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Balkrishna Industries Ltd.

BSE: 502355 Sector: Auto
BSE 13:31 | 20 Apr 1718.75 36.45






NSE 13:24 | 20 Apr 1716.20 33.55






OPEN 1695.00
VOLUME 29142
52-Week high 1885.00
52-Week low 837.90
P/E 31.94
Mkt Cap.(Rs cr) 33,223
Buy Price 1716.65
Buy Qty 23.00
Sell Price 1717.70
Sell Qty 30.00
OPEN 1695.00
CLOSE 1682.30
VOLUME 29142
52-Week high 1885.00
52-Week low 837.90
P/E 31.94
Mkt Cap.(Rs cr) 33,223
Buy Price 1716.65
Buy Qty 23.00
Sell Price 1717.70
Sell Qty 30.00

Balkrishna Industries Ltd. (BALKRISIND) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present the 58th Annual Report of BalkrishnaIndustries Limited (the "Company") along with the audited financial statementsfor the financial year ended 31st March 2020. The consolidated performance ofthe Company and its subsidiaries has been referred to wherever required.


(Rs. in Lakhs)



Particulars Current Year ended 31st March 2020 Previous Year ended 31st March 2019 Current Year ended 31st March 2020 Previous Year ended 31st March 2019
Revenue from Operations 478249 524450 481124 520999
Other Income 24877 21421 25078 21817
Total Income 503126 545871 506202 542816
Gross Profit 149085 151556 151313 150917
Less: Depreciation 36801 33255 37361 33261
Profit before tax 112284 118301 113952 117656
Less: Provision for tax
Current Tax 29230 39160 29431 39350
Deferred Tax (11444) 941 (11444) 941
Profit after Tax 94498 78200 95965 77365


Your Company is primarily engaged into Specialty "Off Highway Tire segment"which is consisting of Agriculture Industrial Construction Earthmoving Mining PortLawn and Garden and All-Terrain Vehicle (ATVs) Tires etc.

This segment is highly technical & capital intensive and known as "largevarieties low volume segment" where any credible player needs to maintain largenumber of Stock Keeping Units (SKUs) to meet the diverse requirement of its customersworldwide. While the sub segment (agriculture) is largely known as non-cyclical in naturethe other sub segment (industrial construction and mining) is generally considered ascyclical and the performance of it is largely linked to overall economic outlook of theworld. The market for Company's products is mainly Europe America Australasia and India.

The first 8 months of the year under review have been challenging due to various macrofactors such as; Trade War unfavourable climate condition in Europe which impacted thedemand of our products adversely in various parts of the globe.

From December 2019 after resolution of trade war between USA and China and favourablewinter agricultural season in Europe the demand scenario turned positive and businesscontinued to improve until middle of March 2020 when we all were caught by the deadlyCorona Virus more commonly known as "COVID-19" which led to lockdown of theentire country and as a result our manufacturing activities as well as dispatchesremained suspended from 25th March 2020 to the later part of April 2020 whenlockdown was partly lifted by the Government as we were falling into essential services.We have undertaken sufficient safety measures across all our plants and followed increasedprotocol to ensure safety and well-being of our staff members as well as outsidersinteracting with our staff members.

After resumption of manufacturing activities and dispatches we were gradually able toramp up our activities and are happy to inform you that we have gained normalcy in ourmanufacturing activities as well as dispatches to a good extent. However the year aheadalso looks challenging as we are still struggling with COVID-19 issues the solution ofwhich does not seem to be in sight as of today.


Standalone: During the year under consideration on Standalone basis your Companyachieved a Revenue from Operations of ' 478249 Lakhs as against ' 524450 Lakhs duringthe previous financial year. Earnings before Interest Depreciation and Tax (EBIDTA) hasdecreased to Rs.149812 Lakhs from Rs.152535 Lakhs during previous financial year andNet profit has increased to Rs.94498 Lakhs from Rs.78200 Lakhs during previous financialyear. More than 80% of our revenue is generated through exports.

Consolidated: During the year under consideration on Consolidated basis your Companyachieved Revenue from operations Rs.481124 Lakhs as against Rs.520999 Lakhs during theprevious financial year. Earnings before Interest Depreciation and Tax (EBIDTA) hasincreased to Rs.152203 Lakhs from Rs.152030 Lakhs during previous financial year andNet profit has increased to Rs.95965 Lakhs from Rs.77365 Lakhs during previous financialyear.

The decrease in revenue and EBIDTA in standalone and decrease in revenue inconsolidated results have happened due to adverse factors explained hereinabove whereasthe net profit has increased despite lower revenue due to reduction in rate of tax by theGovernment of India during the year and consequent adjustments in deferred tax liability.


Your Company enjoys the status of "Four Star Export House".


Your Company had undertaken various projects/expansion during financial year 2018-19.The current status of these are as under:

A. Carbon Black: The Second phase of the Carbon Black project was completed on 12thMarch 2020 with a capacity of 80000 tons per annum. The first Phase of 60000 tons perannum capacity was already completed in the month of June 2018.

B. Greenfield Tire Plant in US: The Board had approved to explore to set up a GreenField Tire Project of 20000 Mts per annum capacity with an estimated capital outlay up toUSD 100 million through its wholly owned subsidiary company in USA. After reviewingvarious aspects of the project in the backdrop of various challenging economic andbusiness environment the Board decided to keep it in abeyance.

C. Waluj Plant: The Green Field Tire project was progressing as per schedule howeverdue to COVID-19 the work was temporarily shut from 25th March 2020. Theproject work resumed after the lockdown was lifted. The Company is trying to complete thisproject as per schedule i.e. before 31st March 2021 subject to delay of onequarter provided there is no further lockdown or any unforeseen circumstances.

D. Bhuj Plant: The various activities; setting up of ultra large sized all steel OTRRadial Tire Plant expansion of mixing facility and setting up of a warehouse at Bhujplant were progressing as per schedule. However due to COVID-19 the work was temporarilyshut from 25th March 2020. The project work resumed after the lockdown waslifted. The Company is trying to complete these activities as per schedule i.e. before 31stMarch 2021 subject to delay of one quarter provided there is no further lockdown or anyunforeseen circumstances.


Your Directors are pleased to inform that your Company has a consistent track record ofdividend payment. Your Company had declared and paid 3 interim dividends during thefinancial year under consideration aggregating to Rs.20/- per share as compared to totaldividend of Rs.8/- per share for the financial year 2018-19. In view of the variousexpansion projects being undertaken by the Company no final dividend is proposed to bedeclared.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations 2015") the Board hasapproved and adopted a Dividend Distribution Policy attached as Annexure - I.


The paid-up Share Capital of the Company as on 31st March 2020 was Rs.3866Lakhs. As on 31st March 2020 the Company has not issued shares withdifferential voting rights nor granted stock options nor sweat equity and none of theDirectors of the Company hold any convertible instruments.


The Company proposes to transfer Rs.300 Lakhs to General Reserves.


The outlook for the current year i.e. 2020-21 is full of challenges mainly due toCOVID-19 pandemic. The entire world including India is struggling with it which hasseverely impacted the economic activities across the globe including India. Since there isno treatment/solution in sight it is very difficult to say when and how normalcy will berestored.

This pandemic has also triggered a fresh tussle between USA and China which may impactthe global business environment adversely. In view of all such factors the outlook forthe current financial year is uncertain. However the long-term prospects of the companyare good and promising as your Company continues to explore all the avenues to ensuregrowth of its business which includes deeper penetration into its existing market withinIndia as well as outside India including OEMs and continuous expansion of its productrange. Your Company is proud to say that it has more than 2700 SKUs.


In terms of Section 134(3)(l) of the Companies Act 2013 there are no material changesand commitments affecting the financial position of your Company which have occurredbetween the close of the financial year of the Company on 31st March 2020 towhich the financial statements relate and up to the date of this report except a delay incompletion of expansion projects as stated earlier.



Your Company operates into a segment predominantly known as "large varieties - lowvolume segment" which is not only capital intensive but also labour intensive. YourCompany is fully geared to take advantage of the peculiarities of the said segment and hasdeveloped a large base of SKUs to meet the diverse needs and applications.

Moreover this segment is neither exposed to any technological obsolescence nor wildfluctuations in demand for its products.

The Company is continuously marching ahead to explore incremental opportunity in theform of developing "Earthmovers & mining tires" markets and taking advantageof the shift from bias to radial tires which is growing continuously. In order to takeadvantage of this opportunity the Company had set up an all-steel OTR Radial tire plantand have further added such capacities by setting up a green field tire plant at Bhuj toproduce large size all steel OTR radial tires besides other categories of tires. YourCompany is proud to be the first Company in India to set up such a plant. Your Company iscontinuously expanding its base into various sub-segments like agricultural industrialconstruction mining winter and solid tires under both technologies - bias as well asradials.

The COVID-19 issue has led to a situation where most of the countries are thinking toreshuffle their sourcing plan/strategy. It may open up lot of opportunities for Indiaincluding our Company.


Like any other Company your Company is also exposed to various threats likecompetition from small players retention of employees labour issues increase in rawmaterial prices and other input costs etc.

A new threat has emerged out of COVID-19 which may change the manner and pattern of thebusiness and also may intensify the various threats to which we are already exposed to. Itmay increase the operating cost of running the business.



As per amendment made under Schedule V read with Regulation 34(3) to the ListingRegulations details of significant changes (i.e. change of 25% or more as compared to theimmediately previous financial year) in Key Financial Ratios and any changes in Return onNet Worth of the Company including explanations thereof are given below:



2019-20 2018-19 2019-20 2018-19
Debtors Turnover ratio (Days) * 50.69 40.92 45.77 37.50
Inventory Turnover ratio (Days) ** 12.27 15.34 14.93 18.76
Interest Coverage Ratio (ICR) # $1 155.45 121.84 129.04 106.71
Current Ratio## $ 2 1.28 1.76 1.23 1.70
Net Debt - Equity Ratio ! $ 3 0.10 0.01 0.11 0.01
Operating Profit Margin !! 23.63 22.74 23.87 22.80
Net Profit Margin ~ $ 4 18.78 15.43 18.96 14.25
Return on Net Worth ~~ 22.48 25.49 22.93 25.52

* Accounts receivables/Sales * 365 days

** Closing stock of finished and traded goods/sales *365 days

# EBIT/finance cost

## Current Assets /Current liabilities

! (Long term borrowings + short term borrowing + current maturities less currentinvestment cash and Cash Equivalents)/Total equity

!! EBIT/Operating Income ~ PAT/Total Income ~~ EBIT/Net Worth $ Reason for variance(> 25%)

$ 1 The ICR increased due to lower finance cost as company availed foreign currencyworking capital loan (PCFC in EURO) at lower rate of interest and also due to reduction inborrowings.

$ 2 The Current Ratio reduced due to reduction in current investment.

$ 3 The net debt/equity increased as net debt increased due to reduction in currentinvestment.

$ 4 The Net Profit margin increased due to lower tax rate.


The Company has adequate internal control systems in place and also has reasonableassurance on authorizing recording and reporting transactions of its operations. TheCompany has a well-placed proper and adequate internal controls environment commensuratewith its size scale and complexities of its operations. The Company had already developedand implemented a framework for ensuring internal controls over financial reporting. Thisframework includes entity level policies processes and operating level standard operatingprocedures. Internal control systems are an integral part of your Company's CorporateGovernance structure. These have been designed to provide reasonable assurance with regardto inter-alia.

a. recording and providing reliable financial and operational information;

b. complying with the applicable statutes;

c. safeguarding assets from unauthorized use;

d. executing transactions with proper authorization and ensuring compliance withcorporate policies

e. Prevention and detection of Frauds/errors;

f. Continuous updating of IT systems. The Company's management has assessed theeffectiveness of the Company's internal control over financial reporting as of 31stMarch 2020.

Your Company has appointed M/s KPMG to assess the effectiveness of internal financialcontrols of the Company. Their assessment was based on an internal audit plan which wasreviewed in consultation with the Audit Committee.

The Audit Committee reviewed the reports submitted by the Management and InternalAuditors. Based on their evaluation (as defined in section 177 of the Companies Act 2013and Regulation 18 of Listing Regulations 2015) the Company's Audit Committee hasconcluded that as of 31st March 2020 the Company's internal financialcontrols were adequate and operating effectively.


Your Company believes in a culture of inclusion trust empowerment and development forits employees. Your Company continues to invest significantly in building a culture ofcoaching and mentoring and further aims to make coaching mentoring and communicationability the foundation of its leadership style. Your Company considers people as itsbiggest asset and believes in People at the heart of its Human resource strategy. YourCompany has established an organization structure that is agile and focused on deliveringbusiness results. With regular communication and sustained efforts it is ensuring thatemployees are aligned on common objectives and have the right information on businessevolution. Your Company ensures that young talent is nurtured and mentored consistentlythat rewards and recognition are commensurate with performance and that employees have theopportunity to develop and grow. Your Company had 2834 employees as on 31stMarch 2020. Your Company strongly believes in fostering a culture of trust and mutualrespect in all its employees and seeks to ensure that Company's values and principles areunderstood by all and are the reference point in all people matters. Employee relationscontinue to be cordial.

COVID-19 has created lot of challenges on the Human Resources front; both in the staffcategory as well as in workmen category. In order to address this challenge the Companyhas taken medical insurance of all its employees to protect them from COVID-19 and havetaken good care of its staff members as well as workers during the period of lockdown andcontinues to do so on regular basis.


Thristha Synthetics Limited the wholly owned subsidiary of the Company incorporatedin year 2013 has voluntarily made an application with the Registrar of Companies (ROC)Mumbai Ministry of Corporate Affairs for striking off its name from the records of ROCafter meeting/discharging all the necessary requirements for striking off on 21stAugust 2018 which is currently 'under process of striking off'.

At the end of the year under review the Company had one Domestic Wholly OwnedSubsidiary Company viz. BKT Tyres Limited and the following Overseas Subsidiary Companiesviz. BKT EUROPE S.R.L. BKT USA INC BKT TIRES (CANADA) INC. BKT EXIM US INC. Thecompany has also one step down subsidiary in the name of BKT Tires Inc. based in USA whichis a 100% subsidiary of BKT Exim US INC. The Company does not have any materialsubsidiary as per the thresholds laid down under the Listing Regulations. A policy onmaterial subsidiaries has been formulated by the Company and posted on the website of theCompany and can be accessed on the Company's website at:

Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing the salient features of the financialposition of subsidiary companies in Form AOC-1 attached as Annexure II.


Pursuant to Section 134 (3)(c) and 134(5) of the Companies Act 2013 your Directorsto the best of their knowledge and belief make the following statements that:

(i) that in the preparation of the annual accounts for the year ended 31stMarch 2020 the applicable accounting standards have been followed and there are nomaterial departures from the same;

(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2020 and theStatement of Profit and Loss of the Company for the financial year ended 31stMarch 2020;

(iii) the Directors have taken proper and sufficient care for maintenance of adequateaccounting records in accordance with provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(iv) the Directors have prepared the annual accounts of the Company on a "goingconcern" basis;

(v) the Directors have laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and are operating effectively;and

(vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that systems are adequate and operating effectively.


All contracts /arrangements/transactions entered by the Company during the financialyear with related parties were in ordinary course of business and on an arm's lengthbasis. During the year the Company has not entered into any contracts/arrangements/transactions with related parties which could be considered material inaccordance with the policy of the Company on materiality of related party transactions.

Accordingly the disclosure of related party transactions as required under Section134(3)(h) of the Companies Act 2013 in Form AOC - 2 is not applicable to your Company.

The Policy on materiality of related party transactions and dealing with related partytransactions are approved by the Board and can be accessed on the Company's website at: details of transactions/contracts/ arrangements entered by the Company with Relatedparties during the financial year are set out in the Notes to the Financial Statement.

The Board of Directors of the Company has approved the criteria for making the omnibusapproval by the Audit Committee within the overall framework of the policy on relatedparty transactions. Prior omnibus approval is obtained for related party transactionswhich are of repetitive nature and proposed to be entered in the ordinary course ofbusiness and at arm's length during the financial year. All related party transactions areplaced before the Audit Committee for review and approval.


The Company's social initiatives empower society at a large and provide a holisticgrowth platform. The Company believes that Corporate Social Responsibility (CSR) projectsundertaken by it should be sustainable with the long-term purpose of improving the qualityof living for the less privileged. The funds on CSR projects/activities are spent verycarefully to ensure that the desired objectives are achieved.

During financial year 2018-19 your Company was required to spent '1893 lakhs ofwhich Company had actually spent Rs.1697 lakhs and balance amount of Rs.197 lakhs wereunspent as on 31st March2019. During the year under review your Company hasspent the balance amount of Rs.197 lakhs on the identified CSR project.

The Board of Directors of the Company has approved a CSR Policy based on therecommendation of the CSR Committee. The brief outline of the CSR policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure-III. The Board of Directors has formed a committee on CSR inaccordance with The Companies Act 2013. The terms of reference of the CSR Committeenumber and dates of meetings held composition and attendance of the Directors during thefinancial year ended 31st March 2020 are given separately in the CorporateGovernance Report.

During the year under review the Company was required to spend Rs.2123 lakhs. TheCompany had identified various CSR projects having a total commitment of more thanRs.2123 lakhs and had spent amount of Rs.1576 Lakhs till March 2020. The balance amountof Rs.547 lakhs has been spent in the month of April May and June 2020 on the CSRidentified projects. Hence your Company has spent the total amount of Rs.2123 lakhstowards CSR.

In line with company's objective under its CSR policy to support the society at alarge the company has distributed cooked food and food grains in various part of India tothe people affected by lockdown due to COVID-19. The Company has also distributed PPE kitsto various hospitals in Mumbai and other part of India. Moreover company has donatedHemodynamic Monitors to Tata Memorial Hospital Mumbai. These monitors will help thehospital to monitor vital parameters like pulse BP Oxygen saturation and other vitalfunctions of patients with severe COVID-19 infection.

The CSR policy of the Company is available on the Company's website:


Risk is an integral and unavoidable component of business. In today's challenging andcompetitive environment mitigating risks is imperative. Common risks include changingregulations competition business risk technology obsolescence investments andretention of talent. Business risk inter alia further includes financial risk socialrisk political risk environmental risk and legal risk. For managing risks moreefficiently the Company has undertaken a detailed risk management exercise and hasidentified key risks that can have a critical impact on the Company's performance. TheCompany has inter alia identified the following key risks:

Operational Risk:

Operational risks like equipment obsolescence can impact production. To mitigate suchrisks the Company continuously monitors equipment obsolescence and upgrades equipmentfrom time to time and undertakes preventive maintenance measures. The Company has alsomade significant investment in equipment modernization.

Fluctuation in Raw Material prices:

The Company's major raw material is Natural Rubber which is an agricultural commodityand actively traded on the commodities exchanges. The demand supply situation of NaturalRubber has been favourable to the users which has kept its prices under check. Though wesee volatility in its pricing we do not foresee any major increase in its prices in thenear to medium term unless due to unforeseen circumstances. The prices of other rawmaterials which are crude derivatives have been declining on account of drop in crudeprices. Since crude is a very volatile commodity the prices of crude linked raw materialsare likely to fluctuate due to any fluctuation in crude prices.

In order to minimize such risks the Company not only enters into medium-term contractsbut also adopts the policy to "Buy and Stock" large quantities during the leanperiod. The timely sourcing of various raw materials consumed by the Company is ensured byprocuring it from different geographies.

COVID-19 has disrupted the entire supply chain across the globe which has led to higherdelivery time coupled with increase in logistic cost. The company is continuouslydeveloping alternative sources of raw material as well as their supply chain to ensuretimely delivery of goods at a minimal cost.

Market Risk:

More than 80% of the Company revenue is generated through exports which is made todifferent geographies. Almost 1/3rd of the Company's revenue is generatedthrough a product category which is cyclical in nature and therefore your Company isexposed to market risk.

Your Company manages this risk by expanding its presence in different markets deeperpenetration into existing markets and by launching new products. Furthermore the Companyspends requisite amount on marketing and promotional activities to ensure customerretention and brand-building.

COVID-19 has led to lockdown across the globe which has impacted the demand adversely.The Company believes that the disruption in demand is temporary in nature and do notforesee any long-term challenges on demand front out of COVID-19.

Labour Relations:

Since the manufacturing process of the Company is labour intensive it requires lot ofskilled as well as un-skilled workers. Maintaining a huge work force is a big challenge.

In order to mitigate the said risk the Company follows good HR practices to promotethe welfare and safety of its workmen and maintain a cordial working environment. Allworkers are paid more than government stipulated remuneration for their work.

COVID-19 led to migration of labour from various industrial zones to their home towns;this may create a situation of shortage of labour which may impact the operations of theCompany adversely. Despite this your Company does not foresee any major challenge as ithas taken good care of all its staff members as well as workers during the period oflockdown and continues to do so regularly ensuring smooth and seamless operations of theCompany.

Retention of skilled manpower:

Like other players in the industry the Company is also exposed to this risk moreparticularly when there is shortage of skilled manpower in the industry. COVID-19 hasfurther intensified this risk. However the Company is able to manage the said risk bygood HR practices and rewarding its employees handsomely.

Currency Fluctuation:

The Company revenues are mainly generated through exports. Further since most of theraw materials and capital equipment are imported the Company is exposed to foreigncurrency risk. However it enjoys natural hedge as most of its revenues are in foreigncurrency.

COVID-19 issue has created imbalance in the economies of various countries includingIndia and therefore we are exposed to wider risk due to currency fluctuation.

However since the Company is a net foreign exchange earner and hedges its netexposure well in advance by way of forward contracts it is immune to a great extent fromthe fluctuation in currencies.

Risk Management and Mitigation:

'Risk Management' is the identification assessment and prioritization of risksfollowed by coordinated and economical application of resources to minimize monitor andcontrol the probability and/or impact of uncertain events or to maximize the realizationof opportunities. Risk management also provides a system for the setting of prioritieswhen there are competing demands on limited resources. Risk management also attempts toidentify and manage threats that could severely impact or bring down the organization.

The Company's Board of Directors has overall responsibility for the establishment andoversight of the Company risk management framework. Pursuant to Regulation 21 of ListingRegulations the Board of Directors at their meeting held on 8th February2019 has constituted Risk Management Committee comprising of Mr. Pannkaj Ghadiali anIndependent Director as Chairman of the Committee Mr. Arvind Poddar Mr. Rajiv PoddarMr. Vipul Shah Directors of the Company and Mr. Basant Bansal KMP are Members

of the Committee. The primary objective of the Committee is to control the variousrisks that the Company is exposed to with a view to prevent unacceptable losses toprovide an effective means of identifying measuring and monitoring credit exposuresincurred by Company and to keep such risk at or below pre-determined levels. The Companyhas framed an Enterprise Risk Management Policy (the "Policy") to realize thefollowing benefits for the Company:

1. Enhanced risk management for the organization including strategy setting.

2. Facilitate risk-based decision making.

3. Improve governance and accountability.

4. Enhance credibility with key stakeholders such as investors employees governmentregulators society etc.

5. Create Protect and enrich stakeholder value.

The policy contains the objectives of risk management company's approach to riskmanagement and the risk organization structure for identification management andreporting of risks. The policy specifies the roles and responsibilities of keystakeholders and other key personnel of the company with regards to risk management. Thepolicy also aims to ensure and identify process of risk identification and management incompliance with the provisions of the Companies Act 2013.

Following objectives are achieved through the Risk Management program of the Companyviz:

1. Enable organizational sustainability taking cognizance of the impact of itsproducts services & operations on society and the environment.

2. Reduce potential gaps in achieving company's objectives.

3. Align and integrate existing risk management practices in the organization.

4. Build confidence of investment community and stakeholders.

5. Enhance Corporate Governance.

6. Successfully respond to changing business environment.

Risk management policies and systems are reviewed regularly to reflect changes inmarket conditions and the Company's Activities.

The Audit Committee oversees how management monitors compliance with the Company's riskmanagement policy and procedures and reviews the adequacy of the risk management frameworkin relation to the risks faced by the Company. Internal Audit undertakes both regular andad hoc reviews of risk management controls and procedures the results of which arereported to the audit Committee.

There are no risks which in the opinion of the Board threaten the existence of theCompany.


Mr. Ashok Saraf Mr. Laxmidas Merchant and Mr. Sanjay Asher Independent Directorswere appointed for a period of five consecutive years w.e.f. 2nd August 2014.During the year under review all the above-mentioned Independent Directors completedtheir second term of five years and ceased to be Independent Directors w.e.f. closingbusiness hours of 1st August 2019. Your directors place on record theirappreciation on the valuable guidance given and the services rendered by all the aforesaidindependent directors during their tenure with the Company.

In accordance with provisions of the Companies Act 2013 and Articles of Association ofthe Company Mr. Vipul Shah Executive Director of the Company retires by rotation at theensuing AGM and being eligible offers himself for re-appointment. The Board recommends hisre-appointment.

Brief profile of the Director being re-appointed as required under Regulations 36(3) ofListing Regulations 2015 and Secretarial Standard on General Meetings is provided in theNotice for the forthcoming AGM of the Company.

The Company has received declaration from all Independent Directors of the Companyconfirming that they meet with the criteria of independence as laid down under Section149(6) of the Companies Act 2013 as well as Regulation 16(1)(b) of the ListingRegulations 2015.

The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirement set out by the SEBI. The Company hascomplied with the requirements of Corporate Governance as stipulated under the ListingRegulations 2015 and accordingly the Report on Corporate Governance forms part of thisAnnual Report. The requisite certificate from the Auditors of the Company confirmingcompliance with the conditions of the Corporate Governance is attached to the Report onCorporate Governance.


The Company has devised the Nomination and Remuneration Policy for the selectionappointment and remuneration of Directors Key Managerial Personnel and also remunerationof other employees including Senior Management employees who have the capacity and abilityto lead the Company towards achieving sustainable development. The extract of Nominationand Remuneration Policy is provided in the Corporate Governance Report and forms part ofBoard's Report.

The Criteria for appointment and remuneration of Directors is as under:

(i) Criteria for Appointment of Managing Director/Whole Time Director/ Director:

The Nomination and Remuneration Committee shall identify persons of integrity whopossess relevant expertise and experience particularly in Tire Industry leadershipqualities required for the position and shall take into consideration recommendation ifany received from any member of the Board.

(ii) Criteria for Appointment of Independent Director:

The Independent Director shall be of high integrity with relevant expertise andexperience so as to have as diverse Board with Directors having expertise in the fields ofmanufacturing marketing finance taxation law governance and general management.


The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to applicable provisions of the Act andthe corporate governance requirements as prescribed by applicable Listing Regulations2015.

The performance of the Board was evaluated after seeking inputs from all the Directorspresent in the meeting on the basis of criteria such as the board composition andstructure effectiveness of board processes information and functioning etc.

The Nomination and Remuneration Committee had evaluated the performance of individualDirectors on the basis of criteria such as the contribution of the individual Director tothe board and committee meetings like preparedness on the issues to be discussedmeaningful and constructive contribution and inputs in meetings etc.

The Securities and Exchange Board of India (SEBI) vide circularSEBI/HO/CFD/CMD/CIR/2017/004 dated 5th January 2017 issued a Guidance Note onBoard Evaluation about various aspects involved in the Board Evaluation process to benefitall stakeholders. While evaluating the performance the above guidance note was considered.Performance evaluation of Independent Directors was carried out by the entire boardexcluding the Independent Director being evaluated. Due to COVID-19 Pandemic and furtherrelaxation as provided by the relevant competent authority a meeting of the IndependentDirector for the financial year 2019-20 with Mr. Pannkaj Ghadiali as the Chairman washeld on 18th June 2020 to review the performance of the Non-IndependentDirectors the Board as a whole and the Chairman on the parameters of effectiveness and toassess the quality quantity and timeliness of the flow of information between theManagement and the Board. The same were discussed in the board meeting that followed themeeting of the Independent Directors at which the performance of the board itscommittees and individual Directors were also discussed. The Directors expressed theirsatisfaction with the evaluation process.


Statutory Auditor:

Pursuant to Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the members of the Company at its AGM held on 9thSeptember 2017 had approved the appointment of M/s. N G Thakrar & Co. CharteredAccountants (Firm Registration No. 110907W) as the Statutory Auditors for period of fiveyears. Pursuant to amendments in Section 139 of the Companies Act 2013 the requirementsto place the matter relating to such appointment for ratification by members at every AGMhas been omitted.

Internal Auditor:

The Board has appointed M/s. RTD & Associates Chartered Accountants as InternalAuditors w.e.f. 17th May 2019 for financial year 2019-20 under Section 138 ofthe Companies Act 2013 and they have completed the Internal Audit as per the scope asdefined by the Audit Committee.

Secretarial Auditor:

The Company has appointed Mr. G.B.B Babuji Company Secretary in Whole Time Practiceto conduct Secretarial Audit for the financial year 2019-20 as required by Section 204 ofthe Companies Act 2013 and rules made thereunder. The Company provided all assistance andfacilities to the Secretarial Auditors for conducting their audit. Further pursuant toSEBI Circular CIR/CFD/ CMD1/27/2019 dated 8th February 2019 Mr. G.B.B Babujihas also conducted the Annual Secretarial Compliance. The Secretarial Audit Report for thefinancial year ended 31st March 2020 is annexed herewith marked as Annexure- IV.

Cost Auditor:

In terms of Section 148 of the Companies Act 2013 read with Rule 5 of Companies (CostRecords and Audit) Rules 2014 ("Cost Records Rules") as amended from time totime the Company maintained its Cost records on regular basis in such manner whichfacilitated the calculation as may be prescribed by the Rules. Also cost recordsmaintained in such manner which enable the Company to exercise to the extent possiblecontrol over the various operations and costs to achieve optimum economies in utilizationof resources. The Company's revenue from exports in foreign exchange exceeds 80% percent of Company's total revenue. Pursuant to Rule 4 of Cost Records Rules of CompaniesAct 2013 as amended from time to time Cost Audit is not applicable to the Company forthe financial year 2019-20.


There are no qualifications in the reports of the Statutory Auditors and SecretarialAuditor. There was no instance of fraud during the year under review which is required tobe reported by Statutory Auditors in their reports as mentioned under sub-section (12) ofSection 143 of the Act.

The Auditors in their report under para titled "Emphasis of Matter" hasmentioned about uncertainty of impact of COVID-19. The Company however has assessed andaccounted for non-usable work-in-progress which was of insignificant value. Consequentlythere is no loss remaining to be accounted during the accounting year ended 31stMarch 2020. After the lifting of the lockdown all the plants of the Company arefunctioning by following the required protocols.


The industrial relations with staff and workers during the year under review continueto be cordial.


There is no change in the nature of business of your Company during the year underreview.


i. Vigil Mechanism /Whistle Blower Policy:

The Vigil Mechanism of the Company which also incorporate a whistle blower policy inthe terms of SEBI (Listing Obligations and Disclosure Requirements) 2015 deals withinstances of fraud and mismanagement if any. Adequate safeguards have been providedagainst victimization of persons who use the vigil mechanism. The Policy on vigilmechanism and whistle blower policy may be accessed on the Company's website:

ii. Audit Committee:

During the year under review Mr. Ashok Saraf and Mr. Laxmidas Merchant IndependentDirectors and member of Audit Committee ceased to be Independent Directors w.e.f. closingbusiness hours of 1st August 2019 due to completion of their second term offive years and consequently also ceased from the membership of the Audit Committee. Yourdirectors place on record their appreciation on the valuable guidance given and servicesrendered by them during their tenure as members of Audit Committee of the Company.

Consequent to cessation of Independent Directors the Audit Committee wasre-constituted and comprised of the following Directors as on 31st March 2020viz. Mr. Pannkaj Ghadiali an Independent Director as Chairman Mr. Rajendra Hingwala& Mrs. Shruti Shah Independent Directors and Mr. Rajiv Poddar Joint ManagingDirector. All the recommendations made by the Audit Committee have been accepted by theBoard.

iii. Number of Board Meetings:

The Board of Directors of the Company met four times in the year the details of whichare provided in the Corporate Governance Report.

iv. Particulars of loans given investment made guarantees given and securitiesprovided:

Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the Notes Nos.5101447 and 50 to Financialstatement forming a part of this Annual Report.

v. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andoutgo:

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014 areprovided in Annexure - V and forms an integral part of this report.

vi. Extract of Annual Return:

Extract of Annual Return of the Company is annexed herewith as Annexure - VI tothis report. However for the compliance of conditions of Section 134 copy of the AnnualReturn for the financial year ended 31st March 2020 shall be placed on theCompany's website at:

vii. Particulars of Employees and related disclosures:

The information required under Section 197(12) of the Companies Act 2013 read withRules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is attached as Annexure - VII.

A statement comprising the names of top 10 employees in terms of remuneration drawn andevery person employed throughout the year who were in receipt of remuneration in terms ofRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are provided in the Report.

However having regard to the provisions of the first proviso to Section 136 of theAct the details are excluded in the report sent to members. Members who are interested inobtaining the particulars may write to the Company Secretary at Email ID : shares@bkt-tires.comor registered/ corporate office of the Company. The aforesaid information is available forinspection.

viii. Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal)Act 2013:

The Company has formulated and implemented a policy of prevention of sexual harassmentat the workplace with mechanism of loading/redressal complaints. During the year underreview there were no complaints reported to the Board.

ix. Business Responsibility Report:

As mandated by Regulations - 34(2)(f) of Listing Regulations 2015 BusinessResponsibility Report of the Company for the year ended 31st March 2020describing the initiatives taken by the Company from an environmental social andgovernance prospective in the prescribed form is annexed as Annexure - VIII.

x. Compliance with the Institute of Company Secretaries of India ("ICSI")Secretarial Standards:

The relevant Secretarial Standards issued by the ICSI related to the Board Meetings andGeneral Meeting have been complied with by the Company.

No disclosure or reporting is required in respect of the following items as there wereno transaction on these items during the year under review:

1. Details relating to deposit and unclaimed deposits or interest thereon.

2. Issue of equity shares with differential rights as to dividend or voting.

3. Issue of shares (including sweat equity shares) and Employee Stock Option Scheme ofthe Company under any scheme.

4. None of the managerial personnel i.e. Managing Director Joint Managing Director andWhole-time Director of the Company are in receipt of remuneration/commission fromSubsidiary Companies of the Company.

5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern and Company's operation in future.


Certain statements in the "Director's Report & Management Discussion andAnalysis" describing the Company's views about the Industry expectations/predictions objectives etc. may be forward looking within the meaning of applicable lawsand regulations. Actual results may differ materially from those expressed in theStatement. Company's operations may inter-alia affect with the supply and demandstipulations input prices and their availability changes in Government regulationstaxes exchange fluctuations and other factors such as Industrial relations and economicdevelopments etc. Investors should bear the above in mind.


Your Company has been able to operate efficiently because of the culture ofprofessionalism creativity integrity and continuous improvement in all functions andareas as well as the efficient utilization of the Company's resources for sustainable andprofitable growth.

The Board of Directors would like to express their sincere appreciation for theassistance and co-operation received from the financial institutions banks Governmentauthorities customers vendors and members during the year under review. The Board ofDirectors also wish to place on record its deep sense of appreciation for the dedicatedand committed services by the Company's executives staff and workers.

Last but not the least your Directors wish to place on record their warm appreciationto you for your continuous support and encouragement.

For and on behalf of the Board of Directors
Place : Mumbai ARVIND PODDAR
Dated: 20th June 2020 Chairman & Managing Director
DIN: 00089984