The Members of CEAT Limited
The Directors are pleased to present their Fifty-Eighth report, together with the Standalone and Consolidated Audited Financial Statements of the Company for the year ended March 31, 2017.
'''' in Lacs
Profit before Taxation
- Current Tax
- Deferred Tax
- MAT credit entitlement
Profit for the period
Other Comprehensive Income:
Items that will not be reclassified to profit or loss
- Actuarial losses for gratuity
- Income tax effect on actuarial losses for Gratuity
Items that will be reclassified to profit or loss
- Net Movement in cash flow hedges
- Income tax effect on net movement in cash flow hedges
Total Comprehensive Income for the period
'''' in Lacs
Profit before Taxation
- Current Tax
- Deferred Tax
- MAT credit entitlement
Profit after tax, non-controlling interest and share of profit from Joint Venture
Other Comprehensive Income:
Items that will not be reclassified to profit or loss
- Actuarial losses for gratuity
- Income tax effect on actuarial losses for Gratuity
Items that will be reclassified to profit or loss
- Movement in cash flow hedges
- Income tax effect on net movement in cash flow hedges
Movement in foreign exchange fluctuation reserve
Total Comprehensive Income for the period (after non-controlling interest)
In the preparation of financial statements, no treatment different from that prescribed in the relevant Accounting Standards have been followed.
During the year under review, on consolidated basis your Company recorded net revenue from operations ofRs,6,44,130.10 Lacs with a growth of 4.81% overRs,6,14,591.14 Lacs for the last fiscal. The Company recorded a net profit ofRs,36,115.46 Lacs, a negative growth of 17.46% over net profit ofRs,43,754.17 Lacs of the last fiscal.
On standalone basis, your Company recorded net revenue from operations ofRs,6,37,651.80 Lacs with a increase of 4.21% overRs,6,11,813.26 Lacs of the last fiscal. The Company recorded a net profit ofRs,36,272.58 Lacs negative a decrease of 18.52% over net profit ofRs,44,517.83 Lacs of the last fiscal.
CEAT continued to be one of the fastest growing tyre Companies in India, for a second year in a row, with a four year Revenue CAGR of 5.3% and a four year PAT CAGR of 178.42%.
The calendar year 2016 was a challenging one for the world economy. Weak international trade and subdued investment slowed world growth to its weakest pace since 2009. Economic activity is projected to pick up in 2017 and 2018, especially in emerging markets. Even though the outlook is brighter this year, heightened uncertainty about policy direction in major economies casts a shadow over the prospects of recovery.
Amid this challenging environment, India has emerged amongst the fastest growing major economies in the world. The Indian economy was expected to grow by more than 7.75% in FY 2016-17, supported by strong government reforms, the Reserve Bank of India''''s inflation focus and benign global commodity prices. However, the second half of FY
2016-17 witnessed a slowdown in growth primarily due to the demonetization impact and a sharp rise in commodity prices.
During FY 2016-17, overall sales growth remained buoyant for the Indian Automobile industry with growth across all categories except Medium & Heavy Commercial vehicles. However, exports continued to remain a cause of concern, predominantly in the two-wheeler segment. The domestic vehicle sales grew by 7.4%, while exports showed a negative growth of 7%. Domestic Passenger vehicles and two-wheelers grew by 9.16% and 7.54% respectively. The automotive industry production which grew by 8% during FY 2014-15, decelerated to 2.3% in FY 2015-16. However, structural tailwinds point to sustenance of this trend and an annual production growth of about 7% during FY 2016-17.
The domestic tyre industry was helped by the fall in input costs in the first half specially Natural Rubber prices which fell by 15% during 2016 and crude which was on a downward spiral in 2016. This led to some margin expansion in the first half of 2017. Growth in demand from the Original Equipment
Manufacturers (OEM) and the replacement market resulted in a positive growth in FY 2016-17 over the previous year. However, the revenues of the tyre industry was affected by unabated flow of cheap Chinese tyres in the country.
STATE OF COMPANY''''S AFFAIRS
Adhering to its purpose of "Making Mobility Safer and Smarter. Every day." the Company continues its unwavering commitment to its adopted vision and strategy.
A validation of the sustained efforts that the Company has been putting in this direction was the No. 1 ranking in the J.D. Power
2017, India Original Equipment Tyre Customer Satisfaction Index (TCSI) Study released on March 28, 2017. In this highly acclaimed survey, CEAT ranked highest in overall customer satisfaction, with a score of 893 (on a 1,000-point scale).
During the year under review, a total of 92 new products were launched across different product categories. A breakthrough innovation in the form of ''''Puncture Safe'''' motorcycle tyres was launched to address a key pain area of customers. The Company has filed a patent for the same. The Company increased its market share in the two-three wheeler and passenger car segment (motorcycle 26% to 30% and scooter 24% to 30% and Passenger Car Radials (PCR) 7% to 8.5%). In the Truck and Bus Radial (TBR) segment, the Company launched the "WIN Series" and grew by 15% in the TBR replacement market. During the year under review, the Company continued its efforts for channel expansion, in a bid to maximise customer reach. The Company''''s network currently caters to 600 districts comprising of more than 4,500 dealers, 250 two-wheeler distributors, 450 franchisees- CEAT Shoppes and CEAT Hubs, and more than 350 multi-brand outlets and shop-in-shops. In FY 2016-17, the Company gained acceptance with premium brands in the OEM category viz. Royal Enfield Himalayan, Bajaj Vikrant, Honda Navi and Tork in two-wheelers and Verna Refresh, i10 refresh, Renault Sedan/ SUV and Nissan SUV in the PC/UV category.
Exports however, continue to remain a cause of concern primarily due to devaluation of certain currencies and overall global slowdown. The Company continues to work relentlessly to improve its exports volumes.
In line with CEAT''''s purpose to make mobility safer and smarter, the Company launched its media campaign "It helps" for both passenger and motorcycle tyres. This campaign is focussed on the issue of jaywalking on roads, and communicates that CEAT''''s two-wheeler tyres have the best-in-class wet and dry grip, which keep the rider safe.
Further in line with the Company''''s focus on improving road safety, two online campaigns named #NoMoreFunny and
Drive Safe Dad Bobblehead were also launched. While the #NoMoreFunny campaign focusses on reducing the drunken driving, the Bobblehead campaign is focussed on reducing the instances of overspeeding on roads. Both of these campaign have gone viral in the online space, with over 1 million views each received on YouTube.
Several other marketing initiatives including Overdrive Kwid Drive from Delhi to Paris, MTV Roadies, MTV Chase the Monsoon and Mahindra Adventure were also undertaken. The Company also strengthened its brand association with cricket through a bat endorsement by Ajinkya Rahane.
The Company also continued its journey of making the workplace safer, cleaner and healthier. The British Safety Council Sword of Honour received by Halol plant was a validation of the Company moving in the right direction. Also all the plants of the Company, including the lastest Nagpur smart plant are ISO 140001 and OHSAS 18001 compliant.
Favourable raw material prices, a shift to the high margin non truck product portfolio and building of an extensive distribution network contributed to increased volumes and margins for the Company during the first half of FY 2016-17. The second half however, witnessed pressure in margins due to the combined effect of demonetization and increase in the raw material prices. The Company received an upgrade in its long term credit rating from AA- to AA.
Considering the profits for the year under review and also the capital expenditure requirements of the Company, your Directors are pleased to recommend a dividend ofRs,11.50 per equity share ofRs,10.00 each (i.e. 115%) for the financial year ended March 31, 2017.
During the year under review, the Company has adopted a Dividend Distribution Policy and the same is annexed herewith as "Annexure A".
TRANSFER TO RESERVE
Your Directors have proposed not to transfer any sum to the General Reserve.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There are no material changes and commitments, affecting the financial position of the Company which have occurred between the close of financial year on March 31, 2017 to which the financial statements relates and the date of this Report.
During the year under review, the Company completed the capacity expansion undertaken at its Halol Plant and ramped the capacity to 120MT/day. The Company also set-up a green field manufacturing plant at Nagpur with an initial capacity of 120 MT/day for manufacture of two-three wheeler tyres at a capital outlay ofRs,420 Crores. Currently, this facility is ramped up to 66 MT/day and is expected to be ramped up to full capacity in the second quarter of FY 2017-18.
Additionally, the Company also proposes to set up an off-the-road tyre manufacturing capacity through its wholly owned subsidiary CEAT Specialty Tyres Limited, in two phases involving a total capital outlay ofRs,650 Crores. The first phase for 40MT/day capacity involving a capital expenditure ofRs,330 Crores is expected to be completed by the third quarter of FY 2017-18.
The Company has also announced expansion projects for investment of approx.Rs,2800 crores over a period of 5 (five) years up to FY 2021-22 through capacity addition at its plants at Halol (Truck Bus Radial capacity of 208 tonnes/day) and Nagpur (two-wheeler capacity of 140 tonnes/day) and investment in a greenfield capacity of 150 tonnes/day for manufacture of PCR.
According to reports by research agencies India could grow at a potential of 7.7 - 8 % during the period 2016 to 2020 powered by greater access to banking, technology adoption, urbanization and other structural reforms.
According, to ICRA, domestic tyre demand is expected to grow by 6-7% over the next two-three years ending FY 2018-19, supported by a broad based revival in Original Equipment (OE) demand and economic activity in the country. Pick up in rural expenditure with good monsoon would translate into higher OEM demand for the rural centric two-wheeler and tractor segments. Growing fleet on ground and higher miles driven/ freight moved would drive replacement sales. The future outlook of the tyre industry is therefore expected to be stable.
The Company expects to continue the growth path gaining share in the two-wheeler, passenger car and utility vehicles segment. It also expects to increase its market share in the TBR segment. The Company shall continue to focus on increasing capacities, enhancing brand visibility, new product development and service innovation.
At the end of the year under review, the Company had following four subsidiaries namely CEAT Specialty Tyres Limited, Mumbai (CSTL), Rado Tyres Limited, Cochin (RTL), Associated CEAT Holdings Company (Private) Limited, Colombo, Sri Lanka, (ACHL), CEAT AKKhan Limited, Dhaka, Bangladesh (CAL).
The Company does not have any material subsidiary whose net worth exceeds 20% of the consolidated net worth of the holding company in the immediately preceding financial year or has generated 20% of the consolidated income of the Company during the previous financial year. A policy on material subsidiaries has been formulated by the Company and posted on the website of the Company at the link httpV/www. ceat.com/Investors intimation.aspx
CEAT Specialty Tyres Limited
CEAT Specialty Tyres Limited (CSTL), a wholly owned subsidiary of the Company, is engaged in manufacturing and sale of tyres for off-the-road vehicles/ equipment, which find application across industries including ports, construction, mining and agriculture. During the year under review, CSTL commenced setting up of its green field facility at Ambernath, in the State of Maharashtra with an initial capacity of 40 MT/ day, which would subsequently be ramped up to 100 MT/day, in the next phase. The commercial production from this facility is expected from the second quarter of the current fiscal.
During the year under review, CSTL registered a revenue ofRs,22,417.23 Lacs (Previous yearRs,10,251.39 Lacs) and a net loss ofRs,1,003.22 Lacs in FY 2016-17 (Previous yearRs,1,197.58 Lacs) through its trading operations in Off- Highway tyres.
Rado Tyres Limited
Rado Tyres Limited (RTL), having its two-three wheeler tyres manufacturing capacity at Cochin, currently supplies its entire production of automotive tyres (two-three wheeler) to the Company. During the year under review, RTL registered a revenue ofRs,898.06 Lacs as compared to a revenue ofRs,1,201.40 Lacs in FY 2015-16, registering a deficit of 25.25%. The net loss for the year under review has however gone up toRs,124.39 Lacs fromRs,108.05 Lacs in the previous year, mainly due to labour unrest during September to November 2016 claiming higher bonus. The production tickets for FY 2016-17 have also being lower than previous year.
Details of ACHL and CAL are given below under the heads "Joint Venture in Sri Lanka" and "Joint Venture in Bangladesh".
JOINT VENTURE IN SRI LANKA
ACHL, the Company''''s investment arm in Sri Lanka, has a 50:50 joint venture company viz. CEAT-Kelani Holdings Private Limited, which operates four manufacturing plants through its wholly owned subsidiaries in Sri Lanka.
During the year under review, ACHL has registered a revenue/ lower revenue of LKR 47,053.31 Lacs (''''21,406.24 Lacs) as compared to LKR 46,338.21 Lacs (''''21,843.83 Lacs) in FY 2015-16. However, the profit after tax has reduced by 20.99% to LKR 6,235.46 Lacs (''''2,836.75 Lacs) as compared to LKR 7.891.76 Lacs (''''3,617.93 Lacs) in FY 2015-16. ACHL''''s joint venture continues to enjoy the overall market leadership in all categories of tyres in Sri Lanka.
ACHL has been consistently paying dividends and it has, during the year under review, paid a dividend of ''''1,639.23 Lacs to the Company.
JOINT VENTURE IN BANGLADESH
CEAT AKKhan Limited, (CAL), is the 70:30 joint venture (JV) of the Company in Bangaldesh. CAL is setting up a green field facility for manufacture of automotive bias tyres in Bangladesh. CAL has been selling CEAT branded automotive tyres, outsourced from the Company in the local market since the last 3 (three) years. For the year under review, the revenue of CAL is BDT 6,586.07 Lacs (''''5,618.58 Lacs) as compared to BDT 6.613.77 Lacs ('''' 5,541.02 Lacs) in FY 2015-16. The net loss for the year under review is BDT 521.98 Lacs ('''' 469.94 Lacs) as compared to the net loss of previous year BDT 594.92 Lacs ('''' 435.50 Lacs).
A report on the performance and financial position of each of the Company''''s aforesaid subsidiaries forms part of the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Section 129(3) of the Companies Act 2013 and Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies of the Company, forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards issued by the Institute of Chartered Accountants of India.
BUSINESS RISK MANAGEMENT
Pursuant to the requirement of Regulation 21 of SEBI (Listing Obligations and Disclosure Regulations) Regulations 2015, the Company has constituted a Risk Management Committee. The details of this Committee and its terms of reference are set out in the Corporate Governance Report, which forms part of this Report.
The Company has in place a Business Risk Management framework to identify risks and minimize their adverse impact on business and strives to create transparency which in turn enhances the Company''''s competitive advantage.
Pursuant to the aforesaid business risk framework, the Company has identified the business risks associated with its operations and an action plan for mitigation of the same is in place. The business risks and its mitigation have been dealt with in the Management Discussion and Analysis section of this Report.
CORPORATE SOCIAL RESPONSIBILITY
The Board of Directors has formed a committee on Corporate Social Responsibility (CSR) in accordance with Companies Act, 2013. The composition of the same has been given in Corporate Governance Report.
The Company, with a vision to drive ''''holistic empowerment'''' of the community, has carried out the following CSR initiatives through RPG Foundation ("the Trust"), a public charitable trust qualified to undertake CSR activities in accordance with Schedule VII of the Companies Act, 2013:
Netranjali - The project aims at providing comprehensive Vision/Eye care to prevent avoidable blindness. During the year, 8,40,310 under-privileged in three target groups viz. elderly, truckers and children were educated on eye care. The project screened 1,20,645 people through 935 Eye Camps, distributed over 54,685 spectacles and made 13,685 referrals for severe cases.
Swayam - The project aims to promote Gender Equality and Women''''s Empowerment and drive powerful social change in the transport industry by training underprivileged women in driving skills to enhance livelihood across sectors such as Taxi, school vans and entrepreneurial ventures and covered 17 locations by completing 57 training batches.
Road Smarrt - In line with the motto of safety, the Company launched "Road Smarrt" to advocate safe driving and prevention of road fatalities. The Company targeted school children and parents to create awareness amongst children who are the future road users. The Company launched sessions in 20 schools in Mumbai covering over 10,000 children.
Pehlay Akshar - The project focuses on Primary Education with emphasis on English speaking and reading skills to enhance employability. During the year, the project covered 30 schools and trained 290 teachers impacting 35,000 students. Further, the initiative reached out to 2,912 students across 26 schools in Mumbai, Halol and Nashik.
Jeevan - The project focuses on improving quality of life in areas of clean drinking water, sanitation and health and nutrition. The project provided nutritional support and safe drinking water in schools and installed rain harvesting structures. Further, in support of the Swachh Bharat Abhiyan, sanitation facilities were provided through construction of toilets in the communities around the Company''''s plants.
Employability- Skill Development (Project-Saksham)/ (Project Sanjeevani) - These two projects are skill development programs, which focuses on alternate livelihoods training for empowering women and technical training to youth.
- Saksham- During the year under review, 155 less privileged women and youths were trained in tailoring, entrepreneurship, mobile phone repairing and preparing nutritional snacks.
- Sanjeevani- The project trained 182 less privileged women and youths in patient care assistance as an alternate livelihood option in the communities around the Company''''s plants.
The Annual Report on CSR activities in pursuance of the Companies (Corporate Social Responsibility Policy) Rules,
2014 is annexed herewith as "Annexure B".
The Company has spent the entire amount ofRs,1,011 Lacs towards CSR activities during the FY 2016-17.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has adopted vigil mechanism in the form of Whistle Blower Policy, to deal with instances of fraud or mismanagement, if any. The Policy can be accessed at the website of the Company at link http://www. ceat.com/Investors intimation.aspx.
RELATED PARTY TRANSACTIONS
The Company has formulated a policy on Related Party Transactions for purpose of identification and monitoring of such transactions. The said policy on Related Party Transactions as approved by the Board is uploaded on the Company''''s website.
All Related Party Transactions are placed before the Audit Committee and wherever necessary, before the Board/ members for approval. The related party transactions entered during the financial year were on an arm''''s length basis and in the ordinary course of business, except the contracts/arrangements or transactions entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 during the course of business but which were not at arm''''s length basis. The details of the same are annexed herewith as "Annexure C" in the prescribed Form AOC-2.
The paid up equity capital of the Company as on March 31, 2017 wasRs,4,045.01 Lacs. The said shares are listed on the BSE Limited and the National Stock Exchange of India Limited. There is no change in the paid-up capital of the Company, during the year under review.
The Company during FY 2015-16, had issued and allotted 2,000 Secured Redeemable Non-Convertible Debentures ofRs,10 Lacs each on private placement basis aggregating toRs,20,000 Lacs. The said Secured Redeemable Non-Convertible Debentures are listed on BSE limited.
Your directors are pleased to inform you that during the year under review, the long term credit rating of the Company improved from "AA-" to "AA" with "Stable" outlook by its rating agencies viz. CARE and India Ratings (Fitch). The rating of AA indicates high degree of safety regarding timely servicing of financial obligations and very low credit risk. A ''''Stable'''' outlook indicates expected stability (or retention) of the credit ratings in the medium term on account of stable credit risk profile of the entity in the medium term.
The short term facilities of the Company have been granted the rating of A1 by CARE and India Ratings (Fitch). The rating of A1 indicates very strong degree of safety regarding timely payment of financial obligations and carries the lowest credit risk.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in the prescribed Form MGT-9 is annexed herewith as "Annexure D".
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed hereto as "Annexure E" and forms part of this report.
PARTICULARS OF EMPLOYEES
The statement required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("the said Rules") in respect of employees of the Company, are required to be set out in this report. However, the second proviso of the sub rule (3) of Rule 5 of the said Rules permits the Company to provide the said statement on specific request of member in writing. Therefore, the Annual Report excluding the said statement is being sent to all the members of the Company and such statement shall be made available to the members on request.
The prescribed particulars of employees required under Section 134(3)(q) and Rule 5(1) of the said Rules are attached as "Annexure F" and forms part of this report.
During the year under review, your Company discontinued the Fixed Deposit Scheme and repaid all the outstanding fixed deposits along with interest accrued up to September 30, 2016.
Hence, there are no deposits outstanding as on March 31,2017. There were no defaults in respect of repayment of any deposits or payment of interest thereon during the year under review. The Company has not accepted any deposits which are not in compliance with the requirements of the Act.
The Company has no overdue deposits, other than the unclaimed deposits as at the end of the year under review.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
In terms of Section 134 (3) (g), the Report of the Board of Directors shall include the details of particulars of Loans, Guarantees and Investments under Section 186 of the Companies Act, 2013, which are provided in the notes to the Financial Statements. The loans and/or advances given to the employees bear interest at applicable rates.
Messrs Vinay Bansal, Atul C. Choksey, S. Doreswamy, Mahesh S. Gupta, Haigreve Khaitan, Ranjit V. Pandit and Paras K. Chowdhary and Ms. Punita Lal are Independent Directors on the Board of the Company and the composition of the Board of Directors duly meets the criteria stipulated in Section 152 of the Companies Act, 2013.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the year under review, Mr. K. R. Podar, Independent Director of the Company, ceased to be a Director of the Company with effect from February 9, 2017, because of resignation from the Board due to health reasons.
The Board at its meeting held on March 22, 2017 considered and approved the re-appointment of Mr. Anant Vardhan Goenka as Managing Director for a period of 5 (five) years w.e.f April 1, 2017 to March 31, 2022 subject to the approval of the members at the Fifty-Eighth Annual General Meeting of the Company.
In accordance with the Companies Act, 2013 and Articles of Association of the Company, Mr. H. V. Goenka retires by rotation and being eligible offers himself for re-appointment.
PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS AND DISCLOSURES ON THE REMUNERATION OF THE DIRECTORS
All pecuniary relationship or transactions of the Non-Executive Directors vis-a-vis the Company, along with criteria for such payments and disclosures on the remuneration of the Directors along with their shareholding are disclosed in Form MGT-9 which forms a part of this Report.
KEY MANAGERIAL PERSONNEL
During the year under review, Mr. Kumar Subbiah was appointed as the Chief Financial Officer with effect from January 16, 2017 in place of Mr. Manoj Kumar Jaiswal. Ms. Shruti Joshi was appointed as the Company Secretary with effect from September 1, 2016 in place of Mr. H. N. Singh Rajpoot. The Company has appointed Mr. Arnab Banerjee as the Whole time Director, designated as the Executive Director-Operations. The Board at its meeting held on March 22, 2017 approved the re-appointment of Mr. Anant Vardhan Goenka as Managing Director for a further period of 5 (five) years with effect from April 1, 2017 subject to the approval by the shareholders at the ensuing Annual General Meeting.
The above are the Key Managerial Personnel of the Company, pursuant to the provisions of Section 203 read with Section 2(51) of the Companies Act, 2013.
INTER-SE RELATIONSHIPS BETWEEN THE DIRECTORS
There are no relationships between the Directors inter-se, except between Mr. Anant Vardhan Goenka, Managing Director and Mr. H. V. Goenka, Chairman. Mr. Anant Vardhan Goenka is the son of Mr. H. V. Goenka, Chairman.
FAMILIARIZATION PROGRAMME FOR
Pursuant to the Code of Conduct for Independent Directors specified under the Companies Act, 2013 and requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has framed a familiarization programme for all its Independent Directors to familiarize them on their roles, rights and responsibilities in the Company, the nature of the industry in which the Company operates and its business model. The familiarization programme posted on the website of the Company at the link http://www.ceat.com/ Investors intimation.aspx.
POLICY ON APPOINTMENT, TRAINING, EVALUATION AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT PERSONNEL
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy on Appointment, Training, Evaluation and Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel (SMP) and their remuneration, which is enclosed as "Annexure G".
EVALUATION OF BOARD, ITS COMMITTEES AND DIRECTORS
For the purpose of evaluation, the Board had finalized a questionnaire and engaged a third party to conduct an independent online confidential survey using the said questionnaire. The results of the survey/feedback were then deliberated at Board Meeting and evaluation of the Board, its Committees and the Directors were reviewed.
MEETINGS OF THE BOARD OF DIRECTORS
During the year, 6 (Six) Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Detailed composition of the mandatory Board Committees viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders'''' Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee and non-mandatory committee viz. Finance and Banking Committee and Special Investments/Project Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms a part of this Report.
There have been no situations where the Board has not accepted any recommendations of the Audit Committee.
The Company has formed Audit Committee and composition of the same has been given in Corporate Governance Report.
DIRECTORS'''' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors, to the best of their knowledge and belief, make following statements that:
i. The applicable Accounting Standards have been followed in the preparation of the annual accounts along with the proper explanation relating to material departure, if any.
ii. Such accounting policies have been selected and applied consistently and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company in the Balance Sheet as at March 31, 2017 and the Statement of Profit and Loss for the said financial year ended March 31, 2017.
iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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.
v. The proper internal financial controls were in place and that such internal financial controls are adequate and were operating effectively.
vi. The systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and are operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT
In compliance with the Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, separate section on Management Discussion and Analysis, as approved by the Board of Directors, which includes details on the state of affairs of the Company, forms part of this Annual Report. Further, the Corporate Governance Report, duly approved by the Board of Directors together with the certificate from the Statutory Auditors confirming the compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT
In compliance with the Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Business Responsibility Report, as approved by the Board, which includes principles to assess compliance with environmental, social and governance norms for the year under review forms part of the Annual Report.
The Company at its AGM held on September 26, 2014 had appointed Messrs S R B C & CO LLP as the Statutory Auditors for a period of 3 (three) consecutive years from the conclusion of the Fifty-Fifth Annual General Meeting to the conclusion of the Fifty-Eight Annual General Meeting subject to ratification of their appointment by the members every year. Further, the first term of the appointment of Statutory Auditors expires at the conclusion of Fifty-Eight Annual General Meeting and pursuant to the provisions of Section 139 (2) (b), an audit frim can be appointed for two terms of five consecutive years. Accordingly statutory auditors have confirmed that their appointment for a further term of 5 (five) years, if approved at the ensuing Annual General Meeting, would be in compliance with Sections 139 and 141 of the Companies Act, 2013.
The Board has appointed Messrs KPMG as Internal Auditors for the period of 1 (one) year up to March 31, 2018 under Section 138 of the Companies Act, 2013 and they have completed the internal audit as per the scope defined by the Audit Committee.
The Company has appointed Messrs Parikh and Associates, Company Secretaries to conduct the Secretarial Audit for the financial year ended March 31, 2017, as required by Section 204 of the Companies Act, 2013 and rules made there under. The Secretarial Audit Report furnished by Messrs Parikh and Associates is annexed to this report as "Annexure H".
The Board of Directors has appointed Messrs D. C. Dave & Co., Cost Accountants, as Cost Auditors of the Company for FY 2017-18 and recommends ratification of their remuneration by the Members at the ensuing Annual General Meeting.
EXPLANATION AND COMMENTS ON AUDITORS AND SECRETARIAL AUDIT REPORT
There is no qualification, disclaimer, reservation or adverse remark made either by the Statutory Auditors in Auditors Report or by the Company Secretary in practice (Secretarial Auditor) in the Secretarial Audit Report.
The Statutory Auditors have not reported any instances of fraud to the Central Government and Audit Committee as per the provisions of Section 143 (12) of the Companies Act, 2013 read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS
There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''''s operations in future.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of the business.
INTERNAL FINANCIAL CONTROL
Details in respect of adequacy on internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this Annual Report.
CEAT continues to be a people focused organization continuously building next generation leadership.
One of the main enablers of achieving CEAT vision 2016-2021, is Unleashing Talent which emphasizes on people focus of the organization. The Company has increased its investment and capacity in training and development to develop people to their maximum potential. Focus on training and development continued through a combination of functional, technical and behavioral training programs adding up to 3.2 man-days per employee of training in FY 2016-17. The Company has been persistent on achieving process and quality excellence by building internal academies and involving employees at the grass-root level in continuous improvement through Total Quality Management (TQM) initiatives.
DISCLOSURE UNDER SEXUAL HARRASEMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
In accordance with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, 4 (four) Internal Complaints Committees (ICC) have been set up to redress complaints. During the year under review 2 (two) complaints were received and resolved satisfactorily.
Your Directors place on record their appreciation for the continued support and co-operation received from the Employees, Customers, Suppliers, Dealers, Financial Institutions, Banks and Members towards conducting the business of the Company during the year under review.
On behalf of the Board of Directors
H. V. Goenka
Date: April 28, 2017