The Directors have pleasure in presenting their Forty Seventh Annual Report together with the accounts for the year ended March 31, 2019 and other prescribed particulars:

1. State of Company’s affairs

1.1 Financial Performance

The financial highlights for the year under review are as follows:

(Rs. in crores)

Key performance indicators, operational performance and balance sheet summary are furnished in page nos. 4 & 5 of this annual report.

The net sales and operating revenue of the Company for the year 2018-19 was Rs. 422.63 crores as against Rs. 383.41 crores (including Excise duty of Rs. 8.17 crores) for the previous year.

The Company incurred a net loss of Rs. 13.57 crores as against of net loss of Rs. 17.06 crores in the previous year. Earnings per share for the year 2018-19 was ' (20.20) as against ' (25.40) in the previous year

There was no material change or commitments, affecting the financial position of the Company between the end of the financial year of the Company and date of the report other than those disclosed in the financial statements section of this annual report. There was no change in nature of business during the year. The Company continues to be a subsidiary of Rane Holdings Limited (RHL / Holding Company). The Company does not have any associate or joint venture.

1.2 Appropriation

The net deficit for the financial year 2018-19 stood at Rs. 13.70 Crores, after adjusting a deficit of Rs. 0.03 Crores brought forward from the previous financial year and adjustments of Other Comprehensive Income (net loss) to the tune of Rs. 0.10 crores.

Considering the financial position of the Company during the financial year, the Board decided not to declare /recommend any dividend for the year 2018-19.

1.3 Management Discussion & Analysis

The business of your Company is manufacturing and marketing of auto components for transportation industry viz., engine valves, valve guide and tappet. The analysis on the performance of the industry, the Company, internal control systems, risk management are presented in the Management Discussion and Analysis report forming part of this report and provided in ‘Annexure A’.

2. Board of Directors

2.1 Composition

The Corporate Governance Report given in ‘Annexure D’ contains the composition of the Board of Directors of the Company.

There is no change in the composition of Board of Directors with reference to the previous year.

The terms and conditions of appointment of Independent Directors have been disclosed on the website of the Company and available at http://ranegroup.com/revl_ investors/terms-conditions-appointment-id/

All the Directors have affirmed compliance with the Code of Conduct of the Company. The Independent Directors have affirmed that they satisfy the criteria laid down under section 149(6) of the Companies Act 2013 (Act) and Regulation 25 and other applicable regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), as amended from time to time. The Board of Directors at its first meeting of the FY 2018-19 has taken on record the declarations and confirmations submitted by the Independent Directors.

During the year, the Board had not appointed any person as an Alternate Director for an Independent Director on the Board.

The Company has obtained a certificate from a Company secretary in practice that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as Directors of Companies by the SEBI / Ministry of Corporate Affairs or any such statutory authority.

2.2 Retirement by rotation

Mr. Harish Lakshman (DIN: 00012602) is retiring by rotation at the ensuing 47^th AGM. Being eligible, he offers himself for re-appointment. The proposal for reappointment of Mr. Harish Lakshman as a Director is included in the notice convening the 47^th AGM.

2.3 Board Meetings

The schedule of meetings of the Board of Directors and Committees of the Board is circulated to the Directors in advance. During the year, six (6) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The gap between two consecutive meetings of the Board of Directors was less than 120 days.

2.4 Meeting of Independent Directors

A meeting of Independent Directors was held to assess the quality, quantity and timeliness of flow of information between the management and the Board. The Independent Directors expressed that the current flow of information and contents were good to effectively perform their duties. They also reviewed the performance of the non-Independent Directors and the Board as a whole and the performance of the Chairperson of the Company taking into account the views of other Non-Executive Directors.

3. Board and Management

3.1 Board Evaluation

During the year, the Board carried out an annual evaluation of its performance as well as of the working of its Committees and individual Directors, including Chairman and Managing Director of the Board. This exercise was carried out through a structured questionnaire prepared separately for the Board, Committees, Chairman and individual Directors, as per the criteria laid down by Nomination and Remuneration Committee. The Chairman’s performance evaluation was also reviewed by Independent Directors at a separate meeting during the year.

The evaluation methodology, questionnaire and process were judiciously formulated taking into consideration following parameters of the Board’s functioning

a) Board structure and processes: Composition, appointment process, diversity, approach towards risk assessment, monitoring mechanism for any related party transactions, ethical standards and fairness in decision makings

b) Meetings and discussions: Adequacy, relevance of information, follow up actions, discussions and debate especially on critical and dissenting views, if any.

c) Board Information and functioning: Adequacy of time for strategic discussions, integrity of accounting and financial reporting systems and feedback of Independent Directors.

d) Board committee effectiveness: clarity of charter laid down, effectiveness of reports of the Committees, its mandates and working procedures, its transparency and independency and contributions towards recommendations made to the Board.

The individual Directors’ evaluation were carried out with an unbiased approach through peer evaluation focussing on following areas:

a) Group dynamics i.e., exhibiting positive behaviours, framing of constructive contents and staying engaged while expressing honest opinions.

b) Competency attributes like having sufficient understanding and knowledge of the Company and operating sector and fulfilling functions assigned to them by the Board and governing laws ; and

c) Commitment in terms of exercising own judgement, voicing Independent opinions and responsibility towards the Company and its success.

The outcome of the evaluation is also considered by the Nomination and Remuneration Committee while considering re-appointments of Directors on the Board and appointment in various Committees.

The Board acknowledged the key areas of improvement emerging through this exercise and the Chairman discussed with the other Board members during the meetings, the action plans including the need for revisiting the Board meeting schedule to allow sufficient time for discussions on matters of strategic importance and scheduling Directors’ visits to the manufacturing facilities and facilitating interaction with the business and functional heads.

Certain strategic discussions at the Board and committee meetings brought to the fore were around long-term strategy in terms of industry trends, technology developments, measures to enhance productivity, innovation and competitiveness and sustainable business models.

Discussions on initiatives taken across the Rane group on areas like Human Resource development especially in the context of talent acquisition & management, succession planning, employee engagement, leadership development at senior management level and Information and Technology challenges, were given extensive time and focus by the Board.

3.2. Familiarisation program for Independent Directors

The familiarisation program for Independent Directors and details of familiarisation program for Independent Directors has been put up on the website and available at http://ranegroup.com/revl_investors/revl-familiarisation-programme-for-independent-directors/

3.3. Key Managerial Personnel

Mr. L Ganesh, Chairman & Managing Director (MD), Mr. V K Vijayaraghavan, Vice President - Finance & Chief Financial Officer (CFO), Mr. Kalidoss S, Secretary hold the office of Key Managerial Personnel respectively within the meaning of Section 2 (51) of the Companies Act, 2013. During the year there was no change in the Key Managerial Personnel (KMP).

3.4. Remuneration policy

The policy on appointment and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP) laid down by the Nomination and Remuneration Committee (NRC) of the Board is available on the website of the Company at http://ranegroup.com/revl_investors/ policy-on-appointment-remuneration-of-directors-kmp-smp/.

The details of remuneration paid / payable to the Directors during the financial year 2018-19, is furnished in the Corporate Governance report annexed to this report of the Board.

4. Audit

4.1 Audit Committee

The terms of reference and meetings of the Audit Committee are disclosed in the Corporate Governance Report section of the Annual Report. The Audit Committee of the Board acts in accordance with the above terms of reference, which is in compliance with the provisions of Section 177 of the Companies Act, 2013 (Act) and Regulation 18 of SEBI LODR and other applicable provision of SEBI LODR, as amended from time to time.

4.2. Statutory Auditors

M/s. Varma & Varma, Chartered Accountants (Varma & Varma) were appointed as Statutory Auditors at the 45^th Annual General Meeting (AGM) held on August 21, 2017, for a period of five consecutive years commencing from the conclusion of 45^th AGM till the conclusion of the 50^th AGM.

M/s Varma & Varma has confirmed that they do not suffer from any disqualification under Section 141 of the Companies Act, 2013 and the rules made thereunder. Varma & Varma has also submitted the peer review certificate issued to them by The Institute of Chartered Accountants of India.

M/s Varma & Varma has not reported any matter under Section 143(12) of the Companies Act, 2013 requiring disclosure under Section 134(3)(ca) of the Companies Act, 2013.

The statutory auditors report to the members for the year ended March 31, 2019 does not contain any qualification, reservation, adverse remark or disclaimer.

4.3. Cost Audit & Maintenance of Cost Records

Pursuant to section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors, at their meeting held on July 23, 2018, had appointed M/s. Jayaram & Associates, Cost Accountants, represented by Mr R Jayaraman (Membership no. 26103) as cost auditors of the Company for the financial year 2018-19 as per the recommendations of the Audit Committee, after obtaining necessary certificate under Section 141 of the Act conveying his eligibility for re-appointment. In terms of Section 148(3) of the Companies Act, 2013 remuneration fixed by the Board, based on the recommendation of the Audit Committee is required to be ratified by the members at the AGM as per the requirement of Section 148(3) of the Act. The notice convening the ensuing AGM includes the proposal for ratification of the remuneration payable to the cost auditors.

The Company maintains all such accounts and records as specified by the Central Government under section 148 (1) of the Companies Act, 2013.

4.4 Secretarial Auditors

M/s. S Krishnamurthy & Co., a firm of Company Secretaries in practice, are the Secretarial Auditors of the Company. The Secretarial Audit report given in ‘Annexure B’ was taken on record by the Board of Directors at its meeting held on May 21, 2019. The secretarial audit report does not contain any qualification, reservation, adverse remark or disclaimer.

The Annual Secretarial Compliance report, (hereinafter referred to as ‘compliance report’), for FY 2018-19 issued by M/s. S Krishnamurthy & Co., the secretarial auditors of the Company, have confirmed compliance with securities law applicable to the Company and the same has been taken on record by the Board of Directors at their meeting held on May 21, 2019. The compliance report does not contain any qualification, reservation, adverse remark or disclaimer and the Board has approved filing of the same with the stock exchanges.

4.5. Internal Auditors

M/s. Capri Assurance and Advisory Servicies, a firm of independent assurance service professionals, continues to be the Internal Auditors of the Company. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on a regular basis to improve efficiency in operations. The internal auditors report directly to the Audit Committee and the Audit Committee while reviewing their performance scope, functioning, periodicity and methodology for conducting the internal audit, has taken into consideration their confirmation to the effect that their infrastructure viz internal audit structure, staffing and seniority of the officials proposed to be deployed etc. which are adequate and commensurate to the scope, functioning, periodicity and methodology for conducting the internal audit.

For FY 2018-19, the Audit Committee has taken on record their certification to the effect that:

i. They have evaluated the internal control systems and risk management systems and reviewed the risk management systems and management’s process of identification and mitigation of risks and controls;

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

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

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

v. There were no significant changes in the internal control over financial reporting during the year under review;

vi. There were no instances of fraud or involvement therein of management or an employee having a significant role in the entity’s internal control system over financial reporting and

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

5. Directors’ Responsibility Statement

I n terms of Section 134(3)(c) read with section 134(5) of the Companies Act, 2013, the Directors, to the best of their knowledge and belief based on the information and explanations obtained by them, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures;

b) they had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company, preventing and detecting fraud and other irregularities;

d) they had prepared the financial statements for the financial year on a ‘going concern’ basis;

e) they had laid down internal financial controls to be followed by the Company and such internal financial controls were adequate and were operating effectively; and

f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

6. Related Party Transactions

All related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Related Parties which may have potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are reviewed by the Audit Committee on a quarterly basis. The Company has put in place proper system for identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website http://ranegroup.com/revl_investors/revl-policy-on-related-party-transaction/.

None of the Directors or Key Managerial Personnel or Senior Management Personnel has any material financial and commercial transactions, where they have personal interest, which may have potential conflict with interest of the Company at large.

7. Corporate Social Responsibility (CSR)

The Rane Group’s vision on Corporate Social Responsibility (CSR) is: “To be socially and environmentally responsive organization committed to improve quality of life within and outside”. The CSR activities of Rane Group focus on four specific areas of: (a) Education (b) Healthcare (c) Community Development; and (d) Environment.

The CSR activities undertaken by the Company are in line with the CSR Policy and recommendations of the CSR Committee comprising of Mr. L Lakshman, Committee Chairman, Mr. L Ganesh, Chairman & Managing Director and Mr. S Krishna Kumar, an Independent Director, as members. The CSR policy of the Company is posted on our website http:// ranegroup.com/revl_investors/corporate-social-responsibility-policy/. In view of the inadequacy of profits / loss during the immediately preceding three financial years, the Company was not required to spend towards CSR activities during FY 2018-19 as per Section 135 of the Companies Act, 2013 read with rules thereunder and therefore the CSR committee did not recommend any amount towards CSR activities for the year under review.

8. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo The ‘Annexure C’ to this report contains the information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014.

9. Particulars of Directors, Key Managerial Personnel and Employees

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors, Key Managerial Personnel (KMP) and Employees of the Company are provided in the full version of the Annual Report. The full version of the Annual Report is available for inspection by the members at the registered office during business hours on a working day of the Company up to the date of the ensuing Annual General Meeting. The full annual report including the aforesaid information is being sent electronically to all those members who have registered their e-mail address and is available on the Company’s website www.ranegroup.com.

10. Corporate Governance Report

Your Company is a leader in compliance with the corporate governance norms under the SEBI regulations. The Corporate Governance report and the certificate issued by the Statutory Auditors are available in ‘Annexure D’ to this report.

11. Other Disclosures

a) Details of loan, guarantees and investments, if any, under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

b) The Internal control systems and adequacy are discussed in detail in the Management Discussion and Analysis annexed to the Directors Report.

c) The Consent for Operations (CFO) under the pollution control regulations in one of the manufacturing plants located in the State of Telangana has been obtained vide consent order dated July 16, 2018. There was no significant material order passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

d) The policies approved and adopted by the Board have been made available on the Corporate Governance section of the Investor page on the website of the Company viz. www.ranegroup.com.

e) The extract of the Annual Return under Section 92(3) of the Companies Act, 2013 in form MGT-9 is available on the website of the Company at www. ranegroup.com and in ‘Annexure E’ to this report.

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

g) The Company does not accept any deposit falling under the provisions of section 73 of the Companies Act, 2013 and the rules framed thereunder.

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

i) The Company believes that women should be able to do their work in a safe and respectful environment that encourages maximum productivity. The Company has a zero tolerance towards sexual harassment. The Company has adopted a policy on prevention of sexual harassment of women at work place and put in place proper dissemination mechanism across the Company. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the period, the details of complaints received / resolved or pending are as under in accordance with provisions of the Companies Act, 2013, as amended from time to time.

No. of complaints received during the financial year - Nil

No. of complaints disposed during the financial year - Nil

No. of complaints pending as of end of the financial year - Nil

There was no complaints reported during the year under review through this mechanism.

j) Electronic copies of the Annual report and the notice convening the 47^th Annual General meeting (AGM) would be sent to the members whose email address are registered with the Company or their respective Depository Participants. For members who have not registered their email address, physical copies of the Notice and Annual Report would be sent in the permitted mode.

For and on behalf of the Board

Harish Lakshman L Ganesh

Vice-Chairman Chairman & Managing Director

DIN: 00012602 DIN: 00012583

Chennai

May 21, 2019