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Balkrishna Industries Ltd.

BSE: 502355 Sector: Auto
BSE 00:00 | 24 Apr 2020 Balkrishna Industries Ltd
NSE 05:30 | 01 Jan 1970 Balkrishna Industries Ltd

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OPEN 886.00
VOLUME 23504
52-Week high 1298.00
52-Week low 677.60
P/E 19.21
Mkt Cap.(Rs cr) 16,759
Buy Price 867.00
Buy Qty 332.00
Sell Price 871.20
Sell Qty 10.00
OPEN 886.00
CLOSE 885.10
VOLUME 23504
52-Week high 1298.00
52-Week low 677.60
P/E 19.21
Mkt Cap.(Rs cr) 16,759
Buy Price 867.00
Buy Qty 332.00
Sell Price 871.20
Sell Qty 10.00

Balkrishna Industries Ltd. (BALKRISIND) - Director Report

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Company director report

Dear Shareholders

Your Directors are pleased to present the 57th Annual Report of Balkrishna IndustriesLimited (the "Company") along with the audited financial statements for thefinancial year ended 31st March 2019. The consolidated performance of the Company and itssubsidiaries has been referred to wherever required.


Shri Dharaprasadji Poddar erstwhile Chairman Emeritus left for heavenly abode on 20thOctober 2018. Late Shri Dharaprasadji Poddar was associated with Company since 1993 as aChairman of the Company. Under the able leadership of Late Shri Dharaprasadji Poddar theCompany has grown from strength to strength and has benefited immensely from his valuableguidance and foresightedness over the years. He was a man of vision determination andintelligence yet believed in simplicity. He stepped down as a Chairman of the Company in2012. The Board of Directors of the Company express their deep condolences and pay tributeto Late Shri Dharaprasasdji Poddar a great visionary leader.

1. FINANCIAL RESULTS: (? in Lakhs)



Particulars Current Year ended Previous Year ended Current Year ended Previous Year ended
31st March 2019 31st March 2018 31st March 2019 31st March 2018
Revenue from Operations 524450 446446 520999 446097
Other Income 21421 33621 21817 33975
Total Income 545871 480067 542816 480072
Gross Profit 151556 142983 150917 142744
Less: Depreciation 33255 31134 33261 31140
Profit before tax 118301 111849 117656 111604
Less: Provision for tax
Current Tax 39160 36903 39350 37002
Deferred Tax 941 1021 941 1023
Profit after Tax 78200 73925 77365 73579


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 Tires (ATVs) etc.

This segment is highly technical & capital incentive 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. Since these tires are highly technical in nature the major markets for it aredeveloped countries like Europe USA Australia New Zealand and Japan etc. While the subsegment (agriculture) is largely known as non-cyclical in nature the other sub segment(industrial construction and mining) is generally considered as cyclical and theperformance of it is largely linked to overall economic outlook of the world.

The growth rate in "Off-Highway tire segment" in a normal businessenvironment ranges between 3-5%. The industry witnessed positive momentum for the last twoand half years. For the last six months industry is facing challenges on account ofvarious macro factors namely; Trade War environment slow-down in global economy benignfood inflation etc.


Standalone: During the year under consideration on Standalone basis your Companyachieved a Revenue from Operations of ' 524450 Lakhs as against ' 446446 Lakhs duringprevious financial year. Earnings before Interest Depreciation and Tax (EBIDTA) hasincreased to ' 152535 Lakhs from ' 144289 Lakhs during previous financial year and Netprofit has increased to ' 78200 Lakhs from ' 73925 Lakhs during previous financial year.More than 80% of our revenue is generated through exports.

Consolidated: During the year under consideration on Consolidated basis your Companyachieved Revenue from operations ' 520999 Lakhs as against ' 446097 Lakhs duringprevious financial year. Earnings before Interest Depreciation and Tax (EBIDTA) hasincreased to ' 152030 Lakhs from ' 144131 Lakhs during previous financial year and Netprofit has increased to ' 77365 Lakhs from ' 73579 Lakhs during previous financial year.


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


Your Company has undertaken various projects/expansion 2018-19 which are as under :

A) Carbon Black: The Company had started the Carbon Project during the financial year2017-18 with a capacity of 60000 MTs p.a. The company revised the said capacity to140000 MTs p.a during the financial year under consideration. The total capital outlayfor full capacity of 140000 MTs is estimated at ' 42500 Lakhs. The first phase ofproject of 60000 MTs is almost complete and company is in the process of giving afinishing touch to it and hoping to commence commercial production by end of June 2019.The second phase of 80000 MTs capacity is likely to be completed by financial year2020-21.

B) Greenfield Tire Plant in US: Your Company have approved a Capex plan for setting upa Greenfield tire plant in United State of America (USA) with a capacity of 20000 MTs p.athrough its wholly owned subsidiary company in USA. The board has approved totalinvestment upto USD 100 million. It will be funded via investments from your Company anddebt. However the Company is still trying to find out right location for the plant.

C) Waluj Plant : The Company had set up the Waluj plant in 1987 to produce 2-3 wheelertires and from time to time the company carried out modernization / expansion during last30 years as per the changing requirement of the company. Since plant is very old and needcomplete revamping to protect its existing capacity the Board decided to construct agreen field tire project on its freehold land of 22 acres which is in the vicinity ofaround 5 kms from existing plant. The total capital outlay of the said project isestimated at ' 50000 Lakhs which will include Co-generation plant mixing plant andin-house warehousing facilities for raw materials and finished goods. It will bring lot ofoperational efficiency and will lead to saving of operational cost as well.

D) Bhuj Plant: The company is currently producing All Steel OTR Radial Tires upto49". In order to complete the entire range and to meet overall demand in higherdimensional tires your company is proposing to set up additional facilities of 5000 MTsp.a. for 51" to 57" tires with an estimated Capital out lay of ' 50000 Lakhs.It also includes setting up of an additional mixing line and warehouse.


Your Directors are pleased to inform that your Company has a consistent track record ofdividend payment. The Board of Directors are pleased to recommend a Final Dividend of '2.00 per equity share for the financial year 2018-19. The total Dividend for financialyear 2018-19 aggregates to ' 8.00 per equity share which includes three Interim Dividendaggregate to ' 6.00 per equity share. The final dividend on equity shares is subject tothe approval of the Shareholders at the ensuing Annual General Meeting of the Companyscheduled to be held on 13th July 2019. The final dividend once approved by Shareholderswill be paid on or after 15th July 2019 but within stipulated time. The Register ofMembers and Share Transfer Books of the Company will remain closed from 8th July 2019 to9th July 2019 (both days inclusive) for the purpose of payment of the Dividend and 57thAnnual General Meeting.

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 2019 was ' 3866 Lakhs. Ason 31st March 2019 the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity and none of the Directors of the Company hold anyconvertible instruments.


The Company proposes to transfer ' 30000 Lakhs to General Reserves.


The Company derives its revenue mainly through exports and therefore its fate largelydepends on various global factors. Of late the Company has witnessed geo-politicaltension protectionism measures by some countries benign food and commodity prices exceptcrude oil and rising interest rate etc. All these factors have posed lot of challengesbefore the Company to maintain its growth journey. Unfortunately all such factors arestill persisting and Company does not see any immediate respite from it. The Companytherefore sees challenges to maintain its healthy growth track record in the near term.However the long term prospects of the Company are good and promising. Your Companycontinues to explore all the avenues to ensure growth of its business which includesdeeper penetration into its existing market within India as well as outside Indiaincluding OEMs and continuous expansion of its product range. Your Company is proud to saythat 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 2019 to which thefinancial statements relate and on the date of this report.



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 up to take advantage of the peculiarities of the said segment andhas developed 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 up 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 first Company in India to set up such 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.


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


Risk is an integral and unavoidable component of business. In today's challenging andcompetitive environment mitigating risks is imperative. Common risks include:regulations competition business risk technology obsolescence investments andretention of talent. Business risk interalia further includes financial risk politicalrisk and legal risk. For managing risks more efficiently the Company has identified keyrisks that can have a critical impact on the Company's performance. The Company hasidentified interalia following key risks:

Operational Risk:

Operational risks like equipment obsolescence which can impact production. To mitigatesuch risks the Company continuously monitors equipment obsolescence and upgradesequipment from time to time and undertakes preventive maintenance measures. The Companyhas also made 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 favorable 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 some unforeseen thing happen. The prices of other raw materialswhich are crude derivatives have been on upswing in the backdrop of rising crude prices.The prices of carbon black have been disproportionately high because of its shortageacross the globe.

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 carbon black is ensured by procuring it from differentgeographies. Since most of the raw materials are imported the Company is exposed toforeign currency risk. However it enjoys natural hedge as most of its revenues are inforeign currency.

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 generated through aproduct category which is cyclical in nature and therefore your Company is exposed tomarket 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.

Labour Relations:

Since Company's manufacturing process is that of batch processing 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 safety of its workmen and improve the work environment. All workers are paidmore than adequate remuneration for their work.

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.

The Company is able to manage the said risk by good HR practices and rewarding itsemployees handsomely.

Currency Fluctuation:

As stated earlier the Company revenues are mainly generated through exports. TheCompany also imports lot of its raw materials and capital equipment's. Moreover all itsborrowings are in foreign currency and it is therefore exposed to risks due to currencyfluctuations. The Company follows the system of hedging its receivables (net off payables)well in advance by entering into Forward Contracts thereby protecting itself from thefluctuations in currencies to a large extent.


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 therefor are given below:




2018-19 2017-18 2018-19 2017-18
Debtors Turnover ratio (Days) * 40.92 41.92 37.50 40.09
Inventory Turnover ratio (Days) ** 15.34 15.67 18.76 17.74
Interest Coverage Ratio ( ICR) # $ 1 121.84 86.64 106.71 81.46
Current Ratio ## 1.76 1.43 1.70 1.41
Net Debt - Equity Ratio ! $ 2 0.01 0.08 0.01 0.09
Operating Profit Margin !! 22.74 25.35 22.80 25.33
Net Profit Margin ~ 15.43 16.92 14.25 15.33
Return on Net Worth ~~ 25.49 27.63 25.52 27.67

* 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 paid its term loan.

$ 2 The net debt / equity decreased due to repayment of long term loan.


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 updatingof IT systems. The Company's management has assessed the effectiveness of the Company'sinternal control over financial reporting as of 31st March 2019.

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 2019 the Company's internal financial controls wereadequate 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 conversationability the foundation of its leadership style. Your Company considers people as itsbiggest asset and believing in People is 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 was to ensure that young talent is nurtured and mentoredconsistently that rewards and recognition are commensurate with performance and thatemployees have the opportunity to develop and grow. Your Company had 2844 employees as on31st March 2019. Your Company strongly believes in fostering a culture of trust andmutual respect in all its employees and seeks to ensure that Company's values andprinciples are understood by all and are the reference point in all people matters.Employee relations continue to be cordial.


During the year under review Thristha Synthetics Limited the wholly owned subsidiaryof your Company incorporated in year 2013 has voluntarily made an application with theRegistrar of Companies (ROC) Mumbai Ministry of Corporate Affairs for striking off itsname from the records of ROC after meeting / discharging all the necessary requirementsfor striking off which is currently under process of striking off.

At the end of the year under review the Company had following wholly owned subsidiarycompanies namely BKT Tyres Limited and following Overseas Subsidiary Companies namely BKTEUROPE S.R.L. BKT USA INC BKT TIRES (CANADA) INC. BKT EXIM US INC and subsidiary ofBKT EXIM Us INC - BKT TIRES INC. The Company does not have any material subsidiary as perthe thresholds laid down under the Listing regulations. A policy on material subsidiarieshas been formulated by the Company and posted on the website of the Company and can beaccessed on the Company's website at the link: .

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 following statements that:

(i) that in the preparation of the annual accounts for the year ended 31st March 2019the applicable accounting standards have been followed and there are no materialdepartures 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 2019 and the Statementof Profit and Loss of the Company for the financial year ended 31st March 2019;

(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 the such internal financial controls are adequate and are operatingeffectively; 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 in accordance withthe 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 thelink: . The details oftransactions / contracts / arrangements entered by the Company with Related parties duringthe 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. None of the Directors has anypecuniary relationship or transactions vis-a-vis the Company except remuneration andsitting fees.


The Company's social initiatives empower society and provide a holistic growthplatform. The Company believes that Corporate Social Responsibility (CSR) projects shouldbe sustainable and with the long term purpose of improving the quality of living for theless privileged and for increasing social assets. The funds should be carefully spent onCSR so that they result in the ultimate objectives meted out in the Company's CSR Policy.The Board of Directors of the Company has approved a Corporate Social Responsibility (CSR)Policy based on the recommendation of the CSR Committee. The brief outline of the CSRpolicy of the Company and the initiatives undertaken by the Company on CSR activitiesduring the year are set out in Annexure-III. The Board of Directors has formed a committeeon CSR in accordance with Companies Act 2013. The terms of reference of the CorporateSocial Responsibility Committee number and dates of meetings held composition andattendance of the Directors during the financial year ended 31st March 2019 are givenseparately in the Corporate Governance Report. During the year the Company was requiredto spend ' 1893 lakhs. The Company has already identified various CSR projects having atotal commitment of ' 1894 lakhs. Out of the total commitment of ' 1894 lakhs theCompany has actually spent ' 1697 lakhs and balance amount of ' 197 lakhs was unspent.Out of balance amount of ' 197 lakhs Company had already spent ' 70 lakhs on theidentified CSR project in the month of April 2019 and remaining amount of ' 127 lakhswill be spent as the CSR project progresses further considering the fact that the CSRprojects are already identified.

The CSR policy of the Company is available on the Company's website and can be accessedon the Company's website at the link: .


'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 February 2019 hasconstituted Risk Management Committee comprising of Mr. Pankaj Ghadiali Chairman of theCommittee and Independent Director Mr. Arvind Poddar Mr. Rajiv Poddar Mr. Vipul ShahDirectors of the Company and Mr. Basant Bansal KMP are Members of the Committee. Theprimary objective of Committee to control risk incurred by the Company with a view toprevent unacceptable losses to provide an effective means of identifying measuring andmonitoring credit exposures incurred by Company and to keep such risk at or belowpre-determined levels. The Company has framed a Risk Management Policy to identify andaccess the key business risk areas and a risk mitigation process. The policy aims toensure resilience for sustainable growth and sound corporate governance by having anidentified process of risk identification and management in compliance with the provisionsof the Companies Act 2013. Risk management policies and systems are reviewed regularly toreflect changes in market conditions and the Company's Activities. The Company throughits training and management standards and procedures aims to maintain a disciplined andconstructive control environment.

The Audit Committee oversees how management monitors compliance with the Company's riskmanagement policies and procedures and reviews the adequacy of the risk managementframework in relation to the risks faced by the Company. Internal Audit undertakes bothregular and ad hoc reviews of risk management controls and procedures the results ofwhich are reported to the audit Committee.

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


Your Directors are pleased to inform that based on the recommendations of theNomination and Remuneration Committee as well as Board of Directors the Shareholders bypassing Ordinary resolution through Postal Ballot have re-appointed Mr. Rajiv Poddar asJoint Managing Director of the Company for a period of further five years with effect from22nd January 2019. During the year Mr. Khurshed Doongaji one of the IndependentDirector of the Company had resigned from the Directorship of the Company with effectfrom close of business hours of 8th February 2019 due to his personal health conditions.Your Directors place on record his appreciation of the guidance given and servicesrendered by Mr. Khurshed Doongaji during his tenure as Independent Director of theCompany.

During the year under review based on the recommendations of the Nomination andRemuneration Committee the Board had appointed three New Additional Directors i.e Mrs.Shruti Shah (DIN:08337714) with effect from 8th February 2019 Mr. Sandeep Junnarkar(DIN:00003534) and Mr. Rajendra Hingwala (DIN:00160602) with effect from 28th March 2019respectively to hold the office upto the date of forthcoming 57th Annual General Meeting(AGM). Further subject to approval of the Members at the ensuing AGM the Board hadappointed Mrs. Shruti Shah as an Independent Director for a term of 5 years with effectfrom 8th February 2019 till 7th February 2024 Mr. Sandeep Junnarkar and Mr. RajendraHingwala as an Independent Directors for a term of 5 years with effect from 28th March2019 till 27th March 2024 respectively. The above appointments form a part of the Noticeof the forthcoming 57th AGM and the resolutions are recommended for your approval. It isproposed to appoint Mrs. Shruti Shah Mr. Sandeep Junnarkar and Mr. Rajendra Hingwala asan Independent Directors not liable to retire by rotation for a period of five yearsfrom date of appointment.

I n accordance with provisions of the Companies Act 2013 and Articles of Associationof the Company Mrs. Vijaylaxmi Poddar Non Executive Non Independent Director of theCompany retires by rotation at the ensuing AGM and being eligible seeks reappointment.The Board recommends her re-appointment.

Brief profile of the Directors being appointed and re-appointed as required underRegulations 36(3) of Listing Regulations 2015 and Secretarial Standard on GeneralMeetings are provided in the notice 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 a 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 the Directors Key Managerial Personnel and alsoremuneration of other employees including Senior Management employees who have thecapacity and ability to lead the Company towards achieving sustainable development. Theextract of Nomination and Remuneration Policy is provided in the Corporate GovernanceReport and forms part of Board'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 regulations of ListingRegulations 2015.

The performance of the board was evaluated by the board after seeking inputs from allthe Directors present in the meeting on the basis of criteria such as the boardcomposition and structure effectiveness of board processes information and functioningetc.

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 on BoardEvaluation about various aspects involved in the Board Evaluation process to benefit allstakeholders. 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. A meeting of the Independent Directorwith Mr. Pannkaj Ghadiali as the Chairman was held on 28th March 2019 to review theperformance of the Non-Independent Directors the Board as a whole and the Chairman on theparameters of effectiveness and to assess the quality quantity and timeliness of the flowof information between the Management and the Board. The same were discussed in the boardmeeting that followed the meeting of the Independent Directors at which the performanceof the board its committees and individual Directors were also discussed. The Directorsexpressed their satisfaction 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 9th September 2017had approved the appointment of M/s. N G Thakrar & Co. Chartered Accountants (FirmRegistration No. 110907W) as the Statutory Auditors in place of the retiring StatutoryAuditors M/s. Jayantilal Thakkar & Co. Chartered Accountants (Firm Registration No.104133W) for a period of 5 years for the auditing of the accounts of the Company from theconclusion of 55th AGM till the conclusion of 60th AGM of the Company (from financial year2018 to financial year 2022). Pursuant to amendments in Section 139 of the Companies Act2013 the requirements to place the matter relating to such appointment for ratificationby members at every AGM has been omitted with effect from 7th May 2018.

Internal Auditor:

The Board has appointed M/s. Dilip A. Jain & Associates as an Internal Auditors fora period of 1 (One) year for Financial Year 2018-19 under Section 138 of the CompaniesAct 2013 and they have completed the Internal Audit as per the scope as defined by theAudit Committee. Further the Board has appointed M/s R T D & Associates as anInternal Auditors for the Financial year 2019-20 under Section 138 of the Companies Act2013 and they will be completing the Internal Audit as per the scope as defined by theAudit 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 2018-19 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 Babuji has alsoconducted the Annual Secretarial Compliance. The Secretarial Audit Report for thefinancial year ended 31st March 2019 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 2018-19.


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 required to bereported by Statutory Auditors in their reports as mentioned under sub-section (12) ofSection 143 of the Act.


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 at the link: .

ii. Audit Committee:

The Audit Committee comprised of Four Independent Non-Executive Directors as on 31stMarch 2019 viz. Mr. Pannkaj Ghadiali (Chairman) Mr. Ashok Saraf Mr. Laxmidas Merchantand Mrs. Shruti Shah. All the recommendations made by the Audit Committee were accepted bythe Board.

iii. Number of Board Meeting:

The Board of Directors of the Company met six 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. 1451047 & 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.

vii. Extract of Annual Return:

Extract of Annual Return of the Company is annexed herewith as Annexure - VI to thisreport.

However for the compliance of conditions of Section 134 copy of the Annual Return forthe financial year ended 31st March 2019 shall be placed on the Company's .

viii. 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 registered/ corporateoffice of the Company. The aforesaid information is available for inspection 21 daysbefore and up to the date of the ensuing AGM during the business hours on working days.

ix. 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.

x. 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 2019 describing theinitiatives taken by the Company from an environmental social and governance prospectivein the prescribed form is annexed as Annexure - VIII.

xi. 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 least your Directors wish to place on record their warm appreciation toyou for your continuous support and encouragement.


For and on behalf of the Board of Directors
Place : Mumbai Chairman & Managing
Dated : 17th May 2019 Director DIN: 00089984

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