Your Directors are pleased to present the 56th Annual Report of the Companyand the Company's Audited Financial Statements for the Financial Year ended March 312017.
1. FINANCIAL SUMMARY
A brief summary of the audited financials of the Company for the Financial Year endedMarch 31 2017 (12 months) is given below. The figures of the current Financial Year andprevious Financial Year have been prepared in accordance with Indian Accounting Standards(Ind AS'). The preceding Financial Year of the Company was changed from aJanuary-December cycle to an April-March cycle in compliance with the provisions of theCompanies Act 2013 which prescribes a uniform Financial Year. Accordingly the FinancialStatements of the previous Financial Year were for 15 months i.e. effective from January01 2015 to March 31 2016. Therefore the figures of the current Financial Year endedMarch 31 2017 are not comparable with the figures of the previous Financial Year endedMarch 31 2016.
| || ||(Rs. in Lakhs) |
|Particulars ||12 months ended March 31 2017 ||15 months ended March 31 2016 |
|Total Income ||166001 ||189697 |
|Less: Total Expenditure ||146440 ||171270 |
|Profit Before Tax ||19561 ||18427 |
|Less: Income Tax Expense: || || |
|Current Tax ||7033 ||6826 |
|Deferred Tax ||(209) ||(375) |
|Profit before other comprehensive income ||12737 ||11976 |
|Other comprehensive income for the year net of tax ||(109) ||(10) |
|Total comprehensive income for the year ||12628 ||11966 |
The Company is proud to share the key highlights of the Company's financial performancefor the financial year ended March 31 2017 (12 Months) as compared to the previousfinancial year ended March 31 2016 (15 Months). The total income was Rs.166001 lakhs asagainst Rs.189767 lakhs in the previous year.
Profit before tax (PBT) was Rs.19561 lakhs against Rs.18427 lakhs in the previousyear showing an increase of 6.15% and the total comprehensive income of the Company forthe year stood at Rs.12628 lakhs against Rs.11966 lakhs in the previous year showing anincrease of 5.53%.
Your Directors have recommended payment of dividend @ Rs. 12.50/- per equity share forthe Financial Year 2016-17. The recommended dividend will absorb a sum of Rs. 2883 lakhsand tax on dividend will be Rs. 587 lakhs.
The Company manufactures automotive bias tyres viz. farm tyres and commercial trucktyres at its Ballabgarh plant and also trades in Goodyear branded tyres[including radial passenger tyres (consumer)] manufactured by Goodyear South Asia TyresPrivate Limited (GSATPL') Aurangabad. The other products which the Company marketsand sells include tubes and flaps.
The sales performance during the Financial Year 2016-17 is as follows:
| ||(Rs. in Lakhs) |
|Tyres ||154618 |
|Flaps ||151 |
|Tubes ||7746 |
The Company has made considerable efforts to refresh product portfolio with theintroduction of new product patterns gradual phase out of outdated patterns andstrengthened offerings in the Sports Utility Vehicle (SUV) segment. The business has beenfocused on working towards expanding distribution footprint and continues to invest inexpanding its branded store format. Brand building is an area of focus for our businesswith significant efforts and investments especially in the Digital space to improveconsumer experience and engagement.
4. AWARDS AND APPRECIATIONS
During the year under review the Company is proud to announce that it has receivedseveral accolades and appreciations for its work including: (i) Golden PeacockAward for Excellence in Corporate Governance' in rubber sector for the year2016. The Golden Peacock awards are the pinnacle for an organization in CorporateExcellence and this honor showcases Goodyear's commitment towards having a sustainable andeffective Corporate Governance system; (ii) India CSR Awards Recognizing CSRInnovation and Leadership 2017 under Road Safety' category; (iii) BusinessPartner of the Year from Mahindra & Mahindra Tractor; (iv) Best DeliveryAward from Escorts Agro Machinery; (v) Supplier Excellence Award/ AnnualCommodity Award from Mahindra & Mahindra Tractor; (vi) Best SupplierAward from Tractors and Farm Equipment Limited; (vii) Best PerformerAward from Escorts Agro Machinery; and (viii) Achieving Excellence inrecognition of Partner-level Performance from John Deere.
5. FINANCE AND ACCOUNTS
During the Financial Year 2016-17 the capital expenditure incurred amounted to Rs.4174 lakhs. The interest and other finance cost during the Financial Year 2016-17 was Rs.336 lakhs.
As of March 31 2017 an amount of NIL matured deposits remained unclaimed.
The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the BalanceSheet.
6. FINANCIAL STATEMENTS (Full & Abridged)
In compliance of Regulation 36 of the SEBI (LODR) 2015 the Company shall circulate:(i) Soft copies of the full Annual Report containing its Balance Sheet Statement ofProfit & Loss and Directors' Report to all those shareholder(s) who have registeredtheir email address(es) for the purpose.
(ii) Hard copy of Abridged Annual Report containing the salient features of all thedocuments as prescribed in Section 136 of the Companies Act 2013 (the Act)to the shareholder(s) who have not registered their email address(es); and (iii) Hardcopies of full Annual Report to the shareholders who request for the same.
The Board of Directors has decided to circulate the abridged Annual Report containingsalient features of the Balance Sheet and Statement of Profit and Loss to the shareholdersfor the Financial Year 2016-17. Beginning April 1 2016 the Company has for the firsttime adopted Ind AS with a transition date of January 1 2015 but the format for abridgedannual report is not yet notified by Ministry of Corporate Affairs. Therefore in absenceof the format notified in line with the Ind AS the Company has prepared Abridged AnnualReport (containing the salient features of all the documents) in line with the Full AnnualReport as prepared under Ind AS. A full version of the Annual Report including thecomplete Balance Sheet Statement of Profit & Loss other statements and notes theretoprepared as per the requirements set out in Schedule III to the Act and Indian AccountingStandards (Ind AS) will be available at the Company's website www.goodyear. co.in(Investor Relations section) and will also be made available to the shareholder(s) uponrequest.
7. DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 134(3)(c) OF THE COMPANIESACT 2013
Your Directors state that the annual accounts of the Company have been prepared inconformity in all material respects with the applicable accounting standards in Indiasupported by reasonable and prudent judgments and statements so as to give a true and fairview of the state of affairs of the Company and of the results of the operations of theCompany. Significant accounting policies followed are appearing in Note no.1 to the Notesof the financial statements.
The financial statements of the Company have been audited by Price Waterhouse & CoBangalore LLP (ICAI Firm Registration No- 007567S/ S-200012). A reference may be made totheir report dated May 26 2017 to the members together with Annexures thereto containinginformation as per the requirements under the Companies (Auditor's Report) Order 2016 andreport on Internal Financial Controls over financial reporting that is attached withthese financial statements. Proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the applicable laws for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities. Theinternal control system including internal financial controls of the Company is monitoredby an independent Internal Audit Team which encompasses examination/ periodic reviews toascertain adequacy of internal controls and compliance to the Company's policies.Weaknesses noted along with agreed upon action plans are shared with the Audit Committeewhich ensures orderly and efficient conduct of the business and effectiveness of thesystem of internal control. Internal Auditors Audit Committee members and StatutoryAuditors have full and free access to all the information and records considered necessaryto carry out the assigned responsibilities. The issues raised from time to time aresuitably acted upon and followed up at different levels of management. The annual accountshave been prepared on a going concern basis.
The Directors have laid down internal financial controls to be followed by the Companythrough periodic checks and testing procedures they monitor compliance to the internalfinancial controls to ascertain that they are adequate and operating effectively. TheDirectors have devised appropriate systems that are designed to ensure compliance with theprovisions of all applicable laws and they monitor adequacy and operating effectiveness ofthe same periodically.
8. FUTURE OUTLOOK
The tractor industry showed strong recovery after two years of back to back de-growthdue to failure of monsoon. This was supported by a strong focus of the Government onagriculture as reflected in the current budget together with an increasing trend towardsmechanization (Source: Crisil & ICRA). Hence the mid to long term outlookremains robust.
The Financial Year 2017-18 outlook seems positive with expectation of Rabi crop harvestto be at record levels as per second advance estimate by Ministry of Agriculture togetherwith a favourable monsoon outlook given by the Indian Metrological Department(IMD) (Source: Ministry of Agriculture). The Tractor industry isexpected to post a growth of 6 -7% (Source: ICRA) The passenger tyreindustry is likely to register a modest growth in the year 2017-18. Driving distributionexpansion increasing the reach of branded retail stores and building brand saliencethrough investments in brand building especially in the digital space will continue to bethe key priorities in 2017-18.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
The Company recognizes the importance of having a diverse Board in view of the currentvolatile business environment. The Company thus aims at an appropriate mix of executivenon-executive and independent Directors to maintain the independence of the Board andseparate its functions of governance and management. During the Financial Year 2016-17Mr. James Constantine Venizelos (DIN: 07184802) (Mr. Venizelos') Alternate Directorto Mr. Christopher Raymond Delaney (DIN: 07348894) (Mr. Delaney) had vacatedhis office on May 27 2016 upon the return of Mr. Delaney to India. Later the Board inits meeting dated May 30 2016 re-appointed Mr. Venizelos as Alternate Director to Mr.Delaney effective from June
1 2016. Consequent to the return of Mr. Delaney to India Mr. Venizelos again vacatedhis office on August 30 2016. However Mr. Venizelos was again re-appointed as AlternateDirector to Mr. Delaney in the Board Meeting dated on August 30 2016 effective fromSeptember 1 2016. During the Financial Year 2016-17 Mr. Yashwant Singh Yadav Director HR & Corporate Affairs (DIN: 03288600) has resigned effective close ofbusiness hours of February 8 2017. The Board of Directors has placed on record its warmappreciation of the rich contribution made by Mr. Yashwant Singh Yadav and the leadershipprovided by him during his tenure as Director - HR & Corporate Affairs.
Further the Board post recommendations of the Nomination and Remuneration Committeeand the Audit Committee of the Company in its meeting held on February 8 2017 appointedMr. Leopoldo Estefano Maggiolo Gonzalez (DIN: 07318939) (Mr. Leo) acting inposition of Chief Financial Officer as Additional and Whole time Director of the Companyliable to retire by rotation subject to the approval of the Members in the ensuing AnnualGeneral Meeting for a period of three years effective February 9 2017. The Company hasreceived the requisite notice in writing from the Member proposing the candidature of Mr.Leo as Director liable to retire by rotation in the forthcoming Annual General Meeting ofthe Company. Mr. Christopher Raymond Delaney Director of the Company is retiring byrotation at the forthcoming Annual General Meeting of the Company and being eligibleoffers himself for re-appointment.
The information relating to Mr. Leo's appointment and Mr. Delaney's re-appointment alsoappears under the head Other Informations' in the Corporate Governance Report.
During the Financial Year 2016-17 4 (four) Board Meetings were held on May 30 2016August 30 2016 November 15 2016 and February 8 2017 respectively. Details regardingattendance of Board Meeting by each of the Directors are given in the Corporate GovernanceReport forming part of this Directors' Report.
10. DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS
As per Section 149(7) of the Companies Act 2013 the Company has received declarationof independence from all the Independent Directors as on March 31 2017.
11. INSIDER TRADING REGULATION
In compliance with the Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015 (the PIT Regulations 2015') on prevention of insidertrading the Company had instituted a comprehensive Code of Conduct for regulatingmonitoring and reporting of trading by Insiders. The said Code lays down guidelines whichadvise Insiders on the procedures to be followed and disclosures to be made in dealingwith the shares of the Company and cautions them on consequences of non-compliances.
The Company has put in place the Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information and Conduct for RegulationMonitoring and Prevention of Insider Trading' and the same is available at the Company'swebsite www.goodyear.co.in (in Investor Relations section).
12. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All Related Party transactions entered into by the Company were in the Ordinary courseof Business and on Arms' Length basis. The particulars of contracts or arrangements withrelated parties referred to in Section 188(1) of the Companies Act 2013 read with rule8(2) of the Companies (Accounts) Rules 2014 in the prescribed Form AOC - 2 is annexed as AnnexureA' to this Report.
14. ANNUAL RETURN
Pursuant to Section 92(3) of Companies Act 2013 read with rules made thereunderextract of Annual Return of the Company in the prescribed Form - MGT 9 is annexed as AnnexureB' to this Report.
15. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint Venture or Associate Company.
16. INTERNAL FINANCIAL CONTROLS
The Integrated Framework adopted by the Company which is based on the applicableavailable guidance on Internal Financial Control is adequate and effective.
17. RISK MANAGEMENT POLICY
The Company has embedded across all its functions a risk assessment and minimizationprocedure that is designed to ensure timely identification reporting and mitigation ofrisk if any. Apart from aforesaid the Company has initiated ERM (Enterprise RiskManagement) to minimize the adverse impact of risk by not only dwelling into riskmanagement but also ensuring applicability of the global policies understanding thecurrent operating environment and developing the risk mitigation plans in relation toimpact of the dynamic business scenario.
The Board of Directors of the Company periodically reviews the key issues of Company'soperations and any element of risk therein. In the opinion of the Board there is noidentified risk which may threaten the operations of the Company.
18. STATUTORY AUDITORS' AND AUDITORS' REPORT
The retiring Statutory Auditors Price Waterhouse & Co Bangalore LLP (ICAI FirmRegistration No. 007567S/ S-200012) Chartered Accountants hold office as StatutoryAuditors until the conclusion of this 56th Annual General Meeting.
In terms of Section 139 of the Act and other applicable provisions if any read withthe Companies (Audit and Auditor) Rules 2014 an audit firm which has completed its termof two consecutive terms of five years each shall not be eligible for re-appointment asStatutory Auditor in the same Company for next five years from the completion of previousterm. In view of the above Price Waterhouse & Co Bangalore LLP Statutory Auditors ofthe Company have completed their two terms of five consecutive years in the currentFinancial Year.
Accordingly the Audit Committee and the Board of Directors of the Company recommendsthe appointment of Deloitte Haskins & Sells LLP (ICAI Firm Registration No.: 117366W/W-100018) Chartered Accountants in place of Price Waterhouse & Co Bangalore LLPChartered Accountants. The appointment of Deloitte Haskins & Sells LLP if made shallbe for a term of five consecutive years commencing from the Company's financial year2017-18 to hold office from the conclusion of this 56th Annual General Meetingof the Company till the conclusion of the 61st Annual General Meeting to beheld in 2022. The remuneration of the Auditors would be fixed by the Board of Directors ofthe Company in consultation with the Auditors and with due recommendation of the AuditCommittee of the Company.
In view of the above the Company has received written Consent and a EligibilityLetter' from Deloitte Haskins & Sells LLP dated April 26 2017 to the effectinter-alia that their appointment if made shall be in accordance with the limitsspecified under the provisions of Companies Act 2013 that they meet the criteria ofindependence and that they are not disqualified for such appointment under provisions ofapplicable laws and rules framed thereunder.
There are no qualifications reservations or adverse remarks and disclaimers made byPrice Waterhouse & Co Bangalore LLP the Statutory Auditors in their Audit Report forthe Financial Year under review.
The Company maintains its books of accounts and other papers in electronic mode and theCompany is in process of maintaining the back-up of the same on a server located in India.
19. COST AUDITOR
M/s Vijender Sharma & Co. Cost Accountants 11 3rd Floor HargovindEnclave Vikas Marg New Delhi 110092 were appointed as cost auditor for conductingthe cost audit for the Financial Year 2016-17. The Cost Audit Report for the FinancialYear 2015-16 was filed on September 27 2016. Pursuant to section 148 of the CompaniesAct 2013 read with applicable rules of the act and the recommendation of Audit Committeeof the Company M/s Vijender Sharma & Co. Cost Accountants were re-appointed by theBoard of Directors as Cost Auditors for conducting the cost audit of the Company for theFinancial Year 2017-18 subject to ratification of remuneration by the Members. TheCompany had received a letter from them to the effect that their re-appointment would bewithin the limits prescribed under section 141(3) (g) of the Companies Act 2013 and thatthey are not disqualified for such re-appointment within the meaning of section 141 of theCompanies Act 2013.
20. SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Boardappointed M/s V K Chaudhary & Co Practicing Company Secretary Firm (Now known as
M/s VKC & Associates Company Secretaries) (UCN- P2017UP060600) having itsoffice at C-140 Sector 51 Noida U.P as Secretarial Auditor to carry out theSecretarial Audit of the Company for the Financial Year 2016-17. The Secretarial AuditReport is annexed as Annexure C' to this Report. The Secretarial Audit Reportdoes not contain any qualification reservation or adverse remark.
21. BOARD EVALUATION
As per the provisions of Companies Act 2013 and SEBI (LODR) 2015 the Nomination andRemuneration Committee devised the Annual Evaluation Framework for the BoardCommittee(s) and individual Director(s) for the Financial Year 2016-17. Accordingly anannual evaluation was carried out of the performance of the Board its Committees andIndividual Director(s) including Independent Directors during the year. The details ofCompany's remuneration policy and performance evaluation of Board are mentioned in theCorporate Governance Report (Annexure-D) forming part of this Director's Report.
22. CORPORATE GOVERNANCE REPORT INCLUDING MANAGEMENT AND DISCUSSION ANALYSIS REPORT
As per the applicable provisions of the SEBI (LODR) 2015 a detailed CorporateGovernance Report together with the Auditors' Certificate on the compliance of conditionsof Corporate Governance and a Management Discussion & Analysis Report forms part ofthe Annual Report and is annexed as Annexure D' to this Report.
The Corporate Governance Report forming part of this Report also covers the following:
(a) Board Meetings
The particulars of Board Meetings held during the Financial Year 2016-17 includingcomposition and category of Directors are mentioned under the head-Board ofDirectors'.
(b) Disclosure regarding Audit Committee
Details regarding the role composition and meetings of Audit Committee of the Companyduring the year are mentioned under the head- Audit Committee'.
(c) Board Committees
Particulars of Committees of the Board other than Audit Committee includingNomination and Remuneration Committee Corporate Social Responsibility Committee andStakeholder Relationship Committee are detailed under their respective separate headings.
Particulars of Committees of the Board inter-alia include details of their compositionchanges in such composition if any and their meetings during the year.
(d) Nomination and Remuneration Policy
Details regarding Policy on Nomination and Remuneration of Director Key ManagerialPersonnel and Senior Management are mentioned under the head- Nomination andRemuneration Committee (NRC)'.
(e) Vigil Mechanism (including Whistle Blower Mechanism/ Policy)
In terms of the SEBI (LODR) 2015 the Company has formulated its Vigil Mechanism(including Whistle Blower Mechanism/Policy) the details of which is mentioned under thehead-Disclosures'.
23. HUMAN RESOURCES Industrial Relations
Industrial peace and harmony was maintained during the year through cordial andproductive employee relations. The new Factory Union Committee was elected on November 82016 and took over the charge. Hiring of 62 Hourly Associates has been done. Capabilitybuilding training was conducted on different topics like Safety Shop Floor Managementbasic IT skills and attitudinal training for Union transformation. The Company'sBallabgarh Plant received two Goodyear Global best practices awards and one regional awardfor improving energy efficiency. Total number of salaried and hourly associates as onMarch 31 2017 stood at 924.
Particulars of Employees (Section 197 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014)
Information in accordance with the provisions of Section 197 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014regarding remuneration and other details is annexed as Annexure E' to thisReport.
24. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility (CSR) Committee of the Company is dulyconstituted in accordance with the requirements of Section 135 of the Companies Act 2013read with rules made thereunder as amended to formulate and monitor the CSR policy ofthe Company.
The Company constantly strives to be a socially ethically and environmentallyresponsible Company. The Company has successfully implemented Corporate SocialResponsibility (CSR) initiatives such as Safer Roads Safer You' adriver training programme for fleet operators in collaboration with Institute of RoadTraffic Education (IRTE). The initiative is a livelihood enhancement project with its mainfocus on driver education road safety and traffic laws. The Company is proud to announcethat it has been awarded India CSR Awards Recognizing CSR Innovation andLeadership 2017 under Road Safety' category.
The Annual Report on CSR activities for the Financial Year 2016-17 is annexed as AnnexureF' to this Report pursuant to Rule 8 of the Companies (Corporate SocialResponsibility) Rules 2014.
25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The particulars related to the conservation of energy technology absorption andforeign exchange earnings and outgo as required under Section 134 of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed as AnnexureG' to this Report.
26. DETAILS OF NUMBER OF CASES FILED IF ANY AND THEIR DISPOSAL IN TERMS OF SECTION 22OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL)ACT 2013.
The Company has in place a policy on Prevention of Sexual Harassment in compliance withthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. As per the said Policy an Internal Complaint Committee (ICC) is in place to redresscomplaints received regarding sexual harassment. During the Financial Year 2016-17following is the summary of complaints received and disposed of: No. of complaintsreceived: NIL
No. of complaints disposed of: N.A.
27. OTHER INFORMATION
(a) Sweat Equity Shares Employee Stock Option
The Company has not issued any Sweat Equity Shares and had not provided any StockOption Scheme to the employees during the period under review.
(b) Details of significant and material orders passed by the regulators or courts ortribunals affecting the going concern status and Company's operations in future.
(c) Material Changes & Commitments
There have been no material changes and commitments which can affect the financialposition of the Company between the end of the Financial Year and the date of this Report.
Your Directors place on record their sincere thanks to the Company's esteemedshareholders customers suppliers associates bankers the Municipality the StateGovernment and the Central Government etc. for their valuable contribution and continuedsupport. Your Directors also wish to place on record their deep appreciation to TheGoodyear Tire & Rubber Company Akron Ohio USA and its subsidiaries for itscontinued support and contribution in all the spheres of operations.
The Company has been able to operate efficiently because of the continuous improvementand hard work put in by all functions as well as the efficient utilisation of theCompany's resources which has enabled the Company to continue to grow stronger.
| ||On behalf of the Board of Directors || |
| ||Rajeev Anand ||R V Gupta |
|May 26 2017 ||(Vice Chairman & Managing Director) ||(Director) |
|New Delhi ||DIN: 02519876 ||DIN: 00017410 |