Mar 31, 2023
Your Directors are pleased to report a year of highly successful operations. JK Tyre''s, both top line and bottom line continued on growth trajectory, despite high input costs during the first half of the year. Focus on sales growth enabled a jump of 22% resulting in the highest ever turnover of '' 14,681 crores by JK Tyre. Strategic interventions, higher operating efficiencies and good performance of subsidiaries helped operating profit increase by 21% and a higher net profit, which grew by 32%.
Operations
Post Covid-19 pandemic, world economies started recovering fast. However, unfortunate geopolitical developments impacted the recovery and the world economies hit inflationary conditions, resulting in tightening of money supply. To check this, interest rates were raised across the globe, which curbed consumer spending. This impacted global trade, thereby lowering the economic growth forecast. However, there was respite in the second half of 2022, as commodity prices stabilised and indications of softening were noticed.
The Indian economy withstood the turbulence well and remained as one of the fastest growing economies in the world.
The Indian Tyre Industry too, was affected by the volatile business environment. However a nimble footed approach, implementation of well thought out business strategies across all functions coupled
Your Directors are pleased to present the Annual Report of your Company, along with Audited Financial Statements for the financial year ended 31st March, 2023.
'' in crore |
||||
Year Ended |
Year Ended |
|||
31-Mar-23 |
31-Mar-22 |
31-Mar-23 |
31-Mar-22 |
|
Standalone |
Consolidated |
|||
Sales |
9,538 |
7,918 |
14,520 |
11,853 |
Other Operating Income |
80 |
114 |
125 |
130 |
Revenue from Operations |
9,618 |
8,032 |
14,645 |
11,983 |
Operating Profit (EBITDA excluding Other Income) |
775 |
701 |
1,297 |
1,072 |
Other Income |
32 |
30 |
37 |
37 |
Less: Finance Costs |
258 |
230 |
454 |
419 |
Less: Depreciation and Amortisation Expense |
243 |
241 |
407 |
385 |
Profit before Exceptional Items and Tax |
306 |
260 |
473 |
305 |
Add: Exceptional Items |
(36) |
4 |
(62) |
4 |
Profit before Tax |
270 |
264 |
411 |
309 |
Less: Provision for Tax |
86 |
81 |
146 |
109 |
Profit after Tax |
184 |
183 |
265 |
200 |
Add: Share in Profit / (Loss) of Associates |
- |
- |
(2) |
1 |
Profit for the year |
184 |
183 |
263 |
201 |
with prudent situational management, enabled JK Tyre to emerge stronger and remained one of the fastest growing tyre companies in India while sustaining its green ethos.
JK Tyre launched several innovative products, Fuel Saver TBR Tyres - JUH XF & JDH XF in the truck/bus radial range and Ultra high Performance passenger radials more particularly for high end cars, to meet the growing needs for EV tyre, the range was vastly expanded across various categories. Strategic market penetration supported by efficient supply chain, revamped fleet management programme with focused customer centric approach, higher participation in the OEMs also helped to achieve robust growth. Prudent financial management on the one hand and improved plant efficiencies on the other hand, helped to attain higher profitability.
During the year, the Company crossed several new milestones, a few of which are given hereunder:
1. Highest ever revenue '' 14,681 crores, a growth of 22% on a consolidated basis.
2. JK Tornel, Mexico and Cavendish Industries Ltd. (subsidiaries), also achieved highest turnover individually.
3. Secured $30 Million ('' 240 crores) funding from the International Finance Corporation (IFC), a member of the World Bank
Group and the largest global development institution, by way of Compulsorily Convertible Debentures, further improved leveraging.
4. ESG Rating - In recognition of its superior environment, social and governance practices, JK Tyre has been rated as the best among peers, in the industry category of tyre by CareEdge.
5. All plants operated at capacity utilization of ~90%.
6. Channel expansion resulting in increased market reach and penetration.
7. Lead player in Green Manufacturing - enhanced the share of power through renewable sources to 55% and use of biomass in place of coal to 28%.
8. Lowest in the tyre industry globally for water consumption & amongst top 3 tyre companies, in lowest energy consumption among the global manufacturers.
9. Over a million people have benefitted over the years from multiple CSR initiatives targeted towards improvement of health and sanitation, skill development, education, livelihood and environment as also water conservation.
10. Completed 25 years of acquisition of Vikrant Tyre Plants, Mysuru by JK Tyre and turned it into a state-of-the-art facility backed by world class research, innovation and technology.
JK Tornel, Mexico''s performance during 2022-23 was at an all-time high and yielded satisfying results. It recorded its highest ever sales of 6,546 Million Pesos in 2022-23 which is a growth of 13% over previous year, despite challenging markets in USA and Latam. Operational efficiencies were enhanced by consolidating production lines and conversion of dollar loans to Peso loan from Mexican banks. JK Tornel received "Best Supplier Award" from both Walmart & Soriana, largest Mass Merchandise Outlets in Mexico, recognized out of > 300 Suppliers in "Home & Essentials" Category. In addition, JK Tornel achieved the status of being highest seller of Tyres on "Online Platform" with a share of over 50%. JK Tornel continued to enjoy the highest Market Share in Passenger Car Radials in Mexico. It also provided value added services to farm OEM clients in USA.
Cavendish Industries Ltd.
It was yet another year of achieving all-round growth recording highest Turnover of '' 3,869 crores, an increase of 29% over last year. Production was also at its all-time high across product categories. The Company enhanced its presence in EV 2/3 wheeler market by launching several new products, which were well received in the market.
The Company received several accolades during the year.
It is indeed a matter of great satisfaction that acquisition of Cavendish has resulted in synergistic benefits for JK Tyre, besides strengthening and complementing its product portfolio as well as its financials. With capacity utilization at high levels and with significant improvement in efficiencies backed by stable raw material prices, Cavendish delivered satisfactory performance during the year.
Raw Material
The year 2022-23 started with very high commodity prices, leading to higher raw material cost, which prevailed throughout the first half of the year. The prices started softening during the second half of the year due to shrinkage in global demand. Also, the international sea freight saw some correction in H2.
Technological Excellence
Keeping in view the customer centric ethos of your Company, wide range of new products have been developed across the categories and segments, both for domestic as well as international markets. These are value added products and are future ready to cater to the new generation of vehicles.
The TBR & LTR product range of tyres are certified for meeting stringent AIS142 stage-2 requirements in domestic market. The tyres were extensively tested by Indian test agencies (ARAI, ICAT) for rolling resistance (RRC) & wet grip.
Our fuel efficient tubeless tyre - JETWAY JUM XM has been certified for 4-star rating by Bureau of Energy Efficiency. The new tyre labelling system is envisaged to bring a better informed decision making process for the customer while purchasing the new tyres.
New OEM approvals have been secured across all categories of tyres - be it commercial, passenger and light truck or Off High Way Tyres. Focused efforts were made on enhancing the EV tyre range and developing ultra low RRC tyres.
This has been made possible by continuous pioneering work and journey of innovation at the Company''s global R&D and Tech centre the "Raghupati Singhania Centre of Excellence" located at Mysuru.
The emphasis on Technology and R&D has lead to many break through achievements which have enabled the Company to stay ahead of the curve in the rapidly evolving customer and regulatory requirements for domestic as well as global markets.
Quality Management Systems
JK Tyre has always believed process based Quality Management. The Company is working TQM journey for Business excellence. There is a continuous drive across the organisation which has enabled significant gains improvement in the domain of Productivity, Quality,
Cost & Delivery. Sustainable business growth coupled with consistent product performance has enhanced the confidence and engagement of all our stakeholders. Our business partners have also benefitted in several improvement activities by way of joint projects.
JK Tyre - The Green Tyre Compa ny
India like other major economies today have two major challenges: the need to create a sustainable growth-oriented economy and the need to be competitive in the global market. Sustainability has become a critical concern in all industries and tyre industry being no exception.
JK Tyre has adopted a ''Cradle-to-grave'' approach to deal with sustainability challenges. Keeping this in mind, the Company is focusing on four key areas: sustainable material usage, sustainable manufacturing practices, In-use tyre performance (low rolling resistance and high wear resistance) and 6R Strategy (Reduce, Reuse, Recycle, Renew, Redesign and Remanufacture).
The Company''s R&D efforts are to prioritize sustainability to reduce the impact on the environment. JK Tyre has taken a target to reduce carbon emission intensity to 50% by 2030.
Extensive usage of various digital predictive tools is also helping us to achieve our target. The benefit of these tools is realised in terms of reduction in new product development time as also prototype making and testing.
The Company is a strong believer in a collaborative approach by harnessing domain expertise available in the complete rubber value chain. Towards this, we are working with various stakeholders, such as raw material suppliers, machine & equipment manufacturers, OEMs, defence, testing agencies, academic institutions and Government agencies.
JK Tyre has always been a frontrunner in the promotion of green manufacturing in the country and greatly focuses on the use of green and clean energy, resulting in the reduction of emission of greenhouse gases and dependence on fossil fuels.
During the financial year 2022-23, the Company achieved a total energy benchmark level of 8.50 GJ/Ton of production which ranks among the best companies in the sector worldwide. Reduction of 61.45% in GHG Emission (Scope 1 & 2) has been achieved over the base year.
JK Tyre is recognized today as a global leader for the lowest water uses per kg of tyre manufactured. During the financial year 2022-23, 1.62
liters per kg at JK Tyre is the lowest in the global tyre industry. Efforts are being made to become a water positive Company.
The Company continues to remain "Zero waste to landfill" in all the plants, ensuring that no waste went to the landfills and also remains single use plastic free.
The Company''s endeavours on ESG have been captured in a Databook which forms a part of our Integrated Annual report for the first time ever. This is a best in class practice and an Industry first in India, another milestone in JK Tyre''s journey of sustainability.
JK Tyre is proud to be recognised with numerous accolades including the:
⢠"CII National Award" for Excellence in Water Management 2022
⢠"National Energy Award" for Excellence in Energy Management 2022 by CII
⢠"RoSPA Bronze Award" for Health and Safety for 2022 from the Royal Society for the Prevention of Accidents, U.K.
⢠"Global Sustainability Leadership Award 2022" by World Sustainability
⢠"Most Iconic Manufacturing Industry 2022" from World Manufacturing Congress
⢠"Social Impact Award" by Indian Chamber of Commerce
⢠"UCCI Excellence CSR Award" in the Large Business Category by Udaipur Chambers of Commerce & Industry
⢠Recognised as "Superbrand" for 9th consecutive time
⢠"ET Iconic Brand" of India
⢠"JK Tyre''s Puncture Guard - Editor''s Choice Innovative Auto Solution" by BBC Top Gear India
⢠"Motorsport Award" of the Year by Car-BiKe
Preferential Allotment of Compulsorily Convertible Debentures
During the financial year under review, the Company has raised $ 30 Million ('' 240 crores) approximately by issue and allotment of 24,000 fully paid compulsorily convertible debentures (carrying an interest of 6% per annum compounded cumulatively on a quarterly basis) of the
face value of '' 1,00,000/- each (CCDs), by way of a preferential issue on a private placement basis, to International Finance Corporation, part of the World Bank Group and a Qualified Institutional Buyer. These CCDs shall be convertible into equity shares of '' 2 each of the Company, within a period up to 18 months from the date of allotment, at a conversion price of '' 180.50 for each equity share. The allotment of CCDs was completed on 20th March 2023. The proceeds of this issue will be utilized for financing expansion of capacities. There are no deviation(s) or variation(s) in the use of proceeds of the preferential issue from the specified objects of the issue.
Your Directors are pleased to recommend a dividend of '' 2.00 per equity share of '' 2 each (i.e., 100%) on the equity share capital of '' 49.25 crores for the financial year ended 31st March 2023. The dividend outgo will be '' 49.25 crores. The Dividend is subject to approval of the members at the ensuing Annual General Meeting and also subject to deduction of tax at source, as may be applicable.
The amount available for appropriation, including surplus from the previous year, stood at '' 1,246 crores and the same has been carried forward to Balance Sheet.
The Annual Return referred to in Section 134(3)(a) of the Companies Act, 2013 is available on the website of the Company: https://www.jktyre.com/annual-returns.aspx
All the related party transactions entered into during the financial year ended 31st March 2023 were in the ordinary course of business and on an arm''s length basis and were in compliance with the applicable provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), as applicable.
Further, particulars of contracts or arrangements or transactions with related parties during the financial year ended 31st March 2023 that could be considered material in accordance with the policy of the Company on materiality of related party transactions, are disclosed
in the prescribed format FORM AOC-2 which is annexed to this Report as Annexure ''A'' and forms a part of it.
The Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions, as amended and approved by the Board, is available on the Company''s website.
Particulars of Loans, Guarantees and Investments
The particulars of loans, guarantees, securities and investments, covered under the provisions of Section 186 of the Companies Act 2013, are furnished in the financial statements.
Directors and Key Managerial Personnel
Shri Arvind Singh Mewar ceased to be a Director upon completion of his second term as an Independent Director of the Company with effect from 25th September 2022. Shri Mewar joined the Board of the Company in the year 1975 when the Company was in the midst of setting up its first tyre plant in the backward area of Kankroli, Rajasthan. The Board places on record its deep appreciation for the valuable services rendered by Shri Mewar during his long tenure as a Director.
The Board appointed Shri Subhrakant Panda as an Additional Director of the Company, effective 2nd November 2022, pursuant to Section 161 of the Companies Act, 2013, which was subsequently, approved by the members of the Company by means of a special resolution passed through postal ballot on 30th January 2023. Shri Subhrakant Panda has been appointed as a director liable to retire by rotation and also as an Independent Director for a term of five consecutive years effective 2nd November 2022.
Shri Anshuman Singhania retires by rotation and, being eligible, offers himself for re-appointment at the ensuing Annual General Meeting (AGM). The Board recommends re-appointment of Shri Anshuman Singhania.
Further, there were no other changes in the Directors/Key Managerial Personnel of the Company during the year.
Declarations have been received from all the Independent Directors of the Company that they meet the criteria of independence prescribed under the Companies Act, 2013 and the SEBI Listing Regulations. All the Independent Directors are registered on the Independent Directors Data Bank.
Conservation of Energy, etc.
The details, as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules 2014, are annexed to this Report as Annexure ''B'' and forms a part of it.
Consolidated Financial Statements
The consolidated financial statements of your Company for the financial year ended 31st March 2023 have been prepared in accordance with the provisions of the Companies Act, 2013, SEBI Listing Regulations and the Accounting Standards. The audited consolidated financial statements, together with the Auditors'' Report, form a part of the Annual Report. A report on each of the subsidiaries and associates together with highlights of their performances and financial positions including highlights of their contribution to the overall performance of the Company, is presented in a separate section in the Annual Report. Please refer to AOC-1 annexed to the financial statements in the Annual Report and the notes to the consolidated financial statements.
Pursuant to the provisions of Section 136 of the Companies Act, 2013 the financial statements, the consolidated financial statements, along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.
During the financial year under review, no Company has become or ceased to be your Company''s subsidiary or associate. The Company does not have any Joint Venture.
Deposits
Pursuant to the approval of members by means of a special resolution dated 22nd September 2015, the Company has been accepting public deposits, in accordance with the provisions of the Companies Act, 2013 and rules thereunder.
The particulars with respect to deposits covered under Chapter V of the said Act, for the financial year ended 31st March 2023 are:
(a) accepted during the year - '' 44.94 crores;
(b) remained unpaid or unclaimed as at the end of the year - '' 1.17 crores;
(c) default in repayment of deposits or payment of interest thereon at the beginning of the year, maximum during the year and at the end of the year - NIL; and
(d) details of deposits which are not in compliance with the requirements of Chapter V of the said Act - NIL.
Auditors
(a) Statutory Auditors and their Report
In accordance with the provisions of the Companies Act, 2013 and rules thereunder, M/s S S Kothari Mehta & Company,
Chartered Accountants, were re-appointed Auditors of the Company to hold office from the conclusion of the 67th Annual General Meeting (AGM) held on 22nd September 2020 until the conclusion of the 72nd AGM to be held in the year 2025. The observations of the auditors in their report on accounts and the financial statements read with the relevant notes are self-explanatory. The Auditor''s Report does not contain any qualification, reservation, adverse remark or disclaimer. Further, no fraud has been reported by the Auditors to the Audit Committee or the Board.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice, as Secretarial Auditor to carry out the secretarial audit of the Company for the FY 2022-23. The Report, given by him for the said financial year in the prescribed format, is annexed to this Report as Annexure ''C.1''. The secretarial audit report does not contain any qualification, reservation, adverse remark or disclaimer.
The Company has one material unlisted subsidiary incorporated in India, namely - Cavendish Industries Ltd. (CIL). The Secretarial Audit Report of Shri Namo Narain Agarwal, the Secretarial Auditor, for the FY 2022-23 of CIL in the prescribed format is annexed as Annexure ''C.2''.
(c) Cost Auditor and Cost Audit Report
The Company is required to maintain the cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and accordingly such accounts and records are made and maintained by the Company. The Cost Audit for the financial year ended 31st March 2022 was conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi and as required, the Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for the financial year ended 31st March 2023 is also being conducted by the said firm.
Particulars of Remuneration
Details as required under the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are placed on the Company''s website www.jktyre.com as an annexure to the Board''s Report. A physical copy of the same will be made available to any shareholder on request, as per provisions of Section 136(1) of the said Act.
Details as required under the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the said Rules, which form part of the Board''s Report, will be made available to any
shareholder on request, as per provisions of Section 136(1) of the said Act.
Corporate Social Responsibility
As a responsible corporate citizen, the Company has been undertaking and participating in the socially important projects in the fields of health, education, adult literacy, livelihood enhancement, environment conservation, rural development, renewable energy, among others - ever since it commenced operations i.e., even before Corporate Social Responsibility (CSR) was mandated by law.
The Company has also framed a CSR Policy in accordance with the provisions of the Companies Act, 2013 and rules made thereunder.
The CSR Policy of the Company, the Projects approved by the Board, the composition of the CSR Committee and other relevant details are disclosed on the website of the Company.
The annual report on the CSR activities undertaken by the Company during the financial year under review, in the prescribed format is annexed to this Report as Annexure ''D''.
Internal Financial Controls
With a view to have a robust Internal Financial Control system, the Company has put in place budgetary controls, internal reporting policies and procedures. The key financial controls to the extent possible have been documented for respective business processes. These systems, policies, procedures and key financial controls are reviewed from time to time for necessary updation. This ensures accuracy and completeness of the accounting records, safeguarding of the assets and resources of the Company and also helps in prevention and detection of frauds and errors. The policies and procedures are also adequate for orderly and efficient conduct of the business of the Company. The Company also has a robust management information system commensurate with the size and nature of its operations, which not only facilitates speedy business decisions but also helps in sharing reliable information across various levels in the Company. No reportable material weaknesses were observed in the system during the year.
Significant and Material Orders Passed by the Regulators or Courts or Tribunals
The Competition Commission of India ("CCI") on 2nd February 2022 published an Order dated 31st August 2018 for alleged contravention of Section 3 of the Competition Act, 2002 against the Company and certain other domestic tyre manufacturing companies and had imposed a penalty of '' 309.95 crores on the Company. The Company filed an Appeal before the Hon''ble National Company Law Appellate Tribunal (NCLAT) against the said CCI Order. Shri Arun K. Bajoria, Director & President - International and one executive (former Sales
Marketing Head) of the Company, also filed appeal(s) before the said Tribunal since they had also been imposed a penalty of ''16.45 Lakh and '' 4.65 Lakh, respectively by CCI vide its said Order dated 31st August 2018.
The NCLAT, through an Order dated 1st December 2022, has disposed of the aforementioned appeals, after taking note of the multiple errors in the said CCI Order dated 31st August 2018 and remanded the matter back to the CCl, to re-examine the matter on merits and also to consider reviewing the penalty (if violation is established) in accordance with the provisions of the Competition Act. The Company understands that the CCI has filed an appeal against the NCLAT Order dated 1st December 2022, however, no notice has been received by the Company till date. Based on legal advice, the Company continues to believe that it has a strong case and accordingly, no provision has been made in the accounts. It is strongly reiterated that there has been no wrongdoing on the part of the Company and that the Company never indulged in or was part of any cartel or undertook any anti-competitive practices.
There were no significant and material orders passed by the regulators or courts or tribunals that could impact the going concern status of the Company and its future operations.
General
During the year under review - (i) there was no change in the nature of business; (ii) there was no instance of onetime settlement with any bank or financial institution; and (iii) no application has been made nor any proceedings are pending under the Insolvency and Bankruptcy Code, 2016.
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.
Business Responsibility and Sustainability Report
Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility and Sustainability Report of the Company for the financial year ended 31st March 2023 in the prescribed format, giving an overview of the initiatives taken by the Company from an environmental, social and governance perspective is given in a separate section of the Annual Report and forms part of it.
Corporate Governance - including details pertaining to Board Meetings, Nomination and Remuneration Policy, Performance Evaluation, Risk Management, Audit Committee And Vigil Mechanism, etc.
Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to the SEBI Listing
Regulations, a Management Discussion and Analysis, Corporate Governance Report and Auditor''s Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report as Annexures - ''E'' & ''F''.
The Corporate Governance Report which forms part of this Report also covers the following:
(a) Particulars of the four Board Meetings held during the financial year under review.
(b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors. The Policy is also available on the website of the Company at www.jktyre.com
(c) The manner in which formal annual evaluation of the performance of the Board, its Committees and of individual Directors has been made.
(d) The details with respect to composition of the Audit Committee and establishment of Vigil Mechanism.
(e) Details regarding development and implementation of Risk Management Policy including identification therein of elements of risks, etc.
(f) Dividend Distribution Policy.
(g) Compliance with provisions under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
(h) Details regarding credit ratings.
(i) The details of utilization of funds raised through preferential allotment of CCDs.
Directors'' Responsibility Statement
As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state that:
(a) i n the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(b) the accounting policies have been selected and applied consistently and judgments and estimates made are reasonable
and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and operating effectively; and
(f) the proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and operating effectively.
Your Directors further state that applicable Secretarial Standards issued under Section 118 of the Companies Act, 2013 have been complied with.
Your Directors wish to place on record their appreciation for the continued support and cooperation received from various State Governments including those of Rajasthan, Madhya Pradesh, Karnataka, Tamil Nadu, Uttarakhand as well as the Governments of India and Mexico. The Directors also thank the banks, shareholders and all value chain partners. We are grateful to our esteemed customers for their trust and patronage.
Your Directors record their appreciation for the dedication and hard work put in by Teams - JK Tyre, CIL & JK Tornel in challenging business conditions, which has enabled the Company to continue to grow stronger.
On behalf of the Board of Directors
17th May, 2023 Dr. Raghupati Singhania
New Delhi Chairman & Managing Director
Mar 31, 2022
Your Directors are pleased to present Annual Report of your Company, along with Audited Financial Statements for the financial year ended 31st March, 2022.
Operations
India and the world were plagued by the resurgence of Covid-19 pandemic especially during the first and the last quarters. This led to disruption both on the supply and demand side as geographies were impacted in varying degrees at different points of time. As a nation however, we displayed greater resilience which was reflected in the gradual yet sustained recovery of the economy.
At JK Tyre, the well-being of employees and stakeholders continued to be of prime importance. The emphasis on Covid appropriate behaviour, observance of safety protocols, thrust on vaccination coupled with increasing adoption of digital business processes enabled safer operations. The JK CARES program was envisioned and implemented which enabled support to the families of those employees who unfortunately lost their lives during the pandemic.
Your Company adopted an agile business strategy which was periodically calibrated to address dynamic market conditions encompassing two Covid waves & global geopolitical uncertainty in Q4. Disruption in supply chains and high oil prices led to a sharp increase of about 30% in the input prices for the tyre industry.
The increase in raw material prices could only be partially offset by higher price realisation to the extent possible which impacted margins for the tyre industry as a whole and JK Tyre was no exception.
Aggressive market expansion, brand building efforts, enrichment of product portfolio with innovative products - the SMART Tyre range and premium product range across categories, new OEM approvals, and thrust on exports ensured robust business growth.
With our inherent capabilities, and nimble footed approach, we are well poised to withstand any challenges and capture future market growth. Customer Obsession and trust will continue to be the corner stone of our strategy.
Key Highlights - FY 2021-22
During the year, the Company achieved several new landmarks, a few of which are given hereunder:
1. Highest ever revenue - ''12,020 crores, a growth of 31% on a consolidated basis
2. Subsidiaries - JK Tornel and Cavendish Industries Ltd. also achieved highest turnover
3. Exports stood at ''1,873 crores as against ''1,176 crores, up by 59%
4. All plants are operating at a capacity utilisation of ~90%
5. Raw Material price increased by about 28%, net impact on selling prices is approx. 19%, increase in selling price ~11% -impacted margins
6. Launched several innovative products - Smart Tyre range, Puncture Guard, High performance tyres
7. Increased market reach by expanding channel - currently 6000 dealers and 650 brand shops
8. Enhanced the share of power through renewables sources to 53% and use of biomass in place of coal to 22%
9. World''s lowest energy consumption amongst top 3 tyre manufacturers globally - 8.83 GJ/Tonnes. Reducing GHG Emission every year to 0.78 Eq. CO2 / MT. JK Tyre is the Global benchmark for the lowest raw water use 1.72 KL/Tonnes
10. More than 10 Lac people have benefitted over the years from multiple CSR programs targeted towards improvement of health and sanitation, skill development, education, and environment. A special drive was launched to combat the Covid-19 pandemic
The year 2021-22 was highly challenging for raw material procurement as the pandemic completely redefined established supply chain protocols.
The year commenced with muted demand, which however witnessed an upswing during H2. While businesses were just recovering from the impact, sudden revival in demand led to an imbalance in the supply chain. This was further aggravated by shipping vessel shortages and increased freight costs. Our Company made suitable alternative arrangements which helped us in ensuring regular flow of materials. The various actions included expansion of supplier base, advance planning and re-organisation of logistics which ensured production continuity at optimised costs for the Company.
At JK Tyre, the journey of product innovation continued with full rollout of the SMART Tyre range and the introduction of the Puncture Guard Range of tyres which is yet another industry first. The SMART Tyre is the way of the future as these tyres deploy AI based TPMS (Tyre Pressure Monitoring System) technology to monitor the health of the tyre thereby ensuring safer driving while optimising the tyre life and better fuel efficiency thus leading to lower carbon emissions. This concept has immense synergy with our green ethos as well as our consistent efforts to promote the cause of road safety. The aggressive multichannel marketing, led by a futuristic TVC featuring Narain Karthikeyan, India''s first F 1 driver and JK Tyre Brand ambassador
witnessed a high degree of digital engagement, brand visibility and user awareness.
The Puncture Guard technology is available in premium PCR Range with Anti Puncture technology which enables trouble free personal mobility with enhanced tyre life and lower maintenance cost.
These innovations are an outcome of our intense emphasis on Technology and R&D which have enabled us to stay ahead of the curve in the rapidly evolving customer and regulatory requirements for domestic as well as global markets. Our Global R&D and Tech centre the "Raghupati Singhania Centre of Excellence" located at Mysuru continues to render pioneering work to the industry, including partnering with electric vehicle manufacturers to meet the paradigm shift in the power train electrification of EV products.
In addition, state-of-the-art predictive technology and solutions are developed at our "RPS Centre of Excellence" at IIT, Madras.
Both the subsidiaries namely- JK Tornel, Mexico and Cavendish Industries Ltd. (CIL) achieved several new landmarks and contributed significantly to JK Tyre''s growth.
JK Tornel
JK Tornel, Mexico achieved highest ever Turnover of ''2,120 crores recording an impressive growth of 87% over last year. JK Tornel focused on improving sales to US and Brazil markets apart from enhancing volumes to mass merchandisers. It is indeed a matter of great pride that JK Tornel was chosen by Walmart as ''No.1 Supplier'' in the home essentials categories out of 300 suppliers. With the introduction of several new products in the Mexican markets, the Company continued to maintain highest replacement market share in the PCR Market. In addition to sales growth, the Company also focussed on improving manufacturing efficiencies. As a result of these initiatives, the Company recorded better margins during the year.
Cavendish Industries Ltd.
During the year under review, the Company achieved highest ever Turnover of ''2,988 crores, thus recording a growth of 16% over last year. This growth has been achieved in all product categories viz., Truck Bias, Truck Radial and 2/3 Wheeler tyres. During the year, the Company launched several new products including range of Tubeless Truck Radial Tyres for several global markets and also entered New OEMs viz., Electrotherm India, Coslight India and several others for supply of EV 2/3 wheeler tyres.
The Company received several accolades during the year including Best Supplier''s award by TATA Motors. It also achieved new landmarks in several efficiency parameters in terms of energy consumption, manpower productivity, etc.
As was true for the tyre industry, the Company was also impacted by the steep increase in cost of inputs without commensurate increase in selling prices, which impacted margins.
Sustainability
As a responsible global tyre manufacturer, JK Tyre continued on the journey to build a sustainable society by balancing our operations through 6"R" strategy viz. Reduce, Reuse, Recycle, Renew, Redesign and Remanufacture. JK Tyre is committed to the goal of being Green and Clean Company with sustainable use of green energy, resulting in the reduction of greenhouse gases and dependence on fossil fuels. This focus on energy and resource conservation has enabled the Company to increase the usage of biomass in its fuel mix to 22% and use of renewables in its power mix to 55%.
All these efforts have enabled us to reduce the carbon emission intensity by 57% in last 8 years and we are amongst the most energy efficient tyre manufacturers globally.
Along with the Company''s stronghold on alternate fuels, JK Tyre has earned the distinction of becoming the lowest water consuming Company establishing the new standards in the tyre industry globally. We continue to remain "Zero waste to landfill" in all our plants, ensuring that no waste went to the landfills and also remains single use plastic free.
Awards
JK Tyre is proud to be recognised with numerous accolades including the:
⢠CII Active Customer Engagement award a first in the tyre industry
⢠Brand of the Decade 2021
⢠First and only Tyre Super brand in the country for the 8th time in a row
⢠The Economic Times Iconic Brand award 2021
⢠JK Tyre has been "Certified as Great Place to Work" 2021-22, for the 3rd consecutive year
⢠Recognised as one of India''s 30 Best Workplaces in Manufacturing -2022 - Certified by Great Place to Work
⢠Globe of Honour (GOH) Award to Kankroli Tyre Plant, Vikrant Tyre Plant & Chennai Tyre Plant by British Safety Council (BSC)
⢠Greenco rating system in Gold was won by Banmore Tyre Plant
⢠UCCI Excellence Award 2022 in CSR
⢠India''s Most sustainable Companies - Top 30
⢠CII National Energy Management Award 2021
⢠CII National Award for Excellence in Water Management 2021
⢠National Energy Conservation Award 2021 by BEE, Ministry of Power, GoI
⢠Quality Sustainability award by Indian Society for Quality
⢠SEEM National Energy Management Award 2021 (SNEMA 2021)
⢠National Energy Conservation Awards 2021 (NECA 2021)
Smt. Sunanda Singhania retires by rotation and, being eligible, offers herself for re-appointment at the ensuing AGM. The Board recommends re-appointment of Smt. Sunanda Singhania.
Further, there were no other changes in the Directors/Key Managerial Personnel of the Company during the year.
Declarations have been received from all the Independent Directors of the Company that they meet the criteria of independence prescribed under the Companies Act, 2013 and the SEBI Listing Regulations. All the Independent Directors are registered on the Independent Directors Data Bank.
Conservation of Energy, etc.
The details, as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules 2014, are annexed to this Report as Annexure ''A'' and forms a part of it.
Consolidated Financial Statements
The consolidated financial statements of your Company for the financial year ended 31st March 2022 have been prepared in accordance with the provisions of the Companies Act, 2013, SEBI Listing Regulations and the Accounting Standards. The audited consolidated financial statements, together with the Auditors'' Report, form a part of the Annual Report. A report on each of the subsidiaries and associates together with highlights of their performances and financial positions including highlights of their contribution to the overall performance of the Company, is presented in a separate section in the Annual Report. Please refer to AOC-1 annexed to the financial statements in the Annual Report and the notes to the consolidated financial statements.
Pursuant to the provisions of Section 136 of the Companies Act, 2013 the financial statements, the consolidated financial statements, along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.
During the financial year under review, no Company has become or ceased to be your Company''s subsidiary or associate. The Company does not have any Joint Venture.
Deposits
Pursuant to the approval of members by means of a special resolution dated 22nd September 2015, the Company has been accepting public deposits, in accordance with the provisions of the Companies Act, 2013 and rules thereunder.
The particulars with respect to deposits covered under Chapter V of the said Act, for the financial year ended 31st March 2022 are:
(a) accepted during the year - ''43.68 crores;
(b) remained unpaid or unclaimed as at the end of the year -''1.24 crores;
(c) default in repayment of deposits or payment of interest thereon at the beginning of the year, maximum during the year and at the end of the year - Nil; and
Your Directors are pleased to recommend a dividend of ''1.50 per equity share of ''2 each (i.e., 75%) on the equity share capital of ''49.25 crores for the financial year ended 31st March 2022. The dividend outgo will be ''36.93 crores. The Dividend is subject to approval of the members at the ensuing Annual General Meeting and also subject to deduction of tax at source, as may be applicable. The dividend pay-out is in accordance with the Dividend Distribution Policy of the Company.
The amount available for appropriation, including surplus from the previous year, stood at ''1,115.77 crores and the same has been carried forward to Balance Sheet.
The Annual Return referred to in Section 134(3)(a) of the Companies Act, 2013 is available on the website of the Company: https://www.iktvre.com/annual-returns.aspx
During the financial year ended 31st March 2022, all contracts or arrangements or transactions entered into by the Company with related parties were in the ordinary course of business and on an arm''s length basis and were in compliance with the applicable provisions of the Companies Act, 2013, and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), as applicable.
Further, the Company did not enter into any contract or arrangement or transaction with related parties that could be considered material in accordance with the policy of the Company on materiality of related party transactions. In view of the above, disclosure in FORM AOC-2 is not applicable.
The Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions, as amended and approved by the Board, is available on the Company''s website.
The particulars of loans, guarantees, securities and investments, covered under the provisions of Section 186 of the Companies Act 2013, are furnished in the financial statements.
Shri Bharat Hari Singhania has been a Managing Director (MD) of the Company since 1994. Upon determination of the five years tenure of Shri B.H. Singhania as a MD and his desire for not seeking re-appointment for a fresh term, Shri Singhania ceased to be a MD and a Key Managerial Personnel effective 1st October 2021. He, however continues to be a Non-Executive Director of the Company. The Board placed on record its deep appreciation for the valuable services rendered by Shri B.H. Singhania during his long tenure as a MD.
(d) details of deposits which are not in compliance with the requirements of Chapter V of the said Act - Nil.
(a) Statutory Auditors and their Report
In accordance with the provisions of the Companies Act, 2013 and rules thereunder, M/s S S Kothari Mehta & Company, Chartered Accountants, were re-appointed Auditors of the Company to hold office from the conclusion of the 67th Annual General Meeting (AGM) held on 22nd September 2020 until the conclusion of the 72nd AGM to be held in the year 2025. The observations of the auditors in their report on accounts and the financial statements read with the relevant notes are self-explanatory. The Auditor''s Report does not contain any qualification, reservation, adverse remark or disclaimer. Further, no fraud has been reported by the Auditors to the Audit Committee or the Board.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice, as Secretarial Auditor to carry out the secretarial audit of the Company for the FY 202122. The Report, given by him for the said financial year in the prescribed format, is annexed to this Report as Annexure ''B.1''. The secretarial audit report does not contain any qualifications, reservations or adverse remarks or disclaimer.
The Company has one material unlisted subsidiary incorporated in India, namely - Cavendish Industries Ltd. (CIL). The Secretarial Audit Report of Shri Namo Narain Agarwal, the Secretarial Auditor, for the FY 2021-22 of CIL in the prescribed format is annexed -Annexure ''B.2''.
(c) Cost Auditor and Cost Audit Report
The Company is required to maintain the cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and accordingly such accounts and records are made and maintained by the Company. The Cost Audit for the financial year ended 31st March 2021 was conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi, and as required, the Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for the financial year ended 31st March 2022 is also being conducted by the said firm.
Details as required under the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are placed on the Company''s website www.jktyre.com as an annexure to the Board''s Report. A physical copy of the same will be
made available to any shareholder on request, as per provisions of Section 136(1) of the said Act.
Details as required under the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the said Rules, which form part of the Board''s Report, will be made available to any shareholder on request, as per provisions of Section 136(1) of the said Act.
Corporate Social Responsibility
As a responsible corporate citizen, the Company has been undertaking and participating in the socially important projects in the fields of health, education, rural development, adult literacy, renewable energy, among others - ever since it commenced operations i.e., even before Corporate Social Responsibility (CSR) was mandated by law.
The Company has also framed a CSR Policy in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. The CSR Policy of the Company, the Projects approved by the Board, the composition of the CSR Committee and other relevant details are disclosed on the website of the Company.
The annual report on the CSR activities undertaken by the Company during the financial year under review, in the prescribed format is annexed to this Report as Annexure ''C''.
Internal Financial Controls
With a view to have a robust Internal Financial Control system, the Company has put in place budgetary controls, internal reporting policies and procedures. The key financial controls to the extent possible have been documented for respective business processes. These systems, policies, procedures and key financial controls are reviewed from time to time for necessary updation. This ensures accuracy and completeness of the accounting records, safeguarding of the assets and resources of the Company and also helps in prevention and detection of frauds and errors. The policies and procedures are also adequate for orderly and efficient conduct of business of the Company. The Company also has a robust management information system commensurate with the size and nature of its operations, which not only facilitates speedy business decisions but also helps in sharing reliable information across various levels in the Company. No reportable material weaknesses were observed in the system during the year.
Significant and Material Orders passed by the Regulators or Courts or Tribunals
The Competition Commission of India ("CCI") on 2nd February 2022 published an Order dated 31st August 2018 for alleged contravention of Section 3 of the Competition Act, 2002 against the Company and certain other domestic tyre manufacturing companies and had imposed a penalty of ''309.95 crores on the Company. The Company has now filed an Appeal before the Hon''ble National Company Law Appellate Tribunal against the said CCI Order. Shri Arun K. Bajoria,
Director & President - International Operations and one executive (former Sales Marketing Head) of the Company, have also filed appeal(s) before the said Tribunal since they have also been imposed a penalty of ''16.45 Lakh and ''4.65 Lakh, respectively by CCI vide its said Order dated 31st August 2018. It is strongly reiterated that there has been no wrongdoing on the part of the Company and that the Company never indulged in or was part of any cartel or undertook any anti-competitive practices.
There were no significant and material orders passed by the regulators or courts or tribunals that could impact the going concern status of the Company and its future operations.
Material Changes and Commitments
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.
Details of Application made or any Proceedings Pending Under Insolvency and Bankruptcy Code
During the year under review, no application has been made nor any proceedings are pending under the Insolvency and Bankruptcy Code, 2016.
Change in the Nature of Business
During the year under review, there was no change in the nature of business.
Business Responsibility and Sustainability Report
Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility and Sustainability Report of the Company for the financial year ended 31st March 2022 in the prescribed format, giving an overview of the initiatives taken by the Company from an environmental, social and governance perspective is given in a separate section of the Annual Report and forms part of it.
Corporate Governance - including details pertaining to Board Meetings, Nomination and Remuneration Policy, Performance Evaluation, Risk Management,Audit Committee and Vigil Mechanism, Etc.
Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to the SEBI Listing Regulations, a Management Discussion and Analysis, Corporate Governance Report and Auditor''s Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report as Annexures - ''D'' & ''E''.
The Corporate Governance Report which forms part of this Report also covers the following:
(a) Particulars of the four Board Meetings held during the financial year under review.
(b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors. The Policy is also available on the website of the Company at www.iktvre.com.
(c) The manner in which formal annual evaluation of the performance of the Board, its Committees and of individual Directors has been made.
(d) The details with respect to composition of the Audit Committee and establishment of Vigil Mechanism.
(e) Details regarding Risk Management.
(f) Dividend Distribution Policy.
(g) Compliance with provisions under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Directors'' Responsibility Statement
As required under Section 134(3)(c) of the Companies Act, 2013, your
Directors state that:
(a) i n the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(b) the accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and
(f) the proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were adequate and operating effectively.
Your Directors further state that applicable Secretarial Standards issued under Section 118 of the Companies Act, 2013 have been complied with.
Acknowledgements
Your Directors wish to place on record their appreciation for the continued support and cooperation received from various State Governments including those of Rajasthan, Madhya Pradesh, Karnataka, Tamil Nadu, Uttarakhand as well as the Governments of India and Mexico. The Directors also thank the banks, shareholders, suppliers, dealers and in particular the valued customers for their trust and patronage.
Your Directors record their appreciation for the dedication and hard work put in by Teams - JK Tyre, CIL & JK Tornel particularly during the socio-economic challenges and disruptions caused by ongoing Covid-19 pandemic, which has enabled the Company to continue to grow stronger.
On behalf of the Board of Directors
20th May, 2022 Dr. Raghupati Singhania
New Delhi Chairman & Managing Director
Mar 31, 2018
Directors'' Report
To The Members
The Directors are pleased to present the Annual Report of your Company, along with Audited Financial Statements for the year ended 31st March, 2018.
OPERATIONS
The year witnessed remarkable policy and structural reforms. The implementation of Goods and Services Tax (GST), recapitalization of Public Sector Banks and other fiscal initiatives will strengthen the Indian economy. In the backdrop of various reforms and developments, the international credit rating agency, Moody''s, upgraded India''s rating after a gap of about 13 years.
During this fiscal, the Indian economy has grown by 6.75%. With the continued focus on rural economy, healthcare, education, infrastructure and digitalization, the GDP is expected to surge ahead in the range of 7 - 7.5% in FY19 leading to a modern, strong and confident India.
The Tyre Industry grew by 7% in volume. JK Tyre outgrew the Industry ending the year with a growth of 11%, and increased its market presence across categories especially in Truck, PCR, Light Truck, Small Commercial Vehicles, Farm and OTR tyres. Truck radicalization further accelerated to 47% during the year and is expected to cross 50% in the year ahead.
The year 2017-18 witnessed an unprecedented increase in the oil prices which together with pre and transitory GST implementation effect had a major impact on production costs and margins of the Tyre Industry as a whole. JK Tyre was no exception.
The Company along with its subsidiaries, on a consolidated basis, recorded a Turnover of Rs, 8,543.41 Crores with Profit Before Tax (PBT) at Rs, 106.81 Crores.
On a standalone basis, the Company achieved a turnover of Rs, 6,610.95 Crores with PBT of Rs, 63.85 Crores.
RAW MATERIALS
The year under review witnessed overall raw material cost increase by 13%, while tyre prices increased marginally.
The first half of the year saw raw materials prices spiraling by as much as 23% over the corresponding period. Oil prices did not abate and surged to a high of US$ 75/barrel. This impacted all the petro based raw materials, particularly carbon black where prices increased by as much as 35%. Natural Rubber prices too remained high throughout the year besides constrained availability.
R&D AND TECHNOLOGY
Technology & innovation play significant role in performance and growth of any organization. To innovate, your organization relies on R&D and technology teams, who passionately work on consistently improving process and products through their knowledge and skill. They create innovative products by understanding application needs and attributes required, through basic & applied research in laboratory and in manufacturing. Innovation and creativity are driving forces behind the R&D and Technology efforts of your organization.
JK Tyre in association with Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI) and "RPS Centre of Excellence for Tyre and Vehicle Mechanics" located at IIT Madras is continuously working on advanced material, alternate material, nano technology, process and product simulation, predictive technology, advanced tyre mechanics, tyre characterization including working towards reduction of raw material consumption. For reduction of greenhouse gas emissions (carbon dioxide), HASETRI in association with JK Tyre''s product development group is developing tyres with reduced rolling resistance & traction (wet & dry) without affecting mileage.
These efforts helped your Company offer various high performance tyres for new generation vehicles, which were successfully commercialized across categories.
AWARDS
During the year under review, your Company received several coveted awards for excellence in the following areas:
1. Certified as Great Place to Work for the year 2018
2. Best Supplier Quality Excellence Award 2016 from General Motors
3. Quality Performance Award received from Volkswagen
4. Golden Peacock Award for Energy Efficiency 2017
5. National Award for Excellence in Energy Management
2017
6. National Award for Excellence in Water Management 2017
7. National Award for Manufacturing Competitiveness 2016-17 - GOLD MEDAL
8. UCCI PP Singhal Excellence Award in CSR - Large Enterprises Category 2018
9. 16th Annual Green Tech Safety Award 2017 - Gold category
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs, 1.50 per equity share of Rs, 2 each (i.e. 75%) on the equity share capital of Rs, 45.36 crores for the financial year ended 31st March 2018. The dividend outgo will be Rs, 41.01 crores (inclusive of a dividend tax of Rs, 6.99 crores). The dividend payout is in accordance with the Dividend Distribution Policy of the Company.
APPROPRIATIONS
The amount available for appropriation, including surplus from the previous year, stood at Rs, 446.55 crores and the same has been carried forward to Balance Sheet.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return, as on 31st March 2018, in the prescribed form MGT 9, is attached as Annexure ''A'' with this Report and forms a part of it.
RELATED PARTY TRANSACTIONS
During the financial year ended 31st March 2018, all contracts or arrangements or transactions entered into by the Company with related parties were in the ordinary course of business and on an arm''s length basis and were in compliance with the applicable provisions of the Companies Act, 2013, and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable.
Further, the Company did not enter into any contract or arrangement or transaction with related parties that could be considered material in accordance with the policy of the Company on materiality of related party transactions. In view of the above, disclosure in FORM AOC-2 is not applicable.
The Related Party Transaction Policy, as approved by the Board, is available on the Company''s website.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees, securities and investments, covered under the provisions of Section 186 of the Companies Act 2013, are furnished in the financial statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company re-appointed Shri Arun K. Bajoria as Whole-time Director of the Company with the designation, Director & President - International Operations, for a term of three years commencing 1st January 2019, subject to the approval of the members of the Company at the ensuing Annual General Meeting (AGM).
Smt. Sunanda Singhania retires by rotation and, being eligible, offers herself for re-appointment at the ensuing AGM.
Declarations have been received from all Independent Directors of the Company that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Further, there were no other changes in the Directors/Key Managerial Personnel of the Company during the year under review.
CONSERVATION OF ENERGY, ETC.
The details, as required under Section 134(3)(m) read with the Companies (Accounts) Rules 2014, are annexed to this Report as Annexure ''B'' and forms a part of it.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared by the Company in accordance with the applicable accounting standards. The audited consolidated financial statements, together with the Auditors'' Report, form a part of the Annual Report.
A report on each of the subsidiaries and associates together with highlights of their performances and financial position is presented in a separate section in this Annual Report. Please refer to AOC-1 annexed to the financial statements in the Annual Report. Highlights of the contribution of major operating subsidiaries and associates to the overall performance of the Company during the year under review are given hereunder:
_(Rs, crores)
Name of Company |
Turnover |
PBT |
- Cavendish Industries Ltd. |
1,670.47 |
(21.18) |
- JK Tornel (together with its subsidiaries) |
1,073.29 |
56.81 |
Pursuant to the provisions of Section 136 of the Act, the financial statements, the consolidated financial statements, along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.
During the financial year under review, Western Tire Holdings, Inc. (USA) has become an associate of the Company. Except this, no Company has become or ceased to be your Company''s subsidiary or associate during the said financial year. The Company does not have any Joint Venture.
DEPOSITS
Pursuant to the approval of members by means of a special resolution dated 22nd September 2015, the Company has continued to accept deposits from the public, in accordance with the provisions of the Companies Act, 2013 and rules thereunder.
The particulars with respect to deposits covered under Chapter V of the said Act, for the financial year ended 31st March 2018 are:
(a) accepted during the year - Rs, 38.93 crores; (b) remained unclaimed as at the end of the year - Rs, 0.97 crores; (c) default in repayment of deposits or payment of interest thereon at the beginning of the year and at the end of the year - Nil and (d) details of deposits which are not in compliance with the requirements of Chapter V of the said Act - Nil.
AUDITORS
(a) Statutory Auditors and their Report
In accordance with the provisions of the Companies Act, 2013 and rules thereunder, M/s S.S. Kothari Mehta & Co., Chartered Accountants, were appointed Auditors of the Company to hold office from the conclusion of the 64th Annual General Meeting (AGM) held on 4th August 2017 until the conclusion of the 67th AGM to be held in the year 2020. The observations of the auditors in their report on accounts and the financial statements, read with the relevant notes are self-explanatory.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013 the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice, as Secretarial Auditor to carry out the secretarial audit of the Company for the financial year 2017-18. The Report, given by him for the said financial year in the prescribed format, is annexed to this Report as Annexure ''C The secretarial audit report does not contain any qualifications, reservations or adverse remarks.
(c) Cost Auditor and Cost Audit Report
The Cost Audit for the financial year ended 31st March 2017 was conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi, and as required, the Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for the financial year ended 31st March 2018 is also being conducted by the said firm.
PARTICULARS OF REMUNERATION
Details as required under the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are placed on the Company''s website www.jktyre.com as an annexure to the Directors'' Report. A physical copy of the same will be made available to any shareholder on request, as per provisions of Section 136(1) of the said Act.
Details as required under the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the said Rules, which form part of the Directors âReport, will be made available to any shareholder on request, as per provisions of Section 136(1) of the said Act.
CORPORATE SOCIAL RESPONSIBILITY
As a responsible corporate citizen, the Company has been undertaking and participating in the socially important projects in the fields of health, education, rural development, adult literacy, renewable energy, among others - ever since it commenced operations i.e., even before Corporate Social Responsibility (CSR) was mandated by law.
The Company has also framed a CSR policy in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. The contents of the CSR policy are disclosed on the website of the Company.
The annual report on the CSR activities undertaken by the Company during the financial year under review, in the prescribed format is annexed to this Report as Annexure ''D''.
INTERNAL FINANCIAL CONTROLS
With a view to have a robust Internal Financial Control system, the Company has put in place budgetary controls, internal reporting policies and procedures. These systems, policies and procedures are reviewed from time to time and are updated. This ensures accuracy and completeness of the accounting records, safeguarding of the assets and resources of the Company and also helps in prevention and detection of frauds and errors. The policies and procedures are also adequate for orderly and efficient conduct of business of the Company. The Company also has a robust management information system commensurate with the size and nature of its operations, which not only facilitates speedy business decisions but also helps in sharing reliable information across various levels in the Company. No reportable material weaknesses were observed in the system during the previous fiscal.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review, there were no significant and material orders passed by the regulators or courts or tribunals that could impact the going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of business.
SUSTAINABILITY & BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Sustainability & Business Responsibility Report of the Company for the financial year ended 31st March 2018 in the prescribed format, giving an overview of the initiatives taken by the Company from an environmental, social and governance perspective is given in a separate section of the Annual Report and forms part of it.
CORPORATE GOVERNANCE - Including details
pertaining to Board Meetings, Nomination and Remuneration Policy, Performance Evaluation, Risk Management, Audit Committee and Vigil Mechanism
Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, a Management Discussion and Analysis, Corporate Governance Report and Auditor''s Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report as Annexures - ''E'' & ''F.
The Corporate Governance Report which forms part of this Report also covers the following:
(a) Particulars of the four Board Meetings held during the financial year under review.
(b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of directors.
(c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.
(d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.
(e) Details regarding Risk Management.
(f) Dividend Distribution Policy.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(b) the accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and
(f) the proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were adequate and operating effectively.
Your Directors further state that applicable Secretarial Standards issued under Section 118 of the Companies Act, 2013 have been complied with.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the continued support and cooperation received from various State Governments including those of Rajasthan, Madhya Pradesh, Karnataka, Tamil Nadu, Uttarakhand as well as the Governments of India and Mexico. The Directors also thank the banks, shareholders, suppliers, dealers and in particular the valued customers for their trust and patronage.
Your Directors record their appreciation for the dedication and hard work put in by ''Team-JK Tyre'', which has enabled the Company to continue to grow stronger in these challenging times.
On behalf of the Board of Directors
17th May, 2018 Dr. Raghupati Singhania
New Delhi Chairman & Managing Director
Mar 31, 2017
To the members
The Directors are pleased to present the Annual Report of your Company, along with Audited Financial Statements for the financial year ended 31st March, 2017.
OPERATIONS
The year 2016-17 was an eventful one. Against the backdrop of robust macro-economic stability, the year was marked by two major domestic policy developments with far-reaching consequences: the passage of the Constitutional amendment, paving the way for implementing the transformational Goods and Services Tax (GST) and the demonetization of the two highest denomination currency notes following which 86% of the currency in circulation ceased to be legal tender. The latter moderated economic growth during the year under review.
The year also witnessed an unprecedented cost increase for the tyre Industry, particularly natural rubber prices and other raw materials, which are essentially petro-based products, impacting production costs and margins.
The Company could partly abate the impact of this by widening its market reach, launch of new products across categories and improving operating efficiencies.
Your Company alongwith its subsidiaries JK Tornel, Mexico, and Cavendish Industries Ltd. (CIL), recorded a Consolidated Turnover of H8,383.28 Crores with Profit After Tax at H381.06 Crores.
On a standalone basis, the Company clocked a Turnover of H6,667.17 Crores. Profit after Tax for the year was H332.13 Crores.
During the year, the Company completed the acquisition of CIL. Consequent to this acquisition, the Company strengthened its leadership in the Truck/Bus Radials and entered the growing 2/3 Wheeler Tyre segment, participating in the entire range of product portfolio in the automotive tyre market. This substantial capacity acquisition makes the Company future-ready to capture growth in the Country''s automotive sector.
It is heartening that operations of CIL turned around and the Company declared a profit in its very first year of operations after JK Tyre assumed management control. This is a yet another turnaround story in the history of JK Tyre, the first being Vikrant Tyres, followed by Tornel and CIL.
Technology is the backbone of Company''s success; technology leadership resides at the core of its R&D activities. To sustain leadership, your Company created a hub of technology and continuous learning by setting up a new Centre of Excellence at Mysuru, with an outlay of HI00 crores equipped with a state-of-the-art testing facility coupled with skilled and professionally-qualified scientists and engineers relocated from other campuses (Jaykaygram, Faridabad and Chennai).
GST is expected to create a common Indian market, improve tax compliance, governance, investment and growth. Following the expected launch of GST from 1st July 2017, declining demonetization impact and availability of enhanced capacities, the Company expects to report healthy growth.
AWARDS
During the year under review, your Company received several coveted awards for excellence in the following areas:
- Awarded ''Super Brand'' for 2016-17 by Super Brand Council of India for six times consecutively, since 2004.
- FICCI Corporate Social Responsibility Award 2015-16 in recognition of commendable work done as a socially responsible company.
- CII National HR Excellence Award, 2016 for significant achievement in HR excellence.
- Platinum Category Award, 2016 by Indian Green Building Council (IGBC) for the Chennai tyre plant.
- Excellent Energy Efficient Unit Award for the Chennai tyre plant from CII during the 15th Energy Efficient Summit, 2016.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 2.50 per equity share of Rs. 2 each (i.e. 125%) on the equity share capital of Rs. 45.36 crores for the financial year ended 31st March 2017. The dividend outgo will be Rs. 68.25 crores (inclusive of a dividend tax of Rs. 11.55 crores).
APPROPRIATIONS
The amount available for appropriation, including surplus from the previous year, stood at Rs. 621.71 crores. The Directors propose this to be appropriated as under:
(Rs. crores)
General Reserve |
150.00 |
Surplus carried to Balance Sheet |
471.71 |
Total |
621.71 |
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return, as on 31st March 2017, in the prescribed form MGT 9, is attached as Annexure ''A'' with this Report and forms a part of it.
RELATED PARTY TRANSACTIONS
During the financial year ended 31st March 2017, all contracts or arrangements or transactions entered into by the Company with related parties were in the ordinary course of business and on an arm''s length basis and were in compliance with the applicable provisions of the Companies Act, 2013, and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable.
Further, the Company did not enter into any contract or arrangement or transaction with related parties that could be considered material in accordance with the policy of the Company on materiality of related party transactions. In view of the above, disclosure in FORM AOC-2 is not applicable.
The Related Party Transaction Policy, as approved by the Board, is available on the Company''s website.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees, securities and investments, covered under the provisions of Section 186 of the Companies Act 2013, are furnished in the financial statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The members of the Company re-appointed Dr. Raghupati Singhania as Chairman & Managing Director and Shri Bharat Hari Singhania as Managing Director of the Company, for respective terms of five years commencing 1st October 2016, at the Annual General Meeting (AGM) held on 2nd September 2016.
The members also appointed Shri Anshuman Singhania, Wholetime Director and Shri Shreekant Somany, who were appointed as Additional Directors, as Directors liable to retire by rotation at the said AGM.
Shri Arun K. Bajoria, Director & President-International Operations, retires by rotation and, being eligible, offers himself for re-appointment at the ensuing AGM.
Declarations have been received from all Independent Directors of the Company that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Further, there were no changes in the KMP composition in terms of Section 203 of the Companies Act, 2013.
CONSERVATION OF ENERGY, ETC.
The details, as required under Section 134(3)(m) read with the Companies (Accounts) Rules 2014, are annexed to this Report as Annexure ''B'' and forms a part of it.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared by the Company in accordance with the applicable accounting standards. The audited consolidated financial statements, together with the Auditors'' Report, form a part of the Annual Report.
A report on the performance and financial position of each of the subsidiaries and associates included in the consolidated financial statements is presented in a separate section in this Annual Report. Please refer to AOC-1 annexed to the financial statements in the Annual Report.
Pursuant to the provisions of Section 136 of the Act, the financial statements, the consolidated financial statements, along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.
During the financial year under review, Cavendish Industries Ltd. has become a subsidiary of the Company and Florence Investech Ltd. has ceased to be an Associate of the Company. Except this, no Company has become or ceased to be your Company''s subsidiary or associate during the said financial year.
DEPOSITS
Pursuant to the approval of members by means of a special resolution dated 22nd September 2015, the Company has continued to accept deposits from the public, in accordance with the provisions of the Companies Act, 2013 and rules there under.
The particulars with respect to deposits covered under Chapter V of the said Act, for the financial year ended 31st March 2017 are:
(a) accepted during the year - Rs. 51.92 crores; (b) remained unclaimed as at the end of the year - Rs. 1.83 crores; (c) default in repayment of deposits or payment of interest thereon at the beginning of the year and at the end of the year - Nil and (d) details of deposits which are not in compliance with the requirements of Chapter V of the said Act - Nil.
AUDITORS
(a) Statutory Auditors and their Report
In accordance with the provisions of the Companies Act, 2013 and rules there under, M/s Lodha & Co., Chartered Accountants, were appointed Auditors of the Company to hold office from the conclusion of the 61st Annual General Meeting (AGM) held on 25th September 2014 until the conclusion of the 64th AGM to be held in the year 2017. M/s Lodha & Co., will therefore, not be eligible for re-appointment as the Auditors of the Company at the forthcoming AGM. Accordingly, being eligible, appointment of M/s S. S. Kothari Mehta & Co., Chartered Accountants as Statutory Auditors of the Company is proposed, for a term of three years to hold office from the conclusion of the 64th AGM to be held in the year 2017 until the conclusion of 67th AGM to be held in the year 2020, subject to the approval of the Members at the AGM to be held in the year 2017 and further subject to ratification of the appointment by the members at the respective AGMs to be held in the subsequent years. The observations of the auditors in their report on accounts and the financial statements, read with the relevant notes, for the financial year ended 31st March 2017, are self-explanatory.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice, as Secretarial Auditor to carry out the secretarial audit of the Company for the financial year 2016-17. The Report, given by him for the said financial year in the prescribed format, is annexed to this Report as Annexure ''C The secretarial audit report does not contain any qualifications, reservations or adverse remarks.
(c) Cost Auditor and Cost Audit Report
The Cost Audit for the financial year ended 31st March 2016 was conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi, and as required, the Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for the financial year ended 31st March 2017 is also being conducted by the said firm.
PARTICULARS OF REMUNERATION
Details as required under the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are placed on the Company''s website www.jktyre.com as an annexure to the Directors'' Report. A physical copy of the same will be made available to any shareholder on request, as per provisions of Section 136(1) of the said Act.
Details as required under the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the said Rules, which form part of the Directors'' Report, will be made available to any shareholder on request, as per provisions of Section 136(1) of the said Act.
CORPORATE SOCIAL RESPONSIBILITY
Your Company aims to contribute to sustainable growth of the society at large. Towards this end, the Company will continue responding to society''s needs and demands in a holistic and decisive manner in the fields of environment, conservation of natural resources, health, education, rural development, among others.
The Company has a CSR policy in accordance with the provisions of the Companies Act, 2013 and rules made there under. The contents of the CSR policy are disclosed on the website of the Company.
The annual report on the CSR activities undertaken by the Company during the financial year under review, in the prescribed format is annexed to this Report as Annexure ''D.
INTERNAL FINANCIAL CONTROLS
The Company has in place an adequate budgetary control system and internal financial controls with reference to financial statements. No reportable material weaknesses were observed in the system during the previous fiscal. Further, the Company has laid down internal financial control policies and procedures which ensure accuracy and completeness of the accounting records and the same are adequate for safeguarding of its assets and for prevention and detection of frauds and errors, commensurate with the size and nature of operations of the Company. The policies and procedures are also adequate for orderly and efficient conduct of business of the Company. The Company also has a robust management information system for the timely preparation of reliable financial information.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review, there were no significant and material orders passed by the regulators or courts or tribunals that could impact the going concern status of the Company and its future operations.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of business.
SUSTAINABILITY & BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Sustainability & Business Responsibility Report of the Company for the financial year ended 31st March 2017 in the prescribed format, giving an overview of the initiatives taken by the Company from an environmental, social and governance perspective is given in a separate section of the Annual Report and forms a part of it.
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, a Management Discussion and Analysis, Corporate Governance Report and Auditor''s Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report as Annexure - ''E'' & ''F.
The Corporate Governance Report which forms part of this Report also covers the following:
a) Particulars of the five Board Meetings held during the financial year under review.
b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of directors.
c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and Individual Directors.
d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.
e) Details regarding Risk Management.
f) Dividend Distribution Policy.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) the accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and
f) the proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the continued support and cooperation received from various State Governments including those of Rajasthan, Madhya Pradesh, Karnataka, Tamil Nadu, Uttarakhand as well as the Governments of India and Mexico. The Directors also thank the banks, shareholders, suppliers, dealers and in particular the valued customers for their trust and patronage.
Your Directors record their appreciation for the dedication and hard work put in by ''Team-JK Tyre'', which has enabled the Company to continue to grow stronger in these challenging times.
On behalf of the Board of Directors
15th May 2017 Dr. Raghupati Singhania
New Delhi Chairman & Managing Director
Mar 31, 2016
The Directors are pleased to present the Annual Report of your Company,
along with audited financial statements for the financial year ended
31st March, 2016.
Operations
The Company recorded an excellent performance during the year under
review. Profit before tax on a standalone basis stood at Rs.590 crores,
an all-time high, registering an increase of 57% on a turnover of
Rs.6,580 crores.
On a consolidated basis, the Company reported a profit before tax of
Rs.669 crores, recording an increase of 38% on a turnover of Rs.7,654
crores.
The Company maintained its leadership in the Truck/Bus Radial segment
while further improving its position in the passenger car tyre segment.
Better operating efficiencies, all-round cost reduction, deeper rural
penetration, launch of several new products across categories and
stable input costs helped the Company achieve this significant
improvement in performance.
What makes this performance even more heartening is that it came in the
wake of subdued demand growth in several tyre segments in India and a
lower export turnover due to disturbed political and economic
conditions in some of the key international markets. With the
automobile industry poised for stronger growth and economic activity
set to improve, the Company''s prospects appear brighter .
Acquisition of Cavendish Industries Ltd.
Your Directors are pleased to announce the acquisition of Cavendish
Industries Ltd. (Cavendish), effective 13th April, 2016. Cavendish
houses three tyre plants, located in Laksar (Haridwar) which
manufacture a wide range of tyres, tubes and flaps. With this
acquisition, JK Tyre has aggregated 12 tyre plants - nine in India and
three in Mexico. The acquisition, undertaken at an Enterprise Value of
Rs.2,170 crores, was funded by a combination of equity and debt.
Post-acquisition, Cavendish has become a subsidiary with eighty percent
shareholding held by the Company along with a subsidiary and the
balance through associates / group companies.
The acquisition is in line with the strategic vision of JK Tyre
emerging as one of the leading global tyre companies with a
comprehensive portfolio capable of catering to the domestic and
international markets.
Following the acquisition of Cavendish, JK Tyre will possess an
additional capacity for Truck and Bus Radials, which represents a
high-growth segment where the Company is already the market leader The
acquisition will also provide JK Tyre entry into the fast-growing two
and three-wheeler tyre segments. Therefore, the acquisition is
strategic, revenue accretive and synergistic with the Company''s
existing tyre business.
Expansion Project
The Company expanded its Truck/Bus and Passenger Line Radial capacities
at its All-Radial Chennai plant. This Rs.1,430 crores project was
completed in phases during the year under review. The benefits of this
expanded capacity will start accruing during the current year and
strengthen the Company''s leadership in this fast-growing segment.
Awards
During the year under review, your Company received several coveted
awards for excellence in various areas including:
- Ranked No.1 in ''Customer Satisfaction with Original Tyre'' by JD Power
Asia Pacific Study 2015.
- The ''Brand of the Year'' award by the World Branding Forum, a global
non-profit organization dedicated to advancing branding standards.
- The ''National Energy Conservation'' award 2015, in the tyre sector
(Chennai plant) by the Ministry of Power Government of India.
- The TPM Consistency award for ''Manufacturing Excellence'' at the
Mysuru plant.
- Felicitated by the 16th National award for ''Excellence in Energy
Management (Kankroli plant)'' by the CII.
- The National award for ''Excellence in Talent Management'' by the Delhi
Management Association.
Dividend
Your Directors are pleased to recommend a dividend of Rs.2.50 per
equity share of Rs.2 each (i.e 125%) on the equity share capital of
Rs.45.36 crores for the financial year ended 31st March, 2016. The
dividend outgo will be Rs.68.25 crores (inclusive of a dividend tax of
Rs.11.55 crores).
Appropriations
The amount available for appropriation, including surplus from the
previous year, stood at Rs.566.22 crores. The Directors propose this to
be appropriated as under:
(Rs. crores)
General Reserve 150.00
Dividend 56.70
Corporate Dividend Tax 11.55
Surplus carried to Balance Sheet 347.97
Total 566.22
Extract of Annual Return
An extract of the Annual Return, as on 31st March 2016, in the
prescribed form MGT 9, is attached as Annexure ''A'' with this Report and
forms a part of it.
Related Party Transactions
During the financial year ended 31st March 2016, all contracts or
arrangements or transactions entered into by the Company with related
parties were in the ordinary course of business and on an arm''s length
basis and were in compliance with the applicable provisions of the
Companies Act 2013, and the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations 2015, as
applicable.
Further, the Company did not enter into any contract or arrangement or
transaction with related parties that could be considered material in
accordance with the policy of the Company on materiality of related
party transactions. In view of the above, disclosure in FORM AOC-2 is
not applicable.
The Related Party Transaction Policy as approved by the Board, is
available on the Company''s website.
Particulars of Loans, Guarantees and Investments
The particulars of loans, guarantees, securities and investments,
covered under the provisions of Section 186 of the Companies Act 2013,
are furnished in the financial statements.
Directors and Key Managerial Personnel
Your Directors express their profound grief on the sad demise of Shri
O.P Khaitan, an Independent Director of the Company on 6th December
2015. Shri Khaitan joined the Board of the Company in the year 1974
when it was just about setting up its first automotive tyre plant in
Jaykaygram, Kankroli, an industrially-backward area in Rajasthan. Your
Directors pay their respectful homage to Shri Khaitan and place on
record their deep appreciation for the valuable services rendered by
him during his long tenure of over 40 years.
Shri Vikrampati Singhania, Deputy Managing Director resigned from the
Directorship of the Company with effect from the close of business
hours of 20th January 2016 owing to other commitments. Consequently
Shri Singhania also ceased to be a key managerial personnel of the
Company. The Board took note of the same and placed on record its deep
appreciation for the valuable services rendered by him during his long
tenure of 20 years in various capacities.
The Board of Directors appointed Shri Shreekant Somany as an Additional
Director of the Company, pursuant to Section 161 of the Companies Act,
2013, effective 16th March 2016. He has been appointed as Independent
Director for a term of five consecutive years with effect from the said
date, subject to the approval of members of the Company at the ensuing
Annual General Meeting (AGM). In terms of the said Section, Shri Somany
will hold office as Director up to the date of the ensuing AGM. The
Company has received a notice in writing from a member proposing his
candidature as a Director The Board recommends the appointment of Shri
Somany as a Director.
The Board of Directors of the Company appointed Shri Anshuman Singhania
as an Additional Director of the Company pursuant to Section 161 of the
Companies Act, 2013, effective 16th March 2016. The Board also
appointed Shri Anshuman Singhania as a Whole-time Director of the
Company for a term of five years commencing 16th March 2016, subject to
the approval of members of the Company at the ensuing AGM. Shri
Anshuman Singhania also became a key managerial personnel of the
Company effective from the said date.
Shri Singhania will hold office as Director up to the date of the
ensuing AGM. The Company has received a notice in writing from a member
proposing his candidature as a Director The Board recommends the
appointment of Shri Anshuman Singhania as a Director
Shri Bharat Hari Singhania retires by rotation and, being eligible,
offers himself for re-appointment at the ensuing AGM.
Declarations have been received from all Independent Directors of the
Company that they meet the criteria of independence as laid down under
Section 149(6) of the Companies Act 2013, and SEBI (Listing Obligations
and Disclosure Requirements) Regulations 2015.
Further, there were no other changes in the KMP composition in terms of
Section 203 of the Companies Act 2013.
Conservation of Energy, Etc.
The details, as required under Section 134(3) (m) read with the
Companies (Accounts) Rules 2014, are annexed to this Report as Annexure
''B'' and forms a part of it.
Consolidated Financial Statements
The consolidated financial statements have been prepared by the Company
in accordance with the applicable accounting standards. The audited
consolidated financial statements, together with the Auditors'' Report,
form a part of the Annual Report.
A report on the performance and financial position of each of the
subsidiaries and associates included in the consolidated financial
statements is presented in a separate section in this Annual Report.
Please refer to AOC-1 annexed to the financial statements in the Annual
Report.
Pursuant to the provisions of Section 136 of the Act, the financial
statements, the consolidated financial statements, along with relevant
documents and separate audited accounts in respect of subsidiaries, are
available on the website of the Company.
During the financial year under review, Natext Biosciences Private Ltd.
has become a wholly-owned subsidiary of the Company. No Company has
ceased to be your Company''s subsidiary during the said financial year
Deposits
Pursuant to the approval of members by means of a special resolution
dated 22nd September 2015, the Company has continued to accept deposits
from the public, in accordance with the provisions of the Companies Act
2013 and rules thereunder
The particulars with respect to deposits covered under Chapter V of the
said Act, for the financial year ended 31st March 2016 are: (a)
accepted during the year - Rs.46.02 crores;
(b) remained unclaimed as at the end of the year - Rs.1.85 crores; (c)
defaulted in repayment of deposits or payment of interest thereon at
the beginning of the year and at the end of the year - Nil and (d)
details of deposits which are not in compliance with the requirements
of Chapter V of the said Act - Nil.
Auditors
(a) Statutory Auditors and their report
M/s Lodha & Co., Chartered Accountants, were appointed Auditors of the
Company to hold office from the conclusion of the 61st Annual General
Meeting (AGM) held on 25th September 2014 until the conclusion of the
64th Annual General Meeting to be held in 2017, subject to ratification
of the appointment by the members at the respective AGMs held/to be
held in the years 2015 and 2016. Accordingly being eligible, matter
relating to the appointment of the auditors will be placed for
ratification by members at the forthcoming Annual General Meeting. The
observations of the auditors in their report on accounts and the
financial statements, read with the relevant notes are self-
explanatory.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013
the Board of Directors appointed Shri Namo Narain Agarwal, Company
Secretary in Practice, as Secretarial Auditor to carry out the
secretarial audit of the Company for the financial year 2015-16. The
Report, given by him for the said financial year in the prescribed
format, is annexed to this Report as Annexure ''C''. The secretarial
audit report does not contain any qualifications, reservations or
adverse remarks.
(c) Cost Auditor and Cost Audit Report
The Company was not required to get its cost accounts audited for the
financial year ended 31st March 2015 pursuant to the provisions of
Section 148 of the Companies Act, 2013 and the Companies (Cost Records
and Audit) Rules, 2014, dated 30th June 2014. However, in terms of the
Companies (Cost Records and Audit) Amendment Rules, 2014, notified on
31st December 2014, the audit of the cost accounts of the Company for
the financial year ended 31st March 2016 is being conducted by M/s R.J.
Goel & Co., Cost Accountants, Delhi.
Particulars of Remuneration
Details as required under the provisions of Section 197(12) of the
Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, are placed on
the Company''s website www.jktyre. com as an annexure to the Directors''
Report. A physical copy of the same will be made available to any
shareholder on request, as per provisions of Section 136(1) of the said
Act.
Details as required under the provisions of Section 197(12) of the
Companies Act, 2013, read with Rule 5(2) and 5(3) of the said Rules,
which form part of the Directors'' Report, will be made available to any
shareholder on request, as per provisions of Section 136(1) of the said
Act.
Corporate Social Responsibility
Your Company aims to contribute to sustainable growth of the society at
large. As a means to this end, the Company will continue responding to
society''s expectations and demands in a holistic and decisive manner in
the fields of environment, conservation of natural resources, health,
education, rural development, among others.
The Company has framed its CSR policy in accordance with the provisions
of the Companies Act, 2013 and rules made thereunder The contents of
the CSR policy are disclosed on the website of the Company.
The annual report on the CSR activities undertaken by the Company
during the financial year under review, in the prescribed format is
annexed to this Report as Annexure ''D''.
Internal Financial Controls
The Company has in place an adequate budgetary control system and
internal financial controls with reference to financial statements. No
reportable material weaknesses were observed in the system during the
previous fiscal. Further, the Company has laid down internal financial
control policies and procedures which ensure accuracy and completeness
of the accounting records and the same are adequate for safeguarding of
its assets and for prevention and detection of frauds and errors,
commensurate with the size and nature of operations of the Company. The
policies and procedures are also adequate for orderly and efficient
conduct of business of the Company. The Company also has a robust
management information system for the timely preparation of reliable
financial information.
Significant and Material Orders Passed by the Regulators or Courts or
Tribunals
During the financial year under review, there were no significant and
material orders passed by the regulators or courts or tribunals that
could impact the going concern status of the Company and its future
operations.
CORPORATE GOVERNANCE - (including details pertaining to Board Meetings,
Nomination and Remuneration Policy, Performance Evaluation, Risk
Management, Audit Committee and Vigil Mechanism)
Your Company reaffirms its commitment to the highest standards of
corporate governance practices. Pursuant to the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements)
Regulations 2015, a Management Discussion and Analysis, Corporate
Governance Report and Auditor''s Certificate regarding compliance of
conditions of Corporate Governance are made a part of this Report as
Annexures - ''E'' & ''F''.
The Corporate Governance Report which forms part of this Report also
covers the following:
a) Particulars of the six Board Meetings held during the financial year
under review.
b) Policy on Nomination and Remuneration of Directors, Key Managerial
Personnel and Senior Management including, inter alia, the criteria for
performance evaluation of directors.
c) The manner in which formal annual evaluation has been made by the
Board of its own performance and that of its Committees and individual
Directors.
d) The details with respect to composition of Audit Committee and
establishment of Vigil Mechanism.
e) Details regarding Risk Management.
Directors'' Responsibility Statement
As required under Section 134(3)(c) of the Companies Act, 2013, your
Directors state that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
(b) the accounting policies have been selected and applied consistently
and judgments and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit and loss of the Company for
that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
said Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have
been laid down and that such internal financial controls are adequate
and were operating effectively; and
(f) the proper systems to ensure compliance with the provisions of all
applicable laws have been devised and that such systems were adequate
and operating effectively.
Acknowledgements
Your Directors wish to place on record their appreciation for the
continued support and cooperation received from various State
Governments including those of Rajasthan, Madhya Pradesh, Karnataka,
Tamil Nadu, Uttarakhand as well as the Governments of India and Mexico.
The Directors also thank the banks, shareholders, suppliers, dealers
and in particular the valued customers for their trust and patronage.
Your Directors record their appreciation for the dedication and hard
work put in by ''Team-JK Tyre'', which has enabled the Company to
continue to grow stronger in these challenging times.
On behalf of the Board of Directors
1st July 2016 Dr. Raghupati Singhania
New Delhi Chairman & Managing Director
Mar 31, 2015
TO THE MEMBERS
The Directors are pleased to present the Annual Report of your
Company, along with Audited Financial Statements for the financial year
ended 31st March, 2015.
Operations
The Company recorded an impressive performance during the year under
review. Turnover (standalone basis) was Rs. 6799 crores; operating profit
at Rs. 766 crores, was higher by 14% while profit before tax at Rs. 377
crores, grew 93% over the previous year.
This performance is considered satisfactory, given the challenges of
all-round low growth in the year gone by.
On a consolidated basis, your Company, (including its wholly- owned
subsidiary JK Tornel, Mexico) reported a turnover of Rs. 8060 crores
during the year under review. Operating profit was Rs. 948 crores, an
increase of 13% over the previous year while consolidated profit before
tax at Rs.486 crores, grew 49%.
The Company responded to the request of the Government of Kerala and
agreed to support procurement of domestic rubber at prices 20% higher
than those prevailing in the market. This was done with a view to
support in particular small rubber growers.
The Company continued to strengthen its leadership in the truck/bus
radial segment while consolidating its position in the passenger car
segment. Besides, the Company reported improvements across operating
parameters, cost compression and increased value-added product volumes;
a softening of input costs helped the Company enhance profitability.
In the export markets, the Company achieved an export turnover ofRs. 844
crores (standalone) during the year despite geopolitical turmoil in
some key international markets.
Expansion Project
Foreseeing an increasing demand for truck/bus radialisation and an
economic recovery, the Company undertook an expansion of its truck/bus
and passenger line radial capacities at its all-radial Chennai plant.
This Rs. 1430 crores project progressed well and is expected to be
commissioned in phases during the current year.
Awards
Your Company received several awards for excellence in various areas,
comprising the following:
Asia''s Most Promising Brand 2014 by World Consulting and Research
Council (WCRC)
Greenco Gold Company by CII-Godrej GBC
Greentech Environment Award 2015 Â Gold Category
General Motors Quality Excellence Award 2014 for Exceptional Quality
Performance
International Convention on Quality Concept (ICQC)
IEI Industry Excellence Award 2014 for Business Excellence and Industry
Practices
CII''s National Award 2014 for HR Excellence
Dividend
Your Directors are pleased to recommend a dividend ofRs. 1.50 per equity
share of Rs.2 each (i.e. 75%) on the equity share capital ofRs.45.36
crores for the financial year ended 31st March 2015. The dividend outgo
will beRs.40.95 crores (inclusive of a dividend tax of Rs. 6.93 crores).
Appropriations
The amount available for appropriation, including surplus from the
previous year, is Rs. 356.21 crores. The Directors
propose this to be appropriated as under:
(Rs. crores)
General Reserve 150.00
Dividend 34.02
Corporate Dividend Tax 6.93
Surplus carried to Balance Sheet 165.26
Total 356.21
Share Capital
(a) Sub-division of Equity Shares
In order to infuse additional liquidity in the Company''s stock and
attract small investors to invest, each equity share of a face value of
Rs. 10 (fully paid-up) was sub-divided into five equity shares of a face
value ofRs. 2 each (fully paid- up). For the purpose, 19th December 2014
was fixed as the record date.
Consequently, 4,10,59,346 equity shares of Rs. 10 each as on the record
date, were sub-divided into 20,52,96,730 equity shares of Rs. 2 each.
(b) Conversion of Warrants
As per the terms of 43,03,350 warrants issued to the promoter group on
a preferential basis, the holders of warrants exercised the option of
converting the said warrants into equity shares by paying the balance
75% of the total consideration of the issue value, amounting to Rs. 37.11
crores. Accordingly, 43,03,350 warrants were converted into 2,15,16,750
equity shares of Rs. 2 each on 8th January 2015.
Consequently, the issued, subscribed and paid-up equity share capital
of the Company increased from Rs. 41.06 crores (comprising 20,52,96,730
equity shares of Rs. 2 each) to Rs.45.36 crores (comprising 22,68,13,480
equity shares of Rs.2 each).
Extract of Annual Return
An extract of the Annual Return as on 31st March 2015, in the
prescribed form MGT 9, is attached as Annexure ''A'' with this Report and
forms a part of it.
Related Party Transactions
During the financial year ended 31st March 2015, all the contracts or
arrangements or transactions entered into by the Company with the
related parties were in the ordinary course of business and on an arm''s
length basis and were in compliance with the applicable provisions of
the Companies Act, 2013 and the Listing Agreement.
Further, the Company has not entered into any contract or arrangement
or transaction with the related parties which could be considered
material in accordance with the policy of the Company on materiality of
related party transactions. In view of the above, disclosure in FORM
AOC-2 is not applicable.
The Related Party Transaction Policy as approved by the Board is
available on the website of the Company.
Particulars of Loans, Guarantees and Investments
The particulars of loans, guarantees, securities and investments,
covered under the provisions of Section 186 of the Companies Act, 2013,
are given in the financial statements.
Directors and Key Managerial Personnel
With the enactment of the Companies Act, 2013, all six Independent
Directors of the Company, Shri Arvind Singh Mewar, Shri Bakul Jain,
Shri O.P. Khaitan, Shri Kalpataru Tripathy, Shri Vimal Bhandari and Dr.
Wolfgang Holzbach were appointed by the members at the Annual General
Meeting (AGM) held on 25th September 2014 under Section 149 of the Act
for a term of five consecutive years commencing from the date of the
AGM. All Independent Directors of the Company have given declarations
that they meet the criteria of independence as provided in Section
149(6) of the Companies Act, 2013 and also Clause 49 of the Listing
Agreements with the Stock Exchanges.
Shri Vikrampati Singhania retires by rotation and, being eligible,
offers himself for re-appointment at the ensuing AGM.
The Board of Directors appointed Smt. Sunanda Singhania as an
Additional Director of the Company pursuant to Section 161 of the
Companies Act, 2013 effective 12th August 2014. The members of the
Company have appointed her as a Director liable to retire by rotation
at the AGM held on 25th September 2014.
The Board of Directors re-appointed Shri Swaroop Chand Sethi as a
Whole-time Director of the Company for a term of three years commencing
1st April 2015, subject to the approval of the members of the Company.
Shri Swaroop Chand Sethi, however, resigned from the directorship of
the Company from the close of business hours of 14th May 2015. The
Board took note of his resignation and placed on record its deep
appreciation for the valuable services rendered by Shri Sethi during
his tenure of office.
The Board of Directors of the Company also re-appointed Shri Arun K.
Bajoria as Whole-time Director of the Company with the designation -
Director & PresidentÂInternational Operations, for a term of three
years commencing 20th January 2016, subject to the approval of members
of the Company at the ensuing AGM.
Further, in terms of Section 203 of the Companies Act, 2013, Dr.
Raghupati Singhania, Chairman & Managing Director; Shri Bharat Hari
Singhania, Managing Director; Shri Vikrampati Singhania, Dy. Managing
Director; Shri S.C. Sethi, Whole-time Director; Shri Arun K. Bajoria,
Director & President-International Operations; Shri Pawan Kumar
Rustagi, Vice President (Legal) & Company Secretary and Shri Ashok
Kumar Kinra, Finance Director were appointed as Key Managerial
Personnel (KMP) of the Company on their existing terms and conditions.
Out of the above, Shri S.C. Sethi has ceased to be a KMP from the close
of business hours of 14th May 2015, upon his resignation from the
directorship of the Company.
Conservation of Energy, Etc.
The details, as required under Section 134(3)(m) read with the
Companies (Accounts) Rules, 2014, are annexed to this Report as
Annexure ''B'' and forms a part of it.
Consolidated Financial Statements
The Consolidated Financial Statements have been prepared by the Company
in accordance with the applicable Accounting Standards. The Audited
Consolidated Financial Statements, together with the Auditors'' Report,
form part of the Annual Report.
A report on the performance and financial position of each of the
subsidiaries and associates included in the Consolidated Financial
Statements is presented in a separate section in this Annual Report.
Please refer to AOC-1 annexed to the Financial Statements in the Annual
Report.
Pursuant to the provisions of Section 136 of the Act, the financial
statements, the consolidated financial statements, along with relevant
documents and separate audited accounts in respect of subsidiaries, are
available on the website of the Company.
During the financial year under review, no company has become or ceased
to be your Company''s subsidiary or joint venture. With the coming into
effect of the Companies Act, 2013, Florence Investech Ltd. and Dwarkesh
Energy Ltd. have become associates of the Company.
Deposits
Pursuant to the approval of members by means of a Special Resolution
dated 25th September 2014, the Company has continued to accept deposits
from the public, in accordance with the provisions of the Companies
Act, 2013 and rules thereunder.
The particulars in respect of the deposits covered under Chapter V of
the said Act, for the financial year ended 31st March 2015 are - (a)
Accepted during the year - Rs. 12.37 crores; (b) Remained unclaimed as at
the end of the year - Rs. 1.43 crores; (c) Default in repayment of
deposits or payment of interest thereon at the beginning of the year
and at the end of the year - NIL and (d) Details of deposits which are
not in compliance with the requirements of Chapter V of the said Act Â
NIL.
Auditors
(a) Statutory Auditors and their Report
M/s Lodha & Co., Chartered Accountants, have been appointed Auditors of
the Company to hold office from the conclusion of the 61st Annual
General Meeting held on 25th September 2014 until the conclusion of the
64th Annual General Meeting to be held in 2017, subject to ratification
of the appointment by the members at the respective AGMs to be held in
the years 2015 and 2016. Accordingly, being eligible, matters relating
to the appointment of the Auditors will be placed for ratification by
members at the forthcoming Annual General Meeting. The observations of
the Auditors in their report on Accounts and the Financial Statements,
read with the relevant notes are self-explanatory.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013,
the Board of Directors appointed Shri Namo Narain Agarwal, Company
Secretary in Practice, as Secretarial Auditor to carry out the
Secretarial Audit of the Company for the financial year 2014-15. The
Report given by him for the said financial year in the prescribed
format is annexed to this Report as Annexure ''C''. The Secretarial Audit
Report does not contain any qualification, reservation or adverse
remark.
(c) Cost Auditor and Cost Audit Report
The Cost Audit for the financial year ended 31st March 2014 was
conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi, and as
required, the Cost Audit Report was duly filed with Ministry of
Corporate Affairs, Government of India. The Audit of the cost accounts
of the Company for the financial year ended 31st March 2015 is also
being conducted by the said firm.
Particulars of Remuneration
Information in accordance with the provisions of Section 197 of the
Companies Act, 2013 read with the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 regarding
remuneration and other details is annexed to this Report. However, as
per the provisions of Section 136 of the said Act, the Report and
Accounts are being sent to all the members of the Company and others
entitled thereto, excluding the aforesaid information. Any member
interested in obtaining such particulars may write to the Company
Secretary at the registered office of the Company. The said information
is available for inspection at the Registered Office of the Company
during working hours.
Corporate Social Responsibility
Your Company has been one of the foremost proponents of inclusive
growth and since inception, has been continuing to undertake projects
for the overall development and welfare of the society in the fields of
environment, conservation of natural resources, health, education,
rural development, etc.
The Company has framed its Corporate Social Responsibility (CSR) Policy
in accordance with the provisions of the Companies Act, 2013 and rules
made thereunder. The contents of the CSR Policy are disclosed on the
website of the Company.
The annual report on the CSR activities undertaken by the Company
during the financial year under review, in the prescribed format is
annexed to this Report as Annexure ''D''.
Internal Financial Controls
The Company has in place adequate internal financial controls with
reference to financial statements and no material reportable weakness
was observed in the system. Further, the Company has in place adequate
internal financial controls commensurate with the size and nature of
its operations. The Company also has a robust Budgetary Control System
and Management Information System (MIS) which is the backbone of the
Company for ensuring that your Company''s assets and interests are
safeguarded.
Significant and Material Orders Passed by the Regulators or Courts or
Tribunals
During the financial year under review, there were no significant and
material orders passed by the regulators or courts or tribunals which
would impact the going concern status of the Company and its future
operations.
CORPORATE GOVERNANCE Â including details pertaining to Board Meetings,
Nomination and Remuneration Policy, Performance Evaluation, Risk
Management, Audit Committee and Vigil Mechanism
Your Company reaffirms its commitment to the highest standards of
corporate governance practices. Pursuant to Clause 49 of the Listing
Agreement with the Stock Exchanges, a Management Discussion and
Analysis, Corporate Governance Report and Auditor''s Certificate
regarding compliance of conditions of Corporate Governance are made a
part of this Report as Annexure ''E''.
The Corporate Governance Report which forms a part of this Report also
covers the following:
a) Particulars of the five Board Meetings held during the financial
year under review.
b) Policy on Nomination and Remuneration of Directors, Key Managerial
Personnel and Senior Management including, inter alia, the criteria for
the performance evaluation of Directors.
c) The manner in which formal annual evaluation has been made by the
Board of its own performance and that of its Committees and individual
Directors.
d) The details with respect to composition of Audit Committee and
establishment of Vigil Mechanism.
e) Details regarding Risk Management.
Directors'' Responsibility Statement
As required under Section 134(3)(c) of the Companies Act, 2013, your
Directors state that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
b) the accounting policies have been selected and applied consistently
and judgments and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit and loss of the Company for
that period;
c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
said Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) the internal financial controls to be followed by the Company have
been laid down and that such internal financial controls are adequate
and were operating effectively; and
f) the proper systems to ensure compliance with the provisions of all
applicable laws have been devised and that such systems were adequate
and operating effectively.
Acknowledgements
Your Directors wish to place on record their appreciation for the
continued support and co-operation received from various State
Governments including those of Rajasthan, Madhya Pradesh, Karnataka,
Tamil Nadu and the Governments of India and Mexico. The Directors also
thank banks, shareholders, suppliers, dealers and in particular the
valued customers for their trust and patronage.
Your Directors record their appreciation for the dedication and hard
work put in by ''Team-JK Tyre'', which has enabled the Company to
continue to march ahead in these challenging times.
On behalf of the Board of Directors
4th August 2015 Dr. Raghupati Singhania
New Delhi Chairman & Managing Director
Mar 31, 2014
Dear members,
The Directors are pleased to present the Annual Report of your
Company, along with Audited Accounts for the financial year ended 31st
March, 2014.
OPERATIONS
Your Company along with its wholly-owned subsidiary JK Tornel, Mexico
achieved a consolidated turnover of Rs. 8,279 Crores, Operating Profit
of Rs. 890 Crores and Profit Before Tax of Rs. 374 Crores, higher by
42% over the previous year.
On a standalone basis, the Company achieved a turnover of Rs. 6,577
Crores. Operating Profit for the year was Rs. 672 Crores, an increase
of 34% over the previous year, and Profit Before Tax at Rs. 195 Crores.
The economy was in a recessionary trend throughout the year with the
average GDP growth clocking 4.5%. Manufacturing sector was worst
affected which resulted in a negative growth. Subdued economic activity
coupled with high rate of interest and high fuel prices adversely
affected the automobile sector. Commercial vehicle manufacturers had
to resort to heavy production cuts.
For the first time in the last 10 years the Passenger Car sales
experienced a decline this year. In fact, even the reduction in excise
duty for vehicles in both passenger and commercial segments failed to
boost sales or add any comfort to the situation.
As a result of these factors which impacted the automobile industry,
the demand for tyres remained sluggish both in commercial as well as
passenger segments. The only breather, however, was a significant
growth in demand of 23% in the Farm tyres segment, The Company met the
challenging economic environment by deploying multi-pronged measures.
JK Tyre renewed its thrust on higher penetration in the replacement
market and adding new OEMs. The Company widened its network of customer
touch points, such as, ''JK Tyre Steel Wheels'' and ''JK Tyre Truck
Wheels'', which enabled it to strengthen its customer service. Several
new products offering higher value added features, were launched in
both Commercial as well as Passenger tyre categories, which have
received excellent consumer feedback.
Concerted efforts were made in the export markets, resulting in the
Company being able to widen its global footprint, in addition to
increasing volumes in the existing markets. As a consequence, JK Tyre''s
exports clocked an all-time high of Rs. 1,040 Crores, registering an
impressive growth of 23%.
These measures were supplemented by continuous cost compression
initiatives, optimisation of resources and attaining better operating
efficiencies. Correction in high raw material prices also helped in
Company''s improved operations.
As the macro-economic fundamentals of the Indian economy remain intact
with several infrastructure projects gradually picking-up, it can be
expected, that the economy would certainly show an upward curve. The
outlook remains positive as the improving scenario promises a better
demand for tyres in the coming years.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 5 per Equity
Share of Rs. 10 each (i.e. 50%) on the Equity Share Capital of Rs.
41.06 Crores. The Dividend outgo will be Rs. 24.02 Crores (inclusive of
dividend tax of Rs. 3.49 Crores).
APPROPRIATIONS
The amount available for appropriation, including surplus from previous
year is Rs. 201.93 Crores. The Directors propose this to be
appropriated as under:
(Rs. Crores)
General Reserve 75.00
Dividend 20.53
Corporate Dividend Tax 3.49
Surplus carried to Balance Sheet 102.91
201.93
ISSUE OF WARRANTS
With a view to augment its net worth, the Company made Preferential
Issue of 43,03,350 Warrants to the Promoter Group, aggregating to Rs.
49.49 Crores based on a price prescribed under relevant SEBI
regulations in that regard.
An amount of Rs. 12.37 Crores being 25% of the total consideration of
the issue value, was received and accordingly allotment of warrants was
completed on 16th December, 2013. Each Warrant is convertible into one
Equity Share of the Company as per the terms of the issue.
JK TYRE RACES AHEAD
JK Tyre continued its growth journey undeterred by the economic
slowdown.
* Consolidated turnover including JK Tornel, Mexico at Rs. 8,279 Crores
- up by 9%.
* Consolidated Profit (PBT) at Rs. 374 Crores - up by 42%.
* Total exports (India and Mexico) - Rs. 1,605 Crores - up by 20%.
* Maintained its No.1 position, in Truck/Bus Radial with a market share
of 34%.
* Introduced new value added products - 7 in Commercial category and 3
for Passenger Cars - received excellent customer acceptance.
* In another first, JK Tyre partnered with Tata Motors to host the
first ever Truck Racing event in India. All racing trucks were
exclusively fitted with specially made JK Racing tyres, which performed
extremely well, as also acknowledged by the International drivers.
* JK Tyre National Karting Championship completed 10 years.
EXPORTS - Scaling new heights
Anticipating slower growth in domestic market due to apparent sluggish
trends in the economy, the Company as a strategy had re-inforced its
effort of exploring newer markets beyond the Indian boundaries and
scaling up its sales in the existing export markets right at the
beginning of the financial year.
It gives the Directors great pleasure to report, that the Company
achieved exports worth Rs. 1,040 Crores during the year 2013-14,
recording an increase of 23% over the previous year. This was achieved
despite tough market conditions prevailing in Middle-East, Africa and
South-East Asian markets.
JK Tyre continues to enjoy a premium-brand status in various
international markets including Americas and Australia. In fact, your
Company tyres are now running on the roads of 1 00 countries across six
continents, offering a wide range of high quality products.
JK TORNEL
JK Tornel continues to perform well and has recorded a turnover of Rs.
1,735 Crores for the 15 months period (January 2013 to March 2014)
despite a slowdown in US and South American markets. It improved its
profitability further with the highest ever PBT of Rs. 179 Crores for
the period. The plants at Mexico, manufactured ''JK Tyre'' and ''Vikrant''
branded tyres apart from its range of ''Tornel'' brand tyres.
JK Tornel expansion project to enhance PCR capacity is progressing as
per schedule. The Company will have a significant increase in
production from next year.
EXPANSION PROJECTS - FUTURE READY
Notwithstanding the current slowdown in the auto industry, the medium
and long-term prospects are promising. It is expected that commercial
and passenger vehicle industry will grow at 7-8% and 11- 12%
respectively in the next 4-5 years time.
Truck/Bus Radials will continue to grow due to new generation vehicles
being fitted with Radials and expected boost to investment in overall
infrastructure growth. These factors will lead to higher radialisation
in commercial segment at a faster pace. It is expected that from the
present levels of 27% radialisation, it will grow to nearly 69% by
2017-18. In addition, there is a huge opportunity for export of
Truck/Bus Radials as well as Passenger Line Radials in the global
markets.
In order to capture these opportunities, the Company has undertaken an
expansion of Truck/Bus Radials and Passenger Line Radials capacities.
This Rs. 1,430 Crores project is expected to be commissioned by
2015-16.
In addition, Company''s ongoing expansion to enhance SCV, Farm and
Passenger Line Radial capacities has been commissioned and benefit of
higher production is expected in the year ahead.
CUSTOMER FIRST
JK Tyre has resolved to continuously give better products keeping the
evolving customer needs at the centre of every activity it plans or
undertakes. In this endeavor, your Company has been undertaking
measures to offer several value added services to its esteemed
customers. In Truck/Bus segment, there have been a number of
initiatives like ''JK Tyre Truck Wheels'', ''JK Tyre Care Centers'' and
''Fleet Management''.
''JK Tyre Truck Wheel'' Centers are located at major transport hubs
across the country. These centers provide exclusive services like Wheel
Alignment, Wheel Balancing and Nitrogen Inflation.
Fleet Management programmes provides exclusive services to the key
fleet accounts. These include Tyre Care & Maintenance Support, Data
Management, Driver Training and ''Heal the Wheel'' service camps. During
the year, the Fleet Management service was further widened by
increasing its reach.
In the Passenger Car Segment, JK Tyre has a unique Tyre breakdown
assistance service called ''Fix-a-Tyre'' in Delhi, NCR and Chennai. JK
Tyre has been operating a chain of one stop retail & tyre care outlets
called ''JK Tyre Steel Wheels''. 120 such retail outlets around the
country are in operation and generate a significant portion of PCR
sales. These outlets also provide services like Wheel Alignment, Wheel
Balancing, Automatic Tyre Change and Nitrogen Inflation, besides
selling a wide range of JK Tyre Passenger Car Tyres.
JK TREADS
The Company''s retread business under the brand "JK Treads" has grown.
It offers retreading solutions through a chain of franchise retreaders
across the country, This initiative has been appreciated particularly
by the Truck/Bus Radial customers, which help them derive maximum life
and optimum value from high performing JK Radials.
R&D AND TECHNOLOGY
Technology leadership is at the core of all R&D activities of the
Company. Multi-disciplinary teams of scientists and technologist
through a synergetic blend of knowledge, experience and hard work are
actively engaged in maintaining Company''s technological leadership.
JK Tyre Tech Center and other in-house R&D Centers are extensively
engaged in technology development and upgradation in the areas of
material, new as well as future ready products and processes. The use
of high end tools and predictive technologies in association with,
"Hari Shankar Singhania Elastomer and Tyre Research Institute"
(HASETRI) and "RPS Center of Excellence for Tyres and Vehicle
Mechanics", located at IIT Madras, leads your Company towards
innovation and creativity, the driving force behind the technology
growth.
Your Comp- any has set up a "Satellite Product Design & Develop- ment
Centre" at JK Tornel, Mexico, manned by highly skilled Develop- ment
Engine- ers, so that customer expectations for both OEMs and Replace-
ment segments in NAFTA Region and in the South American markets, are
well understood and met in the ever growing competition.
MOTORSPORTS
During the year, your Company initiated many path- breaking motorsports
events. JK Tyre introduced ''JK Racing India Series'' which featured BMW
engine powered FIA homologated FB02 Formula Cars and provided a
lifetime opportunity to twelve of India''s best racing drivers below 18
years of age to live their dream.
For the first time in the history of Indian Motorsport, your Company
hosted a round of National Rally Champio- nship and JK Tyre Racing,
together at the same time and venue. The entire motorsport fraternity
converged to witness history in the making. The last two rounds of the
JK Tyre Racing Championship were hosted at world class Buddh
International Circuit, The second year of JK Tyre Himalayan Drive Car
Rally, run under the aegis of Government of Sikkim and West Bengal,
attained newer heights in terms of participation and media coverage.
In another first, JK Tyre partnered with Tata Motors to host the first
ever Truck Racing event in India. All the participating racing trucks
were fitted with JK Truck Radial Racing tyres which were specially made
for this application.
AWARDS
Your Company received several coveted awards for its pioneering efforts
during the year. To mention a few
* Golden Peacock Award for HR Excellence - 2013, Greentech CSR Award
2014, 14th Annual Greentech Environment Award 2013 "Gold" Category in
Rubber Sector, Manufacturing Excellence Award - Best in Class
operational Excellence Award by CMO Asia & Stars of the Industry (World
Brand Congress) & several others.
DIRECTORS
Shri Swaroop Chand Sethi retires by rotation and being eligible offers
himself for re-appointment at the ensuing Annual General Meeting (AGM).
Shri Bakul Jain and Shri Kalpataru Tripathy retire by rotation at the
ensuing AGM and being eligible they are proposed to be appointed as
Independent Directors of the Company, each for a term of five
consecutive years commencing from the date of ensuing AGM. Shri Arvind
Singh Mewar, Shri O.P Khaitan, Shri Vimal Bhandari and Dr. Wolfgang
Holzbach whose period of office is liable to determination by
retirement of Directors by rotation are also proposed to be appointed
as Independent Directors of the Company, each for a term of five
consecutive years commencing from the date of ensuing AGM. The Company
has also received declarations from the said Directors about their
independence pursuant to Section 149 of the Companies Act, 2013.
CONSERVATION OF ENERGY ETC.
The details as required under the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 is annexed to this
Report and forms part of it.
SUBSIDIARY COMPANIES
The particulars required under the provisions of the Companies Act,
1956 in respect of the subsidiary companies are appended.
The statement pursuant to Section 21 2 of the Companies Act, 1956 read
with General Circular No. 51/12/2007-CL-III dated 8th February, 2011
of the Ministry of Corporate Affairs, containing the details of the
Company''s subsidiaries is attached.
In terms of the said Circular dated 8th February, 2011 and the Company
having satisfied the conditions stipulated therein, copies of the
Balance Sheet, Profit & Loss Account, Reports of the Board and the
Auditors of all the subsidiary companies have not been attached to the
Balance Sheet of the Company. However, the annual accounts of the
subsidiary companies and the related detailed information will be made
available to the members of the Company and of the subsidiary companies
seeking such information at any point of time. The annual accounts of
the subsidiary companies are also available for inspection by any
member at the Head Office of the Company and that of the subsidiary
companies concerned.
AUDITORS
M/s Lodha & Co., Chartered Accountants, Auditors of the Company, retire
and are eligible for re- appointment. The observations of the Auditors
in their report on Accounts read with the relevant notes are self
explanatory,
COST AUDIT
The Cost Audit for the financial year ended 31st March 2013 was
conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi and as
required Cost Audit Report was duly filed with Ministry of Corporate
Affairs, Government of India. The Audit of the cost accounts of the
Company for the financial year ended 31st March 2014 is being conducted
by the said firm and the Report will also be filed.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 217(2A) of the
Companies Act 1956 read with the Companies (Particulars of Employees)
Rules 1975 as amended regarding employees is annexed to this Report.
However, as per the provisions of Section 219(1 )(b)(iv) of the
Companies Act, 1956, the Report and Accounts are being sent to all the
members of the Company and others entitled thereto, excluding the
aforesaid information. Any member interested in obtaining such
particulars may write to the Company Secretary at the registered office
of the Company.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has been one of the foremost proponents of inclusive
growth and since inception, has been continuing to undertake projects
for overall development and welfare of the society in the fields of
environment, conservation of natural resources, health, education,
rural development, etc.
Pursuant to the provisions of the Companies Act, 2013 and Rules
thereto, a Corporate Social Responsibility (CSR) Comm- ittee of the
Board has been constituted to monitor CSR related activities in terms
of the said provisions and Rules, comprising of Dr. Raghupati Singhania
(Chairman of the Committee), Shri Arvind Singh Mewar and Shri Arun K.
Bajoria, as members.
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to the highest standards of
corporate governance practices. Pursuant to Clause 49 of the Listing
Agreement with the Stock Exchanges, a Management Discussion and
Analysis, Corporate Governance Report and Auditors Certificate
regarding compliance of conditions of Corporate Governance are made a
part of this Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act 1956, your
Directors state that:-
i) in the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) the accounting policies have been selected and applied consistently
and judgments and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit or loss of the Company for
that period;
iii) proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
said Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities; and
iv) the annual accounts have been prepared on a going concern basis.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the
continued support and co-operation received from various State
Governments including those of Rajasthan, Madhya Pradesh, Karnataka,
Tamil Nadu and the Governments of India and Mexico, The Directors also
thank banks, shareholders, suppliers, dealers and in particular the
valued customers for their trust and patronage, Your Directors record
their appreciation for the dedication and hard work put in by ''Team-JK
Tyre'', which has enabled the Company to continue to march ahead in
these challenging times,
On behalf of the Board of Directors
The 28th May 2014 Dr, Raghupati Singhania
New Delhi Chairman & Managing Director
Mar 31, 2013
TO THE MEMBERS
The Directors have pleasure in presenting the Annual Report and Audited
Accounts of the Company for the year ended 31st March 2013.
OPERATIONS
Your Company achieved a turnover of Rs. 6,015 Crores. Operating Profit
for the year was Rs. 500 Crores, higher by 77% and Profit Before Tax at
Rs. 150 Crores, recorded a multifold increase over the previous year.
The Company alongwith its wholly owned subsidiary-JK Tornel, Mexico
achieved a consolidated Turnover of Rs. 7,570 Crores during the year.
The consolidated Profit Before Tax for the year was Rs. 264 Crores.
The Indian economy slowed down considerably during the year with GDP
recording a growth of merely 5%. This coupled with high rates of
interest prevailing during the year, adversely affected the automotive
sector in particular. Several commercial vehicle manufacturers resorted
to heavy production cuts. Growth in Passenger Car sales, lowest in the
decade, was barely 2.5%. Consequently, demand for tyres slowed down
both for Commercial as well as Passenger segments.
Your Company continued its thrust towards enhancing quality of service
to its customers through new offerings of value added products and
providing tyre care, through a wide network of exclusive outlets.
Improvement of various operating parameters coupled with cost
compression measures, in the backdrop of softer raw material prices,
helped the Company to improve its profitability significantly.
Interest rates and inflation pressures have eased to some extent. With
the expected revival of the economy, the outlook for the current year
is promising.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 3.50 per
Equity Share of Rs.10 each (i.e. 35%) on the Equity Share Capital of
Rs. 41.06 Crores. The Dividend outgo will be Rs. 16.81 Crores
(inclusive of dividend tax of Rs. 2.44 Crores).
APPROPRIATIONS
The amount available for appropriation, including surplus from previous
year is Rs. 144.06 Crores. The Directors propose this to be
appropriated as under:
(Rs. Crores)
General Reserve 60.00
Dividend 14.37
Corporate Dividend Tax 2.44
Surplus carried to Balance Sheet 67.25
144.06
DIRECTORS
Your Directors express their profound grief and sorrow on the sad
demise of Shri Hari Shankar Singhania, President, J.K. Organisation on
22nd February 2013. Shri Singhania joined the Board of the Company in
the year 1974 and was Chairman of the Board ever since. Shri
Singhania, who learnt the ropes of business under his illustrious
father Late Lala Lakshmipatji, was actively involved with J.K.
Organisation since 1951, from the young age of 18 years, and held
various positions, before he assumed the Chairmanship of various
Companies. Shri Singhania contributed immensely not only in the growth
of your Company but also in the industrialization and economic
development of India. In recognition, he received numerous prestigious
Indian & International awards. Yours Directors pay their respectful
homage and tribute to this extraordinary human being, a great leader,
an iconic industrialist and a leading statesman.
The Board of Directors at its meeting held on 27th May, 2013 appointed
Dr. Raghupati Singhania as Chairman of the Board of Directors of the
Company. Dr. Raghupati Singhania shall now be Chairman & Managing
Director of the Company.
Shri Arun K. Bajoria and Shri O.P. Khaitan retire by rotation and being
eligible offer themselves for re-appointment at the ensuing Annual
General Meeting.
The Board of Directors appointed Dr. Wolfgang Holzbach as an Additional
Director pursuant to Section 260 of the Companies Act, 1956 with effect
from 6th November 2012. In terms of the said section, Dr. Holzbach will
hold office as Director upto the date of the ensuing Annual General
Meeting. The Company has received notice in writing from a member
proposing candidature of Dr. Holzbach for being appointed as a
Director, liable to retire by rotation. The Board recommends
appointment of Dr. Holzbach as a Director.
CHENNAI PLANT
Production at the All Radial new Tyre Plant at Chennai (CTP) ramped up
during the year. The additional 2 lac per annum Truck/Bus radials
expansion taken up last year at CTP was also completed and
commissioned. Further expansion of Passenger Car Radial(PCR) capacity
has been undertaken at CTP and is progressing well.
With the expected improvement in market conditions during the current
year, along with the availability of full output from CTP, JK Tyre''s
radial leadership position will be significantly strengthened.
JK TYRE DRIVING AHEAD
Despite slowdown of the automotive sector, JK Tyre made significant
strides :
- Consolidated turnover including JK Tornel, Mexico at Rs. 7,570
Crores.
- Consolidated profit (PBT) at Rs. 264 Crores.
- Total Exports from India and Mexico at Rs. 1,340 Crores, recording
an increase of 31%.
- JK Tyre continues to be the Leader in Truck/Bus Radials - More than
6 Million JK Truck/Bus Radials already on the roads.
- All Radial new Tyre Plant at Chennai went on stream.
- Jaykaygram Tyre Plant achieved a rare distinction of becoming the
First Tyre Plant in Asia and Second Tyre Plant in the World, to receive
ISO 50001 Energy Management System Certification from British Standard
Institution. Subsequently, Tyre Plants at Mysore also received ISO
50001 Energy Management System Certification from British Standard
Institution.
- JK Tyre made its debut in the racing circuits of Europe as part of
2nd edition ''JK Racing Asia Series'' and thus putting the country in the
International racing arena.
- JK Tyre is the First Indian Company to acquire Federation of
Internationale Automobile accredited series.
EXPANSION
With the growing demand for Company''s Farm tyres, it has undertaken an
expansion to enhance Farm tyre capacity at its various plants. Capacity
for Small Commercial Vehicle tyres is also being added to enhance its
presence in this growing segment.
EXPORTS
JK Tyre achieved an export turnover of Rs. 847 Crores from its Indian
plants, highest ever, recording a growth of 44% over the previous year.
Your Company exports tyres to 90 countries and has established ''JK
Tyre'' as a reliable and trustworthy brand, which enjoys premium status
in major markets.
JK TORNEL
JK Tornel continued to make new inroads in the various markets and
achieved a turnover of 3859 million pesos (Rs. 1572 Crores) and Profit
Before Tax(PBT) of 271 million pesos (Rs.116 Crores) for the year 2012.
Apart from serving the Mexican domestic requirements, JK Tornel exports
tyres to both North and South American markets extensively. On the OEM
front, it serves leading car manufacturers in both Mexico as well as
USA. Plans are afoot to enhance the PCR capacity to meet the growing
demand for its tyres.
CUSTOMER FIRST
Over the years, your Company has taken several initiatives to enhance
the quality of service to its valued customers, such as, in Truck/Bus
segment - Fleet Management, ''JK Tyre Truck Wheels'' service centers and
''JK Tyre Care'' centers. These services were further strengthened and
enlarged during the year. These centers offer One-Stop solution for
Truck/Bus tyre customers, like, Wheel Alignment, Wheel Balancing and
Nitrogen Inflation etc.
Fleet Management service was enriched with the launch of ''Heal the
Wheel'' service camps conducted across the country. Engaging with the
customers at various fora helps the Company getting customer feedback
on products and services leading to co-creation of new initiatives.
In the Passenger Car Segment, JK Tyre has launched India''s first tyre
breakdown assistance service called ''Fix-a-Tyre''. Your Company has been
operating a chain of one-stop retail & tyre care outlets - ''JK Tyre
Steel Wheels''. These provide services like Wheel Alignment, Balancing
and automatic tyre changer, besides offering a wide range of JK Tyre
Passenger Car Radials, under one roof.
JK TREADS
As reported in earlier years, your Company entered the business of
offering retreading solutions to its customers, in particular to Truck
& Bus operators Chain of franchisee retreaders offering ''JK Treads'',
has been further enlarged to help customers using Truck/Bus radials to
derive maximum life and optimum value of this superior product.
R&D and TECHNOLOGY
Your Company pursues growth strategy through Technology Edge in the
ever growing competitive scenario in India as well as globally where
its products are sold. Towards this end, Company''s R&D Centers closely
work in partnership with various academic institutions for technology
development, with raw material suppliers to develop specific
application oriented materials, and with Global OEMs for sustainable
development and growth.
The R&D efforts of the Company are focused in the field of advanced
material, alternative material, nano technology, process & product
simulation, predictive technology, advanced tyre mechanics including
tyre characterization and other relevant areas. It''s in-house R&D
Centers work in close association with Hari Shankar Singhania Elastomer
and Tyre Research Institute (HASETRI), a premier scientific and
industrial research organization (SIRO), as also ''RPS Centre of
Excellence for Tyre & Vehicle Mechanics'', a unique industry-academia
joint venture, located at IIT Madras.
Various R&D facilities and the JK Tyre Tech Centre are driven by highly
competent and dedicated team of scientists, engineers and
technologists.
ACCREDITA- TIONS
JK Tyre has since its inception, been making continuous endeavours
towards achieving excellence in all areas of its operations.
Besides maintaining ISO/TS-16949 Quality Manage- ment System for
Automotive Industry, Environment Management System ISO-14001:2004 and
OHSAS-18001:2007 certification; several improvement initiatives like
Total Productive Maintenance (TPM), Manufacturing Excellence,
Sustainability, Social Accountability (SA-8000) etc. have been
undertaken to pursue green environment.
During the year, your Company''s Jaykaygram Tyre Plant and Mysore Tyre
Plants have received ISO 50001 Energy Management System Certification
from British Standard Institution. Jaykaygram Tyre Plant has achieved
this rare distinction of becoming the first Tyre plant in Asia and the
second Tyre plant in the world. Chennai Tyre Plant has received letter
of Conformance for TS-16949 certification.
MOTORSPORTS
JK Racing Asia Series made its debut in Europe and hosted three rounds
in World''s renowned European Circuits, in the year under review. It
also participated in the Formula 1 Indian Grand Prix as a support race
for the second consecutive year.
JK Tyre continues to sponsor ''JK Tyre National Racing Championship'' and
''JK Tyre National Karting Championship'' for the 16th consecutive year.
To support grassroots'' level rallying, JK Tyre organised inaugural
edition of 6 round JK Tyre National TSD Rally Championship. For the
third consecutive year, JK Tyre along with Constitution Club of India
organized the car rally for the Members of Parliament(MPs), in which
several MPs and Union Ministers participated.
AWARDS
Your Company received several coveted accolades during the year. To
mention a few, ''Greentech Environment Award - 2012'' in Gold category,
''Greentech Safety Award 2012'', Award for ''Water Efficiency Unit'' by
CII, Award for Organization with Innovative HR Practices from Asia
Pacific HRM Congress.
CONSERVATION OF ENERGY ETC.
The details as required under the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 is annexed to this
Report and forms part of it.
SUBSIDIARY COMPANIES
The particulars required under the provisions of the Companies Act, 1
956 in respect of the subsidiary companies are appended.
The statement pursuant to Section 212 of the Companies Act, 1956 read
with General Circular No. 51/12/2007-CL-III dated 8th February, 2011
of the Ministry of Corporate Affairs, containing the details of the
Company''s subsidiaries is attached.
In terms of the said Circular dated 8th February, 2011 and the Company
having satisfied the conditions stipulated therein, copies of the
Balance Sheet, Profit and Loss Account, Reports of the Board and the
Auditors of all the subsidiary companies have not been attached to the
Balance Sheet of the Company. However, the annual accounts of the
subsidiary companies and the related detailed information will be made
available to the members of the Company and of the subsidiary companies
seeking such information at any point of time. The annual accounts of
the subsidiary companies are also available for inspection by any
member at the Head Office of the Company and that of the subsidiary
companies concerned.
AUDITORS
M/s Lodha & Co., Chartered Accountants, Auditors of the Company, retire
and are eligible for re-appointment. The observations of the Auditors
in their report on Accounts read with the relevant notes are self
explanatory.
COST AUDIT
The Cost Audit for the financial year ended 31st March 2012 was
conducted by M/s R.J.Goel & Co., Cost Accountants, Delhi and as
required, Cost Audit report was duly filed with Ministry of Corporate
Affairs, Government of India. The Audit of the Cost Accounts of the
Company for the financial year ended 31st March 2013 is being conducted
by the said firm and the Report will also be filed.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended, regarding employees is annexed to this Report.
However, as per the provisions of Section 219(1)(b)(iv) of the
Companies Act, 1956, the Report and Accounts are being sent to all the
members of the Company and others entitled thereto, excluding the
aforesaid information. Any member interested in obtaining such
particulars may write to the Company Secretary at the registered office
of the Company.
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to the highest standards of
corporate governance practices. Pursuant to Clause 49 of the Listing
Agreement with the Stock Exchanges, a Management Discussion and
Analysis, Corporate Governance Report and Auditors Certificate
regarding compliance of conditions of Corporate Governance are made a
part of this Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act 1956, your
Directors state that :-
i) in the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) the accounting policies have been selected and applied consistently
and judgments and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit or loss of the Company for
that period;
iii) proper and sufficient care has been taken for maintenance of
adequate accounting records in ac- cordance with the provisions of the
said Act for safeguarding the assets of the Company and for preventing
and detect- ing fraud and other irregulari- ties; and
iv) the annual accounts have been prepared on a going con- cern basis.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the
continued support and co-operation received from several State
Governments including those of Rajasthan, Madhya Pradesh, Karnataka,
Tamil Nadu and the Governments of India and Mexico. The Directors thank
our valued customers, business and channel partners, bankers and other
stakeholders for their continued support.
Your Directors also record their appreciation for the dedication and
commitment of ''Team-JK Tyre'' which has enabled the Company to continue
to forge ahead and grow.
On behalf of the Board of Directors
The 27th May 2013 Dr. Raghupati Singhania
New Delhi Chairman & Managing Director
Mar 31, 2012
The Directors have pleasure in presenting the Annual Report and Audited
Accounts of the Company for the year ended 31st March 2012.
OPERATIONS
Turnover for the year under review was at all time high of Rs. 6,152
Crores recording an increase of 17% over the previous year. Operating
Profit for the year was Rs. 283 Crores and Profit Before Tax was Rs. 13
Crores.
The Company along with its wholly owned subsidiary JK Tornel achieved a
turnover of Rs. 7,456 Crores during the year.
The year began on a promising note with robust sale of automotives
across various segments. Economy was expected to grow at 9%. However,
in order to contain inflation, monetary policy was tightened, during
the year, resulting in steep increase in interest rates. The automotive
sector was adversely affected and passenger car segment grew by merely
2.7%. Consequently demand for tyres slowed down.
During the year, operations were disrupted at Mysore Plant II and
Banmore Plant for 45 days and 60 days respectively, pursuant to go slow
resorted to by a section of workmen at these locations. This illegal
partial stoppage of work resulted in loss of production and profit to
the Company.
Second half of the year witnessed severe volatility in foreign exchange
rate movement, thus substantially impacting the cost of imported raw
materials. All round cost push on the one hand and slow down in the
automotive sales on the other, affected profitability.
The Company continued its relentless drive towards improving operating
parameters, cost cutting, enrichment of product mix and enlarging
market network. This helped contain the impact of these factors to some
extent.
DIVIDEND
Your Directors are pleased to recommend dividend of Rs. 2.50 per Equity
Share of Rs. 10 each (25%) on the Equity Share Capital of Rs.41.06
Crores. The Dividend outgo will be Rs.11.93 Crores (inclusive of
dividend tax of Rs. 1.67 Crores).
APPROPRIATIONS
The amount available for appropriation, including surplus from previous
year and debenture redemption reserve no longer required is Rs. 60.45
Crores. The Directors propose this to be appropriated as under:
(Rs. Crores)
General Reserve 10.00
Dividend 10.26
Corporate Dividend Tax 1.67
Surplus carried to Balance Sheet 38.52
60.45
EXPANSION PROJECTS
Several expansion projects launched in the earlier years went on stream
during the year:
Truck Radials
Expansion at Mysore for further enhancing the capacity to 10 lac tyres
p.a. was completed.
Chennai Project
The new green site all radial plant at Chennai went on stream towards
the end of the year. This facility with a capacity of 25 lac Car
radials p.a. and 2 lac Truck/ Bus radials p.a., will strengthen our
market presence significantly in the year ahead. The coming financial
year shall have the benefit of enhanced production from this Plant.
Another expansion of Chennai Tyre Plant by 2 lac Truck/Bus radials p.a.
has been undertaken, which is expected to go on stream during the
current year.
With the completion of the above projects, the turnover of the Company
is expected to increase significantly in the current year, cementing JK
Tyre's leadership in Radials.
Plans have been drawn for further enhancing capacity of Chennai Tyre
Plant, both for Passenger Car Radial & Truck Radial tyres.
JK TYRE-MOVING AHEAD
Inspite of difficult and challenging year for the Tyre Industry, JK
Tyre continued to march ahead driven by continued zest for growth;
- Turnover from Indian Operations at Rs. 6,152 Crores grew by 17% and
consolidated Turnover including JK Tornel, Mexico at Rs. 7,456 Crores -
up 16%,
- Total exports from India and Mexico crossed Rs. 1,000 Crores, an
increase of 35% over previous year.
- JK Tyre maintained its leadership position as India's No.l in Truck
and Bus Radial tyre manufacturer. 27% of Company's production in
Truck/Bus tyre category is already radialised. This position will be
further strengthened with the commissioning of its new capacities at
Mysore and at the new all radials Chennai plant,
- A number of new size of Ultra Large OTR tyres were introduced, for
various dumpers and loaders. Their performance have been applauded by
the users.
- Once again "JK Tyre" has been selected as a "Super Brand" and
continues to be India's first and only Tyre Super Brand.
- JK Tyre partnered in the first ever Formula 1 championship held in
India. It has acquired the rights of renowned world series 'Formula BMW
Pacific'which is now known as "JK Racing Asia Series" with the
participating cars racing on speclaiy made UK Tyres'. The race was run
along with the First ever Formula 1 championship held In India.
TRUCK/BUS RADIALISATION
It Is Indeed heartening to note that radialization of truck/bus segment
Is now catching up fast with current radialization being at 19%, which
Is expected to Increase significantly to 35% In the next couple of
years.
Your Company envisioned this much earlier, built capacities and
continues to be the Truck/Bus Radials' leader In India. Already 27% of
the Truck/Bus tyre production at JK Tyres Is that of Radlals.
JK TREAD
Doubling of capacity of retread material was completed during the year,
as planned. The Company markets Its retreading services under the brand
UK Tread'. The network of franchises has been expanded across the
country, which offer end-to-end solutions to customers for retreading,
both Blas as well as Radial truck/bus tyres.
EXPORTS
Your Company exports Its products to over 80 countries across the six
continents, offering its wide range of products. During the year, your
Company's export registered an increase of 41% with exports at Rs. 590
Crores,
In addition to exports from India It also exports tyres from JK Tomel,
which amounted to Rs. 428 Crores, thus the total exports were at Rs.
1,018 Crores.
JKTORNEL
JK Tomel, Mexico, recorded a Sales of 3447 Mn Pesos [Rs. 1,304 Crores)
a growth of 13% over previous year. JK Tornel continues to Improve Its
operations In several areas. There was significant Increase In the
production of Passenger Car Radials. Plans have been drawn to expand
Passenger Car Radials capacity to meet the growing demand In this
segment, JK Tornel has entered for the first time In the highly
competitive and prestigious Passenger Car Radial OE segment for supply
of tyres to Chrysler and Nissan after a rigorous OEM approval procedure.
Slow recovery in the American markets as well as Increased costs &
foreign exchange rate volatility faced during the year was a challenge
for JK Tornel.
JK Tornel enhanced its exports to North and South American markets, it
also exports tyres In "JKTYRE" brand in addition to its range of
"TORNEL" branded tyres.
R&D AND TECHNOLOGY
Technology and R&D has been the key driving force at JK Tyre. Your
Company's vision to deliver world class products to the changing needs
of the customer has enabled team JK Tyre to continuously deliver newer
and newer innovative products.
Your Company's technology leadership is derived from Its In-house R&D
Centres, multidisciplinary collaborative research work with premier
institutions of R&D including HASETRI and raw material suppliers In the
field of highly complex materials, predictive technology, tyre
characteristics, testing and other allied areas
Various projects have been Initiated for reduction of cycletimeinall
operations, optimization of components In the tyres and standardization
of materials and processes. New technological approaches and computing
capabilities using mathematical methods to simulate the tyre behaviour
in traction, breaking and cornering have been developed.
JK Tyre is also continuously improving productivity and quality in
manufacturing processes like mixing, extrusion, calendaring, building
and curing. Furthermore, innovative initiatives are being taken for
substituting materials as well as using eco friendly raw material in
manufacturing.
VALUE ADDED SERVICES TO CUSTOMERS
JK Tyre continues to drive the Radial Revolution in India. Providing
value to customers has always been JK Tyre's forte and towards this
end, your Company has made significant investments. The Company serves
its customers through "JK Truck Radial Tyre Care Centres" located along
major National Highways in the country which operate 365 days/24
hours, for repair & service of tyres. The Company also runs a unique
Fleet Management Program which has enabled major fleets to optimise
operating costs through tyre care provided by dedicated JK Tyre service
teams.
Taking these initiatives further, JK Tyre has launched "TRUCK WHEELS" a
new concept for providing "Total Tyre Solutions" for Truck/Bus tyres.
Several such centres have been established, which enable truckers to
avail of services like repair, retread, wheel alignment & balancing and
other allied services like nitrogen air care which enhances tyre life.
Your Company has been operating several one-stop passenger radial
retail and tyre care outlets "JK Tyre Steel Wheels" across the country
for last several years. These 130 outlets provide to the customers,
value added services like computerized wheel alignment, balancing and
automated tyre changing, air care etc., in addition to offering wide
range of JK Tyre, under one roof.
MOTORSPORTS
The year 2011 was a remarkable one for Indian Motorsport and for JK
Tyre, in particular. The highest echelon of motorsport-Formula 1 was
successfully hosted in India. It was a proud moment for your Company to
be a part of the biggest motorsport extravaganza and to join the most
coveted club of top brands of the world.
During the year, the Company acquired the Formula BMW Series and
rechristened it as the JK Racing Asia Series (JKRAS). With this
acquisition, JK Tyre created history in Indian Motorsport by becoming
the first Indian company to acquire an FIA accredited series.
At the 2011 inaugural season, the JKRAS was a support race at the
Formula One Grand Prix in Malaysia, Singapore and India, providing
exposure to the young racing talents to prove their mettle in front of
motorsports fraternity.
These races had a very large viewership across the globe, providing JK
Tyre an excellent platform for reinforcing its presence in the
Motorsports which added significant value to JK Tyre brand.
AWARDS
During the year, your Company received several coveted awards. To
mention a few, the Company received GOLDEN PEACOCK AWARD for
"ENVIRONMENT MANAGEMENT", Asia's best Employer Branding Awards 2011 for
"TALENT MANAGEMENT" and Greentech Environment Award - "CATEGORY GOLD".
JK Tyre has been selected as a Super Brand once again and continues to
be India's first and only Tyre Super brand. JK Tyre has also been
recognized as an Indian Power brand. It is heartening to note that Dr.
Raghupati Singhania, Vice Chairman & Managing Director of the Company
received "CORPORATE ICON OF THE YEAR AWARD" by IIPM POWER BRAND.
CONSERVATION OF ENERGY ETC.
The details as required under the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules 1988 are annexed, Annexure
-1.
DIRECTORS
Shri Swaroop Chand Sethi and Shri Arvind Singh Mewar retire by rotation
and being eligible offer themselves for re-appointment at the Annual
General Meeting.
The Board of Directors appointed Shri Vimal Bhandari and Shri Ashwani
Kumar Puri, as Additional Directors pursuant to Section 260 of the
Companies Act, 1956 with effect from 29th July 2011. Shri Puri has
since resigned and has ceased to be a Director. In terms of the said
Section, Shri Bhandari will hold office as Director upto the date of
the ensuing Annual General Meeting, The Company has received a notice
in writing from a member proposing candidature of Shri Bhandari for
being appointed as a Director, liable to retire by rotation. The Board
recommends appointment of Shri Bhandari as a Director.
Nomination of Shri Ashok U. Katra has been withdrawn by IDBI Bank Ltd.
from the Board of the Company with effect from 10th May 2012.
The Board records its deep appreciation for the valuable services
rendered by Shri Katra and Shri Puri during their respective tenures of
office.
SUBSIDIARY COMPANIES
The particulars required under the provisions of the Companies Act,
1956 in respect of the subsidiary companies are appended.
The statement pursuant to Section 212 of the Companies Act, 1956 read
with General Circular No, 51/12/2007-CL-lll dated 8th February, 2011 of
the Ministry of Corporate Affairs, containing the details of the
Company's subsidiaries is attached,
In terms of the said Circular dated 8th February 2011 and the Company
having satisfied the conditions stipulated therein, copies of the
Balance Sheet, Profit & Loss Account, Reports of the Board and the
Auditors of all the subsidiary companies have not been attached to the
Balance Sheet of the Company. However, the annual accounts of the
subsidiary companies and the related detailed information will be made
available to the members of the Company and of the subsidiary companies
seeking such information at any point of time. The annual accounts of
the subsidiary companies are also available for inspection by any
member at the Head Office of the Company and that of the subsidiary
companies concerned.
AUDITORS
M/s Lodha & Co., Chartered Accountants, Auditors of the Company, retire
and are eligible for re-appointment. The observations of the Auditors
In their report on Accounts read with the relevant notes are self
explanatory,
COST AUDIT
The Cost Audit for the financial year ended 31st March 2011 was
conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi and as
required Cost Audit report was duly filed with Ministry of Corporate
Affairs, Government of India. The Audit of the Cost Accounts of the
Company for the year ended 31st March 2012 is being conducted by the
said firm and the Report will also be filed.
PARTICULARS OF EMPLOYEES
Information In accordance with the provisions of Section 217(2A) of the
Companies Act 1956 read with the Companies (Particulars of Employees)
Rules 1975 as amended regarding employees Is annexed to this Report.
However, as per the provisions of Section 219(l)(b)(iv) of the
Companies Act, 1956, the Report and Accounts are being sent to all the
members of the Company and others entitled thereto, excluding the
aforesaid Information. Any member Interested In obtaining such
particulars may write to the Company Secretary at the registered office
of the Company,
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to the highest standards of
corporate governance practices, Pursuant to Clause 49 of the Listing
Agreement with the Stock Exchanges, a Management Discussion and
Analysis, Corporate Governance Report and Auditors Certificate
regarding compliance of conditions of Corporate Governance are made a
part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act 1956, your
Directors state that :-
I) In the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
II) the accounting policies have been selected and applied consistently
and judgments and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit or loss of the Company for
that period;
III) proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
said Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other Irregularities; and
iv) the annual accounts have been prepared on a going concern basis.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the
continued support and co-operation received from State Governments of
Rajasthan, Madhya Pradesh, Karnataka and Tamil Nadu, and the
Governments of India and Mexico. The Directors also thank our
customers, business and channel partners, bankers and other
stakeholders for their continued support,
Your Directors also record their appreciation for the dedication and
passion of Team-JK Tyre' which has enabled the Company to continue to
surge ahead in these challenging times.
On behalf of the Board of Directors
The 15th May, 2012 HARI SHANKAR SINGHANIA
New Delhi CHAIRMAN
Mar 31, 2011
The Directors have pleasure in presenting the Annual Report and Audited
Accounts of the Company for the year ended 31st March 2011.
OPERATIONS
Turnover for the year under review was Rs. 5268 Crores registering a
growth of 33% over the previous year. Operating profit for the year
was Rs. 277 Crores and Profit Before Tax was Rs. 92 Crores.
Automobile Sales across the sectors continued to grow robustly
resulting in higher tyre demand. Spiraling increase in the prices of
raw material and their availability is a matter of concern for the tyre
industry. There was an unprecedented increase in the prices of natural
rubber and other key raw materials. The prices of natural rubber almost
doubled during the year. This along with increase in other input costs
impacted the profitability of the Company. Several measures to improve
all round operations and cost efficiencies were undertaken. However,
the revision in selling prices could not keep pace with the abnormal
increases in costs.
JK Tornel - Mexico, a wholly owned subsidiary of the Company also
recorded a growth of 29% in turnover, at 3177 Million Pesos (Rs. 1152
Crores), in face of the slow recovery in South & North American
markets.
Despite severe cost pressures, operations contributed to the
profitability of the Company.
With the Indian economy growing at a healthy pace and automobile
industry making rapid strides, the demand of tyres is expected to
increase sizably. Your Company has undertaken several expansion
projects to meet the rising demand for its tyres.
DIVIDEND
Your Directors are pleased to recommend dividend of Rs. 3.00 per Equity
Share of Rs. 10 each (i.e. 30 %) on the Equity Share Capital of Rs. 41.06
Crores. The dividend outgo will be Rs. 14.32 Crores (inclusive of
dividend tax of Rs. 2.00 Crores).
APPROPRIATIONS
The amount available for appropriation, including surplus from previous
year and debenture redemption reserve no longer required is Rs. 143.44
Crores. The Directors propose this to be appropriated as under:
(Rs. Crores)
General Reserve 80.00
Debenture Redemption Reserve 0.38
Dividend 12.32
Corporate Dividend Tax 2.00
Surplus carried to Balance Sheet 48.74
143.44
QUALITY Ã A CREED AT JK TYRE
"Commitment to Excellence" is one of the core values of your Company.
It is indeed a matter of great pride that your Company has been awarded
"2010 TPM Excellence Award" by JIPM (Japan Institute of Plant
Maintenance) in one go, outside Japan, for all its manufacturing
locations. This more than exemplifies our commitment to excellence, in
our endeavours to produce world-class products and provide pro-active
service to our valued customers.
Besides maintaining ISO/TS-16949 Quality
Management System for Automotive Industry, JK Tyre ensures highest
standards of health,safety and environment, while maintaining
operational integrity. Yo u r Company received
OHSAS-18001 : 2007 for all its three plants at one go during the year.
Concern for "Environment"
JK Tyre has a larger connotation. All our manufacturing facilities are
non-pollutant, with zero-waste discharge to the public system. Further,
thousands of trees are planted around our facilities, to not only
improve the visual environment, but also to improve the quality of air
around.
State-of-the-art Plant & Machinery which deliver high quality products
are installed at all JK Tyre plants. Moreover, continuous upgradation
of existing equipment ensure manufacture of high quality tyres
incorporating latest technologies.
JK TYRE - MARCHING AHEAD
In face of the challenges in the year, your Company made significant
strides.
- JK Tyre continues to be Indias No. 1 Truck Bus Radial (TBR)
manufacturer having crossed 4 million number mark. It has so far
exported 1 million tyres to the global markets - testimony to the high
quality of its tubeless TBRs.
- JK Tyre produced 1st time ever in the country, Ultra Large OTR Tyre
of 12 ft height, weighing 3.6 Tons. This has been delivered to BEML -
our prime
customer for these tyres. This has reinforced our leadership in the OTR
segment.
- Capacity expansion of Passenger Car Radials by 5.34 lac tyres p.a.
became fully operational.
- JK Tyre has been ranked 75th amongst Indias 100 most valuable brands
2010, in a survey conducted by Indian Council for Market Research
(ICMR) & 4Ps Magazine. Last year, JK Tyre was selected as Super Brand
for the years 2009-10 & 2010-11.
EXPANSION PROJECTS
The Company has undertaken several expansion projects to meet the
growing demand for its tyres.
i) Truck Radials
As reported last year, the expansion project for further enhancing the
capacity to 10 Lac tyres at the existing facility in Mysore is
progressing as per schedule and the expanded capacity is expected to be
available from the 2nd Quarter of the current year.
ii) Passenger Car Radials (PCR)
Project for enhancing Car Radial capacity by 5.34 lac p.a. at Companys
Banmore Tyre Plant has been completed during the year.
iii) Off The Road Tyres (OTR)
The expansion of OTR capacity was completed during the year which has
enabled the Company to enhance its OTR range. Ultra Large OTR tyres and
their supplies have commenced. This further reinforced the Companys
leadership position in the OTR market, with highest market share.
NEW GREEN SITE PROJECT
Construction at the state-of-the-art radial tyre facility near Chennai
commenced during the year. This facility slated to produce 25 Lac Car
Radial tyres and 2 lac Truck / Bus Radials per annum, is expected to go
on stream during the current year. Financing for this project has
already been tied up.
With the completion of the above projects, the turnover of the Company
is expected to increase significantly in the years ahead and reinforce
JK Tyres standing in the TBR and Car radial segments.
QUALITY - TECHNOLOGY
JK Tyre continues to be on the forefront of developing tyre technology
in India. It deploys high quality testing equipments and investigative
tools like Uniformity testing machine for large tyres, first in India,
or Shearography machine or On-level tyre testing system à first of its
kind in the world.
Applied research and development work in the field of materials,
predictive technology, tyre characteristics testing and other allied
areas are carried out both at its in-house R&D Centres as well as
through collaborative
research work with premium research and development centres such as
HASETRI. Your Company has also entered into unique industry academia
collaboration with IIT Madras and set up a Centre of Excellence for
vehicle dynamics & tyre mechanics techniques.
JK Tyre Test Track at Chennai provides strategic testing solutions to
the Company.
QUALITY CUSTOMER SERVICES
At JK Tyre, there is constant endeavour to improve the quality of
services to our customers. In addition to the wide network of dealers
across the length and breadth of the country which ensure ready access
to your Companys products, a chain of 125 ÃSteel Wheels spread over
75 cities provide wide range of services and tyre care solutions to the
passenger car tyre customers. Likewise, "JK Radial Tyre Care Centres"
set up along the major national highways, facilitate repair and
servicing including alignment / balancing of Truck/Bus radial tyres.
This quality service helps customers derive optimum value out of high
quality JK Truck/Bus radials. Further, providing pre and post sale
services and technological assistance to the large fleet customers, is
yet another initiative of the Company, to provide quality services
under its fleet management programme.
JK TREAD
Retreading services under the brand ÃJK Treads provides end-to-end
solutions to the customers and act as an enabler to derive enhanced
value from Companys
commercial tyres, more so JK Truck / Bus radials. Large number of
franchises have been appointed across the country for retreading both
bias and radial truck tyres using JK Treads. Steps are underway to
double the retread capacity to meet the growing demand for these high
quality treads.
EXPORT
Your Companys export at Rs. 418 Crores was on back of the revival in the
demand outlook in the international markets from the lows of the
previous year.
JK Tyre enjoys premium brand status in various international markets
including the Americas & Australia. Your Company continues to be a
significant global player and exports its tyres over 80 countries
across 6 continents offering wide range of quality products. Exports
out of JK Tornel have further strengthened your Companys brand
standing in the global markets.
MOTORSPORTS
As is well known that JK Tyre has been promoting motorsports in India,
successfully using it as a plank for its brand promotion. Towards this
endeavour JK Tyre has acquired the title rights of renowned world
series "Formula BMW Pacific" which now will be known as "JK Racing Asia
Series" and the race cars will run on JK Tyres. These races will be run
as support races with some F1 events and will have a large viewership
across the globe.
JK TORNEL
At JK Tornel Plants in Mexico, substantial improvement in the
operational efficiencies were achieved. During the year, the Plants at
Mexico manufactured both ÃJK Tyre & ÃVikrant brand tyres apart from
its range of ÃTornel brand tyres. Despite slow down in the American
markets, sales increased by 29%, a reflection
of increased consumer confidence for ÃTornel tyres. The Company
achieved higher market share in the Mexican replacement market and
increased its exports to USA and South American countries.
CONSERVATION OF ENERGY ETC.
The details as required under the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules 1988 are annexed - Annexure
à 1.
DIRECTORS
Shri O.P. Khaitan and Shri Bakul Jain retire by rotation and being
eligible offer themselves for re-appointment at the Annual General
Meeting.
The Board of Directors appointed Shri Kalpataru Tripathy, as an
Additional Director pursuant to Section 260 of the Companies Act, 1956
with effect from 1st October 2010 on the Board of the Company. In terms
of Section 260 of the said Act, Shri Tripathy will hold office as a
Director upto the date of the ensuing Annual General Meeting. The
Company has received a notice in writing from a member proposing
candidature of Shri Tripathy for the office of a Director, liable to
retire by rotation. The Board recommends appointment of Shri Tripathy
as a Director.
IDBI Bank Ltd. nominated Shri Ashok U. Katra, on the Board of the
Company w.e.f. 1st November 2010, in place of Dr. T.K. Mukhopadhyay.
Shri G.B. Pande, representative of Life Insurance Corporation of India
resigned from the Board of the Company consequent upon his appointment
as Insurance Ombudsman (UP and Uttarakhand) at Lucknow Centre.
Accordingly, Shri G.B. Pande ceased to be a Director of the Company
w.e.f. 6th January 2011.
The Board records its deep appreciation for the valuable services
rendered by Dr. T.K. Mukhopadhyay and Shri G.B. Pande during their
respective tenures of office.
SUBSIDIARY COMPANIES
The particulars required under the provisions of the Companies Act,
1956 in respect of the subsidiary companies are appended.
The Statement pursuant to Section 212 of the Companies Act, 1956 read
with General Circular No. 51/12/2007-CL-III dated 8th February, 2011 of
the Ministry of Corporate Affairs, containing the details of the
Companys subsidiaries is attached.
In terms of the said Circular dated 8th February, 2011, copies of the
Balance Sheet, Profit & Loss Account, Reports of the Board and the
Auditors of all the Subsidiary Companies have not been attached to the
Balance Sheet of the Company. However, the annual accounts of the
Subsidiary Companies and the related detailed information shall be made
available to the shareholders of the Company and of the Subsidiary
Companies seeking such information at any point of time. The annual
accounts of the Subsidiary Companies are also available for inspection
by any shareholder at the Head Office of the Company and that of the
Subsidiary Companies concerned.
AUDITORS
M/s Lodha & Co., Chartered Accountants, Auditors of the Company, retire
and are eligible for re- appointment. The observations of the Auditors
in their report on Accounts read with the relevant notes are
self explanatory.
COST AUDIT
The Audit of the Cost Accounts of the Company for the year ended 31st
March, 2011 is being conducted by the Cost Auditor and the Cost Audit
Report will be submitted to the Ministry of Corporate Affairs,
Government of India.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 217(2A) of the
Companies Act 1956 read with the Companies (Particulars of Employees)
Rules 1975 as amended regarding employees is annexed to this Report.
However, as per the provisions of Section 219(1)(b)(iv) of the
Companies Act, 1956, the Report and Accounts are being sent to all
shareholders of the Company, excluding the aforesaid information. Any
shareholder interested in obtaining such
particulars may write to the Secretary at the Companys New Delhi
address.
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to the good corporate
governance practices. Pursuant to Clause 49 of the Listing Agreement
with the Stock Exchanges, a Management Discussion and Analysis,
Corporate Governance Report and Auditors Certificate regarding
compliance of conditions of Corporate Governance are made a
part of this Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act 1956, your
Directors state that :- i) in the preparation of annual accounts, the
applicable accounting standards have been followed along with proper
explanation relating to material departures;
ii) the accounting policies have been selected and applied consistently
and judgments and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit or loss of the Company for
that period;
iii) proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
said Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the
continued support and co-operation received from the financial
institutions, banks, various central and state government agencies, the
technical collaborators M/s Continental AG Ã Germany, shareholders,
suppliers, dealers and in particular the valued customers.
In particular, Directors record their appreciation for the dedication
and hard work put in by the Team JK Tyre, which has enabled the Company
to surge ahead in these challenging times.
On behalf of the Board
The 24th May, 2011 H.S. SINGHANIA
New Delhi CHAIRMAN
Mar 31, 2010
The Directors have pleasure in presenting the Annual Report and Audited
Accounts of the Company for the year ended 31 st March 2010.
The Company is observing this year as the Birth Centenary Year to pay
humble respects to late Lala Lakshmipat Singhania (1910-1976), who had
been a great Visionary and a Key Architect of JK Organisation. He
believed in the philosophy of inclusive growth encompassing all
sections of the Society. The Companys all time high Sales and Profits
this year is a befitting tribute to the great Founder.
Sales and other income during the year under review was Rs. 3971
Crores, recording an increase of 8% over that of previous period
(annualised). Operating Profit for the year was double at Rs. 420
Crores. Profit Before Tax for the year was Rs. 246 Crores and Profit
After Tax was Rs. 163 Crores.
The year was full of challenges and achievements. India is one of the
few countries which recovered early from economic slowdown and recorded
GDP growth of 7.2% during the year 2009-10. As a consequence,
Automobile Industry grew at about 27-28% and tyre production increased
by 19% during the year.
JK Tyres domestic operations improved with overall higher production.
Despite prolonged illegal strike at its Kankroli plant, the turnover
increased by 8%. The Directors are pleased to report that the
operations have normalised and the Company has achieved improved
operating efficiencies on all parameters.
Tornel - Mexico, which your Company acquired last year, has turned
around and recorded an impressive performance during the year. Tornel
has contributed to your Companys growth both in top line as well as
profitability. This is despite severe world-wide economic slowdown last
year which particularly affected global Automobile Industry.
Automobile Industry in India having made an impressive recovery last
year, continues to consolidate and perform exceedingly well in the
current year as well. With an expected GDP growth of 8 - 9% in the
current year and continued good performance by the Automobile Industry,
this augers well for the Tyre Industry which is poised to grow in the
years ahead.
There has been spurt in the input costs with natural rubber prices more
than doubling during the year. The Company could partly mitigate the
increased costs by all round improvement in operating efficiencies,
higher productivity, cost reduction measures and richer product mix.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 3.50 per
Equity Share of Rs. 10 each (i.e. 35%) on the Equity Share Capital of
Rs 41.06 Crores. The dividend outgo will be Rs. 16.76 Crores (inclusive
of dividend tax of Rs. 2.39 Crores).
APPROPRIATIONS
The amount available for appropriation including surplus from previous
year and debenture redemption reserve no longer required is Rs. 196,04
Crores. The Directors propose this to be appropriated as under:
(Rs, Crores)
Debenture Redemption Reserve 1.01
General Reserve 100.00
Dividend 14.37
Corporate Dividend Tax 2.39
Surplus carried to Balance Sheet 78.27
196.04
JK TYRE - A YEAR OF ACHIEVEMENTS
In the year gone by, apart from achieving highest sales and profits,
the Company crossed many significant milestones.
- Capacity expansion of Truck/Bus Radials (TBR) from 4 Lacs to 8 Lacs
tyres per annum with an investment of Rs. 315 Crores becoming fully
operational.
- Cumulative sales of TBR tyres in the domestic market crossed 2
million mark and JK Tyre continuing to be Indias Number 1 TBR
manufacturer, accounting for 75% of Indian Truck/Bus Radial production.
- JK Tyre produced, its first, Ultra Large OTR tyres of 51" size, and 9
feet high, weighing 1.8 tons each. These were delivered to BEML.
- JK Tyre was selected as vSuperbrand, yet again, for the period
2009-10 based on an extensive consumer survey, and selection by the
Superbrands Council of India.
- The Worlds first OnLEVEL flat surface tyre testing machine, capable
of doing various performance tests, was installed at HASETRI in
association with Companys R&D. The machine, the first of its kind in
the world, has enhanced Companys technological capability manifold.
GROWTH - A WAY OF LIFE AT JK TYRE
India is fast emerging as a global hub for small cars. Worlds major
automobile manufacturers have set up or have plans to set up world
class manufacturing facilities in India for domestic as well as global
markets.
Driven by accelerated economic activity and buoyancy in demand for
tyres, your Company has already undertaken a series of expansions.
EXPANSIONS Truck/Bus Radial
Your Company continues to be the leader in Truck/ Bus Radial with a
state-of-the-art manufacturing facility at Mysore. The expanded
capacity of Truck/ Bus Radial tyres at 8 Lac tyres p.a. at this plant
was formally inaugurated during the year. This has further strengthened
Companys commanding position in this growing segment. This plant is
now being further expanded to 1 million tyres per annum. The expanded
capacity shall be available in first quarter of next fiscal year.
Passenger Car Radials
Companys ongoing expansion at the existing Car Radial Plant at Banmore
for enhancing the capacity by 5.34 Lac Car Radial tyres per annum is
well on schedule and shall be completed by the middle of current year.
Off The Road Tyres (OTR)
Your Company enjoys the highest market share in the OTR market. To
further strengthen its position, the Company undertook an expansion
project estimated to cost Rs. 120 Crores, which is progressing as per
schedule and is expected to be completed by mid 2010. The Company has
already delivered the first batch of Ultra large size OTR tyres, ahead
of the agreed schedule, to BEML, our prime OEM customer.
New Green Site project
Your Company has undertaken to set up a new green site facility in
Tamil Nadu for manufacture of 25 Lac Car radial and 2 Lac Truck/Bus
radial tyres per annum, This is, in addition to the above mentioned
expansion at its existing Truck/Bus Radial tyre facility at Mysore to 1
million tyres per annum. The above expansions are estimated to cost
Rs.930 Crores. All arrangements have been made for tieing up financing
thereof.
The Company has already taken pos- session of land and construction at
the new site is expected to start shortly. The green site project shall
be operational by the end of next year. With the com- pletion of these
proj- ects, the turnover is expected to in- crease significantly in the
years ahead.
TORNEL
Last year, your Company acquired 100% Equity Shares and management of
Compania Hulera Tornel (CHT), a well established Tyre Company in Mexico
with 3 tyre manufacturing plants and combined capacity of 6.6 million
tyres p.a. Soon after acquisition, JK Tyre started streamlining and
improving Tornels operations. Despite economic downturn which has
severely hit Automotive Industry in North and South America resulting
into significant demand contraction, Tornel has recorded an excellent
performance during the year 2009. Tornel achieved Gross Sales of 2472
million pesos (Rs. 893 Crores) and recorded a Profit After Tax of 169
million pesos (Rs. 61 Crores) in the year 2009.
CUSTOMER ENGAGEMENT
With a view to build long term sustainable relationship with the
customers, your Company has taken several steps, thereby moving up the
value chain. Towards this end, JK Tyre Steel Wheels have been providing
wide range of services and tyre care solutions primarily to the
passenger car customers. JK Tyre has 125 Steel Wheels in 75 cities
across the country from Srinagar to Kanyakumari and Ahmedabad to
Aizawal. Further more, JK Radial Tyre Care Centres provide necessary
facilities for Truck / Bus Radial tyre repair & servicing including
alignment / balancing, enabling the customer to derive maximum value
out of the technologically superior JK Truck / Bus Radial tyre. In
addition, the Companys Fleet Management Programme has been a success
since its inception for providing pre and post sales service and
technical assistance to fleets. Your Company has now launched
Retreading facilities to provide end to end solution to the customers.
RETREAD BUSINESS
Your Company has entered the Retreading business under the brand "JK
TREADS". This will provide end to end solutions to the customers
helping them realize enhanced value from Companys products.
TECHNOLOGICAL EDGE
JK Tyre pioneered the Radial Technology in the country three decades
ago, and is in the forefront of development of tyre technology in
India.
Your Companys technological strength is derived from its in-house R&D
centres multidisciplinary collaborative research work with premier
institutions of research and development such as HASETRI, in fields of
materials, predictive technology, tyre characteristics testing and
other allied areas.
Towards this end, Companys in-house R&D Centre in association with
HASETRI has installed a state-of- the-art ONLEVEL Tyre Test System, the
first of its kind in the world, to provide real data in real time for a
wide range of tests and evaluate various scenarios a tyre may be
subjected to on a vehicle, This has helped the Company in reducing the
tyre development time and make available to the customer
technologically superior products.
The Centre of Excellence at NT Madras is the epitome of industry
academia collaboration in the field of vehicle dynamics & tyre
Mechanics. The tools & techniques developed here are used and
integrated into product development process at JK Tyre.
JK Tyre Test Track at Chennai keeps your Company at the cutting edge of
tyre technology.
EXPORTS
Your Company is a strong global player with a presence in over 80
countries across 6 continents offering a wide range of products backed
by world class technology.
JK Tyre enjoys a premium brand status in various advanced markets
including USA and Australia.
The acquisition of TORNEL in Mexico has further added substantial value
to the existing JK Tyre exports and has reinforced your Companys brand
positioning in the global markets.
CONSERVATION OF ENERGY ETC.
The details as required under the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules 1988 are annexed.
DIRECTORS
Shri Hari Shankar Singhania and Shri Arvind Singh Mewar retire by
rotation and being eligible offer themselves for re-appointment at the
Annual General Meeting,
The Board of Directors appointed Shri Arun K. Bajoria with effect from
20th January 2010 as an Additional Director pursuant to Section 260 of
the Companies Act, 1956. The Board also appointed Shri Arun K. Bajoria
as Whole-time Director with the designation "President & Director" of
the Company for a period of three years, with effect from the said
date. In terms of Section 260 of the said Act, Shri Bajoria will hold
office as a Director upto the date of the ensuing Annual General
Meeting. The Company has received a notice in writing from a member
proposing candidature of Shri Bajoria for the office of a Director,
liable to retire by rotation. The Board recommends appointment of Shri
Bajoria as a Director.
The Board at its meeting held on 20th January 2010 noted withdrawal of
nomination of Shri N.C. Muniyappa, IAS by Karnataka State Industrial
Investment & Development Corporation Ltd. (KSIIDC) and placed on record
its appreciation for the valuable services rendered by Shri N.C.
Muniyappa as a Director of the Company during his tenure of office.
The Government of Karnataka has since withdrawn the nomination of
KSIIDC nominee from the Board of the Company.
SUBSIDIARY COMPANIES
The particulars required under the provisions of the Companies Act,
1956 in respect of the subsidiary companies are appended.
The Statement pursuant to Section 212 of the Companies Act, 1956
containing the details of the Companys subsidiaries is attached.
In terms of the approval granted by the Central Government under
Section 212 (8) of the Companies Act, 1956, copies of the Balance
Sheet, Profit & Loss Account, Reports of the Board and the Auditors of
all the Subsidiary Companies have not been attached to the Balance
Sheet of the Company. However, the related detailed information of the
annual accounts of the Subsidiary Companies will be made available to
the investors seeking this information at any point of time. The annual
accounts of the Subsidiary Companies are also available for inspection
by the investors at the Head Office of the Company and that of the
respective Subsidiary Companies.
AUDITORS
M/s Lodha & Co., Chartered Accountants, Auditors of the Company, retire
and are eligible for re- appointment. The observations of the Auditors
in their Report on Accounts read with the relevant notes are self
explanatory.
COST AUDIT
The Audit of the Cost Accounts of the Company for the year ended 31 st
March 2010 is being conducted by the Cost Auditor and the Cost Audit
Report will be submitted to the Ministry of Corporate Affairs,
Government of India.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 21 7 (2A) of
the Companies Act 1956 read with the Companies (Particulars of
Employees) Rules 1975 as amended regarding employees is annexed to this
Report. However, as per the provisions of Section 219(1 )(b)(iv) of
the Companies Act 1956, the Report and Accounts are being sent to all
shareholders of the Company excluding the aforesaid information. Any
shareholder interested in obtaining such particulars may write to the
Secretary at the Companys New Delhi address.
CORPORATE GOVERNANCE
Your Company reaffirms its commitment to the good corporate governance
practices. Pursuant to Clause 49 of the Listing Agreement with the
Stock Exchanges, a Management Discussion and Analysis, Corporate
Governance Report and Auditors Certificate regarding compliance of
conditions of Corporate Governance are made a part of this Annual
Report.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 21 7 (2AA) of the Companies Act 1956, your
Directors state that:
i) in the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) the accounting policies have been selected and applied consistently
and judgments and estimates made are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit or loss of the Company for
that period;
iii) proper and suffi- cient care has been taken for mainte- nance of
adequate accounting records in accordance with the provisions of the
said Act for safe- guarding the assets of the Company and for
preventing and detecting fraud and other irregulari- ties; and
iv) the annual accounts have been prepared on a going concern basis.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the
continued support and co-operation received from the financial
institutions, banks, various central and state government agencies, the
technical collaborators M/s Continental AG - Germany, shareholders,
suppliers, dealers and in particular the valued customers.
Your Directors also record their appreciation for the dedication and
passion of vTeam-JK Tyre which has enabled the Company to remain at
the forefront of the Industry.
On behalf of the board
The 25th May,2010 H.S.SINGHANIA
New Delhi CHAIRMAN