(Rs. in Crores)
|Ten Year Financial Summary ||2021 ||2020 ||2019 ||2018 ||2017 ||2014-16 ||2014 ||2013 ||2012 ||2011 |
|Sales ||15921.35 ||15991.14 ||15837.00 ||15181.05 ||14749.40 ||22162.04 ||13198.12 ||12131.16 ||11870.18 ||9743.17 |
|Other Income ||207.23 ||330.50 ||417.47 ||328.50 ||328.61 ||321.17 ||65.08 ||29.03 ||32.01 ||25.31 |
|Total Income ||16128.58 ||16321.64 ||16254.47 ||15509.55 ||15078.01 ||22483.21 ||13263.20 ||12160.19 ||11902.19 ||9768.48 |
|Profit before Taxation ||1700.27 ||1399.32 ||1608.89 ||1601.91 ||2066.37 ||3605.95 ||1338.89 ||1226.80 ||833.12 ||893.65 |
|Provision for Taxation ||451.21 ||4.34 ||512.02 ||509.63 ||615.29 ||1132.05 ||441.00 ||424.59 ||260.76 ||274.23 |
|Profit after Taxation ||1249.06 ||1394.98 ||1096.87 ||1092.28 ||1451.08 ||2473.90 ||897.89 ||802.21 ||572.36 ||619.42 |
|Share Capital ||4.24 ||4.24 ||4.24 ||4.24 ||4.24 ||4.24 ||4.24 ||4.24 ||4.24 ||4.24 |
|Reserves ||13174.62 ||12000.11 ||10649.06 ||9599.96 ||8540.18 ||7156.97 ||4513.40 ||3640.90 ||2853.56 ||2293.53 |
|Net Worth ||13178.86 ||12004.35 ||10653.30 ||9604.20 ||8544.42 ||7161.21 ||4517.64 ||3645.14 ||2857.80 ||2297.77 |
|Fixed Assets Gross ||15018.09 ||14132.66 ||10779.79 ||9027.88 ||7560.09 ||6306.56 ||6954.43 ||5834.14 ||5477.16 ||4874.07 |
Your Directors have pleasure in presenting to you the Sixtieth AnnualReport and the Audited Financial Statements for the financial year ended 31stMarch 2021.
Rs. in Crores
| ||2020 - 2021 ||2019 - 2020 |
|Total Income ||16129 ||16322 |
|Profit before tax ||1700 ||1399 |
|Provision for taxation ||451 ||4 |
|Profit for the year ||1249 ||1395 |
During the financial year ended 31st March 2021 your Company'stotal income is Rs. 16129 crores as against Rs. 16322 crores in the previous year. Theprofit before tax stood at Rs. 1700 crores for the year as against Rs. 1399 crores for theprevious financial year. The net provision for tax (current tax and deferred tax) for theyear is Rs. 451 crores (previous year Rs. 4 crores). After making provision for incometax the net profit for the year ended 31st March 2021 is Rs. 1249 crores as against Rs.1395 crores for the previous financial year.
Across the board there was an overall decrease of 12% in total tyreproduction.
Your Company's manufacturing facilities sales offices godownsand administrative offices remained closed from 25th of March 2020 due to lockdownsannounced by Central and State Governments on account of Covid 19 pandemic. Operationshowever commenced after the 3rd week of April 2020 and the activities progressivelyattained normal level of operations during the year. Consequently the operations of thefirst quarter of the year was adversely impacted.
The Company's exports (including Indian Rupee Exports) stood atRs. 1333 crores for the financial year ended 31st March 2021 as against Rs.1651 crores for the previous year.
As required under regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Management Discussion and Analysis Reportis attached and forms part of this Report.
Two interim dividends of Rs. 3/- each per share (30% each) for thefinancial year ended 31st March 2021 were declared by the Board of Directors on 6thNovember 2020 and on 11th February 2021. The Board of Directors is now pleased torecommend a final dividend of Rs. 94/- (940%) per share of Rs. 10 each. In addition to thefinal dividend the Board has recommended a special dividend of Rs. 50/- (500%) per shareof Rs. 10 each in connection with the 60th Annual General Meeting of the Company. The year2021 also marks the completion of 75 years of establishment of Madras Rubber Factory(which was originally established in 1946 as a proprietorship concern for manufacture oftoy balloons). Madras Rubber Factory later took up manufacture of tread rubber at whichtime it was converted into a partnership concern. Subsequently during the year 1960 itwas converted into a limited company after which it started manufacture of automotivetyres and tubes. The total dividend for the financial year ended 31st March 2021(including the special dividend) works out to Rs. 150/- (1500%) per share of Rs. 10 each.Both final dividend and special dividend are subject to the approval of the shareholdersat the forthcoming Annual General Meeting of the Company and shall be subject to deductionof income tax at source. The above dividend declared by the Company is in accordance withdividend distribution policy of the Company.
The Directors recommend that after making provision for taxation anddividend an amount of Rs. 1207 crores be transferred to general reserve. With this theCompany's Reserves and Surplus stands at Rs. 13175 crores.
Overall the industrial relations in all our Manufacturing Units havebeen harmonious and cordial. Long Term Settlements have been concluded in KottayamPuducherry & Goa Plants. Both production & productivity were maintained at thesatisfactory levels except production losses because of Covid lockdowns and relatedissues.
Performance of Subsidiaries
The consolidated financial statements of the Company prepared inaccordance with the Companies Act 2013 and applicable accounting standards form part ofthe Annual Report. The consolidated financial statements include the financial results ofits subsidiary Companies. Pursuant to the provisions of section 136 of the Companies Act2013 the financial statements consolidated financial statements along with the relevantdocuments and audited accounts of subsidiaries are available on the website of theCompany.
The Company has four subsidiaries viz. MRF Corp Limited MRFInternational Limited MRF Lanka (P) Ltd and MRF SG PTE. LTD. The aggregateturnover of all four subsidiaries in equivalent Indian Rupees during the financial yearended 31st March 2021 was 1424.33 crores and the aggregate profit after tax was Rs. 28.81crores.
A statement in Form AOC-1 containing the salient features of thefinancial statements of the Company's subsidiaries is attached with the financialstatements. The statement provides details of performance and financial position of eachof the subsidiaries.
The contribution of the subsidiaries to the overall performance of thecompany is given in note 25d of the consolidated financial statements. During the yearthe Company had not entered into any contract/ arrangement/ transaction with relatedparties which could be considered material in accordance with the policy of the Company onmateriality of related party transactions. Hence disclosure as required under section134(3) (b) of the Companies Act 2013 read with Rule 8(2) of the Companies (Accounts)Rules 2014 is not applicable for the financial year ended 31st March 2021.
Directors' Responsibility Statement
As required under section 134(3)(c) of the Companies Act 2013 yourDirectors state that:
a) In the preparation of the annual accounts the applicable AccountingStandards have been followed and that there are no material departures;
b) They have in selection of the accounting policies consulted thestatutory auditors and applied them consistently making judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for the yearended 31st March 2021;
c) Proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) Annual accounts have been prepared on a going concern basis;
e) Internal financial controls had been laid down and followed by theCompany and such internal financial controls are adequate and were operating effectively;and
f) Proper systems to ensure compliance with the provisions of allapplicable laws have been devised and such systems were adequate and operatingeffectively.
The Company has developed and implemented a risk management policy forthe Company including identification therein of elements of risk if any which in theopinion of the Board may threaten the existence of the Company. The "Risk ManagementCommittee" which was constituted as required under the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 met on29.03.2021. The Committee reviewed the risk management initiatives taken by the Company.
Adequacy of Internal Financial Control
The Company has put in place well defined procedures coveringfinancial and operating functions. Delegation of authority and segregation of duties arealso addressed to ensure that the financial transactions are properly authorized. Furtherthe Company has an integrated ERP system connecting head office plant and other locationsto enable timely processing and proper recording of transactions. Physical verification offixed assets is carried out on a periodical basis. The Internal audit department reviewsthe effectiveness of the internal control systems and key observations are reviewed by theAudit Committee. These in the view of the Board are designed to collectively provide anadequate system of internal financial control with reference to the financial statementscommensurate with the the size and nature of business of the Company.
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
Information as required to be given under section 134(3)(m) read withRule 8(3) of the Companies (Accounts) Rules 2014 is provided in Annexure I forming partof this Report.
Corporate Social Responsibility (CSR)
As required under section 135 of the Companies Act 2013 the CSRPolicy was formulated by the CSR Committee and thereafter approved by the Board. CSRPolicy is available on the Company's https://www.mrftyres. com/shareholder-info. Thedetails of the CSR initiatives undertaken during the financial year ended 31st March 2021and other details required to be given under section 135 of the Companies Act 2013 readwith of the Companies (Corporate Social Responsibility Policy) Rules 2014 as amended aregiven in Annexure II forming part of this Report.
Board and Key Management Personnel
During the year under review there was no change in the composition ofthe Board of Directors and Key Managerial Personnel of the Company. As required underSection 152 of the Companies Act 2013 Mrs. Ambika Mammen (DIN: 00287074) Director andMr. Samir Thariyan Mappillai (DIN: 07803982) Whole-time Director of the Company retireby rotation at the forthcoming Annual General Meeting and being eligible have offeredthemselves for re-appointment.
The Company has received declarations of independence from all theIndependent Directors confirming that they meet the criteria of independence as prescribedunder section 149(6) of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and that they are independent from Management.The Board is of the opinion that all the Independent Directors of the Company areperson's of integrity and possess relevant expertise and experience to act asIndependent Directors of the Company. The Independent Directors of the Company haveconfirmed that they have registered with the Indian Institute of Corporate AffairsManesar and have included their name in the databank of Independent Directors within thestatutory timeline as required under Rule 6 of Companies (Appointment and Qualification ofDirectors) Rules 2014. Two Independent Directors were required to appear for the onlineproficiency test. During the financial year both of them passed the test within thestatutory timelines.
Performance evaluation of the Board its Committees and Directors
The Board of Directors has made a formal annual evaluation of its ownperformance and that of its committees pursuant to the provisions of the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015. Theevaluation was done based on the evaluation criteria formulated by Nomination andRemuneration Committee which includes criteria such as fulfilment of specific functionsprescribed by the regulatory framework adequacy of meetings attendance and effectivenessof the deliberations etc.
The Board also carried out an evaluation of the performance of theindividual Directors (excluding the Director who was evaluated) based on their attendanceparticipation in deliberations understanding the
Company's business and that of the industry and in guiding theCompany in decisions affecting the business and additionally in case of IndependentDirectors based on the roles and responsibilities as specified in Schedule IV of theCompanies Act 2013 and fulfilment of independence criteria and independence frommanagement.
In accordance with Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Report on Corporate Governance along withthe Auditors' Certificate confirming compliance is attached and forms part of thisReport.
Following information required to be disclosed as per the CompaniesAct 2013 are set out in the Corporate Governance Report: a) Number of Board meetings held- Para 2(c) of the Corporate Governance Report. b) Constitution of the Audit Committee andrelated matters - Para 3(ii) and 14(o) of the Corporate Governance Report. c) RemunerationPolicy of the Company (including directors remuneration)- Para 7a of the CorporateGovernance Report. d) Company's policy on directors' appointment includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under sub-section (3) of section 178 - Para 5 6 of theCorporate Governance Report. e) Related Party Transactions -Para 14(a) of the CorporateGovernance Report. f) Vigil Mechanism - Para 14 (c) of the Corporate Governance Report.The details of related party transactions are given in note 27d of the financialstatements.
Business Responsibility Report
Business Responsibility Report as per Regulation 34 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 detailing the variousinitiatives taken by the Company on the environment social and governance aspects ofbusiness forms part of this Annual Report.
Particulars of Employees
The disclosures pertaining to remuneration and other details ofDirectors and employees as required under Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 have been provided in the appendix forming part of this report. Having regard to theprovisions of Section 136(1) read with relevant provisions of the Companies Act 2013 theAnnual Report excluding the aforesaid information is being sent to the members of theCompany. The said information is available for inspection at the Registered Office of theCompany during working hours and any member interested in obtaining such information maywrite to the Company Secretary and the same will be furnished to the members. During thefinancial year under review the Company has not received any complaint under The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Further Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
Your Company had discontinued acceptance of fixed deposits with effectfrom 31st March 2019 and all deposits have been repaid. No fresh deposits have beenaccepted subsequently.
Awards received during the year
During the Financial year your Company has been awarded the"Highest Export Award 2019-2020" by the All India Rubber Industries Association(AIRIA).
Messrs SCA AND ASSOCIATES Mumbai (Firm Regn. No.101174W) and MessrsMahesh Virender & Sriram Hyderabad (Firm Regn. No.001939S) were appointed jointstatutory auditors of the Company for a term of 5 (five) consecutive years at the AnnualGeneral Meeting (AGM) of the company held on 11th August 2016 and 4th August 2017.
Messrs. SCA AND ASSOCIATES Chartered Accountants will complete theirpresent term on conclusion of this AGM in terms of the said approval and as per Section139 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014.
Messrs. SCA AND ASSOCIATES have expressed their intention not to seekreappointment as Joint Statutory Auditor of the Company on conclusion of the present termvide their letter dated 24th May 2021 addressed to the Audit Committee and to the Boardof Directors of the Company. The Audit Committee and the Board of Directors at theirmeeting held on 7th June 2021 took note of the above and accepted their request.
The Board of Directors of the Company at its meeting held on 7thJune 2021 on the basis of the recommendations of the Audit Committee recommended for theapproval of the Members the appointment of Messrs. M M NISSIM & CO LLP CharteredAccountants Mumbai (Firm Regn. No.107122W) as the Joint Statutory Auditors of theCompany for a period of 5 (five) consecutive financial years from the conclusion of thisAGM till the conclusion of the Sixty Fifth Annual General Meeting on remuneration termsand conditions as may approved by the Board.
The proposal for appointment of Messrs. M M NISSIM & CO LLP asJoint Statutory Auditor of the Company is listed as an item in the Notice convening theforthcoming Annual General Meeting of the Company for necessary approval of theshareholders.
Auditors Report to the shareholders for the financial year ended 31stMarch 2021 does not contain any qualification.
The Board of Directors on the recommendations of the Audit Committeehas approved the re-appointment of Mr. C. Govindan Kutty Cost Accountant (Mem. No. 2881)as Cost Auditor of the Company for the financial year ending 31st March 2022 undersection 148 of the Companies Act 2013 and recommends ratification of his remuneration bythe shareholders at the forthcoming Annual General Meeting of the Company.
Pursuant to provisions of Section 204 of the Companies Act 2013 readwith rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 your Company engaged the services of Mr K Elangovan Elangovan Associates CompanySecretaries Chennai to conduct the Secretarial Audit of the Company for the financialyear ended 31st March 2021. The Secretarial Audit Report (in Form MR-3) is attached asAnnexure-III to this Report. The Secretarial Auditor's Report to the shareholdersdoes not contain any qualification.
The Annual Return as required under Section 92 and Section 134 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 is available on the Company's website : www.mrftyres.com. Weblink :https://www.mrftyres.com/downloads/download.php?filename=Form-MGT-7-for-the-financial-year-ended-31st-March-2021.pdf.
Material changes and commitments affecting the financial position since31st March 2021.
Given the severity in which the second wave COVID-19 has affectedpeople and the resultant lock down by various states to control the pandemic it isdifficult to accurately assess the impact on the financial position of the Company tillthis date and the future performance at this point of time. Demand is however expected tobe less than normal. The company has a strong net worth low levels of debt and favourableliquidity position. The Company have also serviced all its debt obligations in a timelymanner. The Company does not foresee any incremental risk with regard to its ability toservice financial arrangements and recoverability of its assets including inventory andreceivables at this point in time.
During the year under review there were no material and significantorders passed by the regulators or courts or tribunals impacting the going concern statusand the Company's operations in future.
Details of investments as required under section 134 of the CompaniesAct 2013 is given in note 3 to the financial statements.
During the year under review the Board confirms that the Company hascomplied with the applicable Secretarial Standards issued by the Institute of CompanySecretaries of India.
During the year under review no fraud has been reported by theauditors to the audit committee or the board.
For Cost Audit Records we wish to confirm that we are covered by CostAudit Records Rules under section 148(1) of the Companies Act 2013 and accordingly suchaccounts and all relevant records are maintained by us.
Your Directors place on record their appreciation of the invaluablecontribution made by the Company's employees which made it possible for the Companyto achieve these results. They would also like to take this opportunity to thankcustomers dealers suppliers bankers financial institutions business associates andvalued shareholders for their continued support and encouragement.
| ||On behalf of the Board of Directors |
|Chennai ||K M MAMMEN |
|7th June 2021 ||Chairman & Managing Director |