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Goodyear India Ltd.

BSE: 500168 Sector: Auto
NSE: GOODYEAR ISIN Code: INE533A01012
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OPEN 961.95
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VOLUME 1616
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P/E 14.02
Mkt Cap.(Rs cr) 2,219
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OPEN 961.95
CLOSE 971.25
VOLUME 1616
52-Week high 1330.30
52-Week low 846.10
P/E 14.02
Mkt Cap.(Rs cr) 2,219
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Goodyear India Ltd. (GOODYEAR) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 59th Annual Report of the Companyalong with the Company's Audited Financial Statements for the Financial Year ended March31 2020.

1. FINANCIAL SUMMARY

A brief summary of the audited financials of the Company for the Financial Year endedMarch 31 2020 is given below. The figures of the current Financial Year and previousFinancial Year have been prepared in accordance with the Indian Accounting Standards(‘Ind AS').

Particulars Year ended March 31 2020 Year ended March 31 2019
Revenue from operations 174557 191191
Other Income 3517 3769
Total Income 178074 194960
Less: Expenditure:
Cost of material consumed 67600 81790
Depreciation 5010 4103
Other expenses 93780 93253
Total Expenditure 166390 179146
Profit Before Tax 11684 15814
Less: Income Tax Expense:
Current Tax 3125 5802
Deferred Tax (325) (195)
Profit before other comprehensive income 8884 10207
Other comprehensive income for the year net of tax (407) (99)
Total comprehensive income for the year 8477 10108

2. FINANCIAL HIGHLIGHTS

During the Financial Year 2019-20 the total income was Rs. 178074 Lakhs as comparedto Rs. 194960 Lakhs in the previous Financial Year 2018-19.

During the Financial Year 2019-20 the revenue from operations was Rs. 174557 Lakhsas compared to Rs. 191191 Lakhs in the previous Financial Year 2018-19 registering adecrease of Rs. 16634 Lakhs.

Profit before tax (PBT) during the Financial Year 2019-20 was Rs. 11684 Lakhs ascompared to Rs. 15814 Lakhs in the previous Financial Year 2018-19 showing a decrease of26%.

The total comprehensive income of the Company for the Financial Year 2019-20 stood atRs. 8477 Lakhs as compared to Rs. 10108 Lakhs in the previous Financial Year 2018-19showing a decrease of 16%.

During the Financial Year 2019-20 the capital expenditure incurred amounted toRs.5459 Lakhs as compared to Rs. 7386 Lakhs in the previous Financial Year 2018-19. Theinterest and other finance cost during the Financial Year 2019-20 was Rs. 397 Lakhs ascompared to Rs. 300 Lakhs in the previous Financial Year 2018-19.

3. OPERATIONS

The Company manufactures automotive tyres viz. farm tyres and commercial truck tyres atits Ballabgarh plant. The Company also trades in "Goodyear" passenger car tyres(Radial) for Consumer business which are manufactured by Goodyear South Asia Tyres PrivateLimited (‘GSATPL') Aurangabad. Other products which the Company markets and sellsinclude tubes and flaps.

The Farm Tyre industry has degrown at ~14% year on year in the last Financial Year(source CRISIL) due to sharp decline in tractor production. The subdued farm sentimentswere largely contributed by delayed monsoons and floods in different areas and tightenedfinancing environment. Tough macro-economic conditions prevailed throughout Financial Year2019-2020 and unexpected outbreak of COVID-19 pandemic and nationwide lockdown from 25thMarch 2020 impacted farm business during peak season.

During this downturn Farm Business team continued to focus on sustaining leadershipwith OEMs through excellence in Key Account Management to deliver enhanced CustomerService. In the replacement channel the focus continued on robust channel expansion andextraction. This was supported by operational excellence to ensure delivery of the righttyre to the right place at the right time at the right cost. These initiatives resultedin your Company gaining market share in overall farm segment.

Consumer replacement business delivered a strong performance by growing faster than theindustry in Financial Year 2019-20. This was a result of key initiatives as mentionedbelow:

i) Strengthening the product portfolio by launching two flagship products i.e.Assurance Duraplus 2 in the mid passenger car segment and Wrangler AT SilentTrac in theSUV segment.

(ii) Enhancing consumer experience by making Goodyear easy to buy and increasing thereach and distribution footprint.

(iii) Growth in brand salience through brand building activities including traditionaland digital.

4. DIVIDEND

The Board have recommended a final dividend of Rs. 13/- per equity share for theFinancial Year 2019-20 as against final dividend of Rs. 13/- per equity share in theprevious Financial Year 2018-19.

The Dividend recommendation is in accordance with the Dividend Distribution Policy ofthe Company annexed as part of the Annual Report and also available at the InvestorsRelations section of the Company's website at www.goodvear.co.in/investor-relations.

The final dividend will absorb a sum of Rs. 2999 lakhs if approved at the ensuingAnnual General Meeting (AGM) of the Company shall be paid to the eligible members withinthe stipulated time period.

5. TRANSFER TO GENERAL RESERVE

During the Financial Year 2019-20 the Company has not transferred any amount towardsGeneral Reserve.

6. AWARDS AND RECOGNITIONS

The Company is proud to have received the prestigious award "J.D Power 2019 IndiaOriginal Equipment Tyre Customer Satisfaction Index (TCSI) Study" for being # 1 inSmall Car Segment. J.D Power study measures overall customer satisfaction by examiningfour factors i.e. wear ride traction/handling and appearance.

7. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134 of the Companies Act 2013 (‘the Act') the Directors makethe following statements that:

(i) in the preparation of the annual accounts for the Financial Year 2019-20 theapplicable accounting standards have been followed and that there are no materialdepartures;

(ii) appropriate accounting policies have been selected and applied consistently andjudgements and estimates that are reasonable and prudent have been made so as to give atrue and fair view of the state of affairs of the Company as at March 31 2020 and of theprofit and loss of the Company for that period;

(iii) proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts for the Financial Year 2019-20 have been prepared on a goingconcern basis;

(v) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and

(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

8. FUTURE OUTLOOK

After a turbulent year in the tractor industry we are again seeing short to mid-termheadwinds in demand for Financial Year 202021 and industry is expected to be de-grow by8-10% in 2020-21 (Source: Crisil). Key macro factors influencing the demand includecontainment of COVID-19 spread gradual lifting of nationwide lockdown restoring consumerconfidence liquidity and progress of monsoon. On a positive note as per IMD Southwestmonsoon in India is expected to be normal this year at (96%-104%)

The mid to long-term outlook of the farm tyre industry continue to be positive with anexpected growth of 6%-8% (source: ICRA) due to following factors:

(i) Agriculture contribution to GDP at ~17%;

(ii) Strong focus of the Government to enhance rural income through enhanced MSPs(‘Minimum Support Price');

(iii) Lower tractor penetration driving and increasing trend towards mechanization.

(Source: Crisil & ICRA)

The passenger tyre industry is expected to continue witnessing headwinds in 2020 due tothe Covid-19 pandemic. However the longterm outlook is expected to be positive based onthe demographic profile supported by robust GDP growth. The growing vehicle car parc isalso expected to drive replacement demand in the future.

9. BOARD AND KEY MANAGERIAL PERSONNEL (KMP)

Appointment/Re-appointment and/or Cessation/Resignation of Directors and KMP:

S. No Name of Director / KMP Position Appointment / Re-appointment Cessation / Resignation
1. Mr. Anup Karnwal Company Secretary (KMP) April 22 2019 October 15 2019
2. Ms. Sudha Ravi (DIN:06764496) Independent Director June 07 2019 -
3. Ms. Sonali Khanna Company Secretary (KMP) November 13 2019
4. Mr. Rajeev Kher (DIN:01192524) Independent Director March 06 2020 -
5. Mr. Chandrashekhar Dasgupta (DIN:00381799) Independent Director March 11 2020

In the opinion of Board Ms. Sudha Ravi and Mr. Rajeev Kher both fulfill the criteriawith regard to integrity expertise and experience (including the proficiency) forindependent directors as defined under the Companies Act 2013 and rules made thereunder.

Ms. Nicole Amanda Nuttall (DIN:08164858) Non-Executive Non Independent Director isliable to retire by rotation at the ensuing AGM of the Company and being eligible offersherself for reappointment.

Between the end of the Financial Year on March 31 2020 and upto the date of thisReport the following are the changes in Directors of the Company:

(i) Mr. Rajeev Anand (DIN:02519876) ceased to be a Managing Director of the Companyfrom the close of business hours on May 31 2020.

(ii) Mr. Mitesh Mittal (DIN:05231968) has resigned as a Whole Time Director from theclose of business hours on May 31 2020. However Mr. Mitesh Mittal will continue to bethe Chief Financial Officer and a Key Managerial Personnel of the Company.

(iii) Mr. Rajeev Anand (DIN:02519876) was appointed as WholeTime Director to bedesignated as an Executive-Chairman w.e.f. June 01 2020 to September 30 2020 for whichapproval of the members is sought at the ensuing AGM.

(iv) Mr. Rajeev Anand (DIN:02519876) appointed as Non-Executive Director to bedesignated as a Non-Executive Chairman w.e.f. October 01 2020 till December 31 2020.

(v) Mr. Sandeep Mahajan (DIN:08627456) was appointed as an Additional Director w.e.f.June 01 2020 and as Managing Director of the Company effective June 01 2020 for a periodof 5 years or upto the date of superannuation / retirement whichever is earlier forwhich the approval of the members is sought at the ensuing AGM.

None of the Directors are disqualified from being appointed as or holding office ofDirectors as stipulated in Section 164 of the Act.

Pursuant to Section 149 (6) and 149 (7) of the Act and Regulation 16(1 )(b) and 25(8)of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI(LODR) 2015") the Company has received a declaration of independence from all theIndependent Directors confirming that they have complied with the criteria of independenceas of March 31 2020.

During the Financial Year 2019-20 the Board in consultation with the Nomination &Remuneration Committee (‘NRC') has carried out the formal Annual PerformanceEvaluation of the Board its Committees and individual Directors. The evaluation has beencarried out through a questionnaire formulated by NRC covering various evaluationcriteria like Common understanding of roles & responsibilities; Composition of theBoard is appropriate and diversified and the Board functions as a team; the Boardadequately reviews and guides corporate strategies such as restructuring major plans andpolicies budgets performance and expenditure; effective response to crisis if any andability to foresee the same; substantial business experience or professional expertise;initiatives taken and valuable contributions in meetings etc. Feedback was sought fromeach Director in the said questionnaire based on the framework and thereafter a summaryof such performance evaluation compiled by the Company Secretary was reviewed and notedby the Board.

The Nomination & Remuneration Policy of the Company consists the criteria forappointment of board members performance evaluation and succession planning process. Someof the indicators for appointment of Directors Key Managerial Personnel and SeniorManagement includes criteria for determining qualifications (educational expertiseetc.) positive attributes (personal qualities & characteristics reputation etc.)with the object of attracting retaining and motivating talent which is required to runthe Company successfully. The same is available at the Investors Relations section of theCompany's website at www.goodyear.co.in/investor-relations.

10. A. BOARD MEETINGS

During the Financial Year 2019-20 5 (Five) Board Meetings were held and the detailsare disclosed in the Corporate Governance Report annexed as part of Annual Report.

B. AUDIT COMMITTEE

The Board has duly constituted the Audit Committee and the details of the Committeemeetings and members who have attended the meetings are disclosed in the CorporateGovernance Report annexed as part of Annual Report. Also all the recommendation from theAudit Committee were accepted by the Board.

11. DEPOSITS

The Company has neither accepted nor renewed any deposits in terms of Chapter V of theAct read with the Companies (Acceptance of Deposits) Rules 2014 during the Financial Year2019-20.

12. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE ACT

The Company has not granted any loans guarantees or made investments within themeaning of Section 186 of the Act during the Financial Year 2019-20.

13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions entered into by the Company during the Financial Year2019-20 were in the ordinary course of business and on arm's length basis. Alltransactions with related parties were placed before Audit Committee and Audit Committeehas also given omnibus approval for repetitive and foreseen transactions. The particularsof contracts or arrangements with related parties referred to in Section 188(1) of the Actread with Rule 8(2) of the Companies (Accounts) Rules 2014 in the prescribed Form AOC - 2is annexed as ‘Annexure-A' to this Report.

The Policy on dealing with Related Party Transactions is available at the InvestorsRelations section of the Company's website at www.goodyear.co.in/investor-relations.

14. EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) and Section 134(3) (a) of the Act read with rules madethereunder extract of Annual Return of the Company is available at the InvestorsRelations section of the Company's website at www.goodyear.co.in/investor-relations.

15. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have a Subsidiary Joint Venture or Associate Company.

16. AUDITORS

(i) Statutory Auditors and their Report

In accordance with the provisions of the Act and rules made thereunder Deloitte Haskins& Sells LLP Chartered Accountants (ICAI Firm Registration No. 117366W/ W-100018 wereappointed as Statutory Auditors to hold office from the conclusion of the 56thAnnual General Meeting (AGM) held on August 09 2017 until the conclusion of the 61stAGM to be held in the year 2022. There are no qualifications reservations or adverseremarks and disclaimers made by Deloitte Haskins & Sells LLP the Statutory Auditorsin their Audit Report for the Financial Year 2019-20. Further there was no fraudsreported by the Auditors of the Company for the Financial Year 2019-20.

(ii) Cost Auditors and their Report

Pursuant to the Section 148 of the Act read with applicable rules made thereunder andon recommendation of Audit Committee of the Company M/s Vijender Sharma & Co. (FirmRegistration No.: 000180) Cost Accountants were re-appointed by the Board as CostAuditors for conducting the audit of the cost records maintained by the Company for theFinancial Year 2020-21 subject to ratification of remuneration by the Members at theensuing AGM. The Company had received a consert letter from them to the effect that theirre-appointment would be within the limits prescribed under section 141(3) of the Act andthat they are not disqualified for such re-appointment within the meaning of Section 141of the Act.

Cost records as specified by the Central Government under SubSection (1) of Section 148of the Act are made and maintained by the Company.

(iii) Secretarial Auditors and their Report

Pursuant to provisions of Section 204 of the Act 2013 the Secretarial Audit Report isannexed herewith as ‘Annexure-B' to this Report duly certified by M/s VKC& Associates Practicing Company Secretaries (UCN- P2017UP060600) as SecretarialAuditor of the Company.

The Secretarial Audit Report does not contain any qualification reservation or adverseremark. Further there was no fraud reported by the Secreterial Auditors of the Companyfor the Financial Year 2019-20.

17. INTERNAL FINANCIAL CONTROLS

The Integrated Framework adopted by the Company which is based on applicable guidanceon Internal Financial Control is adequate and effective. The Internal Financial Controlsand its adequacy and operating effectiveness is included in the Management Discussion andAnalysis Report annexed as ‘Annexure-C' forming a part of this Report.

18. VIGIL MECHANISM (INCLUDING WHISTLE BLOWER MECHANISM/POLICY)

The Company has formulated its Vigil Mechanism (including Whistle BlowerMechanism/Policy) to deal with concerns/complaints of directors and associates if any.The details of the Policy are also provided in the Corporate Governance Report annexed aspart of Annual Report and the Policy is available at the Investors Relations section ofthe Company's website at www.goodyear.co.in/investor-relations.

19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance with the applicable provisions of the SEBI (LODR) 2015 a detailedManagement Discussion & Analysis Report forming part of the Annual Report is annexedas Annexure-C to this Report.

20. HUMAN RESOURCES Industrial Relations

Industrial harmony was maintained during the year through peaceful and productiveemployee relations. Multiple training sessions were imparted to employees on mattersrelated to ethics and compliance discipline safety of the employees and environmentalawareness. Various employee engagement initiatives were conducted within the salaried andhourly paid employees to increase the engagement levels of employees. The total number ofsalaried and hourly paid associates as on March 31 2020 stood at 933.

21. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has continuously strived to be a socially ethically and environmentallyresponsible corporate entity. In 2019-20 the Company invested in CSR projects on roadsafety rural development and promotion of rural sports. Implementation of the projectswas carried out through various partners with expertise in the thematic areas and presencein the geographical locations of the projects.

The annual report on CSR activities as required under the Act and rules made thereunderincluding the CSR activities undertaken by the Company during the year are set out in ‘Annexure-D'of this report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014 and the policy is also available at the InvestorsRelations section of the Company's website at www.goodyear.co.in/investor-relations.

22. BUSINESS RESPONSIBILITY REPORT (BRR)

Business Responsibility Report which includes principles to assess compliance withenvironmental social and governance norms for the year under review is annexed as ‘Annexure-E'to this Report.

23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

Particulars related to the conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134 of the Act read with Rule 8(3)of the Companies (Accounts) Rules 2014 is annexed as ‘Annexure-F' to thisReport.

24. RISK MANAGEMENT POLICY

The Board has constituted a Risk Management Committee in fulfilling its corporategovernance oversight responsibilities with regard to the identification evaluation andmitigation of strategic operational and external environment risks. The Risk ManagementCommittee has formulated the Risk Management Policy for the Company.

25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION 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 Committee (IC) is duly constituted by theCompany. During the Financial Year 2019-20 two complaints were received by the Companywhich were addressed within the legal framework.

26. PARTICULARS OF EMPLOYEES (SECTION 197 OF THE COMPANIES ACT 2013 READ WITH THECOMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014)

The information required pursuant to Section 197 of the Act read with Rule 5 (1) of theCompanies (Appoinment and Remuneration Rules) is annexed as ‘Annexure-G' ofthis Report. Information required under Rule 5(2) and 5(3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 in respect of employees of theCompany will be provided to members upon request. In terms of Section 136 of the Act theaforesaid information is open for inspection and any Member is interested in obtaining acopy thereof such Member may write to the Company Secretary in this regard.

27. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 124(6) of the Act read with Rule 6 of Investors Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (as amendedfrom time to time) ("Rules") the dividends {unpaid/ unclaimed for a period of 7(seven) years from the date of transfer to the Unpaid / Unclaimed dividend account} andunderlying equity shares on which dividend has not been paid or claimed by the members forseven consecutive years are required to be transferred to the Investor Education &Protection Fund (IEPF) Authority established by the Central Government.

Accordingly the Company has transferred the following Dividend and Equity Sharesduring the Financial Year 2019-20 to IEPF Authority:

Base Financial Year Unpaid/Unclaimed Dividend (In INR) Underlying Equity Shares
December 31 2011 3148999 44047

28. OTHER INFORMATION

(i) Sweat Equity Shares Employee Stock Option/Right Issue/ Preferential Issue

The Company has neither come up with any Right Issue/ Preferential Issue nor issuedany Sweat Equity Shares and not provided any Stock Option Scheme to the employees duringthe Financial Year 2019-20.

(ii) Significant and material orders passed by the regulators

No significant and material orders have been passed during the Financial Year 2019-20by the regulators or courts or tribunals affecting the going concern status and Company'soperations in the future.

(iii) Material Changes & Commitments

No material changes and commitments have occurred which can affect the financialposition of the Company between the end of the Financial Year and upto the date of thisReport.

(iv) Change in Nature of business if any

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

(v) Compliance with Secretarial Standards

The Company has complied with the provisions of Secretarial Standard - 1 (SecretarialStandard on meetings of Board of Directors) and Secretarial Standard - 2 (SecretarialStandard on General Meetings) issued by the Institute of Company Secretaries of India.

29. ACKNOWLEDGEMENT

The Board of Directors expresses their sincere appreciation to all the stakeholders ofthe Company for the trust confidence and support bestowed upon us. The Board of Directorsis also grateful to the holding and fellow subsidiary companies for their contributiontowards the growth and success of the Company.

The Board of Directors assures to uphold the Company's commitment towards acting withhonesty integrity and respect and to be responsible and accountable to all thestakeholders of the Company.

On behalf of the Board of Directors
Rajeev Anand Sandeep Mahajan
(Chairman) (Managing Director)
DIN:02519876 DIN:08627456
June 12 2020 Place: Gurugram Place: Noida

   

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