following resolution, withor without modification, as an ordinary resolution:
"Resolved that Mr. Ashok Malhotra, who retires byrotation and being eligible for re-appointment, be andis hereby reappointed as a Director of the Company."
4. To appoint auditors of the Company and todetermine their remuneration. The retiring auditorsMessrs Brahmayya & Co., Chartered Accountants,are eligible for re-appointment. The declarationunder Section 224(1B) of the Companies Act, 1956has been received.
To consider adoption of the following resolution, withor without modification, as an ordinary resolution:
"Resolved that Messrs Brahmayya & Co., CharteredAccountants (Registration No. 000511S with theInstitute of Chartered Accountants of India), be andare hereby re-appointed as the auditors of theCompany to hold office from the conclusion of thisAnnual General Meeting until the conclusion of thenext Annual General Meeting of the Company onsuch remuneration as may be determined by theBoard of Directors of the Company, in addition toreimbursement of travelling and other out-of-pocketexpenses actually incurred by them in connectionwith the audit."
SPECIAL BUSINESS:
Appointment of Director
5. To consider adoption of the following resolution, withor without modification, as an ordinary resolution:
"Resolved that Mr. C N Srivatsan, who holds officeas an additional director of the Company up to thedate of this Annual General Meeting, be and ishereby appointed as Director of the Company,whose period of office shall be subject to retirementby rotation".
6. To consider adoption of the following resolution, withor without modification, as an ordinary resolution:
"Resolved that Mr. R V Raghavan, who holds officeas an additional director of the Company up to thedate of this Annual General Meeting, be and is
NOTICE is hereby given that the Thirty Eighth AnnualGeneral Meeting of the Equity Shareholders of theCompany will be held at 10.30 a.m. on Tuesday, the July20, 2010, at The Music Academy (Mini Hall),New No. 168, TTK Road, Royapettah, Chennai 600 014,to transact the following: -
ORDINARY BUSINESS:
1. To receive, consider and adopt the Directors'Report, the audited accounts of the Company forthe year ended March 31, 2010 and the Auditors'report thereon.
To consider adoption of the following resolution, asan ordinary resolution :
"Resolved that the Audited Balance Sheet as atMarch 31, 2010, the Profit and Loss Account forthe year ended March 31, 2010 together with theReports of the Directors and the Auditors of theCompany thereon, as presented to the meeting beand the same are hereby approved and adopted."
2. To declare dividend on equity shares.
To consider adoption of the following resolution, withor without modification, as an ordinary resolution:
"Resolved that the interim dividend of Rs.1.50 perequity share declared by the board of directors ofthe company on January 20, 2010 on 5,150,992equity shares of Rs.10/- each fully paid, absorbinga sum of Rs.9.04 million (including dividenddistribution tax and cess thereon) paid toshareholders in February 2010 for the year endedMarch 31, 2010 be and is hereby approved."
"Resolved further that final dividend of Rs.1.50 perequity share of Rs.10 each on 5,150,992 equityshares be and is hereby declared out of the profits ofthe Company for the year ended March 31, 2010,absorbing an amount of Rs.9.01 million (includingdividend distribution tax and cess thereon) and thatthe dividend be paid to those shareholders, whosenames appears on the Company's Register ofMembers as on July 20, 2010 and in respect ofshares in electronic form to those beneficial ownersof the shares as at the end of business hours on July13, 2010 as per the details furnished by theDepositories for this purpose."
3. To appoint a Director in the place of Mr. AshokMalhotra, who retires by rotation under Article 106
3
Rane Engine Valve Limited
hereby appointed as Director of the Company,whose period of office shall be subject to retirementby rotation."
7. To consider adoption of the following resolution, withor without modification, as a special resolution:
"Resolved that in accordance with the provisions ofSections 198, 269 and 309 read with Schedule XIIIand other applicable provisions, if any, of theCompanies Act, 1956, the approval of theshareholders be and is hereby accorded for revisionin remuneration payable to Mr. L Ganesh, ManagingDirector with effect from 1
st August 2009 on the
following terms and conditions:
(a) Commission as may be decided by the Boardfor every financial year not exceeding five (5)percent of the net profits of the Companycalculated in accordance with the provisions ofSections 349 and 350 of the Companies Act,1956.
(b) No other remuneration viz., salary, perquisites,allowances and contribution to funds would bepayable.
(c) All the other terms and conditions of hisappointment as approved by the shareholdersat the Annual General Meeting held on 23
rd July,
2008 will remain in force."
(By Order of the Board)
For Rane Engine Valve Limited
Chennai K SankaranarayananMay 21, 2010 General Manager (Finance) & Secretary
NOTES:
1. Any member entitled to attend and vote at themeeting may appoint a proxy to attend and voteinstead of himself. The proxy need not be amember of the Company. The proxies shouldhowever be deposited at the registered office
of the Company not less than 48 hours beforethe commencement of the meeting.
2. The Explanatory Statement pursuant to Section173(2) of the Companies Act, 1956 in respect of theSpecial Business as given in the notice is annexed.
3. The Register of Members of the Company will remainclosed from Wednesday, July 14, 2010 to Tuesday,July 20, 2010 (both days inclusive).
4. Pursuant to the provisions of Section 205A of theCompanies Act 1956, dividend for the financial yearended March 31, 2003 and thereafter which remainunclaimed for a period of seven years (including thedividends declared by erstwhile Rane Engine ValvesLtd.) will be transferred to the Investor Education andProtection Fund (IEPF) of the Central Government.
Members are requested to contact the Company'sRegistrars and Transfer Agents, for payment inrespect of the unclaimed dividend for the financialyear 2002-03 and thereafter.
5. Members holding shares in physical form arerequested to notify to the Company immediately ofany change in their residential address to thefollowing address:
M/s. Integrated Enterprises (India) Ltd.II Floor, "Kences Towers", No.1, Ramakrishna Street,North Usman Road, T. Nagar, Chennai 600 017.
Members holding shares in Dematerialized form mayinform the change in address to their DepositoryParticipants.
6. Members who are holding shares in identical orderof names in more than one account are requestedto intimate to the Company, the ledger folio of suchaccounts together with the share certificate(s) toenable the Company to consolidate all the holdingsinto one account. The share certificate(s) will bereturned to the members after necessaryendorsements.
7. Members / Proxies should bring the attendance slipduly filled in for attending the meeting.
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Rane Engine Valve Limited
Resolution Nos. 5 & 6
The Board of Directors of your Company co-optedMr. C N Srivatsan and Mr. R V Raghavan as additionaldirectors during July 2009 and January 2010respectively.
Mr. C N Srivatsan is a Chartered Accountant and isholding Certified Information Systems Auditor (CISA)with over 25 years of diverse experience in handlingIndian and overseas assignments. He was a memberof Information Technology Control Practices Committeeof ISACA. He has addressed innumerable seminarsand is a regular faculty for training corporate heads inInternal Auditing, Risk Assessment and RiskManagement.
Mr. R V Raghavan is a Chartered Accountant and aspecialist in the design and implementation ofManagement Information Systems with over 30 yearsof varied experience at senior levels in reputedcompanies in India and also abroad. He is a fellowmember of Institute of Chartered Accountants of England& Wales and an alumnus of the Harvard BusinessSchool with a wide ranging experience in cross borderjoint ventures, management of human resources andturnaround of operations.
The knowledge and experience of both Mr. C N Srivatsanand Mr. R V Raghavan would be beneficial to theCompany.
The term of additional director, as per Section 260 ofthe Companies Act, 1956 is only up to the succeedingAnnual General Meeting (AGM) and therefore bothMr. C N Srivatsan and Mr. R V Raghavan are seekingappointment at this AGM. Notices in writing underSection 257 of the Companies Act, 1956, along with therequisite deposits have been received from memberssignifying their intention to propose their candidature forthe office of directors of the Company.
Information about directors seeking appointment /re-appointment at the ensuing Annual General Meeting(in accordance with Clause 49 IV of the ListingAgreement) is attached.
Mr. C N Srivatsan and Mr. R V Raghavan are interestedin the resolution to the extent of their appointment. Noneof the other directors is concerned or interested in theresolutions.
Your directors commend the resolutions for adoption.
Resolution No. 7
The shareholders at the Annual General Meeting heldon July 23, 2008 reappointed Mr. L Ganesh as Chairmanand Managing Director with effect from April 1, 2008,for a period of three years, viz., from April 1, 2008 toMarch 31, 2011.
Mr. L Ganesh has been spearheading the business ofRane Group companies after he took over as Chairmanof Rane Group during October 2006. Consequent tothat, he has been committing more time towards thedevelopment, evolving new strategies, identifyinginvestment avenues to enhance the profitability of allthe constituents of Rane Group and hence it wasdecided to remunerate him from Rane Holdings Limited,the holding company.
In view of the above, the Board of Directors at theirmeeting held on July 22, 2009 has restructured theremuneration payable to Mr. L Ganesh, ManagingDirector by way of payment of remuneration only bymeans of commission not exceeding 5% of the net profitsof the Company calculated in accordance with theprovisions of Section 349 and 350 of the Companies Act,1956, as may be decided by the Board for every financialyear, commencing from the financial year 2009-10.No other remuneration such as salary, perquisites andallowances as approved by the shareholders in theAnnual General Meeting held on 23rd July, 2008 wouldbe payable to him with effect from August 1, 2009.The abstracts containing revised terms of remunerationto the Managing Director as required under Section 302of the Companies Act, 1956 was sent to the shareholders.
Mr. L Ganesh is concerned or interested in the resolutionto the extent of remuneration proposed. Mr. L Lakshmanbeing a relative of Mr. L Ganesh may be deemed to beinterested in the resolution. No other director isconcerned or interested in the resolution.
Your directors commend the resolution for adoption.
(By Order of the Board)
For Rane Engine Valve Limited
Chennai K SankaranarayananMay 21, 2010 General Manager (Finance) & Secretary
Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956
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Rane Engine Valve Limited
INFORMATION ABOUT DIRECTORS SEEKING RE-APPOINTMENT/ APPOINTMENT IN THIS ANNUALGENERAL MEETING IN RESPECT OF ITEM NOs. 3, 5 & 6 ABOVE(in accordance with Clause 49 IV of the Listing Agreement)
Item No. 3 Item No. 5 Item No. 6
Name of the Director Mr. Ashok Malhotra Mr. C N Srivatsan Mr.R V Raghavan
Father’s Name Mr. K C Kaifi Mr. C R Natarajan Mr. Gopala Ramabadran
Date of Birth October 9, 1945 May 25, 1957 April 4, 1942
Educational B.A, P.G.Diploma - C.A., C.I.S.A., B.Com, FCA (England &Qualifications Business Administration - Wales), Advanced
IIM Ahmedabad Management Program,Harvard Business School
Experience
Date of Appointment February 6, 2008 July 22, 2009 January 20, 2010
Other Directorships
Committee Member – Investors’ Chairman – Audit Member – AuditMemberships Service 1. Rane Engine Valve 1. Andhra Pradesh Paper
1. Rane Engine Valve Limited Mills Ltd.Limited 2. TRF Ltd.
Member – Audit Member – Remuneration1. Precot Mills Ltd. 1. Andhra Pradesh Paper2. Kar Mobiles Ltd. Mills Ltd.
2. TRF Ltd.
Number of sharesheld Nil Nil Nil
(By Order of the Board)For Rane Engine Valve Limited
Chennai K SankaranarayananMay 21, 2010 General Manager (Finance) & Secretary
He has over 34 years ofexperience in the field ofManagement consultancy.
25 years of diverseexperience in handling Indianand overseas assignments
Possess a wide experience inCross border joint ventures,management of humanresources and the turnaroundof operations
1. Eltrans Solutions PrivateLimited
1. Precot Meridian Ltd.2. Elgi Ruber Company Ltd.3. Astral Consulting Ltd.4. Kar Mobiles Limited5. Astral Autoprint Business
Solutions P. Ltd.6. SKP Astral Consulting
P. Ltd.
1. Andhra Pradesh PaperMills Ltd.
2. Transport Corporation ofIndia Ltd.
3. TRF Ltd.
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Rane Engine Valve Limited
Your Directors have pleasure in presenting their ThirtyEighth annual report together with the accounts for theyear ended March 31, 2010.
1. Financial Performance:
The highlights of the Thirty Eighth financial year underreview are as follows:
(Rs. Million)
2009-10 2008-09Sales and Operating Revenues 2360.31 2202.44Other Income 11.96 8.60Profit before tax 70.01 39.12Provision for tax 27.01 17.02Profit after tax 43.00 22.10Surplus brought forward 50.77 42.93Amount available for appropriation 93.77 65.03
2. Appropriation
Profit available for appropriation is Rs. 93.77 million.Your directors have declared and paid an interimdividend of 15% on the equity capital for the yearended March 31, 2010 and are pleased torecommend a further 15% as final dividend makingfor a total dividend for the year of 30%. The amounton this account inclusive of tax on distributed profitsand surcharge thereon, works out to Rs.18.05 millionleaving the company with retained profits of Rs.75.72million. Out of this, Rs.4.30 million is being transferredto the General Reserve and Rs.71.42 million beingretained as surplus in the Profit and Loss Account.
3. Management Discussion and Analysisa. Industry Structure and Developments:
Growth in %
Segments 2009-10 2008-09Passenger Cars 28 5Utility Vehicles 24 -11Small Commercial Vehicles(One Ton & below) 8 12Light Commercial Vehicles 77 -24Medium and Heavy CommercialVehicles 30 -35Three Wheelers 25 -1Two Wheelers 25 4Farm Tractors 27 -7
Source: Society of Indian Automobile Manufacturers.
The domestic market continues its strong recovery,which started in January 2009. Heavy and Light
REPORT OF THE DIRECTORS
Commercial Vehicle segments recovered strongly inthe second half of the year. The Passenger Carscontinued to do extremely well and had a record year.The Farm Tractors achieved its highest everproduction in the current financial year.
The aftermarket continued to be very robust duringthe year.
For Exports the year was difficult due to the effectsof slowdown in the US and European markets.Besides lower consumption, there were inventorycorrections by customers. There were some signsof improvement from December 2009.
b. Operational and Financial Performance
Sales and Operating Revenue grew by 7.17%compared to 11.09% in the previous year. This waslead by a very strong growth of 15% in OEM and 18%in Aftermarket. However Exports was less than theprevious year by 14%.
The PBT for the year under review was Rs.70.01Million against Rs. 39.12 Million in the previous year.This was achieved not only due to a robust growth insales but also effective cost reduction initiatives anda reasonably stable raw material cost trend.Compared to the previous year the foreign exchangevolatility was also far less which helped theperformance.
c. Outlook
Domestic market is expected to continue its stronggrowth. Passenger Car and Two wheelers areexpected to register significant growth with newproducts launches. Light and Heavy commercialvehicles and tractors are expected to continue itsgrowth momentum although at a lower rate. TheAftermarket demand continues to be strong.
Export market, which has also shown positive signs,is likely to improve further in the current year andyour company is well placed to further grow in thissegment.
Prices of commodities like steel and oil have startedhardening but the general expectation is that theincreases will be moderate. The recent trend ofstrengthening of the Indian currency is causingconcern. The continuance of subsidised exports fromChina and the maintenance of artificial peg on theircurrency could adversely affect Indian exports in themedium term.
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Rane Engine Valve Limited
Your Company will continue to focus on improvingproductivity and quality besides cost reductioninitiatives to sustain the improved performance.
d. Opportunities, Threats and RiskIndia has averted the effects of the global slump andcontinues to grow at a healthy 7-8 %. More and moremultinational companies are now targeting India asthe hub for manufacturing and exporting. Many globalAutomobile manufacturers have set up bases in Indiaand are actively pursuing sourcing from here. Thisprovides good opportunity to componentmanufacturers for accelerated growth.
The main threats are as follows:
- Dumping from China and cheaper imports fromother low cost countries.
- Strengthening of Rupee affecting exports.
- More competition since there are no growthopportunities for multinational companieselsewhere.
e. Internal Control Systems and Risk ManagementYour Company continues to engage the services ofan independent agency to carry out internal audit ofall the Company locations across the country.The Audit Committee of the Board approves the auditplan in the beginning of the financial year inconsultation with the internal auditors, the statutoryauditors and the operating management.The findings of the internal auditors are placed beforethe Audit Committee for review. The response of theoperating management and counter measuresproposed are discussed at the Audit Committeemeetings. The process not only seeks to ensurethe reliability of control systems and compliance withlaws and regulations but also covers resourcesutilization and system efficacy.
Risk Management is an integral part of the businessprocess. The Company has mapped the risks at thebusiness processes and enterprise levels and hasevolved a risk management framework. Mitigativemeasures have been put in place in respect of theserisks. These would be periodically reviewed by theBoard of Directors.
f. Human Resource Development and IndustrialRelations
Your Company attaches significant importance toHuman Resource Development (HRD) andharmonious industrial relations. The management iscontinuously working on the development of humancapital which is very vital for achieving the goals andrealizing the Vision of the Company in an ever-changing and challenging business environment.
"Rane Institute for Employee Development" is agroup resource that imparts training for enhancingleadership and managerial skills. On an averageeach employee across all segments and divisions istrained for 4.68 days.
Total Employee Involvement is a key element of TotalQuality Management (TQM) that enables continuousimprovement to all business processes. TheCompany conducts regular Employee OpinionSurveys, the outcome of which is shared with theemployees, deliberated and acted upon. Specific HRinitiatives are rolled out to enhance employeeengagement. New strategies like multi skilling,competency enhancement programs and enhancingmanagerial depth are being progressivelyimplemented to optimise employee costs andimprove productivity.
As at the end of March 31, 2010, the total number ofemployees stood at 1,377.
g. Cautionary Statement
The information and opinion expressed in this reportmay contain certain forward looking statements,which the management believe are true to the bestof its knowledge at the time of its preparation. Actualresults may differ materially from those eitherexpressed or implied in this report.
4. Deposits
Deposits outstanding as on March 31, 2010amounted to Rs 141.76 million. All deposits thatmatured during the year were repaid / renewed.
5. Board of Directors
Mr. Ashok Malhotra retires by rotation and beingeligible offers himself for re-appointment.
Mr. C N Srivatsan and Mr. R V Raghavan wereco-opted to the Board during the year and would holdoffice till the date of the ensuing Annual GeneralMeeting. Notice has been received from theshareholders signifying their intention topropose the appointment of Mr. C N Srivatsan andMr. R V Raghavan as Directors of the Company, atthe ensuing Annual General Meeting.
During the year, Mr. C Prabhakar resigned as directorfrom the company. The board places on record itsappreciation for the services rendered by him duringhis tenure of office with the Company.
6. Conservation of Energy
The adverse situation on power front in Tamilnaduhas been mitigated by several new initiatives to
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Rane Engine Valve Limited
For and on behalf of the Board
Chennai L. LAKSHMAN L. GANESHMay 21, 2010 Director Chairman & Managing Director
improve energy efficiency. By sustaining high powerfactor, your company has reduced energyconsumption and maximum demand charges.Employee involvement in conserving electricity bothin shop floors and offices by switching off powerwhenever not in use also contributed to reduction inconsumption of power.
7. Research and Development Activities
The details of Disclosure of particulars with respectto Research & Development, technology absorption,adaptation and innovation, as required under theCompanies Act (Disclosure of Particulars in theReport of Board of Directors) Rules, 1988 in Form Bare furnished in Annexure A.
8. Foreign Exchange Earnings and OutgoForeign exchange earned during 2009-10 wasRs. 631.63 million and foreign exchange outgo wasRs. 499.80 million. Your company continued toremain a substantial net foreign exchange earner.
9. EmployeesThe particulars of employees, as per section 217 (2A)of the Companies Act 1956, read with the Companies(Particulars of Employees) Rules 1975, are given inAnnexure B, which forms part of this report.
10. AuditorsM/s Brahmayya & Co., Chartered Accountants,Chennai, the auditors of the company retire at theensuing Annual General Meeting and are eligible forre-appointment. The declaration under Section224(1B) of the Companies Act, 1956 has beenreceived from them.
11. Directors’ Responsibility StatementPursuant to Section 217(2AA) of the Companies Act1956, the directors hereby confirm that they have:
i. Followed the applicable accounting standardsin the preparation of the annual accounts;
ii. Selected such accounting policies and appliedthem consistently and made judgments andestimates that were reasonable and prudent soas to give a true and fair view of the state ofaffairs of the Company at the end of the financialyear and of the profit of the company for the yearunder review;
iii. Taken proper and sufficient care for themaintenance of adequate accounting records inaccordance with the provisions of theCompanies Act 1956, for safeguarding theassets of the company and detecting fraud andother irregularities;
iv. Prepared the accounts for the financial year ona 'going concern' basis.
12. Corporate Social Responsibility (CSR)
The following CSR activities were carried out by theCompany during the year under review:
• Provision of traffic signal at road intersection nearthe factory
• Helmet awareness campaign on road safety alongwith traffic police
• Donation of furniture to nearby school
• Free medical camp and donation of medicines
• Distribution of water to devotees during templefestival
• Provision of streetlights to nearby village.
• Contribution of funds towards establishment ofPolytechnic College by Rane Foundation.
13. Corporate Governance Report
A detailed report on Corporate Governance isattached in Annexure C.
9
Rane Engine Valve Limited
Disclosure of particulars with respect to Research & Development, technology absorption, adaptation and innovation,as required under the Companies Act (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and
forming part of the Report of the Board of Directors for the year ended March 31, 2010.
Research and Development (R & D) Activities
1. Specific areas in which R& D is carried by Company
Co-design of valves
2. Benefits derived as a result of R&D and future plan of action:
Future business prospects
3. Expenditure on R&D (Rs. ’000s)
2009-10 2008-09
A Capex 125 697
B Recurring 2,992 8,895
C Total 3,117 9,582
D Total R & D expenses as a percentage of total turnover 0.13% 0.44%
Technology Absorption, Adaptation and Innovation :
1. Efforts, in brief
The company has a strong technology base. Absorption of enhancements and continuous improvementsare ongoing processes.
2. Benefits derived as a result of the above efforts:
The Company has developed certain special purpose machines in-house to improve productivity and qualityof the product.
These steps have enabled the company to enhance the competitiveness and thereby continue its growth inthe global OEM business.
3. (a) Technology Imported (Technologyimported during the last 5 years
: NILreckoned from the beginning of thefinancial year).
(b) Year of Import : Not Applicable
(c) Has technology been fully absorbed : Not Applicable
(d) Areas where technology not fullyabsorbed, reason and future plan : Not Applicableof action
Annexure - A to Report of the Directors
FORM B
For and on behalf of the Board
Chennai L. LAKSHMAN L. GANESHMay 21, 2010 Director Chairman & Managing Director
10
Rane Engine Valve Limited
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11
Rane Engine Valve Limited
1. Philosophy on Code of GovernanceThe cornerstone of the philosophy of Governanceadopted by the Board has at all times been based onintegrity, transparency and fairness in all its dealings.The company will continue to seek enhancement toshareholder value within the framework of businessethics, regulatory compliances and contribution tosociety. The Rane Group has a clearly defined policydocument titled "Ethical Standards of Behaviour"outlining the value system of the company and definesobligations of each of its employees to the company.
2. Board of DirectorsThe composition of the Board is given below:Promoter Group:Mr. L GaneshMr. L LakshmanMr. Harish LakshmanIndependent and Non-executive Directors:Mr. Ashok MalhotraMr. R JagannathMr. C Prabhakar1
Mr. C N Srivatsan2
Mr. R V Raghavan3
Mr. L Lakshman is related Mr. L Ganesh andMr. Harish Lakshman.
3. Details of Attendance at Board meetings and lastAGM and details of memberships in otherBoards and Board committeesThe Board met five times during the financial yearon May 19, 2009, July 22, 2009, October 23, 2009,January 20, 2010 and March 23, 2010.
Annexure – C to Report of the Directors
CORPORATE GOVERNANCE
No. of board Whether Membership Committee @
Name of the Director meetings attended in otherattended last AGM Boards # Membership Chairmanship
Mr. L Lakshman 5 Yes 10 10 5Mr. L Ganesh 5 Yes 10 10 2Mr. Harish Lakshman 4 Yes 7 4 2Mr. C. Prabhakar1 3 Yes - 2 -Mr. R Jagannath 4 No 1 1 -Mr. Ashok Malhotra 4 Yes - - -Mr. C N Srivatsan2 4 NA 4 3 1Mr. R V Raghavan3 2 NA 3 2 -# Excludes companies exempted under Section 278 of the Companies Act, 1956 and foreign companies.@ Membership in Audit Committee and Investors' Service/Grievance Committee only is considered.1 Ceased to be a director with effect from March 23, 20102 Co-opted as additional director at the Board meeting held on July 22, 20093 Co-opted as additional director at the Board meeting held on January 20, 2010
The information as required under Annexure IA toClause 49 of the listing agreement such as annualoperating plans and budgets, quarterly results for thecompany, minutes of meetings of audit committee andother committees of the board, quarterly details offoreign exchange exposures, risk management andmitigation measures, etc. are placed before the Boardof Directors.
The Institute of Company Secretaries of India (ICSI)has published Standards on secretarial practicesrelating to meetings of the Board/Committees, GeneralMeetings, Dividends, etc. These are recommendatoryin nature. The Secretarial and the operating practicesof the Company are in line with the above SecretarialStandards.
4. Audit Committee
The scope of reference to the committee, inter alia,includes:
1. Review of scope of audit and discuss post-auditarea of concern, if any, withStatutory Auditorsand Internal Auditors.
2. Recommending the appointment of statutoryauditor and fixation of audit fee.
3. Review of quarterly / annual financial statementswith statutory auditors and management beforesubmission to the Board.
4. Review of internal control systems with theManagement, Statutory Auditors and InternalAuditors.
5. Reviewing the adequacy of internal auditfunction.
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Rane Engine Valve Limited
6. Review of financial and risk managementpolicies of the Company.
7. Reviewing defaults, if any, in payments todepositors, shareholders and creditors.
8. Reviewing the statement of significant relatedparty transactions submitted by themanagement.
9. Reviewing the management letters/ letters ofinternal control weaknesses issued by thestatutory auditors, if any.
10. Management discussion and analysis offinancial condition and results of operation.
The composition of audit committee is as follows:Mr. C N Srivatsan- Chairman - Independent Director(from July 22, 2009).Mr. L Lakshman - Member - Non-executive Director.Mr. R Jagannath - Member- Independent Director.Mr. C Prabhakar - Member - Independent Director.(up to March 23, 2010)All the members of the Audit Committee arefinancially literate and possess accounting and otherrelated financial management expertise.Mr. K Sankaranarayanan, Secretary of the companyis the Secretary to the Committee.The committee met four times during the year on May19, 2009, July 22, 2009, October 23, 2009 andJanuary 20, 2010.
Mr. L Lakshman 4Mr. C Prabhakar1 3Mr. R Jagannath 3
Mr. C N Srivatsan2 31 Ceased to be a director w.e.f March 23, 2010.2 Co-opted as additional director at the Board meeting held
on July 22, 2009
The statutory auditors and the internal auditors werepresent as invitees in all the meetings. The Presidentand Head of Finance of the Company attended themeeting by invitation.
The Audit Committee reviews all mandatoryinformation under clause 49 of the listing agreement.
5. Remuneration to DirectorsThe Board has restructured the remuneration payableto Mr. L Ganesh, Managing Director (MD) with onlycommission not exceeding 5% of the net profits of theCompany as may be decided by the Board for everyfinancial year. The remuneration such as salary,perquisites and allowances as approved by the
shareholders in the Annual General Meeting held on23rd July, 2008 has been rescinded with effect fromAugust 1, 2009. The abstracts containing revised termsof remuneration to the MD as required under Section302 of the Companies Act, 1956 was sent to theshareholders. No sitting fee is paid to MD. The detailsof remuneration paid to MD for the year 2009-10 aregiven in Note 16.1 - Notes on Accounts. Theemployment of the MD is contractual. There is noseverance fee payable to him. The Company does nothave any stock option scheme.
Sitting fees of Rs.20,000 per meeting was paid tothe non-executive directors for each Meeting of theBoard & Audit Committee and Rs.2,500 for attendingmeeting of other committees of the Board, apart fromreimbursement of actual travel and out-of-pocketexpenses incurred by them for attending themeetings. Since, Mr. L Lakshman, non-executivedirector, draws commission as part of hisremuneration from the holding company, viz., RaneHoldings Limited, he does not receive sitting feesfor attending the meetings of the board or othercommittees of the board. No other remuneration ispaid to the Non-Executive Directors.
The details of sitting fees paid to the directors are asfollows:
Name of the Director Amount (Rs.)
Mr. C Prabhakar1 127,500
Mr. R Jagannath 140,000
Mr. Ashok Malhotra 80,000
Mr. Harish Lakshman 87,500
Mr. C N Srivatsan 140,000
Mr. R V Raghavan 40,0001 Ceased to be a director with effect from March 23, 2010.
Number of shares held by Non-executive directors:
Name of the Director No. of Shares
Mr. L Lakshman 50
Mr. Harish Lakshman 50
Mr. C Prabhakar1 19,634
1 Ceased to be a director with effect from March 23, 2010.
Mr. L Ganesh Chairman and Managing Directorholds 50 shares in the Company.
None of the other directors hold any share in theCompany.
6. Code of Conduct
The Board of Directors has laid down a code ofconduct for all board members and senior
No. of MeetingsAttended
Name of the Director
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Rane Engine Valve Limited
management of the Company. The same has alsobeen posted on the website of the Company, URL:http://www.rane.co.in/pdf/coc.pdf. The boardmembers and senior management personnel haveaffirmed their compliance with the code of conductfor the year under review.
Declaration from the Chief Executive Officer to thiseffect forms part of this report.
The board of directors has also laid down a code ofconduct for prevention of Insider Trading. Thedesignated persons have affirmed compliance withthe code.
7. Investors’ Service CommitteeAn Investors' Service Committee was constituted to lookinto all types of grievances from shareholders andredress them expeditiously in a fit and proper manner.The composition of the committee is as follows:
Mr. L Lakshman - Chairman
Mr. L Ganesh
Mr. Ashok Malhotra (with effect from March 23, 2010)
Mr. C Prabhakar (upto March 23, 2010)
Mr. K Sankaranarayanan, General Manager(Finance) & Secretary is the Compliance Officer ofthe Company.
The Committee met three times during the year onMay 19, 2009, July 22, 2009 and October 23, 2009.
Name of the DirectorNo. of Meetings
Attended
Mr. L Ganesh 3
Mr. L Lakshman 3
Mr. C Prabhakar1 3
Mr. Ashok Malhotra Not applicable1 Ceased to be a director with effect from March 23, 2010.
During the year, the Company received 19 complaintsfrom the investors and all of them were resolved tothe satisfaction of the shareholders. The complaintspertain to non-receipt of dividend, share certificate andannual report. During the year, no complaint wasreceived from Stock Exchanges/ SEBI / Ministry ofCorporate Affairs.
Date of AGM Special resolutions passed Time VenueJuly 22, 2009 No Special resolution was passed 10.30 a.m. The Music Academy, (Mini Hall),
37th AGM New No. 168, T.T.K Road,Royapettah, Chennai 600 014.
July 23, 2008 Reappointment of Mr. L Ganesh 10.15 a.m. Narada Gana Sabha,36th AGM as Managing Director (Main Hall), 314, T.T.K Road,
Chennai 600 018.September 1. Amendment to the Object Clause of24, 2007 the Memorandum of Association 10.00 a.m. "Maithri", 132, Cathedral Road,35th AGM 2. Amendment to the Articles of Association
Chennai 600 086.
9. DisclosuresDuring the year, the Company had not entered into anytransaction of material nature with any of the promoters,directors, management or relatives etc., which were inconflict with the interest of the Company. The details ofthe related party transactions as stated in Note 20 - Noteson Accounts, have been reviewed by the Audit Committee.There was no instance of non compliance by theCompany on any matters relating to the capital markets;nor was there any penalty / strictures imposed by thestock exchanges or SEBI or any other statutory authorityduring the last three years.The Company has complied with all the mandatoryrequirements prescribed under revised Clause 49 of theListing Agreement. The Company has obtained andplaced before the Board certificate from the CEO and
CFO on matters stated in Clause 49 (V) of the listingagreement.The Company has complied with the following non-mandatory requirements:-i. adopting best practices to ensure a regime of
unqualified financial statements.ii. individual communication of half-yearly results to
shareholders.No remuneration committee meeting was required to beheld during the year. The other non-mandatoryrequirements such as Whistle Blower Policy and trainingof Board members have not been adopted. The Companyis evaluating the impact on the implementation of theVoluntary Guidelines on Corporate Governance issuedby the Ministry of Corporate Affairs during the year 2009for adoption in due course.
There were no resolutions that were required to be passed by means of postal ballot by the members of the companyduring the year 2009-10.
8. General Body Meetings
Details of last three Annual General Meetings are as under:
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Rane Engine Valve Limited
10. Means of communication
The quarterly / annual financial results were published in "Business Standard", and "Dinamani" (Tamil). Thequarterly / annual financial results and the shareholding pattern were uploaded in the websites of the stockexchanges and the Company viz. http://rane.in. During the year, there was no presentation made to the analysts/institutional investors.
11. General Shareholder Information
i. Information about director seeking re-appointment/appointment in this annual general meeting
Name of the Director Mr. Ashok Malhotra Mr. C N Srivatsan Mr. R V Raghavan
Father's Name Mr. K C Kaifi Mr. C R Natarajan Mr. Gopala Ramabadran
Date of birth October 9, 1945 May 25, 1957 April 4, 1942
Educational B.A, P.G.Diploma - C.A., C.I.S.A., B.Com., FCA (England &Qualifications Business Administration - Wales), Advanced
IIM Ahmedabad Management Program,Harvard Business School
Experience He has over 34 years of 25 years of diverse Possess a wide experienceexperience in the field of experience in handling in Cross border jointManagement consultancy. Indian and overseas ventures, management
assignments of human resources andthe turnaround of operations
Date of appointment February 6, 2008 July 22, 2009 January 20, 2010
Other Directorships 1. Eltrans Solutions Private 1. Precot Meridian Limited 1. Andhra Pradesh PaperLimited 2. Elgi Rubber Company Mills Ltd
Limited 2. Transport Corporation3. Astral Consulting Limited of India Ltd4. Kar Mobiles Limited 3. TRF Ltd5. Astral Autoprint Business
Solutions Private Ltd6. SKP Astral Consulting
Private Ltd.
Committee Member - Chairman- Audit Member - AuditMemberships Investor Service 1. Rane Engine Valve 1. Andhra Pradesh Paper
1. Rane Engine Valve Limited Limited Mills LtdMember- Audit 2. TRF Ltd1. Precot Mills Limited Member- Remuneration2. Kar Mobiles Limited 1. Andhra Pradesh Paper
Mills Ltd.2. TRF Ltd.
Number of sharesheld Nil Nil Nil
ii Annual General Meeting July 20, 2010 at 10.30 a.m."The Music Academy" (Mini Hall), New No.168,TTK Road, Royapettah, Chennai 600 014
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Rane Engine Valve Limited
iii Financial Year - 1st April to 31st March
Financial Calendar:
Board Meeting for approval of Tentative DateAnnual Accounts for the year ended March 31, 2010 May 21, 2010Un-audited results for the 1st quarter ending June 30, 2010 July 20, 2010Un-audited results for the 2nd quarter ending September 30, 2010 October 18, 2010Un-audited results for the 3rd quarter ending December 31, 2010 January 24, 2011
Annual Accounts for the year ending March 31, 2011 Fourth week of May 2011
iv. Book Closure & Dividend
The book closure period is from July 14, 2010 (Wednesday) to July 20, 2010 (Tuesday) (Both days inclusive)
Dividend: The Board has recommended a final dividend of Rs.1.50 per share on May 21, 2010. The dividend,if declared by the shareholders, will be made payable on or after July 27, 2010.
v. Listing on Stock Exchanges
Stock Exchange Stock Code
a) Madras Stock Exchange Ltd, (MSE)11, Second Line Beach, Chennai 600 001. RANEENGINE
b) National Stock Exchange of India Ltd. (NSE)Exchange Plaza, 5th Floor, Plot No C/1, G Block, RANEENGINEBandra Kurla Complex, Bandra (E), Mumbai 400 051.
c) Bombay Stock Exchange Limited (BSE)Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001. 532988
Listing Fee: Annual listing fees for the financial year 2010-11 have been paid to all the stock exchangeswhere the shares of the company are listed.
vi. Unpaid / Unclaimed Dividends :Pursuant to the provisions of Section 205A of the Companies Act 1956, dividend for the financial year endedMarch 31, 2003 and thereafter which remain unclaimed for a period of seven years (including dividendsdeclared by erstwhile Rane Engine Valves Limited) will be transferred to the Investor Education and ProtectionFund (IEPF) of the Central Government.During the year, the company had transferred to IEPF the unclaimed dividend for the financial year endedMarch 31, 2002.Information in respect of such unclaimed dividends when due for transfer to the said fund is given below:
Year Date of Last Date for claiming Due date for transfer todeclaration unpaid dividend IEPF u/s 205A(5)
31.03.2003 24.07.2003 27.08.2010 25.09.201031.03.2004** 31.01.2004 04.03.2011 02.04.201131.03.2005** 25.01.2005 02.03.2012 31.03.201231.03.2005 23.07.2005 27.08.2012 25.09.201231.03.2006** 27.01.2006 02.03.2013 31.03.201331.03.2006 25.07.2006 28.08.2013 26.09.201331.03.2007** 21.03.2007 25.04.2014 24.05.201431.03.2008 23.07.2008 28.08.2015 26.09.201531.03.2009 22.07.2009 26.08.2016 24.09.201631.03.2010** 20.01.2010 24.02.2017 25.03.2017
** – Interim Dividend
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Rane Engine Valve Limited
vii. Share Price Data:There has been no trading in Madras Stock Exchange Limited. The Share price data as quoted on theNational Stock Exchange of India Limited and Bombay Stock Exchange Limited during the last financialyear, viz. April 1, 2009 to March 31, 2010 is given below:
viii. Registrar and Transfer AgentsThe contact details of the Registrar and Transfer Agents are as follows:-Integrated Enterprises (India) Ltd.,II Floor, ‘Kences Towers’, No.1, Ramakrishna Street, North Usman Road,T. Nagar, Chennai – 600 017.Phone: 28140801 – 03, Fax: 28142479, 28143378.e-mail: [email protected] of the contact person: Mr. K. Suresh Babu, Asst. Vice President.
ix. Share Transfer System
The power to approve transfer of shares has been delegated by the Board to the share transfer committee.Share transfer process is completed within 30 days from the date of receipt of transfer documents by theRegistrar and Transfer Agents (RTA). Requests for dematerialisation are generally confirmed on a weeklybasis by the RTA.
x. Distribution of shareholding as on March 31, 2010
Number of Folio Shares shares held Number % Number %
Upto 500 4,007 91.44 435,835 8.46501 - 1000 171 3.90 130,254 2.53
1001 - 2000 80 1.83 115,446 2.242001 - 5000 79 1.80 249,057 4.835001 - 10000 19 0.43 134,419 2.61
10001 - 20000 11 0.25 172,329 3.3520001 - 50000 10 0.23 383,261 7.4450001 - 100000 2 0.05 113,072 2.20
100001 & above 3 0.07 3,417,319 66.34Total 4,382 100.00 5,150,992 100.00
MonthHigh Low High Low High Low High Low
April 2009 58.50 45.45 3517.25 2965.70 58.00 44.10 11492.10 9546.29May 2009 94.75 51.10 4509.40 3478.70 93.80 53.25 14930.54 11621.30June 2009 100.40 78.85 4693.20 4143.25 98.45 77.10 15600.30 14016.95July 2009 98.00 67.20 4669.75 3918.75 100.25 70.00 15732.81 13219.99August 2009 103.50 95.00 4743.75 4353.45 104.95 95.00 16002.46 14684.45September 2009 115.00 98.00 5087.60 4576.60 113.90 95.10 17142.52 15356.72October 2009 143.00 101.30 5181.95 4687.50 146.95 100.00 17493.17 15805.20November 2009 132.90 115.00 5138.00 4538.50 125.00 109.30 17290.48 15330.56December 2009 138.00 118.00 5221.85 4943.95 136.40 115.10 17530.94 16577.78January 2010 205.10 124.20 5310.85 4766.00 210.10 120.00 17790.33 15982.08February 2010 239.10 186.50 4992.00 4675.40 236.75 182.45 16669.25 15651.99March 2010 224.75 203.00 5329.55 4935.35 225.55 200.00 17793.01 16438.45
Source : www.bseindia.com : www.nseindia.com
Share Prices (Rs.) NSE S&P Nifty BSE SensexShare Prices (Rs.)
National Stock Exchange of India Ltd (NSE) Bombay Stock Exchange Ltd (BSE)
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Rane Engine Valve Limited
xi. Pattern of shareholding as on March 31, 2010
Sl.Category
No. of No. of % to totalNo. Folios shares capitalA Promoters 13 2,714,716 52.70
B Banks & Financial Institutions 4 6,318 0.12
C Insurance Companies 3 122,607 2.38
D Bodies Corporate 139 361,967 7.03
E NRIs / OCBs 26 35,216 0.68
F Foreign Collaborator - M/s TRW Automotive JV LLC 1 504,000 9.79
G Individuals 4,196 1,406,168 27.30
Total 4,382 5,150,992 100.00
xiv. Address for communication:Mr. K SankaranarayananCompliance OfficerRane Engine Valve LimitedRane Corporate Centre,“Maithri”, 132, Cathedral Road,Chennai 600 086.Ph.28112472 Fax: 28112449E-mail: [email protected]
xii Dematerialisation of shares and liquidityThe Company has entered into the necessary agreements with National Securities Depository Limited andCentral Depositories Services (India) Limited for dematerialisation of the shares held by investors. As ofMarch 31, 2010, about 92.70% of the shareholdings have been dematerialised.
Demat ISIN Number: INE 222J01013
xiii Plant locations - given in the First page of the Annual Report.
Mr. K Suresh BabuAsst. Vice PresidentIntegrated Enterprises (India) Ltd.,II Floor, ‘Kences Towers’,No.1, Ramakrishna Street,North Usman Road, T. Nagar, Chennai 600 017.Phone: 28140801-03, Fax: 28142479E-mail: [email protected]
OR
To
The MembersRane Engine Valve Limited
Declaration by Chief Executive Officer on Code of Conduct under Clause 49 of the Listing Agreement.
I, hereby declare that to the best of my knowledge and information, all the Board Members and Senior ManagementPersonnel have affirmed compliance with the code of conduct for the year ended March 31, 2010.
Place : Chennai L. GaneshDate : May 21, 2010 Chairman & Managing Director
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Rane Engine Valve Limited
AUDITORS’ CERTIFICATE
To the Shareholders of Rane Engine Valve Limited
We have examined the compliance of conditions of Corporate Governance by Rane Engine Valve Ltd. for the yearended on 31st March 2010 as stipulated in Clause 49 of the Listing Agreement of the said company with stockexchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examinationwas limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of theconditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statementsof the company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that thecompany has complied with the conditions of Corporate Governance as stipulated in the above-mentioned ListingAgreement.
We further state that such compliance is neither an assurance as to the future viability of the company nor theefficiency or effectiveness with which the management has conducted the affairs of the company.
For BRAHMAYYA & CO.,Chartered AccountantsFirm Reg. No. 000511S
P.S. KUMARChennai PartnerMay 21, 2010 (Membership No. 15590)
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Rane Engine Valve Limited
AUDITORS’ REPORT TO THE MEMBERS OF RANE ENGINE VALVE LIMITED
1. We have audited the attached balance sheet of RaneEngine Valve Limited as at 31st March 2010 andalso the profit and loss account and the cash flowstatement for the year ended on that date annexedthereto. These financial statements are theresponsibility of the company's management. Ourresponsibility is to express an opinion on thesefinancial statements based on our audit.
2. We conducted our audit in accordance with theauditing standards generally accepted in India.Those Standards require that we plan and performthe audit to obtain reasonable assurance aboutwhether the financial statements are free of materialmisstatement. An audit includes examining, on a testbasis, evidence supporting the amounts anddisclosures in the financial statements. An audit alsoincludes assessing the accounting principles usedand significant estimates made by management, aswell as evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.
3. As required by the Companies (Auditor's Report)Order, 2003 issued by the Central Government ofIndia in terms of sub-section (4A) of section 227 ofthe Companies Act, 1956, we enclose in theAnnexure a statement on the matters specified inparagraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred toabove, we report that:
(i) We have obtained all the information andexplanations, which to the best of our knowledgeand belief were necessary for the purposes ofour audit;
(ii) In our opinion, proper books of account asrequired by law have been kept by the companyso far as appears from our examination of thosebooks;
(iii) The balance sheet, profit and loss account andcash flow statement dealt with by this report arein agreement with the books of account;
(iv) In our opinion, the balance sheet, profit and lossaccount and cash flow statement dealt with bythis report comply with the accounting standardsreferred to in sub-section (3C) of section 211 ofthe Companies Act, 1956;
(v) On the basis of written representations receivedfrom the directors, as on 31st March 2010 andtaken on record by the Board of Directors, wereport that none of the directors is disqualifiedas on 31st March 2010 from being appointed asa director in terms of clause (g) of sub-section(1) of section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our informationand according to the explanations given to us,the said accounts give the information requiredby the Companies Act, 1956, in the manner sorequired and give a true and fair view inconformity with the accounting principlesgenerally accepted in India:
(a) in the case of the balance sheet, of the stateof affairs of the company as at 31st March2010;
(b) in the case of the profit and loss account, ofthe profit for the year ended on that date; and
(c) in the case of the cash flow statement, of thecash flows for the year ended on that date.
For BRAHMAYYA & CO.,Chartered Accountants
Firm Regn No: 000511S
P.S. KUMARChennai PartnerMay 21, 2010 (Membership No: 15590)
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Rane Engine Valve Limited
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE1. The provisions of the following clauses of Companies
(Auditor's Report) Order, 2003 are not applicable to thecompany for the year with respect to:
a) Clause 4 (x) with regard to accumulated lossessince the company's networth is positive and thecompany has not incurred any cash losses duringthe current year and in the immediately precedingfinancial year;
b) Clause 4 (xii) with regard to loans granted againstpledge of securities since no loans have beengranted by the company during the year;
c) Clause 4 (xiii) with regard to special statutesapplicable to Chit funds and Nidhis since thecompany has not carried on such business;
d) Clause 4 (xiv) with regard to trading in securitiessince the company did not carry on such activitiesduring the year;
e) Clause 4 (xviii) with regard to preferential allotmentof shares to specified parties since no allotment ofshares was made during the year;
f) Clause 4 (xix) with regard to creation of security orcharge in respect of debentures since nodebentures issued during the year; and
g) Clause 4 (xx) with regard to money raised by publicissue since no money was raised by public issueduring the year.
2. (a) The company has maintained proper recordsshowing full particulars including quantitative detailsand situation of fixed assets.
b) The company has a programme of verification offixed assets whereby all the fixed assets arephysically verified by the management over aperiod of three years in a phased manner which,in our opinion, is reasonable having regard to thesize of the company and the nature of its assets.No material discrepancies were noticed on suchverification.
c) The company has not during the year disposedoff a substantial part of the fixed assets which wouldgive rise to the question of impairment of status ofthe company as a going concern.
3. a) The inventory has been physically verified duringthe year by the management. In our opinion, thefrequency of verification is reasonable.
b) The procedures of physical verification ofinventories followed by the management arereasonable and adequate in relation to the size ofthe company and the nature of its business.
c) On the basis of our examination of the records ofinventory, we are of the opinion that the companyis maintaining proper records of inventory. Thediscrepancies noticed on verification between thephysical stocks and the book records were notmaterial and have been properly dealt with in thebooks of account.
4. (i) In our opinion and according to the information andexplanations given to us, the company has notgranted any loan, secured or unsecured, tocompanies, firms or other parties covered in theregister maintained under section 301 of theCompanies Act, 1956.
(ii) a) The company has not taken any loanssecured or unsecured to / from companies,firms and other parties covered in the registermaintained under section 301 of theCompanies Act, 1956 except fixed depositsaccepted from directors and their relatives.These deposits have been accepted from 9parties aggregating to Rs. 12.750 Million whichare outstanding as on 31st March, 2010.
b) In our opinion the rate of interest and otherterms and conditions of these deposits are notprima facie prejudicial to the interest of thecompany.
c) The payment of principal and interest areregular.
5. In our opinion and according to the information andexplanations given to us, there are adequate internalcontrol procedures commensurate with the size of thecompany and the nature of its business with regard topurchase of inventory, fixed assets and with regard tothe sale of goods. During the course of our audit, nomajor weakness has been noticed in the internalcontrols.
6. a) Based on the audit procedures applied by us andaccording to the information and explanationsprovided by the management, we are of the opinionthat the particulars of contracts or arrangementsthat need to be entered in the register maintainedunder section 301 have been so entered.
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Rane Engine Valve Limited
(b) In our opinion and according to the information andexplanations given to us, the transactions madein pursuance of such contracts or arrangementsentered in the registers maintained under Section301 and exceeding the value of five lakh rupees inrespect of any party during the year have beenmade at prices which are reasonable having regardto prevailing market prices at the relevant time.
7. The company has accepted deposits from the publicand has complied with the Directives issued by theReserve Bank of India and the provisions of sections58A, 58AA or any other relevant provisions of theCompanies Act, 1956, and the rules framed there underwhere applicable. According to the explanations givento us, no order has been passed by the Company LawBoard or National Company Law Tribunal or ReserveBank of India or any Court or any other Tribunal.
8. In our opinion, the company has an internal audit systemcommensurate with the size and nature of its business.
9. We have broadly reviewed the books of accountmaintained by the company pursuant to the Rules madeby the Central Government for the maintenance of costrecords under section 209 (1) (d) of the CompaniesAct, 1956 and are of the opinion that prima facie, theprescribed accounts and records have been made andmaintained.
10. According to the records of the company, the companyis regular in depositing with appropriate authoritiesundisputed statutory dues including Provident Fund,Investor Education and Protection Fund, Employees'State Insurance, Income-Tax, Sales-Tax, Wealth-Tax,Service Tax, Custom Duty, Excise-Duty, Cessapplicable to it.
11. Based on our audit procedures and on the informationand explanations given by the Management, there areno dues outstanding in respect of customs duty, wealthtax, service tax and cess on account of any dispute.
The details of disputed excise duty tax, income tax,and sales tax that have not been deposited with theappropriate authorities are as follows:
Nature of Dues Amount Forum where(Rs. in dispute is
thousands) pending
Sales Tax demands 703 Deputy Commissionerfor the financial year (Appeals) Commercial2003-2004 Taxes, Ernakulam
Excise duty 57 ExciseAappellateAuthorities
Trade Tax 38 Joint Commissioner -Trade Tax
Income Tax for the 13,005 Commissioner ofAssessment Year Income Tax (Appeals),2004-05 to 2007-08 Chennai
12. The company has not defaulted in repayment of duesto financial institutions, or banks. The company has notissued any debentures.
13. The company has not given any guarantee for loanstaken by others from banks or financial institutions.
14. On the basis of review of utilisation of funds on overallbasis the term loans taken by the company were appliedfor the purposes for which the loans were obtained.
15. According to the information and explanation given tous and on a overall examination of the Balance Sheetof the company, we report that no funds raised on short-term basis have been used for long-term investmentby the company.
16. Based upon the audit procedures performed andinformation and explanations given by themanagement, we report that no fraud on or by thecompany has been noticed or reported during the year.
For BRAHMAYYA & CO.,Chartered Accountants
Firm Regn No: 000511S
P.S.KUMARChennai PartnerMay 21, 2010 (Membership No. 15590)
22
Rane Engine Valve Limited
SOURCES OF FUNDS Schedule 31.03.2010 31.03.2009Rs. ’000 Rs. ’000
Shareholders’ FundsCapital A 51,510 51,510Reserves and Surplus B 769,602 746,006
821,112 797,516Loan Funds
Secured Loans C 603,687 673,784Unsecured Loans D 250,611 230,983
854,298 904,767
Deferred Tax Liability (Note 6.2, 6.3 & 19) 91,980 70,176
TOTAL 1,767,390 1,772,459
APPLICATION OF FUNDSFixed Assets (Note 13 & 14) E
Gross Block 2,347,593 2,223,714Less: Accumulated Depreciation 1,116,335 990,340Net block 1,231,258 1,233,374Less: Impairment of Assets 2,125 1,600Capital Work-in-progress 61,967 72,460
1,291,100 1,304,234Current Assets, Loans and Advances
Inventories F 304,700 308,751Sundry Debtors G 397,638 339,627
Cash and Bank balances H 15,068 28,187
Loans and Advances I 171,157 157,813888,563 834,378
Less : Current Liabilities and Provisions
Liabilities J 366,930 312,643Provisions K 45,343 53,510
412,273 366,153Net Current Assets 476,290 468,225
TOTAL 1,767,390 1,772,459
Contingent Liabilities (Note 31)
Accounting Policies and Notes (Pages 32 to 42)
BALANCE SHEET AS AT 31st MARCH, 2010
As per our report of even date attached For and on behalf of the BoardFor BRAHMAYYA & CO.,Chartered AccountantsFirm Regn No: 000511S
P.S. KUMAR L. LAKSHMAN L. GANESHPartner Director Chairman &Membership No. 15590 Managing Director
CHENNAI K. SANKARANARAYANANMay 21, 2010 General Manager - Finance & Secretary
23
Rane Engine Valve Limited
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2010
As per our report of even date attached For and on behalf of the BoardFor BRAHMAYYA & CO.,Chartered AccountantsFirm Regn No: 000511S
P.S. KUMAR L. LAKSHMAN L. GANESHPartner 0Director Chairman &Membership No. 15590 Managing DirectorCHENNAI K. SANKARANARAYANANMay 21, 2010 General Manager - Finance & Secretary
Schedule 2009-2010 2008-2009Rs. ’000 Rs. ’000
INCOME:Sales and Operating Revenues L 2,360,311 2,202,441Other income M 11,963 8,604TOTAL INCOME 2,372,274 2,211,045
EXPENDITURE :Manufacturing and other expenses N 2,081,271 1,968,601Finance Charges O 62,802 75,292
Depreciation / Amortisation (Note 2.3.1 & 2.3.2) 157,664 128,027Impairment Loss 525 –
TOTAL EXPENDITURE 2,302,262 2,171,920
PROFIT BEFORE TAX 70,012 39,125
Provision for taxation - Current 13,671 4,400
- MAT Credit Entitlement (8,460) (4,310)
- Deferred 21,804 13,406
- Fringe benefit tax – 27,015 3,529 17,025
PROFIT AFTER TAX 42,997 22,100Surplus brought forward (Refer Schedule B) 50,771 42,934
AMOUNT AVAILABLE FOR APPROPRIATION 93,768 65,034Less: Dividend on Equity Shares:
Interim Dividend @ 15% (–) 7,727 –Final Dividend @ 15% (20%) 7,727 10,302Tax on distributed profits 2,596 18,050 1,751 12,053
Transfer to General Reserve 4,300 2,210
Surplus carried to Balance Sheet 71,418 50,771
EARNINGS PER SHARE
Basic (Rs.) 8.35 4.29
Diluted (Rs.) 8.35 4.29
Number of shares of Rs. 10 each 5,150,992 5,150,992
Accounting Policies and Notes: Pages (32 to 42)
24
Rane Engine Valve Limited
31.03.2010 31.03.2009Rs. ’000 Rs. ’000
SCHEDULE ACAPITALAuthorisedEquity Share Capital10,000,000 (10,000,000) Equity Shares of Rs.10 each 100,000 100,000
100,000 100,000
Issued, Subscribed, and Paid-up
Equity Share Capital-5,150,992 (5,150,992) equity shares of Rs.10/- eachfully paid-up (Note 11.1 & 11.2) 51,510 51,510
51,510 51,510
SCHEDULE B
RESERVES AND SURPLUS
Balance Additions Deductions/ BalanceDescription as at during Adjustments as at
31 Mar 2009 the year during 31 Mar 2010the year
Capital Reserves 2,923 – – 2,923
(Arising out of the amalgamation
during1989-90 - Reserves of
amalgamated companies)
Capital Reserve 2,772 – – 2,772
Capital Subsidy 2,281 – – 2,281
Export incentive Reserve 1,908 – – 1,908
Hedge Reserve Account (713) (2,064) (713) (2,064)(Note 4.4 & 28)
General Reserve 686,064 4,300 – 690,364
Surplus in Profit and Loss Account 50,771 20,647 – 71,418
TOTAL 746,006 22,883 (713) 769,602
For the previous year 2008-09 739,760 9,334 3,088 746,006
Schedules forming part of Balance Sheet as at 31st March 2010
25
Rane Engine Valve Limited
31.03.2010 31.03.2009Rs. ’000 Rs. ‘000
SCHEDULE C
SECURED LOANS
Term loan from Banks ( Notes 12.1 & 12.3 ) 444,717 565,773
Cash Credit from Banks (Note 12.2) 158,970 108,011
603,687 673,784
SCHEDULE D
UNSECURED LOANS
Short Term Working Capital Loan from a Bank – 130,000
Commercial Paper (Note 12.7) 50,000 –
Fixed Deposits (Note 12.5 & 12.6) 141,760 39,710
Interest free sales tax loan from Government of Andhra Pradesh (Note 12.4) 58,851 61,273
250,611 230,983
Schedules forming part of Balance Sheet as at 31st March 2010
SCHEDULE E
FIXED ASSETS Rs. ’000
GROSS BLOCK NET BLOCKDESCRIPTION
As at Additions/ Deductions/ As at Upto For the Deductions/ As at As at As at31.03.2009 Adjustments Adjustments 31.03.2010 31.03.2009 Peried Adjustments 31.03.2010 31.03.2010 31.03.2009
Land - Freehold 13,607 – – 13,607 – – – – 13,607 13,607
Buildings (Note 13 & 14) 238,486 2,804 819 240,471 58,196 6,505 – 64,701 175,770 180,290
Plant and Machinery(Note 13 & 14) 1,902,233 165,256 42,479 2,025,010 879,708 145,249 29,695 995,262 1,029,748 1,022,525
Furniture and Fittings 42,406 1,094 1,623 41,877 32,105 2,681 1,211 33,575 8,302 10,301
Office Equipment 13,304 280 39 13,545 11,596 536 36 12,096 1,449 1,708
Vehicles 4,358 45 764 3,639 2,556 603 727 2,432 1,207 1,802
A Total 2,214,394 169,479 45,724 2,338,149 984,161 155,574 31,669 1,108,066 1,230,083 1,230,233
Licence 9,320 124 – 9,444 6,179 2,090 – 8,269 1,175 3,141
B Total 9,320 124 – 9,444 6,179 2,090 – 8,269 1,175 3,141
Grand Total ( A + B ) 2,223,714 169,603 45,724 2,347,593 990,340 157,664 31,669 1,116,335 1,231,258 1,233,374
For the year 2008-2009 1,627,592 620,666 24,544 2,223,714 880,235 128,027 17,922 990,340 1,233,374
DEPRECIATION
26
Rane Engine Valve Limited
SCHEDULE F 31.03.2010 31.03.2009Rs. ’000 Rs. ’000
INVENTORIES
Raw Materials 98,858 98,257
Work-in-progress 69,351 56,897
Finished Goods (Note 22) 72,839 93,840
Stores and Spares 63,652 59,757
304,700 308,751
SCHEDULE G
SUNDRY DEBTORS (Unsecured)
Debts Outstanding for a period exceeding six months
Considered good 330 1,782
Considered doubtful 3,690 7,073
4,020 8,855
Other Debts
Considered good 397,308 337,845
401,328 346,700
Less : Provision for doubtful debts 3,690 7,073
397,638 339,627
SCHEDULE H
CASH AND BANK BALANCES
Cash on hand 404 378
Balance with Scheduled Banks
In Current accounts 11,598 23,147
In Deposit Accounts 3,066 4,662
15,068 28,187
SCHEDULE I
LOANS AND ADVANCES
Advances recoverable in cash or in kind or for value to be received 42,477 27,106
Advance Payment of Income Tax (Net of provisions) 29,824 30,598
MAT Credit Entitllement 12,770 4,310
Deposits 18,694 17,627
Balance with Customs, Excise and other authorities 67,392 78,172
171,157 157,813
Schedules forming part of the Balance Sheet as at 31st March, 2010
27
Rane Engine Valve Limited
CURRENT LIABILITIES AND PROVISIONS 31.03.2010 31.03.2009
SCHEDULE J Rs. ’000 Rs. ’000
CURRENT LIABILITIES
Sundry Creditors for Goods & Services
Due to Micro enterprises and Small enterprises (Note 25) 2,217 2,831
Others 338,383 293,654
For Other Liabilities 17,362 8,867
Investor Education and Protection Fund (Note 23)
Unclaimed dividends 1,451 1,389
Unclaimed matured fixed deposits 275 80
Fixed deposit interest paid but not encashed 892 320
Interest accrued but not due on loans / deposits 6,350 5,502
366,930 312,643
SCHEDULE K
PROVISIONS
Provision for Leave Encashment 28,659 26,942
Provision for Gratutity 7,674 14,515
Provision for tax 312,960 299,289
Less : Advance payments and tax deducted at source 342,649 329,752
Net provision for tax (29,689)* (30,463)*
Provision for Fringe benefit Tax 15,836 15,836
Less : Advance payments 15,971 15,971
Net provision for Fringe Benefit Tax (135)* (135)*
Total provision for Tax – –
Dividend on Equity Shares 7,727 10,302
Provision for tax on distributed profits 1,283 1,751
45,343 53,510
* Shown under Loans and Advances
Schedules forming part of the Balance Sheet as at 31st March, 2010
28
Rane Engine Valve Limited
SCHEDULE L 2009-2010 2008-2009Rs. ’000 Rs. ’000
SALES AND OPERATING REVENUE
Sales 2,488,547 2,381,116
Less : Excise Duty 150,738 198,687
Net Sales (Note 10) 2,337,809 2,182,429
Sale of Material 6,417 1,182
Less: Excise Duty 772 362
Net Sales of Material 5,645 820
Operating Revenue
Sale of Scrap 14,447 19,004
Less: Excise Duty 867 1,835
Net Scrap Sales 13,580 17,169
Interest - trade [Tax deducted at source Rs.172,566 (Previous year Rs.254,702)] 1,780 2,023
Job Work Receipts 1,497 –
2,360,311 2,202,441
SCHEDULE M
OTHER INCOME
Profit on Sale of Assets 1,419 426
Provision for Doubtful Debts written back 3,383 –
Provision no longer required written back 5,698 7,069
Dividend from Investments (Note 15.1) 82 –
Miscellaneous Income 1,381 1,109
11,963 8,604
Schedules forming part of Profit and Loss Accountfor the year ended 31st March, 2010
29
Rane Engine Valve Limited
SCHEDULE N 2009-2010 2008-2009Rs. ’000 Rs. ’000
MANUFACTURING AND OTHER EXPENSESOpening Stock
Finished Goods 93,840 42,134Work-in-progress 56,897 46,376
150,737 88,510Raw materials consumed ( Note 17 ) 729,453 793,979Trade Purchase 46,894 32,190Stores and Tools consumed 180,938 181,778Power and Fuel 125,489 112,659Trade Mark Fees 12,205 11,404Repairs and Maintenance
Plant and Machinery 59,286 63,802Buildings 2,581 2,349Others 10,263 7,644
Salaries, Wages and Bonus 436,274 384,037Contribution to Provident and other funds 43,404 45,561Staff Welfare Expenses 68,599 59,276Job work Expenses 70,827 65,374Rent 4,926 4,887Insurance 8,369 7,138Rates and Taxes 6,347 5,430Travelling and Conveyance 25,036 23,926Professional and Legal Expenses 36,014 29,934Data Processing and Maintenance expenses 19,390 19,847Administrative Expenses 34,887 29,067Selling and Distribution Expenses
Packing and Forwarding 75,647 86,041Advertisement and Sales Promotion 1,923 1,974Commission and Discount 48,417 38,404Bad Debts Written off – 830Provision for Doubtful debts – 1,166
Quality Claim (net of claims receivable of Rs.5,496,263 (Rs.6,242,915)) 3,257 2,928Directors' Sitting Fees 615 670Audit Fees (Note 18) 1,261 949Loss on Sale of Assets 1,833 454Assets Written Off / Provision for Retirement of Assets 149 3,213Advances Written Off 301 418Exchange Loss 13,325 6,215Bank Charges 3,258 6,220Excise Duty adjustment on Inc / (Dec) of Finished Goods 456 1,064Donations 1,100 –
Balance c/f 2,223,461 2,119,338
Schedules forming part of Profit and Loss Account for the year ended 31st March, 2010
30
Rane Engine Valve Limited
2009-2010 2008-2009Rs. ’000 Rs. ’000
Balance b/f 2,223,461 2,119,338
Schedules forming part of Profit and Loss Account for the year ended 31st March, 2010
Less : Closing stock
Finished Goods 72,839 93,840
Work-in-progress 69,351 56,897
142,190 150,737
2,081,271 1,968,601
SCHEDULE O
FINANCE CHARGES
Interest - Fixed Loans
- Term Loans 38,569 41,798
- Fixed Deposits 11,372 3,594
Interest - Others
- Cash Credit Loans 11,564 29,710
- Other Interest 1,297 190
62,802 75,292
31
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32
Rane Engine Valve Limited
ACCOUNTING POLICIES AND NOTES
ACCOUNTING POLICIES
1 System of Accounting
1.1 The financial statements are prepared under thehistorical cost convention, on the accrual basis ofaccounting in accordance with the Companies Act,1956 and comply with the applicable AccountingStandards notified under Section 211(3C) of theCompanies Act, 1956 and issued by the Institute ofChartered Accountants of India (ICAI).
1.2 The preparation of financial statements inconformity with generally accepted accountingprinciples requires management to makeestimates and assumptions that affect thereported amounts. Estimates include allowancefor uncollectible accounts receivables, futureobligations under employees benefit plans, usefullife of fixed assets, accounting for employee costpending execution of agreements with workmenunions etc. The actual amounts (crystallized afterpreparation of financial statements) may differfrom these estimates.
2 Fixed Assets, Impairment & Depreciation
2.1 Fixed assets are stated at cost. None of the fixedassets has been revalued. Expenses incurred inconnection with project prior to thecommencement of commercial production aretreated as part of project cost and capitalised aspart of fixed assets.
2.2 If an asset is carried at a value more than therecoverable amount through use or sale of theasset, such impairment of asset is recognized asexpenditure of the year. If such impairmentceases to exist then the same is recognized asincome of that year.
2.3.1 Depreciation is provided on straight line methodat the rates specified in Schedule-XIV to theCompanies Act, 1956 except for :
a) Assets acquired upto 31.03.1995 -Onwritten down value method.
b) Assets of following categories based onuseful life acquired on or after 01.04.1996
Assets Useful Life(Years)
1. Vehicles 5
2. Furniture & Fittings 53. Office Equipments 3
4. Licence 3
2.3.2 In case of second hand assets, depreciation iscalculated taking into account the estimated usefullife of the assets.
3 Inventories
3.1 Raw materials, work in progress and finishedgoods are valued at lower of cost and netrealisable value. Other items of inventory arevalued at cost. Cost is determined on WeightedAverage basis. Cost includes conversion andother costs incurred in bringing the inventories tothe present location and condition.
4 Foreign Currency Transactions
Transaction and Translation:
4.1 Transactions in foreign currencies are recordedat the exchange rates prevailing on the date ofthe transaction. Foreign currency monetary assetsand liabilities are translated at year end exchangerates. Exchange differences arising on settlementand translation of monetary items other than foracquisition of fixed assets, at the year end arerecognised as income or expense in the year inwhich they arise.
4.2 Premium or discount on forward / option contractsis amortised over the life of such contracts and isrecognised as income or expense in the Profit andLoss account.
4.3 Exchange differences arising on settlement /translation of long term monetary items utilizedfor acquisition of fixed assets are adjusted tocarrying cost of fixed assets.
Derivative instruments and Hedgeaccounting:
4.4 The Company is exposed to foreign currencyfluctuations on foreign currency assets andforecasted cash flows denominated in foreigncurrency. The Company limits the effects offoreign exchange rate fluctuations by followingestablished risk management policies includingthe use of derivatives. The Company enters intoforward contract and option contracts, where thecounterparty is a bank.
Pursuant to ICAI Announcement "Accounting forDerivatives" on the early adoption of AccountingStandard AS 30 "Financial Instruments :Recognition and Measurement", the Companyhas early adopted the standard and accordingly,the changes in the fair values of forward contracts
33
Rane Engine Valve Limited
and options designated as cash flow hedges arerecognised directly in 'Hedge Reserve Account'being part of the shareholders' funds andreclassified into the profit and loss account uponthe occurrence of the hedged transactions. Thechanges in fair value relating to the ineffectiveportion of the cash flow hedges and forwardcontracts / options not designated as cash flowhedges are recognised in the profit and lossaccount as they arise.
5. Borrowing Costs
5.1 Borrowing costs that are attributable to theacquisition or construction of qualifying assetsrequires a substantial period of time are capitalisedas a part of the cost of the asset if they will resultin future economic benefit to the company. Allother borrowing costs are charged to revenue.
6. Taxes on Income
6.1 Provision for Current tax (inclusive of MinimumAlternate Tax) is made based on the tax liabilitycomputed on taxable income in accordance withrelevant tax rates and tax laws.
6.2 Deferred tax, being tax on timing differencebetween taxable income and accounting incomethat originate in one year and are capable ofreversal in one or more subsequent years, hasbeen recognized.
6.3 Deferred tax assets, excluding assets arising fromloss/depreciation carried forward, are notrecognized unless there is reasonable certaintythat sufficient future taxable income will beavailable against which such deferred tax assetscan be realized. In case of carried forward loss/depreciation, it is recognized only if virtual certaintyexists.
7. Research & Development
7.1 Revenue expenditure is charged under naturalheads in Profit and Loss Account.
7.2 Capital expenditure is shown as addition to fixedassets under natural heads.
8. Employee Benefits
8.1 Defined Benefit Plan
Gratuity (Funded)
In accordance with applicable laws, the Companyprovides for gratuity, a defined benefit retirementplan (Gratuity Plan) covering all staff, workers andofficers. The Gratuity Plan provides for, at
retirement or termination of employment, anamount based on the respective employees lastdrawn salary and the years of employment withthe Company. The Company provides the gratuitybenefit through annual contributions to a Gratuitytrust which in turn mainly contributes to LifeInsurance Corporation of India (LIC) for thispurpose. Under this plan the settlement obligationremains with the Gratuity trust. Life InsuranceCorporation of India administers the plan anddetermines the contribution premium required tobe paid by the trust.
Leave encashment liability (Unfunded)
In accordance with applicable rules, the liabilityfor leave encashment (defined benefit plan(Unfunded)) was actuarially valued and providedin the books of accounts, covering all staff,workers and officers.
8.2 Defined Contribution Plan
Provident Fund :
In addition to the above benefits, all employeesare entitled to Provident Fund benefits as perthe law. For certain category of employees theCompany administers the benefits through arecognised Provident Fund Trust. For otheremployees contributions are made to theregional Provident Fund Commissioners as perlaw. The Government mandates the annualyield to be provided to the employees on theircorpus. For the first category of employees(covered by the Trust), the company has anobligation to make good the shortfall, if any,between the yield on the investments of the trustand the yield mandated by the Government.
Superannuation : Defined Contribution Planwhere contributions are made to a Trust whichin turn contributes to LIC
Apart from being covered under the Gratuity Plandescribed above, the employees of the Companywho are Assistant Managers and above alsoparticipate in a defined contributionSuperannuation plan maintained by the Company.The Company has no further obligations underthe plan except making annual contributionsbased on a specified percentage of each coveredemployees salary.
34
Rane Engine Valve Limited
9. Pre-operative Expenditure
9.1 All expenditure incurred prior to commencementof business / Expansion of business activities iscarried forward as pre-operative expenditure andincluded in Capital Work in Progress and iscapitalised along with the cost of fixed assets oncommencement of Business.
10. Revenue Recognition
10.1 Sales are net of sales returns and trade discountsand exclude all taxes and levies.
NOTES
11. Share Capital
11.1 5,150,992 Equity Shares of Rs.10/- each wereallotted on February 06, 2008, as fully paid forconsideration other than cash, pursuant to thescheme of arrangement of the company witherstwhile Rane Engine Valves Limited.
11.2 2,754,521 Equity Shares of Rs.10/- each are heldby Rane Holdings Ltd., the holding company(inclusive of 40,444 Equity Shares of Rs.10 eachheld in trust pending transfer to Rane HoldingsLimited as on 31.03.2010).
12. Loans
12.1 Foreign Currency Term Loan and Rupee TermLoans from Banks are secured on pari-passu basisby a first charge on the Company's immovableproperties both present and future and also securedby hypothecation of company's movable propertiesboth present and future.
12.2 Cash credit from banks is secured by hypothecationof raw materials, work in progress, finished goods,stores & spares and book debts.
12.3 Term Loans repayable within one year Rs.175,858,242 (Rs.163,505,974)
12.4 The Interest Free Sales Tax Loan from Governmentof Andhra Pradesh is due and repayable oncompletion of period of deferral starting from themonth of February 2010. Amount due within oneyear amounts to Rs.4,913,834 (Rs.2,422,180)
12.5 Fixed Deposits include Rs.1,250,000 (Rs. 550,000)from Directors.
12.6 Fixed Deposit maturing within a period of one yearamounts to Rs.22,550,000 (Rs.17,715,000)
12.7 Maximum amount of Commercial Paper outstandingat any time during the period was Rs.50,000,000(Rs. Nil)
13. Fixed Assets
13.1 Foreign currency fluctuation Gain of Rs.9,853,024(fluctuation loss of Rs.27,338,136) arising onsettlement / translation of long term borrowingsutilized for acquisition of capital assets areadjusted to the cost of the assets.
13.2 Borrowing cost of Rs.2,110,793 (Rs.10, 710,015)is capitalized along with the cost of capital asset.
14. In compliance with the Notification No.GSR226(E), dated 31st March, 2009 issued by Ministry ofCorporate Affairs, the company has exercised theoption in terms of newly inserted paragraph 46 tothe Accounting Standard - AS -11 " the effect ofchanges in Foreign Exchange Rates".Accordingly, the exchange differences, fluctuationgain of Rs.9,853,024 (fluctuation loss ofRs.27,338,136) adjusted to cost of fixed assetsarising on settlement / translation of foreigncurrency monetary items utilized to acquiredepreciable capital assets.
15. Investments
15.1 Details of units in mutual funds purchased andredeemed during the year.
Mutual Fund No. of Units
HDFC Cash ManagementFund - Treasury AdvantagePlan - Daily DividendReinvestment 6,236,392
GFRD IDFC Money ManagerFund - Treasury Plan -Daily Dividend Investment 1,243,469
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Rane Engine Valve Limited
16 Managerial Remuneration
16.1 Remuneration to:
2009-2010 2008-2009
Rs. ’000 Rs. ’000
a) Chairman & Managing Director
i) Salary 1,100 3.300
ii) Perquisites 317 869
iii) Contribution to Provident Fund,Pension Fund and Gratuity 174 858
iv) Commission payable for the period
August, 2009 to March, 2010 2,127 –
3,718 5,027
16.2 Computation of net profit under Section 198 of the Companies Act, 1956 for Managerial Remuneration:
2009-2010 2008-2009Rs. ’000 Rs. ’000
Net Profit for the year as per Profit and Loss Account 70,012 39,125
Add: Remuneration paid/provided to Chairman& Managing Director 1,591 5,027
Commission @ 5% of Profit 2,127 –
Wealth Tax paid 11 15
Director’s Sitting Fees 615 4,344 670 5,712
Net profit as per Section 198 of the CompaniesAct, 1956 74,356 44,837
Maximum Remuneration Payable u/s 309 of theCompanies Act, 1956 - 5% of the profits 3,718 2,242
Variation in terms of Remuneration payable toChaiman & Managing Director effective from1st August, 2009 is subject to approval of Members ofthe Company in the ensuing Annual General Meeting.
17. Consumption of raw materials 2009-2010 2008-2009Rs.’000 Rs.’000
Opening Stock 98,257 95,526
Add: Purchases during the year 730,054 796,710
828,311 892,236
Less: Closing stock 98,858 98,257
Consumption during the year 729,453 793,979
36
Rane Engine Valve Limited
18. Audit Fees
Audit fees (net of Service Tax Credit availed) comprises of the following:
2009-2010 2008-2009Rs. ’000 Rs.’000
Statutory Audit 850 600
Tax Audit 150 100
Certification fees 261 249
1,261 949
19. Deferred Tax Liabilities (Net):2009-2010 2008-2009
Rs.’000 Rs.’000Deferred Tax Liability
Depreciation (net of impairment) 105,877 101,236
105,877 101,236
Deferred Tax Assets
Provision for leave Salary 9,520 9,158
Provision for Liability 3,115 5,571
Provision for Bad Debts 1,262 2,441
Unabsorbed business depreciation – 13,890
13,897 31,060
Net Deferred Tax Liability 91,980 70,176
Note : The deferred tax asset arising on unabsorbed depreciation has been recognised to the extent of
availability of future taxable income by virtue of future reversal of deferred tax liability recognised at the balancesheet date.
20. Related Party Disclosures:
20.1 Related parties and their relationship
Holding Company : Rane Holdings Limited
Fellow Subsidiaries : Rane Madras LimitedRane Brake Lining Limited
Enterprise Significantly influenced byKey Management Personnel : Kar Mobiles Limited
Key Management Personnel : Mr L Ganesh
Relatives of Key Management Personnel : 1. Mr L Lakshman 2. Mrs Meenakhi Ganesh3. Ms Aparna Ganesh 4. Mr Aditya Ganesh5. Mrs Hema C Kumar 6. Mrs Vanaja Aghoram
7. Mrs Shanthi Narayan
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Rane Engine Valve Limited
20.2 Disclosure in respect of material transactions with associated parties.
For the period 01.04.2009 to 31.03.2010 Rs. in `000s
EnterpriseSignificantly Relatives
Sl. Holding Fellow influenced Key of KeyNo. Particulars Company Subsidiary by Key Management Management
Management Personnel PersonnelPersonnel
1 Interest Received – – – – –(–) (–) (–) (–) (–)
2 Remuneration paid – – – 3,718 –(–) (–) (–) (5,027) (–)
3 Trade Mark Fees Paid 12,205 – – – –(11, 404) (–) (–) (–) (–)
4 Services Received 34,717 – – – –(31,804) (–) (–) (–) (–)
5 Interest paid on Fixed Deposits – – – 35 1,032(–) (–) (–) (13) (735)
6 Reimbursement of Expenses 719 952 15 – –(–) (–) (–) (–) (–)
7 Sale of Material – – 3,958 – –(–) (–) (–) (–) (–)
8 Purchase of Material – – 2,199 – –(–) (–) (–) (–) (–)
9 Services Rendered – – 1,497 – –(–) (–) (–) (–) (–)
10 Sale of Assets 900 – – – –(–) (–) (–) (–) (–)
11 Amount payable - Trade 3,344 – – – –(2, 752) (–) (–) (–) (–)
12 Amount receivable - Trade – 318 – – –(–) (–) (–) (–) (–)
13 Fixed deposits accepted / – – – 500 5,100(repaid) (–) (–) (–) [(500)] [(1000)]
14 Fixed deposits outstanding – – – 550 12,000(–) (–) (–) (50) (7,850)
20.3 The details of amount paid as remuneration to key management personnel are given in the note 16.
21. Segment Reporting:
21.1 The entire operations of the company relate only to one segment, viz, "Components for Transport Industry". Asthe exports are predominantly to developed countries, geographical risk is not different from domestic marketand hence no separate secondary segment disclosure is required.
22. The Company has included an amount of Rs.2,480,200 (Rs. 1,934,145) representing the excise duty on finishedgoods manufactured but not cleared as on 31st March, 2010, for valuation and charging off the excise duty toProfit and Loss Account. This has, however, no impact on profit of the year.
23. There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as on31st March 2010.
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Rane Engine Valve Limited
24. Revenue expenditure during the year on Research & Development activities shown under the various heads ofaccount amounted to Rs.3,117,302 (Previous Year Rs.8,895,123)
25. Disclosure required under the Micro, Small and Medium Enterprises Development Act, 2006 are given asfollows:
31.03.2010 31.03.2009Rs.’000 Rs.’000
a) Principal amount due 2,217 2, 831Interest due on the above 1 2
b) Interest paid during the period beyond the appointed day 6 12c) Amount of payment made to the supplier beyond the appointed day
during the accounting year 2,052 1,513d) Amount of interest due and payable for the period of delay in making
payment without adding the interest specified under the Act. 61 62e) Amount of interest accrued and remaining unpaid at the end of the period 55 50f) Amount of further interest remaining due and payable even in the
succeeding years, until such date when the interest dues as above areactually paid to the small enterprise for the purpose of disallowance asdeductible expenditure under section 23 of the Act. – –The above information and that given in Schedule- J "Current Liabilities"regarding micro enterprise and small enterprises has been determined onthe basis of information available with the Company. This has beenrelied upon by the auditors.
26. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)is Rs.16,158,657 (Rs.56,213,349)
27. Employee BenfitsThe company has implemented Revised AS-15 and made the provisions accordingly. The disclosure as perRevised AS-15 produced below:-
The following tables set out the details of amount recognised in the financial statements in respect of employeebenefit schemes:
31.03.2010 31.03.2009 31.03.2010 31.03.2009Gratuity Gratuity Leave Leave
Salary SalaryRs.’000 Rs.’000 Rs.’000 Rs.’000
A Net Asset / (liability) recognised in the Balance Sheetas at March 31, 2010
1 Present value of the Defined Benefit Obligation 104,511 99,063 28,659 26,942
2 Fair Value of plan assets 96,837 84,548 – –
3 Net Asset / (Liability) recognised in the Balance Sheet (7,674) (14,515) (28,659) (26,942)
B Expenses recognised in the statement of Profit andLoss Account for the year ended March 31, 20101 Current Service Cost 5,927 4,919 2,682 2,642
2 Interest Cost 7,925 6,240 1,723 1,434
3 Expected return on plan assets 8,473 5,388 – –
4 Net actuarial (gain) / loss recognised during the year 6,647 12,097 8,129 10,459
5 Expense / (Income) recognised in Profit and LossAccount 12,026 17,868 12,534 14,535
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Rane Engine Valve Limited
31.03.2010 31.03.2009 31.03.2010 31.03.2009Gratuity Gratuity Leave Leave
Salary SalaryRs.’000 Rs.’000 Rs.’000 Rs.’000
C Change in Defined Benefit obligation during the yearended March 31, 2010
1 Present value of Defined Benefit obligation as atApril 1, 2009 99,063 81,355 26,942 23,442
2 Current Service Cost 5,927 4,919 2,682 2,642
3 Interest Cost 7,925 6,240 1,723 1,434
4 Benefits paid 15,051 6,707 10,817 11,035
5 Actuarial gain / (loss) on obligation (6,647) (13,256) (8,129) (10,459)
6 Present value of obligation as at March 31, 2010 104,511 99,063 28,659 26,942
D Change in Fair value of Asset during the yearended March 31, 2010
1 Fair value of plan assets as at April 1, 2009 84,549 59,922 – –
2 Expected return on plan assets 8,473 5,388 – –
3 Contributions made 18,867 24,359 10,817 11,035
4 Benefits paid 15,051 6,707 10,817 11,035
5 Actuarial gain / (loss) on plan assets – 1,587 – –
6 Fair value of plan assets as at March 31, 2010 96,838 84,549 – –
E Actual return on plan assets for the year endedMarch 31, 2010
1 Expected return on plan assets 8,473 5,388 – –
2 Actuarial gain / (loss) on plan assets – 1,587 – –
3 Actual Return on plan assets 8,473 6,975 – –
F Actuarial Assumptions
1 Discount rate 8.00% 8.00% 8.00% 8.00%
2 Expected rate of return on plan assets 9.30% 8.00% – –
3 Rate of increase in compensation levels 4.50%/ 5.00% 4.50%/ 5.00%7.0% 7.0%
The company assesses these assumptions with itsprojected long-term plans of growth and prevalentindustry standards.
28. Derivative Instrument and hedge accountingAs per Accounting Standard AS 30 "Financial Instruments: Recognition and Measurement", the Company hasprovided for the effective portion amounting to Rs.2.06 Mio (Rs.0.71 Mio) of the changes in the fair values offorward contracts and options designated as cash flow hedges directly in 'Hedge Reserve Account' being part ofthe shareholders' funds, the changes in fair value relating to the ineffective portion amounting to Rs.0.08 Mio(Rs.Nil) of the cash flow hedges and forward contracts / options are recognised in the profit and loss account.
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Rane Engine Valve Limited
29. Derivative Instrument and Unhedged Foreign Currency Exposure
S. Purpose Nature Currency 31.03.10 31.03.09 31.03.10 31.03.09No. FCY Amount’000 INRAmount’000
1 Forward Currency SwapOutstanding
ECB Loan taken in Cross Currency USD 1,432 2,166 64,743 109,847JPY 351,433,247 and Swapswapped against USD
ECB Loan taken in USD Cross Currency INR 3,694 5,171 148,625 208,0755,910,000 and swapped Swapagainst INR
2 Payable in JPY Currency Swap INR 160,642 76,034 83,844 40,284
Payable in USD Currency Swap INR 499 – 22,626 –
Receivable in USD Currency Swap INR 220 – 10,202 –
Receivable in EURO Currency Swap INR 475 – 29,834 –
Receivable in AUD Currency Swap INR 95 – 3,924 –
3 Receivable in USD Currency INR – 600 – 29,100Options
4 Unhedged ForeignCurrency Exposure
a) ECB Loan taken in USD USD 313 688 14,028 34,870
b) ECB Loan taken inJPY 351,433,247 andswapped against USD USD 1,058 2,166 47,512 109,847
c) PCFC Loan in USD USD 1,314 1,000 58,992 50,720
d) PCFC Loan in EURO EURO 1,300 600 78,636 40,182
e) Outstanding Debtors USD 1,352 1,838 60,692 94,214EURO 255 290 15,447 18,293GBP 19 32 1,316 2,350AUD – 37 – 1,282
f) Outstanding Creditors - USD 315 71 14,136 3,603Goods GBP 25 12 1,667 842
JPY 24,006 – 11,537 –
g) Outstanding Creditors- USD 5 265 246 13,498Expenses EURO 35 12 2,350 834
AUD 13 – 519 –
30. The company has during the year received an intimation of product recall on acount of product defect from oneof the Original Equipment Manufacturer (OEM) customer. The company has not accepted the facts and theclaim made by the OEM customer. The company is adequately insured for claims on account of product defectliability. In the opinion of the management, the potential claim net of insurance coverage would not be material.
31. Contingent Liabilities not provided for 31.03.2010 31.03.2009Rs.’000 Rs. ’000
Liability on bills discounted with bank 22,678 29,642
Liability on letter of credits & guarantees issued by the Banks 142,771 86,030
Labour Disputes 18,691 25,577
Income tax 11,320 9,912
Other Liabilities 1,097 6,226
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Rane Engine Valve Limited
33. Balance Sheet Abstract and Company’s General Business Profile
I. Registration Details
Registration No. 6 1 2 7 State Code 1 8
Balance Sheet Date 3 1 0 3 2 0 1 0
II. Capital Raised during the year (Amount in Rs. Thousands)
Public Issue Rights Issue
N I L N I L
Bonus Issue Private Placement
N I L N I L
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities Total Assets
1 7 6 7 3 9 0 1 7 6 7 3 9 0
Source of Funds
Paid-up Capital Reserves & Surplus
5 1 5 1 0 7 6 9 6 0 2
Deferred tax liability
9 1 9 8 0
Secured Loans Unsecured Loans
6 0 3 6 8 7 2 5 0 6 1 1
Application of Funds
Net Fixed Assets Investments
1 2 9 1 1 0 0 N I L
Net Current Assets Misc. Expenditure
4 7 6 2 9 0 N I L
Accumulated Losses
N I L
IV. Performance of Company (Amount in Rs. Thousands)
Turnover (Gross Revenue) Total Expenditure
2 3 7 2 2 7 4 2 3 0 2 2 6 2
+ – Profit / Loss Before Tax + – Profit / Loss After Tax
+ 7 0 0 1 2 + 4 2 9 9 7
+ – Earnings Per Share in Rs Dividend Rate %
+ 8 . 3 5 3 0
V. Generic Names of Three Principal Products / Services of Company (as per Monetary Terms)
8 4 0 9 9 1 V A L V E S - I N L E T & E X H A U S T
8 4 0 9 9 1 V A L V E G U I D E S
F O R I C E N G I N E S
Item Code No. (ITC Code)
32. Figures in brackets in the Schedules and Notes pertain to previous year.
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Rane Engine Valve Limited
The foregoing Schedules A to P along with Accounting Policies and Notes 1 to 33 annexed to the Balance Sheet andthe Profit and Loss Account form part of the accounts and should be read in conjunction therewith.
As per our report of even date attached For and on behalf of the Board
For BRAHMAYYA & CO.,Chartered AccountantsFirm Regn No: 000511S
P.S. KUMAR L. LAKSHMAN L. GANESHPartner Director Chairman &Membership No. 15590 Managing Director
CHENNAI K. SANKARANARAYANANMay 21, 2010 General Manager - Finance & Secretary
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Rane Engine Valve Limited
Particulars 2009-10 2008-2009A Cash flow from operating activities Rs. ’000 Rs. ’000
Net profit before tax and extraordinary items 70,012 39,125Adjustments for : Depreciation 157,664 128,027
Impairment of Assets 525 –Unrealised Foreign exchange Loss / (Gain) - net 1,118 (3,421)Dividend income (82) –Interest expense 62,802 75,292(Gain) / Loss on sale of fixed assets - net 414 28Assets Writtten off / Provision for Retirement of Assets 149 3,213Provision for bad debts and bad debts written off (3,383) 1,996Voluntary Retirement Expenditure Written off – 2,881Provision for gratuity and leave salary - (net) (5,124) (3,944)
Operating profit before working capital changes 284,095 243,197Adjustments for: (Increase) / Decrease in trade and other receivables (70,240) 45,491
(Increase) / Decrease in inventories 4,051 (62,294)Increase / (Decrease) in sundry creditors 54,205 97,752
Cash generated from operations 272,111 324,146Income taxes paid - net of refund (12,897) (4,425)Net cash from operating activities (A) 259,214 319,721
B Cash flow from investing activities:Purchase of fixed assets (166,348) (277,805)Proceeds from sale of fixed assets 3,639 3,981Dividend received 82 –
Net cash used in investing activities (B) (162,627) (273,824)
C Cash flow from financing activities:Proceeds from long term borrowings 50,000 150,000Proceeds from other borrowings 79,094 –Repayment of long term borrowings (153,965) (95,711)Repayment of other borrowings – (2,591)Repayment of interest free Sales Tax (2,422) –Interest paid (61,383) (68,086)Dividend paid (21,030) (27,085)
Net cash from financing activities (C) (109,706) (43,473)
Net increase / (Decrease) in cash equivalents (A) + (B) + (C) (13,119) 2,424
Cash and cash equivalents - Opening Balance 28,187 25,763Cash and cash equivalents - Closing Balance 15,068 28,187
Cash Flow Statement for the year ended 31st March, 2010
As per our report of even date attached For and on behalf of the Board
For BRAHMAYYA & CO.,Chartered AccountantsFirm Regn No: 000511S
P.S. KUMAR L. LAKSHMAN L. GANESHPartner Director Chairman &Membership No. 15590 Managing Director
CHENNAI K. SANKARANARAYANANMay 21, 2010 General Manager - Finance & Secretary
Note : Cash and cash equivalents include ear-marked accounts amounrting to Rs.23,42,805/-
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Rane Engine Valve Limited
Balance Sheet SummaryFig. in Rs. million
Year ended 31st March 2010 2009 2008 2007 2006
A Gross Fixed Assets 2,409.56 2,294.57 2,018.78 – 1.33
B Depreciation 1,118.46 990.34 880.23 – 1.06
C Net Fixed Assets (A-B) 1,291.10 1,304.23 1,138.55 – 0.27
D Investments – – – – –
E Current Assets 717.41 676.57 620.50 0.59 2.01
F Loans & Advances 171.15 157.81 190.02 – 1.18
G Deferred Revenue Expenditure – – 2.88 – –
H Total Assets (C to G) 2,179.66 2,138.61 1,951.95 0.59 3.46
I Secured & Unsecured Loans 854.30 904.77 820.32 – 0.09
J Current Liabilities & Provisions 412.27 366.15 283.59 0.01 3.35
K Deferred Tax Liability 91.98 70.17 56.77 – (0.54)
L Total Liabilities (I + J + K) 1,358.55 1,341.09 1,160.68 0.01 2.90
M Net Worth (H – L) 821.11 797.52 791.27 0.58 0.56
Represented by -
Equity Capital 51.51 51.51 51.51 0.51 0.51
Reserves & Surplus 769.60 746.01 739.76 0.07 0.05
Net Worth per Equity Share ofRs. 10 each Rs. 159.41 154.83 153.61 11.31 11.02
HIGHLIGHTS
Summary of Results 2006 to 2010Fig. in Rs. million
Year Income Profit Profit Reserves & Share Dividend E.P.S.
before Tax after Tax Surplus Capital % Rs.
2005-06 18.89 0.38 0.09 0.05 0.51 350% 1.67
2006-07 0.05 0.02 0.01 0.07 0.51 0% 0.29
2007-08 1,992.46 41.04 24.20 739.76 51.51 45% 4.70
2008-09 2,211.04 39.12 22.10 746.01 51.51 20% 4.29
2009-10 2,372.27 70.01 42.99 769.60 51.51 30% 8.35
Rane Engine Valve LimitedRegd. Office : ‘Maithri’, 132, Cathedral Road, Chennai 600 086.
38th Annual General Meeting at 10.30 a.m. on Tuesday, July 20, 2010 at
The Music Academy (Mini Hall), New No.168, TTK Road, Royapettah, Chennai 600 014.
ATTENDANCE SLIPTo be handed over at the entrance of the meeting hall.
I certify that I am a registered Shareholder of the Company.
I hereby record my presence at the above Annual General Meeting of the Company.
A member / proxy wishing to attend the meeting must complete this attendance slip and hand it overat the entrance of the meeting hall.
Name of Proxy (if any) in BLOCK LETTERS
Signature of Member / Proxy
Rane Engine Valve LimitedRegd. Office : ‘Maithri’, 132, Cathedral Road, Chennai 600 086.
PROXY FORM
I/We ..................................................... of .......................................... in the district of .................................
being a member/members of RANE ENGINE VALVE LIMITED, hereby appoint ........................................
of ................................................ in the district of .......................................... or
failing him ...................................................................... of ...........................................................……
in the district of …………………. ………. as my / our proxy to attend and vote for me / us on my/our
behalf at the 38th Annual General Meeting of the Company to be held at 10.30 a.m. on Tuesday,
July 20, 2010 or at any adjournment thereof.
Signature of Member
Signed this ……….. day of ……..…………… 2010.
NOTE : Any member entitled to attend and vote at the meeting is entitled to appoint a proxy to attendand vote instead of himself and the proxy need not be a member. The form duly completedshould be deposited at the Registered Office of the Company at Chennai not less than 48hours before the commencement of the meeting.
Name of First named ShareholderNo. ofshares
FolioNo.
If held in dematerialised form
D P ID No. Client ID No.
No. ofshares
FolioNo.
If held in dematerialised form
D P ID No. Client ID No.
Affix 15 p.Revenue
Stamp