Your Directors have pleasure in presenting to you the Fifty Seventh
Annual Report and the Audited Financial Statements for the financial year ended 31stMarch 2018.
| || ||Rs. Crores |
| ||2017 - 2018 ||2016 - 2017 |
|Total Income ||15510 ||15078 |
|Profit before tax ||1602 ||2066 |
|Provision for taxation ||510 ||615 |
|Profit fortheyear ||1092 ||1451 |
During the financial year ended 31st March 2018 your Company's total income was Rs.15510 crore as against Rs. 15078 crore in the previous year.
The net profit for the financial year was` 1092 crore as against Rs. 1451 crore in theprevious year.
Across the board there was an overall increase in all segments adding up to a 8 %increase in total tyre production. The Company witnessed higher raw material prices in2017-18 as compared with the previous year.
The Company's exports stood at Rs. 1353 crore for the financial year ended 31st March2018 as against Rs. 1316 crore for the previous year.
As required under regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report is attachedand forms part of this Annual Report.
Two interim dividends of Rs. 3/- each per share (30% each) for the financial year ended31st March 2018 were declared by the Board of Directors on 10th November 2017 and on 1stFebruary 2018. The Board of Directors is now pleased to recommend a final dividend of`54/- per share (540%) on the paid up equity share capital of the Company forconsideration and approval of the shareholders at the forthcoming Annual General Meetingof the Company. With this the total dividend for the financial year ended 31st March2018 works out to Rs. 60/- per share (600 %). The total amount of dividend aggregates toRs. 25.45 crore.
The Directors recommend that after making provision for taxation debenture redemptionreserve and dividend an amount of Rs. 1046.89 crore be transferred to general reserve.With this the Company's Reserves and Surplus stands at Rs. 9599.96 crore.
Overall the Industrial Relations in all our manufacturing units had been harmonious aswell as cordial except in Thiruvottiyur unit wherein long term wage settlement case hasbeen referred to Industrial Tribunal. Efforts are made to resolve it bilaterally. Bothproduction and productivity were maintained at the desired satisfactory levels throughoutthe year under review.
Prospects for the Current Year
A favourable economic outlook expectation of greater stability in GST likely recoveryin investment levels and ongoing structural reforms are a harbinger of higher growth(barring any unprecedented global events which could have a dampening effect on GDPgrowth).
Tyre companies are therefore expected to reap the benefits of the buoyant growthprospects for Auto OEMs and consequently in time replacement demand will also berobust given the steady growth in vehicle population that will be due for replacement inthe years to come.
Performance of Subsidiaries
The consolidated financial statements of the Company and its subsidiaries 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 Act 2013 the financialstatements consolidated financial statements along with the relevant documents andaudited accounts of subsidiaries are available on the website of the Company.
A statement in Form AOC-1 containing the salient features of the financial statementsof the Company's subsidiaries is attached with the financial statements. The statementalso provides details of performance and financial position of the subsidiaries Thecontribution of the subsidiaries to the overall performance of the company is given innote 26(d) of the consolidated financial statement
Directors' Responsibility Statement
As required under section 134(3)(c) of the Companies Act 2013 your Directors statethat: a) In the preparation of the annual accounts the applicable Accounting Standardshave been followed and that there are no material departures; b) They have in selectionof the accounting policies consulted the
Statutory Auditors and applied them consistently making judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profit and loss of the Company forthat period; c) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; d) Annual accounts have been prepared on a going concern basis; e)Internal financial controls had been laid down and followed by the Company and suchinternal financial controls are adequate and were operating effectively; and f) Propersystems to ensure compliance with the provisions of all applicable laws have been devisedand such systems were adequate and operating effectively.
The Company has developed and implemented a risk management policy for the Companyincluding identification therein of elements of risk if any which in the opinion of theBoard may threaten the existence of the Company. During the year a Risk ManagementCommittee was constituted as required under the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015.
The Committee reviewed the risk management initiatives.
Adequacy of Internal Financial Control
The Company has adequate internal financial control with reference to the financialstatements commensurate with its size and nature of business.
These controls include well documented procedures covering financial and operationalfunctions. The internal financial controls of the Company are adequate to ensure theaccuracy and completeness of accounting records timely preparation of reliable financialinformation prevention and detection of frauds and errors and safeguard against anylosses or unauthorized use or disposal of assets. These controls are assessed on a regularbasis by Internal Audit.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
Information as required to be given under section 134(3)(m) read with rule 8(3) of theCompanies (Accounts) Rules 2014 is provided in Annexure I forming part of this Report.
Corporate Social Responsibility (CSR)
As required under section 135 of the Companies Act 2013 the CSR Policy was formulatedby the CSR Committee and thereafter approved by the Board. CSR Policy is available on theCompany's website - http://www.mrftyres.com/downloads/download.php?filename=csr-Policy.pdf. The details of the CSRinitiatives undertaken during the financial year ended 31st March 2018 and other detailsrequired to be given under section 135 of the Companies Act 2013 read with rule 8(1) ofthe Companies (Corporate Social Responsibility Policy) Rules 2014 are given in AnnexureII forming part of this Report.
At the last Annual General Meeting held on 4th August 2017 Mr.Samir Thariyan Mappillaiand Mr.Varun Mammen were inducted into the Board and appointed as Whole-time Directors ofthe Company.
The Board of Directors at its meeting held on 1st February 2018 reappointed Mr. ArunMammen Vice Chairman and Managing Director of the Company for a further period of 5 yearsw.e.f. 1st April 2018 upon conclusion of his earlier tenure on 31st March 2018.
As required vide Section 152 of the Companies Act 2013 Dr.(Mrs) Cibi Mammen and Mrs.Ambika Mammen Directors of the Company retire by rotation at the forthcoming AnnualGeneral Meeting and being eligible have offered themselves for re-appointment. The noticeconvening the Annual General Meeting includes the proposal for the above re-appointments.
The Company has received declaration of independence from all the Independent Directorsconfirming that they meet the criteria of independence as prescribed under Section 149(6)of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
Performance evaluation of the Board its Committees and Directors
The Board of Directors has made a formal annual evaluation of its own performance andthat of its committees pursuant to the provisions of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015. The evaluation wasdone based on the evaluation criteria formulated by Nomination and Remuneration Committeewhich includes criteria such as fulfilment of specific functions prescribed by theregulatory framework adequacy of board meetings attendance and effectiveness of thedeliberations etc.
The Board and the Nomination and Remuneration Committee also carried out an evaluationof the performance of the individual Directors (excluding the Director who was evaluated)based on their attendance participation in deliberations understanding the Company'sbusiness and that of the industry and in guiding the Company in decisions affecting thebusiness and additionally in case of Independent Directors based on the roles andresponsibilities as specified in Schedule IV of the Companies Act 2013.
In accordance with Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Report on Corporate Governance along with the Auditors'Certificate is attached and forms part of this Annual Report.
The information pertaining to the number of Board meetings held the constitution ofthe Audit Committee Remuneration Policy of the Company criteria under section 178(3) ofthe Companies Act 2013 Related Party Transactions and the Vigil Mechanism as requiredunder the various provisions of the Companies Act 2013 have been disclosed in theCorporate Governance Report which forms part of this report. The details of related partytransactions are given in note 27(e) of the financial statements.
Business Responsibility Report
Business Responsibility Report as per Regulation 34 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 detailing the various initiatives taken bythe Company on the environment social and governance aspects of business forms part ofthis Annual Report.
Particulars of Employees
The disclosures pertaining to remuneration and other details of Directors and employeesas required under section 197(12) of the Companies Act 2013 read with rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 have beenprovided in the appendix forming part of this report. Having regard to the provisions ofSection 136(1) read with relevant provisions of the Companies Act 2013 the Annual Reportexcluding the aforesaid information is being sent to the members of the Company. The saidinformation is available for inspection at the Registered Officeof the Company duringworking hours and any member interested in obtaining such information may write to theCompany Secretary and the same will be furnished to the members. During the financial yearunder review the Company has not received any complaint under The Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.
Your Company has not accepted any deposits during the financial year ended 31st March2018. There were no deposits which remain unclaimed as at the close of the financial yearended 31st March 2018.
There were no defaults in respect of repayment of any deposits or payment of interestthereon during the financial year under review
Awards received during the year
Your Company has been awarded the Highest Export Award 2016-17 by All India RubberIndustries Association (AIRIA).
Messrs. SCA AND ASSOCIATES (Firm Regn. No.101174W) and Messrs. Mahesh Virender &Sriram (Firm Regn. No.001939S) were appointed joint statutory auditors of the Company fora term of 5 (five) consecutive years at the Annual General Meeting of the company held on11th August2016 and 4th August2017.They have confirmed that they are not disqualifiedfrom continuing as joint statutory auditors of the Company. Auditors Report to theshareholders for the financial year ended 31st March 2018 does not contain anyqualification.
The Board of Directors on the recommendations of the Audit Committee has approved there-appointment of Mr C. Govindan Kutty Cost Accountant (Mem. No. 2881) as Cost Auditorof the Company for the financial year ending 31st March 2019 under section 148 of theCompanies Act 2013 and recommends ratification of his remuneration by the shareholdersat the forthcoming Annual General Meeting of the Company.
Pursuant to provisions of Section 204 of the Companies Act 2013 read with rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany engaged the services of Mr K Elangovan Elangovan Associates Company SecretariesChennai to conduct the Secretarial Audit of the Company for the financial year ended 31stMarch 2018. The Secretarial Audit Report (in Form MR-3) is attached as Annexure-III tothis Report. The Secretarial Auditor's Report to the shareholders does not contain anyqualification
Extract of Annual Return
An extract of Annual Return in Form MGT-9 as on 31st March 2018 is attached asAnnexure-IV to this Report.
There are no material changes and commitments affecting the financial position of theCompany between the financial year ended 31st March 2018 and the date of this report.
During the year under review there were no material and significant orders passed bythe regulators or courts or tribunals impacting the going concern status and the Company'soperations in future.
Details of loans guarantees and investments as required under the Companies Act 2013are given in the Notes to the financial statements (Note 3 and 27).
During the year under review the Board confirms that the Company has complied with theapplicable Secretarial Standards issued by the Institute of Company Secretaries of India.
During the year under review no fraud has been reported by the auditors to the auditcommittee or the board.
Your Directors place on record their appreciation of the invaluable contribution madeby the Company's employees which made it possible for the Company to achieve theseresults. They would also like to take this opportunity to thank customers dealerssuppliers bankers financial institutions business associates and valued shareholdersfor their continued support and encouragement.
| ||On behalf of the Board of Directors |
|Chennai ||K M MAMMEN |
|3rd May 2018 ||Chairman & Managing Director |