FOR THE YEAR ENDED MARCH 31 2022
The Board presents the Company's Fourth Annual Report together with the AuditedFinancial Statements for the year ended March 31 2022.
|Particulars ||March 31 2022 ||March 31 2021 |
|Total Income ||2244.28 ||15310.02 |
|Profit / (Loss) before Interest Depreciation Tax and other Amortizations ("EBIDTA") * ||(1439.83) ||(9197.76) |
|Less : Depreciation and Amortization Expenses (Net of transfer from Revaluation Reserve) ||2960.54 ||3329.07 |
|Finance Costs ||17614.97 ||16235.85 |
|Profit / (Loss) before Exceptional Items and Tax ||(22015.34) ||(28762.68) |
|Exceptional Items ||(43551.70) ||- |
|Profit / (Loss) before Tax ||(65567.04) ||(28762.68) |
|Tax Expenses - Net ||- ||- |
|Profit / (Loss) for the year from continuing operations ||(65567.04) ||(28762.68) |
|Profit / (Loss) before tax from discontinued operations ||- ||- |
|Total Profit / (Loss) for the year ||(65567.04) ||(28762.68) |
|Other Comprehensive Income (net of tax expense) || || |
|Re-measurement of Post-employment Benefit Obligations ||115.06 ||384.89 |
|Fair valuation of Equity Investments ||- ||- |
|Total Other Comprehensive Income / (Loss) ||115.06 ||384.89 |
|Total Comprehensive Income / (Loss) for the year ||(65451.98) ||(28377.79) |
*EBIDTA before Other Comprehensive Income
No dividend is recommended in view of the loss during the year and non-availability ofany carry forward surplus.
AMOUNT TRANSFER TO RESERVE
In view of losses incurred no amount has been transferred to Reserve for the yearended March 31 2022.
The Company's paid-up Equity Share Capital stood at RS 14259.01 Lakh as on March312022.
During the year under review the Company has not issued any shares or convertiblesecurities with or without differential voting rights granted stock options or issuedsweat equity shares.
The Company has not accepted any deposits from the public falling under the ambit ofSection 73 of the Companies Act 2013 ("the Act") read with 'Chapter V -Acceptance of Deposits by Companies' during the year under review.
GENERAL REVIEW OF BUSINESS PERFORMANCE AND BUSINESS IMPACT DUE TO COVID-19 PANDEMIC
The main objective of the Company is to carry on the business of manufacturing anddealing in automotive tyres.
During the year under review the operations at factory were halted. This was on accountof the impact of Covid-19 pandemic and unavailability of working capital. Total Incomecomprising Revenue from Operations and other income for the year was RS 2244.28 Lakh andthe loss for the year was RS 65451.98 Lakh.
PROPOSED SCHEME OF ARRANGEMENT WITH CREDITORS SHAREHOLDERS & DEMERGER OF THEPASSENGER CAR RADIALS BUSINESS WITH BIRLA TYRE RADIALS LTD.
The Board with a view to re-organising the Company's Businesses has proposed a"spin off" of the Company's yet to operate Passenger Car Radial Business("PCR") into a separate Company i.e. Birla Tyre Radials Limited("BTRL") and other Internal Reconstructions through National Company LawTribunal ("NCLT") approved Scheme of Arrangement ("the Scheme") attheir Meeting held on January 28 2022.
The Scheme envisages -
1) bifurcating the PCR business from the commercial tyre business with C 758 Crore ofexisting debt of the lenders moving along with the assets of the PCR business into a newcompany BTRL which has been specifically incorporated for the purpose so that the lendershave sufficient asset cover for the debt moving out; and
2) debt resolution and restructuring thereof in the manner such that for the debt ofthe secured creditors being the lenders remaining in the Company a part will be paidupfront part will be converted into equity and the rest would be converted into along-term instrument; and
3) reduction of face value of equity share of the Company from C 10 each to C 5 each byreason of the demerger; and
4) restructuring of the unsecured financial and operational dues (including worker andemployee dues) for its resolution such that the operating expenses of the Companycurtailed and it can soon be brought back on the rails; and
5) infusion of working capital into the Company.
The Company has filed the Scheme with the Stock Exchanges and is in the process offiling the same with the other necessary authorities. Accordingly the implementation ofthe Scheme is subject to the necessary approvals sanctions and consents being obtained.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI LODR Regulations") the Management Discussion andAnalysis Report for the year under review is enclosed as Annexure-I to this AnnualReport.
A Report on Corporate Governance along with the Auditor's Certificate on compliancewith the provisions of Corporate Governance under SEBI - LODR Regulations is enclosed asAnnexure-II to this Annual Report.
The Company has a Business Risk Management framework designed to identify and mitigaterisks that has the potential to materially impact its business objectives and maintains abalance between managing risk and exploiting the opportunities. The approach of RiskManagement is defined across the Company at various levels including documentation andreporting interspersed with diverse risk models to help identify risk trends exposureand potential impact analysis at the corporate level.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS /TRIBUNALS
During the year under review there were no significant or material Orders passed byRegulators / Courts / Tribunals impacting or influencing the Company's going concernstatus and / or its future operations.
However the Company has received an Order of Competition Commission of India("the CCI") under Section 3 of the Competition Act 2002 on February 11 2022dated August 31 2018 imposing a penalty of RS 17833 Lakh.
The Company backed by Legal opinions is of the view that the Order is fit for anappeal with NCLAT and the same has been filed with. Accordingly no provision has been madein the books of accounts.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
In order to ensure orderly and efficient conduct of business the Company's Managementhas put in place adequate Internal Financial Control Systems which commensurate with thenature size and complexity of its business for safeguarding the assets of the Companyprevention and detection of frauds and errors accuracy and completeness of accountingrecords and timely preparation of reliable financial information.
An external independent firm carries out the Internal Audit of the Company and reportsits findings to the Audit Committee on a regular basis. Internal Audit provides assuranceon functioning and quality of internal controls along with adequacy and effectivenessthrough periodic reporting.
During the year under review the Internal Financial Control Audit was carried out bythe Statutory Auditors the Report of which is forming part of the Annual Report.
ANNUAL EVALUATION OF BOARD PERFORMANCE
The Board of Directors has carried out an annual evaluation of its own performance andthat of its Committees and individual Directors in line with the provisions of Section178(2) of the Act and the SEBI - LODR Regulations as amended from time to time. Themethodology adopted in the evaluation process are explained in the Report on CorporateGovernance.
NUMBER OF BOARD MEETINGS
Seven Meetings of the Board of Directors of the Company were convened and held duringthe year under review the details of which appears in the Report on Corporate Governancewhich forms part of this Annual Report. The schedule of the Board/ Committee Meetings tobe held in the forthcoming financial year is prepared and circulated amongst the Directorsand Key Management Personnel well in advance to enable them to plan their schedule foreffective participation in the Meetings.
NOMINATION AND REMUNERATION POLICY
The Company's Nomination and Remuneration Policy is prepared in conformity with therequirements of Section 178(3) of the Act and is available on the website of the Companyat https://www.birlatyre.com/investors/corporate-codes and as a result does not formpart of this Annual Report.
All recommendations of the Nomination and Remuneration Committee made during the yearunder review were accepted by the Board and there were no instances of any disagreementbetween the Committee and the Board.
The Audit Committee comprises of five (5) members. The Committee is chaired by KashiPrasad Khandelwal an eminent Chartered Accountant and a former Chairman of the EasternIndia Regional Council of The Institute of Chartered Accountants of India("ICAI"). The other Members of the Committee are Rashmi Bihani Uma ShankarAsopa Abhijit Ghosh and Anil Goenka. The Committee comprises of majority of IndependentDirectors.
Details of the role and responsibilities of the Audit Committee the particulars ofMeetings held and attendance of each Member at such Meetings are given in the Report onCorporate Governance which forms part of this Annual Report.
There were no instances of any disagreement between the Committee and the Board and allrecommendations of the Audit Committee made during the year under review were accepted bythe Board.
CORPORATE SOCIAL RESPONSIBILITY
The Company does not meet the criteria specified under Section 135 of the Act andapplicable Rules thereto requiring to constitute a Corporate Social ResponsibilityCommittee and formulate a Policy for this purpose.
RELATED PARTY TRANSACTIONS
As required under the SEBI - LODR Regulations all Related Party Transactions areplaced before the Audit Committee for approval. Wherever required prior approval of theAudit Committee is obtained on an omnibus basis for continuous transactions and thecorresponding actual transactions become a subject of review at subsequent Audit CommitteeMeetings on a quarterly basis.
All Related Party Transactions / Arrangements entered into by the Company during theyear under review were on an arm's length basis and in the ordinary course of business.
There were no materially significant Related Party Transactions entered into by theCompany with the Promoters Directors Key Management Personnel or other designatedpersons which could conflict with the interest of the Company as a whole and as suchdisclosure of related party transactions as required under Section 134(3)(h) of the Actread with Rule 8(2) of the Companies (Accounts) Rules 2014 in Form AOC-2 has not beenmade.
Details of related party transactions entered into by the Company in terms of IndAS-24 have been disclosed in the notes to the financial statements forming part of thisAnnual Report.
The Company's Related Party Transactions Policy appears on its website athttps://www.birlatyre.com/investors/corporate- codes.
SUBSIDIARY AND JOINT VENTURE COMPANY
The Company does not have any Subsidiary Associate or Joint Venture.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the year under review the Company had not made any investment in anybody-corporate or given any guarantee or provided any security stipulated under Section186 of the Act.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Fraud and corruption free culture has always been at the Company's core. In view of thepotential risk of fraud corruption and unethical behavior that could adversely impact theCompany's operation performance and reputation the Company has established a robustWhistle Blower Policy and also established the necessary vigil mechanism for directors andemployees in confirmation with Section 177(9) of the Act and Regulation 22 of SEBI - LODRRegulations to report concerns about unethical behavior. The policy is available on thewebsite of the Company at https://www.birlatyre.com/investors/corporate-codes.
STATUTORY AUDITOR AND THEIR REPORT
Shareholders at the Company's First Annual General Meeting appointed Messrs. DeloitteHaskins & Sells Chartered Accountants as the Statutory Auditors of the Company for aperiod of five Year from the conclusion of that Annual General Meeting.
In the Report of the Auditors for the year ended March 31 2022 forming part of thisAnnual Report the Auditors have given following observations: -
1) Clause (ii)(b) of the Annexure B to the Independent Auditor's Report.
2) Clause (v) of the Annexure B to the Independent Auditor's Report.
3) Clause (ix)(d) of the Annexure B to the Independent Auditor's Report.
4) Clause (vii) (ix)(a) and (xix) of the Annexure B to the Independent Auditor'sReport.
In relation to the observations referred above the point wise submissions are asunder:
1. The difference amount of receivable and stocks as reported by the Auditors is onaccount of the provisions in the accounts.
2. During the year under review the Company has not accepted any deposits. Howeverthere are some advances received from the customers against supply of materials which arelying unadjusted over one year and the same shall be adjusted in due course. The delay insupplying of materials is on account of the pandemic and halting of operations.
3. Post demerger the borrowings related to the demerged undertaking was accounted inthe books of the Company and lying unpaid as on date. Subsequently there is no furtherborrowings by the Company from the banks. Since the loans are lying unpaid for more thanone year the auditor reported the same stating short term loan used for long termpurpose.
4. Due to liquidity issue the Company has not paid the undisputed statutory dues andthe loan liabilities. To come out from the financial issues the Board of Directors of theCompany at its meeting held on January 28 2022 has approved the Scheme of Arrangementfor Reconstruction of the Company and for Compromise with its Creditors and Memberstogether with Demerger of Passenger Car Radial Business into Birla Tyre Radials Limited("the Scheme"). The Company has filed the Scheme with the stock exchanges and isin the process of filing the same with the other necessary authorities.
Other observations and opinions of the Statutory Auditors in their report areself-explanatory.
As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules2014 the Company is required to prepare maintain as well as have the audit of its costrecords conducted by a Cost Accountant and accordingly it has made and maintained suchcost accounts and records. The Board of Directors of the Company on the recommendation ofAudit Committee has appointed M/s. Mani & Co. Cost Accountants (Firm RegistrationNo. 000004) to conduct the cost audit of the Company for the Financial Year 2022-23.
An appropriate Resolution has been incorporated in the Notice convening the Company'sFourth Annual General Meeting for ratification of remuneration of the Cost Auditors asapproved by the Board of Directors on the recommendation of the Audit Committee.
SECRETARIAL AUDITOR AND SECRETARIAL STANDARDS
In terms of the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company has appointed M/s. RP & Associates Company Secretaries as theSecretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year2021-22.
The report of the Secretarial Auditor is set out in Annexure III to this AnnualReport. The Secretarial Audit Report does not contain any qualification reservation oradverse remark. However her observations are self-explanatory. The Company is incompliance with the Secretarial Standards as specified by the Institute of CompanySecretaries of India.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other particulars as prescribed under theprovisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are set out in Annexure IV andforms part of this Annual Report. None of the employees listed in the said Annexure isrelated to any Director of the Company.
As per the provisions of Section 136 of the Act read with various circulars issued byMCA and SEBIfrom time to time the Annual Report and Accounts are being sent throughelectronic mode to those Members whose e-mail addresses are registered with the Company /Depositories excluding the information on employees particulars as per Rule 5(2) and Rule5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014as amended. This information is readily available for inspection by Members at theCompany's Registered Office between 3:00 P.M. to 5:00 P.M. on all working days (excludingSaturdays) up to the date of the forthcoming Annual General Meeting. Should any Member beinterested in obtaining a copy (including through e-mail) s/he should write to theCompany Secretary at the Company's Registered Office or request by e-mail email@example.com.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 and the Rules made thereunder the Company has inplace the requisite Internal Complaints Committee for providing a redressal mechanismpertaining to sexual harassment of women employees at workplace if any.
No complaints on the issues covered by the above Act was received during the year underreview.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act and based upon the representations from theManagement the Board of Directors to the best of its knowledge and belief states that:
(a) in the preparation of the Annual Accounts applicable accounting standards havebeen followed and there were no material departures;
(b) such accounting policies have been selected and applied consistently and suchjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearMarch 312022 and of the loss for that period;
(c) proper and sufficient care were taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
(d) the Annual Accounts have been prepared on a going concern basis;
(e) proper internal financial controls have been laid down to be followed by theCompany and that such internal financial controls are adequate and operating effectively;and
(f) proper systems have been devised to ensure compliance by the Company with theprovisions of applicable laws and that such systems are adequate and working effectively.
During the year under review neither the Statutory Auditors nor the SecretarialAuditor have reported to the Audit Committee under Section 143(12) of the Act anyinstances of fraud committed against the Company by its Officers or Employees the detailsof which would need to be mentioned in this Annual Report.
BOARD OF DIRECTORS
In accordance with the provisions of the Act and the Articles of Association of theCompany Manjushree Khaitan (DIN: 00055898) Non-Executive Director of the Companyretires by rotation at the ensuing Annual General Meeting and being eligible offersherself for re-appointment. An appropriate Resolution has been incorporated in the Noticeconvening the Company's Fourth Annual General Meeting for her re-appointment.
The Shareholders had approved appointment of Kashi Prasad Khandelwal (DIN: 00748523) asan Independent Director of the Company at the First Annual General Meeting("AGM") held on December 02 2019 for a term of three consecutive Year from theconclusion of the Company's First AGM till the conclusion of the Company's Fourth AGM. Theterm of Mr. Khandelwal as an Independent Director of the Company will conclude upon theconclusion of the ensuing Annual general Meeting. The Board of Directors at its Meetingheld on April 11 2022 based on the recommendation of the Nomination and RemunerationCommittee and subject to the approval of the Shareholders through Special Resolutionre-appointed him as an Independent Director for a term of five consecutive Yearcommencing from the conclusion of Company's Fourth Annual General Meeting to theconclusion of Company's Ninth Annual General Meeting. An appropriate Resolution has beenincorporated in the Notice convening the Company's Fourth Annual General Meeting for hisre-appointment as an Independent Director of the Company.
In terms of Section 149 of the Act Kashi Prasad Khandelwal Rashmi Bihani AbhijitGhosh and Anil Goenka are the Independent Directors of the Company. The Company hasreceived declarations from all the Independent Directors confirming that they meet thecriteria of independence as prescribed under Section 149(6) of the Act and Regulation16(1)(b) of the SEBI - LODR Regulations. In terms of Regulation 25(8) of the SEBI - LODRRegulations they have confirmed that they are not aware of any circumstance or situationwhich exist or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgement and without any externalinfluence.
The Independent Directors of the Company have confirmed that they have enrolledthemselves in the Independent Directors' Databank maintained with the Indian Institute ofCorporate Affairs ('IICA') in terms of Section 150 of the Act read with Rule 6 of theCompanies (Appointment & Qualification of Directors) Rules 2014 and complied with thecriteria of online proficiency self-assessment test.
The Board of Directors of the Company has taken on record the declaration andconfirmation submitted by the Independent Directors after undertaking due assessment ofthe veracity of the same.
The Board is of the opinion that the Independent Directors of the Company possessrequisite qualifications experience and expertise and that they hold highest standards ofintegrity.
Brief profiles of Directors being appointed / re-appointed at the forthcoming FourthAnnual General Meeting have been given in the Report on Corporate Governance.
KEY MANAGERIAL PERSONNEL
The following persons functioned as Key Managerial Personnel during the year underreview:
|Herve Frederic Richert ||Chief Executive Officer (till July 10 2021) |
|Anant Gupta ||Chief Financial Officer |
|Saurabh Mantri ||Company Secretary |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
There were no foreign exchange earnings during the year under review. However theforeign exchange outgo during the year was RS 25.24 Lakh. Since the operations at thefactory were halted the particulars relating to conservation of energy and technologyabsorption as required to be disclosed pursuant to the provisions of Section 134(3)(m) ofthe Act read with Rule 8 of the Companies (Accounts) Rules 2014 are not available.
MATERIAL CHANGES AFFECTING THE COMPANY
There were no material changes and commitments affecting the financial position of theCompany between the end of the financial year and the date of this Annual Report. Therehas been no change in the nature of business of the Company as on the date of this AnnualReport.
PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016
There are no proceedings filed by the Company which is pending under the Insolvency andBankruptcy Code 2016 as amended before National Company Law Tribunal or other Courtsduring the year under review. However there are six cases filed against the Company for atotal claim of RS 1841.28 Lakh before the NCLT which are not yet admitted at theTribunal.
ONE-TIME SETTLEMENT WITH THE BANKS OR FINANCIAL INSTITUTIONS
There were no instances of one-time settlement with any Banks or Financial Institutionsduring the year under review. CREDIT RATING
The details of credit ratings obtained by the Company are disclosed in the CorporateGovernance Report which forms part of this Annual Report.
In terms of the provisions of Section 92 (3) and Section 134 (3) (a) of the Act readwith Rule 12 of the Companies (Management and Administration) Rules 2014 the draft ofthe Annual Return of the Company as on March 31 2022 is available on the website of theCompany at https://www.birlatyre.com/investors/notices.
ANNEXURES FORMING PART OF THIS REPORT
|Annexure Particulars |
|I Management Discussion and Analysis Report |
|II Report on Corporate Governance |
|III Secretarial Audit Report |
|IV Remuneration and other particulars as prescribed under Section 197 of the Companies Act 2013 |
The Board wishes to gratefully acknowledge the understanding and support received bythe Company from its employees and workers. The Board also takes this opportunity to thankthe Central and State Governments and the local authorities lenders customers dealerssuppliers advisors local community for their continued co-operation and support.
This Report will be incomplete without a specific appreciation for the Members of theCompany who have shown immense confidence and understanding in the Company's well-being.
| ||For and on behalf of the Board of Directors || |
| ||Rashmi Bihani ||Manjushree Khaitan |
| ||Director ||Chairman |
|Place: Kolkata ||DIN: 07062288 ||DIN: 00055898 |
|Date: April 112022 || || |