The consolidated performance of the Company and its subsidiaries for the year ended 31st
March, 2023 has been referred to wherever required.
1. FINANCIAL RESULTS:
2. INDUSTRY STRUCTURE AND DEVELOPMENT:
Your Company is one of the world's leading manufactures of "Off- Highway
Tires". It has the widest product range with more than 3,200 SKU's (Stock Keeping
Units). Your Company has made it's mark in speciality segments like Agricultural, Mining,
Construction, Industrial, Earthmover, Port, ATV (All-Terrain Vehicle), and Turf care
applications in both cross ply and radial construction.
Your Company is always paying close attention when it comes to latest market trends as
well as the technological developments.
As a result of global economic slowdown and ongoing war, there is some pressure on
exports which seems to be improving. We are fairly hopeful of the demand growing in the
coming quarters with a reduction in inflation.
3. OPERATIONS AND STATE OF AFFAIRS:
Standalone: During the year under consideration on Standalone basis, your Company
achieved Revenue from Operations of Rs.9,81,052 Lakhs as against Rs.8,26,671 Lakhs during
the previous financial year, an increase of 18.67%. EBITDA has decreased to Rs.2,05,343
Lakhs from Rs.2,40,610 Lakhs during previous financial year and Net profit has decreased
to Rs.1,07,871 Lakhs from Rs.1,41,069 Lakhs during previous financial year. The revenue
from exports is about 79%.
Consolidated: During the year under consideration on Consolidated basis, your
Company achieved Revenue from operations Rs.9,75,953 Lakhs as against Rs.8,29,512 Lakhs
during the previous financial year, an increase of 17.65%. EBITDA has decreased to
Rs.2,05,364 Lakhs from Rs.2,44,667 Lakhs during previous financial year, and Net profit
has decreased to Rs.1,05,740 Lakhs from Rs.1,43,538 Lakhs during previous financial year.
4. EXPORT HOUSE AND AUTHORISED ECONOMIC OPERATOR STATUS:
In accordance with provisions of Foreign Trade Policy, your Company continues to enjoy
the "Five Star Export House" status w.e.f September 2021. In addition to this,
your Company is also Authorised Economic Operator (AEO) Tier II which helps your company
in faster processing and clearance of cargo, deferred payment of duty, direct port
delivery/entry and other benefits.
5. PROJECTS AND EXPANSION:
Expansion of Carbon Black and Captive Power Plant: During the year the capacity to
manufacture Carbon Black has been increased from 1,15,000 MTPA to 2,00,000 MTPA in
December, 2022 (well ahead of schedule) leading to an increase in the capacity of power
generation in the Captive Power Plant. The high value advanced Carbon Black of 30,000 MTPA
is now expected to be completed by H2 FY 2024.
Modernization, Automation and Technology Upgradation: During the year under review,
your Company has successfully completed the modernization, automation and technology
upgradation at its Bhiwadi, Chopanki and Bhuj Plants.
Waluj Plant: The expansion at new Waluj plant to have overall capacity of 55,000 MTPA
is completed.
6. DIVIDEND:
You are aware of the consistent track record of dividend payment by your Company over
last three decades. In keeping with this trend, the Board of Directors are pleased to
recommend a Final Dividend of Rs.4 (200%) per equity share for the financial year
20222023. This is in addition to 3 interim dividends each of Rs.4 (200%) per equity share
aggregating to Rs.12 (600%) per equity share. The aggregate dividend for the year thus
works out to Rs.16 (800%) per equity share. The final dividend is subject to approval of
the Shareholders at the ensuing Annual General Meeting of the Company Scheduled to be held
on 22nd July, 2023. The final dividend once approved by Shareholders will be
paid within the stipulated time after deduction of applicable tax at source. The Record
Date for the purpose of payment of final dividend will be 11th July, 2023.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("Listing Regulations, 2015"), the Dividend
Distribution Policy can be accessed at the Company's website at:
https://www.bkt-tires.com/ww/us/investors- desk.
7. SHARE CAPITAL:
The paid-up Share Capital of the Company as on 31st March, 2023 remains
unchanged at Rs.3,866 Lakhs. The Company has neither issued shares with differential
voting rights, nor granted stock options, nor sweat equity and none of the Directors of
the Company hold any such shares or convertible instruments.
8. RESERVES:
The Company proposes to transfer Rs.40,000 Lakhs to General Reserves.
9. OUTLOOK FOR THE FINANCIAL YEAR 2023-24:
Concerns of global economic slowdown, the Impact of war in Ukraine and the Risks of
stagflation envisaging numerous market scenarios are pressing the need for Tire Material
industry players to be more vigilant and forward-looking. COVID-19 has changed the
dynamics of Tire Material supply chain which is further influenced by the burgeoning drive
for a cleaner and sustainable environment.
Over the last few years, the global automobile industry has witnessed a considerable
increase in demand for different vehicles, which boosted the sale of Tire globally. Most
of our customer segments are thriving for mechanization and modernization. This trend is
expected to prevail with continuing growth in tire production and demand over the next
five years.
Despite the Challenges due to global economy due to recessionary conditions, rising
interest rate and political turmoil which has led to slowing of external demand, your
Company is determined to grow further in "Off Highway Tire" segment with its
core strength of Research and Development which is supported by the state-of-the-art
manufacturing facilities. Simultaneous expansion projects at Company's plants are leading
to the launch of advanced and eco-friendly tires also lead to sustainable market growth of
tires. In the Union Budget of 2022-23 there is Duty tweak of Compounded rubber which
according to the industry will pinch the margins. The increase in duty is in line with the
demands of the All India Rubber Industry Association.
The Captive Power Plant of the Company at Bhuj will hedge energy cost and provide
better flow of energy to the plant. While your Company's demand outlook is strong, our
approach is to remain vigilant to ensure that we are agile and evolve our dynamics.
10. MATERIAL CHANGES AND COMMITMENTS:
In terms of Section 134(3)(l) of the Companies Act, 2013, there are no material changes
and commitments affecting the financial position of your Company which have occurred
between the close of the financial year of the Company on 31st March, 2023 to
which the Financial Statements relate and up to the date of this report.
11. OPPORTUNITIES AND THREAT:
Opportunities:
Your Company operates into a segment predominantly known as "large varieties - low
volume segment", which is not only capital intensive but also labour intensive. Your
Company is fully geared to take advantage of the peculiarities of the said segment and has
developed a large base of SKUs to meet the diverse needs and applications. Your Company is
witnessing gains in market leadership due to its strong and robust product portfolio.
Moreover, this segment is neither exposed to any technological obsolescence nor wild
fluctuations in demand for its products.
The Company is continuously marching ahead to explore incremental opportunity in the
form of developing "Ultra Large Earthmovers & Mining Radial Tires" markets
and taking advantage of the shift from Bias to Radial Tires, which is growing
continuously. In order to take advantage of this opportunity, the Company had set up
India's first Ultra Large size all-steel OTR Radial tire plant at Bhuj and further added
capacity to cater the market demand. Your Company is continuously expanding its base into
various segments like agricultural, mining, industrial, construction, winter and solid
tires under both technologies - Bias as well as Radials.
Threats:
Like any other Company, your Company is also exposed to various threats like
competition, retention of employees, labour issues, increase in raw material prices and
its timely availability, etc.
An economic downturn or slowdown in the key markets (India and Europe) may lead to
decrease in volumes and capacity utilisation. Volatile exchange rates, Price Competition
and fears of aggravation in Russia-Ukraine war are some of the threats. It may increase
the operating cost of running the business. Increases in raw material cost can impact the
profitability of the Company.
12. SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS & RETURN ON NET WORTH:
As per Schedule V read with Regulation 34(3) of Listing Regulations, details of
significate changes (i.e change of 25% or more as compared to the immediate previous
financial year) in Key Financial Ratios and any changes in Return on Net Worth of the
Company including explanations thereof are provided in Note No. 52 & 54 of Standalone
and Consolidated financial statement respectively forming part of this Annual Report.
13. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has put in place well defined procedures, covering financial and operating
functions. Delegation of authority and segregation of duties are also addressed to ensure
that the financial transactions are properly authorised. The Company believes that
Internal Control is one of the key pillars of governance, which provides freedom to the
management within a framework of appropriate checks and balances.
The Company has a robust internal control framework, which has been developed
considering the nature, size and risks in the business. The Company has adequate internal
control systems in place and has reasonable assurance on authorising, recording and
reporting transactions of its operations. The Company has well-placed, proper and adequate
internal controls environment, commensurate with its size, scale and complexities of its
operations. The Company has already developed and implemented a framework for ensuring
internal controls over financial reporting.
This framework includes entity level policies, processess and operating level standard
operating procedures (SOP). Internal control systems are an integral part of your
Company's Corporate Governance structure. Information Technology (IT) policies and
processes also ensure that they mitigate the current business risks. The Company has
successfully implemented ERP system, supported by SAP software & backed by necessary
Bandwidth. The systems and processes are continuously improved by adopting best in class
processes and automation and implementing the latest IT tools which help further for
maintaining financial and commercial discipline. These have been designed to provide
reasonable assurance with regard to credibility of data and compliances, inter-alia:
a. recording and providing reliable financial and operational information;
b. complying with the applicable statutes;
c. safeguarding assets from unauthorized use;
d. executing transactions with proper authorization, and ensuring compliance with
corporate policies;
e. prevention and detection of frauds / errors;
f. continuous updating of IT systems;
g. managing the risk of security exposure or compromise.
Your Company has adopted Cyber Security and Data Privacy Policy. Further, your Company
understands the significance of protecting personal and sensitive data (as per the
regulatory provisions such as price sensitive information, details of complainant in case
of discrimination or POSH related incidents) and the requirement for appropriate controls
while collecting, transferring, storing and processing personal data. It anticipates that
all information shall be handled responsibly in accordance with the applicable laws.
The management has assessed the effectiveness of the Company's internal control over
financial reporting as of 31st March, 2023.
The Company recognizes that in today's fast growing digital world, one must be equally
conscious of cyber threats. Your Company has a robust system to prevent any intrusion into
their IT systems and servers thereby protecting the IT assets of the Company.
Your Company has appointed M/s. Deloitte Haskins & Sells LLP to assess the
effectiveness of internal financial controls of the Company. Their assessment was based on
an internal audit plan, which was reviewed in consultation with the Audit Committee and is
found to be quite adequate.
The Audit Committee reviewed the reports submitted by the Management and Internal
Auditors. Based on their evaluation (as defined in section 177 of the Companies Act, 2013
and Regulation 18 of Listing Regulations, 2015), the Company's Audit Committee has
concluded that, as of 31st March, 2023, the Company's internal financial
controls were adequate and operating effectively.
14. HUMAN RESOURCES:
With a motivated team of 3,472 employees (permanent) as on 31st March, 2023,
your Company is proud to inform that the employees have been the key players in its
progress. This workforce is focussed towards building a Sustainable organisation. Immense
emphasis is placed on to have a safe workplace with an agile team. Your Company believes
in a culture of inclusion, trust, skill development, empowerment, and all-round
development of its employees. Your Company continues to build strong pillars of cultural
values which strengthens the business operations. Young Talent is coached and mentored by
a seasoned leadership team.
Effective Communication channels help your Company to transcend its Vision and Mission
till the bottom of the pyramid. Your Company visualises the greater good of its workforce
which would conversely make the Company achieve its business goals in a competitive
environment. Your Company keeps an "Employee First" approach and accords topmost
priority to all human issues within the organisation.
The core cultural values of your Company is nurturing top quality talent, teamwork,
innovation, respect for all, open door policy and creation of a future ready workforce
with Happy Hearts. Your Company's organisation structure is robust and committed to
deliver the best business results. Your Company through its people policies, promotes the
congruence of employee personal vision and the Company's goals.
There is a constant sharing of information about the business with the employees. Your
Company provides fast track career paths for the young talent. Employee engagement
programmes and developmental sessions have created an outstanding workforce which is
focussed and cognizant of its responsibilities. An objective performance management system
has provided satisfaction and growth to all employees. Your Company strongly believes in
harnessing a culture of trust and mutual respect amongst all employees. The values and
principles of your Company have given good results in challenging times. Industrial
relations continue to be cordial across the plants.
15. SUBSIDIARY COMPANIES:
At the end of the year under review, the Company had one Domestic and four Overseas
Wholly Owned Subsidiary Companies (WOS). The domestic WOS is known as BKT Tires Limited
and the Overseas WOS are BKT EUROPE S.R.L., BKT USA INC, BKT TIRES (CANADA) INC., BKT EXIM
US, INC. The Company also has one step down subsidiary in the name of BKT Tires Inc. based
in USA which is a 100% subsidiary of BKT Exim US, INC. The Company does not have any
material subsidiary as per the thresholds laid down under the Listing Regulations. A
policy on material subsidiaries has been formulated by the Company and posted on the
website of the Company and can be accessed at:
https://www.bkt-tires.com/ww/us/investors-desk.
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies
(Accounts) Rules, 2014, a statement containing the salient features of the financial
position of subsidiary companies in Form AOC-1 attached as Annexure I.
16. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (3)(c) and 134(5) of the Companies Act, 2013, your Directors,
to the best of their knowledge and belief, make the following statements that:
(i) that in the preparation of the annual accounts for the year ended 31st
March, 2023, the applicable accounting standards have been followed and there are no
material departures from the same;
(ii) the Directors have selected such accounting policies and applied them consistently
and made judgments and estimates that were reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company as at 31st March, 2023 and the
Statement of Profit and Loss of the Company for the financial year ended 31st
March, 2023;
(iii) the Directors have taken proper and sufficient care for maintenance of adequate
accounting records in accordance with provisions of the Companies Act, 2013, for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
(iv) the Directors have prepared the annual accounts of the Company on a "Going
Concern" basis;
(v) the Directors have laid down internal financial controls to be followed by the
Company and such internal financial controls are adequate and are operating effectively;
and
(vi) the Directors have devised proper systems to ensure compliance with the provisions
of all applicable laws and that systems are adequate and operating effectively.
17. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
All contracts /arrangements / transactions entered by the Company during the financial
year with related parties were in ordinary course of business and on an arm's length
basis. During the year, the Company has not entered into any contracts /arrangements /
transactions with related parties which could be considered material in accordance with
the policy of the Company on materiality of related party transactions.
Accordingly, the disclosure of related party transactions as required under Section
134(3)(h) of the Companies Act, 2013 in Form AOC - 2 is not applicable to your
Company.
The Policy on materiality of related party transactions and dealing with related party
transactions are approved by the Board and can be accessed on the Company's website at:
https://www.bkt-tires.com/ww/us/investors-desk. The details of transactions / contracts /
arrangements entered by the Company with Related parties during the financial year are set
out in the Notes to the Financial Statement.
The Board of Directors of the Company has approved the criteria for making the omnibus
approval by the Audit Committee within the overall framework of the policy on related
party transactions. Prior omnibus approval is obtained for related party transactions
which are of repetitive nature and proposed to be entered in the ordinary course of
business and at arm's length during the financial year. All related party transactions are
placed before the Audit Committee for review and approval.
18. CORPORATE SOCIAL RESPONSIBILITY:
The Company's social initiatives empower society at a large and provide a holistic
growth platform. The Company believes that Corporate Social Responsibility (CSR) projects
undertaken by it should be sustainable with the long-term purpose of improving the quality
of livelihood of the less privileged. The funds on CSR projects / activities are spent
very carefully to ensure that the desired objectives are achieved. CSR Activities has been
segregated as to have a reach in different areas such as promoting education, improving
healthcare, sustainability, rural development.
The Board of Directors of the Company has approved a Corporate Social Responsibility
(CSR) Policy based on the recommendation of the CSR Committee. The brief outline of the
CSR policy of the Company and the initiatives undertaken by the Company on CSR activities
during the year are set out in Annexure-II.
The Board of Directors has formed a committee on CSR in accordance with the Companies
Act, 2013. The terms of reference of the Corporate Social Responsibility Committee, number
and dates of meetings held, composition and attendance of the Directors during the
financial year ended 31st March, 2023 are given separately in the Corporate
Governance Report. During FY 2021-22, the Company had spent excess CSR amount of Rs.11
lakhs. During the year under review, the Company was required to spend Rs.2,889 Lakhs.
The Company had identified various CSR projects having a total commitment of Rs.2,878
Lakhs and after considering the excess spend in FY 2021-22 the company has completed their
obligation of Rs.2,889 Lakhs for FY 2022-23. In terms of Amendment to Companies (Corporate
Social Responsibility Policy) Amendment Rules, 2021 (the CSR Rules 2021") effective
from 22nd January, 2021, the Company in FY 2021-22 had identified Ongoing
Project upto Rs.75 lakhs of which Company had spent Rs.72 lakhs till 31st
March, 2022 and had deposited Rs.3 lakhs in separate Bank account opened with a Scheduled
Bank in Compliance with CSR Rules 2021. During the year under review, out of Rs.3 lakhs,
Company had spent Rs.1.5 lakhs towards ongoing Project and would spend remaining Rs.1.5
lakhs in FY 2023-24 in Compliance with CSR Rules 2021.
The CSR policy of the Company is available on the Company's website and can be accessed
at: https://www.bkt-tires.com/ww/us/ investors-desk.
19. RISKS RELATED TO BUSINESS:
Risk is an integral and unavoidable component of business. BKT's nature and scale of
the business operations calls for a robust risk management framework to deal with impacts
of external and internal environment. In today's challenging and competitive environment,
mitigating risks is imperative. The range of risks are not only limited to business
disruptions to COVID-19, but include volatile commodity prices, raw material price
fluctuation, growing demand of customers, cybersecurity risks, etc. Common risks include
changing regulations, competition, business risk, technology obsolescence, investments and
retention of talent.
Business risk, inter alia, further includes financial risk, social risk, political
risk, environmental risk and legal risk. These ranges of risks have been meticulously
addressed through a comprehensive risk management process. For managing risks more
efficiently, the Company has undertaken a detailed risk management exercise and has
identified key risks that can have a critical impact on the Company's performance. Risks,
once identified, are periodically monitored, along with emerging risks on the dual scale
of impact and probability. The Company has inter alia identified the following key risks:
Operational Risk:
Operational risks like equipment obsolescence can impact production. To mitigate such
risks, the Company continuously monitors equipment obsolescence and upgrades equipment
from time to time and undertakes preventive maintenance measures. The Company has also
made significant investment in equipment modernisation.
The Company's major raw material is Natural and Synthetic Rubber, Carbon Black and
Nylon fabric. Due to the high demand of all the major raw materials and shutting down of
some raw material manufacturers, the prices and the supply have been adversely affected.
In view of this we have experienced that an increase in cost gets set off by an increase
in prices over a period of time.
Market Risk:
Your Company manages market risk by expanding its presence in different markets, deeper
penetration into existing markets and by launching new products. Furthermore, the Company
spends requisite amount on marketing and promotional activities to ensure customer
retention and brand-building. Company has also invested in building larger network of
distributors and dealers across the market to avoid the risk in case of fluctuations in
market.
Labour Relations:
Since the manufacturing process of the Company is labour intensive, it requires lot of
skilled as well as un-skilled workers. Maintaining a huge work force is a challenging
task.
I n order to mitigate the said risk, the Company follows good HR practices to promote
the welfare and safety of its workmen and maintain a cordial working environment. All
workers are paid more than government stipulated wages.
Retention of skilled manpower:
Like other players in the industry, the Company is also exposed to this risk, more
particularly when there is shortage of skilled manpower in the industry. However, the
Company is able to manage the said risk by good HR practices and rewarding its employees
handsomely. Company provides various opportunities for career development.
Currency Fluctuation:
The Company revenues are mainly through exports. Further, since most of the raw
materials and capital equipment are imported, the Company is exposed to foreign currency
risk. However, it enjoys natural hedge as most of its revenues are in foreign currency.
However, since, the Company is a net foreign exchange earner and mostly hedges its net
exposure in advance by way of forward contracts, it is immune to a large extent from the
fluctuation in currencies.
Technology Risk:
Due to growing digitalisation the company is exposed to vulnerability to cyber-attacks.
To avoid such risks your company has put in place policies and procedure for data privacy.
Also, adaptation of Security operations control and technologies to safeguard IT data and
applications. Focus is also maintained on mandatory employee training on cybersecurity
awareness.
RISK MANAGEMENT AND MITIGATION:
'Risk Management' is the identification, assessment, and prioritisation of risks
followed by coordinated and economical application of resources to minimise, monitor and
control the probability and/or impact of uncertain events or to maximise the realisation
of opportunities. Risk management also provides a system for the setting of priorities
when there are competing demands on limited resources. Risk management also attempts to
identify and manage threats that could severely impact or bring down the organisation.
The Company's Board of Directors has overall responsibility for the establishment and
overseeing of the Company risk management framework. Pursuant to Regulation 21 of Listing
Regulations, Risk Management Committee was constituted comprising of Mr. Pannkaj Ghadiali,
an Independent Director as Chairman of the Committee, Mr. Arvind Poddar and Mr. Vipul
Shah, Directors of the Company are Members of the Committee. The primary objective of the
Committee is to control the various risks that the Company is exposed to, with a view to
prevent unacceptable losses, to provide an effective means of identifying, measuring and
monitoring credit exposure risks by the Company and to keep such risk at or below
predetermined levels. The Company has framed an Enterprise Risk Management Policy (the
"Policy") to realise the following benefits for the Company:
a. Enhanced risk management for the organization including strategy setting.
b. Facilitate risk-based decision making.
c. Improve governance and accountability.
d. Enhance credibility with key stakeholders such as investors, employees, government,
regulators, society, etc.
e. Create, protect and enrich stakeholder value.
The policy contains the objectives of risk management, company's approach to risk
management and the risk organization structure for identification, management and
reporting of risks. The policy specifies the roles and responsibilities of key
stakeholders and other key personnel of the Company with regards to risk management. The
policy also aims to ensure and identify process of risk identification and management in
compliance with the provisions of the Companies Act, 2013.
Following objectives are achieved through the Risk Management program of the Company
viz:
a. Enable organizational sustainability taking cognizance of the impact of its
products, services & operations on society and the environment
b. Reduce potential gaps in achieving company's objectives
c. Align and integrate existing risk management practices in the organization
d. Build confidence of investor community and stakeholders
e. Enhanced Corporate Governance
f. Successfully respond to changing business environment
Risk management policies and systems are reviewed regularly to reflect changes in
market conditions and the Company's Activities.
The Audit Committee oversees how management monitors compliance with the Company's risk
management policies and procedures and reviews the adequacy of the risk management
framework in relation to the risks faced by the Company. Internal Audit undertakes both
regular and ad hoc reviews of risk management controls and procedures, the results of
which are reported to the audit Committee.
There are no risks, which in the opinion of the Board threaten the existence of the
Company.
20. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the year under review, as recommended by the Nomination and Remuneration
Committee, the Board of Directors of the Company has approved the re-appointment of Mr.
Pannkaj Ghadiali as Independent Director of the Company for a term of five years w.e.f. 8th
November, 2022 which was duly approved by the members of the Company at the 60th
Annual General Meeting held on 7th July, 2022.
The Company has received declaration from all Independent Directors of the Company
confirming that they meet with the criteria of independence as laid down under Section
149(6) of the Companies Act, 2013 as well as Regulation 16(1)(b) of the Listing
Regulations, 2015.
The Company is committed to maintain the highest standards of Corporate Governance and
adhere to the Corporate Governance requirement set out by the SEBI. The Company has
complied with the requirements of Corporate Governance as stipulated under the Listing
Regulations, 2015 and accordingly, the Report on Corporate Governance forms part of this
Annual Report. The requisite certificate from the Auditors of the Company confirming
compliance with the conditions of the Corporate Governance is attached to the Report on
Corporate Governance.
21. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The Company has devised the Nomination and Remuneration Policy for the selection,
appointment and remuneration of Directors, Key Managerial Personnel and remuneration of
other employees including Senior Management employees who have the capacity and ability to
lead the Company towards achieving sustainable development. The extract of Nomination and
Remuneration Policy is provided in the Corporate Governance Report and forms part of
Board's Report.
The Criteria for appointment and remuneration of Directors is as under:
(i) Criteria for Appointment of Managing Director / Whole Time Director/ Director:
The Nomination and Remuneration Committee shall identify persons of integrity who
possess relevant expertise and experience particularly in Tire Industry, leadership
qualities required for the position and shall take into consideration recommendation, if
any, received from any member of the Board.
(ii) Criteria for Appointment of Independent Director:
The Independent Director shall be of high integrity with relevant expertise and
experience so as to have a diverse Board with Directors having expertise in the fields of
manufacturing, marketing, finance, taxation, law, governance and general management.
22. PERFORMANCE EVALUATION:
The Board of Directors has carried out an annual evaluation of its own performance,
Board Committees and individual Directors pursuant to applicable provisions of the Act and
the corporate governance requirements as prescribed by applicable regulations of Listing
Regulations 2015.
The performance of the Board was evaluated after seeking inputs from all the Directors
present in the meeting based on criteria such as the board composition and structure,
effectiveness of board processes, information and functioning, etc.
The Nomination and Remuneration Committee had evaluated the performance of individual
Directors based on criteria such as the contribution of the individual Director to the
board and committee meetings like preparedness on the issues to be discussed, meaningful
and constructive contribution and inputs in meetings, etc.
The Securities and Exchange Board of India (SEBI) vide circular SEBI /HO /CFD /CMD/
CIR/ 2017/004 dated 5th January, 2017, issued a Guidance Note on Board
Evaluation about various aspects involved in the Board Evaluation process to benefit all
stakeholders. While evaluating the performance, the above guidance note was considered.
Performance evaluation of Independent Directors was carried out by the entire board.
A meeting of the Independent Director for the 2022-23, with Mr. Pannkaj Ghadiali as the
Chairman, was held on 18th March, 2023, to review the performance of the
Non-Independent Directors, the Board as a whole and the Chairman on the parameters of
effectiveness and to assess the quality, quantity and timeliness of the flow of
information between the Management and the Board. The same were discussed in the board
meeting that followed the meeting of the Independent Directors, at which the performance
of the board, its committees, and individual Directors were also discussed. The Directors
expressed their satisfaction with the evaluation process.
23. AUDITORS:
Statutory Auditor:
During the year under review, as recommended by the Audit Committee, the Board of
Directors has approved the appointment of M/s Jayantilal Thakkar & Co. (Firm
Registration Number 104133W) as Statutory Auditors of the Company, for a period of 5
(five) consecutive financial years from the conclusion of 60th AGM till the
conclusion of the 65th AGM on remuneration, terms and conditions as may be
approved by the Board and pursuant to approval of members of the Company at 60th
Annual General Meeting M/s Jayantilal Thakkar & Co. was appointed as Statutory
Auditors of the Company.
The Notes on Financial Statements referred to in the Auditors' Report are
self-explanatory and do not call for any further comments. The Auditors' Report do not
contain any qualification, reservation, adverse remark or disclaimer.
Internal Auditor:
The Board has appointed M/s. RTD & Associates, Chartered Accountants as Internal
Auditors for a period of 1 (One) year for Financial Year 2022-23 under Section 138 of the
Companies Act, 2013 and they have completed the Internal Audit as per the scope as defined
by the Audit Committee.
Secretarial Auditor:
The Company has appointed Mr. G.B.B Babuji, Company Secretary in Whole Time Practice,
to conduct Secretarial Audit for the financial year 2022-23 as required by Section 204 of
the Companies Act, 2013 and rules made thereunder. The Company provided all assistance and
facilities to the Secretarial Auditors for conducting their audit. Further, pursuant to
SEBI Circular CIR/CFD/ CMD1/27/2019 dated 8th February, 2019, Mr. G.B.B Babuji,
has also conducted the Annual Secretarial Compliance. The Secretarial Audit Report for the
financial year ended 31st March, 2023 is annexed herewith marked as Annexure
- III.
Cost Auditor:
In terms of Section 148 of the Companies Act, 2013 read with Rule 4(3) of Companies
(Cost Records and Audit) Rules, 2014, ("Cost Records Rules") as amended from
time to time, the Company maintained its Cost Records on regular basis in such manner
which facilitates the calculation as may be prescribed by the Rules. The cost records are
maintained in such manner which enable the Company to exercise, to the extent possible,
control over the various operating costs to achieve optimum economies in utilization of
resources. Since the Company's revenue from exports, in foreign exchange, exceeds 79% per
cent of the Company's total revenue and pursuant to Rule 4 of Cost Records Rules of
Companies Act, 2013 as amended from time to time, Cost Audit is not applicable to the
Company for the financial year 2022-23.
24. AUDITOR'S QUALIFICATION:
There are no qualifications in the reports of the Statutory Auditors and Secretarial
Auditor. There was no instance of fraud during the year under review, which is required to
be reported by Statutory Auditors in their reports as mentioned under sub-section (12) of
Section 143 of the Act. Subject Audit Report.
25. INDUSTRIAL RELATIONS:
The industrial relations with staff and workers during the year under review continue
to be cordial.
26. CHANGE IN THE NATURE OF BUSINESS, IF ANY:
There is no change in the nature of business of your Company during the year under
review.
27. DISCLOSURES:
i. Vigil Mechanism /Whistle Blower Policy:
The Vigil Mechanism of the Company which also incorporate a whistle blower policy in
the terms of SEBI (Listing Obligations and Disclosure Requirements), 2015 deals with
instances of fraud and mismanagement, if any. Adequate safeguards have been provided
against victimization of persons who use the vigil mechanism. The Policy on vigil
mechanism and whistle blower policy may be accessed on the Company's website at:
https://www.bkt-tires.com/ww/us/investors-desk .
ii. Audit Committee:
The Audit Committee consist of Mr. Pannkaj Ghadiali an Independent Director as
Chairman, Mr. Rajendra Hingwala, Mr. Sandeep Junnarkar & Mrs. Shruti Shah, Independent
Directors as the members. All the recommendations made by the Audit Committee have been
accepted by the Board. All the members have relevant experience in financial matters.
iii. Audit Trail:
Ministry of Corporate Affairs vide the Notification dated 24.03.2021 has mandated that
every company which uses accounting software for maintaining its books of account, shall
use only such accounting software which has a feature of recording audit trail of each and
every transaction, creating an edit log of each change made in books of account along with
the date when such changes were made and ensuring that the audit trail cannot be disabled.
Accordingly, your Company has already in past placed an accounting software in place
which records the audit trail of each and every transaction which creates an edit log of
each changes made in the books of accounts and the audit trail is being preserved by the
Company as per the Statutory requirements.
iv. Number of Board Meetings:
The Board of Directors of the Company met five times in the year, the details of which
are provided in the Corporate Governance Report.
v. Particulars of loans given, investment made, guarantees given and securities
provided:
Particulars of loans given, investments made, guarantees given and securities provided
along with the purpose for which the loan or guarantee or security is proposed to be
utilised by the recipient are provided in Note Nos. 5,10,14, 46 and 48 to the financial
statement forming part of this Annual Report.
vi. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and
outgo:
The particulars relating to conservation of energy, technology absorption, foreign
exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the
Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 are
provided in Annexure - IV and forms an integral part of this report.
vii. Annual Return:
Pursuant to Section 92(3) read with section 134(3)(a) of the Companies Act, 2013,
copies of the Annual Returns of the Company prepared in accordance with Section 92(1) of
the Act read with Rule 11 of the Companies (Management and Administration) Rules, 2014 may
be accessed on the Company's website at:
https://www.bkt-tires.com/ww/us/investors-desk .
viii. Particulars of Employees and related disclosures:
The information required under Section 197(12) of the Companies Act, 2013 read with
Rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 is attached as Annexure - V.
A statement comprising the names of top 10 employees in terms of remuneration drawn and
every person employed throughout the year, who were in receipt of remuneration in terms of
Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, are provided in the Report.
However, having regard to the provisions of the first proviso to Section 136 of the
Act, the details are excluded in the report sent to members. Members who are interested in
obtaining the particulars may write to the Company Secretary at registered/ corporate
office of the Company. The aforesaid information is available for inspection 21 days
before and up to the date of the ensuing AGM during the business hours on working days.
ix. Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal)
Act, 2013:
The Company has adopted zero tolerance for sexual harassment at the workplace and has
formulated a policy on prevention, prohibition, and redressal of sexual harassment at the
workplace in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention
and redressal of complaints of sexual harassment at workplace. The Company has complied
with provisions relating to the constitution of Internal Complaints Committee (ICC) under
the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013. The Company have setup ICCs to redress complaints on sexual harassment.
x. Business Responsibility and Sustainability Committee Report:
Your Company does business that delivers long-term shareholder value and benefits the
society. Your Company continue to focus on its commitments which are aligned with national
priorities and United Nations Sustainability Development Goals.
In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("Listing Regulations") read with relevant SEBI Circulars, new
reporting requirements on ESG parameters were prescribed under "Business
Responsibility and Sustainability Report" ('BRSR'). The BRSR seeks disclosure on the
performance of the Company against nine principles of the "National Guidelines on
Responsible Business Conduct' ('NGRBCs'). As per the SEBI Circulars, effective from the
financial year 2022-23, filing of BRSR is mandatory for the top 1000 listed companies by
market capitalisation. Accordingly, for the financial year ended 31st March,
2023, your Company is publishing BRSR instead of Business Responsibility Report. BRSR
describes the initiatives taken by the Company from an environmental, social and
governance prospective, in the prescribed form is annexed as Annexure - VI and
forms an integral part of the Annual Report.
xi. Compliance with the Institute of Company Secretaries of India ("ICSI")
Secretarial Standards:
The relevant Secretarial Standards issued by the ICSI related to the Board Meetings and
General Meeting have been complied with by the Company.
No disclosure or reporting is required in respect of the following items as there were
no transaction on these items during the year under review:
a. Details relating to deposit and unclaimed deposits or interest thereon.
b. Issue of equity shares with differential rights as to dividend or voting.
c. Issue of shares (including sweat equity shares) and Employee Stock Option Scheme of
the Company under any scheme.
d. None of the managerial personnel i.e. Managing Director, Joint Managing Director and
Whole-time Director of the Company are in receipt of remuneration / commission from
Subsidiary Companies of the Company.
e. No significant or material orders were passed by the Regulators or Courts or
Tribunals which impact the going concern and Company's operation in future.
xii. IBC Code & One-time Settlement:
There is no proceeding pending against the Company under the Insolvency and Bankruptcy
Code, 2016 (IBC Code). There has not been any instance of one-time settlement of the
Company with any bank or financial institution.
28. CAUTIONARY STATEMENTS:
Certain statements in the "Director's Report & Management Discussion and
Analysis" describing the Company's views about the Industry, expectations/
predictions, objectives etc., may be forward looking within the meaning of applicable laws
and regulations. Actual results may differ materially from those expressed in the
Statement. Company's operations may inter-alia affect with the supply and demand
stipulations, input prices and their availability, changes in Government regulations,
taxes, exchange fluctuations and other factors such as Industrial relations and economic
developments etc. Investors should bear the above in mind.
29. APPRECIATION:
Your Company has been able to operate efficiently because of the culture of
professionalism, creativity, integrity and continuous improvement in all functions and
areas as well as the efficient utilization of the Company's resources for sustainable and
profitable growth.
The Board of Directors would like to express their sincere appreciation for the
assistance and co-operation received from the financial institutions, banks, Government
authorities, customers, vendors and members during the year under review. The Board of
Directors also wish to place on record its deep sense of appreciation for the dedicated
and committed services by the Company's executives, staff and workers.
Last but not the least, your Directors wish to place on record their warm appreciation
to you for your continuous support and encouragement.