Your Directors are delighted to present the report on the business and operations ofthe Company for the Financial Year ended March 31 2016 (a period of 15 months fromJanuary 01 2015 to March 31 2016):
1. FINANCIAL SUMMARY
A brief summary of the audited financials of the Company for the Financial Year endedMarch 31 2016 (15 months) is given below. The Financial Year of the Company has beenchanged from January-December to April-March in compliance with the provisions of theCompanies Act 2013 which prescribe a uniform Financial Year. Accordingly the FinancialStatements of the current Financial Year are for 15 months i.e. effective from January 012015 to March 31 2016. Therefore current Financial Year figures are not comparable withthose of the figures of the previous Financial Year ended December 31 2014.
(Rs. In Lakhs)
|Particulars ||15 months ended March 31 20161 ||12 months ended December 31 2014 |
|Total Sales & Other Income ||191510 ||174153 |
|Less: Excise Duty ||12898 ||12962 |
|Net Sales & Other Income ||178612 ||161191 |
|Less: Total Expenditure Excluding Interest & Depreciation ||155302 ||142648 |
|Profit Before Interest ||23310 ||18543 |
|Depreciation & Tax || || |
|Less: i) Finance Cost ||324 ||341 |
|ii) Depreciation ||4053 ||2851 |
|Profit Before Tax ||18933 ||15351 |
|Less: Provision for Taxation: || || |
|Current Tax ||6826 ||5164 |
|Deferred Tax ||(203) ||63 |
|Profit After Tax ||12310 ||10124 |
Except as disclosed elsewhere in the Report there have been no material changes andcommitments which can affect the financial position of the Company between the end of theFinancial Year and the date of this Report.
Your Board recommends a dividend @ Rs 12/- per equity share for the Financial Year2015-16 (15 months). The recommended dividend will absorb a sum of Rs. 2768 lakhs and taxon dividend will be Rs. 579 lakhs.
The Company manufactures automotive bias tyres viz. farm tyres and commercial trucktyres at its Ballabgarh plant and also trades in "Goodyear" branded tyres[including radial passenger tyres (consumer) and Off The Road (OTR) bias tyres]manufactured by Goodyear South Asia Tyres Private Limited (GSATPL)Aurangabad. The other products which the Company markets and sells include tubes flapsand Radial OTR imported tyres.
The sales performance during the Financial Year 2015-16 (15 months) is as follows:
| ||(Rs. in Lakhs) |
|Tyres ||178223 |
|Flaps ||314 |
|Tubes ||9074 |
Your Company had put considerable efforts to refresh product Portfolio by the consumertyre business with the introduction of new product patterns gradual phase out of outdatedpatterns and strengthened offerings in the Sports Utility Vehicle (SUV) segment. Thebusiness has been focused on working towards expanding distribution footprint &continues to invest in expanding its branded store format. Digital continues to be an areaof focus for the business with significant efforts in improving consumer experience andengagement.
Further Corporate Social Responsibility ("CSR") has been an area of immensefocus in the year gone by. Your Company has introduced two new programs as part of its CSRobligation with Safer Roads Safer You and Healthy India program. These programs havefocus towards improving road safety & augmenting sanitation infrastructurerespectively.
Your Company feels proud to have received awards from Top Tractor Manufacturers in 2015such as M&M TAFE Escorts Agro Machinery & John Deere. These awards confirm thehigh trust & confidence our Key Customers have reposed in our product processes &people.
4. FINANCE AND ACCOUNTS
During the Financial Year 2015-16 (15 months) additions to fixed assets amounted toRs. 2958/- lakhs. The capital expenditure incurred amounted to Rs. 3984/- lakhs. Theinterest and other finance cost during the Financial Year 2015-16 (15 months) was Rs.324/- lakhs.
As of the end of March 31 2016 an amount of NIL matured deposits remained unclaimed.
The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the BalanceSheet.
1 The present Financial Year of the Company is of 15 months commenced from January01 2015 to March 31 2016 and thus the financial statements have been prepared for aperiod of 15 months.
5. FINANCIAL STATEMENTS (Full & Abridged)
In compliance of Regulation 36 of the Securities and Exchange Board of India (Listingand Disclosure Obligations) Regulations 2015 (LODR Regulations 2015) yourCompany shall supply:
(i) Soft copies of full Annual Reports containing its Balance Sheet Statement ofProfit & Loss and Directors Report to all those shareholder(s) who haveregistered their email address(es) for the purpose.
(ii) Hard copy of Abridged Annual Report containing the salient features of all thedocuments as prescribed in Section 136 of the Companies Act 2013 to those shareholder(s)who have not registered their email address(es); and
(iii) Hard copies of full Annual Reports to those shareholder(s) who request the same.
The Board of Directors has decided to circulate the abridged Annual Report containingsalient features of the Balance Sheet and Statement of Profit and Loss to the shareholdersfor the Financial Year 2015-16 (15 months). A Full version of the Annual Report includingcomplete Balance sheet Statement of Profit & Loss other statements and notes theretoprepared as per the requirements of Schedule III to the Act will be available at theCompanys website www.goodyear.co.in (investor relations section) and will also bemade available to the shareholder(s) upon request.
6. DIRECTORS RESPONSIBILITY STATEMENT UNDER SECTION 134(3)(c) OF THECOMPANIES ACT 2013
Your Directors state that the annual accounts of the Company have been prepared inconformity in all material respects with the generally accepted accounting standards inIndia and supported by reasonable and prudent judgments and statements so as to give atrue and fair view of the state of affairs of the Company and of the results of theoperations of the Company. Significant accounting policies followed are appearing in Note2 to the Notes of the financial statements.
The financial statements of the Company have been audited by Price Waterhouse & CoBangalore LLP (FRN: 007567S/ S-200012). A reference may be made to their report dated May30 2016 to the members together with Annexure(s) thereto containing information as perrequirement under the Companies (Auditors Report) Order 2015 that is attached withthese financial statements.
Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the applicable laws for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities.
The internal control system including internal financial controls of the Company ismonitored by an independent Internal Audit Team which encompasses examination/ periodicreviews to ascertain adequacy of internal controls and compliance to Companyspolicies. Weaknesses noted along with agreed upon action plans are shared with AuditCommittee which ensures orderly and efficient conduct of the business and effectivenessof the system of internal control.
Internal Auditors Audit Committee members and Statutory Auditors have full and freeaccess to all the information and records considered necessary to carry out the assignedresponsibilities. The issues raised from time to time are suitably acted upon and followedup at different levels of management.
The annual accounts have been prepared on a going concern basis.
Directors have laid down internal financial controls to be followed by the Company;through periodic checks and testing procedures they monitor compliance to the internalfinancial controls to ascertain that they are adequate and operating effectively. TheDirectors have devised appropriate systems to ensure compliance with the provisions of allapplicable laws and they monitor adequacy and operating effectiveness of the sameperiodically.
7. FUTURE OUTLOOK
There is an increasing trend towards mechanization which will boost the tractor demandin the future (Source: Crisil & ICRA). In addition Indian tractor penetration stilllags behind the global average (19 Vs 21 per 1000 hectares). These trends are supportedwith a high focus of the Government on agriculture as reflected in the current budget.Hence while in the short term the industry is facing strong headwinds due to failure ofmonsoon for two consecutive years the long term outlook remains robust based on industryand macro trends.
The Financial Year 2016-17 outlook seems positive with above normal predictions of themonsoons by Indian Metrology Department ("IMD") leading to overall expectedgrowth of 6% from the Farm Sector (Source: Niti Aayog projections & IMD predictions)
The passenger tyre industry is likely to register a modest growth in the year 2016.Driving distribution expansion increasing the reach of branded retail and building brandsalience through investments in the digital space will form the cornerstones for 2016.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
During the Financial Year 2015-16 (15 months) Ms Sudha Ravi [DIN: 06764496] wasappointed as an Additional Director in the Board Meeting held on June 06 2014 andappointed as an Independent Director for a period of 5 (five) years effective June 7 2014by the members of the Company through postal ballot (notice dated January 16 2015) theresults which were declared on March 12 2015 ("Postal Ballot").
Also effective March 12 2015 Mr Ravi Vira Gupta [DIN: 00017410] and Mr C Dasgupta[DIN: 00381799] the existing Independent Directors have also been reappointed asIndependent Directors in terms of the provisions of the Companies Act 2013 through thePostal Ballot as mentioned above for a period of 3 (three) years and 5 (five) yearsrespectively.
The Company received declarations from all the Independent Directors of the Companyconfirming that they met with the criteria of independence as prescribed under applicablelaws.
Further in terms of Section 203 of the Companies Act 2013 Mr Leopoldo EstefanoMaggiolo Gonzalez was appointed as Chief Financial Officer (KMP) of the Company effectiveAugust 13 2015 and Mr Mark Chandran Ravunni resigned as Chief Financial Officer (KMP) ofthe Company effective close of business hours on August 12 2015.
Mr Yashwant Singh Yadav [DIN: 03288600] Director of the Company is retiring byrotation at the forthcoming Annual General Meeting of the Company and being eligibleoffers himself for reappointment.
Further the term of Mr Yashwant Singh Yadav as a Wholetime Director expired on October31 2015. The Board has reappointed Mr Yadav for an additional tenure of 2 years and 10months (effective November 1 2015 to August 31 2018) as a Wholetime Director (liable toretire by rotation) in the Nomination and Remuneration Committee (NRC) and Board Meetingheld on August 12 2015 subject to the approval of shareholders. The reappointment of MrYadav is being proposed for approval by the Members of the Company at the forthcomingAnnual General Meeting.
During the Financial Year 2015-16 (15 months) Mr Daniel Lawrence Smytka [DIN:05139358] had resigned effective close of business hours on December 31 2015.
The Board of Directors in its meeting held on August 12 2015 appointed Mr JamesConstantine Venizelos [DIN:07184802] as an Alternate Director to Mr Daniel Lawrence Smtykaeffective August 13 2015. Mr Venizelos ceased to be Director effective the close ofbusiness hours on December 31 2015 due to resignation of Mr Daniel Lawrence Smytka.
The Board of Directors appointed Mr Christopher Raymond Delaney [DIN: 07348894] as anAdditional Director effective January 1 2016 via Circular Resolution No. Board 01/2015-16dated December 14 2015 who holds office up to the date of forthcoming Annual GeneralMeeting. Mr Delaney was also appointed as the Chairman of the Board. A notice underSection 160 had been received for his appointment at the forthcoming Annual GeneralMeeting as a director of the Company liable to retire by rotation.
The Board of Directors in its meeting held on February 5 2016 appointed Mr JamesConstantine Venizelos [DIN:07184802] as an Alternate Director to Mr Christopher RaymondDelaney effective February 5 2016.
The information relating to Mr Yadavs reappointment and Mr Delaneysappointment is also appearing under the head other informations in theCorporate Governance Report.
During the Financial Year 2015-16 (15 months) 8 (eight) Board Meetings were held onJanuary 16 2015 February 23 2015 February 27 2015 May 07 2015 June 26 2015August 12 2015 November 5 2015 and February 05 2016. Details regarding attendance ofBoard Meeting by each of the Directors is given in the Corporate Governance Report.
The details regarding Companys remuneration policy evaluation of Board itsCommittees and the Directors is mentioned in the Corporate Governance Report forming partof this Directors Report.
9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013
10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 read with rule 8(2) of the Companies (Accounts)Rules 2014 in the prescribed Form AOC - 2 is annexed as Annexure Ato this Report.
11. ANNUAL RETURN
Pursuant to Section 92(3) of Companies Act 2013 read with rules made thereunderextract of Annual Return of the Company in the prescribed form MGT 9 is annexed as AnnexureB to this Report.
12. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
13. INTERNAL FINANCIAL CONTROLS
The Integrated Framework adopted by the Company which is based on the applicableavailable guidance on Internal Financial Control is adequate and effective.
14. RISK MANAGEMENT POLICY
The Board of Directors periodically reviews the risks faced by the Company and thepractices/processes followed to manage them including the risk reporting structure alongwith the responsibilities mitigation control and key risk. In the opinion of the Boardthere is no identified risk which may threaten the existence of the Company.
15. FINANCIAL YEAR
The present Financial Year of the Company is of 15 months commencing from January 12015 to March 31 2016 and thus the financial statements have been prepared for a periodof 15 months. The Board of Directors of your Company have in their meeting held onFebruary 27 2015 approved the change of the Financial Year from (January 1 to December31) to (April 1 to March 31) in compliance of applicable provisions of the Companies Act2013 read with rules made thereunder as amended. In view of the above for the firstyear of implementation the Financial Year has started from January 1 2015 to March 312016 (i.e. 15 months). The next Financial Year will be from April 1 2016 to March 312017.
16. STATUTORY AUDITORS AND AUDITORS REPORT
M/s Price Waterhouse & Co Bangalore LLP (FRN: 007567S/ S-200012) the StatutoryAuditors of the Company will retire at the conclusion of the forthcoming Annual GeneralMeeting and being eligible consented and offered themselves for reappointment asStatutory Auditors for Financial Year 2016-17 and to hold office till the conclusion ofnext Annual General Meeting to be held in the year 2017. In view of the above a"Certificate" to act as an auditor of the Company has been received from M/sPrice Waterhouse & Co Bangalore LLP (FRN: 007567S/ S- 200012) to the effectinter-alia that their re-appointment if made would be within the limits laid down bythe Act shall be as per the term provided under the Act that they are not disqualifiedfor such re-appointment under the provisions of applicable laws.
There are no qualifications reservations or adverse remarks or disclaimers made by M/sPrice Waterhouse & Co Bangalore LLP (FRN 007567S/ S-200012) the Statutory Auditorsin their report for the Financial Year 2015-16 (15 months) under review.
The backup of the books of accounts and other papers maintained in electronic mode hasbeen maintained by the company on server located outside India and basis theimplementation difficulties of the Rule 3 of Companies (Accounts) Rules 2014 the Companyhad submitted the detailed representations with the appropriate authorities andsubsequently on the recommendations of Company Law Committee constituted by the Ministryof Corporate Affairs necessary amendment in the said Rule is proposed.
17. COST AUDITOR
M/s Vijender Sharma & Co. Cost Accountant Cost Accountants 11 3rd FloorHargovind Enclave Vikas Marg New Delhi-110 092 was appointed as cost auditor forconducting the cost audit for the Financial Year 2015-16 (15 months). The Cost AuditReport for the Financial Year 2014 was filed on June 26 2015 within due date.
Based on the recommendation of Audit Committee M/s Vijender Sharma & Co. CostAccountants being eligible have also been appointed by the Board as the Cost Auditors ofthe Company for the Financial Year 2016-17 subject to ratification of remuneration by theMembers. The Company has received a letter from them to the effect that theirre-appointment would be within the limits prescribed under section 141(3)(g) of theCompanies Act 2013 and that they are not disqualified for such re-appointment within themeaning of section 141 of the Companies Act 2013.
18. SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors in its meeting held on May 7 2015 appointed M/s V. K. Chaudhary & CoCompany Secretaries a Company Secretary firm having its office at C-140 Sector 51Noida U.P. as Secretarial Auditor to carry out the Secretarial Audit of the Company forthe Financial Year 2015-16 (15 months). The Secretarial Audit Report is annexed as AnnexureC to this Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
19. CORPORATE GOVERNANCE REPORT INCLUDING MANAGEMENT AND DISCUSSION ANALYSIS REPORT
As per the applicable provisions of the LODR Regulations 2015 a detailed CorporateGovernance Report together with the auditors certificate on the compliance ofconditions of Corporate Governance and a Management Discussion & Analysis Report formspart of the Annual Report and annexed as Annexure D to this Report.
The Corporate Governance Report forming part of this Report also covers the following:
a) Particulars of the Board Meetings held during the Financial Year 2015-16 (15months).
b) Policy on Nomination and Remuneration of Directors Key Managerial Personnel andSenior Management including inter alia the criteria for the performance evaluation ofDirectors.
c) The manner in which formal annual evaluation has been made by the Board of its ownperformance and that of its Committees and individual Directors.
d) The details with respect to composition of Committees and establishment of VigilMechanism (including Whistle Blower Mechanism/Policy)
20. HUMAN RESOURCES
Industrial harmony was maintained during the Financial Year through cordial andproductive employee relations. A formal tripartite settlement was signed before the DeputyLabour Commissioner Faridabad Haryana on Feb 05 2015. The Collective BargainingAgreement ("CBA") is effective May 1 2014 and valid till April 30 2017. Thisnew settlement will help the Ballabgarh factory to improve productivity and operationalefficiencies which will offset the cost of the CBA. High priority was given by themanagement to training and development related to ethics and compliance disciplinesafety of the employees and environmental awareness. The total number of salaried andhourly paid associates as of March 31 2016 stood at 880.
Information in accordance with the provisions of Section 197 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014regarding remuneration and other details is annexed as Annexure E tothis Report.
21. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility ("CSR") Committee of the Company is dulyconstituted in accordance with the requirements of Section 135 of the Companies Act 2013read with rules made thereunder as amended to formulate and monitor the CSR policy of theCompany.
During the Financial Year 2015-16 (15 months) 1 (one) CSR Committee Meeting was heldon November 5 2015. Details regarding attendance of CSR Committee meeting by each of theDirectors is given in the Corporate Governance Report.
The Annual Report on CSR activities for the Financial Year 2015-16 (15 months) isannexed as Annexure F to this Report pursuant to Rule 8 of TheCompanies (Corporate Social Responsibility) Rules 2014.
22. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The particulars related to the conservation of energy technology absorption andforeign exchange earnings and outgo as required under Section 134 of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed as AnnexureG to this Report.
23. DETAILS OF NUMBER OF CASES FILED IF ANY AND THEIR DISPOSAL IN TERMS OF SECTION 22OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL)ACT 2013.
During the Financial Year 2015-16 (15 months) no case on Sexual Harassment was filedhence disposal was not applicable.
24. OTHER INFORMATION
(a) Disclosure of composition of audit committee
Details regarding composition of the Audit Committee is given in the CorporateGovernance Report.
(b) Vigil Mechanism (including Whistle Blower Mechanism/ Policy)
In terms of the LODR Regulations 2015 the Company has formulated its Vigil Mechanism(including Whistle Blower Mechanism/Policy) the detail of which is mentioned in theCorporate Governance Report under the head Disclosures.
(c) Board Committees
The Corporate Governance Report also includes details of the various Committees of theBoard.
(d) Sweat Equity Shares Employee Stock Option
The Company has not issued any Sweat Equity Shares and had not provided any StockOption Scheme to the employees during the period under review.
(e) Details of significant and material orders passed by the regulators or courts ortribunals affecting the going concern status and companys operations in future.
Your Directors place on record their sincere thanks to the Companys esteemedshareholders customers suppliers associates bankers the Municipality the StateGovernment and the Central Government etc. for their valuable contribution and continuedsupport. Your Directors also wish to place on record their deep appreciation to TheGoodyear Tire & Rubber Company Akron Ohio USA and its subsidiaries for itscontinued support and contribution in all the spheres of operations.
| ||On behalf of the Board of Directors || |
| ||Christopher ||Rajeev Anand |
| ||Raymond Delaney ||(Vice Chairman & |
|May 30 2016 ||(Chairman) ||Managing Director) |
|New Delhi ||DIN: 07348894 ||DIN:02519876 |