CEAT LIMITED ANNUAL REPORT 2018-19
SAFER SMARTER BETTER CEAT Limited
About RPG Group Established in 1979, the RPG Group is a diversified conglomerate with interests in the areas of infrastructure, tyres, information technology, pharmaceuticals, energy and plantations. Founded by Dr. R.P. Goenka, the Group’s lineage dates back to early 19th century. Today, the Group has several companies in diverse sectors predominantly CEAT, Zensar Technologies, KEC International and RPG Life Sciences. Built on a solid foundation of trust and tradition, the RPG name is synonymous with steady growth and high standards of transparency, ethics and governance.
hello happiness
Last year, we launched the RPG Group’s new brand tagline – ‘hello happiness’, which is now an integral part of our Group’s ethos. Our Vision tenets clearly outline the path we all collectively traverse – one that seeks to propel every RPGian to overcome their own limitations; one that drives each one of us to contribute and shape the lives of others around us positively; an organization where dreams will not be constrained by fences. The smiley signifies ‘THAT’ happiness which is within our grasp and is the culmination of our Vision tenets captured in our tagline. ‘hello happiness’ is a bold statement that helps us open our doors to a world of opportunities and possibilities; a statement that signifies our intent to touch and enrich the lives of others.
Forward-looking statement
In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This Report and other statements - written and oral - that we periodically make contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward- looking statements will be realised, although we believe we have been prudent in our assumptions. The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward- looking statement, whether as a result of new information, future events or otherwise.
04 Annual Report 2018-19 SAFER SMARTER BETTER
At CEAT, we continue to resonate with our Purpose of ‘Making Mobility Safer & Smarter. Every Day.’ On the back of our innovative and agile methods and the drive to experiment, we have become one of the largest Indian manufacturer of high-performance tyres for all vehicle segments. We seek to sustain growth and deliver future-ready products and solutions that are safer, smarter and better in every respect.
We build best-in-class products through a culture of continuous innovation. Our tyres are durable and provide a secure grip, thereby ensuring the safety of our customers on the road, every day. We are expanding our reach and distribution, introducing differentiated products and creating strong brand associations and social media presence. With our cutting-edge mobility solutions, we are leaving no stone unturned in our drive to create a ‘SAFER SMARTER BETTER’ tomorrow.
Index
CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS
3 About CEAT 32 Management Discussion and 104 Standalone 4 Financial Highlights (Consolidated) Analysis Financial Statements 6 Global Presence 44 Discussion on the Financial 170 AOC-1 8 Product Portfolio Performance and Key Financial 172 Consolidated Ratios Financial Statements 12 Associations 52 Board’s Report 16 Campaigns 82 Corporate Governance Report 18 Awards & Recognitions 98 Business Responsibility Report Committed towards 20 NOTICE AND PROXY a SAFER Tomorrow Driving towards 22 247 Notice a SMARTER Tomorrow Attendance Slip and Proxy Striving towards 24 a BETTER Tomorrow 26 Corporate Social Responsibility 28 People Practices 30 Board of Directors Please scan the QR Code to download the Annual Report
Committed towards a Driving towards a Striving towards a SAFER Tomorrow >>> 20 SMARTER Tomorrow >>> 22 BETTER Tomorrow >>> 24 Ruling the Road Since its inception in 1958, CEAT has steadily expanded its tyre production capacities and today, is one of India’s leading tyre manufacturers with a strong presence in global markets. CEAT is built on strong ethos of passion, values, dynamism and resilience and remains committed to helping millions of vehicles travel safely. CEAT produces over 37 Million tyres a year. It manufactures world-class tyres for a wide range of vehicle segments. CEAT’s manufacturing operations are carried out through a combination of in-house manufacturing facilities and outsourcing units. State-of-the-art R&D centres at Halol, India and Frankfurt, Germany enable CEAT to come up with safer and smarter products to fulfil the mobility needs of its customers.
Our Strategic Pillars
Strong brand equity
Differentiated Strong OEM products relationships
Global World-class Extensive reach R&D distribution network
2 Annual Report 2018-19 About CEAT Values Key Facts
CEAT’s values define our customer-centric culture which is led by innovation, passion E 7,023 Crores and transparency. Consolidated total income
CHALLENGER Innovative and agile, questioning the existing ways and E 663 Crores promoting experimentation Consolidated EBITDA (excluding non-operating income) ASPIRATION-LED Purpose-led, passion for superior performance and walking the extra mile E 251 Crores INTEGRITY Consolidated PAT Being authentic, transparent and keeping commitments
RESULT OBSESSION Passion, high energy, speed and collaboration E 12 Dividend per share OPENNESS Approachable open and boundary-less E 1,199 Crores Capital expenditure
Ranked amongst 124 New products launched top 25 In Manufacturing (CEAT & CSTL)
100+ countries $1 Billion Global presence Revenue Organization 1Lac+ tyres Manufacturing capacity per day
CEAT Limited 3 Financial Highlights (Consolidated) On a Steady Path
Net Sales (`in lacs) EBITDA
15.00
12.04 12.05 9.99 10.57 5,77,070 5,51,527 5,77,949 6,21,458 6,91,337 70,299 83,706 70,378 66,724 70,174
FY 15 FY 16* FY 17* FY 18* FY 19* FY 15 FY 16* FY 17* FY 18* FY 19*
Net Sales (`in lacs) EBITDA (`in lacs) EBITDA (%)
Gross Margin PAT
41.18 39.51 7.93 43.96 38.77 38.69 5.50 6.25
3.83 3.65 31,718 43,754 36,116 23,797 25,222 2,40,458 2,23,737 2,42,442 2,37,972 2,73,156
FY 15 FY 16* FY 17* FY 18* FY 19* FY 15 FY 16* FY 17* FY 18* FY 19*
Gross Margin (`in lacs) Gross Margin (%) PAT (`in lacs) PAT (%)
Book Value Per Share (`per share) Earnings Per Share (`per share) 424 508 597 644 684 84.62 108.17 89.28 58.83 62.35
FY 15 FY 16* FY 17* FY 18* FY 19* FY 15 FY 16* FY 17* FY 18* FY 19*
* The Company transitioned to IndAS from April 1, 2015. Thus, previous year’s figures are not comparable. 3 Interest includes interest capitalised during the year 1 EBITDA includes non-operating income. 4 Average capital employed considered for ROCE/ROE 2 PAT attributable to owners of parent company 5 ROCE calculated based on PBIT * (1-Tax rate)
4 Annual Report 2018-19 Corporate Overview
Net Debt/Equity and Dividend per share (`per share) Net Debt to EBITDA
2.03
0.95 1.26 1.18
0.75 Statutory Reports 10.00 11.50 11.50 11.50 12.00 0.39 0.29 0.37 0.30 0.51
FY 15 FY 16 FY 17 FY 18 FY 19 FY 15 FY 16* FY 17* FY 18* FY 19*
Net Debt/Equity (times) Net Debt/EBITDA (times)
ROCE (%) ROE (%) Financial Statements 17.00 17.09 11.27 8.33 7.30 25.00 23.22 16.16 9.48 9.39
FY 15 FY 16* FY 17* FY 18* FY 19* FY 15 FY 16* FY 17* FY 18* FY 19* Notice & Proxy
EBITDA/Interest EBITDA/Interest (times) R&D Expenditure/Net Sales
2.30
1.62 1.43 0.97
0.37 5.31 8.40 7.25 6.01 5.83 9,880 2,155 5,328 13,316 10,080
FY 15 FY 16* FY 17* FY 18* FY 19* FY 15 FY 16 FY 17 FY 18 FY 19 R&D Expenditure R&D Expenditure / * The Company transitioned to IndAS from April 1, 2015. Thus, (`in lacs) Net Sales (%) previous year’s figures are not comparable. 3 Interest includes interest capitalised during the year 1 EBITDA includes non-operating income. 4 Average capital employed considered for ROCE/ROE 2 PAT attributable to owners of parent company 5 ROCE calculated based on PBIT * (1-Tax rate)
CEAT Limited 5 Global Presence Our Firm Foothold
Middle East United States Europe
South-East Asia Latin Africa America
Operational Facilities
Halol, 2009 Nagpur, 2016 2 Wheeler Tyres Passenger Car Radial, Truck Bus Radial Tyres
Bhandup, 1958 Truck Bus Bias, Off-Highway Tyres
Ambernath, 2017 Off-Highway Radial Tyres
Nashik, 1973 Chennai (upcoming) Light Truck Bias, Truck Bus Passenger Car Radial Tyres Bias and Off-Highway Tyres
6 Annual Report 2018-19 Corporate Overview
International Business
CEAT continues to be a dominant player in tyre exports from India. Geographically, the Company has a stratified export market divided into seven clusters. This division has helped CEAT better understand customer needs and design market-specific products. This year, CEAT expanded its global footprint by entering 9 new countries. Statutory Reports Financial Statements
CEAT Store - Spain Notice & Proxy
Product launch & showcase - BAUMA CONEXPO 2018
CEAT Store - Italy
CEAT Limited 7 Product Portfolio Smarter Products for Smarter Mobility
Passenger Car Tyres
Milaze X3 Secura Drive Tyres with high Tyres that provide a mileage up to secure grip even at high 1 lacs km tyre life speed
CZAR HP Fuelsmarrt Tyres that provide Tyres that provide low superior control at rolling resistance, thus high speed translating into greater fuel savings
Two Wheeler Tyres
Milaze Gripp X3 Tyres with superior life Tyres that provide long lasting grip
Zoom Gripp XL Tyres that provide Tyres that provide control at high speed better grip over different terrains
8 Annual Report 2018-19 Corporate Overview
Truck-Bus Radial Tyres
WinMile X3 WinLoad X3 Tyres with high mileage Tyres made to carry (for long haul highway heavy loads
application) Statutory Reports
Off-Highway Tyres Financial Statements
Minemax Floatmax FT Tyres with puncture Tyres with additional resistance, superior traction and stability with traction, enhanced a firm grip on the loose grip and higher surface conditions typical to mileage agricultural land Notice & Proxy
Aayushmaan series Aayushmaan plus Tyres designed to Tyres that offer puncture have a good grip and protection, in addition to high overall life giving good grip and high overall life
CEAT Limited 9 Light Commercial Vehicle Tyres
Buland Lug XL Pro Milaze Tyres with better Tyres with high mileage loadability and and better durability loadability
Last Mile Tyres
Buland Mile XL Rib Anmol Rib HD Tyres for cargo Tyres for cargo and application providing passenger applications higher loadability with long life
Milaze LT Tyres for passenger application with long life and durability
10 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
CEAT Limited 11 Associations
Establishing the Right COLLABORATIONS
We continued to develop smart associations to drive home the point that CEAT tyres are the right choice for the ‘Game called Road’.
12 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
13 CEAT Limited CEAT CEAT tied up with Torino FC, one of the leading football clubs tied up with Torino CEAT in the Italian Serie A, for a period of two years, to expand its markets. in the European presence CEAT CRICKET RATING CRICKET RATING CEAT TORINO FOOTBALL CLUB CEAT Cricket Rating (CCR) is the first cricket rating to officially Cricket Rating (CCR) is the first cricket rating to officially CEAT for their performances in the cricketers and reward recognise CCR International The international and domestic cricket arena. best of the international the cricketers 2019 honoured Awards like Rohit Sharma, Jasprit Bumrah, Virat Kohli, Cheteshwar Pujara. Association with Sports with Association visibility during the biggest cricketing event in India. CEAT continued its ongoing partnership with Indian Premier with Indian Premier continued its ongoing partnership CEAT League as the ‘Strategic Timeout Partner’ driving higher INDIAN PREMIER LEAGUE the likes of Rohit Sharma, Ajinkya Rahane, Shubman Gill and the likes of Rohit Sharma, Ajinkya Rahane, association with it’s also renewed CEAT Kaur. Harmanpreet Rohit Sharma. CEAT entered into an association with Mayank Agarwal, a into an association with Mayank entered CEAT This endorsement makes young Indian Cricketer. promising which also has Mayank a valuable addition to team CEAT, BAT SPONSORSHIP SPONSORSHIP BAT 14 AnnualAnnual Report Report 2018-19 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 15
Royal Enfield Himalayan ABS CEAT Limited CEAT JBM CNG Bus Hyundai Verna Royal Enfield Bullet Trails Royal Enfield Bullet
New Santro Hyundai
Mahindra Pick Up Bolero Royal Enfield Classic ABS
Cleveland Cycleworks The Ace Deluxe Hero Destini Hero Hyundai Venue CEAT continued to strengthen its association with its association strengthen to continued CEAT its entry in leading to Global OEMs Indian and major OEM projects. multiple new New OEM Entries New OEM Campaigns Smarter CONNECT
Road safety is central to CEAT’s business philosophy and we strive to communicate the same through our campaigns.
16 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 17 #CEATSafetyBanner CEAT Limited CEAT Kumbh Mela in India attracts massive brings unique challenges which crowd major identified three along with it. CEAT issues at the Kumbh Mela – injuries, As a safety. and women’s control crowd brand that stands for safety on-road we decided to take a and off-road, step ahead and extend a helping hand. the #CEATSafetyBanner, introduced We an easy-to-use multipurpose safety device that transforms into a stretcher, a barricade and a changing room. CEAT SAFETY BANNER CEAT #CEATGripp X3 #CEATGripp Tyres #CEATSuperiorGrip ‘Kamla’, our new TVC aims at communicating the importance of in keeping the scooter superior grip tyres riders safe. The TVC showcases a riding her scooter woman progressive along with her kid, when all of a sudden, cow comes in her way. ‘Kamla’ – a rogue with their superior grip, help tyres, CEAT the rider stay safe. Campaigns The Gripp X3 brand campaign was generate consumer to created the benefits and promote awareness that has an ‘everlasting’ grip. of a tyre The campaign challenges customer likely is more belief that an old tyre to cause accidents. The campaign with emphasises that the Gripp X3 tyre (DCT) Dual Compound Technology a grip as good as a new tyre provides become old, thereby even when the tyres allowing the rider to have a safe drive on the road. CEAT GRIPP X3 CEAT CEAT SUPERIOR GRIP CEAT Awards & Recognitions Winning through Excellence
‘Great Place to Work’ - Ranked amongst Top 25 Manufacturing companies in India
IR Magzine Award - Best IR Team in the small to midcap category 2018
AVTAR Group & Working Mother Media - One of the 100 Best Companies for Women in India
British Safety Council’s ‘Sword of Honour’ - Manufacturing excellence at Nagpur Plant
Hyundai Partnership Award - Excellence in Customer Delight
18 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 19 CEAT Limited CEAT ET Innovation Award ET Innovation Award Kyoorius Design for Marketing & Brand Awards – Big elephant Awards Innovation - CEAT’s Innovation - CEAT’s for ‘CEAT Safety Grip’ for ‘CEAT media campaign on road safety on road Programme’ Inclusion Training Inclusion Training Year 2018 Year as ‘Tycoon of Tomorrow’ as ‘Tycoon for ‘Best Diversity and Entrepreneur of the Entrepreneur Enablement’ and Silver recognized as the Young as the Young recognized Mr. Anant Goenka chosen Mr. Programme for ‘Sales Programme - Mr. Anant Goenka - Mr. Awards - Gold for Best Awards Manufacturing Today Manufacturing Today TISS Leapvault CLO Forebs India - Forebs Committed towards a SAFER TOMORROW
Safety is of utmost importance to CEAT, for our customers as well as for our employees. We, therefore, invest well towards creating safer products for the customers and building safer work environment for the employees.
20 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
21 CEAT Limited CEAT These tyres are designed to provide designed to provide are These tyres a mix of comfort and safety at high have wide speed driving. The tyres intended for longitudinal grooves while the new aquaplaning resistance, generation compound is intended to grip. Their optimised superior provide pattern helps in lowering the noise, tread customers a peaceful and giving thereby comfortable drive. Ventilation at Bhandup plant improved at Bhandup plant improved Ventilation development at infrastructure through installed at Silencers were the shop floor. in noise Banbury RAM exhaust resulting by ~21 decibels. reduction SECURA DRIVE CEAT follows the environment follows the environment CEAT principle of ‘Reduce, Reuse protection and Recycle’, by adopting several to maintain ecological measures facilities its production balance around accidents’ at all ‘zero aiming towards its plants.
months from the release of the standard. of the standard. the release months from Bhandup plant was successfully certified with ISO 45001:2018, Standard for Occupational Health & Safety Management System, first in Indian tyre achieving it in a short span of 6 industry, safe ride without the fear of punctures, safe ride without the fear of punctures, the most common cause of which are two-wheeler accidents in India. These innovative tyres come with These innovative tyres technology to ensure resistant puncture and that customers enjoy a hassle-free PUNCTURE-SAFE TYRES
highest standard of health, safety and highest standard management. environmental Nagpur plant was awarded with the Nagpur plant was awarded of Honour’ by British coveted ‘Sword Safety Council for demonstrating GRIPP X3 Safety in Plants thus providing complete confidence and thus providing the lifetime safety to the rider throughout of the tyre. grip even when the first layer of the tyre grip even when the first layer of the tyre is worn out. This everlasting grip action wear, even up to 80% tyre is effective These tyres are developed with Dual are These tyres which provides Compound Technology, Tyre technology: Rolling Resistance, Grip and technology: Tyre Tread-wear. life and performance of the tyres, optimizing of the tyres, life and performance of parameters in the Magic Triangle the three We have built an ecosystem where designing, designing, where have built an ecosystem We validate the research field testing and extensive CEAT’s range of tyres undergo extensive quality extensive undergo range of tyres CEAT’s and grip control. endurance to ensure checks Safe Products Safe Products Driving towards a SMARTER TOMORROW
At CEAT, our driving force is working towards a smarter tomorrow, by investing in upgrading technological and R&D capabilities to deliver high- quality, innovative and customized products across categories. CEAT facilities are well-equipped with new simulation technologies for predictive testing, enabling better understanding of products.
22 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 23 ols CEAT Limited CEAT for machines after detailed risk assessment in energy Significant improvement of boiler convention by improvement evaporation ratio Enhanced engineering contr by SMS/e-mail and monitor through by SMS/e-mail and monitor through locations remote
• • Automation, digital, design thinking and product data analytics will help reduce development time, which will make and agile. the development efficient technologies developed in the Various of reducing last few years in the areas and noise, resistance rolling life will grip and tyre and improving development of accelerate the product for passenger, tyres Electrical Vehicle categories, two-wheeler and commercial for FY 20. which will be a key focus area manual tasks and help automate their business operations. monitoring 4.0, online temperature system, online utility parameter monitoring system, energy monitoring system and others to ease fault alerts predictive receive traceability, Digital pr
• ojects suchasMaintenance improve the experience of its business improve partners and simplify their day to day operations. Dealer portal is one such initiative which helps dealers register warranties and claims, check their financial transactions, view product with CEAT catalogue and place orders their time in which helps them reduce CEA R&D Centre at Frankfurt, Germany R&D Centre Research and Development (R&D) and Development Research R&D capability in the In our constant endeavour to improve noise, we focused grip, durability and of fuel efficiency, areas specially on developing simulation technologies, predictive testing capabilities and using novel materials and advanced raw material characterisation. • T hasextensivelyuseddigitalto DIGITAL INITIATIVES INITIATIVES DIGITAL The Design & Advance Engineering plays The Design & Advance we in ensuring that an important role quality products. deliver innovative and automation has The use of digital and development product also helped reduce approach time. The use of semantic with updated pattern bank has assisted Original for in developing new products Equipment (OE) and Replacement have elevated test facilities markets. We Flat by installing High Speed Uniformity, which and Semi Anechoic Chamber, Trac objective testing and has reinforced to meet timely development of products customer requirements. Smart Technology Technology Smart us to and units enables in our plants technology The simulation thus enhancing our capability better, products understand our tyres. future-ready of producing Striving towards a BETTER TOMORROW
Sustainability is a key business priority for CEAT with there being a clear transition towards greener mobility solutions worldwide. Our capabilities, culture and use of best available technology enable us to prepare for a better tomorrow and touch the lives of our stakeholders positively.
24 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 25 CEAT Limited CEAT SERVITIZATION Online buying and doorstep fitment Fleet Advisory Services
New investments in the areas of the areas New investments in raw testing and advanced predictive has resulted material characterisation edge over in significant technological also initiated we competition. Last year, projects multiple advanced research in collaboration and Ph.D. programmes and German Universities. with IITs in the areas approach Aggressive research/special of patent filing and a total of 46 patents has created projects cumulatively. and 51 design registrations CULTURE Innovation Customer Centricity Our approach to the future Our approach CAPABILITY Digital Analytics Design Thinking Better Tomorrow for Customers Customers for Tomorrow Better enabler a powerful to make innovation our aim is R&D, At CEAT have identified several We breakthroughs. to achive business tyre and nano materials for ‘greener’ new functional of grip, rolling meet stringent requirements compounds, which ensuring a ‘sustainable’ future. and noise, while resistance Corporate Social Responsibility Enriching Lives
At CEAT, we believe that it is our responsibility to uplift and foster strong relationships with the society we operate in. We are, therefore, committed to conducting our operations in a socially responsible manner. All our CSR initiatives are undertaken through RPG Foundation, a public charitable trust that operates 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, the project screened 1,67,328 people (including 1,17,182 truck drivers, 14,568 bus drivers and 35,578 beneficiaries from community and schools), through 1,895 eye camps and 244 days of at the Vision Centre. Under the project, 86,097 spectacles were distributed and 12,857 referrals were provided for severe cases.
The sixth edition of Travel Safe, starting from February 11, 2019 in Indore, targeted ~1,000 drivers for free eye check-up services under CEAT’s Netranjali programme. This edition’s prime focus is on the road safety of school children. As a result, CEAT is partnering with local authorities in areas close to schools to create maximum awareness around the initiative. 1,67,328 1,895 86,097 people screened eye camps conducted spectacles distributed
Women’s Empowerment We have undertaken several initiatives to empower women with skills and employment opportunities, thereby helping them gain financial independence and enhance their family incomes.
SWAYAM We imparted driving skills to women and helped them get licences to be employed as drivers in the transport sector. We trained them to drive taxis, school vans and two-wheelers to earn a livelihood. While 1,279 women across locations (728-two‑wheeler, 361 – three-wheeler, 250 – four-wheeler) enrolled in the driver’s training programme, 600 women completed their training for two-wheeler riding, 258 women completed training for three-wheeler driving and 199 women completed their training for four-wheeler driving. These women are in the process of procuring their permanent driving licences, post which they will receive placement support. The women were trained across Mumbai, Nagpur, Chennai, Delhi, Indore, Bhopal, Jaipur and other cities.
26 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 27 CEAT Limited CEAT As a part of the government’s National As a part of the government’s Digital Literacy Mission, 1,445 candidates (800 in Ambernath and imparted basic 645 in Nashik) were digital literacy training. Over 2,000 and will enrolled beneficiaries were complete the training by July 2019. In Panchmahal district in Gujarat, in schools were 2,200 children highly nutritious snacks provided the mid-day meal as before to reduce effort a proactive malnourishment. As a part of developing alternate livelihoods, this intervention also supported 60 trained to develop women who were these nutritious snacks and supply was This project them to the children. of undertaken jointly by all RPG Group Companies having facilities in Gujarat. expected to impact over 10,500 beneficiaries. In addition, 11 Rainwater Harvesting Systems were supported (Nashik – 3 units complete and 3 ongoing; Bhandup – 5 units ongoing).
• • As a part of the Bal Vikas programme, As a part of the Bal Vikas programme, attended workshops on 250 children yoga, art and craft, storytelling, etc. in Bhandup. 573 less-privileged youth were for training in various trades enrolled two-wheeler such as mobile repairing, etc. white goods repairing, repairing, locations. across Installation of seven water ATMs was initiated in FY 19. Installation of five units in Nashik is complete and installation of two units in Nagpur is ongoing. These installations are
• • • 670 government and teachers from municipal schools trained under the programme 114 in Halol candidates trained
880 adolescent children (460 girls 880 adolescent children and 320 boys) attended sessions in the Bhandup area. on healthcare included meetings The programme too. with parents
Community Development Community Development Education PEHLAY AKSHAR AKSHAR PEHLAY focuses on primary education, with emphasis on English speaking and The project out to 2,932 students The initiative reached to enhance employability. skills reading also Nashik. We and Bhandup), Halol and schools in Mumbai (Worli 26 across Nasik and Bhandup, across classrooms invested in developing 11 Pehlay Akshar government and municipal also trained 670 teachers from Halol. The programme the academic year across training sessions spread schools. This included three coaching sessions that focused on implementing the ‘Magic with weekly group principles in the schools. Classroom’ SANJEEVANI SANJEEVANI women in Bed Side of 719 less-privileged the training supported This programme with livelihood options them providing Assistant programmes, Care Assistant/Patient was in Halol. This training also trained candidates were 114 sector. in the healthcare in Gujarat (CEAT, having facilities of Companies jointly by the RPG Group supported KEC International and Raychem RPG). • The following initiatives were undertaken The following initiatives were as a part of Community Development: The Community Development project The Community Development project in focuses on holistic improvement quality of life, by working towards sanitation, clean drinking water, providing overall health and nutrition, and skilling/ among others. employability,
2,932 out across students reached and Bhandup), Mumbai (Worli Halol and Nashik
719 with livelihood women provided sector options in healthcare People Practices Nurturing Talent for a Smarter Organisation
CEAT has always made sincere, substantive and sustained efforts towards building an ecosystem that promotes the development and advancement of all its employees. During the year under review, CEAT was ranked amongst the Top 25 India’s Best Workplaces, Manufacturing by ‘Great Place To Work’ Institute for building a high-trust and high-performance culture.
ATTRACTING AND RETAINING TALENT We seek to engage and attract bright minds wherever we operate. We also want to enable our employees to develop their skills and potential to take themselves and our business further. We encourage our people to invest in learning throughout their career by providing multiple opportunities and platforms that fit their needs. The aim is to enable our employees to meet their career aspirations and perform successfully.
EMPLOYEE ENGAGEMENT HEALTH AND SAFETY we gain a better understanding of their expectations. We want our employees to feel that caring for their well-being is an integral part of our relationship with our people. We continually look for ways in which we can help them lead healthy lifestyles. We also make sure that our employees get to spend a lot of time with their families. The policies of five-day work week (for manufacturing), flexi workplace and work hours gives flexibility to the employees to manage The health and safety of our people is their work-life balance. paramount. We prepare our people as much as possible for the potential risks in our facilities. This preparation includes A motivated workforce is instrumental adherence to clear standards, education, to business success. By encouraging training, auditing and follow-up to continuous dialogue with our employees, reinforce accountability.
28 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 29 CEAT Limited CEAT Board of Directors Governed by an Able Leadership
3 7 4 9 2 5
6 11 1 8 10
1 H. V. Goenka 2 Anant Goenka 3 Arnab Banerjee Chairman Managing Director Chief Operating Officer Mr. H. V. Goenka is the Chairman of RPG Mr. Anant Goenka is the Managing Mr. Arnab Banerjee, currently designated Enterprises, one of the largest industrial Director of CEAT and a Member as the Chief Operating Officer of the groups in India, active in key business of the Management Board at RPG Company, was re-appointed as its segments such as tyres, infrastructure, Enterprises. He is also the former Whole-time Director for 5 years in information technology and other Chairman of Automotive Tyre May 2018. Mr. Banerjee comes with diversified segments, having an annual Manufacturers’ Association (ATMA). a vast experience and knowledge of turnover of about US $4 Billion. Born Mr. Anant Goenka has over 15 years FMCG & Paints sector and has more in December 1957, Mr. Goenka is a of experience during which he has than 25 years of experience having graduate in Economics and MBA from worked in CEAT, KEC International and worked in diverse industries at various the International Institute of Management Hindustan Unilever. Mr. Anant Goenka locations. Prior to joining CEAT Limited, Development (IMD), Lausanne, has been recognised by Forbes as the Mr. Banerjee worked with Berger Paints Switzerland and is presently on the ‘Next Generation Business Leader of the and Marico Limited. He joined CEAT Foundation Board of IMD, Lausanne. Year’ in 2017 and as ‘India’s 40 under as Vice President-Sales & Marketing in Mr. Goenka is a past President of the 40 Business Leaders’ by Economic November 2005 and later was elevated Indian Merchants’ Chamber, now known Times-Spencer Stuart. He was as the Whole-time Director of the as the IMC Chamber of Commerce instrumental in leading CEAT to win the Company in May 2013. At CEAT Limited, and Industry and is a member of the Deming Prize in 2017, one of the most Mr. Banerjee spearheads the Sales, Executive Committee of FICCI. He has prestigious global quality awards in the Marketing and Manufacturing functions been the Chairman of the Board of the world. Mr. Anant Goenka is an MBA and is responsible for driving revenue Company since 2013. from the Kellogg School of Management in Domestic, Exports & OE markets. and a BS (Economics) from the Wharton He is also developing CEAT as the most School, University of Pennsylvania. premium, dynamic and robust Brand.
30 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
31 CEAT Limited CEAT Vinay Bansal Punita Lal Pandit Ranjit V.
9 11 10 Mumbai and Petroleum Management from Mumbai and Petroleum Arthur D’Little, Massachusetts Institute of Development, US. Managing Director at General Atlantic Managing Director LLC - a leading private equity firm. Prior to this, he was Managing Director and Chairman of McKinsey & Company in India. He also served on a variety of bodies governments and regulatory Pandit has done MBA Mr. on policy. School, University Wharton from of Pennsylvania. Independent Director Vinay Bansal has experience in Mr. Indian Administrative Service (IAS), 1969 to 2005. from Maharashtra Cadre He has been part of Senior Management and Administration in State and Union Governments retired for over 35 years and in the Department ofas the Secretary Chemicals in the GovernmentIndia. of associated as a Bansal is currently Mr. consultant with Reliance Industries Ltd for over 14 years. He has represented Government of India in Joint Commissions Bansal has to several countries. Mr. in Science and Diploma done Master’s University, Allahabad from in French, Diploma in Business Management in Independent Director Independent than 30 years Lal has more Ms. Punita Marketing of experience in Strategy, Ms. Lal’s and People Management. was CEO for NourishCo last held role joint venture Beverages – a strategic and PepsiCo. group between the Tata – Director she was Executive Earlier, Beverages and a Marketing, PepsiCo Committee key member of the Executive Her work of PepsiCo Indian Beverages. disciplines, experience spans multiple has and she geographies and cultures including to her credit, many recognitions top 20 being chosen as one of India’s and Businesswomen by Business Today of the the Corporate Woman awarded organization. by the FICCI Women’s Year Indian Ms. Lal has done MBA from Institute of Management, Calcutta. Independent Director Pandit earlier served as Ranjit Mr.
Pierre E. Cohade E. Pierre Paras K. Chowdhary
8 7 position of President and Whole-time position of President time and he a reasonable within Director was also instrumental in turning around Chowdhary is one Mr. that company. industry of the few experts of the tyre in India. Independent Director K. Chowdhary has over 35 Paras Mr. years’ experience in senior management including as industry, positions in tyre of the Company the Managing Director than 11 years. Prior to joining for more the Company as the Managing Director, Business he spearheaded the Telecom July 1997 of RPG Enterprises from to December 2000. Earlier he was Limited employed with Apollo Tyres a junior from started his career he where the management position and reached group as Group CFO and Management CFO and Management as Group group Gupta has received Mr. Member. Board for his business recognitions numerous CFO of the acumen. He was awarded Special Commendation Award, the Year (Mergers & for Financial Excellence in 2001 by IMA Acquisitions Category) New Delhi. (formerly known as EIU), in Degree Gupta holds Honours Mr. and is Fellow B. Com; L.LB (Gen.) Member of ICAI and ICSI holding Third Rank and a Silver Medal in Company Final examination. Secretaries professional experience in business experience professional of and in all aspects management Finance, mergers and Corporate planning, etc. acquisitions, strategic with the RPG He has also worked ‘Employer of the Year’ in 2010 and 2011. ‘Employer of the Year’ startups and is a Senior Advisor to Leadership (CCL) for Creative Centre China. He serves as Chairman of the IMA CEO forum. Most recently, Cohade was the CEO of Triangle Mr. largest private tyre China’s Tyre, Cohade was also Mr. manufacturer. of Goodyear Asia Pacific. the President Under his leadership, Goodyear Asia recognition beyond its Pacific earned receiving numerous financial success, its product for awards third-party innovation, brand building, branded network and was named China’s retailing Non-Executive Director E. Cohade has lived and Pierre Mr. worked globally in four continents, building and leading multi-billion dollars businesses, in many cases after turning He is advising some them around. Mahesh S. Gupta Haigreve Khaitan Haigreve Atul C. Choksey
6 5 4 oversees all businesses of the Group oversees all businesses of the Group estate, textiles, which comprises real energy. cutting tools and renewable Gupta has about four decades of Mr. Independent Director Mahesh S. Gupta is Managing Mr. and at Ashok Piramal Group Director leading law chambers as an ‘Outstanding as an leading law chambers lawyer’ and ‘Eminent Practitioner’. 100 lawyers in India by India Business Law Journal (IBLJ) and is acclaimed by the corporates, industries, world’s and other securities laws matters. He is of various public listed on the Boards companies and often speaks at various industry events. He ranked amongst top financial institutions on a wide range of corporate matters, including corporate governance, corporate restructuring Executive Committee of the Firm which strategic for the firm’s is responsible and development. He advises growth and of directors companies, boards and heads the Corporate/M&A and Private Equity practice at the Firm. He is an elected member of the National Independent Director Khaitan is a Senior Haigreve Mr. Partner of Khaitan & Co, a law Firm Finance, Personnel, Micro and Macro and Macro Finance, Personnel, Micro Economics etc. of India. Mr. Choksey holds bachelor’s Choksey holds bachelor’s of India. Mr. Chemical Engineering from in degree Chicago Illinois Institute of Technology and also Management courses in Chamber of Commerce and Industry as Chamber of Commerce of Associated well as Deputy President and Industry Chamber of Commerce as the Managing Director of Asian as the Managing Director April 1984 to August 1997. Paints from of the Indian He was the President Paint Association and of the Bombay and was subsequently appointed as and was subsequently of Asian Paints Whole-time Director May 1979. He served from with effect Mr. Atul C. Choksey is currently the the Atul C. Choksey is currently Mr. Industries Limited. Chairman of Apcotex (India) Limited He joined Asian Paints in July 1973 as a Junior Executive Management, Calcutta in 1987. Management, Calcutta Independent Director Institute of Technology, Kharagpur in Institute of Technology, in 1985. Further, Mechanical Engineering of Indian Institute he did PGDM from At the same time, he also handles the time, he also handles At the same He supply chain of CEAT. integrated the Indian his graduation from completed Management Discussion and Analysis
About CEAT Limited CEAT, the flagship company of RPG Group, was established in 1958. CEAT is one of the largest tyre manufacturers in terms of revenue and is one of the fastest growing tyre company in India. Recently, CEAT became a $1 Billion Company and was recognised as one of India’s Top 25 Workplaces (Manufacturing) by the Great Place to Work® Institute.
CEAT produces best-in-class, high performance tyres for a wide range of vehicles, including tyres for 2/3 Wheelers, Passenger Vehicles and Utility Vehicles, Commercial Vehicles and Off-Highway Vehicles and produces over 37 Million tyres in a year. CEAT also manufactures and markets superior quality tubes and flaps. The Replacement, Original Equipment Manufacturing (OEM) and International Business segments accounted for 59%, 29% and 12% of CEAT’s revenue, respectively, in FY19.
Currently, CEAT has footprint in over 100 countries across the world. CEAT has plants in Nashik, Mumbai, Halol, Ambernath and Nagpur. With the upcoming unit in Chennai, CEAT will have six plants in India. Ambernath plant is undertaken by CEAT's wholly owned subsidiary. CEAT also has a manufacturing facility in Sri Lanka through its overseas joint ventures. CEAT is aggressively working on expanding its manufacturing capacities across product; categories for 2-Wheeler tyres in Nagpur, Commercial Vehicles Radial tyre plant in Halol and Off-Highway tyres in Ambernath while also setting up a greenfield facility for Passenger Car tyres in Chennai.
CEAT has over six decades of experience and has led the industry in innovation, product diversity and technology. CEAT has dedicated state-of‑ the-art R&D centres in Halol, Gujarat and Frankfurt, Germany. Built on the corporate ethos of reliability, dynamism and toughness, CEAT is committed to innovate, rebuild and help millions of vehicles travel safely.
32 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
33 (%) 6.8
FY 19 6.7 Limited CEAT
FY 18 7.1 110 Trillion. BCG estimates that this `110 Trillion.
FY 17 8.2 in the World Bank’s Ease of Doing Business Index Bank’s in the World th
FY 16 2018, moving up by 23 places. These positive developments on focus enhanced tax structure, by a formalised offset were short-term adverse impact of and reduced creation infrastructure (BCG), Group Consulting to Boston According demonetisation. 3.5 domestic consumption in India in the last decade increased to `31 Trillion times from by FY 28. number will touch `335 Trillion Source: The Central Statistics Office (CSO) Central Statistics Office The Source: Outlook tosteps courageous take to needs economy the ahead, Going to and push demand growth boost the investment environment will continue in FY 19, GDP growth robust the next level. India’s sectors, better demand driven by the services and infrastructure conditions, settled GST implementation, capacity expansion continuing investments in infrastructure, the growing from resulting policies undertaken and improved of the reform positive effects off-take. credit India ranked 77 In the last five years (FY 15 - FY 19), the average GDP growth GDP growth FY 19), the average five years (FY 15 - In the last environment macro-economic been at 7.7%. The rate has has been contained, fiscal Inflation significantly. has improved investment on the right trail and foreign consolidation has been Both headline Consumer after year. year flows have been growing Wholesale Price Index (WPI) inflation Price Index (CPI) and 2019. March in respectively, 3.2%, and 2.9% to increased WPI inflation fell to 4.7%, core CPI inflation while core However, during Moreover, month. the during 2.5% to increased marginally Governmentthe years, few last the various undertaken has segment every for allocations budgetary equivalent and reforms sustainable and growth all-inclusive simplify to population the of development of the economy. rate India GDP growth 6.1 (%) 3.6 1.7 1.9 1.5 0.5 1.4 2.5 4.8 2020 Projections 3.3 1.8 2.3 1.3 1.0 1.2 2.2 4.4 6.3 2019 3.6 2.2 2.9 1.8 0.8 1.4 2.6 4.5 6.6 2018 Actual World Output World Advanced Economies US Eurozone Japan UK Other Advanced Economies Emerging Markets and Developing Economies China Particulars Indian Economy five-year a recorded 19 FY for rate growth economic Indian The low of 6.8%, on the back of a consumption and investment slowdown. Despite FY 18 being filled with external exposures arising out of rising oil prices, trade wars between major global trading partners and monetary tightening in the US, India major economy. fastest growing outshone as the world’s Source: The International Monetary Fund (IMF) Source: Global growth Global growth Outlook 3.6% in down from The IMF estimates world output to slow back to 3.6% in normalising 2018 to 3.3% in 2019, before because of downward has been revised 2020. Global growth endorsed in the US and increase of tariff the negative effects in the second half China, and weaker momentum in Europe is the growth of 2018. A major risk to the global economic is expected to pull intensification of trade wars in 2019, which than further growth (GDP) Product Domestic Gross the down In addition to the US and China major economies projected. by affected indirectly such as Germany and Japan may also be the trade war. half of 2018 after strong growth in 2017 and early 2018, mainly in 2017 growth half of 2018 after strong advanced economies. emanating from on account of factors remained 4.0% in 2017, global growth After expanding to half of 2018, only to significantly at 3.8% in the first strong to the International According to 3.2% in the second half. drop by 3.6% in the global economy grew Monetary Fund (IMF), factors, multiple by down weighed was rate growth The 2018. in financial markets, heightened including weaker sentiments issues the US & China, macroeconomic trade tensions between the volatility in crude prices. However, and in Argentina & Turkey tax back of on the pace its fastest at economy expanded US and sales their scaled US the in corporations Global reforms. well-below-normal interest while central banks exercised profits, rates. Global Economy the second slowed down in activity markedly Global economic Management Discussion and Analysis
Global Automobile Industry Outlook The global automotive industry has evolved significantly over the Positive forecasts in private consumption and corporate past decade. Growth in digital technologies, change in customer investment, fuelled by rising incomes and low interest rates sentiment and general improvement in economic health have are expected to drive growth in the Passenger Vehicle and played a vital role in this evolution. OEMs and other key industry Commercial Vehicle segments in most countries. The growth players are taking note of this evolution and investing heavily in the might be encouraged further due to the improving economic and non-commercial business practices of manufacturing vehicles. strong financial conditions across all regions. The confluence of various technologies and industries with the automotive The global vehicle market was virtually flat in 2018, with around space is expanding the global automotive industry and creating 94 Million vehicles having been sold. China's car market numerous opportunities in the market. declined following a combination of regulatory tightening to rein in shadow banking and an increase in trade tensions with the Indian Automobile Industry US, which sapped confidence. The euro area economy lost The industry in the second half of FY 19 was affected as liquidity more momentum than was expected due to the lingering effects issues arising out of Non Banking Finance Companies (NBFC) of the disruption to car production in Germany caused by the crisis, high fuel prices, poor sentiments and high interest rates introduction of the new Worldwide Harmonised Light Vehicles hurt demand. Test Procedure (WLTP) emission standards. Investment dropped The Indian automobile industry registered a growth of just in Italy, threatening the country with recession. 6.26% by producing 30.9 Million vehicles in FY 19 as against 29.1 Million in FY 18. Key Trends in the Global Automotive Industry Technology-driven trends have been transforming the way in Passenger Vehicles which automotive industry players are reacting to the changing Passenger Vehicles sales grew by 2.70% in FY 19 over behaviour of consumers and building partnerships. Here are FY 18. Within this segment, the sale of Passenger Vehicles, some of the emerging megatrends that are impacting operations Utility Vehicles and Vans grew by 2.05%, 2.08% and 13.10%, in the global automotive industry: respectively, in FY 19 over FY 18. Autonomous Driving 2-Wheelers Though self-driving technology is not yet predominant on the 2-Wheeler sales registered a growth of 4.86% in FY 19 over streets, it is one of the most exciting prospect for the future. FY 18. Within the 2-Wheeler segment, Scooters declined by From minimising accidents caused due to lethargy to making 0.27%, whereas Motorcycles and Mopeds grew by 7.76% and personal travel hassle-free, the benefits of this technology 2.41%, respectively, in FY 19 over FY1 8. are numerous. Commercial Vehicles Connected Vehicles The overall Commercial Vehicles segment garnered a growth of Connected vehicles are those that use diverse communication 17.55% in FY 19 compared to FY 18. Medium & Heavy Commercial technologies to communicate with the driver, other vehicles on Vehicles (M&HCVs) increased by 14.66% and Light Commercial the road [Vehicle-to-Vehicle (V2V)] and the roadside infrastructure. Vehicles (LCVs) grew by 19.46% in FY 19 compared to FY 18. This technology can improve vehicle safety, enhance vehicle efficiency and reduce commute times. Tractors The Indian tractor industry witnessed a double-digit growth for Ride Sharing the third consecutive year in FY 19. However, the pace was the There is a significant transformation taking place in people’s slowest in the last three years. In FY 19, Tractor sales grew by perception of automobile travel. This could have an impact on 10.24% at 878,476 units compared to 20.52% in FY 18 and ride sharing as well as on the automotive industry and public 15.74% in FY 17. Tractor sales, which mirrors rural sentiment, transport. The global ride sharing market is mainly driven was impacted due to erratic rainfall, coupled with delayed by declining preference to own a vehicle and rather use it as sowing and low production of rabi crops in the last fiscal. a service. Ride sharing offers the users a sense of owning a (Source: Society of Indian Automobile Manufacturers (SIAM)) vehicle at a much lower cost and hassle. Therefore, consumers are preferring ride-sharing services. Interim Budget 2019-20 highlights The 2019-20 Interim Budget declared a tax exemption for income Electric Vehicles up to `5 Lacs. Therefore, consumer spending is expected to There has been a gradual increase in the number of electric receive a boost. As middle-income families will now have more vehicles across the world and more models are expected to be access to liquid money, their spending power is expected to mass produced in the coming years. Several industry experts increase, thereby benefitting automobile companies. and professionals have predicted that electric cars will soon be more cost-effective and popular than diesel and petrol models, The Budget also announced a direct benefit transfer scheme for owing to their eco-friendly nature. Therefore, the global market for small and marginal farmers, which will assist them with structured electrified transport is starting to pick up speed. The magnitude income support. Around 72% farmers are in this category and the of government subsidies, expansion of the charging network number is likely to increase to 90% by FY 25. The farm income and falling battery prices (due to technological progress) are the support of `6,000 per annum is positive for the 2-Wheeler and key growth drivers of the electric car market. tractor industries as the increased purchasing power in the hands of the poor is likely to benefit automobile companies.
34 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
35 20,000 Crore during this during `20,000 Crore CEAT Limited CEAT Indian Tyre Industry Indian Tyre volume of a production market reached The Indian tyre industry faced During the second half of FY 19, the domestic tyre due to the NBFC crisis. The liquidity crunch financing problems limited financing options for heavy vehicle owners. provided of the industry was also affected and profitability The growth insurance and fuel raw material prices, increased by increased there However, slowdown. industry automobile with along prices, with a nearly 11% recorded growth revenue was a still a robust on a y-o-y basis to `63,000 Crore. in revenue growth capacity additions (partly Amidst continued investments towards being debt funded) and the liquidity position, capitalisation and expected to remain coverage indicators of the industry players are comfortable, largely supported by the stable earnings and healthy available with most of the players. In the coming cash reserves KIA brands such as MG Motor, years, global automobile three will begin setting up a manufacturing base in Motors and Citroen period. 192 Million units in FY 19, making it the fourth largest in the world in the largest fourth the making it FY 19, in units 192 Million radialisation of tyres, and the US. Increasing after China, Europe consumer especially in buses and trucks along with a growing to According market. tyre Indian the driving currently is base, by 7-9% over demand is estimated to grow ICRA, the India tyre the next five years (FY 19-23) supported by favourable outlook is expected The industry for the domestic automotive industry. of around to see a capital expenditure Growing vehicle population, coupled with the emergence of new the emergence of coupled with vehicle population, Growing in Europe. demand tyre to drive expected is technologies, tyre tyre segment in European is the dominating Passenger Vehicle is expected to continue its dominance market, and the segment as well. during the coming years market is the African tyre report, Research to TechSci According to $ 7.50 Billion $ 5.57 Billion in 2017 from to grow forecasted of 5.53%, owing to the rising a CAGR by 2023, registering sales in the region. Vehicle Commercial Passenger Car and major per capita across power and GDP purchasing Increasing tyre replacement growing the to addition in economies, African As the African region. sales in the likely to lift tyre market, are is focus on expanding is majorly import driven, there market tyre sales. boosting tyre the distributor and dealer network for demand radialisation and the growing tyre increasing Moreover, expected to drive demand and used cars are for Chinese tyres in Africa in the coming years. for tyres sales in 2018, with China's automobile market saw slow decades. the first time in three for predicted growth zero lack of consumption incentives and Slowing economic growth, of the growth have hindered restrictions tightened car-buying ongoing in China. However, automobile market the domestic and noteworthy areas development in both urban as well as rural the boosting gradually are infrastructure road in improvement tyre well as China’s expansion of the automobile sector as 2020, from that stated has Transport of Ministry China’s market. (electric or hybrid) all buses in large cities must be ‘new energy’ used tyres of style the on influence large a have will This designs. and market opportunities creating on these large fleets, thereby demand. increasing
According to the European Tyre & Rubber Tyre to the European According Association (ETRMA), the performance of the Manufacturers’ in 2018 was stable, with a positive growth industry tyre European sector tyre agricultural While the (9%). replacement truck tyre for to 2017. The Original compared decrease a 4% registered while the of 4% this year, Equipment market saw a drop positive market witnessed a more Replacement consumer tyre Withperformance. on number of automobiles the increasing has also increased. the demand for tyres roads, the European According to the TechSci Research report, the US tyre market the US tyre report, Research to the TechSci According at to grow $ 52 Billion in 2017 and is forecasted stood at around $ 68 Billion by 2023. The growth a CAGR of over 4.80%, crossing will mainly be attributed to the expanding vehicle fleet and growing With ongoing and various the country. in industry construction the US is expected to witness planned construction projects, transformation. This will boost the developmental infrastructure country, the across sectors various in construction activities and driving the automobile sector in the coming years. thereby of a well-established network presence the widespread Further, sales in the tyre of dealers and distributors is expected to propel have and rubber products domestic market. The imports of tyre US the between war tariff escalating the amidst increasing been and China. Passenger Vehicles are expected to hold the largest share of expected to hold the largest share are Passenger Vehicles also likely sales. They are due to their increased demand tyre levels in developing to be accessible owing to the rising income sales in enhance tyre nations. These two factors will further largely sales are tyre Motorcycle the Asia-Pacific markets. in the Asia-Pacific developing areas focused in the fast-growing used as low-cost substitutes for are motorcycles where region, passenger vehicles. The North American and European markets have registered an markets have registered The North American and European to enjoy a strong outstanding CAGR in the past and continue a rise in sales and position in the global market, registering that Passenger in exports. By 2020, it is forecasted increase sales would reach Vehicle and Light Commercial Vehicle in demand is resulting the number of Electric Vehicles in Growth material new performance. Consequently, for advanced tyre to minimise rubber, development, especially new synthetic functions, such as fuel efficiency, major tyre between trade-off critical. noise, has become more largest and fastest growing tyre market. Three of the world’s of the world’s Three market. tyre growing largest and fastest China, India and Japan. located in markets are four largest tyre will be accountable for more region By 2023, the Asia-Pacific gains. demand of the global tyre than two-thirds about 3.7 Million units in Europe, 16.9 Million units in Western and 4.6 Million units in EasternEurope. Central Europe The Asia-Pacific region is expected to continue as the world’s world’s the as continue to expected is region Asia-Pacific The a volume of 3.1 Billion units in 2018. In value terms, tyre sale is sale tyre terms, In value 2018. in 3.1 Billion units a volume of population, rising by Driven year. this 4.9% by grew to projected in disposable changes and increase urbanisation, lifestyle of consumers worldwide has power incomes, the purchasing last few years. significantly over the increased Global Tyre Industry Industry Global Tyre market reached the global tyre Group, to the IMARC According Management Discussion and Analysis
India and rolling out more than a dozen models as they seek to Imports capture share in India’s Passenger Vehicle market. The tyre imports had declined in the last one year following the imposition of the Anti-dumping Duty (ADD) on the import of Production new Chinese Truck and Bus Radial (TBR) tyres for a period of In the last few years, the movement in tyre production and sales for five years, effective from September 18, 2017 and the increase the OEM market have been in line with the automobile sales for the in customs duty on Passenger Vehicle by 500 bps to 15%, period. Both domestic and export demand for tyres is expected effective April 1, 2018. This has benefitted the domestic players to remain robust on the back of strong growth prospects for auto as the large capacities added in recent years are now being OEMs as well as the stable replacement market. effectively utilised.
Tyre Production (Nos. in Million) Tyre Import (`in Crore) 192 178 3,336 3,290 167 3,165 3,115 152 146 129
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 16 FY 17 FY 18 FY 19
Source: The Automotive Tyre Manufacturer’s Association (ATMA) Source: The Automotive Tyre Manufacturer’s Association (ATMA)
Exports Raw Material Trends According to the Automotive Tyre Manufacturers Association Natural Rubber (ATMA), tyre exports from India have been witnessing robust The world consumption of natural rubber is likely to slow down growth in the last three years and crossed `12,000 Crore during in 2019 on account of estimated lower global economic growth, FY 19 from `11,180 Crore in FY 18, `9,659 Crore in FY 17 and trade war concerns and geopolitical issues. Emerging economic `8,825 Crore in FY 16. trends, a strong Bollar and crude oil outlook are also weighing negatively on the commodity. Indian-manufactured tyres are being exported to more than 100 countries in the world, including the US and European countries. The world production of natural rubber is likely to grow faster The US is the largest export destination for Indian-manufactured at 6.6% to 14.844 Million MT in 2019 compared to the 4.3% tyres, accounting for 13% of the total export turnover, whereas increase preliminarily estimated for 2018. While the overall Germany is the second-largest market with more than 7% share. average annual yield per hectare is expected to remain still due However, according to ATMA, the high import duty of natural rubber to unfavourable rubber prices and climatic stress, there would and the reduction in the export obligation period against import from be a considerable expansion of the mature area, in varying 18 months to 6 months are stumbling blocks to tyre exports. degrees across countries.
Tyre Export (`in Crore) Globally, natural rubber production went up by 1% in 2019 over the previous year, whereas consumption increased by 4%. The International prices have seen an increase in the range of 12-15% in the last few months partially on account of increase in crude oil prices and export restrictions by South-East Asian countries. In India, natural rubber production dipped by 7.5% 12,890 11,180 9,861 9,795 over FY 18 while consumption increased by 9%. Sentiments over 9,659 8,825 the general health of the Chinese economy and the looming trade war between the US and China kept global rubber prices muted. Price volatility recorded in FY 19 was the lowest in the past five years. Natural rubber prices in India averaged at `126 per kg in FY 19 as against `130 per kg during FY 18.
Carbon black FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Carbon black is an important supporting material and filler in Source: The Automotive Tyre Manufacturer’s Association (ATMA) rubber products, both in the tyre and non-tyre segments, constituting 25% of the product by weight.
36 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
37 CEAT Limited CEAT CEAT’s focus on R&D will help it to close the technology gap with focus on R&D will CEAT’s Germany is at Frankfurt, R&D centre industry leaders. The CEAT journeyits on milestone achieved another customer enriching of innovation. experience through Specialty Tyres CEAT decided to merge CEAT During the year, on by the Board Limited (CSTL) and the scheme was approved Business Review Business brands fastest-growing and respected of the most one is CEAT strategic focus areas Company’s market. The in the Indian tyre Commercial tyre, Vehicle Passenger tyre, include 2-Wheeler business tyres segments and Off-Highway tyre Vehicles markets. In the last few years, CEAT and sales to emerging despite a challenging profitability has continued to maintain revenue net consolidated a reported it 19, FY For environment. by 8% y-o-y. growing operations of `6,984.51Crore, from capacity to cater to the increasing its production is building CEAT working is CEAT plans. expansion capacity through demand plant in Nagpur, for a 2-Wheeler tyre on capacity expansion Vehicle Halol, Passenger in plant tyre Radial Vehicle Commercial plant in Ambernath. tyre in Chennai and Off-Highway plant tyre Passenger 2-Wheeler, strategic drivers include key future CEAT's segments. Revenue contribution tyre and Off-Highway Vehicles significantly over the years, has increased focus areas these from stronga has laid 18. CEAT FY in 48% to FY 10 in 20% from marketing and branding of its products. emphasis on effective has developed creative CEAT competitively, position its products To and consumer insights ad campaigns based on extensive research programmes.and has also invested in innovative marketing April 3, 2019. 10,000 Crore for its `10,000 Crore 19,000 Crore to the to Crore `19,000 Pradhan Mantri Gram Sadak Yojana (PMGSY), under which the which under (PMGSY), Yojana Sadak Gram Mantri Pradhan has tripled. roads construction of rural Interim Budget 2019-20 highlights Interim Budget 2019-20 During FY 19, prices rose mainly due to increase in petroleum in petroleum mainly due to increase rose 19, prices During FY black eased of carbon price. Overall availability crude oil mainly due to weak demand in China. out during FY 19 planned by have been capacity expansions Domestically also, capacities being set up by new besides all major manufacturers, largely stable players. With expected to remain this, prices are during FY 20. The Government’s decision to leapfrog to the BS-VI decision to leapfrog The Government’s BS-IV by 2020 will be a the current from emission standards who need manufacturers game-changer for both OEMs and tyre to demonstrate agility in adapting to a volatile market situation. expensive. Diesel vehicles BS-VI compliant vehicles will be more see a sharp increase will and economy-segment motorcycles some time. away for buyers may keep which in price, increased and regulations stringent market, overcrowded An investment in both cost and technological compliance with the likely to pose a major challenge. are new emission standards strong in FY 20. Shortening ownership cycles of new cars, cycles of ownership 20. Shortening in FY strong participation of organised players, which is bringing in credibility are fuelling and consumer confidence and access to financing and acceptance of the used car market. As the the growth it is expected to have a and evolves structurally, industry grows sector. positive impact on the tyre The growth outlook for the auto industry continues to remain outlook for the auto industry continues to remain The growth Outlook The Government of India has decided to shift to Bharat Stage VI for various category emission standard (is equivalent to Euro-VI) With of the introduction the vehicles by April 1, 2020 directly. diagnostics (OBD) become mandatory for new norms, on-board all vehicles. The Government is thinking of tightening the Corporate Average The Government is thinking of tightening the Corporate Average FY 23 to compel car Fuel Economy (CAFE) norms for FY 22 or in electric and hybrid vehicle more and SUV makers to invest technology. smooth rollout. The three-year scheme will be implemented from scheme will be implemented from The three-year smooth rollout. 5 Lac 3-Wheelers, April 1 and will support 10 Lac 2-Wheelers, 55,000 4-Wheelers and 7,000 buses. On February 28, 2019, the Union Cabinet approved the second approved On February 28, 2019, the Union Cabinet Electric & Hybrid of Manufacturing and Adoption Faster of phase in India and allocated (FAME-II) Vehicles Key Announcements The Budget also focused on improving connectivity and The Budget also focused on improving in the North Eastern states of India. developing infrastructure industry as India is This step will be a boon to the Indian tyre and the North East highly deficient in natural rubber production shortfall. India holds immense potential to meet this The Interim Budget allotted a sum of sum a allotted Budget Interim The Management Discussion and Analysis
FY 19 Revenue Breakup by Product (%) Capacity Expansion CEAT increased its capacity in the Commercial Radial Tyre category to 9.6 Lacs tyres per annum at Halol. The new 4 Commercial Radial Tyre capacity was commissioned in FY 19. 7 CEAT is also setting up a greenfield Passenger Car Radial 32 tyre plant of 96 Lacs tyres per annum, near Chennai, with an 14 Truck and Buses estimated investment of approximately `2,000 Crore. CEAT is 2/3 Wheeler also increasing its 2-Wheeler tyre capacity at Nagpur by 170 LCV & LM Lacs tyres per annum. Both these projects are expected to be 12 Passenger Car/ commissioned in FY 20. These projects are expected to be Utility Vehicles ramped up over 18-24 months. Farm 31 Speciality The total investment in capacity expansion is `3,500 Crore, including the amount already incurred on the Halol Commercial FY 19 Revenue Breakup by Market (%) Radial Tyre expansion, with the remaining amount to be spent over the next 3-4 years. These expansion projects will be funded by a combination of internal accrual and debt. These capacity 12 enhancements, will enable CEAT, increase market share in the key focus category of Commercial Radial, Passenger Car / Utility Vehicle Radial and 2-Wheeler tyre categories. 59 29 Exports OEM Replacement
• Strong distribution network • Low market share in commercial categories • Strong brand equity in Two wheeler • Sub scale manufacturing plants • Strengthened association with brand s W and safety th e g ak n n re e • Strong balance sheet t s S s • Culture of collaboration and transparency SWOT Analysis
• India growth in rural and semi O • Competitive intensity in Two urban markets p Wheeler p s o t r a • Value play in developed markets tu re • Increasing footprint of global ni Th ties players in India • E-Commerce and new business models • Commodity price fluctuations
International Business CEAT is one of the major exporters among India’s tyre CEAT’s product series in the Passenger Car Winter, Summer, manufacturers, selling its products to over 100 countries across All-Season, Ultra High Performance (UHP) and Van categories the globe. Geographically, the Company has a stratified export launched in Europe have met the stringent performance market divided in seven clusters. This division has helped it requirements of European markets and have been well accepted better understand customer needs and design market-specific there. CEAT achieved yet another milestone this year by products. CEAT has consolidated its position in Bangladesh and developing its first 19-inch and 20-inch UHP tyres with high rim Sri Lanka by forming Joint Ventures (JV) with strategic partners. diameter and low aspect ratio. With this range of tyres, CEAT’s presence in Europe’s niche market segments such as Germany CEAT’s main growth driver categories have been 2-Wheeler, will increase. CEAT is therefore poised to become one among Passenger Car Radial and TBR tyres. CEAT’s main focus the global market leaders with its high-range premium products. continues to be European markets where it is expanding its footprints. CEAT has not only increased its depth in several countries but has also entered 9 new countries in FY 19.
38 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 39 CEAT Limited CEAT
CEAT undertook a focused CEAT improving towards approach the footprint of exclusive in key geographies stores that account for a bulk of sales. Passenger Car tyre CEAT adopted a 360-degree adopted a 360-degree CEAT take distribution to approach retain to the next level. To competitive advantage against entry into distribution by competitors, CEAT leveraged technology to service at monitor and ensure the subdealer level.
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300+ 3,400+ Dealers Adoption of the dealer portal was driven to develop a higher level of engagement with the channel partners. Bulk of the transactions have now shifted to this medium and of the orders almost two-thirds the through online are received dealer portal. Online warranty registration Online warranty registration and complaint resolution for consumers have been the dealer enabled through in higher portal, resulting level of engagement with end consumers and reducing service to the time required consumer complaints. 400+ Multi-brand Outlets and shop-in-shop concepts (CEAT Shoppes Exclusives (CEAT Service Hubs) Replacement Business Highlights Tyre and CEAT Management Discussion and Analysis
Technology and R&D CEAT has proved its technological prowess and developed CEAT has been focusing on new and innovative materials and more than 58 new products across various categories and processing, and breakthrough product development. In addition geographies globally in FY 19. This has significantly contributed to its plants in various regions across India, CEAT has a R&D to CEAT’s profitability and growth, resulting in approx. 20% of centre at Halol and a newly opened CEAT European Technical CEAT’s revenue from new products. Centre (CETC) in Frankfurt, Germany, which plays a key role in meeting the challenging requirements of matured markets such Risk Management as Europe. In recent years, CEAT has taken several strides in new The risk management process at CEAT begins with the development projects, adding several domestic and international identification of risks and an assessment of their impact. OEMs to its portfolio and various innovative solutions for which, The assessment is based on past trends and future projection. in the last few years alone, CEAT has filed several patents. Thereafter, ways to mitigate these risks are identified and implemented when necessary. Risks, once identified, are CEAT’s R&D way of working is well aligned with its Total Quality periodically monitored, along with emerging risks. Management (TQM) philosophy and activities are carried out based on a five-year rolling roadmap. CEAT aligns its strategies Risks and their mitigation with its vision and develops newer technologies keeping in • Competition mind future requirements. New investments in the areas of Rising competition from domestic players and Chinese predictive testing and advanced raw material characterisation imports are impacting profitability. have resulted in significant technological edge over competition. Various technologies developed in the last few years in the areas Mitigation - CEAT is insistent on channel expansion, enhanced of reducing rolling resistance, reducing noise, and improving grip after-sales services and superior quality of products and and tyre life will accelerate the product development for Electric warranty offered on them. CEAT is challenging both domestic Vehicle, Passenger Car, 2-Wheeler tyres and Commercial and foreign players with its deep domain knowledge, along Categories, which will be a key focus area for FY 20 development. with technology prowess, branding and reach. Moreover, it has long-standing relations with OEMs, which helps CEAT cut Design and Advance Engineering played an important role through the competition. CEAT is focusing on sales in profitable to ensure CEAT delivers innovative and quality products. segments, developing capacities for new products and The use of digitisation and automation has helped reduce entering new markets under premium segments to increase product development time. The use of a semantic approach with market share. an updated pattern bank helped develop new products for OE and replacement markets. We elevated test facilities by installing • Radialisation in the TBR tyre segment High Speed Uniformity, Flat Trac and Semi Anechoic Chamber, Increase in the TBR tyre segment may impact volumes and which have reinforced objective testing and timely development result in a degrowth of the bias segment. of products to meet customer requirements.
40 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 41 CEAT Limited CEAT Institute for building a high-trust, ® Identified MURI (fatigue) projects and implemented measures and implemented measures Identified MURI (fatigue) projects in all plants for fatigue reduction to plants all across programmes wellbeing health Arranged amongst the employees awareness health create Management Achieved ISO 14001:2015 (Environment System) Certification for all manufacturing plants consumption in freshwater to reduce Implemented projects manufacturing plants. The Halol, Nashik and Nagpur Plants Plants Liquid Discharge’ ‘Zero are waste generation hazardous to reduce Incorporated projects in manufacturing plants Carried out occupational health risk assessment Carried out occupational health in all plan and implemented health risk mitigation manufacturing plants for all employees, Conducted periodical medical examination including contractor employees
• • principle of ‘reduce, protection follows the environment CEAT to measures several adopted has CEAT recycle’. and reuse facilities. its production maintain ecological balance around was involved in the following environmental CEAT initiatives: protection • • • Human Assets Aspiration Led, (Challenger, values of C.A.I.R.O. The CEAT Quality Based Result Obsession, Openness) and Integrity, continues its Management define its way of working. CEAT journeyof ‘Making Company Purpose in living the of innovation Every Day.’ Mobility Safer & Smarter. was ranked amongst CEAT During the year under review, Manufacturing 2019 by Best Workplaces, 25 India’s the Top Work Place To the Great CEAT has implemented British Safety Councils Health and Safety Councils Health Safety British has implemented CEAT achieved plants and System in all manufacturing Management of Honour’ for its Nagpur Plant in ‘Sword British Safety Council’s in FY 18. FY 19 and Halol plant certified by the ISO are of CEAT All manufacturing plants 45001:2018 standard. Occupational Health occupational illness cases’ and ‘zero to have aspires CEAT occupational to reduce efforts thus, engages in cross-functional maintains Occupational Health Centres CEAT health hazards. CEAT Further, round-the-clock. operated by professionals and for at all its plants ambulances and first-aid facilities provides who get periodic its employees, including contract employees has put in place as a process medical check-ups done. CEAT, the following occupational health measures: • • Environment high-performance culture. We are committed to leadership to committed are We culture. high-performance fect profit fect profit e spread across various international currencies. various international currencies. across e spread - CEAT has been strengthening supplier has been strengthening - CEAT - CEAT is converting its Truck & Bus bias tyre & Bus bias tyre Truck is converting its - CEAT Revenues ar Incr Fluctuating raw material prices can af Fluctuating raw material prices Incr Therefore, CEAT’s net expenses and any future investment future any and expenses net CEAT’s Therefore, to fluctuations in or other income may be vulnerable exchange rates. Currency risk Currency Cyber security risk margins considerably. Raw material price volatility impact profit margins. impact profit High investment risk – CEAT is periodically doing an assessment of any Mitigation – CEAT and detective and taking preventive to its system cyber risks External consultants is also to mitigate it. Help from measures cyber-attacks. systems from CEAT being taken to secure Mitigation – CEAT is carrying out a sensitivity analysis and is carrying Mitigation – CEAT planned in a being are Investments thereof. periodic review phased manner. Mitigation – CEAT has established a robust currency hedging currency robust a established has – CEAT Mitigation fluctuation and is constantly from strategy to safeguard this concern. evaluating derivatives to address relations to build mutually beneficial long-term associations. relations supplier base to a wider continues to explore Besides, CEAT ones. on the current dependency reduce capacities into non-truck segments that have higher demand. that have higher into non-truck segments capacities penetrating the overseas markets to fully The focus is also on its radial is also increasing CEAT capacity. utilise its bias tyre increasing the to leverage new projects capacity through radial demand.
safety training to recruits and periodic training sessions for all sessions periodic training and to recruits safety training has adopted employees, including contract employees. CEAT (BSC) Five Star Occupational Health British Safety Council’s its own benchmark to as a System Safety Management and for risk elimination at its has an agile approach systems. CEAT worksites with the latest safety measures. CEAT aims at having ‘zero accidents’. This has led to providing accidents’. This has led to providing aims at having ‘zero CEAT Safety Environment, Occupational Health and Safety Environment, for all a safe working environment creating works towards CEAT worksite accidents its employees. It is committed to reducing and and occupational illnesses by following a proactive takes CEAT risks. and hazards identify to approach systematic to contractors and employees training by measures appropriate it functions on the principle Moreover, follow safety measures. and complies with all instead of control’ of ‘pollution prevention laws. environmental
• • ITsystemsanddata. ofattacksonCEAT ease inthreat • may andinvestments expenditure capital ease inplanned • Management Discussion and Analysis
development and set up a robust process for CXO succession With a firm belief in nurturing its internal talent, this year, CEAT planning. A comprehensive leadership development programme selected and trained interested shop floor associates in Halol called INSPIRE was designed in-house and launched this year, and Nagpur plants to take on frontline sales role under its covering leadership teams of sales and manufacturing and Machine to Market programme, Saamarthya. This programme eventually all people leaders. Next year, CEAT will be launching helps CEAT build a talent pipeline for its frontline sales position, a few innovative and powerful initiatives to make CEAT an one of the most critical roles for CEAT. aspirational employer. This year, CEAT embarked on the journey of being a truly diverse Long-term settlements signed in CEAT’s legacy plants this year and inclusive workplace. As a part of this, CEAT is conducting is the biggest testimony to the trust-based culture of CEAT. sensitisation sessions on disability with its people and making Both the settlements happened in historic periods of time, the necessary infrastructure modifications to suit the needs of requiring minimum number of meetings and zero production loss. People With Disability (PWD) in spirit. CEAT’s hiring strategy has been made in line with its purpose of creating a diverse and In its endeavour to work the ‘smart’ way, CEAT built an Artificially inclusive workforce. Intelligent Chat-bot called ‘Sherlock’ to be the one-stop solution for all employee grievances. Sherlock is built to converse like a CEAT believes in providing a work environment that is conducive human and will get smarter with time. to the wholesome development of its employees whereby, CEAT tries to unleash employees’ potential not just as professionals In a changing marketplace, organisations have to be able but also as the individuals that they are beyond work. Last year, to make changes quickly to adapt to customer needs and CEAT made its annual talent event, CEAT GOT Talent 2.0, competitor offerings. CEAT is focusing heavily on building a bigger and better by inviting employees’ family members also culture of flexibility and agility to prepare for the future, as well to participate. CEAT received overwhelming response, with as have policies in place that allow for changes. Last year, approximately 300 people giving auditions in different parts of CEAT introduced flexi-time and virtual workplace policies. It also the country. announced a 5-day week in manufacturing, a first in the industry, based largely on trust and has implemented it successfully in As at March 31, 2019, permanent employees in the Company all its plants without additional manpower and zero production were 5,815 out of which 438 were women. 3,918 have been loss. CEAT’s leave policy also underwent similar changes. employed on a contract basis.
42 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 43
CEAT Limited CEAT Inventory Turnover Ratio Inventory Turnover Debt Equity Ratio Price EarningRatio
Cautionary Statements and Analysis Statements in the Management Discussion estimates and objectives, projections, describing CEAT’s within statements’ expectations may be ‘forward-looking the meaning of applicable securities, laws and regulations. or those expressed materially from could differ Actual results operations implied. Important factors that could influence CEAT’s demand country, the within developments economic include prices, changes input and supply conditions in the industry, as such factors other and laws tax governmentin regulations, litigation and industrial relations. Discussion on Financial Performance and Key and on Financial Performance Discussion Listing Regulations, pursuant to the amended As required having significant changes the key ratios following are to the previous as compared or more i.e. change of 25% financial year: • • • and ratios including the above Details of key financial to the compared change in return on net worth, as with detailed financial year along immediately previous on financial forms part of discussion explanation thereof performance, appended to this Report. Financial Ratios Financial ed by ols
meeting chaired by meeting chaired espective functional/ d of Directors - Their oversight d of Directors d Operating Procedures ee lines of defence are further strengthened by further strengthened ee lines of defence are The above thr Risk Management Committee Boar Audit Committee of the Boar Monthly Management Committee (MCM) Monthly Operating Committee (OpCom) meeting chair Monthly Operating Committee (OpCom) Monthly Operation Reviews (MOR) by r Policies and Standar Entity Level, Operating Level and IT General Contr Entity Level, Operating Level and IT General Delegation of Authority Matrix Employee Code of Conduct Whistle-blower Policy independent audits such as statutory audit, tax audit, cost audit. audit and secretarial activities mainly include: the Managing Director the Managing Director business managers – Operation the Executive Director Reviewing CEAT’s statutory and internal audit activities Reviewing CEAT’s Reviewing CEAT’s established systems and procedures for procedures and systems established CEAT’s Reviewing governanceinternal and risk management financial controls, Reviewing financial reports and other financial information, Reviewing financial and communicating with the regulators Accuracy and completeness of accounting records and of accounting records Accuracy and completeness financial information of reliable timely preparation Assurance on orderly and efficient conduct of operations conduct and efficient Assurance on orderly Security of assets and errors and detection of frauds Prevention
• 3. • • 1. 2. d ofDirectors The third line of defence is the Governing and the Audit The third Board Committee. This independent assurance and oversight of internal the following governing bodies: is achieved through controls 3. 2. is achieved through the following: is achieved through 1. 5. Second line Management of CEAT The second line of defence by the Senior 3. 4. 1. 2. Management control: The line managers are directly responsible responsible directly The line managers are Management control: implementation of the for ensuring the design and effective The line manager carries Framework in CEAT. Internal Controls by defined operations within the boundaries out day-to-day including its various policies and procedures, through CEAT the following: • • • • Internal Control Systems and their Adequacy Systems and their Internal Control internal suitable and adequate has a well-placed, control CEAT with the size, scale and complexity commensurate environment, provides: environment of its operations. This First line Third line Third Discussion on Financial Performance and Key Financial Ratios
The standalone financial statements, the analysis whereof is presented hereunder and in the following pages pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, have been prepared in accordance with the requirements of the Companies Act, 2013 and applicable Accounting Standards issued by the Institute of Chartered Accountants of India. The management of CEAT Limited accepts the integrity and objectivity of these financial statements as well as various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements are reflected in a true and fair manner and also reasonably presents the company’s state of affairs and profit for the year.
Balance Sheet Property, plant and equipment, capital work-in-progress, intangible assets and intangible assets under development (Net Block) (Note 3 and 4) As at As at Particulars Change Change % March 31, 2019 March 31, 2018 Property, plant and equipment 2,78,574 2,39,931 38,643 16% Capital work-in-progress 71,889 15,247 56,642 371% Intangible assets 6,057 6,544 (487) (7%) Intangible assets under development 3,055 939 2,116 225% Total 3,59,575 2,62,661 96,914 37%
Property, plant and equipment has increased due to the following offsetting reasons: - During the year, the Company has capitalised Property, plant and equipment of ` 56,062 lacs mainly consisting of Halol Phase III and Nagpur Phase I projects. - Depreciation on Property, plant and equipment for the year is ` 16,171 lacs
Capital work in progress mainly includes the project capital expenditure of Halol Phase III, Nagpur and Chennai projects. Intangible assets under development mainly includes capital expenditure towards softwares.
Investments (Note 5 and 10) (` in lacs) As at As at Particulars Change Change % March 31, 2019 March 31, 2018 Non-current investments Investments in subsidiaries and associates 31,299 27,999 3,300 12% Other non-current investments 2 0 2 1029% Current investments - 4,006 (4,006) (100%)
Non-current investments has increased on account of additional investment in subsidiaries viz. CEAT Specialty Tyres Ltd – ` 3,000 lacs and investment in associate viz. Tyresnmore Online Pvt Ltd – ` 300 lacs
All the current investments have been redeemed during the year which resulted in nil closing balance as at year end
Loans (Note 6 and 14) (` in lacs) As at As at Particulars Change Change % March 31, 2019 March 31, 2018 Non-current loans 408 304 104 34% Current loans 5,800 4,902 898 18% Total 6,208 5,206 1,002 19% Non-current loans mainly comprises of security deposits given for Warehouse taken on rent.
Current loans have increased on mainly on account of increase in loan to CEAT Specialty Tyres Ltd, a wholly owned subsidiary company.
44 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 45 6% 2% 4% 6% 75% 12% 13% 57% 38% 28% (22%) 195% 172% (` in lacs) (` in lacs) (` in lacs) (` in lacs) (` in lacs) Change % Change % Change % Change % Change % 10 340 183 1,431 1,411 5,379 2,332 1,349 2,342 6,728 (1,538) 19,085 21,019 CEAT Limited CEAT Change Change Change Change Change 171 6,964 7,141 1,193 2,933 1,364 3,192 As at As at As at As at As at 71,215 35,876 10,615 33,495 17,756 75,496 March 31, 2018 March March 31, 2018 March March 31, 2018 March March 31, 2018 March March 31, 2018 March 181 5,426 3,525 3,273 3,706 3,375 As at As at As at As at As at 72,646 37,287 12,520 11,964 52,580 24,484 96,515 March 31, 2019 March March 31, 2019 March March 31, 2019 March March 31, 2019 March March 31, 2019 March 3,079 lacs due to increased utilization in the current year. utilization in the current ` 3,079 lacs due to increased 1,961 lacs mainly due to advertisement payments made in advance. ` 1,961 lacs mainly due to advertisement ` 1,970 lacs. eceivable has reduced by eceivable has reduced Advance to vendors has gone up by Pr Export Benefit r
Particulars Particulars Particulars Particulars Particulars Trade receivables Trade Raw Materials Other non-current non-financial assets Other non-current Other non-current financial assets financial Other non-current Cash and cash equivalents Work-In-Progress Other current non-financial assets Other current Other current financial assets Other current Finished Goods (including stock-in-trade) Total Total Stores and Spares Stores Total The amount was higher in the previous year as we had undeposited cheques as last 3 days of the year were bank holidays. year as we had undeposited cheques as last 3 days of the year were The amount was higher in the previous Cash and cash equivalents (Note 12) The receivables position for the current year is at 27 days sales as at March 31, 2019 as compared to 35 days sales outstanding to 35 days sales 31, 2019 as compared year is at 27 days sales as at March position for the current The receivables 31, 2018. as at March Trade Receivables (Note 11) Receivables Trade As a measure of the goods sold, the finished goods inventory (including traded goods stock) is stated at 31 days as at March 31, of the goods sold, the finished goods inventory (including traded goods stock) is stated at 31 days as at March As a measure 31, 2018. 2019 against 27 days for as at March Raw material inventory when compared as a measure of the cost of material consumption for goods sold, it is equivalent to 34 as a measure Raw material inventory when compared carbon black and in rubber, mainly due to increase 31, 2018 increased 31, 2019 against 29 days as at March days as at March fabric inventory. Inventories (Note 9) - - by epaid expenseshaveincreased Other current non-financial assets have increased due to the following offsetting reasons: the following offsetting due to non-financial assets have increased Other current - Increase in non-current non-financial assets is mainly due to increase in capital advances given towards the Halol Phase III, Chennai III, Phase Halol the towards given advances capital in increase to due mainly is assets non-financial non-current in Increase and Nagpur projects. Other non-financial assets (Note 8 and 16) Other non-financial Other current financial assets has increased mainly on account of interest receivable from Income tax authorites ` 2,594 lacs. Income tax authorites receivable from mainly on account of interest has increased financial assets Other current Other financial assets (Note 7 and 15) assets (Note Other financial Discussion on Financial Performance
Borrowings (Note 20 and 24) (` in lacs) As at As at Particulars Change Change % March 31, 2019 March 31, 2018 Non-current borrowings 1,00,272 27,230 73,042 268% Current borrowings 21,431 14,364 7,067 49% Total 1,21,703 41,594 80,109 193%
Non-current borrowings have gone up due to the following offsetting reasons: - Pre-payment of non-convertible debentures ` 20,000 lacs - Repayment of capex buyers credit ` 3,894 lacs (excluding current maturities) - Rupee term loan taken ` 97,096 lacs for refinance of existing project loan and drawl for expansion project.
Current borrowings have gone up due to the following offsetting reasons: - Reduction in cash credit balance by ` 5,753 lacs - Repayment of export packing credit ` 1,955 lacs - Repayment of raw materials buyers credit ` 5,277 lacs - Issuance of commercial paper ` 19,852 lacs
Other financial liabilities (Note 21 and 26) (` in lacs) As at As at Particulars Change Change % March 31, 2019 March 31, 2018 Other non-current financial liabilities 461 323 138 43% Other current financial liabilities 58,099 57,001 1,098 2% Total 58,560 57,324 1,236 2%
Other current financial liabilities has gone up due to the following offsetting reasons: - Increase in unrealised loss on revaluation of hedge contracts ` 3,131 lacs - Repayment of capex buyers credit (current maturities) ` 18,082 lacs - Increase in payables to capital vendors ` 13,798 lacs due to expansion projects in process viz. Halol Phase III, Nagpur II and Chennai projects. - Increase in deposits from dealers ` 1,774 lacs
Provisions (Note 22) (` in lacs) As at As at Particulars Change Change % March 31, 2019 March 31, 2018 Non current provisions 3,683 3,380 303 9% Current provisions 9,985 5,014 4,971 99% Total 13,668 8,394 5,274 63%
Increase in current provisions is due to the following reasons: - Provision made towards differential amount of Goods and Service Tax is attributable to the composite supply of Tyres and Tubes for the period from November 15, 2017 to January 11, 2019, aggregating to ` 3,000 lacs. - Provision for gratuity ` 1,032 lacs as at March 31, 2019 as compared to ` 366 lacs of fair value of plan assets as at March 31, 2018.
Trade Payables (Note 25) (` in lacs) As at As at Particulars Change Change % March 31, 2019 March 31, 2018 Trade payables 1,03,393 84,571 18,822 22%
The trade payables position as at March 31, 2019 is at 59 days which was at 52 days as at March 31, 2018.
46 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 47 1% 5% 1% 2% 7% 1% 3% 0% 2% 0% 7% 4% 5% (9%) 13% 59% 33% 22% 10% 10% (11%) (82%) 145% % of 100% (` in lacs) (` in lacs) (` in lacs) Change % Change % operations Revenue from Revenue from 22 714 0.6% 5,681 5,988 9,332 1,851 8,645 2,640 1,400 (0.8%) 1,015 (1,062) (6,699) (3,847) 69,789 59,979 41,311 61,830 16,168 40,966 13,094 27,872 29,272 CEAT Limited CEAT 28,150 (` in lacs) Change Change Change 2017-18 6,21,300 3,65,033 1,36,898 1% 1% 7% 1% 3% 1% 2% 0% 6% 4% 4% (3%) 419 63% 23% % of 100% 9,672 2,195 4,710 1,273 As at 38.8% 10.1% 71,525 62,738 2017-18 5,41,178 6,20,027 6,21,300 2017-18 2,40,948 operations Revenue from Revenue from March 31, 2018 March 441 863 9.3% 8,610 5,530 2,909 6,092 3,124 6,452 4,424 As at 39.4% (2,988) 64,826 49,195 17,430 40,977 12,086 28,891 25,903 63,753 (19,425) 2018-19 2018-19 6,10,967 6,83,130 4,27,364 6,80,006 6,83,130 1,56,151 2018-19 2,69,098 March 31, 2019 March eased by 2% (in absolute terms) and fallen by 80 bps (in percentage terms) eased by 2% (in absolute terms) and fallen by 80 bps (in percentage from operations has increased by 10% due to favourable volume and strengthening our customer and market approach our and strengthening to favourable volume due by 10% has increased operations from EBITDA has incr Revenue Gr
Particulars Particulars Particulars Sale of goods Automotive Tyres Revenue from operations (net of excise duty as Revenue from applicable) Other current liabilities Other current Tubes and others Tubes Other income Royalty income Cost of material consumed Sale of scrap Purchase of stock-in-trade Purchase Other revenues Changes in inventories of finished goods, work-in-progress Changes in inventories of finished goods, work-in-progress and stock-in-trade Total revenue from contracts with customers contracts from revenue Total Employee benefit expense Government grants Finance costs Revenue from operations Revenue from Depreciation and amortization expenses Depreciation Other expenses Exceptional items Profit before tax before Profit Tax expense Tax Profit for the year Profit Other comprehensive income for the year, net of tax income for the year, Other comprehensive Total comprehensive income for the year comprehensive Total Particulars EBITDA Gross Margin (%) Gross EBITDA (%) Gross Margin Gross - operations (Note 28) Revenue from - - terms) by12%(inabsoluteterms)and60bpspercentage oss marginhasincreased As compared to previous year: to previous As compared Other current liabilities has decreased mainly due to decrease in statutory dues mainly due to decrease in GST liability. decrease in statutory dues mainly due to due to decrease mainly liabilities has decreased Other current and Loss Profit from as part of the Revenue expenses of the Company’s sets forth the breakup The following table operations (net) Other current liabilities (Note 27) liabilities Other current Discussion on Financial Performance
Sale of goods in value has moved up due to growth in volume and realization.
Fall in other revenues is due to excise credit of ` 2,329 lacs included in previous year and lower quantum of sale of semi-finished goods to CEAT Specialty Tyres Ltd, a wholly owned subsidiary by ` 1,176 lacs in the current year as compared to previous year.
Increase in government grants is due to increase in the grant incentive on exports.
Other Income (Note 29) (` in lacs) Particulars 2018-19 2017-18 Change Change % Other Income 5,530 5,681 (151) (3%)
Other income has marginally decreased due to the following offsetting reasons: - Increase in interest income on Income tax refund by ` 1,920 lacs. - Fall in dividend income from Associated CEAT Holdings Company (Pvt) Limited, a wholly owned subsidiary by ` 1,195 lacs. - Fall in net gain on disposal of investments by ` 982 lacs due to lower investments and redemptions done during the year.
Cost of material consumed/ finished goods consumed analysis (Note 30 and 31) (` in lacs) Particulars 2018-19 2017-18 Change Change % Cost material consumed 4,27,364 3,65,033 62,331 17% Purchase of stock-in-trade 6,092 5,988 104 2% Changes in inventories of finished goods, stock-in-trade and (19,425) 9,332 (28,757) (308%) work-in-progress Total 4,14,031 3,80,353 33,678 9%
The raw material prices have increased during the year. As a result, the cost of material consumed as a percentage of sale of products has increased to 63% for the year as compared to 60% for the previous year.
Raw material consumed 2018-19 Raw material consumed 2017-18
Rubber Rubber Fabrics Fabrics Carbon black Carbon black Chemicals Chemicals Others Others
Movement of changes in Inventory is mainly on account of increase in finished goods stock as compared to the previous year. Inventory of finished goods is ` 51,751 lacs as at March 31, 2019 as compared to ` 32,215 lacs as at March 31, 2018.
Employee benefit expense (Note 32) (` in lacs) Particulars 2018-19 2017-18 Change Change % Employee benefit expense 49,195 41,311 7,884 19% Increase in employee benefit expense is due to normal annual increments apart from increase in annual bonus, incentives. During the year, the Company has hired employees as a part of its expansion plan.
48 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 49 8% 4% 6% 8% 8% (2%) 68% 14% 19% 13% 17% 15% 15% 10% 21% (25%) (41%) (` in lacs) (` in lacs) (` in lacs) (` in lacs) Change % Change % Change % Change % 50 (20) 906 312 258 413 120 (221) 1,784 4,847 1,212 2,471 1,262 4,691 2,220 1,095 (2,193) CEAT Limited CEAT Change Change Change Change 541 2,640 8,645 4,696 1,209 5,291 3,231 2,747 1,151 1,071 5,166 35,468 14,959 18,815 16,168 27,724 14,672 2017-18 2017-18 2017-18 2017-18 2,697 lacs partly offset by increase in interest cost interest in increase by offset partly lacs 2,697 ` 320 4,424 6,452 5,602 1,259 5,603 3,489 3,160 1,271 1,051 6,261 40,315 16,171 21,286 17,430 32,415 16,892 2018-19 2018-19 2018-19 2018-19 espect of workmen’s seperation. espect of workmen’s oduced VRS for employees across the Company. During the year, 56 employees (March 31, 2018, 178 56 employees (March During the year, the Company. oduced VRS for employees across ease in diesel prices, there has been increase in freight cost. in freight has been increase ease in diesel prices, there Pr The Company had intr The Company has paid compensation in r Incr Incr Incr Due to incr Incr period from November 15, 2017 to January 11, 2019, aggregating to ` 3,000 lacs. November 15, 2017 to January 11, 2019, aggregating period from employees) opted for the VRS. increased on account of increase in production by 10%. in production on account of increase increased by 10%.
Particulars Particulars Particulars Particulars Exceptional Items Conversion Charges Finance cost plant and equipment on property, Depreciation Stores and Spares Consumed and Spares Stores Amortization of intangible assets Amortization of intangible Power and Fuel Total Freight and Delivery Charges Freight Repairs - Machinery Travelling and Conveyance Travelling Advertisement and Sales Promotion Expenses Advertisement and Sales Promotion Professional and Consultancy Charges Professional Training and Conference Expenses and Conference Training CSR Expenses Sales related obligations Sales related Bank Charges - forthe andTubes thecompositesupplyofTyres isattributableto andServiceTax amountofGoods ovision fordifferential - - Exceptional items has increased due to the following reasons: Exceptional items has increased activities. invariouspromotional expensesisduetoincrease ease inadvertisementandsalespromotion Exceptional Items (Note 36) insaleofproducts. obligationsisinlinewithincrease ease insalesrelated substantially has consumption The consumption. higher and tariff in increase of outcome an is fuel and power in ease - - - volume inoutsourced vendorsduringtheyearwasonaccountofincrease ease inconversionchargespaidtooutsourcing - - Other Expenses (Note 35) 88%) thereof: year expenses, constituting 88% (Previous Other expenses primarily include the following Depreciation expenses on Property, plant and equipment has increased on account of commissioning of Halol III project. on account plant and equipment has increased expenses on Property, Depreciation Depreciation and amortization expense (Note 34) and amortization Depreciation Fall in finance cost is attributable to increase in capitalization of interest costs by costs interest of capitalization in increase to attributable is cost finance in Fall 97,096 lacs for our expansion plans. 97,096 lacs for our of ` due to additional borrowing Finance Costs (Note 33) Finance Discussion on Financial Performance
Tax expenses (Note 23) (` in lacs) Particulars 2018-19 2017-18 Change Change % Tax expenses 12,086 13,094 (1,008) (8%)
Effective income tax rate for the year 2018-19 is 29.49% as compared to 31.96% for 2017-18
Cash Flows (` in lacs) Particulars 2018-19 2017-18 Change Change % Net cash flow generated from operating activities 53,275 74,423 (21,148) (28%)
Net cash from operating activities has decreased as compared to previous year due to following offsetting reasons: - The cash operating profit before working capital changes has decreased by` 954 lacs. - Direct tax paid - (Net of refunds) has reduced by ` 1,725 lacs. - Increase in working capital by ` 572 lacs in the current year as compared to decrease in working capital by ` 21,348 lacs in the previous year which is mainly due to increase in inventories and trade receivables which is partly offset by an increase in trade payables.
(` in lacs) Particulars 2018-19 2017-18 Change Change % Net cash used in investing activities (1,05,208) (41,982) (63,226) 151%
Net cash used for investing activities has increased mainly due to increase in capital expenditure towards Halol Phase III, Nagpur and Chennai projects.
(` in lacs) Particulars 2018-19 2017-18 Change Change % Net cash flows (used in)/generated from financing activities 50,395 (26,902) 77,297 (287%)
Increase in Net cash flows for financing activities is mainly due to increase in proceeds from long term as well as short term borrowings which is offset by repayments done during the year.
* For details, refer cash flow statement
Ratio Analysis Debtors turnover ratio (times) Particulars 2018-19 2017-18 Debtors turnover ratio 9.40 9.40 Debtors turnover ratio in the current year is fairly in line with previous year.
Inventory turnover ratio (times) Particulars 2018-19 2017-18 Inventory turnover ratio 7.87 11.36 Inventory turnover ratio has decreased in 2018-19 as compared to the previous year mainly on account of increase in inventory.
Interest coverage ratio (times) Particulars 2018-19 2017-18 Interest coverage ratio 4.94 5.44
Interest coverage ratio has decreased in 2018-19 as compared to the previous year mainly on account of increase in interest costs and marginal decrease in earnings before interest and taxes.
50 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 51 1.01 0.25 As at 21.79 4.49% As at 16.39% 10.94% 10.10% 2017-18 2017-18 2017-18 2017-18 2017-18 March 31, 2018 March March 31, 2018 March 0.95 0.46 As at 15.74 As at 4.23% 9.33% 12.93% 10.50% CEAT Limited CEAT 2018-19 2018-19 2018-19 2018-19 2018-19 March 31, 2019 March March 31, 2019 March 1,785 lacs offset by reduced interest cost by interest by reduced ` 1,785 lacs offset Return on capital employed Particulars Current ratio Current Particulars Particulars Particulars Particulars Particulars Particulars Net profit margin Net profit Return on net worth Price earning ratio Debt equity ratio Operating profit margin Operating profit Return on capital employed has fallen due to a 26% increase in capital employed wherein net worth has increased by 8% and debt net worth has increased in capital employed wherein Return due to a 26% increase on capital employed has fallen and interest in earnings by a marginal decrease before which is offset by 97% due to ongoing expansion projects has increased tax by 1%. Return on capital employed (%) 71.42 for the year ended March 31, 2019 registering an increase by 4% as compared to year to compared 4% as by increase an 2019 registering 31, March year ended the 71.42 for at ` stood EarningsBasic share per price was lower by 25%. Closing share in profitability. 31, 2018 on account of marginal increase ended March 2,194 lacs increase in depreciation by ` 1,262 lacs. in depreciation ` 2,194 lacs increase Price earning ratio (times) Return on net worth has reduced due to 4% increase in proft after tax vis a vis 8% increase in net worth in the current year. in net worth in the current tax vis a vis 8% increase after in proft increase due to 4% Return on net worth has reduced Return on net worth (%) Net profit margin has decreased marginally because of higher exceptional costs by marginally because of higher margin has decreased Net profit Net profit margin (%) Net profit Decrease in operating profit margin is mainly due to higher raw material costs by 17% and marginal increase in other costs which other in marginal increase 17% and raw material costs by to higher due is mainly margin profit in operating Decrease by higher price realization. was partly offset Operating profit margin (%) Operating profit The Company’s debt equity ratio is recorded at 0.46 times as at March 31, 2019 as compared to 0.25 times as at March 31, March at as times 0.25 to compared as 2019 31, March at as times 0.46 at recorded is ratio equity debt Company’s The the to as compared for capital expansion projects term borrowings in long term and short is mainly due to increase 2018. Increase year. previous The Company’s current ratio is recorded at 0.95 times as at March 31, 2019 as compared to 1.01 times as at March 31, 2018. as at March to 1.01 times 31, 2019 as compared 0.95 times as at March at is recorded ratio current The Company’s days. in trade payables days by 4 due to increase ratio is primarily in current The marginal decrease (times) Debt Equity Ratio Current ratio (times) Current Board’s Report
To, The Members of CEAT Limited
Your Directors are pleased to present their Sixtieth report, together with the Standalone and Consolidated Audited Financial Statements of the Company for the year ended March 31, 2019.
Financial Highlights I. Standalone: (` in Lacs) Particulars 2018-19 2017-18 Total Revenue 6,88,660 6,43,872 Total Expenses (excluding exceptional items) 6,43,259 6,00,266 Profit Before Taxation 40,977 40,966 Tax expense: – Current Tax 9,009 10,408 – Deferred Tax 3,077 2,686 Profit for the period 28,891 27,872 Other Comprehensive Income Items that will not be reclassified to profit or loss – Remeasurement gains/(losses) on defined benefit plans (798) 1,043 – Income tax relating to above 279 (361) Items that will be reclassified to profit or loss – Net movement in cash flow hedges (3,792) 1,098 – Income tax effect on net movement in cash flow hedges 1,323 (380) Total Comprehensive Income for the year 25,903 29,272
II. Consolidated: ` (in Lacs) Particulars 2018-19 2017-18 Total Revenue 7,02,351 6,48,179 Total Expenses 6,62,272 6,10,352 Profit Before Taxation 37,620 36,732 Tax expense: – Current Tax 9,400 10,639 – Deferred Tax 3,112 2,764 – MAT credit entitlement - - Profit after tax, non-controlling interest and share of profit from Joint Venture 25,108 23,329 Other Comprehensive Income Items that will not be reclassified to profit or loss – Remeasurement gains/(losses) on defined benefit plans (740) 1,042 – Income tax relating to above 278 (368) Items that will be reclassified to profit or loss – Net movement in cash flow hedges (4,656) 234 – Income tax effect on net movement in cash flow hedges 1,323 (380) Total Comprehensive Income for the year 21,313 23,857
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 standalone basis, your Company recorded net revenue from operations of ` 6,83,130 Lacs with an increase of 10% over ` 6,21,300 Lacs (net of excise duty) of the last fiscal. The Company recorded a net profit of ` 28,891 Lacs with an increase of 4% over net profit of ` 27,872 Lacs of the last fiscal.
52 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 53 ` 3,716 Lacs). CEAT Limited CEAT ` 26,664 Lacs) and a net loss 4,570 Lacs in FY 2018-19 (Previous year ` 4,570 Lacs in FY 2018-19 (Previous 36,792 Lacs (Previous year 36,792 Lacs (Previous of Transfer to Reserve to Transfer Act’), your Act, 2013 (‘the under the Companies As permitted sum to the General not to transfer any propose Directors FY 2018-19. Reserve pertaining to Declaration of Independence have given the declaration of The Independent Directors to Section 149(7) of the pursuant independence as required 25(8) of the Listing Regulations, stating Act and Regulation down laid as independence of criteria the meet they that the of 16 Regulation and Act the of 149(6) Section under Listing Regulations. if any Material Changes and Commitments, the Financial Position of the Company affecting the no material changes and commitments, affecting are There between have occurred financial position of the Company which the 2019 to which 31, March year on financial close of the relate and the date of this Report. financial statements Subsidiary Companies the Company had the At the end of the year under review, Tyres Specialty CEAT namely subsidiaries (four) 4 following Kochi (RTL), Limited, Limited, Mumbai (CSTL), Rado Tyres Holdings Company (Private) Limited, Associated CEAT Dhaka, AKKhan Limited, Lanka, (ACHL), CEAT Colombo, Sri Bangladesh (CAL). Limited Specialty Tyres CEAT Limited (CSTL), a wholly owned subsidiary Specialty Tyres CEAT for is engaged in manufacturing and sale of tyres of the Company, vehicles and equipment having application across off-the-road mining and agriculture. industries including ports, construction, Specialty viz. CEAT CSTL has set up two overseas subsidiaries BV in Netherlands. Tyres Specialty Tires Inc. in USA and CEAT of a revenue CSTL registered During the year under review, ` The loss was largely due slower ramp up of radial capacity in lower sales. resulting approved of Directors the Board During the year under review, a Scheme of Amalgamation with the wholly owned subsidiary business integrate to view a with CSTL Company the of carried on by both the companies, economies of scale due and better coordination to synergies of operations, effective standardization and rationalization activities, the over control issued, subscribed etc. Since the entire of business processes held or indirectly capital of CSTL is directly and paid-up share to be issued by the required are no shares by the Company, of CSTL, pursuant to the Scheme Company to the shareholders becoming effective. Limited Rado Tyres subsidiary The Company’s Limited (RTL) has Rado Tyres discontinued its operation after exploring all opportunities to given The Government Kerala has of /lease out the factory. revive vide their letter their consent to close the factory permanently, ` 12 (120%) 10 each for the Financial Year 10 each for the Financial Year ` https://www.ceat.com/corporate/ is embracing new trends in manufacturing is embracing new trends 6,98,451 Lacs with a growth of 8% over of 8% over with a growth 6,98,451 Lacs ` 25,108 Lacs, a growth of 8% over net profit of over net profit of 8% ` 25,108 Lacs, a growth Indian tyre industry Indian tyre 6,45,233 Lacs for the last fiscal. The Company recorded a recorded last fiscal. The Company 6,45,233 Lacs for the investor#corporate-governance. per equity share of face value per equity share 31, 2019. ended March Dividend Distribution Policy Obligations (Listing SEBI the of 43A to Regulation Pursuant Regulations, 2015 (‘the Listing Requirements) and Disclosure Regulations’), the Company has adopted a Dividend Distribution Policy which is annexed to this Report and also disclosed on website at the Company’s Dividend review and keeping for the year under Considering the profits your of the Company, requirements in view capital expenditure a dividend of to recommend pleased are Directors More details on the Company’s business vis-à-vis the overall details on the Company’s More in given etc. are outlook and future markets economy, industry, the Management Discussion and Analysis section which forms part of this Annual Report. processes to meet the changing market dynamics and cater to cater and dynamics market changing the meet to processes (OEM). the latest demands of Original Equipment Manufacturers With importance of lower emission and noise levels the growing weight, reducing in vehicles, besides and enhanced fuel efficiency the While continuing the journey towards the Company’s mission Company’s While continuing the journey the towards the Company Every Day.’, of ‘Making Mobility Safer & Smarter. and design safety a priority in its product seeks to provide technology platforms. The Company’s network extends to more than 4,000 dealers and than network extends to more The Company’s (four) 4 has currently Company The sub-dealers. 30,000 over Nagpur and Halol manufacturing facilities at Bhandup, Nashik, It has representative and is setting up a new facility near Chennai. Indonesia, Germany and the United Arab Emirates. in offices During the year under review, the Company introduced 49 new 49 new the Company introduced During the year under review, launches the With of product products. innovation at the core of new innovative last few years have seen a healthy roll-out categories. across products During the year, the Company also expanded its horizons by During the year, out to the new export markets and in India, sustained reaching in key segments by serving its key consumers its pace of growth to market preferences. that catered offerings with product State of Company’s Affairs State of Company’s terms both in on expansion, its focus continued The Company was emphasis There during the year. of capacities and markets, as and R&D for the existing as well on technology upgradation helped in growing other measures which besides new products year. over the previous levels by 12.7% the production On consolidated basis your Company recorded net revenue net revenue Company recorded basis your On consolidated operations of from 23,329 Lacs of the last fiscal. ` 23,329 Lacs of the net profit of net profit ` Board’s Report
dated October 6, 2018. In order to reduce the losses, RTL had During the year under review, the Company invested a further offered Voluntary Retirement Scheme (VRS) to all its employees amount of ` 300 Lacs through subscription of 12,741 CCPS and was successfully implemented in the previous year. This has of the face value of ` 1 each (Rupee One Only) of TNM, and helped RTL to contain the loss at ` 147 Lacs (Previous year thereby holding 36.96% of the total share capital of TNM. ` 870 Lacs). Due to cessation of operations, the revenue of RTL for the year under review dropped to ` 14 Lacs (Previous During the year under review, TNM registered a revenue of ` 578 year ` 31 Lacs). Lacs (Previous year ` 104 Lacs) and a net loss of ` 254 Lacs in FY 2018-19 (Previous year ` 112 Lacs). Since the Company has no other activity, the accounts of RTL for the financial year under review have not been prepared on a A statement containing the salient features of the subsidiaries, going concern basis. associates and joint ventures in the prescribed form AOC-1 is annexed separately. Overseas Subsidiaries Details of ACHL and CAL are given below under the heads ‘Joint Consolidated Financial Statements Venture in Sri Lanka’ and ‘Joint Venture in Bangladesh’. In accordance with Section 129(3) of the Act, and Regulation 34(2) of the Listing Regulations, the Consolidated Financial Joint Venture in Sri Lanka Statements of the Company, including the financial details of Associated CEAT Holding Company (Private) Limited (ACHL), all the subsidiary companies, associate companies and joint the Company’s investment arm in Sri Lanka, has a 50:50 joint ventures of the Company, forms part of this Annual Report. venture company viz. CEAT-Kelani Holdings Private Limited, The Consolidated Financial Statements have been prepared in which operates four manufacturing plants through its wholly accordance with the applicable Indian Accounting Standards owned subsidiaries in Sri Lanka. issued by the Institute of Chartered Accountants of India.
During the year under review, ACHL registered a revenue of LKR Business Risk Management 56 Lacs (` 23 Lacs) lower as compared to LKR 152 Lacs (` 64 The Company has constituted a Risk Management Committee Lacs) in FY 2017-18. The profit after tax for FY 2018-19 has in compliance with the requirement of Regulation 21 of the reduced by 10% to LKR 5,098 Lacs (` 2,120 Lacs) as compared Listing Regulations. The details of this Committee and its terms to LKR 5,664 Lacs (` 2,380 Lacs) in FY 2017-18. ACHL’s joint of reference are set out in the Corporate Governance Report, venture continues to enjoy the overall market leadership in all which forms part of this Annual Report. categories of tyres in Sri Lanka. The Company has in place an Enterprise Risk Management ACHL has been consistently paying dividends and it has, framework to identify risks and minimize their adverse impact during the year under review, paid a dividend of ` 732 Lacs on business and strives to create transparency which in turn to the Company. enhances the Company’s competitive advantage.
Joint Venture in Bangladesh Pursuant to the aforesaid business risk framework, the CEAT AKKhan Limited (CAL), is a 70:30 joint venture of the Company has identified the business risks associated with its Company in Bangladesh. CAL is setting up a green field facility operations and an action plan for mitigation of the same is put for manufacture of automotive bias tyres in Bangladesh. CAL is in place. The business risks and its mitigation have been dealt locally selling CEAT branded automotive tyres. For the year under with in the Management Discussion and Analysis Section of review, the revenue of CAL was BDT 10,118 Lacs (` 8,447 Lacs) this Annual Report. as compared to BDT 7,630 Lacs (` 6,017 Lacs) in FY 2017-18. The net loss for the year under review was BDT 281 Lacs (`176 Corporate Social Responsibility Lacs) as compared to the net loss of previous year BDT 422 The Board of Directors has formed a Corporate Social Lacs (` 363 Lacs). Responsibility (CSR) Committee in accordance with the provisions of the Act. During the year under review, Ms. Punita Lal Associate Company has been appointed as a member of the CSR Committee w.e.f. The Committee of the Board of Directors (formed for the limited January 28, 2019 in place of Mr. Hari L. Mundra, consequent to purpose) at its meeting held on June 23, 2017 had approved a his resignation from the Board w.e.f. January 29, 2019. total investment of ` 700 Lacs in TNM, in one or more tranches. Accordingly, the Company on June 23, 2017 had acquired Detailed information on the Corporate Social Responsibility approx. 31.93% of the total share capital of Tyresnmore Policy developed and implemented by the Company and on Online Private Limited (TNM) by investing ` 400 Lacs through CSR initiatives taken during the year pursuant to Section 135 subscription of 50,855 Compulsorily Convertible Preference of the Act, is given in the Annual Report on CSR activities, as Shares (‘CCPS’) of face value of ` 1 each and 100 Equity Shares annexed to this Report. of face value of ` 1 each of TNM.
54 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
55 CEAT Limited CEAT AGM held on September 26, 2014 to hold office for a for AGM held on September 26, 2014 to hold office AGM of the Company up to September 25, 2019. th th Particulars of Loans,Guarantees or Investments Particulars of Loans,Guarantees and Investments Details of particulars of Loans, Guarantees in the Financial provided under Section 186 of the Act, are at bear interest Statements. The loans given to the employees applicable rates. and Key Managerial Personnel Directors E. Cohade, who was Pierre Mr. During year under review, w.e.f. by the Board appointed as an Additional Director February 1, 2018, was appointed as Non-Executive Director by the Members at the Annual General Meeting (AGM) of Hari L. Mundra the Company held on July 20, 2018. Mr. Fixed Deposits the public to accept deposits from Company being eligible Your 76 of the Act, and Rules made thereunder, pursuant to Section during the FY 2014-15, for the Fixed Deposit Scheme approved members and persons other than from acceptance of deposits the by passed Resolution Special the to pursuant members, of the Company held members at the Annual General Meeting discontinued 26, 2014. The Company thereafter on September all the outstanding fixed the Fixed Deposit Scheme and repaid accrued up to September 30, deposits along with interest 2016 in FY 2016-17. deposits during fresh The Company has not accepted any the not in compliance with which are the year under review 31, 2019, the Company of the Act. As on March requirements and statutorily required has no deposits outstanding, except as the year under review. which have been unclaimed at the end of of any of repayment no defaults in respect were As such there thereon. deposits or payment of interest the from resigned Company the of Director 00287029), (DIN: January 29, 2019 of the Company w.e.f. of Directors Board due to various personal commitments and pre-occupations. of the Company (DIN: 00042897), Director S. Doreswamy Mr. 12, 2019 owing to compelling March w.e.f. also resigned personal reasons. the of Association of Articles and Act, the with accordance In by rotation Goenka (DIN: 00026726) retires H. V. Mr. Company, himself for re-appointment. and being eligible offers Khaitan Haigreve Atul C. Choksey (DIN: 00002102), Mr. Mr. Mahesh S. Gupta (00046810), Ms. Punita Mr. (DIN: 00005290), Vinay Bansal (DIN: 00383325) Lal (DIN: 03412604) and Mr. of the Company at appointed as Independent Directors were the 55 of Managerial Personnel) Rules, 2014 (‘the Rules’), as amended, as Rules’), (‘the 2014 Rules, Personnel) Managerial of to any will be made available of this Report and form part therein. as prescribed on request, shareholder under 5(1) of employees required particulars of The prescribed Report. annexed to this the said Rules are term of 5 (five) consecutive years with effect from the date of the date of from term of 5 (five) consecutive years with effect the 55 https:// 10 Lacs each and consequently ` 10 Lacs each and consequently Particulars of Employees with Rule pursuant to Section 197 read The statements required 5(2) & 5(3) of The Companies (Appointment and Remuneration Conservation of Energy, Technology Absorption, Technology Conservation of Energy, Exchange Earnings and Outgo Foreign technology energy, of conservation of details giving statement A exchange earnings absorption, foreign and outgo, in accordance of The Rule 8 with read Act, of the Section 134(3)(m) with Companies (Accounts) Rules, 2014, is annexed to this Report. Extract of Annual Return under Section 92(3) The extract of Annual Return as prescribed is annexed to this Report. Form MGT-9 in the prescribed During the year under review, the Company redeemed the said the redeemed Company the review, under year the During 2,000 (two thousand) NCDs of applicable disclosures statutory no are there Accordingly, under specifically described as to the Debentures, pertaining Chapter V of the Listing Regulations. Non-Convertible Debentures on July 31, 2015, The Company had issued and allotted Redeemable Non-Convertible 2,000 (two thousand) Secured to (‘NCD’) on private placement basis aggregating Debentures listed on BSE Limited. ` 20,000 Lacs, which were BSE. delisted from Share Capital Share 31, as on March of the Company The paid-up equity capital listed on the are 2019 was ` 4,045.01 Lacs. The said shares Limited. India of Exchange Stock National the and Limited BSE no change in the paid-up capital of the Company, was There during the year under review. Related Party Transactions were placed before the Audit placed before were Related Party Transactions under Section 177 of the Act, although Committee, as prescribed of 188 of Section the provisions attracted transactions no such in the no particulars to be disclosed are the Act. As such, there Form AOC-2. prescribed The Company has formulated a policy on Related Party formulated a policy on Related Party The Company has for the purpose of identification and monitoring of Transactions Party Transactions such transactions. The said policy on Related website. is uploaded on the Company’s by the Board as approved Related Party Transactions Pursuant to Section 177 of the Act and Regulation 22 of the 22 of Regulation Act and of the Section 177 to Pursuant has adopted vigil mechanism in the Board Listing Regulations, to deal with instances of fraud Policy, the form of Whistle Blower The Policy can be accessed at if any. or mismanagement, Vigil Mechanism/Whistle Blower Policy Vigil Mechanism/Whistle More details on CSR activities undertaken by the Company by the Company activities undertaken details on CSR More provided are agency implementing its Foundation, RPG through Annual Report. in and form part of this ate-governance. www.ceat.com/corporate/investor#corpor Board’s Report
In terms of the provisions of Section 149(10), the aforesaid For the purpose of evaluation for FY 2018-19, the Nomination Directors are eligible for being appointed as Independent and Remuneration Committee finalized a questionnaire based Directors, for another term of 5 (five) years, subject to approval on the criteria of evaluation and engaged an external agency, of shareholders by way of special resolution. to facilitate the process of online confidential survey using the said questionnaire. The results of the survey/feedback were then As recommended by the Nomination and Remuneration deliberated and evaluation of the Board, its Committees and the Committee, as required under the Act and the Rules made Directors was carried out by the Nomination and Remuneration thereunder, the same is now submitted for approval of Committee and the Board at their respective meetings, as shareholders at the ensuing Annual General Meeting, for a further prescribed under the law. term of 5 (five) years from September 26, 2019 to September 25, 2024. In this regard, necessary details have been annexed to the Meetings of the Board of Directors Notice of the meeting in terms of Section 102(1) of the Act and During the year, 5 (five) Board Meetings were convened and held Regulation 36(3) of the Listing Regulations. on April 30, 2018, July 20, 2018, October 25, 2018, January 28, 2019 and March 11, 2019. The details of which are given in the Mr. Anant Goenka, Managing Director and Mr. Arnab Banerjee, Corporate Governance Report. The intervening gap between Chief Operating Officer do not receive any profit related the meetings was within the period prescribed under the Act commission from the Company or any of the subsidiaries of the and Regulation 17 of the Listing Regulations. Company as prescribed under Section 197(14) of the Act. Secretarial Standard Mr. Arnab Banerjee (DIN: 06559516) who was appointed The Institute of Company Secretaries of India has currently as ED-Operations in the category of a Whole-time Director mandated compliance with the Secretarial Standards on board of the Company, for a period of 5 (five) years with effect from meetings and general meetings, as revised w.e.f. October 1, May 7, 2018 was redesignated as Chief Operating Officer of the 2017. During the year under review, the Company has complied Company w.e.f. March 1, 2019. with the applicable Secretarial Standards.
In view of the resignation of Ms. Shruti Joshi (ACS 19112) Board Committees as the Company Secretary and Compliance Officer of the As required pursuant to the Act and the Listing Regulations, the Company w.e.f. June 11, 2018, the Board at its meeting held Company has formed all the statutory committees. In addition, on October 25, 2018 appointed Ms. Vallari Gupte (FCS 5770) the Company has a Finance and Banking Committee. as the Company Secretary and Compliance Officer of the Detailed information of these Committees and relevant Company, upon due recommendations of the Nomination and information for the year under review are set out in the Corporate Remuneration Committee. Governance Report.
Apart from the above there were no changes in the Directors and During the year under review, the Board of Directors closed the Key Managerial Personnel of the Company, during the year. the 2 (two) non-operational committees of the Company, viz. Special Project/Investment Committee and Committee of Nomination and Remuneration Policy Directors, which was formed for a specfic purpose. The Board has put in place a policy on directors’ appointment and remuneration including criteria for determining qualifications, There have been no instances where the Board did not accept positive attributes, independence of a director as required under the recommendations of the Audit Committee. Section 178(3) of the Act. More details on these Committees, including Audit Committee The Policy, inter alia, is directed to work as guiding principles have been provided under the Corporate Governance Report on qualifications, positive attributes and independence for which forms part of this Annual Report. appointment of a Director, remuneration for the Directors, KMP and Senior Management Personnel, performance evaluation of Directors’ Responsibility Statement all Directors and achieving the benefits of having a diverse Board. Pursuant to Section 134(3)(c) of the Act, your Directors, to the best of their knowledge and belief, state that: The Detailed Policy, duly modified in terms of the Listing Regulations, as amended in 2018 is available at https://www. i) The applicable Accounting Standards have been followed ceat.com/corporate/investor#corporate-governance and is in the preparation of the annual accounts along with the also annexed to this Report. proper explanation relating to material departure, if any.
Evaluation of Board, its Committees and Directors ii) Such accounting policies have been selected and As required pursuant to the provisions of the Act and the Listing applied consistently and such judgements and estimates Regulations, the Board has carried out an annual evaluation of have been made that are reasonable and prudent so as its own performance and that of its Committees, Chairperson to give a true and fair view of the state of affairs of the and individual directors. Company in the Balance Sheet as at March 31, 2019 and
56 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 57 CEAT Limited CEAT The Company believes in providing a work environment which is a work environment The Company believes in providing conducive to wholesome development of employees to endeavor but to unleash employees’ potential not just as professionals beyond work. also as individuals that they are Explanation and Comments on Auditors and Explanation and Comments on Auditors Audit Report Secretarial reservations or no qualifications, disclaimers, are There made either by the Statutory Auditors in the adverse remarks in practice Secretary Auditors’ Report or by the Company Audit Report. Auditor) in the Secretarial (Secretarial by Auditors of frauds reported Details in respect under Section 143(12) of the Act have not reported During FY 2018-19, the Statutory Auditors Governmentany instances of fraud to the Central and of Section 143(12) Audit Committee as per the provisions and (Audit Companies of the Rule 13 with read of the Act, Auditors) Rules, 2014. passed by the Significant and Material Orders impacting the Regulator or Courts or Tribunal Going Concern Status passed by the and material orders no significant are There the going concern impacting Regulators or Courts or Tribunals operations in future. status and Company’s Internal Financial Control of adequacy on internal financial controls Details in respect in stated are Statements Financial the to reference with part forms which Section Analysis and Discussion Management of this Annual Report. Human Resources Internal Auditors Messrs appointed Board 138, the Section under prescribed As internalKPMG for carrying out and Messrs audit of the Company out internal Stephen Singh for carrying audit of locations Moore units, for FY 2018-19. outsourcing and like CFA/DC/RO/Zone The internal by was completed as per the scope defined audit the Audit Committee. Auditors Secretarial Messrs Parikh & Associates, The Company appointed the Secretarial to conduct Company Secretaries, Practising 31, 2019, as prescribed year ended March Audit for the financial of the Act and Rules made thereunder. under Section 204 MR-3 Form Audit Report in the prescribed The Secretarial for FY 2018-19 furnished by Messrs Parikh and Associates is annexed to this Report. Cost Auditors Co., appointed Messrs D. C. Dave & of Directors The Board as Cost Auditors Cost Accountants, (Membership No. M7759) ratification of the Company for FY 2019-20 and recommends by the Members at the ensuing AGM, of their remuneration of Section 148 of the Act. pursuant to the provisions
th epared on a epared AGM subject to ratification of rd oper internal financial controls were in place and in were oper internalcontrols financial the Statement of Profit and Loss for the said financial year and Loss for the of Profit the Statement 31, 2019. ended March The The pr The annual accounts have been pr The annual accounts Pr applicable laws were in place and that such systems were in place and that such systems were applicable laws were operating effectively. adequate and are that such internal financial controls are adequate and were adequate and were are that such internal financial controls operating effectively. going concern basis. maintenance of adequate accounting records in accordance in accordance accounting records maintenance of adequate the assets for safeguarding of the Act, with the provisions and detecting fraud for preventing of the Company and and other irregularities.
Accordingly, no such item is being proposed in the Notice of no such item is being proposed Accordingly, ensuing Annual General Meeting of the Company. However, in terms of the amendment to the provisions of the provisions in terms of the amendment to However, the Companies Section 139 of the Act, notified through May 7, from (Amendment) Act, 2017, to come into effect of of appointment for ratification is no requirement 2018, there Auditors every year. their appointment every year. their appointment every year. Statutory Auditors The Company at its AGM held on August 8, 2017 appointed Messrs S R B C & CO LLP as the Statutory Auditors for a second the conclusion of the 58 term of 5 (five) consecutive years from Business Responsibility Report the Listing Regulations, In compliance with the Regulation 34 of as Report, Responsibility Business on Section separate a which includes principles to assess by the Board, approved social and governancecompliance with environmental, norms forms part of this Annual Report. for the year under review Further, the Corporate Governance including the general Report Further, to the under Schedule V information, as prescribed shareholder of Directors by the Board Listing Regulations, duly approved the Statutory Auditors together with the certificate from Listing of the requirements confirming the compliance with the Report. Regulations also forms part of this Annual Management Discussion and Analysis and Management Discussion and Analysis Corporate Governance Report the Listing Regulations, In compliance with the Regulation 34 of as and Analysis, Section on Management Discussion separate of which includes details on the state by the Board, approved forms part of this Annual Report. the Company, of affairs vi) all of provisions the with compliance ensure to systems v) iv) iii) hasbeentakenforthe care oper andsufficient AGM to the conclusion of the 63 Board’s Report
During the year under review, the Company ranked amongst Disclosure under Sexual Harassment of Women the ‘Top 25 India’s Best Workplaces - Manufacturing, at the Workplace (Prevention, Prohibition and 2019’ by Great Place To Work Institute for building a high-trust, Redressal) Act, 2013 high-performance culture and was yet again certified as a Great In accordance with the provisions of the Sexual Harassment of Place To Work for the second time in a row. Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has put in place a Policy on Prevention Long-Term Settlements signed during this year is the biggest of Sexual Harassment at Workplace and 7 (seven) Internal testimony to the trust-based culture of the Company. Complaints Committees (ICC) have been set up to redress Both the settlements happened in historic periods of time complaints. During the year under review no complaints were requiring minimum number of meetings and zero production received by ICC. loss. Various training programmes were conducted to train people to take on frontline sales role under the programme - Acknowledgment Saamarthya, to help build the talent pipeline. A comprehensive Your Directors place on record their appreciation for the leadership development programme called INSPIRE was continued support and co-operation received from its designed in-house and launched this year covering leadership Customers, Suppliers, Dealers, Banks, Financial Institutions and teams of sales and manufacturing and eventually all people the Members towards conducting the business of the Company. leaders. This year, the Company embarked on the journey of making it a truly diverse and inclusive workplace. As a part of On behalf of the Board of Directors which, sensitization sessions are being done on disability with people and necessary infrastructure modifications are being H. V. Goenka made to suit the needs of People With Disability (PWD) in spirit. Chairman Place: Mumbai The Company continues its efforts on offering itself as a Great Date: May 7, 2019 Place To Work and align with the Group’s vision statement – Unleash Talent, Touch Lives, Outperform and .
58 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 59 the following , inter alia CEAT Limited CEAT
.
onment and state of the nment Policy, which can have a nment Policy,
estrictions, if any or the prevalent estrictions, if any or the prevalent plans, restructuring, Environment, nature of industry/business, of nature dinary income/profits by the Company Company by the dinary income/profits d shall also consider the following internald shall also consider d shall also consider eseen events and contingencies with ovisions of Tax laws governing dividend, ovisions of Tax otal Cash outflow including tax payments, outflow including tax otal Cash dividend and the cash ax impact of the Business Cyclical Expansion Corporate Unfor statutory requirements, capital markets, financial impact on the Company, and its business. arising from transactions such as sales of land transactions such arising from or undertaking, outflow post tax. can have a financial impact on the Company, financial implications Regulatory r Pr Dividend Pay-out ratios of Peers, Economic envir Change in Gover Commodity price impact on the business, Need to maintain competitiveness of the Company T Extra-or T Business Strategy of the Company which Scheme of arrangement or any other item factors while declaring an interim dividend or factors while declaring to: to the shareholders a final dividend recommending external factors i.e. factors on which the Management while declaring an or the Company has no control, a final dividend: interim dividend or recommending The Boar • • • • • • • • • • The Boar • • External Parameters: External • • • • •
Cir The Company has been consistently paying out dividends or may not expect dividend: expected to and can be reasonably to its shareholders is restrained as well, unless the Company continue in future or due to any profits dividend due to insufficient to declare of the external or internal factors listed above. C
IV may cumstances underwhichtheshareholders
ed for declaration ofit after tax,
ends of the Company and
e requirements including loan including e requirements
nal Parameters:
owings and total debt equity ratio, etained for business needs, , declared by the Company (including , declared equired to meet contingencies, equired d shall recommend dividend only d shall recommend expenditure requirements, expenditure d would consider the following financial d would consider the following financial ces required to fund acquisitions and to ces required
orking capital requirements, capital orking W Capital dividend track record, inorganic growth, repayments and interest payments, and interest repayments if it is of the opinion that it is financially if it is of the opinion that it is prudent to do so. Outstanding borr Past dividend payment tr Resour Cash to be r Cash flow r Operating expenditur Stand-alone net operating pr The Boar
Financial and Inter parameters before declaring interim dividend or parameters before a final dividend to shareholders recommending for declaration: • • • • • • The Boar • • General: • •
B Parameters/factors to be consider Regulatory Framework: The Dividend, if any This Policy aims to help the investors and Stakeholders This Policy aims to help the investors In compliance with Regulation 43A of the Listing In compliance with R Intr referred as “Applicable Laws”). referred of dividend: Interim Dividend) shall be governed by the provisions of the Interim Dividend) shall be governed by the provisions with the Companies (Declaration Companies Act, 2013 read the Listing and Payment of Dividend) Rules, 2014, of Articles of Association of Regulations and the provisions collective time (hereinafter time to as in force the Company, (“the Board”). in their investing decisions and shall be effective from the from effective in their investing decisions and shall be of Directors date of adoption of the same by the Board Regulations, the Company has framed this Dividend Regulations, the Company Distribution Policy. of Indiaof (“SEBI”) (Listing Obligations and Disclosure Requirements) (‘the Listing Regulations, 2015 Regulations’), mandates 500 top listed entities, determined on the basis their of market capitalization calculated on everyMarch of 31 financialyear formulateto a Dividend DistributionPolicy. A
III II
egulation 43A the of Securities and Exchange Board Dividend Distribution Policy Distribution Dividend I. oduction &Objective: Annexure to the Board’s Report the Board’s to Annexure Further, though the Company endeavors to declare the VII Procedure with respect to dividend: dividend to the shareholders, the Board may propose not • The Board upon perusing the rational for proposed to recommend dividend after analysis of various financial pay-out, may recommend a final dividend or declare an parameters including those listed above, cash flow position interim dividend. and funds required for future growth and capital expenditure or in case of a proposal to utilize excess cash for buy-back • The final dividend ecommendedr by the Board is subject of existing share capital. to declaration by the shareholders in the ensuing Annual General Meeting. V Policy as to how the retained earnings shall be utilized: • The interim dividend declared by the Board shall be The profits being retained in the business shall be continued placed for confirmation before the shareholders in the to be deployed in business for meeting the operating ensuing Annual General Meeting. expenses, capital expenditure, augmentation of working capital including servicing of term loans, cash outflow for • The CFO may in consultation with the MD shall also business growth and potential acquisition, if any, thus recommend to the Board transfer of such percentage contributing to the growth of business and operations of profits for that financial year as deemed appropriate of the Company. to the reserves of the Company and the Board may decide on the same. The Company stands committed to deliver sustainable value to all its stakeholders. • In case of inadequacy of profits for any financial year, the Board may approve declaration of dividend out of VI Parameters that shall be adopted with regard to accumulated profits of the previous years as per this various classes of shares: Policy and the Regulatory Framework. The holders of the Equity Shares of the Company as per the Issued and Paid-up capital, on the record date, are VIII Disclosure: entitled to receive dividends. The Company shall make appropriate disclosures as required under the SEBI Regulations and the The other classes of shares for e.g. Preference Shares or Companies Act, 2013. Shares with differential voting rights will be governed by the terms of issue of such shares. IX Amendments: The Board reserves the right to amend this Policy in whole or Any convertible instruments issued by the Company shall in part, at any point of time, as may be deemed necessary. be entitled for dividend only upon conversion. It is hereby clarified that provisions of the Applicable Laws shall prevail over the provisions of this Policy to the effect necessary amendments in the Applicable Laws have not been carried out in this Policy.
60 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 61 ector) https:// 52,544.90 ` (in Lacs) 1,57,634.71 Amount 64,353.84 49,770.53 43,510.34 ector) CEAT Limited CEAT onmental sustainability, ecological ecological sustainability, onmental otection of national heritage, art and culture heritage, art and culture otection of national T Ensuring envir Ensuring Pr ` 1,050.90 Lacs Implementing Agency); balance, protection of flora and fauna, animal welfare, animal welfare, of flora and fauna, balance, protection and conservation of natural resources agro-forestry, soil, air and water; maintaining quality of and sites of historical of buildings including restoration of art; setting up public importance and works of traditional art and development libraries; promotion and handicrafts; (Amount contributed to RPG Foundation, the
Computation of Profle for CSR Computation of Profle Net Profit as per Section 198: Net Profit FY 2015-16 FY 2016-17 FY 2017-18 of last 3 years Net Profit Average A Details of CSR spent during the financial year: a) (iv) (v) the Company is available at The CSR Policy of www.ceat.com/corporate/investor#corporate-governance The Composition of the CSR Committee: Mr Mr Ms. Punita Lal, (Independent Dir Dir During the year Ms. Punita Lal (Independent financial years: ` 52,544.90 Lacs (2% of the amount as in CSR Expenditure Prescribed item 3 above): ` 1,050.90 Lacs was inducted as the Member of CSR Committee was inducted as the Member of Hari L. January 28, 2019 in place of Mr. w.e.f. who Director) Mundra, (Non-Executive Non-Independent January 29, 2019. w.e.f. resigned
Sr. 1 2 3. oftheCompanyforlast3(three) verage netprofit 4. 5. be spentforthefinancialyear otal amountto 2. . AnantGoenka,Chairman(ManagingDirector) . Vinay (IndependentDirector) Bansal, s Corporate Social s Corporate , poverty and malnutrition, omoting education including special education omoting education including special empowering women, omoting gender equality, Pr Pr Eradicating hunger setting up homes and hostels for women and centres orphans, setting up old age homes, day care and such other facilities for senior citizens and faced by socially inequalities for reducing measures groups; and economically backward and employment enhancing vocation skills especially women, elderly and the differently among children, abled and livelihood enhancement projects; promoting preventive health care and sanitation and health care preventive promoting making available safe drinking water;
(iii) (ii) (i) The Company has undertaken activities as CSR activities The Company has undertaken activities As a r A brief outline of the Company’ A brief outline of within the CSR policy of the Company particularly:- pride in taking effective Corporate Social Responsibility Corporate pride in taking effective fulfilling critical vital towards are (CSR) initiatives which gaps, not only in the communities societal needs and on sustainable it operates in but also society at large some CSR initiatives have also been basis. Therefore, Goals (SDGs) aligned to the Sustainable Development vision Company’s established by the United Nations. The the community is to drive ‘holistic empowerment’ of implementation of sustainable initiatives and the through partnerships Company carries out these initiatives through government and local NGO’s with individuals, institutions, its CSR with in accordance by undertaking projects bodies 2013. VII of the Companies Act, with Schedule read Policy, the of the Company has approved of Directors The Board poverty hunger, CSR Policy with aim and object to fight health employment, education, promote malnutrition, and etc. rural development and sanitation equality, gender care, Act, 2013. as embodied in Schedule VII to the Companies Responsibility (CSR Policy), including overview of overview including Policy), (CSR Responsibility to be undertaken proposed or programmes projects CSR Policy and to the web-link to the and a reference or programmes: projects
takes esponsible businesscorporation,theCompany 1. Annual Report on CSR Activities for CSR Activities Report on Annual FY 2018-19 Annexure to the Board’s Report the Board’s to Annexure b) Amount unspent, if any; Nil (` 413.07 Lacs remained unspent by RPG Foundation, the Implementing Agency)
c) Manner in which the amount spent during the financial year is detailed below:
` (in Lacs) Amount Amount Cumulative Amount Outlay Spent Expenditure spent: Direct CSR project or Sector in which the Project Location (Area/ (Budget) Sr. on the upto or through activity identified project is covered District and State) Project or project or reporting implementing Programmes programme period agency* Wise (1) (2) (3) (4) (5) (6) (7) (8) 1. Netranjali Eye Care Bhandup, Ambernath, 342.00 401.57 401.57 IA Mumbai; Nashik; Nagpur (Maharashtra); Chennai (Tamil Nadu); Halol (Gujarat); 50+ Trucker fleet locations across India 2. Pehlay Akshar Primary Education Worli, Bhandup, 134.00 124.58 124.58 IA Ambernath, Mumbai; Nashik (Maharashtra); Halol (Gujarat) 3. Community Health, Water Bhandup, Ambernath, 386.90 286.01 286.01 IA Development and Sanitation, Mumbai; Nashik; Entrepreneurship and Nagpur (Maharashtra); Skill Development Halol (Gujarat)
4. Women Helathcare Skilling and Bhandup, Ambernath, 188.00 238.74 238.74 IA Empowerment Driving Training for Mumbai; Thane; women Nashik; Nagpur (Maharashtra); Chennai (Tamil Nadu); Halol (Gujarat); Jaipur (Rajasthan); Delhi; Indore, Bhopal (Madhya Pradesh) Total 1,050.90 1,050.90 1,050.90
* IA - Implementing Agency - RPG Foundation, a Public Charitable Trust.
6. Responsibility Statement of the CSR Committee: CSR activities are implemented and monitored in compliance with the CSR objectives and Policy of the Company.
For CEAT Limited
Anant Goenka Vinay Bansal Punita Lal Chairman of the CSR Committee Member of the CSR Committee Member of the CSR Committee (Managing Director) (Independent Director) (Independent Director)
Place: Mumbai Date: May 7, 2019
62 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 63 2(6) 2(87) 2(87) 2(87) 2(87) 100% Section Applicable 70% held* 100% 100% 87.62% 36.96% % of shares % of shares CEAT Limited CEAT % to total turnover of the Company 22111 Holding/ Subsidiary/ Associate Subsidiary Subsidiary Subsidiary Subsidiary Asscociate NIC Code of the Product/service TSR Darashaw Limited 6-10, Haji Moosa Patrawala Industrial Estate, Mumbai 400 011 E. Moses Road, Mahalaxmi, 20, Dr. L25100MH1958PLC011041 10, 1958 March Capital Company having Share Annie Besant Road, 463, Dr. Mumbai 400 030 Worli, 91-22-24930621 Tel: Fax: +91-22-25297423 Email: [email protected] www.ceat.com Web: of India Limited and BSE Limited) (National Stock Exchange Yes E mail: [email protected] www.tsrdarashaw.com Web: Fax: 022-66568494 022-66178484; Tel.: e of the total turnover of the Company shall be stated:- CIN / GLN Body Corporate Foreign Foreign Body Corporate Foreign U25199MH2012PLC236623 U25111KL1986PLC004449 U25119DL2014PTC267768 ess and Contact details of Registrar and Share Transfer Transfer ess and Contact details of Registrar and Share
Name and address of the Company Name and address Name and Description of main products/services Associated CEAT Holdings Company (Private) Associated CEAT Limited, Sri Lanka Manufacturing and sale of automotive Tyres, tubes and flaps Manufacturing and sale of automotive Tyres, CEAT AKKhan Limited, Bangladesh AKKhan Limited, CEAT CEAT Specialty Tyres Limited Specialty Tyres CEAT Limited Rado Tyres Online Private Limited Tyresnmore All the Business activities contributing 10% or mor All the Business activities contributing 10% Agents Particulars of Holding, Subsidiary and Associate Companies Particulars of Holding, Subsidiary Principal Business Activities of the Company Principal Business Activities of the Name Addr Whether listed Company Category/Sub-Category of the Company Category/Sub-Category Addr Registration and Other Details Registration and CIN Registration Date
1 Sr. Sr. No. Sr. Sr. No. 1 2 3 4 5 * Includes preference shares held by the Company in the respective subsidiary/associate company. held by the Company in the respective shares * Includes preference III. II. vi. v. iii. iv. details andcontact office ess oftheRegistered I. i. ii.
Form MGT-9 Annual ReturnExtract of 31, 2019 ended on March As on the financial year Administration) Rules, 2014] 12(1) of the Companies (Management and of the Companies Act, 2013 and Rule [Pursuant to Section 92(3) Annexure to the Board’s Report the Board’s to Annexure IV. Share Holding Pattern (Equity Share Breakup as Percentage of Total Equity) i) Category-wise Share Holding No. of Shares held at the beginning of the No. of Shares held at the end of the year year i.e. April 1, 2018 i.e. March 31, 2019 % Change Category of Shareholers during the % of Total % of Total Demat Physical Total Demat Physical Total year Shares Shares A. Promoters (1) Indian (a) Individuals / Hindu Undivided Family 1,48,117 0 1,48,117 0.37 1,48,137 0 1,48,137 0.37 0 (b) Central Government / State Government(s) ------(c) Bodies Corporate 1,86,03,273 0 1,86,03,273 45.99 1,87,33,200 0 1,87,33,200 46.31 0.32 (d) Financial Institutions / Banks ------(e) Any Other (specify) i Trusts 6 0 6 0 6 0 6 0 0 Sub-Total (A) (1) 1,87,51,396 0 1,87,51,396 46.36 1,88,81,343 0 1,88,81,343 46.68 0.32 (2) Foreign (a) Individuals (Non-Resident Individuals / ------Foreign Individuals) (b) Bodies Corporate 17,82,348 0 17,82,348 4.41 17,82,348 0 17,82,348 4.41 0 (c) Institutions ------(d) Qualified Foreign Investor ------(e) Any Other (specify) Sub-Total (A) (2) 17,82,348 0 17,82,348 4.41 17,82,348 0 17,82,348 4.41 0 Total Shareholding of Promoter and 2,05,33,744 0 2,05,33,744 50.76 2,06,63,691 0 2,06,63,691 51.08 0.32 Promoter Group (A) (B) Public Shareholding (1) Institutions (a) Mutual Funds / UTI 36,13,552 9,198 36,22,750 8.96 20,96,459 9,198 21,05,657 5.21 (3.75) (b) Financial Institutions / Banks 1,05,403 4,822 1,10,225 0.27 2,08,705 4,822 2,13,527 0.53 0.26 (c) Cental Government / State Government(s) 0 9,700 9,700 0.02 0 9,700 9,700 0.02 0 (d) Venture Capital Funds ------(e) Insurance Companies 10,03,117 75 10,03,192 2.48 7,20,140 75 7,20,215 1.78 (0.70) (f) Foreign Institutional Investors 67,881 2,436 70,317 0.17 1,38,698 2,436 1,41,134 0.35 0.18 (g) Foreign Venture Capital Investors ------(h) Qualified Foreign Investor ------(i) Foreign Portfolio Investors (Corporate) 89,53,923 0 89,53,923 22.14 98,72,015 0 98,72,015 24.41 2.27 (j) Any Other (specify) Sub-Total (B) (1) 1,37,43,876 26,231 1,37,70,107 34.04 1,30,36,017 26,231 1,30,62,248 32.29 (1.75) (2) Non-Institutions (a) Bodies Corporate i Indian Companies 4,03,056 17,719 4,20,775 1.04 1,28,266 17,372 1,45,638 0.36 (0.68) ii Foreign Companies 14,21,375 37 14,21,412 3.51 14,21,375 37 14,21,412 3.51 0 (b) Individuals - 0 0 i Individual shareholders holding nominal 29,93,110 5,28,062 35,21,172 8.70 36,72,763 4,64,146 41,36,909 10.23 1.52 share capital upto ` 1 lakh ii Individual shareholders holding nominal 28,932 0 28,932 0.07 40,718 0 40,718 0.10 0.03 share capital in excess of ` 1 lakh (c) Qualified Foreign Investor ------(d) Any Other i Alternate Investment Fund 7,000 0 7,000 0.02 0 0 0 0 (0.02) ii Non- Resident Indian NRI 1,32,375 148 1,32,523 0.33 2,18,665 81 2,18,746 0.54 0.21 iii Trusts 1,736 0 1,736 0 28,252 0 28,252 0.07 0.07 iv IEPF 2,04,838 0 2,04,838 0.51 2,24,210 0 2,24,210 0.55 0.05 v HUF 83,086 0 83,086 0.21 1,05,039 0 1,05,039 0.26 0.05 vi Director and relatives 4,200 7 4,207 0.01 4,207 0 4,207 0.01 0 vii Clearing Members 2,86,184 0 2,86,184 0.71 3,73,004 0 3,73,004 0.92 0.21 viii Unclaimed Suspense or Escrow Account 19,351 0 19,351 0.05 15,532 0 15,532 0.04 (0.01) ix LLP 12,576 0 12,576 0.03 5,370 0 5,370 0.01 (0.02) x Bodies Corporate-NBFC 2,449 0 2,449 0.01 5,116 0 5,116 0.01 0.01 Sub-total (B) (2) 56,00,268 5,45,973 61,46,241 15.19 62,42,517 4,81,636 67,24,153 16.62 1.43
64 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 65 year 0.76 0.10 0.13 year 0.32 (0.32) (0.68) during the % change in shareholding shareholding during the % Change - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 100 100 0.00 48.92 pledged/ Shares % of shares % of shares encumbered encumbered to total shares % of Total % of Total - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4.41 3.49 2.50 0.33 0.04 29.22 11.09 Total CEAT Limited CEAT 51.08 Company % of total shares of the of the shares 1,97,86,401 4,04,50,092 4,04,50,092 March 31, 2019 March - 1 1 1 1 1 1 1 10 10 10 10 10 10 10 876 14,185 Shareholding at the end of the year as on Shareholding 1,33,932 5,07,867 5,07,867 5,07,867 Physical i.e. March 31, 2019 i.e. March 17,82,348 14,16,757 10,14,230 44,84,624 No. of shares 2,06,63,691 1,18,16,662 - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 pledged / Demat No. of Shares held at the end of the year held at the end of the No. of Shares % of shares % of shares encumbered encumbered to total shares 1,92,78,534 3,99,42,225 3,99,42,225 - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 100 100 4.41 3.39 2.37 0.33 0.04 0.68 28.46 11.09 49.24 50.76 Company % of total Shares shares of the of the shares April 1, 2018 % of Total % of Total - 0 0 0 0 1 1 0 1 0 1 1 1 1 0 Total 14,185 9,59,125 1,33,932 2,75,876 17,82,348 13,72,835 44,84,624 No. of shares Shareholding at the beginning of the year as on at the beginning of the year as Shareholding 1,15,10,812 2,05,33,744 1,99,16,348 4,04,50,092 4,04,50,092 - 5,72,204 5,72,204 5,72,204 Physical year i.e. April 1, 2018 year i.e. April - Demat No. of Shares held at the beginning of the held at the beginning No. of Shares 1,93,44,144 3,98,77,888 3,98,77,888 Shares held by Custodians Shares and against which Depository Receipts have been issued Shareholder’s name Shareholder’s Instant Holdings Limited Ektara Enterprises LLP D Investissementen Asie S A Societe CEAT Malabar Coastal Holdings LLP STEL Holdings Limited Sofreal Mercantrade Private Limited Mercantrade Sofreal Summit Securities Limited Vayu Udaan Aircraft LLP Udaan Aircraft Vayu Mr. H. V. Goenka H. V. Mr. H. V. Goenka (in the Capacity of Trustee of Secura India Trust) of Trustee Goenka (in the Capacity H. V. Mr. Anant Goenka Mr. H. V. Goenka (in the Capacity of Trustee of Stellar Energy Trust) of Trustee Goenka (in the Capacity H. V. Ms. Mala Goenka H. V. Goenka (in the Capacity of Trustee of Nucleus Life Trust) of Trustee Goenka (in the Capacity H. V. Ms. Radha Goenka H. V. Goenka (in the Capacity of Trustee of Crystal India Tech Trust) of Crystal India Tech Goenka (in the Capacity of Trustee H. V. Sudarshan Electronics and TV Limited Sudarshan Electronics H. V. Goenka (in the Capacity of Trustee of Monitor Portfolio Trust) of Monitor Portfolio Trust) Goenka (in the Capacity of Trustee H. V. Chattarpati Apartments LLP H. V. Goenka (in the Capacity Trustee of Prism Estate Trust) Goenka (in the Capacity Trustee H. V. Swallow Associates LLP Atlantus Dwellings & Infrastructure LLP Atlantus Dwellings & Infrastructure 1 Sr. No. Sr. (C) Total Public Shareholding (B) = (B)(1)+(B)(2) Public Shareholding Total Category of Shareholers Category of 13 Total (A)+(B) Total Grand Total (A)+(B)+(C) Grand Total 2 14 3 15 4 16 5 17 6 18 7 19 8 20 9 21 10 22 11 12 ii) Shareholding of promoters ii) Shareholding iii) Change in Promoters’ Shareholding (Specify if there is no Change) Share holding at the beginning of the Cumulative Share holding during the Sr. Year year Name of the Promoter No. % of total shares % of total shares No. of Shares No. of shares of the Company of the Company At the beginning of the year April 1, 2018 2,05,33,744 50.76 Date-wise increase/(decrease) - 1 Instant Holdings Limited 6.4.2018 Inter-seTransfer 2,75,000 0.68 2,05,64,594 50.84 7.9.2018 Market Purchase 30,850 0.08 2,05,95,444 50.92 2 Stel Holdings Limited 15.3.2018 Market Purchase 39,922 0.10 2,06,35,366 51.01 22.3.2019 Market Purchase 1,300 0 2,06,36,666 51.02 29.3.2019 Market Purchase 2,700 0.01 2,06,39,366 3 Summit Securities Limited 31.8.2018 Market Purchase 23,155 0.06 2,06,59,821 51.07 7.9.2018 Market Purchase 26,150 0.06 2,06,85,971 51.14 28.9.2018 Market Purchase 5,800 0.01 2,06,91,771 51.15 4 Chattarpati Apartments LLP 6.4.2018 Inter-se Transfer (2,75,000) (0.68) 2,04,16,771 50.47 5 Radha Anant Goenka 13.4.2018 Market Purchase 10 0 2,04,16,781 50.47 6 Ektara Enterprises LLP 13.4.2018 Market Purchase 10 0 2,04,16,791 50.47 7 Vayu Udaan Aircraft LLP 13.4.2018 Market Purchase 10 0 2,04,16,801 50.47 8 Sofreal Mercantrade Private Limited 13.4.2018 Market Purchase 10 0 2,04,16,811 50.47 9 Malabar Coastal Holdings LLP 13.4.2018 Market Purchase 10 0 2,04,16,821 50.47 10 Atlantus Dwellings & Infrastructure LLP 13.4.2018 Market Purchase 10 0 2,04,16,831 50.47 11 Mala Goenka 13.4.2018 Market Purchase 10 0 2,04,16,841 50.47 At the end of the year March 31, 2019 2,06,63,691 51.08 iv) Shareholding pattern of top ten Shareholders as on March 31, 2019 (other than Directors, Promoters and Holders of GDRs and ADRs) Share holding at the Cumulative Share holding Sr. beginning of the Year during the year Name of the promoter No. % of total shares % of total shares No. of Shares No. of shares of the Company of the Company 1 Jwalamukhi Investment Holdings At the beginning of the year April 1, 2018 32,53,841 8.04 Date-wise Increase/(decrease) 13.4.2018 Market Sale (1,52,849) (0.38) 31,00,992 7.67 20.4.2018 Market Sale (1,20,231) (0.30) 29,80,761 7.37 23.10.2018 Market Sale (29,80,761) (7.37) 0 0 26.10.2018 Market Purchase 29,80,761 7.37 29,80,761 7.37 5.2.2019 Market Sale (29,80,761) (7.37) 0 0 8.2.2019 Market Purchase 29,80,761 7.37 29,80,761 7.37 27.2.2019 Market Sale (29,80,761) (7.37) 0 0 1.3.2019 Market Purchase 29,53,366 7.30 29,53,366 7.30 26.3.2019 Market Sale (29,53,366) (7.30) 0 0 29.3.2019 Market Purchase 29,53,366 7.30 29,53,366 7.30 At the end of the year March 31, 2019 29,53,366 7.30
66 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 0 0 0 0 0 0 0 0 67 2.87 2.87 2.87 2.87 2.67 2.71 1.10 1.09 2.87 5.96 5.96 3.51 2.66 2.46 5.96 2.30 5.95 2.15 1.90 5.78 1.57 5.34 4.34 1.57 1.52 4.05 1.44 3.35 1.45 1.40 3.35 1.18 of the Company % of total shares % of total shares 0 0 0 0 0 0 0 0 during the year 4,75,575 4,45,575 4,42,575 9,95,575 9,28,575 8,68,575 7,68,575 6,33,575 6,33,575 6,13,575 5,83,575 5,84,575 5,65,575 CEAT Limited CEAT 11,60,775 11,60,775 11,60,775 11,60,775 10,79,575 10,94,375 11,60,775 24,09,373 24,09,373 14,21,375 10,74,675 24,09,373 24,05,949 23,36,191 21,59,306 17,54,950 16,37,020 13,54,650 13,54,650 Cumulative Share holding Share Cumulative No. of shares 1 0 2.87 2.87 0.20 0.07 2.71 0.01 1.08 0.01 0.21 5.96 3.51 0.20 0.17 0.01 0.15 5.95 0.25 0.33 0.44 1.57 4.34 0.05 0.07 0.70 3.35 0.05 0.22 3.47 (2.87) (2.87) (0.04) (2.87) (5.96) (5.78) (1.57) (4.05) (3.35) (0.12) of the Company % of total shares % of total shares 3,000 4,000 3,424 (1,000) 81,200 30,000 86,100 79,100 67,000 60,000 20,000 30,000 19,000 90,000 (14,800) (47,660) Share holding at the holding at the Share 4,38,575 1,00,000 1,35,000 1,76,885 6,33,575 4,04,356 2,82,370 beginning of the Year beginning of (6,33,575) 11,60,775 11,60,775 10,94,375 24,09,373 14,21,375 24,05,949 17,54,950 13,54,650 14,02,310 (11,60,775) (11,60,775) (11,60,775) (24,09,373) (23,36,191) (16,37,020) (13,54,650) No. of Shares Market Purchase Market Sale Market Purchase Market Sale Market Purchase Market Sale Market Purchase Market Purchase Market Purchase Market Sale Market Purchase Market Purchase Market Purchase Market Purchase Market Sale Market Purchase Market Purchase Market Purchase Market Purchase Market Purchase Market Sale Market Purchase Market Purchase Market Purchase Market Purchase Market Sale Market Purchase Market Purchase Market Sale Market Purchase Market Purchase Market Sale Market Purchase Market Purchase Market Sale Market Purchase Market Sale At the end of the year March 31, 2019 At the end of the year March 29.3.2019 26.3.2019 1.3.2019 27.2.2019 22.2.2019 15.2.2019 8.6.2018 8.2.2019 20.4.2018 5.2.2019 At the end of the year March 31, 2019 At the end of the year March at the end of the year – No change 31, 2018 during the year ended March Citizens Fund Young Tata At the beginning of the year April 1, 2018 Date-wise Increase/(decrease) 6.4.2018 11.1.2019 29.3.2019 Westbridge Crossover Fund, Llc Crossover Westbridge At the beginning of the year and 4.1.2019 26.3.2019 21.12.2018 8.3.2019 14.12.2018 1.3.2019 7.12.2018 27.2.2019 16.11.2018 22.2.2019 26.10.2018 15.2.2019 23.10.2018 8.2.2019 21.9.2018 5.2.2019 14.9.2018 1.2.2019 24.8.2018 26.10.2018 6.7.2018 23.10.2018 22.6.2018 Name of the promoter Name of the Date-wise Increase/(decrease) 4.5.2018 Amansa Holdings Private Limited Amansa Holdings Private year April 1, 2018 At the beginning of the 4 3 2 Sr. Sr. No. Share holding at the Cumulative Share holding Sr. beginning of the Year during the year Name of the promoter No. % of total shares % of total shares No. of Shares No. of shares of the Company of the Company 5 Mirae Asset Tax Saver Fund At the beginning of the year April 1, 2018 14,74,391 3.64 Date-wise Increase/(decrease) 11.3.2018 Market Purchase 1,06,000 0.26 15,80,391 3.91 18.5.2018 Market Purchase 1,06,558 0.26 16,86,949 4.17 25.5.2018 Market Purchase 39,000 0.10 17,25,949 4.27 1.6.2018 Market Purchase 15,000 0.04 17,40,949 4.30 8.6.2018 Market Purchase 3,000 0.01 17,43,949 4.31 15.6.2018 Market Purchase 15,000 0.04 17,58,949 4.35 29.6.2018 Market Purchase 4,000 0.01 17,62,949 4.36 20.7.2018 Market Purchase 3,000 0.01 17,65,949 4.37 27.7.2018 Market Purchase 79,351 0.20 18,45,300 4.56 3.8.2018 Market Purchase 3,000 0.01 18,48,300 4.57 10.8.2018 Market Purchase 64,229 0.16 19,12,529 4.73 17.8.2018 Market Purchase 30,023 0.07 19,42,552 4.80 24.8.2018 Market Purchase 30,000 0.07 19,72,552 4.88 31.8.2018 Market Purchase 3,000 0.01 19,75,552 4.88 7.9.2018 Market Purchase 31,500 0.08 20,07,052 4.96 28.9.2018 Market Purchase 10,000 0.02 20,17,052 4.99 19.10.2018 Market Purchase 4,500 0.01 20,21,552 5 19.1.2018 Market Purchase 2,500 0.01 14,53,391 3.59 23.10.2018 Market Sale (20,21,552) (5) 0 0 26.10.2018 Market Purchase 20,21,552 5 20,21,552 5 30.11.2018 Market Sale (1,74,571) (0.43) 18,46,981 4.57 14.12.2018 Market Sale (63,000) (0.16) 17,83,981 4.41 21.12.2018 Market Sale (76,000) (0.19) 17,07,981 4.22 5.2.2019 Market Sale (17,07,981) (4.22) 0 0 8.2.2019 Market Purchase 17,07,981 4.22 17,07,981 4.22 15.2.2019 Market Sale (5,25,637) (1.30) 11,82,344 2.92 27.2.2019 Market Sale (9,88,026) (2.44) 1,94,318 0.48 1.3.2019 Market Purchase 9,60,126 2.37 11,54,444 2.85 26.3.2019 Market Sale (9,60,126) (2.37) 1,94,318 0.48 29.3.2019 Market Purchase 8,80,126 2.18 10,74,444 2.66 At the end of the year March 31, 2019 8,80,126 2.18 6 Mirae Asset India Mid Cap Equity Fund At the beginning of the year April 1, 2018 3,97,833 0.98 Date-wise Increase/(decrease) 18.5.2018 Market Purchase 33,475 0.08 4,31,308 1.07 27.7.2018 Market Purchase 47,831 0.12 4,79,139 1.18 17.8.2018 Market Purchase 23,515 0.06 5,02,654 1.24 24.8.2019 Market Purchase 52,058 0.13 5,54,712 1.37 31.8.2019 Market Purchase 48,721 0.12 6,03,433 1.49 7.9.2018 Market Purchase 26,805 0.07 6,30,238 1.56 21.9.2018 Market Purchase 33,631 0.08 6,63,869 1.64 23.10.2018 Market Sale (6,63,869) (1.64) 0 0 26.10.2018 Market Purchase 6,63,869 1.64 6,63,869 1.64 14.12.2018 Market Sale (45,072) (0.11) 6,18,797 1.53 5.2.2019 Market Sale (6,18,797) (1.53) 0 0 8.2.2019 Market Purchase 6,18,797 1.53 6,18,797 1.53 27.2.2019 Market Sale (6,18,797) (1.53) 0 0 1.3.2019 Market Purchase 61,89,797 15.30 6,18,797 1.53 8.3.2019 Market Sale (69,188) (0.17) 5,49,609 1.36 26.3.2019 Market Purchase 5,49,609 1.36 0 0 29.3.2019 Market Purchase 5,49,609 1.36 5,49,609 1.36 At the end of the year March 31, 2019 5,49,609 1.36
68 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 0 0 0 0 0 0 0 0 0 0 0 0 0 69 0.83 0.74 0.66 0.58 0.41 0.67 0.14 0.74 0.82 0.90 0.90 0.82 0.90 0.64 0.83 0.58 0.53 0.79 0.86 0.86 0.20 0.78 0.75 0.86 0.83 0.83 0.66 0.86 0.62 0.83 0.86 0.62 of the Company % of total shares % of total shares 0 0 0 0 0 0 0 0 0 0 0 0 609 during the year 27,000 54,978 80,000 3,35,000 3,00,000 2,65,000 2,35,000 1,67,691 3,00,000 3,30,000 3,62,953 3,62,953 3,30,000 3,62,953 2,60,000 3,34,759 2,35,000 2,15,000 3,20,255 3,47,428 3,47,428 3,16,173 3,01,480 3,47,428 3,35,000 3,35,000 2,67,230 3,47,428 2,51,385 3,35,000 3,47,428 2,51,385 CEAT Limited CEAT Cumulative Share holding Share Cumulative No. of shares 0 0 0 0 0.09 0.09 0.66 0.28 0.13 0.82 0.90 0.17 0.07 0.06 0.83 0.05 0.33 0.01 0.20 0.86 0.04 0.75 0.86 0.83 0.04 0.86 0.62 0.83 0.44 0.73 (0.58) (0.09) (0.07) (0.07) (0.82) (0.90) (0.79) (0.86) (0.66) (0.86) (0.83) (0.86) (0.62) (0.83) (0.10) of the Company % of total shares % of total shares 0 609 609 (609) 4,082 35,000 35,000 54,378 70,000 28,194 25,000 20,000 80,000 14,693 15,845 (35,000) (30,000) (30,000) (42,066) Share holding at the holding at the Share 2,65,000 1,12,704 3,30,000 3,62,953 3,34,759 1,35,000 3,47,428 3,01,480 3,47,428 3,35,000 3,47,428 2,51,385 3,35,000 1,79,737 2,93,451 beginning of the Year beginning of (2,35,000) (3,30,000) (3,62,953) (3,20,255) (3,47,428) (2,67,230) (3,47,428) (3,35,000) (3,47,428) (2,51,385) (3,35,000) No. of Shares Market Purchase Market Purchase Market Purchase Market Sale Market Purchase Market Sale Market Purchase Market Sale Market Purchase Market Sale Market Purchase Market Purchase Market Purchase Market Sale Market Sale Market Sale Market Purchase Market Purchase Market Purchase Market Purchase Market Purchase Market Sale Market Purchase Market Purchase Market Purchase Market Purchase Market Purchase Market Sale Market Purchase Market Purchase Market Sale Market Sale Market Purchase Market Purchase Market Purchase Market Sale Market Purchase Market Sale Market Purchase Market Sale Market Sale Market Sale 27.2.2019 22.2.2019 15.2.2019 8.2.2019 5.2.2019 1.2.2019 28.12.2018 14.12.2018 21.12.2018 7.12.2018 14.12.2018 At the end of the year March 31, 2019 At the end of the year March 26.10.2018 26.10.2018 Government Pension Fund Global At the beginning of the year April 1, 2018 29.3.2019 Date-wise Increase/(decrease) 23.10.2018 23.10.2018 26.3.2019 12.10.2018 22.3.2019 5.10.2018 1.3.2019 21.9.2018 27.2.2019 At the end of the year March 31, 2019 At the end of the year March 14.9.2018 22.2.2019 Date-wise Increase/(decrease) 7.9.2018 Crestwood Capital Master Fund, Ltd. Crestwood At the beginning of the year April 1, 2018 29.3.2019 15.2.2019 26.3.2019 8.2.2019 1.3.2019 At the end of the year March 31, 2019 At the end of the year March 5.2.2019 27.2.2019 29.3.2019 1.2.2019 8.2.2019 26.3.2019 26.10.2018 5.2.2019 1.3.2019 23.10.2018 Name of the promoter Name of the Dimensional Emerging Markets Value Fund Markets Value Dimensional Emerging year April 1, 2018 At the beginning of the Date-wise Increase/(decrease) 27.4.2018 8 9 7 Sr. Sr. No. Share holding at the Cumulative Share holding Sr. beginning of the Year during the year Name of the promoter No. % of total shares % of total shares No. of Shares No. of shares of the Company of the Company 10 General Insurance Corporation of India At the beginning of the year April 1, 2018 32,038 0.08 Date-wise Increase/(decrease) 23.10.2018 Market Sale (32,038) (0.08) 0 0 26.10.2018 Market Purchase 3,20,038 0.79 3,20,038 0.79 5.2.2019 Market Sale (3,20,038) (0.79) 0 0 8.2.2019 Market Purchase 3,20,038 0.79 3,20,038 0.79 27.2.2019 Market Sale (3,20,038) (0.79) 0 0 1.3.2019 Market Purchase 3,20,038 0.79 3,20,038 0.79 26.3.2019 Market Sale (3,20,038) (0.79) 0 0 29.3.2019 Market Purchase 3,20,038 0.79 3,20,038 0.79 At the end of the year March 31, 2019 3,20,038 0.79 *Note: The shares of the Company are traded on daily basis. Hence the date wise increase/ decrease in the shareholding of the above shareholders are consolidated based on the weekly beneficial position and Permanent Account Number (PAN) of the shareholder. v) Shareholding of Directors and Key Managerial Personnel Share holding at the Cumulative Share holding Sr. beginning of the Year during the year Name of the promoter No. % of total shares % of total shares No. of Shares No. of shares of the Company of the Company 1 Mr. H. V. Goenka, Chairman, (Non-Executive Director) At the beginning of the year 1,33,932 0.33 and at the end of the year-No change during the year ended March 31, 2019 1,33,932 0.33 2 Mr. Anant Goenka, Managing Director At the beginning of the year 14,185 0.04 and at the end of the year-No change during the year ended March 31, 2019 14,185 0,04 3 Mr. Paras K. Chowdhary, Director At the beginning of the year 3,000 0.01 and at the end of the year-No change during the year ended March 31, 2019 3,000 0.01 4 Mr. Arnab Banerjee, Director At the beginning of the year 1,207 0 and at the end of the year-No change during the year ended March 31, 2019 1,207 0.00 5 Mr. Kumar Subbiah, Chief Financial Officer At the beginning of the year 500 0 and at the end of the year-No change during the year ended March 31, 2019 500 0.00 6 Ms. Vallari Gupte, Company Secretary At the beginning of the year April 1, 2018 Date-wise Increase/(decrease) 11.10.2018 - Market Purchase 15 0 At the end of the year March 31, 2019 15 0.00 Note: 1. No other Director holds shares in the Company. 2. Shares held above are in individual capacity and do not include shares held as Trustees.
70 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy ------71 Total Total 128.70 537.92 64,217.53 61,962.78 64,088.84 41,99,063 34,67,058 (55,185.99) 1,17,148.77 1,26,051.62 1,26,589.54 7,64,34,588 6,87,68,467 Total Amount Total Indebtedness 43,63,73,170 ------0.20 0.20 0.20 0.20 - - - - - Deposits CEAT Limited CEAT (COO) 39,600 11,92,903 2,91,21,313 2,78,88,810 - - - - Mr. Arnab Banerjee, Mr. 22,614 22,614 Chief Operating Officer Chief Operating Officer (269.07) 3,030.80 3,030.80 19,583.20 19,852.27 - - - - - Unsecured loans Unsecured 30,06,160 34,27,458 - - 4,73,13,275 4,08,79,657 128.70 537.92 deposits Mr. Anant Goenka, Mr. Managing Director excluding 61,186.53 42,379.59 61,057.84 97,296.51 (54,916.92) 1,03,975.34 1,03,437.42 Secured Loans Secured est outstanding/accrued but not due for payment but est outstanding/accrued ector, Whole-time Directors and/or Managers Whole-time Directors ector, ectors and Key Managerial Personnel ovision contained in Section 17(1) of Act, 1961 Income Tax Act, 1961 Income Tax V Pr Salary as per pr
* Others, Specify Stock option Sweat Equity Commission of profit * As percent benefits) Others please specify (retiral Total (A) Total of the Company Ceiling as per the Act (Being 10% of Net Profits calculated as per Section 198 of the Act) Particulars of Remuneration b) c) 1961 Act, u/s17(2)ofIncomeTax alue ofperquisite Tax inlieuofsalaryunderSectionu/s17(3)Income ofit a) Gross Salary Gross Principal Amount Inter Inter Inter Inter Principal) Addition (Includes only Principal) Reduction (Includes only Principal Amount Remuneration to Managing Dir Indebtedness of the Company including inter of the Company Indebtedness Remuneration of the Dir INDEBTEDNESS
2 3 4 5 Total (i+ii+iii) Total Net Changes +iii) (i +ii Total Sr. Sr. No. 1 i) ii) iii) est duebutnotpaid est accruedbutnotdue – year Indebtedness at the end of the Financial est duebutnotpaid during the Financial year Change in Indebtedness est accruedbutnotdue – Indebtedness at the beginning of the Financial year Indebtedness at the i) ii) iii) VI. A. V. B. Remuneration to Other Directors Sr. Particulars of Remuneration Name of Directors Total No. Mr. Mahesh Mr. S. Mr. Haigreve Mr. Atul C. Mr. Vinay Mr. Paras K. Ms. Punita Mr. Ranjit V. Amount S. Gupta Doreswamy$ Khaitan Choksey Bansal Chowdhary Lal Pandit# Independent Directors • Fee for attending board/ 8,05,000 8,00,000 4,00,000 4,00,000 7,75,000 6,00,000 5,00,000 - 42,80,000 committee meetings • Commission 8,00,000 8,00,000 8,00,000 8,00,000 8,00,000 8,00,000 8,00,000 - 56,00,000 • Others, please specify Total (1) 16,05,000 16,00,000 12,00,000 12,00,000 15,75,000 14,00,000 13,00,000 - 98,80,000 Mr. H. V. Mr. Hari L. Mr. Pierre E. Goenka Mundra@ Coahde** Other Non-Executive Directors • Fee for attending board 5,30,000 4,70,000 ------10,00,000 committee meetings • Commission 3,75,00,000 6,67,000 ------3,81,67,000 • Others, please specify Total (2) 3,80,30,000 11,37,000 0 0 0 0 0 0 3,91,67,000 Total (B) = (1+2) 3,96,35,000 27,37,000 12,00,000 12,00,000 15,75,000 14,00,000 13,00,000 0 4,90,47,000 Total Managerial Remuneration 4,90,47,000 Overall Ceiling as per the Act* 48,00,10,487 * Sitting Fees have not been considered as a component for reckoning as per the Companies Act, 2013. ** Mr . Pierre E. Cohade was appointed as Director (Non-Executive Director Non Independent Director) w.e.f. July 20, 2018 and is not being paid sitting fees and commission. # Mr. Ranjit V. Pandit has waived off his right to receive remuneration include sitting fees and commission from the Company. @ Ceased to be a director w.e.f. January 29, 2019 $ Ceased to be a director w.e.f. March 12, 2019
C. Remuneration to Key Managerial Personnel other than MD/ Manager/ WDT Sr. Particulars of Remuneration Mr. Kumar Subbiah Ms. Shruti Joshi Ms. Vallari Gupte CS Total Amount No. CFO (1.4.2018 – 11.6.2018) (25.10.2018 – 31.3.2019) 1 Gross Salary a) Salary as per provision contained in 1,96,23,005 7,01,535 26,25,788 2,29,50,328 Section 17(1) of Income Tax Act, 1961 b) V alue of perquisite u/s 17(2) of Income 39,600 8,44,398 0 8,83,998 Tax Act, 1961 c) Pr ofit in lieu of salary under Section u/s 17(3) of Income Tax Act, 1961 2 Stock option - - - - 3 Sweat Equity - - - - 4 Commission * As percent of profit - - - - * Others, Specify - - - - 5 Others please specify (retiral benefits) 5,14,059 6,72,055 1,80,032 13,66,146 Total (A) 2,01,76,664 22,17,988 28,05,820 2,52,00,472
VII. Penalties/ Punishment/ Compounding of offences: During FY 2018-19, there were no penalties/ punishment/ compounding of offences under the Companies Act, 2013.
72 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 73 essure by essure ube lights with ol to PID (I to P) control ol to PID (I to P) control CEAT Limited CEAT . oposals for reduction of oposals for reduction ocess air dryers (2 nos.) of Supply recovery pumps recovery Supply of ol for HT motors cooling fans in mixing essors, blowers, pumps at Bhandup ficient pumps for Cooling Towers ficient pumps for Cooling of magnetic level sensor with auto control in control auto with sensor level magnetic of ficient Heat Pumps Electrical Band Heaters ficient Heat Pumps Electrical Band Heaters efficient pumps with VFD - New System for hot System for - New with VFD pumps efficient s for controlling utilities at Bhandup Plant s for controlling at Bhandup Plant. water Hot and tank water cold BOM tank, condensate tank at Bhandup Plant. recovery air to instrument air control for deaerator steam, Process valves at Bhandup Plant. at Nashik Plant operations Nashik Plant Halol Plant at process substation at Halol Plant at Halol Plant new compressor introducing pumps at Bhandup Plant. efficient at Bhandup Plant. Nashik Plant (3000 KWH/day saving) Nashik Plant Plant and saved 500 CFM air (2000 banbury at Bhandup KWH/Day saving). KWH/day saving). LED in all Plants. and Nashik Plant Plant. Conversion to Heat Pump system at Nashik water system with VFD at Nashik Plant Installation Conversion of pneumatic contr Banbury No.1 Conversion with AC drive and 60 rpm Banbury No.1 Conversion with AC drive Optimization Use of VFD contr 9 in electric Harmonic filter installation for DTR 7 and Reduce carbon conveying system pr VFD’ Unidrive instead of bull gear assembly at Bhandup Plant Replacement of old hot water pumps with energy Energy ef Unidrive for 3 Roll Calendar Replacement of pr Banbury 1 conversion with AC drive and 60 rpm at drive and 60 rpm conversion with AC Banbury 1 RAM to hydraulic RAM in Conversion of pneumatic pump at Bhandup Plant (200 Installed VFD for vacuum conventional T Replacement of VFD for Compr Energy Ef Energy
• • • • • • • • • • • • • • • • Additional investments/Pr • • • • Consumption of energy.
(b) ocess at Nagpur Plant om pneumatic to Hydraulic eplacement job at Halol Plant reduction at Nagpur Plant (800 (800 Plant at Nagpur reduction ew compressor with VFD (500 ew compressor f set point optimization at Halol Plant (200 ficient pump fixed in process cooling tower at ficient pump fixed in eturn interconnection passing valve replacement passing valve replacement eturn interconnection idle running time of hydraulic motor at Halol Plant Halol at motor hydraulic of time running idle at Nashik Plant (600 KWH/day saving). Plant (600 KWH/day saving). at Nashik Plant (650 KWH/day saving). KWH/day saving). steam at Nashik Plant (300 KWH/day saving). uni-drive system at Nashik Plant (275 KWH/day saving). with new one at Halol Plant (1037 KWH/day saving). KWH/day saving). (150 KWH/day saving) KWH/day saving) replacement at Halol Plant (400 cooling tower fills KWH/day saving) Halol Plant (180 KWH/day saving) (100 KWH/day saving) (250 KWH/day saving) KWH/day saving) New system for hot water pumps with VFD at Nashik Electrical band heaters conversion to heat pump system Banbury Scr Banbury Ram conversion fr Bead filler extruder electrical heater TCU conversion to Conversion of drive system of 84” mill of Ban 4 to Supply r AHU On/Of Kirloskar chiller descaling job done at Halol Plant (100 Kirloskar chiller descaling job done at Halol HV Energy Ef Cooling tower FRP blade r Stop Operation optimization of Mixer pr Fix power consumption
• • • • • • • • • • • • • • • The Company continued to give major emphasis on The Company continued conservation of energy and the measures taken during the and the measures conservation of energy of energy efficiency continued. The years were previous at the unit is monitored utilization in each manufacturing to achieve effective in order quarter, corporate level every significant energy conservation The conservation of energy. during the year were: measures Conservation of Energy Conservation of
andmixer coolingprocess AC coolingtower,
A. (a) [Pursuant to Section 134(3)(m) of The Companies Act, 2013 134(3)(m) of The Companies Act, 2013 [Pursuant to Section (Accounts) Rules, 2014]:- with Rule 8(3) of The Companies read Conservation of Energy, Technology Technology of Energy, Conservation Exchange and Foreign Absorption Earnings and Outgo Annexure to the Board’s Report the Board’s to Annexure B. T echnology Absorption and Foreign Exchange MNC OEMs like Suzuki, Hyundai, KIA Motors, Renault, Earnings and Outgo Mahindra etc. for hatchback, sedan and Compact SUVs. The Company has further strengthened its relationships Research and Development (R&D) with key Original Equipment Manufacturers (‘OEMs’) 1. Specific areas in which R&D activities were carried and received nominations for new projects from Skoda, out by the Company Nissan, and Peugeot for their premium hatch and SUV The major focus of R&D has been on new and innovative programmes. The Company has entered Global Supplier materials and processing and breakthrough product Panel of Volkswagen by Clearing VDA 6.3 process audit development. Today, it is 180+ members strong team, and is working on 6 Skoda Projects. HQ in Halol and spread across Bhandup, Nashik, Nagpur and upcoming Chennai plant, and newly opened CETC In FY 2018-19, the Company has received approvals from (CEAT European Technical Centre) in Frankfurt Germany Hyundai QXi, TUV3oo Plus, Hyundai Santro. Further, the which plays key role in meeting challenging requirement of Company is working with other global OEMs like Ford, matured markets such as Europe. In recent few years, R&D Toyota, Honda, PSA Peugeot etc. and is confident that it has taken several strides in new development projects, will be able to open it’s accounts with them in the coming adding several domestic and international OEMs to the days. In domestic replacement market. Milaze X3 tyres portfolio and various innovative solutions for which in the were launched successfully which are designed to provide last few years alone we have filed several patents. tyre life upto 1 Lac km. R&D way of working is well aligned with TQM philosophy The Company’s product series in PCR Winter, Summer, of Company and activities are carried out based on a All season, UHP and Van categories launched in Europe five-year rolling roadmap, aligning with Company’s vision are well accepted in meeting stringent performance which ensured forecast and developed newer technologies requirement of European markets. The Company achieved keeping in mind future requirements. yet another milestone this year by developing its first 19 & 20-inch UHP tyres with high rim diameter and lowest At CEAT R&D, the aim is to make innovation a powerful aspect ratio. With this range of 19 and 20-inch UHP tyres tool that will enable us to affect business breakthroughs. the Company’s presence in Europe’s niche market segment With use of basic research department, we developed new such as Germany will increase. With this the Company and innovative materials and processing. Within 1 (one) year poised to become one among the global market leaders we have identified several new functional and nano materials with high range premium products. for tyre compounds which has helped to meet stringent requirements of grip, RR and noise. New vestments in In commercial category, new Truck-Bus Radial tyres Win the areas of predictive testing and advanced raw material Series was successfully launched for Domestic market and characterization resulted in significant technological now well accepted in the market. A Super Heavy Load tyre edge over competition. Last year, multiple advanced first of its kind Truck Bus tyre was launched to cater to research projects and Ph.D. programmes in collaboration heavy Load Markets. In the Bias segment Premium Rib with IITs and German Universities were initiated. Tyre for high mileage was developed and New Tyre for Aggressive approach in the areas of patent filing and Mining segment was launched giving higher retreadability. research/special projects has created total 46 patens and 51 design registrations cumulatively. In 2/3 Wheeler category, development programmes with OEM’s resulted in product approvals and continuous The Design and Advance Engineering played an important supplies to many leading OEMs including Honda, Suzuki, role to ensure the Company delivers innovative and quality Yamaha, Bajaj and Royal Enfield premium models products and use of Digitization and automation has upto 650CC. In FY 2018-19, the Company received helped to reduce product development time. The use of approvals for Bajaj Platina Low RR, Royal Enfield 350 semantic approach with updated pattern bank helped to cc Bike and received approval in Mahindra E Rickshaw. develop new products for OE and replacement markets. 2/3-Wheeler market undergone a considerable change in Test facilities were elevated by installing High Speed the past years including introduction of electric vehicles, Uniformity, Flat Trac and Semi Anechoic Chamber which ABS /CBS implementation and BS6 vehicle developments. has reinforced objective testing and timely development of This year the Company launched industry first ‘GRIPP products to meet the customer requirements. X3-Everlasting Grip’ the Dual Compound Technology which is first of its kind in India providing lasting Grip to customer. 2. Benefits derived as a esultr of the above R&D The Company also launched its indigenously developed With help of above initiatives, the Company has proved puncture safe series of tubeless 2 Wheeler tyres, first time its technological provence and developed more than 58 in selected markets in India. new products across various categories and geographies globally in FY2018-19, which has significantly contributed 3. Awards and Accolades to company’s profitability and growth resulting into 19.4% CEAT CZAR Pattern has been awarded ‘INDIA DESIN of the Company’s revenue from new products. MARK’ in 2014 and 2018 which is highest design recognition from the Indian Government through India Design Council In Passenger Car Radials (‘PCR’) category, today and has been initiated in cooperation with Japan Institute of the Company is proud partners of leading Indian and
74 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 75 76,090 1,38,556 2017-18 (` in Lacs) nal research with nal research ojects were initiated ojects were 84,709 2,00,943 2018-19 CEAT Limited CEAT n experimentation methods e: national conferences, seminars for national conferences, oduct development with automobile esearch projects and Ph.D. and Ph.D. projects esearch Product Development Product Improvements Product Efficiency Process reduction Cost Substitution Development Import Process generation New Property Intellectual Sustenance with consultants and domain experts from Europe Europe from with consultants and domain experts of work included development of and Japan. The area Patterns Material new Product and designs, Advanced development and simulation Process technology, capability development. programmes in collaboration with IITs and German with IITs in collaboration programmes technologies. Universities on identified us to innovate enabled and global suppliers institutions product and improve or R&D in many emerging areas efficiency. performance and process technology exploration and joint projects. helped in taking-up Original Equipment Manufacturer developing emerging challenges in the industry and and current technological innovations to meet requirements. future out many and simulation techniques helped in trying in conceptual innovative concepts in virtual mode performance and stages to improve and prototyping cut-down both cost and development time. Joint Contracts and development pr Advanced r and exter Strategic partnerships Participation in inter Partnership and pr Sophisticated and moder
Foreign exchange earned Foreign exchange used Foreign • Benefits of the above ar For Ef • • • • • absorption, adaptation and innovation: absorption, adaptation a) b) c) d) e) f) g) h)
2. eign ExchangeEarnings andOutgo: TECHNOLOGY ABSORPTION, ADAPTATION AND ADAPTATION ABSORPTION, TECHNOLOGY INNOVATION 1. technology forts, inbrief,madetowards 2017-18 2,964 6,069 9,033 (` in Lacs) opean market, the 2018-19 2,917 6,159 9,076 e on Research and Development: e on Research Revenue expenditure Total Capital expenditure Design Promotion (JDP). During FY 2017-18, the Company During FY 2017-18, (JDP). Design Promotion for customer satisfaction Ranked No. 1 in India has been J. the to according segment, car tyre passenger in Customer Tyre Equipment Original India 2018 Power D. R&D has The Company’s study. Satisfaction Index (TCSI) and publications in papers published several research and journals internationalenhance which will conferences the global footprint. Expenditur V Post to the successful entry in Eur Futur T areas of reducing rolling resistance, reducing noise and reducing resistance, rolling of reducing areas life will accelerate the product grip and tyre improving 2 for Passenger, development of Electrical vehicle tyres key a will be which categories commercial and Wheeler for FY 2019-20 development. focus area Company is now looking to enter into Australia market as a Company is now looking to enter into Australia With technological strong part of global expansion strategy. to meet competence, the Company is confident to of these new markets and look forward requirements for Australian market. After successful launch SUV products the launch of Win tyres, product series in commercial market for to enter European Company is now preparing well. progressing are category and projects commercial TCO of Intelligent truck tyres, working in the areas are We Win with 20% Low Fuel (Industry Best Fuel-Efficient Tire to launch in RR is under development and will be ready FY enhance the Company’s 2019-20) which will further and technological Provence. market presence constantly forecasting and exploring technological technological and exploring forecasting constantly and develop newer technologies. of future requirement R&D capability in the areas In constant endeavour to improve special grip, durability and noise through of fuel efficiency, testing predictive focus developing simulation technologies, advanced raw capabilities and use of novel materials and Design Digitization, material characterization. Automation, product reduce Thinking and Data analytics will help to development fore development time which will make the and agile. efficient
5. arious technologiesdevelopedinlastfewyearsthe
4. Company is mobilitychallenges,the o meetfuture e plans: Annexure to the Board’s Report
Particulars of Employees pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31, 2019. Particulars Name of the Director Ratio of the Percentage remuneration increase/ of each decrease in director to remuneration the median of each remuneration Director of the employees of the Company (i) the ratio of the remuneration of each director to the median Mr. H. V. Goenka 129.19:1 1% remuneration of the employees of the Company for the financial year; Mr. Anant Goenka 160.72:1 19% Mr. Arnab Banerjee 98.92:1 14% Mr. Atul C. Choksey 4.08:1 26% Mr. Haigreve Khaitan 4.08:1 41% Mr. Hari L. Mundra 3.86:1 (2%) Mr. Mahesh S. Gupta 5.45:1 18% Mr. Paras K. Chwodhary 4.76:1 24% Ms. Punita Lal 4.41:1 53% Mr. S. Doreswamy 5.44:1 18% Mr. Vinay Bansal 5.35:1 35% (ii) the percentage increase/decrease in remuneration of each Director, Mr. Kumar Subbiah, CFO 12% Chief Financial Officer, Chief Executive Officer, Company Secretary or Ms.Vallari Gupte, CS N. A. manager,if any, in the financial year; (iii) the percentage increase in the median remuneration of employees in (37.1) the financial year; (iv) the number of permanent employees on the rolls of the Company as 5,815 on March 31, 2019 (v) average percentile increase already made in the salaries of employees The average increase in salaries of employees (other than other than the managerial personnel in the last financial year and its managerial personnel) during FY 2018-19 was 10.83%, whereas comparison with the percentile increase in the managerial remuenration the increase in salary of the managerial personnel was 13.43%, and justification thereof and point out if there are any exceptional in view of the rationalization done to align the salaries with the circumstances for increase in the managerial remuenration; external benchmarks. Compensation benchmarking process is followed by the Company to evaluate the individual salaries internally and externally and the increment given to each employee is based on the market benchmark, performance and potential of the individual and performance of the Company during the financial year. (vi) affirmation that the remuneration is as per the remuneration policy of Remuneration paid during FY 2018-19 was as per the the Company; Nomination and Remuneration Policy of the Company. Notes: 1. Mr. Hari L. Mundra ceased to be a Director w.e.f. January 29, 2019 due to resignation. 2. Mr. S. Doreswamy ceased to be a Director w.e.f. March 12, 2019 due to resignation. 3. Ms. Vallari Gupte was appointed w.e.f. October 25, 2018 and therefore comparable amount of remuneration was not available for determination of percentage increase/decrease in the remuneration. 4. Median remuneration of the employees is calculated on the basis of remuneration details of employees including the Managing Director. 5. The reduction in median salary of employees for FY 2018-19 over the previous financial year is mainly due to increase in the number of associates at the Company’s plants. 6. Directors’ remuneration includes commission and sitting fees for FY 2018-19.
76 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 77 ector on ector on the ector of the persons who ector shall not epresentation of epresentation e skills/ expertise/ CEAT Limited CEAT e; d level shall be used a tool for supporting d level shall be used a Board of Directors of the Company, including of the Company, Directors of Board shall, in addition to a Independent Director possess should qualification professional formal knowledge and experience skills, appropriate actuarial sciences, viz. fields more one or in sciences, banking, finance, economics, law, marketing, management, sales, human resource, corporate governance administration, research, or technical operations. of the Company shall be such person the Board policy directions who shall be able to provide on good to the Company including directions corporate governance. Any person to be appointed as a Dir Any person to be appointed as a Dir ements Relating to Directors
possess any disqualifications as prescribed under the under possess any disqualifications as prescribed Applicable Laws. possess requisite qualifications & experience and & experience qualifications requisite possess of diversity positive attributes within overall framework as described in this Policy. Company shall, in addition to the formal qualifications experience described in this Policy, and relevant integrity, as such attributes the possess also shall leadership, business orientation, commitment and and such other attributes, track record proven in the interest which in the opinion of the NRC are of the Company. Any person to be appointed as Dir The Company shall appoint those i. ii. The person to be appointed as a Dir Disqualification Appointment of Directors of Appointment Experience & Qualifications attributes Positive female members to also ensure statutory to also ensure female members compliance as applicable; in of Directors of the Board competencies required business/sector. context of company’s Experience of diverse natur Experience of diverse the right r Gender in having and cor Qualifications, Knowledge
• • • Diversity at the Boar and shall The Company is committed to meritocracy Requir the attainment of the strategic objectives of the Company the attainment of the strategic objectives while Accordingly, and also to drive business results. diversity shall be designing the composition of the Board, shall be all appointments and all aspects on considered based on meritocracy. members and shall have within the Board diversity respect and all all view shall be heard where an inclusive culture opinions respected. and skills. Withand skills. a sustainable a view to achieving diversity aim to increase the Company shall development, element in terms of: level as an essential at the Board D. A. B. C.
4. d. for the ectors; ficer (CEO) or the Managing ficer (CFO); emuneration of the Directors, Directors, emuneration of the d of Directors ficer, designated as key managerial ficer, Company Secretary (CS); Secretary Company (WTD); Director Whole-time efers to the variety of attributes of diverse the context otherwise requires, words and words otherwise requires, the context e skills/ expertise/ competencies required of the e skills/ expertise/ competencies required the the personnel by the Board, who is in whole-time personnel by the Board, than one level employment at a level not more below the directors; Director (MD) or Manager; (MD) Director the Chief Financial Of Such other of the Chief Executive Of
achieving the benefits of having a diverse Boar achieving the benefits of having a diverse qualifications, positive attributes and independence qualifications, positive attributes and independence performance evaluation of all Dir cor appointment and r appointment and Senior Management Personnel (SMP) purpose of this Policy means officers/personnel management team members of the core who are and normally comprising of directors excluding board of all members of management one level below the whole-time director/ managing officer/ executive chief manager and shall specifically include director/ and chief financial officer. company secretary “Key Managerial Personnel” (KMP) mean: “Non-Executive Directors” (NED) means a “Non-Executive Directors” who is of Directors Board member of a Company’s not in whole-time employment of the Company. for appointment of a Director and assessment of for appointment of a Director independence of Independent Director; of the Company; Directors of Board Key Managerial Personnel and Senior Key Managerial Management Personnel; • • • • •
Diversity in the Boar Diversity r Unless Definitions v iii. iv ii. This Policy sets out the guiding principles on: This Policy sets out the i. This Intr nature between people and encompasses acceptance, nature and an understanding that everyone is unique. respect physical ethnicity, These aspects include age, gender, knowledge abilities, marital status, ideologies, background, expressions used in this policy and not defined herein but used in this policy and not defined herein expressions defined in the Companies Act, 2013 and SEBI (Listing Regulations, Requirements) Obligations and Disclosure time to time, shall have 2015, as may be amended from assigned to them therein. the meaning respectively the Companies Act, 2013 and the SEBI (Listing Obligations SEBI the Companies Act, 2013 and the 2015 relating Regulations, Requirements) and Disclosure Key the Directors, of remuneration and appointment to the Senior Management Personnel and Managerial Personnel, diversity. Board other employees and iii. ii. i.
3.
2. . .
of the provisions of in terms formulated been policy has Nomination and Remuneration Policy and Remuneration Nomination 1. oduction /Objective Annexure to the Board’s Report the Board’s to Annexure E. Evaluation ii. The evaluation process adopted by the i. NRC shall facilitate the Board to undertake Company shall always consider the appropriate evaluation of performance of all Directors benchmarks set as per industry standards, on yearly basis. performance of the Industry, the Company and of the individual KMP / SMP. ii. The Board shall evaluate, every year, its performance along with that of the individual iii. Evaluation of performance shall be carried out directors including Chairman, Independent at least once in a year, in accordance with the Directors (IDs), independence of IDs and of existing evaluation process of the Company. its Committees. E. Remuneration iii. The Company may appoint an external agency Guiding Principles to conduct the exercise of evaluation and submit i. The terms of employment and remuneration of the report/outcome to the Company, in the MD, WTD, KMPs, Directors and SMPs shall be manner desired by the Company. competitive in order to ensure that the Company can attract and retain competent talent. F. Famliarization Programme The Company shall familiarise the independent ii. The Remuneration Policy shall ensure that: directors of the Company with their roles, rights, a) The level and composition of remuneration responsibilities in the Company, nature of the industry is reasonable and sufficient to attract, in which the Company operates, business model of retain and motivate Directors, KMPs and the Company through various programmes. SMPs of the quality required to run the Company successfully. 5. Requirement Relating to Key Management Personnel and Senior Managerial Personnel b) Relationship of remuneration to A. Appointment of KMP and SMP performance is clear and meets appropriate i. Based on the recommendation of NRC, the performance benchmarks. appointment of the MD, CEO, WTD, CFO and the c) Remuneration to Directors, KMPs and CS shall be approved by the Board of Directors. SMPs involves a balance between fixed and ii. KMP and SMP shall be employed by the Company variable pay reflecting short and long-term only on a whole-time basis and they will not be performance objectives and goals set permitted to take up employment anywhere by the Company. else, except in the subsidiary of the Company d) Remuneration package is linked to the with prior approval of the Board of Directors. achievement of corporate performance iii. The appointments of SMP shall be approved targets and a strong alignment of interest by MD. Remuneration payable to SMP with stakeholders. shall be recommended by the NRC and iii. While determining the remuneration and approved by the Board. incentives for the MD / WTD, KMP’s and SMPs, B. Qualifications and Experience the following shall be considered: i. Any person to be appointed as KMP or as SMP a) Pay and employment conditions with peers/ shall possess relevant educational, professional elsewhere in the competitive market. qualifications, experience and domain knowledge required for performing the job for b) Benchmarking with the industry practices. which they are appointed. c) Performance of the individual. ii. There shall be no discrimination on account d) Company Performance of gender, race and religion in terms of appointment as KMP or SMP. . iv For the benchmarking with Industry practice, criteria of size, complexity, data transparency C. Positive Attributes and geographical area shall also be given i. KMP and the SMP shall also possess attributes due consideration. like decision making skills, leadership skills, integrity and proven track record and shall . v The pay structures shall be appropriately aligned demonstrate commitment to the organization. across levels in the Company. ii. KMP and SMP shall meet the expectations of 6. Remuneration Policy operational transparency to stakeholders while A. MD / WTD at the same time maintaining confidentiality of i. Remuneration to the MD and WTD at the time information in order to foster a culture for good of his/her appointment shall be proposed by the decision making. NRC and subsequently approved by the Board of Directors and the shareholders of the Company D. Performance Evaluation or Central Government, whenever required. i. MD / CEO shall carry out the performance evaluation of all the SMPs and KMPs excluding himself/herself and the WTD. 78 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 79 , and s website cular(s) etc. eset at any time CEAT Limited CEAT emuneration in whatever form payable emuneration in whatever es KMPs & SMPs pursuant to any Stock Option to any pursuant & SMPs KMPs Plan adopted by the Company. to the KMPs and SMP at the time of his/her to the KMPs and SMP by the be recommended appointment, shall by the Board. NRC and approved considering shall be decided annual increase individual and also of the the performance of the shall also / trends Industry practices Company. be given due consideration. Annual increment to the /subsequent variation in remuneration by the NRC/ KMPs/SMP shall be approved Directors. of Board considering the benchmark of international similar are companies, which and domestic in size and complexity to the Company. Benchmark information shall be obtained compensation internationallyfrom recognized service consultancies. NRC may consider grant of Stock Options to NRC may consider grant of Stock Options and other benefits as per the policy of the benefits as per and other qualification, relevant considering Company, of the individual as experience and performance market conditions. well as the prevailing The r be evaluated annually Remuneration shall Remuneration can be r Company may provide an insurance cover to cover insurance an provide may Company d of Directors may amend this Policy, as and may amend this Policy, d of Directors premium paid by the Company for such insurance such for Company the by paid premium
The The Directors, KMPS & SMPS for indemnifying them Directors, of any negligence, against any liability in respect of of duty or breach default, misfeasance, breach paid on the same shall not be trust and the premium paid to them. a part of remuneration as treated Liability and Officers called for Directors cover, shall taken for the above purpose Insurance Policy, be paid by the Company without any charge to the KMPs and SMPs. Directors, vi. iii. iv v
In case of any amendment(s), clarification(s), cir Dir a) b) Disclosur This Policy shall be disclosed on the Company’ Amendments to the Policy The Boar issued by the relevant authorities, not abeing consistent abeing not authorities, relevant the by issued then such laid down under this Policy, with the provisions etc. shall prevail amendment(s), clarification(s), circular(s) the effective from hereunder notwithstanding the provisions date as laid down under such amendment(s), clarification(s), etc. circular(s) and a web link thereto shall be provided in its Annual Report. shall be provided and a web link thereto of this Policy would when deemed fit. Any or all provisions with the / amendment in accordance be subject to revision Rules, Regulations, Notifications etc. on the subject as may time to time. statutory authorities, from be issued by relevant
7. LiabilityInsurance ector andOfficer 8. 9. . . ed that total remuneration ed that total remuneration linked Bonus linked high-flier executives in a delivery of key business strategies, business key of delivery shall be evaluated annually against annually against shall be evaluated ements / subsequent variation in subsequent variation ements / (both fixed & variable) & fixed (both quisites shall also be entitled for payment for entitled be also shall shall be eligible for remuneration of remuneration for eligible be shall shall be entitled to such sitting fees as may as fees sitting such to entitled be shall Motivates Attracts Salary Per Performance creates a strong performance-orientated a strong creates of achievement and rewards environment objectives & goals over the the Company’s short and long-term. competitive global market and remunerate executives fairly and responsibly. Retirals benefits Retirals otal remuneration for the MD and WTD shall be shall WTD and MD the for remuneration otal include salary comprising of both fixed and variable components, performance incentives such manner that: pursuant to any Stock Option Plan adopted Plan Option Stock any to pursuant by the Company. if in the services rendered such professional opinion of the NRC, the NED possesses rendering such qualification for the requisite services. professional of remuneration / commission as may be of remuneration by NRC and subsequently recommended up to the of Directors, by the Board approved and limits permitted under the Applicable Laws of of the shareholders approval required wherever time to time. the Company shall be obtained from be decided by the Board from time to time for to time time from Board the by be decided and of the attending the meeting of the Board Committee thereof. payable to MD and WTD’s shall not exceed the payable to MD and WTD’s limits mentioned under the Applicable Laws. performance and a benchmark of international and a benchmark performance similar in which are and domestic companies, information Benchmark complexity. and size internationally recognized shall be obtained from consultancies. compensation service comprised of the following: remuneration to the MD and WTD shall be MD and WTD to the remuneration within of Directors, by the NRC/Board approved of the shareholders by the overall limits approved Government.the Company or Central Remuneration shall be competitive and shall Remuneration packages shall be designed in IDs shall not be eligible for any Stock Options, IDs shall not be eligible for any Stock Options, NEDs NEDs NEDs It shall be ensur T Annual incr Remuneration a) b) a) b) c) d)
SMPs & KMPS (other than MD / WTD) ii. i. iii. iv ii. i. iv ii. iii. NEDs
C. B.
.
.
Annexure to the Board’s Report
FORM No. MR-3 (c) The Securities and Exchange Board of India (Issue of Secretarial Audit Report Capital and Disclosure Requirements) Regulations, 2009 For The Financial year ended 31st March, 2019 and amendments from time to time; (Not applicable to (Pursuant to Section 204 (1) of the Companies Act, 2013 and the Company during the audit period) Rule 9 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014) (d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not To, applicable to the Company during the audit period) The Members, CEAT Limited (e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not We have conducted the secretarial audit of the compliance applicable to the Company during the audit period) of applicable statutory provisions and the adherence to good corporate practices by CEAT Limited (hereinafter called the (f) The Securities and Exchange Board of India (Registrars Company). Secretarial Audit was conducted in a manner to an Issue and Share Transfer Agents)Regulations, 1993 that provided us a reasonable basis for evaluating the regarding the Companies Act and dealing with client;(Not corporate conducts/statutory compliances and expressing our applicable to the Company during the audit period) opinion thereon. (g) The Securities and Exchange Board of India (Delisting of Based on our verification of the Company’s books, papers, Equity Shares) Regulations, 2009; (Not applicable to the minute books, forms and returns filed and other records Company during the audit period) and maintained by the company, the information provided by the company, its officers, agents and authorized representatives (h) The Securities and Exchange Board of India (Buyback during the conduct of secretarial audit, the explanations and of Securities) Regulations, 2018; (Not applicable to the clarifications given to us and the representations made by the Company during the audit period) Management, we hereby report that in our opinion, the company has, during the audit period covering the financial year ended on (vi) Other laws specifically applicable to the Company namely March 31, 2019 generally complied with the statutory provisions listed hereunder and also that the Company has proper Board a. The Rubber Act, 1947 and the Rubber Rules, 1955. processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have also examined compliance with the applicable clauses of the following: We have examined the books, papers, minute books, forms and returns filed and other records made available to us and (i) Secretarial Standards issued by The Institute of maintained by the Company for the financial year ended on Company Secretaries of India with respect to board and 31st March, 2019 according to the provisions of: general meetings.
(i) The Companies Act, 2013 (‘the Act’) and the rules (ii) The Listing Agreements entered into by the Company made thereunder; with BSE Limited and National Stock Exchange of India Limited read with the SEBI (Listing Obligations and (ii) The Securities Contract (Regulation) Act, 1956 (‘SCRA’) and Disclosure Requirements) Regulations, 2015. the rules made thereunder; During the period under review, the Company has complied (iii) The Depositories Act, 1996 and the Regulations and with the provisions of the Act, Rules, Regulations, Guidelines, Bye-laws framed thereunder; standards etc. mentioned above.
(iv) Foreign Exchange Management Act, 1999 and the rules We further report that: and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External The Board of Directors of the Company is duly constituted Commercial Borrowings; with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the (v) The following Regulations and Guidelines prescribed composition of the Board of Directors that took place during under the Securities and Exchange Board of India Act, the period under review were carried out in compliance with the 1992 (‘SEBI Act’) provisions of the Act.
(a) The Securities and Exchange Board of India (Substantial Adequate notice was given to all directors to schedule the Acquisition of Shares and Takeovers) Regulations, 2011; Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for (b) The Securities and Exchange Board of India (Prohibition seeking and obtaining further information and clarifications of Insider Trading) Regulations, 2015; on the agenda items before the meeting and for meaningful participation at the meeting.
80 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 81 Partner Signature: . N. Parikh N. . P Company Secretaries Company No: 327 CP No: 1228 No: CP 327 No: CEAT Limited CEAT For Parikh & Associates FCS ovisions of Corporate and Practising etarial record is the responsibility of the is the responsibility etarial record
etarial Audit report is neither an assurance as to etarial Audit report The Compliance of the pr The Secr 2019 7, May Place: Mumbai Date: Maintenance of Secr W W Wher representation about the Compliance of laws, rules and about the Compliance of laws, rules and representation and happening of events etc. regulations is the standards other applicable laws, rules, regulations, of management. Our examination was limited responsibility on test basis. to the verification of procedure or viability of the Company nor of the efficacy the future with which the management has conducted effectiveness of the Company. the affairs management of the Company. Our responsibility is to express express is to responsibility Our the Company. of management audit. based on our records secretarial an opinion on these assurance about to obtain reasonable appropriate were records. of the contents of the Secretarial the correctness correct that to ensure basis test done on was verification The We believe that the records. in Secretarial reflected facts are a reasonable and practices, we followed provide process basis for our opinion. and Books of Accounts of the Company. records financial 5. 6. Annexure A Annexure To, The Members Limited CEAT with this letter. along be read of even date is to Our report 1. 2. 3. 4. as process and practices audit the followed e have of appropriateness and correctness the verified not e have wehaveobtainedtheManagement e everrequired, Partner Signature: . N. Parikh N. . P Company Secretaries Company No: 327 CP No: 1228 No: CP 327 No: For Parikh & Associates FCS wo Thousand only) Secured, wo Thousand only) Secured, Practising oval of the Board on January 28, 2019 on January oval of the Board
10,00,000/- (Rupees Ten Lakhs only) aggregating to Lakhs only) aggregating ` 10,00,000/- (Rupees Ten Fully Redemption of 2000 (T In-principle appr 200 Crores on July 31, 2018. ` 200 Crores Listed Redeemable Non-Convertible Debentures of face Listed Redeemable Non-Convertible Debentures value for amalgamation of CEAT Specialty Tyres Limited, wholly Specialty Tyres for amalgamation of CEAT owned subsidiary with the Company.
We further report that during the audit period the following that during the audit further report We affairs Company’s the on bearing had which occurred events laws, rules, regulations, above referred in pursuance of the guidelines etc. We further report that there are adequate systems and processes adequate systems and processes are that there further report We of with the size and operations in the Company commensurate compliance with applicable and ensure the Company to monitor and guidelines. laws, rules, regulations Decisions at the Board Meetings were taken unanimously. Meetings were at the Board Decisions with our letter of even date which is This Report is to be read A and forms an integral part of this report. annexed as Annexure
Place: Mumbai Date: May 7, 2019
2. 1. Corporate Governance Report
Securities and Exchange Board of India (‘SEBI’) vide its II. The Board of Directors notification No. SEBI/LAD-NRO/GN/2018/10 dated May 9, CEAT believes that a dynamic, well-informed and independent 2018, notified various amendments to the SEBI (Listing Board is essential to ensure highest standards of Corporate Obligations and Disclosure Requirements) Regulations, 2015 Governance. The Board of CEAT, being at the core of its (‘the Listing Regulations’), being implemented with effect Corporate Governance practice, plays most pivotal role in from several dates as prescribed therein. overseeing the management in serving and protecting the long-term interests of all its stakeholders. This Corporate Governance Report of CEAT Limited (‘CEAT’ or ‘the Company’) for FY 2018-19, thus prepared pursuant to the The Board of CEAT plays a vibrant role in deriving its business Listing Regulations, as amended and circulars issued thereunder, in an ethical and profitable way to ensure the maximization forms part of the Board’s Report and states compliance as per of its stakeholders’ value, in line with its purpose statement requirements of the Companies Act, 2013 and Rules made ‘Making Mobility Safer & Smarter. Every Day.’ The Board guides thereunder (‘the Act’) and the Listing Regulations, as divided the management to run business as a socially responsible and into the following parts: ethically compliant corporate citizen and in a sustainable way. I. CEAT’s Philosophy on Corporate Governance The Management endeavours to provide the Board with II. The Board of Directors (‘the Board’) information ahead of the list as mandated under Regulation III. Committees of the Board 17(7) read with Part A of Schedule II to the Listing Regulations. a) Audit Committee Through various information being placed or presented at the b) Nomination and Remuneration Committee Board meetings, the Board is kept well informed about the c) Stakeholders’ Relationship Committee overall functioning of the Company, which enables the Board to d) Risk Management Committee contribute to the growth of the Company and helps them to take e) Corporate Social Responsibility Committee informed decisions. f) Finance and Banking Committee IV. Remuneration of Directors The Board periodically reviews the updates on the projects, V. General Body Meetings/Postal Ballot business performance, risk management, strategies, people, VI. Means of Communication processes, compliance with applicable laws and other key affairs VII. Other Disclosures of the Company having impact on the business. The Board VIII. General Shareholder Information is satisfied that plans are in place for orderly succession for appointment to the Board and to senior management. I. CEAT’s Philosophy on Corporate Governance Corporate Governance is an integral part of CEAT’s values, The adoption of a new digital application has enabled the ethics and best business practices followed by CEAT. Company to conduct paperless board meetings, thereby Corporate Governance is the broad framework which defines improving governance while simplifying the process of the way CEAT functions and interacts with its environment. conducting such meetings. This involves conducting the CEAT follows laws and regulations in each of the markets where meetings digitally and efficaciously, with the Board being able to it operates, leading to effective management of the organization. access information directly on their digital devices. Moreover, CEAT in its journey towards sustainability is integrating sustainability practices in its governance system which goes The Independent Directors of the Company at their meeting beyond compliance. CEAT is guided by a key set of values for all held on March 11, 2019 appreciated the quality, quantity its internal and external interactions. Simultaneously, in keeping and timeliness of flow of information between the Company with the best practices, CEAT seeks to execute the practices Management and the Board, that is necessary for the Board to of Corporate Governance by maintaining strong business effectively and reasonably perform their duties. fundamentals and by delivering high performance through relentless focus on its core values, which are as following: The Managing Director and Executive Director are responsible • Commitment to excellence and customer satisfaction; for the day-to-day management of the Company, subject to the • Maximising long-term shareholders’ value; supervision, direction and control of the Board. The Executive • Socially valued enterprise; and Directors are ably assisted by the Management Committee • Caring for people and environment and Operating Committee for implementing the decisions and strategic policies of the Board for effective execution. In a nutshell, the philosophy can be described as observing of business practices with the ultimate aim of enhancing long-term Composition of the Board shareholders’ value and commitment to high standard of The composition of the Board is in conformity with the business ethics. CEAT has in place a Code of Corporate Ethics requirements of the Act and the Listing Regulations. The Board and Conduct reiterating its commitment to maintain the highest of CEAT has an optimum combination of Executive and standards in its interface with stakeholders and clearly laying Non-Executive Directors with one Women Independent Director down the core values and corporate ethics to be practiced by its and more than half of the Board comprising Independent entire management cadre. Directors, satisfying the criteria prescribed under the amended Listing Regulations.
82 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 83 No No No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes AGM Attendance at the last CEAT Limited CEAT % of 80% 80% 75% 80% 100% 100% 100% 100% 100% 100% 100% 100% 100% attendance 5/5 5/5 5/5 4/5 4/5 3/4 5/5 5/5 4/5 5/5 5/5 5/5 5/5 meetings Director of the Company by the Members at the Annual General at the Annual General by the Members of the Company Director on July 20, 2018. Meeting held of the Company Director Hari L. Mundra, Non-Executive Mr. 29, 2019 January of the Company w.e.f. the Board from resigned commitments and pre-occupations. due to various personal who Company, the of Director Independent Doreswamy, S. Mr. for 5 years w.e.f. Independent Director was appointed as an up to September 25, 2019, also resigned September 26, 2014 personal reasons. 12, 2019 owing to compelling March w.e.f. no other were that there has confirmed S. Doreswamy, Mr. letter. stated in his resignation other than as material reasons designated earlier Arnab Director, Banerjee, Whole-time Mr. as Chief was re-designated as Executive Director-Operations, 1, 2019. w.e.f. March of the Company Operating Officer meetings and attendance Board Details of Directors, of the Board records met 5 (five) times on the Board During the year under review, 25, 2018, January 28, April 30, 2018, July 20, 2018, October than 120 (one hundred 11, 2019 and not more 2019 and March meetings. and twenty) days elapsed between the two Attendance at board Attendance at board 18% 18% 64% Board 100% % of the 2 2 7 As on 11 inter se Nos. March 31, 2019 March 15% 23% 62% Board 100% % of the As on 2 3 8 13 April 1, 2018 Nos. Category of Directors Non-Executive, Chairman (Promoter) Managing Director (Promoter) Managing Director Whole-time Director Independent Director Independent Director Non-Executive Director Independent Director Independent Director Non-Executive Director Independent Director Independent Director Independent Director Independent Director Name of the Director Name of the Director Goenka H. V. Mr. Non-Executive Non-Independent Non-Executive Non-Independent others (1 Promoter, Directors Non-Promoter) (Including Independent Directors Independent Director) a Woman Total Category (1 Promoter Executive Directors and 1 Non-Promoter) Mr. Anant Goenka Mr. Arnab Banerjee Mr. Atul C. Choksey Mr. Mr. Haigreve Khaitan Haigreve Mr. Hari L. Mundra* Mr. Mr. Mahesh S. Gupta Mr. Paras K. Chowdhary Mr. Mr. Pierre E. Cohade Pierre Mr. Ms. Punita Lal Pandit Ranjit V. Mr. S. Doreswamy** Mr. Vinay Bansal Mr. The composition of the Board during the year under the year under during of the Board The composition was as under: review * Ceased to be a director w.e.f. January 29, 2019 w.e.f. * Ceased to be a director 12, 2019 March w.e.f. ** Ceased to be a director Details of changes in the Board during the year Details of changes in the Board Director E. Cohade who was appointed as an Additional Pierre Mr. Non-Executive February 1, 2018, was appointed as w.e.f. Disclosure of relationships between directors between directors of relationships Disclosure Managing Anant Goenka, Goenka, Chairman and Mr. V. H. Mr. to each other as father and related the Company are of Director to each other. related are son. None of the other Directors The composition, category of Directors and their attendance details at the aforesaid Board meetings and at the last Annual General meetings and at Board and their attendance details at the aforesaid The composition, category of Directors as given below: July 20, 2018 are Meeting (AGM) of the Company held on Corporate Governance Report
Details of shares held by Non-Executive Directors As on March 31, 2019, 2 (two) Non-Executive Directors, viz. Mr. H. V. Goenka and Mr. Paras K. Chowdhary held 1,33,932 and 3,000 shares in the Company, respectively and such shares do not include shares held by them in the capacity of Trustee.
Directorship(s) / Committee membership held by Directors Details of Directorship(s) / Committee membership(s) / Chairmanship(s) held by Directors as on March 31, 2019, are as under:
Name of the Director Directorships in Name of the listed companies Category of directorship Committee position public companies in listed companies Membership Listed Unlisted (including Chairmanship chairmanship) Mr. H. V. Goenka 5 2 0 0 CEAT Limited Non-Executive Director (Chairman) KEC International Limited Non-Executive Director (Chairman) Zensar Technologies Limited Non-Executive Director (Chairman) RPG Life Sciences Limited Non-Executive Director (Chairman) Bajaj Electricals Limited Independent Director Mr. Anant Goenka 3 3 0 0 CEAT Limited Managing Director Zensar Technologies Limited Non-Executive Director STEL Holdings Limited Non-Executive Director Mr. Arnab Banerjee 1 1 0 0 CEAT Limited Whole-time Director Mr. Atul C. Choksey 2 2 0 0 CEAT Limited Independent Director Apcotex Industries Limited Non-Executive Director Mr. Haigreve Khaitan 6 3 9 4 CEAT Limited Independent Director JSW Steel Limited Independent Director Inox Leisure Limited Independent Director Ambuja Cements Limited Independent Director Torrent Pharmaceuticals Limited Independent Director Harrisons Malayalam Limited Independent Director Mr. Mahesh S. Gupta 4 1 6 2 CEAT Limited Independent Director Peninsula Land Limited Managing Director Morarjee Textiles Limited Non-Executive Director RPG Life Sciences Limited Independent Director Mr. Paras K. Chowdhary 2 2 4 1 CEAT Limited Independent Director Phillips Carbon Black Limited Independent Director Mr. Pierre E. Cohade 1 0 0 0 CEAT Limited Non-Executive Director Ms. Punita Lal 2 1 0 0 CEAT Limited Independent Director Cipla Limited Independent Director Mr. Ranjit V. Pandit 2 4 4 1 CEAT Limited Independent Director Reliance Jio Infocomm Limited* Independent Director Mr. Vinay Bansal 1 0 2 1 CEAT Limited Independent Director * Has its debentures listed on the stock exchange(s) Notes: • As required under the amended Regulation 17A, of the Listing Regulations none of the directors holds directorship in more than eight listed companies and as per declarations received, none of the directors serves as an independent director in more than seven listed companies, across the directorships held including that in CEAT Limited. Further, the whole-time directors in the Company do not serve as an independent director of any listed company. • The amended Regulation 17A of the Listing Regulations provides for inclusion of only equity listed entities reckoning the directorship in listed entity, in view of the said regulation becoming effective from April 1, 2019, directorships in all listed entities have been considered for reporting as above. • None of the directors was a member in more than ten committees, nor a chairman in more than five committees across all companies in which he was a director, including those held in CEAT Limited. • For the purpose of considering the limit of the committees on which a director can serve, all public limited companies, whether listed or not, have been included and all other companies including private limited companies, foreign companies and companies under section 8 of the Act, have been excluded. Only audit committee and stakeholders’ relationship committee are considered for the purpose of reckoning committee positions.
84 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 85 inter CEAT Limited CEAT s financial reporting process and reporting process s financial https://www.ceat.com/corporate/investor/ nal financial controls and risk management nal financial controls , performs the following functions: systems, reviewing the functioning of the whistle systems, reviewing blower mechanism. disclosure of financial information to ensure that the financial that the financial of financial information to ensure disclosure and creditable; sufficient correct, statements are report results and the auditors’ and annual financial quarterly for approval; submission to the Board before thereon of operations; condition and results Party with the Related in accordance Party Transactions Policy of the Company; Transaction of appointment of Statutory Auditors of the Company and for availing any other services; approval reviewing process; audit of effectiveness and performance weaknesses internalof / letters letters management control issued by the Statutory Auditors; of internal adequacy control internaland auditors auditor, the adequacy of internal audit function systems; reviewing and discussing with Internal any significant finding Auditors and follow-up thereon; evaluating inter r r r r r r overseeing the Company’ alia As on March 31, 2019, the Committee consisted of 3 (three) 31, 2019, the Committee consisted of 3 (three) As on March Mahesh S. Gupta, as the viz. Mr. Independent Directors, as K. Chowdhary, Paras Vinay Bansal and Mr. Chairman and Mr. members of the Committee. • • • • • • • of the Board. The Board Committees are set up under the set up under Committees are Board The of the Board. roles, defined to carry out clearly the Board of formal approval as a part of good governance of the practice. The Chairman about the summary the Board Committees informs respective minutes The Meetings. Committee the in held discussions the of the Board placed before Committees are of the meetings of all special request Committees Board and noting. The for review as appropriate. invitees to join the meeting, a) Audit Committee Section 177 of the Act of with the provisions In accordance of the Listing Regulations, the Company and Regulation 18 of terms and composition Committee, Audit its formed has conformity with the said provisions in of which are reference available at are and corporate-governance the Management, The Committee acts as a link between the Statutory Auditors, Internal Auditors and the Board. internal controls, The Committee supervises the Company’s and process reporting financial monitors the Company’s • examiningwiththeManagement, eviewing performanceofand andanalysisoffinancial eviewing managementdiscussion orsubsequentlymodifyinganyRelated eviewing, approving andterms ecommending theappointment,remuneration independenceand eviewing andmonitoringtheauditor’s statutory of performance management, the with eviewing https:// nmental Regulations nance ces Management Inter Strategy/M&A/Restructuring Corporate Gover Business Development/Sales/Marketing Public Policy/Gover Accounting/Finance/Legal Risk Management Human Resour Thought Leadership CEO/Senior Management Experience T General Management and Business Operations General Management
The Committees of the Board play a significant role in the play a significant The Committees of the Board instituted been have and Company the of governancestructure the matters as instructed by applicable to transact/approve concerning requirement per the as and Company the regulations III. Committees of the Board The details of familiarization programme are provided at provided are The details of familiarization programme Liability Insurance (D&O) Policy and Officers Directors since the D&O Policy the been taking has The Company it became mandatory pursuant to the year 2013, even before coverage to amendment to the Listing Regulations, providing the Independent/Non- Executive Directors. Familiarization Programme for Independent Directors Familiarization Programme Independent Directors Pursuant to the Code of Conduct for Listing of the requirements specified under the Act and a familiarization Regulations, the Company has framed The Company for all its Independent Directors. programme for the Independent orientation programme follows a structured of industry to familiarize them to understand the nature Directors model, updates on the the Company operates into its business rights business and operations of the Company and their roles, and responsibilities. Confirmation of independence of Independent Directors the at its meeting held on May 7, 2019, reviewed The Board Independent by the submitted independence of declaration the of veracity the of assessment due out carried and Directors of the Company same noting that the Independent Directors are fulfill the conditions specified in the Listing Regulations and independent of the management. • and have eminent industrialists/professionals are The Directors national Business with which bring functional areas, expertise in their respective of independent judgement and experience. them the reputation rate-governance www.ceat.com/corporate/investor/corpo • • • • • • • • • • experience Industry yre • The Board has identified the following skills/expertise/ has identified The Board functioning of the for the effective competencies fundamental the Board: available with currently Company which are Skills/expertise/competence of the Board Skills/expertise/competence With the development, a sustainable a view to achieving Company with to have right balance on its Board aims qualifications, of diverse nature, attributes such as experience in wide spectrum of functional knowledge and competencies business, gender in the context of Company’s required areas etc. representation, Corporate Governance Report
In compliance with the Act and Regulation 18(1)(c) of the The Committee inter alia, reviews matters relating to appointment/ Listing Regulations, all the three members of the Committee re-appointment and remuneration of Directors, Key Managerial are independent and are financially literate. Moreover, the Personnel, Senior Management Personnel; formulating a criteria Committee has members who have relevant experience in for effective evaluation of the performance of the Board, its financial matters as well as have accounting or related financial Committees, Chairperson and individual Directors and devising management expertise. a policy on diversity of the Board.
During the year under review, the Committee met 5 (five) As on March 31, 2019, the Committee consisted of 3 times on April 30, 2018, July 19, 2018, October 25, 2018, (three) Independent Directors, comprising of Mr. Mahesh S. January 28, 2019 and March 11, 2019 and not more than Gupta, as the Chairman and Mr. Vinay Bansal and Mr. Paras K. 120 (one hundred and twenty) days elapsed between Chowdhary, as members of the Committee. the two meetings. During the year under review, the Committee met 5 (five) times The details of composition of the Committee and the attendance on April 30, 2018, July 4, 2018, October 25, 2018, January 28, at the meetings held during the year are given below: 2019 and March 11, 2019.
Name of the Director Category of Attendance % of The details of composition of the Committee and the attendance Director at the attendance at the meetings held during the year are given below: Committee meeting Mr. Mahesh S. Gupta Independent 5/5 100% Name of the Director Category of Attendance % of Director at the attendance (Chairman) Director Committee Mr. Hari L. Mundra* Non-Executive 3/4 75% meeting Director Mr. Mahesh S. Gupta Independent 5/5 100% Mr. Paras K. Chowdhary** Independent 1/1 100% (Chairman) Director Director Mr. Paras K. Chowdhary Independent 5/5 100% Independent Director Mr. S. Doreswamy*** 5/5 100% Director Independent Mr. S. Doreswamy* 4/5 80% Mr. Vinay Bansal Independent 5/5 100% Director Director Mr. Vinay Bansal** Independent NA NA * Ceased to be a member w.e.f. January 29, 2019 Director ** Inducted as a member w.e.f. January 28, 2019 * Ceased to be a member w.e.f. March 12, 2019 *** Ceased to be a member w.e.f. March 12, 2019 ** Inducted as a member w.e.f. March 11, 2019
The Company Secretary & Compliance Officer functions as the Mr. Mahesh S. Gupta, the Chairman of the Committee was Secretary to the Committee. present at the Annual General Meeting of the Company held on July 20, 2018, to answer the queries of the shareholders. The Committee invites the Statutory Auditors and the Internal Auditors for discussions at the meeting. The Cost Auditors are The Minutes of the meetings of the Committee are placed before invited as and when required. Managing Director, Chief Financial and noted by the Board. During the year under review, there Officer, Head-Internal Audit and Vice President-Finance were no instances where recommendation of the Committee are permanent invitees at the Committee meetings. was not accepted by the Board. members of Senior Management team also attend the meetings depending on the agenda. Performance evaluation criteria for independent directors Pursuant to the provisions of the Act and Regulation 25(4) of The Minutes of the meetings of the Committee are placed before the Listing Regulations, the Board has carried out the annual and noted by the Board. During the year under review, there performance evaluation of its own performance, individual were no instances where recommendation of the Committee Directors and of its Committees. The Company had appointed was not accepted by the Board. external independent agency for carrying out the said evaluation process in a transparent manner by using the questionnaire Mr. Mahesh S. Gupta, Chairman of the Committee was present considered/approved by the Board after taking into account at the Annual General Meeting of the Company held on July 20, the Guidance Note issued by SEBI vide its circular SEBI/ 2018, to answer the queries of the shareholders. HO/CFD/CMD/CIR/2017/004 dated January 5, 2017 and the recommendations of the Nomination and Remuneration b) Nomination and Remuneration Committee Committee, covering various aspects of the Board’s functioning In accordance with the provisions of Section 178 of the Act such as adequacy of the composition of the Board and its and Regulation 19 of the Listing Regulations, the Company Committees, board culture, execution and performance of has formed its Nomination and Remuneration committee, specific duties, obligations, compliance and governance, etc. composition and terms of reference of which are in conformity with the said provisions and are available at https://www.ceat. com/corporate/investor/corporate-governance
86 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 3 1 87 17 19 Numbers September 1, 2016 to June 11, 2018 June 12, 2018 to October 24, 2018 October 25, 2018 onwards Tenure Tenure CEAT Limited CEAT https://www.ceat.com/corporate/
reviews the business risk including reviews ovisions of Regulation 21 of the Listing ovisions of Regulation 21 of the Listing Designation Interim Compliance Officer Interim Compliance Officer and Company Secretary Compliance Officer Company Secretary and Company Secretary Compliance Officer inter alia e pr
Mr. Amit Dodani Amit Mr. Gupte Ms. Vallari during FY 2018-19 Complaints disposed-off Complaints not solved to the satisfaction of shareholders during FY 2018-19* 31, 2019** pending as on March Complaints remaining Name Ms. Shruti Joshi Particulars Complaints as on April 1, 2018 during FY 2018-19 Complaints received d) Risk Management Committee th to Pursuant entities based April 1, 2019 top 500 listed Regulations, w.e.f. to form a Risk required on their market capitalization are was which previously Management Committee of the Board, entities. applicable only for the top 100 such listed Management has constituted its Risk however, The Company, it become applicable to the Company Committee well before and terms of Composition provisions. the aforesaid under in conformity with the said Committee are of the reference available at and are provisions investor/corporate-governance . The Committee Mr. S. Doreswamy, the then Chairman of the Committee was Chairman of the the then S. Doreswamy, Mr. on of the Company held General Meeting at the Annual present the queries of the shareholders. July 20, 2018, to answer during the period under Officers Details of Compliance as under were review during the year under Details of complaints received review any feedback complaints, the Company has not received * Out of the resolved of their complaint. dissatisfaction on resolution regarding shareholders from SCORES and was 26, 2019 through on March ** Complaint was received 31, 2019. after March resolved strategic, operational, financial, cyber security and its mitigation plans and monitors compliance risks, approves thereof. effectiveness 31, 2019, the Committee consisted of 3 As on March (three) Mahesh S. comprising of Mr. Independent Directors, Paras K. Vinay Bansal and Mr. Gupta, as the Chairman and Mr. as members of the Committee. Chowdhary, times (two) 2 met Committee the review, under year the During on July 19, 2018 and January 28, 2019. NA % of 100% 100% 100% attendance NA 4/4 4/4 4/4 at the meeting Committee Attendance https://www.ceat.com/corporate/ reviews the mechanism of redressal the mechanism of redressal reviews Category of Director Independent Director Independent Director Independent Director Independent Director inter alia Mr. Vinay Bansal* Mr. (Chairman) Name of the Director Name of the Director Mr. S. Doreswamy** Mr. Mr. Mahesh S. Gupta Mr. Mr. Paras K. Chowdhary Mr. The details of composition of the Committee and the attendance the and Committee the of composition of details The given below: at the meetings held during the year are During the year under review, the Committee met 4 (four) met 4 the Committee under review, the year During and 2018 25, October 2018, 20, July 2018, 30, April on times 2019. 11, March As on March 31, 2019, the Committee consisted of 3 (three) 31, 2019, the Committee consisted of 3 (three) As on March Vinay Bansal, as comprising of Mr. Independent Directors, Paras K. Mahesh S Gupta, and Mr. the Chairman and Mr. as members of the Committee. Chowdhary, of grievances of the securities holders, service level of registrar level of registrar of grievances of the securities holders, service matters concerningand transfer agents and deals with other securities holder including dividend. The Minutes of the meetings of the Committee are placed before placed before The Minutes of the meetings of the Committee are there During the year under review, and noted by the Board. of the Committee recommendation no instances where were was not accepted by the Board. * Inducted as a member & Chairman w.e.f. March 11, 2019 March * Inducted as a member & Chairman w.e.f. 12, 2019 March ** Ceased to be member w.e.f functions as the & Compliance Officer The Company Secretary to the Committee. Secretary The Committee c) Stakeholders’ Relationship Committee c) Stakeholders’ Relationship Section 178 of the Act of with the provisions In accordance the Listing Regulations, the Company has and Regulation 20 of Relationship Committee, composition formed its Stakeholders’ with the said in conformity of which are and terms of reference available at and are provisions investor/corporate-governance The performance evaluation of the Independent Directors was the Independent Directors evaluation of The performance being Directors excluding the Board by the entire carried out the evaluation of the Chairman and evaluated. The performance carried out by the Independent was Non-Independent Directors over the their satisfaction expressed The Directors Directors. evaluation process. Corporate Governance Report
The details of composition of the Committee and the attendance Name of the Director Category of Director Attendance % of at the attendance at the meetings held during the year are given below: Committee meeting Name of the Director Category of Attendance % of Mr. Anant Goenka Manging Director 2/3 67% Director at the attendance (Chairman) Committee Mr. Hari L. Mundra* Non-Executive 2/3 67% meeting Director Mr. Mahesh S. Gupta Independent 2/2 100% Mr. Vinay Bansal Independent Director 3/3 100% (Chairman) Director Ms. Punita Lal** Independent Director NA NA Mr. Hari L. Mundra* Non-Executive 2/2 100% Director * Ceased to be a member w.e.f. January 29, 2019 Mr. Paras K. Chowdhary** Independent NA NA ** Inducted as a member w.e.f. January 28, 2019 Director More details about the Committee and details of expenditure Independent made by Company under CSR are described in detail in the Mr. S. Doreswamy*** 2/2 100% Director Annual Report on CSR activities, as annexed to the Board’s Mr. Vinay Bansal Independent 2/2 100% Report, forming part of the Annual Report. Director * Ceased to be a member w.e.f. January 29, 2019 f) Finance and Banking Committee (Non-Mandatory ** Inducted as a member w.e.f. January 28, 2019 Committee) *** Ceased to be a member w.e.f. March 12, 2019 The Board with an objective of ease of business transaction and to facilitate the timely approval of the routine but important Managing Director, Chief Financial Officer, Head-Internal Audit matters has constituted the Finance and Banking Committee and who also functions as Chief Risk Officer, are permanent invitees delegated some of its powers, which inter alia include approving for the Committee meetings. Members of Senior Management matters concerning borrowing and investment of surplus fund, team also attend the meetings depending on the agenda. banking and treasury operations, issue of power of attorney and authorization for day to day operations, etc. The composition The Minutes of the meetings of the Committee are placed before and terms of reference of the Committee are available at https:// and noted by the Board. During the year under review, there www.ceat.com/corporate/investor/corporate-governance were no instances where recommendation of the Committee was not accepted by the Board. During the year under review, Special Investment/Project Committee was dissolved, delegating the power vested with the Disclosure of Risk Management Committee to the Finance and Banking Committee. The Company has in place an Enterprise Risk Management framework to identify risks and minimize their adverse impact As on March 31, 2019, the Committee consisted of 3 (three) on business of the Company and strives to create transparency members, Mr. Anant Goenka, as Chairman of the Committee which in turn enhances the Company’s competitive advantage. and Mr. H. V. Goenka and Mr. Arnab Banerjee as members of the Committee. Pursuant to the aforesaid business risk framework, the Company has identified the business risks associated with its During the year under review, Committee met 7 (seven) times on operations and an action plan for mitigation of the same is put April 30, 2018, July 4, 2018, July 20, 2018, September 11, 2018, in place. The business risks and its mitigation have been dealt October 25, 2018, December 21, 2018 and January 28, 2019. with in the Management Discussion and Analysis section of this Annual Report. The details of composition of the Committee and the attendance at the meetings held during the year are given below: e) Corporate Social Responsibility Committee In accordance with provisions of Section 135 of the Act, Name of the Director Category of Director Attendance % of the Board has formed the Corporate Social Responsibility at the attendance Committee, composition and terms of reference of which are in Committee meeting conformity with the said provisions and are available at https:// Mr. Anant Goenka Managing Director 7/7 100% www.ceat.com/corporate/investor/corporate-governance (Chairman) Mr. Arnab Banerjee Whole Time Director 7/7 100% As on March 31, 2019, the Committee consisted of 3 (three) Mr. H. V. Goenka* Non-Executive Director 6/6 100% members, Mr. Anant Goenka, as Chairman of the Committee Mr. Paras K. Independent Director 1/1 100% and Mr. Vinay Bansal and Ms. Punita Lal as Members of Chowdhary** the Committee. * Inducted as a member w.e.f. April 30, 2018 ** Ceased to be a member w.e.f. May 1, 2018 During the year under review, the Committee met 3 (three) times The Minutes of the meetings of the Committee are placed before on April 30, 2017, July 19, 2018 and January 28, 2019. and noted by the Board. During the year under review, there were no instances where recommendation of the Committee The details of composition of the Committee and the attendance was not accepted by the Board. at the meetings held during the year are given below:
88 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
89 , disclosing inter alia , CEAT Limited CEAT https://www.ceat.com/corporate/ ently does not have a stock option ently does not have a stock option are summarized under major groups, such as salary, benefits, as salary, such groups, summarized under major are pension, fixed component and bonuses, stock options, disclosed under Form incentives etc, are performance linked fees to any Director for any of its Directors programme MGT- 9, which forms part of the Board’s Report of the Board’s 9, which forms part MGT- All The Nomination and Remuneration Policy Key Managerial the criteria of making payments to Directors, the performance Personnel and employees, along with criteria is available at investor#corporate-governance of paying severance The Company does not have a practice The Company curr V. General Body Meetings/Postal Ballot V. Company held in the Details of the General Meetings of the Resolutions passed last 3 years along with summary of Special notices particularly set out in the respective more as thereat, Members, the by passed as Meetings, General Annual such of as follows: are Mr. Anant Goenka, Managing Director and Mr. Arnab Banerjee, Mr. and Managing Director Anant Goenka, Mr. receive do not Officer) (Chief Operating Director Whole-time of the subsidiary any related commission from any profit of the Company. V of the Listing Regulations, as per Schedule Disclosures Directors: of pertaining to remuneration • • • • Directors individual package of of remuneration elements Particulars of Special Resolution Approval for making offer or invitation to subscribe Non-Convertible for making offer Approval or such other debt securities upto ` 500 Crores Debentures/Bonds Anant Goenka as Managing Director for appointment of Mr. Approval remuneration for further period of 5 years and fixing his or invitation to subscribe Non-Convertible for making offer Approval or such other debt securities upto ` 500 Crores Debentures/Bonds Arnab Banerjee as Whole-time for appointment of Mr. Approval remuneration for further period of 5 years and fixing his Director or invitation to subscribe Non-Convertible for making offer Approval or such other debt securities upto ` 500 Crores Debentures/Bonds to Non-Executive for payment of remuneration/commission Approval of the Company not exceeding 3% of the net profits Directors
` 50,000 per ` 5,000 per meeting of other Friday, July 20, 2018 at 3.30 p.m. at The Auditorium, Friday, Press), Plaza (TATA Committee, next to Trade Textile Balu Road, Prabhadevi Chowk, Prabhadevi, P. Mumbai - 400 025 Tuesday, August 9, 2016 at 3.00 p.m. at Ravindra Natya Tuesday, L. Deshpande Maharashtra Kala Academy, P. Mandir, Sayani Road, Prabhadevi, Mumbai - 400 025 August 8, 2017 at 3.00 p.m. at Ravindra Natya Tuesday, L. Deshpande Maharashtra Kala Academy, P. Mandir, Sayani Road, Prabhadevi, Mumbai - 400 025 Day, Date, Time and Venue Date, Time and Venue Day, 1,00,000 per meeting of the Board, ` 1,00,000 per meeting of the Board, AGM AGM AGM th th th 57 AGM/EGM 58 59 During the year under review, no resolution was passed by the Company through Postal Ballot and there is no such proposal to pass is no such proposal Postal Ballot and there was passed by the Company through no resolution During the year under review, Postal Ballot as on the date of this Report. through any resolution Managing Director/Whole-time Director compensation Director Managing Director/Whole-time for payment their approval The Members have accorded at passed vide a special resolution of remuneration, Company held on the Annual General Meeting of the Anant Goenka and held on July 20, August 8, 2017 for Mr. Arnab into an has entered Banerjee. The Company 2018 for Mr. Goenka dated April 1, 2017 and with Anant with Mr. agreement ArnabgoverningApril 30, 2018 dated Banerjee terms the Mr. remuneration of their appointment including remuneration.The duly is and Whole-time Director paid to Managing Director by the Nomination and Renumeration Committee recommended of Directors. by the Board and approved meeting of Audit Committee and Committees, attended by them. In terms of the said approvals, Non-Executive Directors of the of Directors Non-Executive said approvals, In terms of the the by being paid Commission as recommended Company are by and approved Nomination and Renumeration Committee being paid are Non-Executive Directors Additionally, the Board. sitting fees of The Members of the Company at the Annual General Meeting Company at the Annual General Meeting The Members of the on July 20, 2018, vide a special resolution of the Company held to the remuneration/commission the payment of approved up to a sum not the Company, of Non-Executive Directors of the Company, profits of the net percent) exceeding 3% (three 198 Section of the provisions with accordance in calculated as may be decided by the Board of the Act, in the manner time to time. from IV. Remuneration of Directors Remuneration IV. FY 2018-19 during paid to the directors Details of remuneration of Annual Return in Part VI of the extract in the provided are forms part of this Annual Report. format MGT -9, which prescribed Corporate Governance Report
VI. Means of Communication A Policy on Related Party Transaction has been formulated by Financial Results the Board and is available at https://www.ceat.com/corporate/ Quarterly financial results are announced within 45 (forty-five) investor/corporate-governance days from the end of the quarter and annual audited results are announced within 60 (sixty) days from the end of the financial Details of non-compliance by the Company year as per the Regulation 33 of the Listing Regulations and are The Company has complied with all the requirements of the published in the newspapers in accordance with Regulation 47 of Stock Exchanges, SEBI and Statutory Authorities related to the Listing Regulations. Quarterly financial results are announced the capital markets and during the last three financial years, to Stock Exchanges within 30 (thirty) minutes from the closure of there has been no instance of non-compliance and that no the Board meeting at which these are considered and approved. penalties, strictures were imposed on the Company by Stock Exchanges or SEBI. Quarterly, half-yearly and annual financial results and other public notices issued to the shareholders are usually published Vigil Mechanism (Whistle Blower Policy) in various leading dailies, such as Economic Times, Maharashtra In accordance with Section 177 of the Act and Rules made Times, The Free Press Journal and Navshakti. These quarterly thereunder, read with Regulation 22 of the Listing Regulations, financial results are also hosted on the website of the Company. the Board has adopted a ‘Whistle Blower Policy and Vigil Mechanism’ for Directors and Employees to report their Annual Report genuine concerns and actual / potential violations, if any, to the Annual Report for FY 2017-18 containing inter alia, Audited designated official of the Company fearlessly. Financial Statements, Boards’ Report, Management Discussion and Analysis and Corporate Governance Report etc. was sent The said Policy provides the type of concerns/violation to be to all Members through courier/post, who had not registered reported, investigation procedure, protection and safeguards their email address and via email to all shareholders who have and other related matters and the same is available at https:// provided their email addresses. Annual Reports are also hosted www.ceat.com/corporate/investor/corporate-governance on the website of the Company. No personnel/employee of the Company has been denied access to the Audit Committee for reporting genuine concerns. Press Release/Investor Presentations During the year under review, no complaint was received under The Company participates in various investor conferences and the Whistle Blower Policy. analyst meets and make presentation thereat. Press Releases, Investors presentation are submitted to the stock exchanges as Subsidiary companies well as are hosted on the website of the Company. The Company does not have any material subsidiary, as defined under Regulation 16 of the Listing Regulations and as prescribed Website for the purpose of Regulation 24. The Company has however The Company has a functional website, www.ceat.com which framed a Policy for determining Material Subsidiaries, as required under its section, Investors, disseminates the information as pursuant to the said Regulation 16, which is available at https:// required under the Act and the Listing Regulations. www.ceat.com/corporate/investor#corporate-governance
Exclusive email address for investors Provisions to the extent applicable as required under Regulation [email protected] is the designated email address exclusively 24 of the Listing Regulations, with reference to subsidiary for investors/shareholders servicing. companies, were duly complied with.
VII. Other Disclosures During the year under review, the Audit Committee reviewed Related Party Transactions the financial statements of and in particular, the investments All related party transactions (RPTs) entered by the Company made by the unlisted subsidiaries, to the extent applicable. during the year under review were on an arms’ length basis and Minutes of the board meetings of unlisted subsidiaries as well in the ordinary course of business. These RPTs did not attract as a statement of all significant transactions and arrangements provisions of section 188 of the Act and were also not material entered into by the subsidiary, as applicable, were regularly RPTs under Regulation 23 of the Listing Regulations. placed before the Board.
During the year under review, all RPTs were placed before the Certificate of non-disqualification of Directors Audit Committee for approval, as required under section 177 of Certificate from M/s. Parikh & Associates, Practising Company the Act and Regulation 23 of the Listing Regulations. Secretaries, confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being A statement showing the disclosure of transactions with related appointed or continuing as directors of companies by SEBI/ parties as required under Indian Accounting Standard 24 is set Ministry of Corporate Affairs or any other statutory authority, is out separately under the Financial Statements. annexed to this Report.
There were no material transactions entered into with related parties, during the period under review, which may have had any potential conflict with the interests of the Company.
90 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 91 ectors : CEAT Limited CEAT inter alia https://www.ceat.com/corporate/ , quantity and timelines of flow of Review the performance of Non-Independent Dir Review the performance of the Chairperson considering the Review the performance Assessed the quality and the Board as a whole; and the Board Non- Executive Directors; and views of Executive Directors Management and the information between the Company’s and to effectively is necessary for the Board that Board perform their duties. reasonably
Independent Directors Meeting Directors Independent Regulation IV to the Act and with Schedule In compliance of Regulation, the Independent Directors 25(3) of the Listing 2019, 11, March on meeting separate their held Company the and of the non-independent directors without the attendance members of the Management, i. ii. iii. All the Independent Directors were present at the meeting and meeting the at present were Directors Independent the All C. Choksey was elected to Chair the meeting. Atul Mr. deliberated on the above and The Independent Directors their satisfaction on each of the matters. expressed CEO and CFO Certification (CEO) and the Chief Financial Officer The Managing Director to the provisions (CFO) have issued a certificate pursuant certifying that of Regulation 17 (8) of the Listing Regulations any untrue statement the financial statements do not contain a true and fair view of the represent and these statements affairs. Company’s Code of Conduct has laid down a Code of Conduct for all Board The Board of the Company, Members and Senior Management which is available at investor#corporate-governance Members and Senior Management Personnel have All Board compliance with the Code for the financial year ended affirmed signed by the 31, 2019. A declaration to this effect March is annexed to this Report. Managing Director of Insider Trading Prevention (Including The Company has formulated a Code of Fair Disclosure and Determination of Legitimate Purpose), Internal Procedures by Conduct for Regulating, Monitoring and Reporting of Trading provisions with accordance in Code’) (‘the Person(s) Designated as 2015, Regulations, Trading) Insider of (Prohibition SEBI of to view a with 2019, 1, April from effect into come to amended and Designated trading in securities by the Directors regulate Persons as identified therein. and compliances for the procedures The Code prescribes of unpublished price applicable for the preservation SEBI Regulations. sensitive information under the aforesaid to ensure acts as the Compliance Officer Company Secretary of on pre-clearance approvals compliance with the requisite trade, monitoring of trades and implementation of the Code under the overall supervision of the Board.
(` in Lacs) 0.90* 84.50 16.50 5.38** 107.28 Amount
Name of Company or its subsidiaries obtaining the service CEAT Limited CEAT CEAT Specialty CEAT Limited Tyres CEAT Akkhan CEAT Limited (Pvt) Limited. Associated CEAT Associated CEAT Holdings Company on Standalone and Consolidated and on Standalone Chairman of the Board and Managing and the Board of Chairman Type of Services Type Audit fee, Limited and review Certification Audit fee, Limited and review Certification Consultancy Internal Audit Inter The Auditors Reports The position of all the functional matters. Director are held by separate persons. are Director 31, 2019 March Financial Statements for the year ended audit opinion. with unmodified are
S R B C & CO LLP Name of Statutory Auditor and network entity S R B C & CO LLP Qasem & Co. Chartered Accountants (EY Bangladesh) Ernst & Young Sri Ernst & Young Lanka Total Total Compliance with Discretionary Requirements Compliance with Discretionary by the Company with the to compliance The status with regard as listed out in Part E of Schedule II requirements discretionary of the Listing Regulations is as under: As per Regulation 34 (3) read with schedule V of the Listing As per Regulation 34 (3) read its a certificate from Regulations the Company has obtained the compliance with the mandatory Auditors confirming Statutory of the Listing Regulations and the same is annexed requirement to this Report. Disclosures in relation to the Sexual Harassment of Sexual Harassment to the in relation Disclosures and Prohibition (Prevention, at Workplace Women Act, 2013 Redressal) of duly framed a Policy on Prevention The Company has and formed 7 (seven) Internal at Workplace Sexual Harassment pursuant to the (‘ICC’), as required Complaints Committees (Prevention, at Workplace of Women Sexual Harassment During the year under Act, 2013. and Redressal) Prohibition by ICC received no complaints were review, with mandatory requirements. Details of compliance with the corporate governanceThe Company is in compliance (b) clauses and 27 to 17 Regulations in specified requirements (2) of Regulation 46. to (i) of Sub-Regulation Note: Above amount does not include reimbursement of out of pocket expenses Note: Above amount does not include reimbursement 31, 2019 * Converted 1 BDT = 0.82538 INR, as on March 31, 2019 ** Converted 1 LKR = 0.39492 INR, as on March c. Committeein totheAudit nal AuditorReportsdirectly b. a. Consolidated Fees paid/payable to Statutory Auditors: Consolidated Fees paid/payable to Statutory services availed by the Details of total fees paid/payable for all to the consolidated basis, on a its subsidiaries Company and Statutory Auditor and all entities in the network firm/network entity of which Statutory Auditor is a part, during the year under given below: are review Corporate Governance Report
VIII. General Shareholder Information Market Price Data for Equity shares of face value of 10/- Date, Time and Venue of Annual General Meeting each Thursday, August 1, 2019 at 3.00 p.m. at Ravindra Natya BSE NSE Month Mandir, P. L. Deshpande Maharashtra Kala Academy, Sayani High Price Low Price High Price Low Price Road, Prabhadevi, Mumbai - 400 025. Apr-18 1,666.00 1,493.00 1,665.90 1,515.00 May-18 1,647.90 1,286.10 1,650.00 1,284.50 Financial Year Jun-18 1,413.00 1,232.20 1,414.10 1,230.30 The Company follows April 1 to March 31 as the financial year. Jul-18 1,409.50 1,228.65 1,409.85 1,227.15 Aug-18 1,455.00 1,372.00 1,455.00 1,370.10 Date of Book Closure Sep-18 1,421.00 1,122.05 1,424.15 1,121.55 Saturday, July 20, 2019 to Thursday, August 1, 2019 (both Oct-18 1,161.00 983.80 1,159.05 985.85 day inclusive). Nov-18 1,283.00 1,135.05 1,283.85 1,142.10 Dec-18 1,373.00 1,214.70 1,372.85 1,213.80 Dividend Payment Date Jan-19 1,319.45 1,055.45 1,324.65 1,059.05 Dividend on equity shares, if declared at the Annual General Feb-19 1,136.40 1,027.00 1,137.85 1,038.00 Meeting, will be credited/dispatched on or before Friday, Mar-19 1,178.00 1,070.80 1,179.00 1,070.05 August 30, 2019. Share Performance of the Company in comparison to a. to all those beneficial owners holding shares in electronic S & P BSE 500 form, as per the beneficial ownership data made available to the Company by National Securities Depository Limited CEAT in Comparison with S & P BSE 500 (NSDL) and the Central Depository Services (India) Limited
(CDSL) as of the close of business hours on Friday, 16000 1,800.00 July 19, 2019; and 15500 1,600.00 1,400.00 15000 b. to all those shareholders holding shares in physical form, 1,200.00 whose names stand registered in the Company’s Register 14500 1,000.00 of Members as Members on the end of business day on 14000 800.00 Friday, July 19, 2019. 600.00 13500 400.00 Listing on Stock Exchanges 13000 200.00 The Equity shares of the Company are listed on the following 12500 0.00 stock exchanges: Jul-18 Apr-18 Oct-18 Jan-19 Jun-18 Mar-19 Feb-19 Aug-18 Sep-18 Nov-18 Dec-18 May-18 Name Address Scrip /Stock Code S & P BSE 500 CEAT BSE Limited Phiroze Jeejeebhoy Towers, 500878 (equity) Dalal Street, Mumbai - 400 001 National Stock Exchange Plaza, CEATLTD (equity) Registrar and Share Transfer Agents for equity shares Exchange of India Bandra Kurla Complex, Bandra Limited (East), Mumbai - 400 051 The Company has appointed TSR Darashaw Limited (TSR) as its Registrar and Share Transfer Agents and accordingly, Listing fees for FY 2018-19 for both the stock exchanges were all physical transfers, transmissions, transpositions, issue of duly paid by the Company. duplicate share certificate(s), issue of demand drafts in lieu of dividend warrants, etc. as well as requests for dematerialization/ The Company had its Non-Convertible Debentures Listed on rematerialization are being processed in periodical cycles at TSR the BSE Limited for the part of FY 2018-19. Consequent to the offices. The work related to dematerialization/rematerialization is early redemption of the Non-Convertible Debentures on July 31, handled by TSR through connectivity with NSDL and CDSL. 2018, the same were delisted from BSE Limited during the year under review. TSR Darashaw Limited 6-10, Haji Moosa Patrawala Industrial Estate, 20, Dr. E. Moses Road, Mahalaxmi, Mumbai – 400 011 Email: [email protected] Web: www.tsrdarashaw.com Tel.: 022-66178484; Fax: 022-66568494
92 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 93 7.09 1.25 0.98 0.45 0.26 0.29 0.80 87.62 98.74 Demat 0.96 0.09 0.10 0.04 0.02 0.01 0.04 0.00 1.26 CEAT Limited CEAT % of Equity Capital Physical Demat 5,05,872 3,95,457 1,80,172 1,04,803 1,18,040 3,24,286 28,69,446 3,54,44,149 3,99,42,225 0 No. of Shares 6,900 4,530 Risk Management policy of the Company with respect to Risk Management policy of the Company with respect commodities and Forex: managed by combining in commodity prices are Volatility mechanism with a buying model price forecast a robust buying and strategic comprising of spot buying, forward alignment in maintained are levels Inventory contracts. long-term procured to this. Since significant quantum of raw materials are hedging mechanisms appropriate internationalfrom sources, fluctuations. in place to insulate forex are prices currency foreign the in volatility the manages Company The risk arises primarily hedging mechanisms. The exposure through well as Company the of activities export and import the to due currency. in foreign as short-term and long-term borrowings Exchange The Company has put in place a Policy for Foreign by the Risk Management which is duly approved and Interest Exchange Risk Management The Foreign of the Company. Board of the Company is carried out as per the said Policy programme contracts, derivatives, structured and the Company uses forward derivatives and swaps as hedging instruments. The Company is currency suitably insulated against the risk arising out of foreign hedging mechanisms and the appropriate fluctuations through Disclosure of commodity price risks/foreign exchange of commodity price risks/foreign Disclosure risk and hedging activities As such now only cases of valid transmission or transposition transmission or only cases of valid As such now the with compliance to subject TSR, the by processed be may by SEBI. guidelines prescribed of for transfer requests all valid review, During the year under for transfer at mode received in physical 30,659 equity shares Agents or at the Transfer Share of the Registrar and the office returned and processed of the Company were Office Registered receipt of the date of (fifteen) days from within a period of 15 in all respects. documents complete of shares Dematerialization and CDSL for with NSDL arrangement has an The Company with ISIN No. INE482A01020. dematerialization of shares 497 dematerialised and were During the year 49,536 shares 31, 2019, 98.74% of on March As rematerialized. were shares to 3,99,42,225 equity shares capital corresponding equity share in dematerialised form. held were 35,129 39,124 17,751 16,657 Physical 3,87,776 5,07,867 2.31 5.21 1.88 4.05 0.37 10.34 51.08 24.75 Capital 100.00 % of Equity 72 30 26 45 81 690 278 65,361 66,583 Demat 7,61,107 1,50,754 9,33,742 21,05,657 16,40,158 41,81,834 2,06,63,691 1,00,13,149 4,04,50,092 Total Holdings Total 7 2 1 2 0 51 28 14,172 14,263 No. of Shareholders Physical Category Group and Promoter Promoters No. of Equity Shares 1 to 500 Portfolio/Institutional Investors Foreign FI, Banks and Insurance Companies Mutual Funds Resident Individuals TOTAL NRI/OCB Others Bodies Corporate 501 to 1000 1001 to 2000 2001 to 3000 3001 to 4000 4001 to 5000 5001 to 10000 Greater than 10000 Greater Total Outstanding GDRs/ADRs/Warrants/Any other Outstanding GDRs/ADRs/Warrants/Any Convertible Instruments GDRs/ outstanding any have not does Company The Instruments as on other Convertible ADRs/Warrants/Any 31, 2019. March Categories of Shareholding as on March 31, 2019: as on March Categories of Shareholding Share Transfer System Transfer Share Regulations, made Pursuant to the amendment to the Listing unless can be transferred April 1, 2019, no shares from effective held in dematerialized mode. Members holding shares they are to convert their holdings requested therefore in physical form are and fraudulent shares into dematerialized mode to avoid loss of transactions and avail better investor servicing. Registrar for Deposits Registrar any did not accept the Company review, year under During the under the Act. In case of any unclaimed deposits as defined the Company, the of schemes previous the from deposits to: deposit holder may write Private Limited Kisu Corporate Services Supariwala Estate, D- 28 – Mezzanine Floor Prasad Chambers Compound House Near Roxy Cinema Opera Mumbai 400004. No.: 022-49710146, Tel. Email ID: [email protected] Distribution of shareholding as at March 31, 2019 as at March Distribution of shareholding Corporate Governance Report
same is monitored by the Board on a timely basis. The Company 2013. Voting rights on such shares remain frozen till the rightful is in fully compliance with the rules, regulations and guidelines, owner claims the shares. as may be applicable, prescribed by the Reserve Bank of India from time to time in this behalf. As and when the beneficiary of such unclaimed shares approaches the Company, after verifying authenticity of the Exposure of the Company to commodity and commodity beneficiary, the Company transfers the shares from Unclaimed risk faced throughout the year: Suspense Account to respective beneficiary’s demat accounts The Company does not have any exposure hedged through or issues a share certificate, as the case may be. commodity during FY 2018-19. The Company, acting as a trustee in respect of the unclaimed Plant Locations shares, follows the modalities for the operation of the said account in the manner set out in Regulation 39(4) read with Mumbai Plant : Village Road, Bhandup, Schedule VI to the Listing Regulations. Mumbai - 400 078. Nashik Plant : 82, MIDC Industrial Estate, Satpur, The summary of Unclaimed Suspense Account for Nashik - 422 007. FY 2018-19 is as follows: Halol, Gujarat Plant : Village Gate Muvala, Halol, Sr. Particulars No. of Outstanding Panchmahal - 389 350. No shareholders shares Nagpur Plant : Plot No.SZ-39, Butibori MIDC, 1 Aggregate no. of shareholders & 621 19,351 Nagpur - 441 108. the outstanding shares lying in the Unclaimed Suspense Account as on April 1, 2018 Credit Ratings: 2 No. of shareholders who 21 932 During the year under review, the long-term credit rating of the approached the Company for Company was affirmed/assigned as ‘AA’ with ‘Stable’ outlook transfer of shares from the by its rating agencies viz. CARE Ratings Limited (‘CARE’) and Unclaimed Suspense Account during the year 2018-19* India Ratings & Research Private Limited (‘Ind-ra’). The rating have been reaffirmed even after considering the expected 3 No. of shareholders to whom 19 901 shares were transferred from the incremental long-term debt for the on-going expansions and Unclaimed Suspense Account greenfield project. The rating of AA indicates high degree of during the year 2018-19* safety regarding timely servicing of financial obligations and very 4 No. of shareholders whose shares 123 2,918 low credit risk. A ‘Stable’ outlook indicates expected stability (or were transferred to IEPF Authority retention) of the credit ratings in the medium term on account of during the year 2018-19 stable credit risk profile of the entity in the medium term. 5 Aggregate no. of shareholders & 479 15,532 the outstanding shares lying in the The short-term facilities (working capital limit) of the Company Unclaimed Suspense Account as have been granted the rating of ‘A1+’ by CARE. The rating of on March 31, 2019 ‘A1+’ indicates very strong degree of safety regarding timely *Requests received from two shareholders during March 2019, were processed payment of financial obligations and carries the lowest credit risk. and transferred to the concerned claimant after the year ended March 31, 2019. Transfer of Unclaimed / Unpaid amounts and Shares to The ratings on Commercial Paper issue of the Company have the Investor Education and Protection Fund been reaffirmed as ‘A1+’ by CARE and Ind-ra. Pursuant to the provisions of Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority Further the Company has repaid the Non-Convertible (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the IEPF Debentures (NCDs) amounting to ` 200 Crores fully on Rules’), dividend which remains unclaimed for consecutive July 31, 2018. The rating assigned to the NCDs by CARE since 7 (seven) years from the date of transfer to unclaimed dividend been withdrawn. account shall be transferred to the Investor Education and Protection Fund (IEPF) Authority. During the year under review, Disclosures with respect to unclaimed suspense account unclaimed dividend amounting to ` 9,22,634 of FY 2010-11, In accordance with Regulation 39(4) of the Listing Regulations as required aforesaid, was transferred to the IEPF Authority on (erstwhile Clause 5A of the Listing Agreement), the Company October 26, 2018. Unclaimed Dividend of ` 20,784 pertaining during the year 2013, had sent three reminders to such to 38 cases was retained by the Company on account shareholders whose shares were lying ‘Undelivered/ of court orders. Unclaimed’ with the Company and opened a demat suspense account with Keynote Capital Limited, a Depository Participant Further, as provided under the IEPF Rules, the Company on (hereinafter referred as ‘Unclaimed Suspense Account’). As per October 29, 2018, after compliance with the due procedure the requirements of the said Regulation, the Company after laid down under the said provisions, transferred 19,372 shares completing the necessary formalities, has credited 1,40,918 of 791 shareholders to the demat account of IEPF Authority, in such unclaimed equity shares of the Company pertaining to respect of which dividend had not been claimed for 7 (seven) 4,738 shareholders, to Unclaimed Suspense Account in the year consecutive years.
94 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 95
P. N. PARIKH P. Anant Goenka For CEAT Limited For CEAT Managing Director FCS: 327 CP: 1228 CEAT Limited CEAT For Parikh & Associates Practising Company Secretaries amount will thereby directly be credited to the Member’s bank to the Member’s be credited directly thereby amount will Agents Transfer and Share with Registrar account, maintained mode or maintained with the held in physical in case of shares mode. demat in held are of shares case in Participants Depository of the dividend amount credit speedier This facility ensures of dividend warrants of loss/interception and eliminates the risk fraudulent encashment of Dividend in postal transit and/or facility the of avail to requested are Members warrants. bank details viz. and correct their complete by registering banking of the branch, core full address name of the Bank, digits 11 and MICR 9-digit type, account and number account account. IFSC against the bank be of the Bank details should for registration The request bearing the name accompanied by an original cancelled cheque as the account holder and should be of the first shareholder Transfer and Share sent to TSR Darashaw Limited, Registrar held in physical are Agents of the Company in case the shares are in case shares form and to your Depository Participant held in demat mode. Disclosure Requirements) Regulations, 2015] Requirements) Disclosure Declaration on the Code of Conduct Certificate of Non-Disqualification of Directors
[Regulation 34(3) read with Schedule V (Part D) to the Securities and Exchange Board of India (Listing Obligations and with Schedule V (Part D) to the Securities and Exchange Board [Regulation 34(3) read
Mandatory Bank details for Payment of dividend Mandatory Bank details for Payment the Company is As per Regulation 12 of the Listing Regulations, electronic through dividend of payment for facility the providing of India. The dividend mode permissible by the Reserve Bank Member(s) who have not encashed/claimed their dividend of not encashed/claimed their dividend Member(s) who have requested to financial years are FY 2011-12 or any subsequent Transfer of the Registrar and submit their claims to the office of transfer avoid any 2019, to August 31, before on or Agents, to the IEPF Authority. dividend or shares Shares including dividends and other benefits accruing thereon thereon accruing other benefits including dividends and Shares IEPF Authority can be claimed to which have been transferred prescribed procedure the following after Authority IEPF from above and no claim shall lie mentioned under the provisions Agents. Transfer Registrar and Share or it’s against the Company As required under the IEPF Rules, 10,392 Shares of 38 cases of 38 cases Rules, 10,392 Shares under the IEPF As required specific orders on account of by the Company retained were any such Authority restraining or statutory of court or Tribunal of dividend. and payment transfer of shares We have examined the compliance of provisions of the aforesaid clause 10 (i) of the Part C of Schedule V of SEBI (Listing Obligations clause of the aforesaid have examined the compliance of provisions We to the explanations given to us Regulations, 2015 and to the best of our information and according Requirements) and Disclosure Limited (“the Company”) of CEAT we certify that none of the directors by the Directors, and the declarations made by the Company, Worli, Mumbai 400030 have been Annie Besant Road, 463, Dr. at office CIN: L25100MH1958PLC011041 having its registered of the Company by SEBI/ Ministry of being appointed or continuing as directors or disqualified as on 31.03.2019 from debarred or any other statutory authority. Corporate Affairs This certificate is issued pursuant to clause 10 (i) of the Part C of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Requirements) (Listing Obligations and Disclosure This certificate is issued pursuant to clause 10 (i) of the Part C of Schedule V of SEBI of India. dated May 9, 2018 of the Securities Exchange Board Regulations, 2015 as amended vide circular Annexure to the Corporate Governance Report Annexure Place: Mumbai Date: May 6, 2019 Place: Mumbai Date: May 7, 2019 This is to declare that all the members of the Board of Directors and the Senior Management of the Company have, for the year and the Senior Management of the Company of Directors that all the members of the Board This is to declare 17(5) of the SEBI in terms of Regulation laid down Code of Conduct the compliance with the 31, 2019, affirmed ended March 2015. Regulations, Requirements) (Listing Obligations and Disclosure Annexure to the Corporate Governance Report
Independent Auditor’s Report on compliance with the conditions of Corporate Governance as per provisions of Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
The Members of CEAT Limited i. Reading and understanding the information prepared 1. The Corporate Governance Report prepared by CEAT by the Company and included in its Corporate Limited (hereinafter the “Company”), contains details Governance Report; as specified in regulations 17 to 27, clauses (b) to (i) of sub – regulation (2) of regulation 46 and para C, D, and ii. Obtained and verified that the composition of the E of Schedule V of the Securities and Exchange Board of Board of Directors with respect to executive and India (Listing Obligations and Disclosure Requirements) non-executive directors has been met throughout the Regulations, 2015, as amended (“the Listing Regulations”) reporting period; (‘Applicable criteria’) for the year ended March 31, 2019. This Report is required by the Company for annual iii. Obtained and read the Register of Directors as submission to the Stock exchange and to be sent to the on March 31, 2019 and verified that at least one Shareholders of the Company. woman director was on the Board of Directors throughout the year; Management’s Responsibility 2. The preparation of the Corporate Governance Report . iv Obtained and read minutes of meetings held during is the responsibility of the Management of the Company the year of the Board of Directors, and committees including the preparation and maintenance of all relevant including Audit Committee, Nomination and supporting records and documents. This responsibility also Remuneration Committee, Stakeholders Relationship includes the design, implementation and maintenance of Committee, Risk Management Committee, internal control relevant to the preparation and presentation Finance and Banking Committee, Corporate Social of the Corporate Governance Report. Responsibility Committee, and also minutes of the general meetings; 3. The Management along with the Board of Directors are also responsible for ensuring that the Company complies . v Obtained necessary declarations received by the with the conditions of Corporate Governance as stipulated Company from its directors. in the Listing Regulations, issued by the Securities and Exchange Board of India. vi. Obtained and read the policy adopted by the Company for related party transactions. Auditor’s Responsibility 4. Pursuant to the requirements of the Listing Regulations, vii. Obtained the schedule of related party transactions our responsibility is to provide a reasonable assurance in during the year and balances at the year end. the form of an opinion whether, the Company has complied Obtained and read the minutes of the audit committee with conditions of Corporate Governance as specified in meeting where in such related party transactions have the Listing Regulations. been approved by the audit committee.
5. We conducted our examination of the Corporate viii. Performed necessary inquiries with the management Governance Report in accordance with the Guidance Note and also obtained necessary specific representations on Reports or Certificates for Special Purposes and the from management. Guidance Note on Certification of Corporate Governance, both issued by the Institute of Chartered Accountants of 8. The above-mentioned procedures include examining India (“ICAI”). The Guidance Note on Reports or Certificates evidence supporting the particulars in the Corporate for Special Purposes requires that we comply with the Governance Report on a test basis. Further, our scope of ethical requirements of the Code of Ethics issued by the work under this report did not involve us performing audit Institute of Chartered Accountants of India. tests for the purposes of expressing an opinion on the fairness or accuracy of any of the financial information or 6. We have complied with the relevant applicable requirements the financial statements of the Company taken as a whole. of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Opinion Financial Information, and Other Assurance and Related 9. Based on the procedures performed by us, as referred in Services Engagements. paragraph 7 above, and according to the information and explanations given to us, we are of the opinion that the 7. The procedures selected depend on the auditor’s Company has complied with the conditions of Corporate judgement, including the assessment of the risks Governance as specified in the Listing Regulations, as associated in compliance of the Corporate Governance applicable for the year ended March 31, 2019, referred to Report with the applicable criteria. Summary of key in paragraph 4 above. procedures performed include:
96 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 97 CEAT Limited CEAT This r This of the Company solely for the purpose of enabling it to of the Company solely under the Listing Regulations comply with its obligations regulations relevant to compliance with the with reference of Corporate Governanceby any and should not be used we do Accordingly, other purpose. any for or person other or any liability or any duty of care not accept or assume to whom it is for any other purpose or to any other party without our prior shown or into whose hands it may come to update this have no responsibility consent in writing. We occurring after the events and circumstances for report date of this report. viability of the Company nor the efficiency or effectiveness or effectiveness nor the efficiency viability of the Company has conducted the affairs with which the management of the Company.
11. tothemembers provided toand isaddressed eport Other matters and Restriction on Use and Restriction Other matters 10. future the as to assurance an neither is report Place of Signature: Mumbai Place of Signature: Date: May 7, 2019 per Vinayak Pujare Partner Membership Number: 101143 For S R B C & CO LLP Accountants Chartered ICAI Firm Registration Number: 324982E/E300003 Business Responsibility Report
Section A: General Information about the Company 1. Identity Number (CIN) of the Company: L25100MH1958PLC011041 2. Corporate Name of the Company: CEAT Limited 3. Registered address: 463, Dr. Annie Besant Road, Worli, Mumbai - 400 030 4. Website: www.ceat.com 5. E-mail ID: [email protected] 6. Financial Year reported: 2018-19 7. Sector(s) that the Company is engaged in (industrial • 22111- Manufacture of rubber tyres and tubes for motor vehicles, activity code-wise): motorcycles, scooters, 3 Wheelers, tractors
8. List three Key Products/Services that the Company • Tyres, Tubes and Flaps manufactures/provides (as in Balance Sheet):
9. Total number of locations where business activity is undertaken by the Company
(a) Number of International Locations 3 (three) Liason offices in Indonesia, United Arab Emirates and Germany; (Provide details of major 5) (b) Number of National Locations Registered Office: 463, Dr. Annie Besant Road, Worli, Mumbai 400 030; Factories: 4 (four); Regional Offices: 33 (thirty-three)
10. Market Served by the Company - Local/ State/ India and Internationally at over 100 (hundred) countries National/ International
Section B: Financial Details of the Company Paid up Capital (`) 40,45,00,920 Total Turnover (`) 69,84,51,04,134 Total profit after taxes (`) 2,51,08,07,168 Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%) 10,50,90,000 4.19%
List of activities in which expenditure in 4 above has been incurred:- Please refer to table below
Relevant Section of Amount spent Direct/ Sr. Coverage of Project/ Amount Spent CSR Project/Programme Schedule VII in which the through Implementing No. Programme (` in Lacs) Project is covered Agency a. Pehlay Akshar (ii) Local around factories 124.58 Implementing Agency* b. Community Development (ii), (iii) PAN India 286.01 Implementing Agency* c. Netranjali (i), (x) PAN India 401.57 Implementing Agency* d. Women Empowerment (i), (x) Local around factories 238.74 Implementing Agency*
* Through RPG Foundation, a Public Charitable Trust recognized for the purpose of CSR
Relevant Section of Schedule VII in which the Project is covered: (i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation (including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation) and making available safe drinking water; (ii) Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancements projects; (iii) Promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups; (x) Rural development projects;
98 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 99 CEAT Limited CEAT The Company drives its business in line with the 9 (nine) in line with The Company drives its business Guidelines, under the National Voluntary principles prescribed Report: in detail in this and described as listed below and governPrinciple 1: Businesses should conduct themselves and Accountability. Transparency with Ethics, goods and services Principle 2: Businesses should provide safe and contribute to sustainability throughout that are cycle. their life the well-being Principle 3: Businesses should promote of all employees. be of, and the interests should respect 4: Businesses Principle are all stakeholders, especially those who towards responsive marginalized. vulnerable and disadvantaged, human rights. and promote Principle 5: Businesses should respect efforts make and protect respect should Business 6: Principle the environment. to restore Principle 7: Businesses, when engaged in influencing public manner. so in a responsible should do policy, and regulatory and Principle 8: Businesses should support inclusive growth development. equitable value provide and with engage should Businesses 9: Principle manner. responsible consumers in a and to their customers Associated CEAT Holdings Company (Private) Limited, Sri Lanka Holdings Company Associated CEAT AKKhan Limited, Bangladesh CEAT Limited, India Specialty Tyres CEAT Limited, India Rado Tyres Business Responsibility (BR) initiatives are guided by the Code of (BR) initiatives are Business Responsibility through undertaken Corporate Governance & Ethics. CSR initiatives are Company encourages its The Charitable Trust. RPG Foundation, a Public BR initiatives. subsidiaries to carry out and sustainable business responsible The Company encourages (e.g. suppliers, practices and supports such initiatives. All entities with make an active distributor etc.) that the Company does business Company. attempt to participate in the BR initiatives of the Details [email protected] 02089850 Anant Goenka Mr. Managing Director 022-24930621 NVGs) BR Policy/policies ector/Directors responsible for for responsible ector/Directors Head: d of Directors particularly the Managing Director Director the Managing particularly d of Directors of Director/Directors responsible for BR responsible of Director/Directors Name Designation number Telephone Email Address Particulars DIN 2. 3. 4. 5. No. 1. Principle-wise (as per The purpose of the Company is ‘Making Mobility Safer & Details of BR The Boar Details Details of the Dir Smarter. Every Day.’, while its CSR vision is to drive “holistic while its CSR Every Day.’, Smarter. implementation through empowerment” of the community, of sustainable initiatives which will have maximum societal impact by identifying the critical gaps and requirements. of the forefront at the and commitment are Thus, respect Company. initiatives of the responsibility business is responsible for the Business Responsibility initiatives. Responsibility Business for the is responsible implementation of the BR policy/policies implementation the Company does business with participate in the BR initiatives the Company does business with participate of such of the Company? If yes, then indicate the percentage 60%] than entity/entities? [Less than 30%, 30-60%, More BR Initiatives of the parent company? If yes, then indicate the BR Initiatives of the parent company(s) number of such subsidiary Do any other entity/entities (e.g. suppliers, distributors etc.) that Do any other entity/entities Do the Subsidiary Company/Companies participate in the Do the Subsidiary Company/Companies Does the Company have any Subsidiary Company/Companies? Does the Company have
3. 2. 1. 2.
1. (a) Section D: Business Responsibility (BR) Responsibility D: Business Section Information Section C: Other Details Section Business Responsibility Report
Details of compliance (Reply in Y/N)
No. Questions P 1 P 2 P 3 P 4 P 5 P 6 P 7 P 8 P 9 1. Do you have a policy/ policies for... Y Y Y Y Y Y Y Y Y 2. Has the policy being formulated in consultation with the Y Y Y Y Y Y Y Y Y relevant stakeholders? 3. Does the policy conform to any national/international standards? If Yes, the policies conform to the principles of NVGs, the Companies yes, specify? (50 words) Act, 2013 and International Standard ISO14001, OHSAS18001 as applicable to the respective policies 4. Has the policy being approved by the Board? Policies have been approved by the Board or under its authority as If yes, has it been signed by MD/ owner/ CEO/ appropriate may be mandated under the applicable laws, or otherwise. Board Director? Y Y Y Y Y Y Y Y Y 5. Does the Company have a specified committee of the Board/ Y Y Y Y Y Y Y Y Y Director/ Official to oversee the implementation of the policy? 6. Indicate the link for the policy to be viewed online For the detailed Policies please refer to the website of the Company at https://www.ceat.com/corporate/investor#corporate-governance 7. Has the policy been formally communicated to all relevant internal Y Y Y Y Y Y Y Y Y and external stakeholders? 8. Does the Company have in-house structure to implement the Y Y Y Y Y Y Y Y Y policy/policies? 9. Does the Company have a grievance redressal mechanism related Y Y Y Y Y Y Y Y Y to the policy/policies to address stakeholders’ grievances related to the policies? 10. Has the Company carried out independent audit/evaluation of the Y Y Y Y Y Y Y Y Y working of this policy by an internal or external agency?
(a) If answer to the question at serial number 1 against any principle, is ‘No’, please explain why: (Tick up to 2 options)-N.A.
No. Questions P 1 P 2 P 3 P 4 P 5 P 6 P 7 P 8 P 9 1. The Company has not understood the Principles 2. The Company is not at a stage where it finds itself in a position to formulate and implement the policies on specified principles 3. The Company does not have financial or manpower resources available for the task Not Applicable 4. It is planned to be done within next 6 months 5. It is planned to be done within the next 1 year 6. Any other reason (please specify)
3. Governance related to Business Responsibility (BR) its business in an ethical and responsible manner. The Board of Directors reviews the BR initiatives, the Audit Committee reviews the whistle blower policy of the Towards this goal, the Company has formulated/adopted Company, the CSR Committee reviews the CSR policy various policies including the Code for Corporate Governance and the CSR initiatives undertaken by the Company. & Ethics (‘the Code’) covering principles of business integrity, In addition, since the Company is a part of the RPG Group, responsibilities relating to employees, consumers and the the RPG Group has constituted the Corporate Governance environment. The Company periodically cascades the principles and Ethics Committee, which reviews the corporate under the Code across the organization. Concerns and issues governance, code of conduct and the sustainability related to this framework are reviewed and dealt with by the initiatives taken by the Company. The reviews are held on a Corporate Governance and Ethics Committee. need basis or quarterly/annually as the case may be. A dedicated email address [email protected] is provided for Section E: Principle wise Performance reporting grievances and violations of the said Code. The report Principle 1: Ethics, Transparency and Accountability of the Corporate Governance and Ethics Committee is placed A strong corporate governance foundation based on the before the Audit Committee as deemed necessary. cornerstones of transparency, fairness and accountability has been laid down by the Company since its inception. The Company has adopted a Whistle Blower Policy which The Company believes in an environment of mutual respect, provides a framework through which the Directors and employees fairness, transparency and integrity and is committed to conduct as well as external stakeholders viz. customers, vendors,
100 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 101 CEAT Limited CEAT (CEAT was the first in the tyre industry to launch this policy), industry to launch the tyre was the first in (CEAT policy etc. bereavement sabbatical policy, leave policies, has been reconized the Company review, During the year under 25 top the India’s as one of Institute to Work Place by Great of manufacturing. workplaces in the field and culture a as diversity embraced has Company The not similarities. and in differences lies understands that strength like encourages diversity in all aspects, Though the Company on focus particular a has it etc., nationality, culture, ethnicity, the Company has several inclusivity In addition, gender diversity. and as flexi-timing, work-from-home guidelines/policies such on business to aid women who have to travel better facilities that celebrates and matters thus building an organization leverages diversity. as a flagship Company of the RPG Enterprises, is part CEAT that has been launched to bring of an initiative by RPG Group initiative The workforce. Company’s the in balance gender the number in gender gap of the workforce ‘WE’ aims to reduce growth and foster women’s an exclusive environment and create also the first in the tyre in the organization. The Company was on the shop floor in industry to have female employees working we are to champion the cause of inclusivity factories. Moreover, of inducting people with disabilities in our plants. in the process of sexual prevention The Company has in place a Policy of safe to provide harassment at workplace which endeavours with work freely to only for women not environment and workplace and their ideas freely any danger to their person but also express The Internal Committees formed at various Complaints without fear. any complaint reviews factories and locations under the said Policy are programmers person. Various or grievance made by the affected on the issue of sexual harassment ofconducted to raise awareness no complaint review, women at workplace. During the year under by the Internal was received Complaints Committee. Unleashing talent is the value pillar of the Company and is a clearly defined emphasizes on people focus. There and diversity of philosophy which involves job rotation career and Training career. experiences at all stages of the individual’s Organization development is given utmost importance. health and safety The Company has in place an environment, policy and highest priority is given to the health and safety of The health premises. all persons working on the Company’s and reviewed regularly are Company the of policies safety and set of key performance indicators. a through monitored believer in fair business practices and The Company is a great The rights of on industrial relations. has an excellent record of association and collective bargaining are workers to freedom have been no there During the year, and respected. recognized involuntary labour labour forced alleging child labour, complaints or discriminatory employment. 31, 2019, the Company had 5,815 permanent As on March employees in the Company including 438 women showing a rise the previous in woman workforce of the six times than of more on a contract The Company had employed 3,918 people year. yres – Fuel yres compliance raw materials: Reduction in Reduction materials: raw compliance 2 Wheeler tyres: Gripp X3 Series for Safe in riding Series for Gripp X3 tyres: 2 Wheeler Low Rolling Resistance Passenger Car Radials T High grip REACH (social safety) smart and EcoDrive series: Reduction in fuel consumption environmental hazards environmental
Withmind, the Company is committed the above objective in and environmental for safe are which products the deliver to several new green sociological aspects. It has developed follow for various types of raw materials which resources CMRT etc. ELV, like REACH, international norms and standards products the following 3 (three) Among its various products, hazards: environmental have contributed in reducing Principle 2: Products Lifecycle Sustainability Principle 2: Products from value chain covers the entire The Life cycle of the product distribution, manufacture, of raw materials to product sourcing productthat believes Company The consumer use and disposal. to managing the stages of alifecycle sustainability is an approach so as to minimize any negative impact on the existence product of sustainability is largerly determined during The degree environment. lifecycle in which the product the beginning of life stage of the product of very same principle,is designed and developed. On the basis will safe and that are the Company has developed its products their lifecycle. While designingcontribute to sustainability throughout productof stage initial very the at Company the products, various its can that processes and materials such development, have selected footprint. environment have significant impact on the product’s During FY 2018-19, 1(one) complaint was received by the Ethics 1(one) complaint was received During FY 2018-19, was same and the the Company by to it as referred Committee satisfactorily. resolved Additionally, the Company has formulated a Policy on Code of the Company Additionally, and Senior Management for ethical Members Conduct for Board of achieve the highest standards behavior to and transparent corporate governance. suppliers, outsourcing partners, etc. may report their genuine report partners, etc. may outsourcing suppliers, concerns to the designated violations and actual/potential of the Company fearlessly. officials 2. 3. 1. With the above mind, the Company during the year under review, Withreview, under year the during Company the mind, above the policies such as 5-day working in Manufacturing launched revised Principle 3: Employee Well-being: The Company encourages its employees to maintain a healthy the importance of safety both “work-life balance” and stresses a working at the workplace and outside it. The aim is to create while lives personal employee’s of supportive environment objectives. meeting the Company’s In the last year, the Company has used approximately 7,514 MT the Company has used approximately In the last year, of reclaimed (Metric tons) being 2.5% of the total production in their products. forms rubber of different The Company always promoted local and domestic (local and The Company always promoted for their business enrichment small-scale industries) resources and has identified local small-scale industries which have the with up come to them encourage and capability/resources of international benchmark for mutual benefits. products Business Responsibility Report
basis. Currently, there is 1 employee associations across the responsibility which the Board Members and the Senior Company and 2,173 workmen are its members. The Company Management have towards the stakeholders in the Company. does not have any employees with disabilities. Therefore, Board Members and Senior Management will act as trustees in the interest of all stakeholders of the Company by Principle 4: Stakeholder Engagement balancing conflicting interest, if any, between stakeholders for The Company believes that businesses should respect the optimal benefit. interests of and be responsive towards all stakeholders especially those who are disadvantaged, vulnerable and Principle 5: Human Rights marginalized. The Company’s mission ‘Making Mobility Safer & The Company completely believes that businesses should Smarter. Every Day.’, is a proof of the Company’s stakeholder respect and promote human rights. Openness and integrity engagement. Customer-centricity is the core value of the form the core values of the Company. The Company conducts Company. There are various policies for the internal as well its operations with honesty, integrity and with respect external stakeholders of the Company such as Corporate Social for human rights. Responsibility (CSR) Policy, Policy on Code of Conduct for Board Members and Senior Management, Whistle Blower Policy The Company duly endorses the human rights element of for External Stakeholders etc. through which the stakeholder’s the Constitution of India, various laws and regulations and engagement with the Company is encouraged. the contents of the International Human rights. The Company expects and encourages its partners, suppliers and contractors The Company constantly seeks to understand what motivates to fully respect human rights and strictly avoid any violation of the consumers to consume the Company’s products, seeks to human rights. All stakeholders including employees impacted provide best in class products and services and to connect and by the business have full right and access to the grievance engage with the consumers. This principle is enshrined in the mechanisms introduced by the Company. The Company Quality Policy of the Company. The Company has undertaken believes in providing equal employment opportunities based on important initiatives like establishing call centres and creation of talent and meritocracy without any discrimination. helplines to become more customer centric. The Company upholds the principles of human rights and fair The Company constantly endeavours to provide the best of treatment through various policies adopted by it such as Code services to its shareholders and investors and to maintain the of Corporate Governance & Ethics, Policy on Prevention of highest level of corporate governance. For this the Company Sexual Harassment at Workplace, CSR Policy, Hospitalization regularly interacts with the shareholders and investors through Policy, Voluntary Provident Fund Policy, etc. investor calls, results announcements, media releases and interactions, Company’s website and the quarterly and annual During the year, the Company participated in the famous reports. The Investor Relations team also regularly interacts with Kumbh Mela being held in India, providing its helping hand investors and analysts through quarterly results calls, one-on- to cater towards injuries, crowd control and women’s safety. one and group meetings participation at investor conferences, The Company introduced the CEATSafetyBanner, an easy-to- road shows and RPG investor meets. The Annual General use multipurpose safety device that transforms into a stretcher, Meeting is also a forum where the shareholders of the Company a barricade and a changing room. engage directly with the Board of Directors and get answers to their queries on Company’s business. There were no complaints or grievances received against the Company in this regard. All interactions with government, regulators and quasi-judicial bodies are done by duly authorized and trained individuals with Principle 6: Environment honesty, integrity, openness and in compliance of all laws and The Company fully endorses that businesses should utilize legislations. The principles and guidelines for these are enshrined natural and man-made resources in an optimal and responsible in the Code of Corporate Governance & Ethics. All media manner and ensure sustainability of resources by reducing, interactions i.e. print and broadcast to keep the stakeholders reusing, recycling and managing waste. The Company takes updated and informed happen as per principles provided in efforts to check and prevent pollution. The Company has a the aforesaid Code. Any association with trade bodies is done Environment Health and Safety Team which functions under as per the relevant and extent laws and as per the principles the Chief Operating Officer to ensure that the operations of the embedded in the aforesaid Code. Company follow in spirit of the laws relating to preservation and restoration of the environment. Several initiatives are undertaken The Company also recognises its employees as important by the Research and Development and the Engineering team stakeholders and several initiatives are undertaken to for increasing usage of clean technology, alternative sources of communication, the vision, strategy and way forward to the energy, cleaner fuels, energy efficiency etc. employees. The employees are kept abreast of all important events, achievements and milestones of the Company. The Company has in place an Environment Health and Safety Such communication channels help employees to connect, Policy for all its 4 (four) plants at Mumbai, Nashik, Nagpur and bond, inspire, motivate and celebrate achievements. Halol with the following objectives: 1. Compliance with all applicable environment, health and The objective of the Policy on Code of Conduct for Board safety statutory regulations Members and Senior Management stems from the fiduciary 2. Ensure zero incidents
102 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 103 CEAT Limited CEAT Principle 8: Inclusive Growth Principle social and business means believes that inclusive The Company employment generation and skill through economic development a positive is committed to creating development. The Company various all the stakeholders. Through its existence on impact through its Corporate Social Responsibility under initiatives and programmes Company not only contributes to economic(CSR) activities, the but also work along with underdevelopedand social development lifestyle. The Company undertakes their communities to improve initiatives in the vicinity of its plants.several community development Foundation,RPG the of aegis the under CSR Policy its Through andskill development for Company runs several programmes the amongst them are Most prominent upliftment of the community. Swayam, Netranjali and Saksham. and training undertakes Company the Saksham Project Through Swayam, Project employment generation for youth and women. driving courses and encourages women to undertake vehicle vehicle licenses which in turn opens new obtain commercial Wheeler 2 operators, forklift like opportunities employment Project etc. Through entrepreneurs delivery professionals, check-up camps Company carries out vision/eye Netranjali, the the community around for niche communities like the truckers of the Company have been plants. All the programmes/projects The Company is also involved in other very well appreciated. clean drinking water and sanitation Jeevan- providing like projects which aims for 100% facilities to communities and Pehlay Akshar of marginalized communities. in children English proficiency undertaken by the Company under its CSR projects Various listed out in detail in the Annual Report on CSR initiatives are Report. activities, which forms part of this Annual Principle 9: Customer Value business partners i.e. the suppliers, distributors, The Company’s very crucial forare dealers, fleet operators and customers C&FAs, together ensures eco-system operations. The entire the Company’s andto produce Company machinery which enables the a well-oiled and products and continuously improve market quality products services. The Company also has a continuous focus of improvement available are that its products of the distribution channels to ensure itsin the smallest town/village. The Company constantly re-invents Shoppes distribution channels and has launched initiatives like CEAT undertaken by the Company is Hubs. Another initiative and CEAT the customers the ultimate service experience which goesproviding Fleet Advisory Services. through beyond tyres belief in quality and delivers the best inThe Company has a strong PolicyQuality the enshrined in services which is and products class important initiatives The Company has undertaken of the Company. of helplines to become and creation like establishing call centres customer centric. The Company is committed on creating more and convenient customer journeys transparent, delightful through customers.valuable the to replacement claim provide to way quick and launched the claim process The Company has reinvented first of its kind ine-Claim mobile app for On-Spot claim resolution, the customer claims in less than an hour. to resolve industry, tyre 31, 2019 only 0.49% of the total customer As at March remained during the year under review complaints received subsequently. resolved pending. These complaints were egarding egarding ehensive on-site emergency plan ehensive on-site emergency evention, waste minimization and waste minimization evention, ocesses at the plant that are safe to that are ocesses at the plant and conducting risk assessments, safety assessments, risk conducting and Planning Maintenance of compr education to employees r Information, training, Deployment of pr The Highest priority to health and safety of employees to health and safety Highest priority pollution pr Focus on audits and inspections of plant operations within and audits and inspections of plant operations plant. the around and related facilities to handle emergencies facilities to handle and related of their jobs safe conduct ensure health and safety to environment, health and safety standards at the plant standards health and safety environment, and environment people, plant equipment optimal use of natural resources. optimal use of natural
5. 3. 4. 2. 1. of upgradation continuous and maintenance 3. 4. Principle 7: Policy Advocacy The Company believes that businesses when engaged in a in so do must policy regulatory and public influencing this, the Company has set to make Towards manner. responsible issues that matter most to its business such to public a difference external By combining its own actions with advocacy as Safety. on public matters and jointly working with Corporate Social Responsibility partners, the Company is seeking transformational in the “Drive Safe, Dad”, “No more change. This is reflected funny” and Haath Dikhau, Bobblehead campaigns undertaken road driving and the safe underscore Company which by the under its In addition the Company demonstrated safety. in the Kumbha Mela, campaign undertaken #CEATSafetyBanner and women control the issues of injuries, crowd addressing in industry and trade/ The Company is well represented safety. business associations. During the year under review, the emissions/waste generated During the year under review, by the Company was within the permissible limits given by Control Pollution (CPCB)/State Board Control Pollution Central 1 the Company has received (SPCB). During the year, Boards the same to the (one) show cause/legal notice and has resolved satisfaction of authorities. Several initiatives are undertaken by the Research and undertaken by the Research Several initiatives are for team Engineering the and department Development of alternative sources usage of clean technology, increasing cleaner fuels like Natural Gas and so on. energy like solar, The Company has a clearly defined process to identify potential The Company has a clearly defined process Aspects “RISK” which includes Environmental Environmental relevant of expectations and needs Impacts, associated and Internal Risk and and external Environmental stakeholders, to the context of the organization. Opportunities relevant and targets are Based on the RISK identified, objectives and developed are programmes managements risk taken, carries out periodic implemented. Risk Management Committee plants All the manufacturing continual improvement. for reviews and Safety Occupational Health have implemented of Company Certification Standard. Management System (ISO 45001:2018) Nagpur plant the Company’s During the year under review, British from Award Honour’ of ‘Sword prestigious received Safety Council, UK. The management also ensures: The management also Independent Auditor’s Report
To the Members of CEAT Limited the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules Report on the Audit of the Standalone Ind AS thereunder, and we have fulfilled our other ethical responsibilities Financial Statements in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient Opinion and appropriate to provide a basis for our audit opinion on the We have audited the accompanying standalone Ind AS financial standalone Ind AS financial statements. statements of CEAT Limited (“the Company”), which comprise the Balance Sheet as at March 31 2019, the Statement of Profit Key Audit Matters and Loss, including the statement of Other Comprehensive Key audit matters are those matters that, in our professional Income, the Cash Flow Statement and the Statement of judgment, were of most significance in our audit of the Changes in Equity for the year then ended, and notes to standalone Ind AS financial statements for the financial year the financial statements, including a summary of significant ended March 31, 2019. These matters were addressed in the accounting policies and other explanatory information. context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not In our opinion and to the best of our information and according provide a separate opinion on these matters. For each matter to the explanations given to us, the aforesaid standalone Ind below, our description of how our audit addressed the matter is AS financial statements give the information required by the provided in that context. Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the We have determined the matter described below to be a key accounting principles generally accepted in India, of the state of audit matter to be communicated in our report. We have fulfilled affairs of the Company as at March 31, 2019, its profit including the responsibilities described in the Auditor’s responsibilities for other comprehensive income its cash flows and the changes in the audit of the standalone Ind AS financial statements section equity for the year ended on that date. of our report, including in relation to this matter. Accordingly, our audit included the performance of procedures designed to Basis for Opinion respond to our assessment of the risks of material misstatement We conducted our audit of the standalone Ind AS financial of the standalone Ind AS financial statements. The results of statements in accordance with the Standards on Auditing (SAs), our audit procedures, including the procedures performed to as specified under section 143(10) of the Act. Our responsibilities address the matter below, provide the basis for our audit opinion under those Standards are further described in the ‘Auditor’s on the accompanying standalone Ind AS financial statements. Responsibilities for the Audit of the Standalone Ind AS Financial Statements’ section of our report. We are independent of the Company in accordance with the ‘Code of Ethics’ issued by
Key audit matter Auditor’s Response Significant estimates and judgment relating to litigations, claims and contingencies (refer note 2.25 (accounting policy), note 22 (financial disclosures) and note 41(b) (financial disclosures) to the Ind AS financial statements) The Company is involved in legal proceedings including those relating Our audit procedures included the following: to direct and indirect taxes, contracts, and other regulatory matters • W e evaluated the design and tested the operating effectiveness of relating to conduct of its business. controls in respect of the identification and evaluation of tax and other demands, proceedings and investigations at different levels in the The Company assesses the need to recognize provisions or disclose a Company and re-assessment of the related liabilities, provisions and contingency on a case-to-case basis considering the underlying facts disclosures. of each litigation. The aforesaid assessment may result in an incorrect • W e obtained a list of litigations and claims from the Company’s disclosure or provision in the books of account. tax and legal head. We identified material litigations from the list and performed inquiries with the said tax and legal head on the The evaluation of management’s judgments, including those that management evaluation of these material litigations. involve estimations in assessing the likelihood that a pending claim • In relation to the material litigations, claims and contingencies will succeed, or a liability will arise, and the quantification of potential we involved our legal / tax specialists to perform an independent financial settlement have been a matter of most significance during assessment of the conclusions reached by management. the current year audit. Evaluation of the outcome of legal proceedings • We requested independent confirmations from the Company’s and whether the risk of loss is remote, possible or probable, requires external lawyers/advisors with respect to the material litigations and significant judgment by management given the complexities involved. demands. • W e evaluated management’s assumptions, estimates and judgments used in the calculations of provision for litigation, claims and contingencies and disclosures in the financial statements.
104 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 105 nal control relevant to the relevant nal control CEAT Limited CEAT esentation, structure and content of esentation, structure opriateness of management’s use of opriateness of management’s opriateness of accounting policies used opriateness of accounting policies used Evaluate the overall pr Obtain an understanding of inter Evaluate the appr Conclude on the appr Identify the standalone Ind AS financial statements, including the and whether the standalone Ind AS financial disclosures, the underlying transactions and events statements represent in a manner that achieves fair presentation. audit in order to design audit procedures that are appropriate appropriate that are to design audit procedures audit in order we Act, the of 143(3)(i) section Under circumstances. the in our opinion on whether for expressing responsible also are system the Company has adequate internal financial controls of such controls. in place and the operating effectiveness of accounting estimates and related and the reasonableness made by management. disclosures the going concern and, based on the basis of accounting uncertainty a material whether evidence obtained, audit to events or conditions that may cast exists related ability to continue as a significant doubt on the Company’s going concern. that a material uncertainty If we conclude to draw attention in our auditor’s required exists, we are in the financial statements disclosures to the related report inadequate, to modify our opinion. are if such disclosures or, based on the audit evidence obtained Our conclusions are events future However, report. up to the date of our auditor’s to cease to continue may cause the Company or conditions as a going concern. standalone Ind AS financial statements, whether due to fraud standalone Ind AS financial statements, to responsive design and perform audit procedures or error, and is sufficient those risks, and obtain audit evidence that of a basis for our opinion. The risk to provide appropriate is fraud from not detecting a material misstatement resulting involve may fraud as error, from resulting one for than higher intentional omissions, misrepresentations, collusion, forgery, or the override of internal control.
• • • • Auditor’s Responsibilities for the Audit of the Audit of the for the Responsibilities Auditor’s Statements Ind AS Financial Standalone about assurance reasonable to obtain are Our objectives Ind AS financial statements as a whole whether the standalone due to fraud or material misstatement, whether from free are our opinion. includes that report and to issue an auditor’s error, not is a high level of assurance, but is Reasonable assurance with SAs audit conducted in accordance a guarantee that an a material misstatement when it exists. will always detect considered and are fraud or error from Misstatements can arise reasonably could they aggregate, the in or individually if, material the economic decisions of users taken be expected to influence standalone Ind AS financial statements. on the basis of these with SAs, we exercise As part of an audit in accordance skepticism judgment and maintain professional professional also: the audit. We throughout • of the of materialmisstatement and assesstherisks Those Board of Directors are also responsible for overseeing the also responsible are of Directors Those Board reporting process. financial Company’s In preparing the standalone Ind AS financial statements, financial AS Ind standalone the preparing In ability for assessing the Company’s management is responsible to continue as a going concern, as applicable, matters disclosing, to going concern and using the going concernrelated basis of accounting unless management either intends to liquidate the alternativeCompany or to cease operations, or has no realistic but to do so. Responsibilities of Management for the Standalone Responsibilities of Management Ind AS Financial Statements for the matters is responsible of Directors Board The Company’s to the preparation stated in section 134(5) of the Act with respect that give a true of these standalone Ind AS financial statements performance financial and fair view of the financial position, changes and flows cash income, comprehensive other including with the accounting in equity of the Company in accordance Indian the including India, in accepted generally principles (Ind AS) specified under section 133 of Accounting Standards with the Companies (Indian Accounting Standards) the Act read also includes Rules, 2015, as amended. This responsibility in accordance records maintenance of adequate accounting of of the assets of the Act for safeguarding with the provisions and detecting frauds and other the Company and for preventing accounting appropriate of application and selection irregularities; reasonable are estimates that judgments and policies; making and maintenance and prudent; and the design, implementation operating that were of adequate internalcontrols, financial the of completeness and the accuracy ensuring for effectively and presentation to the preparation relevant accounting records, of the standalone Ind AS financial statements that give a true material misstatement, whether from free and fair view and are due to fraud or error. In connection with our audit of the standalone Ind AS financial In connection with our audit of the standalone the other information is to read statements, our responsibility other information and, in doing so, consider whether such or our with the financial statements is materially inconsistent appears to be knowledge obtained in the audit or otherwise performed, work we have on the If, based misstated. materially is a material misstatement of this other we conclude that there have nothing that fact. We to report required information, we are in this regard. to report Our opinion on the standalone Ind AS financial statements does Ind AS financial statements does Our opinion on the standalone any form and we do not express not cover the other information thereon. of assurance conclusion Other Information Other Information the other for is responsible of Directors Board The Company’s information comprises the information information. The other Board’s and Analysis, in the Management Discussion included Report, Business to Board’s Report including Annexures Information but does and Shareholder’s Responsibility Report our Ind AS financial statements and not include the standalone thereon. report auditor’s Independent Auditor’s Report
We communicate with those charged with governance (e) On the basis of the written representations received regarding, among other matters, the planned scope and timing from the directors as on March 31, 2019 taken on of the audit and significant audit findings, including any significant record by the Board of Directors, none of the directors is deficiencies in internal control that we identify during our audit. disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act; We also provide those charged with governance with a statement that we have complied with relevant ethical requirements (f) With respect to the adequacy of the internal financial regarding independence, and to communicate with them controls over financial reporting of the Company with all relationships and other matters that may reasonably be reference to these standalone Ind AS financial statements thought to bear on our independence, and where applicable, and the operating effectiveness of such controls, refer to related safeguards. our separate Report in “Annexure 2” to this report;
From the matters communicated with those charged with (g) In our opinion, the managerial remuneration for the governance, we determine those matters that were of most year ended March 31, 2019 has been paid / provided significance in the audit of the standalone Ind AS financial by the Company to its directors in accordance with statements for the financial year ended March 31, 2019 and the provisions of section 197 read with Schedule V to are therefore the key audit matters. We describe these matters the Act; in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare (h) With respect to the other matters to be included in circumstances, we determine that a matter should not be the Auditor’s Report in accordance with Rule 11 of communicated in our report because the adverse consequences the Companies (Audit and Auditors) Rules, 2014, as of doing so would reasonably be expected to outweigh the amended in our opinion and to the best of our information public interest benefits of such communication. and according to the explanations given to us:
Report on Other Legal and Regulatory Requirements i. The Company has disclosed the impact of pending 1. As required by the Companies (Auditor’s Report) Order, litigations on its financial position in its standalone Ind 2016 (“the Order”), issued by the Central Government of India AS financial statements – Refer Note 22 and Note in terms of sub-section (11) of section 143 of the Act, we give 41(b) to the standalone Ind AS financial statements; in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order. ii. The Company has made provision, as required under the applicable law or accounting standards, 2. As required by Section 143(3) of the Act, we report that: for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer (a) We have sought and obtained all the information and Note 21, 26 and 50 to the standalone Ind AS explanations which to the best of our knowledge and financial statements; belief were necessary for the purposes of our audit; iii. There has been no delay in transferring amounts, (b) In our opinion, proper books of account as required by required to be transferred, to the Investor Education law have been kept by the Company so far as it appears and Protection Fund by the Company. from our examination of those books; For S R B C & CO LLP (c) The Balance Sheet, the Statement of Profit and Loss Chartered Accountants including the Statement of Other Comprehensive Income, ICAI Firm Registration Number: 324982E/E300003 the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the per Vinayak Pujare books of account; Partner Membership Number: 101143 (d) In our opinion, the aforesaid standalone Ind AS financial Place: Mumbai statements comply with the Accounting Standards Date: May 7, 2019 specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
106 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 107 Net 4,719 3,319 2,828 4,097 (` in lacs) Amount ovident fund, 81 78 626 142 Deposit - - - - CEAT Limited CEAT Court ding to the information and information and ding to the Supreme Supreme - 51 75 160 High Court ding to the information and explanations given ding to the information and explanations the dues of of the Company, ding to the records - and 1,959 2,780 2,904 Undisputed statutory dues including pr Undisputed statutory dues including Accor Accor employees’ state insurance, income-tax, goods and employees’ state insurance, income-tax, generally have dues statutory other and cess tax, service authorities deposited with the appropriate been regularly has been a slight delay in a few cases. though there of in respect to us, no undisputed amounts payable fund, employees’ state insurance, income-tax, provident sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues outstanding, at the year end, for a period of more were the date they became payable. than six months from income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any as follows: dispute, are Tribunal Appellate authorities (a) (b) (c) In our opinion and accor In our opinion In r W explanations given to us, provisions of section 185 and 186 section 185 and 186 of given to us, provisions explanations of loans to directors 2013 in respect of the Companies Act, and in respect interested they are including entities in which given, investments made and, of loans and advances given have been complied with guarantees, and securities by the Company. explanations given to us, directives to the information and Bank of India and the provisions issued by the Reserve the of provisions relevant other any 76 or to 73 section of under, and the rules framed there Companies Act, 2013, are with. We to the extent applicable, have been complied in this regard informed by the management that no order National Board, has been passed by the Company Law or Reserve Bank of India or any court Company Law Tribunal or any other Tribunal. by the Central by the Company pursuant to the rules made under Government for the maintenance of cost records to the related section 148(1) of the Companies Act, 2013, all types of and flaps for tubes tyres, of rubber manufacture specified the facie, prima that opinion the of are and vehicles, have been made and maintained. accounts and records of made a detailed examination not, however, have We the same.
vii. iv. v. vi. inouropinionandaccording espect ofdepositsaccepted, maintained the booksofaccount reviewed e havebroadly 78 3,386 3,301 1,196 Commissionerate oper records showing oper records relates 1987-2018 1985-2019 2004-2015 1974-2016 the amount Period to which ding to the information and explanations given by ding to the information e are no amounts of loans granted to subsidiary to granted loans of amounts no are e Ther In The Company has granted loan to a subsidiary Company The Company has granted loan to a subsidiary Accor The Company has maintained pr has maintained The Company not been physically verified by All fixed assets have Company listed in the register maintained under section maintained the register listed in Company for overdue 189 of the Companies Act, 2013 which are than ninety days. more covered in the register maintained under Section 189 of in the register covered of repayment the Companies Act, 2013, the schedule has been stipulated of principal and payment of interest The Company has regular. and these payments are Company, subsidiary to the loan another also granted informed that are on demand. We which is repayable and principal demanded by the the amount of interest in respect Thus Company has been paid during the year. has been no default on part of the of these loan, there subsidiary Company to which the money was lent. covered in the register maintained under section 189 of in the register covered and according the Companies Act, 2013. In our opinion to us, the to the information and explanations given not loans are terms and conditions of the grant of such interest. to the Company’s prejudicial the management, the title deeds of immovable properties title deeds of immovable properties the management, the included in other than self-constructed buildings, held in the name of plant and equipment are property, the Company. full particulars, including quantitative details and situation details and situation including quantitative full particulars, of fixed assets. regular a is there but year the during management the which, in our opinion, is of verification programme Company the of size the to regard having reasonable No material discrepancies of its assets. and the nature noticed on such verification. were
(c) (b) (a) The (c) (b) (a) inventory at reasonable intervals during the year and no inventory at reasonable physical such on noticed were discrepancies material parties have been verification. Inventories lying with third and no material 2019 31, at March by them as confirmed of such confirmations. noticed in respect were discrepancies
Sales Tax, VAT, CST (Tax/ VAT, Sales Tax, Interest/Penalty) Income Tax Act (Tax/ Income Tax Interest/Penalty) Service Tax under Finance Service Tax Act,1994 (Tax/Interest/Penalty) Central Excise Tax/ Custom Act Central Excise Tax/ (Tax/Interest/Penalty) Name of the Statute
Company subsidiary the to granted loan the of respect iii. ii. of verification physical conducted has management
i. Annexure 1 referred to in paragraph 1 under the heading “Report on other legal and Regulatory Requirement” of Requirement” and Regulatory on other legal the heading “Report paragraph 1 under to in 1 referred Annexure of even date our report Annexure 1
(viii) In our opinion and according to the information and (xiv) According to the information and explanations given to us explanations given by the management, the Company and on an overall examination of the balance sheet, the has not defaulted in repayment of loans or borrowing Company has not made any preferential allotment or private to a financial institution, bank or government or dues to placement of shares or fully or partly convertible debentures debenture holders. during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the (ix) In our opinion and according to the information and Company and hence, not commented upon. explanations given by the management, the term loans were applied for the purpose for which the loans were obtained. (xv) According to the information and explanations given by the management, the Company has not entered into any (x) Based upon the audit procedures performed for the purpose non-cash transactions with directors or persons connected of reporting the true and fair view of the financial statements with him as referred to in section 192 of Companies Act, and according to the information and explanations given by 2013. the management, we report that no fraud by the Company or no material fraud on the Company by the officers and (xvi) According to the information and explanations given to us, employees of the Company has been noticed or reported the provisions of section 45-IA of the Reserve Bank of India during the year. Act, 1934 are not applicable to the Company.
(xi) According to the information and explanations given by For S R B C & CO LLP the management, the managerial remuneration has been Chartered Accountants paid / provided in accordance with the requisite approvals ICAI Firm Registration Number: 324982E/E300003 mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013. per Vinayak Pujare Partner (xii) In our opinion, the Company is not a Nidhi Company. Membership Number: 101143 Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon. Place: Mumbai Date: May 7, 2019 (xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013, where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
108 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 109 CEAT Limited CEAT S R B C & CO LLP Inherent Limitations of Internal Financial Controls Limitations of InternalFinancial Controls Inherent to these over Financial Reporting With Reference Standalone Ind AS Financial Statements limitations of internal controls financial Because of the inherent to these standalone Ind reference reporting with over financial possibility of collusionAS financial statements, including the material management override of controls, or improper or fraud may occur and not be misstatements due to error of any evaluation of the internaldetected. Also, projections to these reference reporting with over financial financial controls periods are to future Standalone Ind AS Financial Statements over financialsubject to the risk that the internal financial control Financial to these Standalone Ind AS with reference reporting Statements may become inadequate because of changes in of compliance with the policies or conditions, or that the degree may deteriorate. procedures Opinion adequate In our opinion, the Company has, in all material respects, reference reporting with over financial internal financial controls to these Standalone Ind AS Financial Statements and such reference reporting with over financial internal financial controls operating to these Standalone Ind AS Financial Statements were 31, 2019, based on the internal as at March control effectively reporting criteria established by the Company over financial stated components of internalessential the considering control in the Guidance Note on Audit of Internal Financial Controls Chartered of Institute the by issued Reporting Financial Over Accountants of India. For Accountants Chartered ICAI Firm Registration Number: 324982E/E300003 per Vinayak Pujare Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 Meaning of Internal Financial Controls over Financial of InternalMeaning Controls Financial to these Financial Reference Reporting With Statements reporting with over financial internal financial control A Company’s Financial Statements is a to these Standalone Ind AS reference regarding assurance reasonable designed to provide process of financial preparation reporting and the of financial the reliability with generallystatements for external purposes in accordance internal financial principles. A Company’s accepted accounting to these Standalone reference reporting with over financial control Statements includes those policies andInd AS Financial that, in of records that (1) pertain to the maintenance procedures and transactions the reflect fairly and accurately detail, reasonable reasonable (2) provide dispositions of the assets of the Company; as necessary to recorded assurance that transactions are with of financial statements in accordance permit preparation and receipts that accepted accounting principles, and generally being made only in accordance of the Company are expenditures of the Company; with authorisations of management and directors or prevention assurance regarding reasonable and (3) provide use, or dispositiontimely detection of unauthorised acquisition, on the assets that could have a material effect of the Company’s financial statements. We have audited the internal financial controls over financialthe internal have audited financial controls We 31, 2019 (“the Company”) as of March Limited of CEAT reporting audit of the Standalone Ind AS Financialin conjunction with our for the year ended on that date. Statements of the Company Our responsibility is to express an opinion on the Company’s the Company’s on opinion an express to is Our responsibility reference reporting with over financial internal financial controls based on ourto these Standalone Ind AS Financial Statements with the Guidance conducted our audit in accordance audit. We Over FinancialNote on Audit of Internal Financial Controls Auditing on Standards Reporting (the “Guidance Note”) and the Companies Act, 2013,as specified under section 143(10) of the internalapplicable to an audit of the extent to controls financial Accountants and, both issued by the Institute of Chartered that and the Guidance Note require of India. Those Standards the perform and plan and requirements ethical with comply we assurance about whether adequate audit to obtain reasonable to reference reporting with internal over financial financial controls was establishedthese Standalone Ind AS Financial Statements in all operated effectively and maintained and if such controls material respects. to obtain audit evidence Our audit involves performing procedures over financialabout the adequacy of the internal financial controls Financial to these Standalone Ind AS with reference reporting Our audit of internaloperating effectiveness. Statements and their reporting included obtaining an over financial financial controls reporting over financial understanding of internalcontrols financial standalone Ind AS financial statements, to these with reference assessing the risk that a material weakness exists, and testing of internaland evaluating the design and operating effectiveness selected based on the assessed risk. The procedures control judgement, including the assessment depend on the auditor’s of the risks of material misstatement of the financial statements, whether due to fraud or error. believe that the audit evidence we have obtained is sufficient We a basis for our audit opinion on the to provide and appropriate to reference reporting with internal over financial financial controls these standalone Ind AS financial statements. Auditor’s Responsibility Auditor’s Management’s Responsibility for Internal Responsibility for Financial Management’s Controls for establishing and Management is responsible The Company’s based on the internalmaintaining internal control controls financial established by the Companyreporting criteria over financial stated internalcomponents of essential the considering control on Audit of Internalin the Guidance Note Controls Financial of Chartered by the Institute Financial Reporting issued over include the design, Accountants of India. These responsibilities internalimplementation and maintenance of adequate financial for ensuring the orderly operating effectively that were controls the to conduct of its business, including adherence and efficient the prevention of its assets, policies, the safeguarding Company’s the accuracy and completeness and detection of frauds and errors, of reliable and the timely preparation of the accounting records, 2013. Act, Companies the under required as information, financial Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) of the Companies Act, 3 of Section 143 Clause (i) of Sub-section under the InternalReport on Controls Financial Annexure 2 to the Independent Auditor’s report of even date on the standalone Ind AS financial statements of statements of Ind AS financial on the standalone of even date report Auditor’s 2 to the Independent Annexure Limited CEAT Balance Sheet as at March 31, 2019 (` in lacs) As at As at Particulars Note no. March 31, 2019 March 31, 2018 I Assets (1) Non-current assets (a) Property, plant and equipment 3 2,78,574 2,39,931 (b) Capital work-in-progress 3 71,889 15,247 (c) Intangible assets 4 6,057 6,544 (d) Intangible assets under development 4 3,055 939 (e) Financial assets (i) Investments 5 31,301 27,999 (ii) Loans 6 408 304 (iii) Other financial assets 7 181 171 (f) Non-current tax assets (net) 23 5,733 3,915 (g) Other non-current assets 8 12,520 7,141 Total non-current assets 4,09,718 3,02,191 (2) Current assets (a) Inventories 9 96,515 75,496 (b) Financial assets (i) Investments 10 - 4,006 (ii) Trade receivables 11 72,646 71,215 (iii) Cash and cash equivalents 12 5,426 6,964 (iv) Bank balances other than cash and cash equivalents 13 548 337 (v) Loans 14 5,800 4,902 (vi) Other financial assets 15 3,525 1,193 (c) Other current assets 16 11,964 10,615 (d) Assets held-for-sale 3 44 - Total current assets 1,96,468 1,74,728 Total assets 6,06,186 4,76,919 II Equity and liabilities (1) Equity (a) Equity share capital 17 4,045 4,045 (b) Other equity 18 2,71,059 2,50,637 Total equity 2,75,104 2,54,682 (2) Non-current liabilities (a) Financial liabilities (i) Borrowings 20 1,00,272 27,230 (ii) Other financial liabilities 21 461 323 (b) Provisions 22 3,683 3,380 (c) Deferred tax liabilities (net) 23 20,771 17,815 Total non-current liabilities 1,25,187 48,748 (3) Current liabilities (a) Financial liabilities (i) Borrowings 24 21,431 14,364 (ii) Trade payables 25 - Total outstanding dues of micro enterprises and small enterprises 547 360 - Total outstanding dues of creditors other than micro enterprises and small enterprises 1,02,846 84,211 (iii) Other financial liabilities 26 58,099 57,001 (b) Provisions 22 9,985 5,014 (c) Current tax liabilities (net) 23 4,377 2,867 (d) Other current liabilities 27 8,610 9,672 Total current liabilities 2,05,895 1,73,489 Total equity and liabilities 6,06,186 4,76,919 Significant accounting policies 2
The accompanying notes are an integral part of the financial statements For and on behalf of Board of Directors of CEAT Limited As per our report of even date For S R B C & CO LLP Kumar Subbiah H. V. Goenka Anant Goenka Chartered Accountants Chief Financial Officer Chairman Managing Director ICAI Firm Registration No.: 324982E/E300003 per Vinayak Pujare Vallari Gupte Mahesh S. Gupta Partner Company Secretary Chairman- Audit Committee Membership Number: 101143 Place: Mumbai Place: Mumbai Date: May 7, 2019 Date: May 7, 2019
110 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 111 (361) (380) 2,686 2,640 5,988 9,332 8,645 1,098 1,043 1,400 68.90 68.90 5,681 27,872 10,408 40,966 43,606 29,272 41,311 16,168 16,891 (` in lacs) 2017-18 3,65,033 1,36,898 6,00,266 6,38,191 6,43,872 - 279 (798) 9,009 3,077 4,424 6,092 6,452 1,323 71.42 71.42 5,530 (3,792) 28,891 40,977 45,401 25,903 49,195 17,430 (2,988) (19,425) CEAT Limited CEAT 2018-19 4,27,364 1,56,151 6,43,259 6,83,130 6,88,660 Anant Goenka Managing Director 2 23 36 38 30 31 32 33 34 35 28 29 Note no.
For and on behalf of Board of Directors of CEAT Limited of CEAT of Directors For and on behalf of Board Goenka H. V. Chairman Mahesh S. Gupta Chairman- Audit Committee Kumar Subbiah Chief Financial Officer Gupte Vallari Company Secretary Place: Mumbai Date: May 7, 2019 eclassified subsequently to the statement of profit of profit eclassified subsequently to the statement eclassified subsequently to the statement of profit of profit eclassified subsequently to the statement elating to above elating to above `) ement gains/(losses) on defined benefit plans `) and loss and loss Basic (in Diluted (in Items that will be r Net movement on cash flow hedges Income tax r Items that will not be r Remeasur Income tax r
Other comprehensive income Other comprehensive Profit for the year Profit Current tax Current tax Deferred Tax expense expense Tax Profit before tax before Profit Exceptional items Earnings per equity share (of face value of ` 10 each) (of face value Earnings per equity share Profit before exceptional items and tax before Profit Total Comprehensive income for the year (Comprising profit and other profit income for the year (Comprising Comprehensive Total income for the year) comprehensive (a) (b) (i) (ii) (i) (ii) (b) (a) Purchase of stock-in-trade Purchase and stock-in-trade of finished goods, work-in-progress Changes in inventories Employee benefit expense Finance costs and amortization expenses Depreciation Excise duty on sale of goods Other expenses expenses Total Expenses Cost of material consumed Total other comprehensive income for the year comprehensive other Total Significant accounting policies Other income income Total Income operations Revenue from
VIII VII VI V IV X III IX The accompanying notes are an integral part of the financial statements The accompanying notes are per Vinayak Pujare As per our report of even date As per our report For S R B C & CO LLP Accountants Chartered ICAI Firm Registration No.: 324982E/E300003 Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 II Particulars I
for the year ended March 31, 2019 31, ended March for the year Statement of Profit and Loss Profit of Statement Statement of Cash Flow for the year ended March 31, 2019 (` in lacs) Particulars 2018-19 2017-18 I) Cash Flow From Operating Activities Profit before tax 40,977 40,966 Adjustments to reconcile profit before tax to net cash flows: Depreciation and amortization expenses 17,430 16,168 Interest income (3,205) (1,327) Finance costs 6,452 8,645 Dividend income (732) (1,927) Provision for obsolescence of stores and spares 74 120 Allowance for doubtful debts and advances 197 371 Credit balances written back (23) (238) Bad debts and advances written off (net) 6 50 Loss on disposal of property, plant and equipment (net) 480 929 Unrealised foreign exchange (gain) / loss (net) 109 (57) Net gain on disposal of investments (83) (1,065) Operating profit before working capital changes 61,682 62,635 Adjustments for: Decrease / (Increase) in inventory (21,093) 16,727 Decrease / (Increase) in trade receivables (1,689) (12,090) Decrease / (Increase) in current loans, other current assets and other financial assets (874) 5,766 Decrease / (Increase) in non-current loans and other non-current assets (523) (857) (Decrease) / Increase in trade payables 19,122 9,589 (Decrease) / Increase in current financial liabilites and other current liabilities 713 1,654 (Decrease) / Increase in non-current financial liabilities (702) - (Decrease) / Increase in current provisions 4,172 598 (Decrease) / Increase in non-current provisions 303 (38) Cash flow from operating activities 61,111 83,984 Direct taxes paid (net of refunds) (7,836) (9,561) Net cash flow (used in)/generated from operating activities (I) 53,275 74,423 II) Cash Flow From Investing Activities Pur chase of property, plant and equipment and intangible assets (including capital work-in (1,06,215) (40,367) progress, intangible assets under development and capital advance) (Withdrawal) / Investments of margin money deposit with banks (0) 52 Changes in other bank balances (212) (14) Investment in subsidaries and associates (3,300) (8,560) Purchase of other non current investments (2) - Proceeds from sale of current investment (net) 4,088 3,486 Interest received 601 1,394 Repayment of loan given to subsidiary 18,730 19,800 Loan given to subsidiary (19,630) (19,700) Dividend received 732 1,927 Net cash flow (used in) investing activities (II) (1,05,208) (41,982)
112 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy (9) 113 (553) 3,246 5,539 1,425 6,964 (8,155) (4,727) 18,660 13,056 (13,383) (35,037) (` in lacs) (26,902) 2017-18 - - (829) 6,964 5,426 (6,268) (5,314) (4,434) 12,344 97,097 50,395 (1,538) (42,201) CEAT Limited CEAT 2018-19 Anant Goenka Managing Director For and on behalf of Board of Directors of CEAT Limited of CEAT of Directors For and on behalf of Board Goenka H. V. Chairman Mahesh S. Gupta Chairman- Audit Committee Kumar Subbiah Chief Financial Officer Chief Financial Officer Gupte Vallari Company Secretary Place: Mumbai Date: May 7, 2019
edit owings (net) owings Dividend distribution tax paid Pr buyers cr Repayment of short-term Pr borr Repayment of long-term Dividend paid Inter Repayment of public deposit borr Change in other short-term Cash flow from financing activities financing Cash flow from Net cash flows (used in)/generated from financing activities (III) Net cash flows (used in)/generated from Net increase / (decrease) in cash and cash equivalents (I+II+III) / (decrease) Net increase Cash and cash equivalents at the beginning of the year (refer note 12) of the year (refer Cash and cash equivalents at the beginning note 12) year (refer Cash and cash equivalents at the end of the short-termbuyerscredit oceeds from long-termborrowings oceeds from
est paid
Particulars III) The accompanying notes are an integral part of the financial statements The accompanying notes are As per our report of even date As per our report For S R B C & CO LLP per Vinayak Pujare Chartered Accountants Chartered ICAI Firm Registration No.: 324982E/E300003 Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 Statement of Changes in Equity for the year ended March 31, 2019 (829) (553) 5,001 1,667 1,400 (5,001) (1,667) (4,652) (4,652) (2,988) 25,903 29,272 28,891 27,872 ( ` in lacs) 2,75,104 2,54,682 2,30,615 Total equity Total (829) (553) 5,001 1,667 1,400 (5,001) (1,667) (4,652) (4,652) (2,988) 25,903 29,272 28,891 27,872 equity 2,71,059 2,50,637 2,26,570 Total other Total ------718 718 476 (242) (2,469) (1,993) (2,469) 18(d)) hedge reserve reserve Cash flow (refer note (refer - - - 682 (829) (553) (519) (1,667) (4,652) (4,652) 28,372 28,554 28,891 27,872 18(g)) 1,89,604 1,66,713 1,45,031 earnings Retained (refer note (refer ------5,001 25,178 20,177 20,177 18(f)) reserve reserve General (refer note (refer ------1,667 5,001 3,334 (5,001) 18(e)) reserve reserve (refer note (refer Debenture Debenture redemption redemption Other equity Anant Goenka Managing Director ------390 390 390 18(c)) Capital reserve reserve (refer note (refer redemption redemption ------1,177 1,177 1,177 18(b)) Capital reserve reserve (refer note (refer ------56,703 56,703 56,703 For and on behalf of Board of Directors of CEAT Limited of CEAT of Directors For and on behalf of Board H. V. Goenka H. V. Chairman Mahesh S. Gupta Chairman- Audit Committee 18(a)) premium premium Securities (refer note (refer ------4,045 4,045 4,045 share share Equity capital Kumar Subbiah Chief Financial Officer Gupte Vallari Company Secretary Company Secretary Place: Mumbai Date: May 7, 2019 As at March 31, 2019 As at March As at March 31, 2018 As at March Transfer from debenture redemption reserve (refer note 18(f)) (refer reserve redemption debenture from Transfer Transfer from retained earnings retained from Transfer Transfer to general reserve (refer note 18(e)) (refer to general reserve Transfer Transfer to debenture redemption reserve redemption to debenture Transfer Payment of dividend distribution tax (DDT) (refer note 19) Payment of dividend distribution tax (DDT) (refer Payment of dividend distribution tax (DDT) (refer note 19) Payment of dividend distribution tax (DDT) (refer Payment of dividend (refer note 19) Payment of dividend (refer Payment of dividend (refer note 19) Payment of dividend (refer Total comprehensive income comprehensive Total Total comprehensive income comprehensive Total Other comprehensive income Other comprehensive Other comprehensive income Other comprehensive Profit for the year Profit Particulars Profit for the year Profit The accompanying notes are an integral part of the financial statements The accompanying notes are As per our report of even date As per our report For S R B C & CO LLP Accountants Chartered ICAI Firm Registration No.: 324982E/E300003 per Vinayak Pujare Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 As at April 1, 2017
114 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
82 115 As at 1,050 (1,132) (` in lacs) April 1, 2017
82 968 estricted from being estricted from As at (1,050) CEAT Limited CEAT March 31, 2018 March ealised or intended to be sold or ealised within twelve months after the e classified as non-current. e classified as non-current. ent when: e is no unconditional right to defer the settlement is due to be settled within twelve months after the after months twelve within settled be to due is It is expected to be settled in normal operating cycle It is held primarily for the purpose of trading It Ther Expected to be r Held primarily for the purpose of trading Expected to be r Cash or cash equivalent unless r reporting period, or reporting of the liability for at least twelve months after the period reporting consumed in normal operating cycle period, or reporting least at for liability a settle to used or exchanged period twelve months after the reporting
Decrease in Non Decrease liabilities current liabilities in current Decrease Decrease in property, in property, Decrease plant and equipment Particulars Had the Company continued to follow the erstwhile to follow the erstwhile Company continued Had the to as below is restatement of impact the policy accounting the financial statements • • • • Curr • • • • All other assets ar A liability is curr The Company has adopted Ind AS 115 'Revenue from 'Revenue from The Company has adopted Ind AS 115 initial application Contracts with Customers' with a date of its changed has Company the result, a As 2018. 1, April of below. detailed as recognition for revenue policy accounting 115 using the The Company has applied Ind AS the method – i.e. by recognising cumulative effect of initially applying Ind AS 115 as an cumulative effect equity at April 1, adjustment to the opening balance of the comparative information has not 2018. Therefore, under reported to be continues and been restated AS Ind and changes the significant details of 18. The set out below. quantitative impact of the changes are significant no are there method, effect cumulative Under earnings to the retained 1, as at April adjustments required 115 did not have 2018. Also, the application of Ind AS of recognition and measurement any significant impact on items in the financial statements. related and revenue and liabilities in the balance assets The Company presents classification. An asset non-current sheet based on current/ when it is: as current is treated There is no impact on the statement of Profit and Loss. of Profit is no impact on the statement There
2.3 classification ent versusnon-current 2.2.2 Ind AS 115 'Revenue from Contracts with Customers' 2.2.2 Ind AS 115 'Revenue from ed at fair value (refer ed at fair value (refer eparation of financial nment Grant related to non- nment Grant related Derivative financial instruments and Certain financial assets measur accounting policy regarding financial instruments) accounting policy regarding
Accounting for Gover monetary assets The company has chosen to adjust government grant the carrying value of non-monetary asset pursuant from for GovernmentAS 20 Accounting to amendment in Ind the company Till year, Grants and Disclosure. the previous asset the non-monetary followed the policy recording to profit and the grant at carrying amounts and released and loss over the expected useful life in a pattern of asset i.e. of the benefit of the underlying consumption by equal annual instalments. Changes in accounting policies • • Basis of accounting and pr These financial statements have been prepared on accrual on accrual These financial statements have been prepared except for the basis and under historical cost basis, been measured following assets and liabilities which have at fair value: statements have been The financial statements of the Company Indian Accounting Standards with in accordance prepared (Indian Accounting (Ind AS) notified under the Companies time to time) and Rules, 2015 (as amended from Standards) to III Schedule of II Division of requirements presentation Schedule III). the Companies Act, 2013, (Ind AS compliant All amounts disclosed in the financial statements and lacs as per the to the nearest off notes have been rounded III of the Companies Act, 2013 of Schedule requirements (Ind AS compliant Schedule III), unless otherwise stated. construes (zero) ‘0’ represented amount the Wherever value less than Rupees fifty thousand. In addition, the carrying values of recognised assets and In addition, the carrying values of recognised fair value hedges liabilities designated as hedged items in cost are that would otherwise be carried at amortised attributable changes in the fair values adjusted to record hedge being hedged in effective to the risks that are The Standalone financial statements are relationships. in ` lacs except when otherwise indicated. presented
2.2 2.2.1
2.1 Note 2: Basis of preparation and summary of and summary Note 2: Basis of preparation significant accounting policies
for the year ended March 31, 2019 31, ended March for the year information Note 1: Corporate in India and company domiciled Limited is a public CEAT of the Companies Act the provisions incorporated under is principal business The Company’s applicable in India. tubes and flaps. The Company tyres, manufacturing of automotive and of India Limited Tyres 1958 as CEAT started operations in Limited in 1990. The Company caters as CEAT was renamed internationalto both domestic and company’s markets. The exchanges in India. stock listed on two recognised stock are at RPG House, of the company is located office The registered Mumbai, Maharashtra Road, Worli, 463, Dr Annie Besant authorised for issue in statements were 400030. The financial 7, 2019. on May of the directors with a resolution accordance Notes to Financial Statements Statements to Financial Notes Notes to Financial Statements for the year ended March 31, 2019
The Company classifies all other liabilities as non-current. is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur in future on Deferred tax assets and liabilities are classified as account of refund or discounts. non-current assets and liabilities. Variable consideration includes volume discounts, price The operating cycle is the time between the acquisition of concessions, incentives, etc. The Company estimates the assets for processing and their realisation in cash and cash variable consideration based on an analysis of historical equivalents. The Company has identified twelve months as experience and it is adjusted from transaction price. its operating cycle. 2.4.2.2 Significant financing component 2.4 Revenue recognition Generally, the Company receives short-term advances 2.4.1 Revenue from contract with customer from its customers. Using the practical expedient in Ind AS Revenues from contracts with customers are recognised 115, the Company does not adjust the promised amount when the performance obligations towards customer of consideration for the effects of a significant financing have been met. Performance obligations are deemed to component if it expects, at contract inception, that the have been met when control of the goods or services are period between the transfer of the promised good or transferred to the customer at an amount that reflects the service to the customer and when the customer pays for consideration to which the Company expects to be entitled that good or service will be one year or less. in exchange for those goods or services. The Company acts as the principal in all of its revenue arrangements since 2.4.3 Sales related obligations it is the primary obligor in all the revenue arrangements as The Company normally provides sales related obligations it has pricing latitude and is also exposed to inventory and for a period of three years on all its products sold, in line credit risks. with industry practice. These sales related obligations are accounted for under Ind AS 37 Provisions, Contingent Based on the educational material on Ind AS 18 issued Liabilities and Contingent Assets. See Note 22 for more by the ICAI, the Company has assumed that recovery of information. The Company does not provide any extended excise duty flows to the company on its own account. warranties to its customers. This is for the reason that it is a liability of the manufacturer which forms part of the cost of production, irrespective 2.4.4 Contract balances of whether the goods are sold or not. Since the recovery Trade receivables of excise duty flows to the company on its own account, A receivable represents the Company’s right to an amount revenue includes excise duty. of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration An entity collects Goods and Services Tax (“GST”) is due). Refer to note 2.17 – Financial Instruments in collected on behalf of the government and not on its own accounting policies. account. Hence it should be excluded from revenue, i.e. revenue should be net of GST. 2.4.5 Royalty and technology development fees: The Company also earns sales based royalty income which The disclosures of significant accounting judgements, is recognised as revenue typically on an over time basis. estimates and assumptions relating to revenue from This is because in such arrangements the customer gets contracts with customers are provided in Note 39. a right to access the Company’s intellectual property as it exists throughout the license period. The revenue to be 2.4.2 Sale of Goods: recognised is determined based on a specified percentage Revenue from sale of goods (Tyres, tubes and flaps) is of the sales made by the customer. recognised at a point in time when control of the goods is transferred to customer depending on terms of sales. 2.4.6 Interest Income: The normal credit term is 30 to 60 days upon delivery. For all debt instruments measured either at amortised cost or at fair value through other comprehensive income, The Company considers whether there are other promises interest income is recorded using the effective interest rate in the contract that are separate performance obligations (EIR). EIR is the rate that exactly discounts the estimated to which a portion of the transaction price needs to be future cash payments or receipts over the expected life allocated (e.g., warranties). In determining the transaction of the financial instrument or a shorter period, where price for the sale of goods, the Company considers the appropriate, to the gross carrying amount of the financial effects of variable consideration, the existence of significant asset or to the amortised cost of a financial liability. financing components, if any. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the 2.4.2.1 Variable consideration contractual terms of the financial instrument (for example, The Company offers various forms of discounts on the prepayment, extension, call and similar options) but does goods sold to its dealers and distributors. In all such cases, not consider the expected credit losses. Interest income accumulated experience is used to estimate and provide is included in finance income in the statement of profit for the variability in revenue, using the expected value and loss. method and the revenue is recognised to the extent that it
116 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 117
CEAT Limited CEAT ed tax assets is reviewed at ed tax assets is reviewed ed tax liability arises from the initial the from ed tax liability arises ed tax asset relating to the deductible ed tax asset relating
espect of deductible temporary differences espect of deductible temporary differences espect of taxable temporary differences associated espect of taxable temporary differences When the deferr In r When the deferr In r temporary difference arises from the initial recognition the initial recognition arises from temporary difference that is not of an asset or liability in a transaction time of the a business combination and, at the nor neither the accounting profit transaction, affects and loss taxable profit associatesassociated with investments in subsidiaries, tax assets are deferred in joint ventures, and interests that the only to the extent that it is probable recognised in the foreseeable will reverse temporary differences will be available against which and taxable profit future can be utilised the temporary differences recognition of an asset or liability in a transaction that of an asset or liability recognition and, at the time of the is not a business combination nor accounting profit neither the transaction, affects and loss taxable profit in interests with investments in subsidiaries and of when the timing of the reversal joint ventures, and it can be controlled the temporary differences not will differences temporary that the is probable future the foreseeable in reverse
Deferr Deferred tax is provided using the liability method on using the liability method tax is provided Deferred of assets and between the tax bases temporary differences reporting amounts for financial liabilities and their carrying date. purposes at the reporting taxable for all recognised liabilities are tax Deferred except: temporary differences, • • The carrying amount of deferr Deferr • • at the reporting date. at the reporting other in (either and loss profit outside is recognised loss tax items income or in equity). Deferred comprehensive to the underlying transaction correlation in recognised are in equity. either in OCI or directly each reporting date and reduced to the extent that it is no date and reduced each reporting will be available taxable profit that sufficient longer probable tax asset to be utilised. to allow all or part of the deferred at each re-assessed tax assets are deferred Unrecognised to the extent that it has recognised date and are reporting will allow the taxable profits that future become probable tax asset to be recovered. deferred expected to apply in the year when the asset rates that are or the liability is settled, based on tax rates (and is realised enacted substantively or enacted been have that laws) tax Deferred tax assets are recognised for all deductible recognised tax assets are Deferred of unused tax the carry forward temporary differences, are assets tax Deferred tax losses. any unused and credits that taxable profit to the extent that it is probable recognised temporary will be available against which the deductible of unused tax credits and the carry forward differences, and unused tax losses can be utilised, except:
atthetax measured ed taxassetsandliabilitiesare and outsideprofit toitemsrecognised ed taxrelating 2.7.2 Deferred tax 2.7.2 Deferred
nment grants and Export incentives Dividend income is recognised when the Company’s right Company’s the when recognised income is Dividend which is generally the payment is established, to receive the dividend. approve when shareholders Gover Investments in Subsidiaries and Associates Investments in Subsidiaries provisions where appropriate. where provisions the Company operates and generates taxable income. outside to items recognised income tax relating Current and loss (either in outside profit recognised and loss is profit tax items income or in equity). Current other comprehensive to the underlying transaction correlation in recognised are in equity. and loss or directly either in Statement of profit Management periodically evaluates positions taken in the to situations in which applicable with respect tax returns and establishes subject to interpretation are tax regulations Current income tax assets and liabilities are measured measured are liabilities and tax assets income Current or paid to from at the amount expected to be recovered the taxation authorities. The tax rates and tax laws used enacted or those that are to compute the amount are date in India where substantively enacted, at the reporting Export Incentive under Merchandise Export from India Export from Export Incentive under Merchandise and in the Statement of Profit Scheme (MEIS) is recognized Loss as a part of other operating revenues. The company has chosen to adjust government grant carrying value of non-monetary asset pursuant the from for GovernmentAS 20 Accounting to amendment in Ind When loans or similar assistance Grants and Disclosure. by governments institutions, with or related provided are applicable market rate below the current an interest as is regarded of this favourable interest rate, the effect a government grant. The loan or assistance is initially at fair value and the government and measured recognised between the initial as the difference grant is measured received. carrying value of the loan and the proceeds as per the accounting The loan is subsequently measured policy applicable to financial liabilities. which it is intended to compensate, are expensed. which it is intended to compensate, are Government grants are recognised where there is there where Government recognised grants are and all assurance that the grant will be received, reasonable When the grant attached conditions will be complied with. as income on a an expense item, it is recognised to relates costs, for related systematic basis over the periods that the Investments in subsidiaries and associates are carried at and associates are Investments in subsidiaries an Where impairment losses, if any. cost less accumulated exists, the carrying amount of indication of impairment and written down immediately the investment is assessed On disposal of investments amount. to its recoverable between difference the associates, and subsidiaries in the carrying amounts are and net disposal proceeds and Loss. in the Statement of Profit recognized
2.4.7 Dividends: 2.6 2.5 2.7 Taxes income tax 2.7.1 Current Notes to Financial Statements for the year ended March 31, 2019
Deferred tax assets and deferred tax liabilities are offset if a major inspection is performed, its cost is recognised legally enforceable right exists to set off current tax assets in the carrying amount of the plant and equipment as a against current tax liabilities and the deferred taxes relate to replacement if the recognition criteria are satisfied. All other the same taxable entity and the same taxation authority. repair and maintenance costs are recognised in profit and loss as incurred. The present value of the expected cost for Minimum alternate tax (MAT) paid in a year is charged to the decommissioning of an asset after its use is included in the statement of profit and loss as current tax for the year. the cost of the respective asset if the recognition criteria for The deferred tax asset is recognised for MAT credit available a provision are met. Refer to note 39 regarding significant only to the extent that it is probable that the concerned accounting judgements, estimates and assumptions for company will pay normal income tax during the specified further information about the recorded decommissioning period, i.e., the period for which MAT credit is allowed provision. to be carried forward. In the year in which the company recognizes MAT credit as an asset, it is created by way Leasehold land – amortised on a straight line basis over the of credit to the statement of profit and loss and shown as period of the lease of 95 years. part of deferred tax asset. The company reviews the “MAT credit entitlement” asset at each reporting date and writes Depreciation is calculated on a straight-line basis using down the asset to the extent that it is no longer probable the rates arrived at based on the useful lives estimated by that it will pay normal tax during the specified period. the management. The Company has used the following useful lives to provide depreciation on its fixed assets. 2.7.3 Sales tax/ value added taxes/GST paid on acquisition The identified components are depreciated over their of assets or on incurring expenses useful lives, the remaining asset is depreciated over the life Expenses and assets are recognised net of the amount of of the principal asset. sales tax/ value added taxes/GST paid, except:
• When the tax incurred on a purchase of assets or Asset Class Useful life services is not recoverable from the taxation authority, Buildings 50 years - 60 years in which case, the tax paid is recognised as part of Plant & Machinery 15 years - 20 years the cost of acquisition of the asset or as part of the Moulds 6 years expense item, as applicable Computers 3 years • When receivables and payables are stated with the Furniture & Fixtures 10 years amount of tax included Office Equipment 5 years Motor Vehicles 8 years The net amount of tax recoverable from, or payable to, Carpeted Roads- RCC 10 years the taxation authority is included as part of receivables or Computer Servers 6 years payables in the balance sheet. Electrical Installations 20 years Temporary Structure 3 years 2.8 Non-current assets held for sale Hand Carts, Trollies 15 years The Company classifies Non-current assets or disposal groups comprising of assets and liabilities are classified as The management has estimated, supported by ‘held for sale’ when all of the following criterias are met: (i) independent assessment by professional, the useful lives decision has been made to sell. (ii) the assets are available of the following class of assets. for immediate sale in its present condition. (iii) the assets are being actively marketed and (iv) sale has been agreed or is • Factory buildings - 50 years (Lower than those expected to be concluded within 12 months of the Balance indicated in Schedule II of the Companies Act, 2013) Sheet date. • Office buildings- 60 years (Higher than those indicated in Schedule II of the Companies Act, 2013) Subsequently, such non-current assets and disposal groups classified as ‘held for sale’ are measured at the • Plant & Machinery – 20 years (Higher than those lower of its carrying value and fair value less costs to indicated in Schedule II of the Companies Act, 2013) sell. Non-current assets held for sale are not depreciated • Moulds – 6 years (Lower than those indicated in or amortised. Schedule II of the Companies Act,2013) 2.9 Property, plant and equipment • Electrical Installations – 20 years (Higher than those Property, plant and equipment is stated at cost, net of indicated in Schedule II of the Companies Act,2013) accumulated depreciation and accumulated impairment • Air conditioner having capacity of > 2 tons – 15 years losses, if any. Capital work in progress is stated at cost. (Higher than those indicated in Schedule II of the Such cost includes the cost of replacing part of the plant and Companies Act,2013) equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant • Serviceable materials like trollies, iron storage tacks parts of plant and equipment are required to be replaced skids – 15 years (Higher than those indicated in at intervals, the Company depreciates them separately Schedule II of the Companies Act,2013) based on their specific useful lives. Likewise, when a
118 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 119 e economic benefits
CEAT Limited CEAT esources to complete the asset esources
e expenditure have been amortised over a have been amortised e expenditure technical feasibility of completing the intangible the completing of feasibility technical ability to measure reliably the expenditure during expenditure the reliably measure to ability The Its intention to complete and its ability and intention to How the asset will generate futur The availability of r The Softwar T asset so that the asset will be available for use or sale use or sell the asset development period of three years. period of three a period of twenty years.
and are recognised in the statement of profit and loss when and loss when profit in the statement of recognised and are derecognised. the asset is on straight line method amortised Intangible assets are as under: • • • • • • • impairment annually. Research costs are expensed as incurred. expensed as incurred. costs are Research are on an individual project Development expenditures as an intangible asset when the Company can recognised demonstrate: the development of initial recognition Following as an asset, the asset is carried at cost expenditure less any accumulated amortisation and accumulated when begins the asset of Amortisation losses. impairment development is complete and the asset is available for use. benefit. It is amortised over the period of expected future in the statement Amortisation expense is recognised forms part of and loss unless such expenditure of profit carrying value of another asset. During the period of development, the asset is tested for The Company has originally generated technical The Company has of Halol radial know-how and assistance for setting up plant/facility, plant. Considering the life of the underlying straight line is amortised on a this technical know-how, basis over a period of twenty years global rights of “CEAT” The Company has acquired Prior to the said Pirelli. maker, the Italian tyre brand from of the brand acquisition, the Company was the owner India. Within only a few Asian countries including the worldwide, new of the brand which is renowned acquisition the to accessible be will markets unexplored hitherto and fully exploit Company will be in a position to The Company. volume and better in increased the export market resulting management believes that the Therefore, price realization. a period of at for significant benefits the Brand will yield least twenty years.
know-how and Brand 2.10.1 Technical over amortised echnical Know-howandBrandsare 2.10.2 Research and development costs (Product and development costs (Product 2.10.2 Research development)
fork lifts trucks - 5 years (Lower 5 years (Lower trucks - fork lifts
Batteries used in Batteries used than those indicated in Schedule II of the Companies II of the Companies indicated in Schedule than those Act,2013)
Intangible assets • from indefinite to finite is made on a prospective basis. indefinite to finite is made on a from of an intangible derecognition Gains or losses arising from between the net as the difference measured asset are of the asset and the carrying amount disposal proceeds of another asset. not amortised, Intangible assets with infinite useful lives are or individually either annually, impairment for tested are but at the cash-generating unit level. The assessment of infinite annually to determine whether the infinite life life is reviewed continues to be supportable. If not, the change in useful life Intangible assets with finite lives are amortised over the useful Intangible assets with finite lives are whenever there economic life and assessed for impairment is an indication that the intangible asset may be impaired. for method amortisation and the period amortisation The reviewed at are a finite useful life an intangible asset with period. Changes in the least at the end of each reporting patternexpected the or life useful expected consumption of economic benefits embodied in the asset are of future to modify the amortisation period or method, considered in accounting as changes treated and are as appropriate, estimates. The amortisation expense on intangible assets and recognised in the statement of profit with finite lives is forms part of carrying value loss unless such expenditure which the expenditure is incurred. which the expenditure assessed as either The useful lives of intangible assets are infinite or finite. Intangible assets acquired separately are measured on measured separately are Intangible assets acquired at cost. Following initial recognition, initial recognition carried at cost less any accumulated intangible assets are losses. amortisation and accumulated impairment Internally generated intangibles, excluding capitalised not capitalised and the related development costs, are and loss in the period in in profit is reflected expenditure The residual values, useful lives and methods of The residual reviewed plant and equipment are of property, depreciation prospectively, adjusted end and year each financial at if appropriate. derecognised. An item of property, plant and equipment and any significant plant and equipment An item of property, upon disposal or is derecognised part initially recognised its expected from are economic benefits when no future gain or loss arising on derecognition use or disposal. Any between the net as the difference of the asset (calculated asset) the of amount carrying the and proceeds disposal the asset is is included in the income statement when The management believes that the depreciation rates fairly that the depreciation The management believes residual values lives and its estimation of the useful reflect of the fixed assets.
2.10
Notes to Financial Statements for the year ended March 31, 2019
2.11 Borrowing costs Company will obtain ownership by the end of the lease Borrowing costs directly attributable to the acquisition, term, the asset is depreciated over the shorter of the construction or production of an asset that necessarily estimated useful life of the asset and the lease term. takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of 2.12.1.2 Operating lease the asset. All other borrowing costs are expensed in the Operating lease payments are recognised as an expense period in which they occur. Borrowing costs consist of in the statement of profit and loss on a straight line basis interest and other costs that an entity incurs in connection over the lease term unless payments to the lessor are with the borrowing of funds. Borrowing cost also includes structured to increase in line with expected general inflation exchange differences to the extent regarded as an to compensate for the lessor’s expected inflationary cost adjustment to the borrowing costs. increase.
To the extent that the Company borrows funds specifically 2.13 Inventories for the purpose of obtaining a qualifying asset, the Company Inventories are valued at the lower of cost and net determines the amount of borrowing costs eligible for realisable value. capitalisation as the actual borrowing costs incurred on that borrowing during the period less any investment Costs incurred in bringing each product to its present income on the temporary investment of those borrowings. location and conditions are accounted for as follows: • Raw materials, components, stores and spares are To the extent that the Company borrows funds generally valued at lower of cost and net realizable value. and uses them for the purpose of obtaining a qualifying However, materials and other items held for use in asset, the Company determines the amount of borrowing the production of inventories are not written down costs eligible for capitalisation by applying a capitalisation below cost if the finished products in which they will rate to the expenditures on that asset. The capitalisation rate be incorporated are expected to be sold at or above is the weighted average of the borrowing costs applicable cost. Cost is determined on a weighted average basis. to the borrowings of the Company that are outstanding during the period, other than borrowings made specifically • Work-in-progress and finished goods are valued at for the purpose of obtaining a qualifying asset. lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of 2.12 Leases manufacturing overheads based on normal operating The determination of whether an arrangement is (or contains) capacity but excluding borrowing cost. Cost is a lease is based on the substance of the arrangement at determined on a weighted average basis. the inception of the lease. The arrangement is, or contains, • Traded goods are valued at lower of cost and net a lease if fulfilment of the arrangement is dependent on realizable value. Cost includes cost of purchase and the use of a specific asset or assets and the arrangement other costs incurred in bringing the inventories to their conveys a right to use the asset or assets, even if that right present location and condition. Cost is determined on is not explicitly specified in an arrangement. a weighted average basis. 2.12.1 Company as a lessee Initial cost of inventories includes the transfer of gains and 2.12.1.1 Finance lease losses on qualifying cash flow hedges, recognised in OCI, A lease is classified at the inception date as a finance lease in respect of the purchases of raw materials. or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Net realisable value is the estimated selling price in the Company is classified as a finance lease. ordinary course of business, less estimated costs of completion and the estimated costs necessary to make Finance leases are capitalised at the commencement the sale. of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum 2.14 Impairment of non-financial assets lease payments. Lease payments are apportioned between The Company assesses, at each reporting date, whether finance charges and reduction of the lease liability so as to there is an indication that an asset may be impaired. If any achieve a constant rate of interest on the remaining balance indication exists, or when annual impairment testing for of the liability. Finance charges are recognised in finance an asset is required, the Company estimates the asset’s costs in the statement of profit and loss, unless they are recoverable amount. An asset’s recoverable amount is directly attributable to qualifying assets, in which case the higher of an asset’s or cash-generating unit’s (CGU) they are capitalised in accordance with the Company’s fair value less costs of disposal and its value in use. general policy on the borrowing costs. Contingent rentals Recoverable amount is determined for an individual asset, are recognised as expenses in the periods in which they unless the asset does not generate cash inflows that are are incurred. largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU A leased asset is depreciated over the useful life of the exceeds its recoverable amount, the asset is considered asset. However, if there is no reasonable certainty that the impaired and is written down to its recoverable amount.
120 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 121
CEAT Limited CEAT The estimated liability for sales related obligations is for sales related The estimated liability sold. These estimates are when products recorded information on the established using historical are of obligations and and average cost frequency nature, incidence future possible regarding management estimates The timing failure. on product actions based on corrective - arise will obligation the when and as vary will outflows of is based years. Initial recognition being typically up to three of sales related on historical experience. The initial estimate If the effect of the time value of money is material, of money value time the of the effect If rate that pre-tax a current discounted using are provisions liability. the to specific risks the appropriate, when reflects, due in the provision used, the increase When discounting is as a finance cost. is recognised to the passage of time The Company has a defined benefit gratuity plan, which plan, gratuity benefit defined a has Company The to be made to a separately administered contribution requires this benefit is liability towards fund. The Company’s determined on the basis of actuarial valuation using Projected Retirement benefit in the form of provident fund, fund, benefit in the form of provident Retirement Superannuation, Employees State Insurance Contribution defined contribution scheme. fund are and Labour Welfare The Company has no obligation, other than the contribution payable to the above mentioned funds. The Company fund provident the to payable contribution recognizes the scheme as an expense, when an employee renders scheme the to payable contribution the If service. related balance sheet date exceeds the before for service received paid, the deficit payable to the the contribution already as a liability after deducting the scheme is recognized paid paid. If the contribution already contribution already before exceeds the contribution due for services received as an the balance sheet date, then excess is recognized will lead to, for asset to the extent that the pre-payment payment or a cash refund. in future example, a reduction The Company records a provision for decommissioning a provision The Company records manufacturing costs of land taken on lease at one of the Decommissioning costs of tyres. facility for the production value of expected costs to at the present provided are and are flows settle the obligation using estimated cash as part of the cost of the particular asset. recognised rate that pre-tax discounted at a current The cash flows are the risks specific to the decommissioning liability. reflects and as incurred The unwinding of the discount is expensed and loss as a finance in the statement of profit recognised costs of decommissioning are cost. The estimated future Changes in annually and adjusted as appropriate. reviewed costs or in the discount rate applied the estimated future the cost of the asset. to or deducted from added are Retir Unit Credit Method at the date of balance sheet. Unit Credit obligations -related costs is revised annually. costs is revised obligations -related
2.15.1 Provision for sales related obligations for sales related 2.15.1 Provision 2.16.2 Defined benefit plan 2.16 2.16.1 Defined contribution plan ement andotheremployeebenefits 2.15.2 Decommissioning liability An assessment is made at each reporting date to An assessment is made at each reporting is an indication that previously determine whether there impairment losses no longer exist or have recognised If such indication exists, the Company decreased. amount. recoverable or CGU’s estimates the asset’s only impairment loss is reversed recognised A previously has been a change in the assumptions used to if there amount since the last recoverable determine the asset’s is limited The reversal impairment loss was recognised. exceed does not of the asset the carrying amount so that amount, nor exceed the carrying amount its recoverable had that would have been determined, net of depreciation, prior asset in the for recognised loss been impairment no in the statement of profit is recognised years. Such reversal and loss. Impairment losses of continuing operations, including Impairment losses of continuing operations, in the statement recognised impairment on inventories, are and loss. of profit The Company bases its impairment calculation on detailed calculation impairment its Company bases The prepared which are calculations, budgets and forecast CGUs to which separately for each of the Company’s allocated. These budgets and the individual assets are calculations generally cover a period of five years. forecast rate is calculated For longer periods, a long-term growth cash flows after the fifth year. future and applied to project covered periods beyond projections estimate cash flow To the Company budgets/forecasts, by the most recent in the budget using a extrapolates cash flow projections rate for subsequent years, steady or declining growth rate can be justified. In any case, this unless an increasing does not exceed the long-term average growth rate growth in countries or country or industries, products, the for rate in which the which the entity operates, or for the market asset is used. In assessing value in use, the estimated future cash flows estimated future value in use, the In assessing pre-tax value using a their present discounted to are market assessments of current discount rate that reflects asset. the to specific risks the and money of value time the value less costs of disposal, recent In determining fair into account. If no such taken are market transactions valuation an appropriate identified, transactions can be by corroborated calculations are model is used. These prices for publicly traded share valuation multiples, quoted available fair value indicators. companies or other Provisions Provisions are recognised when the Company has a present when the Company has a present recognised are Provisions of a past event, obligation (legal or constructive) as a result embodying resources that an outflow of it is probable the obligation to settle required will be economic benefits estimate can be made of the amount of and a reliable the obligation. When the Company expects some or all for example, under an to be reimbursed, of a provision as a is recognised insurance contract, the reimbursement is virtually separate asset, but only when the reimbursement in is presented to a provision certain. The expense relating reimbursement. and loss net of any the statement of profit
2.15 Notes to Financial Statements for the year ended March 31, 2019
Remeasurement, comprising of actuarial gains and losses, sheet date, they are measured at present value of the the effect of the asset ceiling, excluding amounts included future cash flows using the discount rate determined by in net interest on the net defined benefit liability and the reference to market yields at the balance sheet date on the return on plan assets (excluding amounts included in net government bonds. interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit 2.17 Financial instruments or credit to retained earnings through OCI in the period in A financial instrument is any contract that gives rise to a which they occur. Remeasurement is not reclassified to financial asset of one entity and a financial liability or equity profit and loss in subsequent periods. instrument of another entity.
Past service costs are recognised in profit and loss on the 2.17.1 Financial assets earlier of: 2.17.1.1 Initial recognition and measurement All financial assets are recognised initially at fair value • The date of the plan amendment or curtailment and plus, in the case of financial assets not recorded at fair • The date that the Company recognises related value through profit and loss, transaction costs that restructuring costs are attributable to the acquisition of the financial asset. Purchase or sale of financial asset that require delivery Net interest is calculated by applying the discount rate of assets within a time frame established by regulation to the net defined benefit liability or asset. The Company or convention in the market place (regular way trades) recognises the following changes in the net defined benefit are recognised on the trade date, i.e., the date that the obligation as an expense in statement of profit and loss: Company commits to purchase or sell the asset. • Service costs comprising current service costs, past-service costs, gains and losses on curtailments 2.17.1.2 Subsequent measurement and non-routine settlements; and For purposes of subsequent measurement, financial assets are classified in four categories: • Net interest expense or income 2.17.1.2.1 Debt instruments at amortised cost 2.16.3 Compensated absences Accumulated leave, which is expected to be utilized within 2.17.1.2.2 Debt instruments at fair value through other the next 12 months, is treated as short-term employee comprehensive income (FVTOCI) benefit and this is shown under short term provision in 2.17.1.2.3 Debt instruments, derivatives and equity the Balance Sheet. The Company measures the expected instruments at fair value through profit and loss (FVTPL) cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that 2.17.1.2.4 Equity instruments measured at fair value through has accumulated at the reporting date. other comprehensive income (FVTOCI) 2.17.1.2.1 Debt instruments at amortised cost The Company treats accumulated leave expected to be A ‘debt instrument’ ‘other financial assets as carried forward beyond twelve months, as long-term well’ is measured at the amortised cost if both the following employee benefit for measurement purposes and this is conditions are met: shown under long term provisions in the Balance Sheet. Such long-term compensated absences are provided for a) The asset is held within a business model whose based on the actuarial valuation using the projected unit objective is to hold assets for collecting contractual credit method at the year-end. Actuarial gains/losses are cash flows, and immediately taken to the Statement of Other Comprehensive Income and are not deferred. The Company presents the b) Contractual terms of the asset give rise on specified leave as a current liability in the balance sheet, to the extent dates to cash flows that are solely payments of it does not have an unconditional right to defer its settlement principal and interest (SPPI) on the principal amount for 12 months after the reporting date. Where the Company outstanding. has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is After initial measurement, such financial assets are presented as non-current liability. subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is 2.16.4 Termination benefits calculated by taking into account any discount or premium The Company recognizes termination benefit as a liability on acquisition and fees or costs that are an integral part of and an expense when the Company has a present the EIR. The EIR amortisation is included in finance income obligation as a result of past event, it is probable that an in the profit and loss. The losses arising from impairment outflow of resources embodying economic benefits will be are recognised in the profit and loss. This category required to settle the obligation and a reliable estimate can generally applies to trade and other receivables, loans and be made of the amount of the obligation. If the termination other financial assets. benefit falls due for more than 12 months after the balance
122 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 123 e not measured e not measured ed its rights to receive ed its rights to receive CEAT Limited CEAT
e debt instruments, and
eceive cash flows from the asset have the eceive cash flows from
assets that are debt instruments and are are and instruments debt are that assets eceivables under Ind AS 17 commitments which are not measured as measured not are which commitments Loan Financial guarantee contracts which ar Financial assets that ar Financial Lease r T The rights to r transferr The Company has at FVTPL as at FVTPL are measured at amortised cost e.g., loans, debt loans, e.g., cost amortised at measured are and bank securities, deposits, trade receivables balance as at FVTOCI measured result from cash or another financial asset that within the scope of Ind AS 18 transactions that are expired or expired or has assumed an the asset cash flows from cash flows in full received obligation to pay the party under a to a third without material delay and either (a) the arrangement; ‘pass-through’ all the risks substantially Company has transferred of the asset, or (b) the Company has and rewards substantially all the nor retained neither transferred of the asset, but has transferred risks and rewards the asset. of control Derecognition
In accordance with Ind AS 109, the Company applies with Ind AS 109, the Company In accordance and Loss (ECL) model for measurement Expected Credit of impairment loss on the following financial recognition risk exposure: assets and credit e) f) a) b) c) d) • • that the Company has retained. of a guarantee Continuing involvement that takes the form of the at the lower asset is measured transferred over the maximum the and asset the of amount carrying original could be amount of consideration that the Company to repay. required A financial asset (or, where applicable, a part of a financial applicable, a part where asset (or, A financial similar financial assets) is of group asset or part of a when: primarily derecognised its rights to receive When the Company has transferred pass-through a into entered has or asset an from flows cash it has retained arrangement, it evaluates if and to what extent of ownership. When it has neither the risks and rewards and risks the of all substantially retained nor transferred of the asset, control of the asset, nor transferred rewards asset the transferred the Company continues to recognise continuing involvement. to the extent of the Company’s an associated In that case, the Company also recognises are asset and the associated liability The transferred liability. the rights and obligations on a basis that reflects measured
2.17.1.4 Impairment of financial assets receive to right contractual any or receivables rade 2.17.1.3 e
model is achieved both model is achieved both
s contractual cash flows represent SPPI. represent s contractual cash flows The asset’ The objective of the business The objective of the by collecting contractual cash flows and selling the by collecting contractual financial assets, and
A ‘debt instrument’ is classified as at the FVTOCI if both of as at the FVTOCI if is classified A ‘debt instrument’ met: are the following criteria Debt instruments included within the FVTPL category ar Debt instruments included within the FVTPL b) a) statement of profit and loss. statement of profit Equity instruments included within the FVTPL category are Equity instruments included within the FVTPL category are in the at fair value with all changes recognized measured on initial recognition and is irrevocable. on initial recognition In case of equity instrument classified as FVTOCI, all fair are dividends, excluding instrument, the changes on value of the amounts no recycling is the OCI. There in recognized sale on even loss, and profit of statement to OCI from transfer the the Company may of investment. However, cumulative gain or loss within equity. All equity investments in scope of Ind AS 109 are measured measured All equity investments in scope of Ind AS 109 are held for trading at fair value. Equity instruments which are instruments, equity all other For FVTPL. as at classified are election to present the Company may make an irrevocable in changes subsequent income comprehensive other in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made statement of profit and loss. statement of profit any debt instrument as at FVTPL. in the at fair value with all changes recognized measured In addition, the Company may elect to designate a debt In addition, the Company may elect to cost or instrument, which otherwise meets amortized such election FVTOCI criteria, as at FVTPL. However, or eliminates a is allowed only if doing so reduces to as inconsistency (referred or recognition measurement not designated ‘accounting mismatch’). The Company has classified as at FVTPL. Debt instruments included within the FVTOCI category Debt instruments included date each reporting initially as well as at measured are in the recognized movements are at fair value. Fair value the group (OCI). However, income other comprehensive income, impairment losses & reversals interest recognizes exchange gain or loss in the statement of profit and foreign of the asset, cumulative gain or and loss. On derecognition the from in OCI is reclassified recognised loss previously earned and loss. Interest whilst equity to statement of profit as interest holding FVTOCI debt instrument is reported income using the EIR method. category for debt instruments. FVTPL is a residual meet the criteria Any debt instrument, which does not or as FVTOCI, is for categorization as at amortized cost 2.17.1.2.2 Debt instrument at FVTOCI Debt instrument at 2.17.1.2.2 2.17.1.2.4 Equity investments
2.17.1.2.3 Debt instrument at FVTPL Notes to Financial Statements for the year ended March 31, 2019
The Company follows ‘simplified approach’ for recognition the head ‘other expenses’ in the Statement of profit and of impairment loss allowance on: loss. The balance sheet presentation for various financial instruments is described below: • Trade receivables • Financial assets measured as at amortised • All lease receivables resulting from transactions within cost, contractual revenue receivables and lease the scope of Ind AS 17 receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets The application of simplified approach does not require in the balance sheet. The allowance reduces the the Company to track changes in credit risk. Rather, it net carrying amount. Until the asset meets write-off recognises impairment loss allowance based on lifetime criteria, the Company does not reduce impairment ECLs at each reporting date, right from its initial allowance from the gross carrying amount. recognition. • Debt instruments measured at FVTOCI: Since financial For recognition of impairment loss on other financial assets assets are already reflected at fair value, impairment and risk exposure, the company determines that whether allowance is not further reduced from its value. there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, For assessing increase in credit risk and impairment loss, 12-month ECL is used to provide for impairment loss. the Company combines financial instruments on the basis However, if credit risk has increased significantly, lifetime of shared credit risk characteristics with the objective of ECL is used. If, in a subsequent period, credit quality of facilitating an analysis that is designed to enable significant the instrument improves such that there is no longer a increases in credit risk to be identified on a timely basis. significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss The Company does not have any purchased or originated allowance based on 12-month ECL. credit-impaired (POCI) financial assets, i.e., financial assets which are credit impaired on purchase/ origination. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of 2.17.2 Financial liabilities a financial instrument. The 12-month ECL is a portion of 2.17.2.1 Initial recognition and measurement the lifetime ECL which results from default events that are Financial liabilities are classified, at initial recognition, possible within 12 months after the reporting date. as financial liabilities at fair value through profit and loss, loans and borrowings, payables, or as derivatives ECL is the difference between all contractual cash flows designated as hedging instruments in an effective hedge, that are due to the company in accordance with the as appropriate. contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original All financial liabilities are recognised initially at fair value and, EIR. When estimating the cash flows, an entity is required in the case of loans and borrowings and payables, net of to consider: directly attributable transaction costs. • All contractual terms of the financial instrument The Company’s financial liabilities include trade and (including prepayment, extension, call and similar other payables, loans and borrowings including bank options) over the expected life of the financial overdrafts, financial guarantee contracts and derivative instrument. However, in rare cases when the expected financial instruments. life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining 2.17.2.2 Subsequent measurement contractual term of the financial instrument The measurement of financial liabilities depends on their • Cash flows from the sale of collateral held or classification, as described below: other credit enhancements that are integral to the contractual terms 2.17.2.2.1 Financial liabilities at fair value through profit and loss As a practical expedient, the Company uses a provision Financial liabilities at fair value through profit and loss matrix to determine impairment loss allowance on include financial liabilities held for trading and financial portfolio of its trade receivables. The provision matrix is liabilities designated upon initial recognition as at fair value based on its historically observed default rates over the through profit and loss. Financial liabilities are classified expected life of the trade receivables and is adjusted for as held for trading if they are incurred for the purpose forward-looking estimates. At every reporting date, the of repurchasing in the near term. This category also historical observed default rates are updated and changes includes derivative financial instruments entered into by the in the forward-looking estimates are analysed. company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Gains or losses on liabilities held for trading are recognised statement of profit and loss. This amount is reflected under in the profit and loss.
124 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 125
CEAT Limited CEAT
determined as per impairment requirements of Ind AS 109 of Ind requirements as per impairment determined amortisation. less cumulative recognised and the amount Derivative financial instruments The Company uses derivative financial instruments, such as currency contracts, to manage its foreign currency forward designated as cash risks. These derivative instruments are entered fair value or net investment hedges and are flow, Such derivative into for period consistent with currency. recognised at fair value on initially financial instruments are A financial liability is derecognised when the obligation is derecognised A financial liability discharged or cancelled or expires. under the liability is replaced by another liability is When an existing financial or the terms, different the same lender on substantially from substantially modified, such are terms of an existing liability as the derecognition is treated an exchange or modification of a new liability. and the recognition of the original liability is carrying amounts in the respective The difference loss. and profit in the statement of recognised of financial assets The Company determines classification After initial recognition, and liabilities on initial recognition. are is made for financial assets which no reclassification For financial equity instruments and financial liabilities. is debt instruments, a reclassification assets which are is a change in the business model for made only if there business model managing those assets. Changes to the senior The Company’s to be infrequent. expected are model as management determines change in the business external of significant a result or internal changes which are evident to operations. Such changes are to the Company’s external parties. A change in the business model occurs to perform an when the Company either begins or ceases If the Company activity that is significant to its operations. reclassification financial assets, it applies the reclassifies date which is the the reclassification from prospectively reporting period following first day of the immediately next not model. The Company does the change in business gains, losses (including recognised previously any restate impairment gains or losses) or interest.
2.18 2.17.2.3 Derecognition assets 2.17.3 Reclassification of financial Fair value is measured at reclassification date. Difference between previous amortized between previous date. Difference at reclassification Fair value is measured and loss. in statement of profit cost and fair value is recognised carrying amount. EIR is date becomes its new gross Fair value at reclassification carrying amount. calculated based on the new gross amortised between previous date. Difference at reclassification Fair value is measured in OCI. No change in EIR due to reclassification. cost and fair value is recognised date becomes its new amortised cost carrying amount. Fair value at reclassification cumulative gain or loss in OCI is adjusted against fair value. Consequently, However, at amortised cost. as if it had always been measured the asset is measured date becomes its new carrying amount. No other Fair value at reclassification adjustment is required. at fair value. Cumulative gain or loss previously Assets continue to be measured reclassification at the and loss to statement of profit in OCI is reclassified recognized date. Accounting treatment
FVTPL FVTPL FVTOCI FVTOCI
Amortised cost Amortised Cost Revised classification Original classification Amortised cost FVTPL Amortised cost FVTOCI FVTPL FVTOCI Financial liabilities designated upon initial recognition at fair initial recognition designated upon Financial liabilities as such at the designated are and loss profit value through only if the criteria in Ind AS and initial date of recognition, designated as FVTPL, fair satisfied. For liabilities 109 are attributable to changes in own credit value gains/ losses not loss are in OCI. These gains/ recognized risks are and loss. of profit to statement subsequently transferred gain the cumulative transfer may the Company However, such of fair value in changes other All within equity. loss or and loss. of profit in the statement recognised liability are designated any financial liability as The Company has not Financial assets and financial liabilities are offset and the and offset are liabilities financial and assets Financial is a if there in the balance sheet net amount is reported the recognised legal right to offset enforceable currently is an intention to settle on a net basis, amounts and there the assets and settle the liabilities simultaneously. to realise The following table shows various reclassifications and how they are accounted for: and how they are The following table shows various reclassifications Financial guarantee contracts issued by the Company the by issued contracts guarantee Financial a payment to be made to contracts that require those are the holder for a loss it incurs because the specified reimburse in accordance debtor fails to make a payment when due guarantee with the terms of a debt instrument. Financial initially as a liability at fair value, recognised contracts are attributable directly adjusted for transaction costs that are liability the Subsequently, guarantee. the of issuance the to at the higher of the amount of loss allowance is measured as through the EIR amortisation process. the EIR amortisation process. as through into account any Amortised cost is calculated by taking on acquisition and fees or costs that discount or premium part of the EIR. The EIR amortisation is an integral are and loss. of profit included as finance costs in the statement This is the category most relevant to the Company. to the Company. This is the category most relevant and loans interest-bearing initial recognition, After at amortised cost subsequently measured are borrowings in recognised are using the EIR method. Gains and losses as well derecognised loss when the liabilities are and profit at fair value through profit and loss. profit at fair value through 2.17.4 Offsetting of financial instruments 2.17.4 Offsetting 2.17.2.2.3 Financial guarantee contracts 2.17.2.2.2 Loans and borrowings Notes to Financial Statements for the year ended March 31, 2019
the date on which a derivative contract is entered into and 2.19 Fair value measurement are subsequently re-measured at fair value. Derivatives are The Company measures financial instruments, such as, carried as financial assets when the fair value is positive derivatives, foreign denominated borrowings and assets, and as financial liabilities when the fair value is negative. forward contracts at fair value at each balance sheet date. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit and loss. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction 2.18.1 Fair value hedges between market participants at the measurement date. The change in the fair value of a hedging instrument is The fair value measurement is based on the presumption recognised in the statement of profit and loss as finance that the transaction to sell the asset or transfer the liability costs. The change in the fair value of the hedged item takes place either: attributable to the risk hedged is recorded as part of the • In the principal market for the asset or liability or carrying value of the hedged item and is also recognised in the statement of profit and loss as finance costs. • In the absence of a principal market, in the most advantageous market for the asset or liability For fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through The principal or the most advantageous market must be profit and loss over the remaining term of the hedge using accessible by the Company. the EIR method. EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged The fair value of an asset or a liability is measured using item ceases to be adjusted for changes in its fair value the assumptions that market participants would use attributable to the risk being hedged. when pricing the asset or liability, assuming that market participants act in their economic best interest. If the hedged item is derecognised, the unamortised fair value is recognised immediately in profit and loss. When an A fair value measurement of a non-financial asset takes into unrecognised firm commitment is designated as a hedged account a market participant’s ability to generate economic item, the subsequent cumulative change in the fair value benefits by using the asset in its highest and best use or by of the firm commitment attributable to the hedged risk is selling it to another market participant that would use the recognised as an asset or liability with a corresponding asset in its highest and best use. gain or loss recognised in profit and loss. The Company uses valuation techniques that are 2.18.2 Cash flow hedges appropriate in the circumstances and for which sufficient The effective portion of the gain or loss on the hedging data are available to measure fair value, maximising the instrument is recognised in Other Comprehensive use of relevant observable inputs and minimising the use Income(OCI) in the cash flow hedge reserve, while any of unobservable inputs. ineffective portion is recognised immediately in the statement of profit and loss. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised The Company uses forward currency contracts as within the fair value hierarchy, described as follows, based hedges of its exposure to foreign currency risk in forecast on the lowest level input that is significant to the fair value transactions and firm commitments. The ineffective portion measurement as a whole: relating to foreign currency contracts is recognised in the • Level 1 — Quoted (unadjusted) market prices in active statement of profit and loss. markets for identical assets or liabilities Amounts recognised as OCI are transferred to statement of • Level 2 — Valuation techniques for which the profit and loss when the hedged transaction affects profit lowest level input that is significant to the fair value and loss, such as when the hedged financial income or measurement is directly or indirectly observable financial expense is recognised or when a forecast sale • Level 3 — Valuation techniques for which the occurs. When the hedged item is the cost of a non-financial lowest level input that is significant to the fair value asset or non-financial liability, the amounts recognised as measurement is unobservable OCI are transferred to the initial carrying amount of the non-financial asset or liability. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company If the hedging instrument expires or is sold, terminated determines whether transfers have occurred between or exercised without replacement or rollover (as part of levels in the hierarchy by re-assessing categorisation the hedging strategy), or if its designation as a hedge is (based on the lowest level input that is significant to the revoked, or when the hedge no longer meets the criteria for fair value measurement as a whole) at the end of each hedge accounting, any cumulative gain or loss previously reporting period. recognised in OCI remains separately in equity until the forecast transaction occurs or the foreign currency firm commitment is met.
126 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 127 CEAT Limited CEAT Ear Segment Reporting A contingent liability is a possible obligation that arises is a possible obligation A contingent liability the by confirmed will be existence whose events past from uncertain of one or more or non—occurrence occurrence of the Company not wholly within the control events future because it is obligation that is not recognized or a present required will be resources that an outflow of not probable also arises in to settle the obligation. A contingent liability is a liability that cannot there cases where rare extremely reliably. because it cannot be measured be recognized a contingent liability but The Company does not recognize discloses its existence in the financial statements. unless it becomes A contingent assets is not recognised that an inflow of economic benefits will virtually certain probable, arise. When an inflow of economic benefits is statements. the financial in disclosed assets are contingent at reviewed Contingent liabilities and contingent assets are each balance sheet date. Basic Earnings Per Share (EPS) amounts are calculated by are (EPS) amounts Basic Earnings Per Share attributable to equity holders for the year dividing the profit weighted average number of equity of the company by the year. outstanding during the shares calculated by dividing the are Diluted EPS amounts holders of the company after attributable to equity profit by the weighted average shares adjusting impact of dilution during the year plus outstanding number of equity shares that would number of equity shares the weighted average of all the dilutive potential equity be issued on conversion into equity shares. shares as defined in Ind AS Based on "Management Approach" Management 108 -Operating Segments, the Executive performance and Committee evaluates the Company's based on an analysis of various allocates the resources performance indicators by business segments. its segment information in The Company prepares adopted for conformity with the accounting policies the financial statements of the and presenting preparing Company as a whole.
2.23 2.24 nings PerShare 2.25 Contingent liabilities and assets `,
` spot rate at the date the transaction For the purpose of fair value disclosures, the Company has the of fair value disclosures, For the purpose basis of liabilities on the classes of assets and determined risks of the asset or liability characteristics and the nature, as explained above. value hierarchy and the level of the fair Foreign Foreign currencies Dividend distribution to equity holders Dividend distribution to equity holders Cash and cash equivalents Non-monetary items that are measured in terms of measured Non-monetary items that are using translated are currency historical cost in a foreign the exchange rates at the dates of the initial transactions. at fair value in a foreign Non-monetary items measured rates at the the exchange using translated are currency date when the fair value is determined. The gain or loss at arising on translation of non-monetary items measured of the gain or in line with the recognition fair value is treated translation (i.e., the item of value fair in the change on loss whose fair value gain or loss is on items differences recognised in also and loss are in OCI or profit recognised respectively). and loss, OCI or profit Exchange differences arising on settlement or translation of translation or on settlement arising differences Exchange and loss. in profit recognised monetary items are first qualifies for recognition. Monetary assets and assets Monetary recognition. for qualifies first translated are currencies liabilities denominated in foreign at the exchange of rates spot currency the functional at date. reporting Transactions in foreign currencies are initially recorded by initially recorded are currencies in foreign Transactions the Company at which is also the Company’s functional currency. functional currency. which is also the Company’s The Company’s financial statements are presented in presented financial statements are The Company’s The Company recognises a liability to make cash to equity The Company recognises is authorised holders of the Company when the distribution of the discretion and the distribution is no longer at the As per the corporate laws in India, a distribution Company. by the shareholders. is authorised when it is approved in equity. directly amount is recognised A corresponding For the purpose of the statement of cash flows, cash and For the purpose of the of cash and short-term deposits, cash equivalents consist as of outstanding bank overdrafts as defined above, net an integral part of the Company’s considered they are cash management. Cash and cash equivalent in the balance sheet comprise Cash and cash equivalent hand and short-term deposits with cash at banks and on months or less, which are of three an original maturity risk of changes in value. subject to an insignificant
2.22 2.21 2.20 Notes to Financial Statements for the year ended March 31, 2019 (5) (48) 176 167 Total (740) (2,182) (1,171) (1,243) 55,986 14,959 36,667 16,171 22,784 52,093 (22,808) (55,288) ( ` in lacs) 1,67,218 2,60,673 2,91,845 4,02,556 2,55,178 3,50,463 ------` 1,050 as 4,877 Capital 33,178 15,247 71,889 15,247 71,889 work in (22,808) (55,288) progress 1,11,930 - - (6) (2) (5) (2) 95 115 277 914 283 252 321 340 819 843 (393) (450) (389) (120) Office Office 1,642 1,183 equipments ------(7) (1) (6) (1) 86 93 95 524 603 101 695 171 260 360 343 335 Vehicles - - - - 2 (2) (4) (1) 13 and (11) 223 199 169 208 156 362 530 1,138 1,363 1,560 1,001 1,030 fixtures Furniture Furniture ------3 3 2 (2) (7) (1) 36 34 27 31 25 (Leased) Plant and equipment - - 9 2 613 285 (767) (674) (1,091) (1,585) 46,801 14,882 19,879 32,506 14,233 13,109 46,067 (Owned) 1,73,105 1,87,015 2,32,734 1,54,509 1,86,667 Plant and equipment - - - - (4) (71) (48) (77) (59) 771 (184) 7,731 2,055 3,219 1,340 1,241 4,496 32,237 32,824 40,436 29,605 35,940 Buildings (refer foot (refer note 1 & 8)
------76 75 As at 186 147 222 298 lease) 5,391 5,391 5,577 5,169 5,279 15,247 ( ` in lacs) 2,39,931 Leasehold March 31, 2018 March land (Financial ------1
land 6,731 As at 41,723 48,454 48,455 48,454 48,455 Freehold Freehold 71,889 2,78,574 March 31, 2019 March 0.10 Lacs) being value of unquoted fully-paid shares held in various co-operative housing societies. 31, 2018 ` 0.10 Lacs) being value of unquoted fully-paid shares 31, 2019 (As at March ` 0.10 Lacs as at March , the Company has transferred the following expenses which are attributable to the construction activity and are included in the cost of capital work-in-progress (CWIP) / Property, plant and equipment as the (CWIP) / Property, included in the cost of capital work-in-progress attributable to the construction activity and are the following expenses which are , the Company has transferred case may be. Consequently, expenses disclosed under the respective notes are net of such amounts. notes are expenses disclosed under the respective case may be. Consequently, Building includes During the year
Capital work in progress Property, plant and equipment Property, Gross carrying amount Gross As at April 1, 2017** capitalised Transfers/ 31, 2018 As at March Disposals Additions Disposals Adjustments during the year* Additions capitalised Transfers/ Adjustments during the year* As at March 31, 2019 As at March Accumulated depreciation As at April 1, 2017** Disposals Adjustments during the year* 31, 2018 As at March for the year Depreciation Disposals Depreciation for the year Depreciation Adjustments during the year* 31, 2019 As at March Net book value 31, 2018 As at March As at March 31, 2019 As at March Particulars Particulars Note 3: Property, plant and equipment capital work-in-progress Note 3: Property, plant and equipment Refer note 2.9 for accounting policy on Property, *Adjustments include regrouping of certain assets into other class of assets (refer note 4) of certain assets into other class (refer *Adjustments include regrouping Government the company had setup a deferred grant under other liabilities of standard As per the pre-amendment ** Adoption of amendment in Ind AS 20 Accounting for Government grant and disclosures: note 2.2.1 for changes in Governmentcarrying amount of the asset. (refer 31, 2017: ` 1,132 lacs). Pursuant to the amendment, company has now opted adjust deferred grant from 31, 2018 (March on March accounting policy). Net book value Notes: 1. 2.
128 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
- - - - 67 66 129 939 937 772 468 309 459 As at (176) (167) 6,544 8,447 9,208 1,369 9,980 1,622 1,209 2,664 1,259 3,923 6,544 6,057 2017-18 (` in lacs) (` in lacs) (` in lacs) Total March 31, 2018 March
512 238 ------8,044 1,356 2,782 3,156 60 394 107 213 273 230 503 2018-19 As at 33,819 lacs (March 31, 2018 ` 33,819 lacs (March 3,055 6,057 1,032 1,426 1,533 1,153 1,030 7,233 lacs (March 31, 2018 ` 7,233 lacs (March CEAT Limited CEAT Product Product March 31, 2019 March development ------35 32 35 35 33 83 41 41 704 704 704 124 165 580 539 Note No. Technical Technical Knowhow (refer foot note 2) (refer ------5,067 lacs). This has resulted in the installed in the 31, 2018 ` 5,067 lacs). This has resulted ` 7,409 lacs (March 529 265 794 265 3,156 lacs (March 31, 2018: ` 459 lacs). The rates used to determine the ` 3,156 lacs (March 4,404 4,404 4,404 1,059 3,610 3,345 Brand (refer foot note 1) (refer - - - - 543 665 950 690 723 (176) (167) 2,307 2,674 3,339 1,473 2,196 1,201 1,143 44 lacs (March 31, 2018: Nil) as assets held-for-sale (Refer note 2.8 for accounting policy on Non-current (Refer note 2.8 for accounting policy on Non-current 31, 2018: Nil) as assets held-for-sale ` 44 lacs (March Software oject at Halol-Phase III, during the year the Company has capitalised and commissioned assets of the year the Company has capitalised and commissioned oject at Halol-Phase III, during ed technical know-how and assistance from International LLC, for setting up of Halol Tireed technical know-how and assistance from Engineering Resources een field project at Chennai, during the year the Company has capitalised and commissioned the assets of during the year the Company has capitalised and at Chennai, een field project owing cost capitalised during the year ended March 31, 2019 is owing cost capitalised during the year ended March , the Company has acquired global rights of “CEAT” brand from the Italian tyre maker, Pirelli. Prior to the said acquisition, Pirelli. maker, the Italian tyre brand from global rights of “CEAT” , the Company has acquired the Company was the owner of the brand in only a few Asian countries including India. With the brand which is renowned the acquisition of The Company will be in a position to fully exploit the export to the Company. accessible markets are worldwide, new and hitherto unexplored believes that the Brand will yield significant benefits for a the management Therefore, volume and price realization. in increased market resulting period of at least twenty years. The Company has acquir In an earlier year 79 lacs). This has resulted in the installed capacity as on March 31, 2019 to 35 MT per day (March 31, 2018 Nil). The planned expansion of 208 MT per day is 31, 2018 Nil). The planned 2019 to 35 MT per day (March 31, in the installed capacity as on March ` 79 lacs). This has resulted in phases. expected to be commissioned, is expected to be commissioned in phases. ` 6,731 lacs). The planned capacity of 252 MT per day Refer note 20 and 24 for details on pledges and securities. of The Company has classified building having net block As a part of ongoing gr The amount of borr At the Nagpur plant of the Company has capitalised and commissioned the assets of Company has capitalised and commissioned the assets At the Nagpur plant of the As a part of ongoing expansion pr As a part of ongoing expansion assets held for sale) amount of borrowing cost eligible for capitalisation was in range of 7.4% to 8.9% (March 31, 2018: 7.79%) which is the effective interest rate of specific borrowings. rate of specific interest 31, 2018: 7.79%) which is the effective cost eligible for capitalisation was in range of 7.4% to 8.9% (March amount of borrowing capacity as on March 31, 2019 to 114 MT per day (March 31, 2018 91 MT per day). The additional planned expansion of 140 MT per day is under construction day). The additional planned expansion of 140 MT 31, 2018 91 MT per 2019 to 114 MT per day (March 31, capacity as on March in phases. and expected to be commissioned,
Total Travelling and conveyance Travelling Employee benefit expenses Miscellaneous expenses Gross carrying amount Gross As at April 1, 2017 Professional and consultancy charges Professional Particulars Particulars Particulars Finance cost Additions Intangible assets under development Intangible assets Disposals Adjustments during the year* As at March 31, 2018 As at March Additions Disposals As at March 31, 2019 As at March Accumulated amortization As at April 1, 2017 Amortization during the year Disposals Adjustments during the year* As at March 31, 2018 As at March Amortization during the year Disposals As at March 31, 2019 As at March Net book value 31, 2018 As at March As at March 31, 2019 As at March 2. 1. Note 4: Intangible assets and Intangible assets under development Note 4: Intangible assets and Intangible on Intangible assets Refer note 2.10 for accounting policy 7. 8. 5. 6. 4. 3. *Adjustments include regrouping of certain assets into other class of assets (Refer note 3) *Adjustments include regrouping Notes to Financial Statements for the year ended March 31, 2019
radial plant. Considering the life of the underlying plant / facility, this technical know-how, is amortized on a straight line basis over a period of twenty years. 3. During the year, the Company has transfered employee benefit expenses of` 576 Lacs (March 31, 2018: ` Nil) which are attributable to the development activity and are included in the cost of intangible assets under development / intangible assets as the case may be. Consequently, expenses disclosed under note 32 are net of such amounts.
Note 5: Investments Note 5(a): Investments in subsidiaries and associate Refer note 2.5 for accounting policy on Investments in subsidiaries and associate (` in lacs) As at As at Particulars Face Value March 31, 2019 March 31, 2018 Non-current Unquoted equity shares (at cost) (Non trade) Investment in subsidiaries 1,00,00,000 (March 31, 2018: 1,00,00,000) equity shares of Associated CEAT Holdings 10 LKR 4,358 4,358 Company (Pvt) Limited. 10,49,99,994 (March 31, 2018: 10,49,99,994) equity shares of CEAT AKKHAN Limited 10 Taka 3,717 3,717 94,16,350 (March 31, 2018: 94,16,350) equity shares of Rado Tyres Limited ` 4 9 9 2,10,50,000 (March 31, 2018: 1,80,50,000) equity shares of CEAT Specialty Tyres Limited ` 10 21,005 18,005 (refer note 49 for Events after the reporting period) Investment in associates (at cost) 100 (March 31, 2018: 100) equity shares of Tyresnmore Online Private Limited ` 1 1 1 Unquoted preference shares (Non trade) Investment in subsidiaries (at amortised cost) 15,10,000 (March 31, 2018: 15,10,000) 12.5% cumulative redeemable preference shares of ` 100 1,510 1,510 Rado Tyres Limited Investment in associate (at cost classified as equity) 63,596 (March 31, 2018: 50,855) 0.001% compulsory convertible preference shares of ` 1 699 399 Tyresnmore Online Private Limited Total (a) 31,299 27,999
Note 5(b): Investment in others Refer note 2.17 for accounting policy on Financial instruments (` in lacs) As at As at Particulars Face Value March 31, 2019 March 31, 2018 Investment in Others (at fair value through profit and loss) 1,800 (March 31, 2018: 1,800) equity shares of RPG Ventures Limited (formerly known as ` 10 0 0 Maestro Comtrade Private Limited) 9,75,000 (March 31, 2018: Nil) equity shares of Bhadreshwar Vidyut Private Limited ` 0.19 2 - (formerly known as OPGS Power Gujarat Private Limited) Total (b) 2 0 Total [(a)+(b)] 31,301 27,999 Aggregate amount of quoted investments - - Aggregate market value of quoted investments - - Aggregate amount of unquoted investments 31,301 27,999 Notes: a) Refer note 47(d) for information about liquidity risk relating to investments Information about subsidiaries Proportion (%) of Country of equity interest Name and principal business Incorporation As at As at March 31, 2019 March 31, 2018 CEAT Specialty Tyres Limited - Trading & manufacturing of tyres, tubes and flaps India 100.00 100.00 Associated CEAT Holdings Company (Pvt.) Ltd - Investing in companies engaged in Sri Lanka 100.00 100.00 manufacturing of tyres CEAT AKKHAN Limited - Trading of tyres, tubes and flaps Bangladesh 70.00 70.00 Rado Tyres Limited - Manufacturing of tyres India 58.56 58.56
130 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
6 131 304 304 171 128 476 209 298 171 As at As at As at As at (304) (128) (209) 7,141 1,496 5,169 31.93* (` in lacs) (` in lacs) (` in lacs) March 31, 2018 March 31, 2018 March 31, 2018 March March 31, 2018 March
1 408 274 181 121 209 407 181 As at As at As at As at (274) (121) (209) 1,729 1,643 9,148 equity interest equity interest 36.96* 12,520 (%) of Proportion CEAT Limited CEAT March 31, 2019 March 31, 2019 March March 31, 2019 March March 31, 2019 March India Country of Incorporation ement and note 47(d) for information about liquidity risk relating to other financial assets. ement and note 47(d) for information about liquidity risk relating ement and note 47(d) for information about liquidity risk relating to loans risk relating ement and note 47(d) for information about liquidity e for bank guarantees given to statutory authorities. e due from directors or promoters of the company either severally or jointly with any person of the company either severally or jointly or promoters directors e due from The margin deposits ar Refer note 45 of information about fair value measur No loans ar Refer note 45 of information about fair value measur
Total Less: Allowance for doubtful balances Total Unsecured, considered doubtful considered Unsecured, Balances with government authorities and agencies Less: Allowance for doubtful deposits Total Unsecured, considered doubtful considered Unsecured, Security deposits Security deposits with statutory authorities Less: Allowance for doubtful receivables Unsecured, considered good considered Unsecured, Security deposits doubtful considered Unsecured, note 42) subsidiaries (refer Receivables from note 42) Capital advances (Related parties) (refer TYRESNMORE Online Pvt Ltd - Trading of tyres, tubes and flaps tubes of tyres, Pvt Ltd - Trading TYRESNMORE Online Margin money deposits (refer foot note a) Margin money deposits (refer Non current (at amortised cost) (at amortised Non current good considered Secured, Security deposits (at amortised cost) Non current good considered Unsecured, good considered Unsecured, Capital advances (Others) Name and principal business Particulars Particulars Particulars Notes: Notes: *Includes compulsory convertible preference shares (potential voting right) shares preference *Includes compulsory convertible Information about associate Information a) b) assets Note 8: Other non-current Note 7: Other financial assets instruments Refer note 2.17 for accounting policy on Financial a) b) Refer note 2.17 for accounting policy on Financial instruments Refer note 2.17 for accounting Note 6: Loans Notes to Financial Statements for the year ended March 31, 2019
Note 9: Inventories (At cost or net realisable value, whichever is lower) Refer note 2.13 for accounting policy on Inventories (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 a) Raw materials 34,024 27,762 Goods in transit 3,263 8,114 37,287 35,876 b) Work-in-progress 3,273 2,933 c) Finished goods 51,751 32,215 d) Stock in trade 713 1,118 Goods in transit 116 162 829 1,280 e) Stores and spares 3,374 3,142 Goods in transit 1 50 3,375 3,192 Total 96,515 75,496 Details of finished goods Automotive tyres 42,576 26,867 Tubes and others 9,175 5,348 Total 51,751 32,215 Notes: 1) Cost of inventory recognised as an expense as at March 31, 2019 includes ` 1,292 lacs (March 31, 2018 ` 808 lacs) of write down in net realisable value with respect to slow moving stock as per Company's policy. 2) Loans are secured by first pari passu charge on stock (includes raw materials, finished goods and work in progress) and book debts (refer note 20 and 24)
Note 10: Investments Refer note 2.17 for accounting policy on Financial instruments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Current (at fair value through profit and loss) Investment in units of liquid mutual funds (quoted) a) Unit of Face value `100 each, fully-paid up Nil (March 31, 2018: 5,18,176) units of Aditya Birla Sun Life Floating Rate Fund - STP - Dir - - 1,202 Growth b) Unit of Face value `1,000 each, fully-paid up Nil (March 31, 2018: 36,767) units of SBI Premier Liquid Fund - Direct - Growth - 1,002 Nil (March 31, 2018: 29,246) units of HDFC Liquid Fund - Direct - Growth - 1,001 Nil (March 31, 2018: 3,34,470) units of ICICI Prudential Money Market Fund - Direct - Growth - 801 Aggregate market value of quoted instruments - 4,006 Aggregate amount of quoted investments - 4,006 Aggregate market value of quoted investments - 4,006 Aggregate amount of unquoted investments - - Notes: a) Refer note 45 of information about fair value measurement and note 47(d) for information about liquidity risk relating to investments.
Note 11: Trade receivables Refer note 2.17 for accounting policy on Financial instruments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Trade receivables from others 64,307 68,755 Trade receivables from related parties (refer note 42) 8,339 2,460 Total 72,646 71,215
132 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
5 - 2 133 335 260 As at As at As at 2,129 2,129 6,964 3,291 6,702 (2,129) (1,497) 71,215 73,344 54,896 46,396 24,819 49,724 71,706 (21,987) (` in lacs) (` in lacs) (` in lacs) (` in lacs) 1,04,620 borrowings* Non- current Non- current March 31, 2018 March 31, 2018 March 31, 2018 March
- 1 38 20 764 As at As at As at (129) 2,020 2,020 5,426 7,029 2,129 8,565 4,661 5,799 (2,020) 72,646 21,431 74,666 49,097 23,549 14,364 Current Current CEAT Limited CEAT borrowings borrowings March 31, 2019 March March 31, 2019 March 31, 2019 March edit risk of Trade receivables. edit risk of Trade elating to related party receivables, refer note 42. refer party receivables, elating to related ed into an arrangement to sell it receivable to third parties on without recourse to the Company. The Company to the Company. parties on without recourse to third ed into an arrangement to sell it receivable e secured to the extent of security deposit obtained from the dealers to the extent of security deposit obtained from e secured eceivables are due from directors or other officers of the company either severally or jointly with any other person nor any trade or of the company either or other officers directors due from eceivables are On curr On r 4,894 lacs from the books. The Company has transferred substantially all the risks and the books. The Company has transferred of ` 4,894 lacs from trade receivables has derecognised of the asset. rewards other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member other than a director is a partner, respectively in which any director firms or private companies due from are other receivable those disclosed in note 42. The Company has enter For terms and conditions r T Refer note 47(c) for informatiom about cr These debts ar No trade r
Grant Total Allowance for doubtful debts Allowance for doubtful As at March 31, 2019 As at March Total Balance as at end of the year Trade receivables written off during the year written off receivables Trade Exchange Impact Foreign Doubtful Unsecured, considered good considered Unsecured, the year Change in allowance for doubtful debts during Cash and cash equivalent as per statement of cash flow 31, 2018 As at March Cash flows Break-up for security details Break-up foot note a) good (refer considered Secured, debts is as follows: The movement in allowance for doubtful Balance as at beginning of the year Balances with Banks Others Cash on hand ent accounts emittance intransit Particulars Particulars As at April 1, 2017 Cash flows Particulars Particulars Notes: *including current maturities of non-current borrowings. maturities of non-current *including current Notes: to cash and cash equivalents. a) Refer note 47(d) for information about liquidity risk relating Changes in liabilities arising from financing activities Changes in liabilities arising from Note 12: Cash and cash equivalents and cash equivalents Refer note 2.20 for accounting policy on cash f) c) d) e) periodwhichisgenerally30to60days. bearingwithinthecredit non-interest are rade receivables a) b) Notes to Financial Statements for the year ended March 31, 2019
Note 13: Bank balances other than cash and cash equivalents (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Balances held for unclaimed public fixed deposit and interest thereon (refer foot note a) 105 112 Balances unclaimed dividend accounts (refer foot note b) 443 225 Total 548 337 Notes: a) These balances are available for use only towards settlement of matured deposits and interest on deposits. Also includes ` 0.20 lacs (March 31, 2018 ` 0.20 lacs) outstanding for a period exceeding seven years, in respect of which a Government agency has directed the Company to hold. b) These balances are available for use only towards settlement of corresponding unpaid dividend liabilities. c) Refer note 47(d) for information about liquidity risk relating to bank balances other than cash and cash equivalents.
Note 14: Loans Refer note 2.17 for accounting policy on Financial instruments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Current (at amortised cost) Unsecured, considered good Advance receivable in cash - 2 Loans to related parties (refer note 42) 5,800 4,900 Unsecured, considered doubtful Loans, advances and deposits 149 163 Less: Allowance for doubtful advances and deposits (149) (163) Total 5,800 4,902 Notes: a) Refer note 47(d) for information about liquidity risk relating to Loans.
Note 15: Other financial assets Refer note 2.17 for accounting policy on Financial instruments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Current Unsecured, considered good At amortised cost Advance receivable in cash 354 240 Other receivables (refer note b) 50 392 Interest receivable (refer note c) 2,595 1 Receivable from related parties (refer note 42) 420 560 Others 106 - Total 3,525 1,193 Notes: a) Refer note 47(d) for information about liquidity risk relating to Other financial assets. b) Includes fair value of plan assets for gratuity (net) of Nil (March 31, 2018: ` 366 lacs).(refer note 40 for details). c) Includes interest due on Income tax refunds ` 2,594 lacs (March 31, 2018: Nil)
Note 16: Other current assets (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Unsecured, considered good Advance receivable in kind or for value to be received 4,677 5,795 Balance with government authorities 4,732 4,095 Advance to employees 29 160 Prepaid expense 2,526 565 Unsecured, considered doubtful Advance receivable in kind or for value to be received 44 44 Less: Allowance for advance receivable in kind or for value to be received (44) (44) Total 11,964 10,615
134 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy ------135 4,045 4,045 4,045 4,045 4,045 4,045 1,000 1,000 1,000 3.47% 8.04% 11.09% 28.46% ` in lacs ` in lacs ` in lacs the class % holding in ------Numbers Numbers Numbers Numbers Unclassified Shares Shares Unclassified 14,02,310 32,53,841 44,84,624 As at March 31, 2018 As at March CEAT Limited CEAT 4,04,50,780 4,04,50,092 4,04,50,780 4,04,50,092 4,04,50,780 4,04,50,092 1,15,10,812 1,00,00,000 1,00,00,000 1,00,00,000 - - 390 390 390 5.96% 7.30% 11.09% 29.21% ` in lacs the class % holding in - - 10 per share. Each holder of equity shares is entitled to entitled is equity shares of holder Each share. per `10 Preference Shares Shares Preference Numbers Numbers 24,09,373 29,53,366 44,84,624 39,00,000 39,00,000 39,00,000 As at March 31, 2019 As at March 1,18,16,662
- - 4,610 4,610 4,610 ` in lacs - -
Equity shares Equity shares Numbers 4,61,00,000 4,61,00,000 4,61,00,000 ch 31, 2018- 688) equity shares offered on right basis and kept in abeyance. offered ch 31, 2018- 688) equity shares eholders holding more than 5% shares in the company than 5% shares eholders holding more Amansa Holdings Pvt Limited Jwalamukhi Investment Holdings Swallow Associates LLP Equity shares of ` 10 each fully paid Equity shares Instant Holdings Limited Name of the shareholders Details of shar T Includes 688 (Mar The Company has not issued any equity shares as bonus for consideration other than cash and has not bought back any bought not cash and has than other for consideration as bonus shares equity issued any has not Company The 31, 2019. March during the period of 5 years immediately preceeding shares As per the records of the Company as at March 31, 2019 no calls remain unpaid by the directors and officers of the company. and officers unpaid by the directors 31, 2019 no calls remain of the Company as at March As per the records The shareholders have all other rights as available to equity shareholders as per the provision of the Companies Act, applicable of per the provision as equity shareholders available to rights as all other have The shareholders as applicable. together with the Memorandum of Association and Articles of Association of the Company, in India read In the event of winding-up, the holders of equity shares shall be entitled to receive remaining assets of the Company after assets of the remaining shall be entitled to receive of equity shares In the event of winding-up, the holders shareholders. by held shares equity of number the to proportion in be will distribution The amounts. preferential all of distribution payable to any member, any sum due from him to the Company. any sum due from payable to any member, The Company has only one class of equity shares having face value of value face having shares equity of class one only has Company The one vote per equity share. Dividend is recommended by the Board of Directors and is subject to the approval of the members of the members and is subject to the approval of Directors Board by the Dividend is recommended one vote per equity share. the dividend have a right to deduct from of Directors interim dividend. The Board at the ensuing Annual General Meeting except
At March 31, 2019 At March Increase / (decrease) during the year / (decrease) Increase At March 31, 2018 At March Increase / (decrease) during the year / (decrease) Increase At April 1, 2017 At March 31, 2019 (refer foot note a) 31, 2019 (refer At March foot note a) 31, 2019 (refer At March Alloted during the year Alloted during the year At March 31, 2018 (refer foot note a) 31, 2018 (refer At March foot note a) 31, 2018 (refer At March At April 1, 2017 (refer foot note a) foot At April 1, 2017 (refer Alloted during the year foot note a) At April 1, 2017 (refer Alloted during the year Equity shares of ` 10 each subscribed and fully paid Equity shares Equity shares of ` 10 each issued Equity shares Authorised share capital Authorised share Subscribed and Paid-up share capital Subscribed and Paid-up share Issued share capital Issued share e) d) c) rightsattachedtoequityshares erms/ b) Notes: a) Note 17: Equity share capital Equity share Note 17: Notes to Financial Statements for the year ended March 31, 2019
Note 18: Other equity (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Securities premium (refer foot note a) 56,703 56,703 Capital reserve (refer foot note b) 1,177 1,177 Capital redemption reserve (refer foot note c) 390 390 Cash flow hedge reserve (refer foot note d) (1,993) 476 Debenture redemption reserve (DRR) (refer foot note e) - 5,001 General reserve (refer foot note f) 25,178 20,177 Retained earnings (refer foot note g) 1,89,604 1,66,713 Total other equity 2,71,059 2,50,637 a) Securities premium Amount received on issue of shares in excess of the par value has been classified as security share premium. (` in lacs) At April 1, 2017 56,703 At March 31, 2018 56,703 At March 31, 2019 56,703 b) Capital reserve Capital reserve includes profit on amalgamation of entities. (` in lacs) At April 1, 2017 1,177 At March 31, 2018 1,177 At March 31, 2019 1,177 c) Capital redemption reserve Capital redemption reserve represents amount transferred from profit and loss account on redemption of preference shares during FY 1998-99. (` in lacs) At April 1, 2017 390 At March 31, 2018 390 At March 31, 2019 390 d) Cash flow hedge eserver It represents mark-to-market valuation of effective hedges as required by Ind AS 109. (` in lacs) At April 1, 2017 (242) Gain / (Loss) arising during the year 718 At March 31, 2018 476 Gain / (Loss) arising during the year (2,469) At March 31, 2019 (1,993) e) Debenture redemption reserve (DRR) Debenture redemption reserve (DRR) is required to be created in accordance with section 71 of the Companies Act, 2013 read with Companies (Share capital and Debenture) Rules, 2014 at equivalent to 25% of the value of the debentures issued. (` in lacs) At April 1, 2017 3,334 Add: Transfer from retained earnings during the year 1,667 At March 31, 2018 5,001 Less: Transferred to general reserves during the year (refer foot note 1) (5,001) At March 31, 2019 -
136 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
137 553 956 682 As at As at (553) (519) (829) 5,205 5,608 4,652 4,652 5,001 (4,652) (1,667) (4,652) 20,177 20,177 25,178 27,872 28,891 (` in lacs) (` in lacs) (` in lacs) (` in lacs) 1,66,713 1,89,604 1,45,031 March 31, 2018 March 31, 2018 March
829 998 As at As at 5,481 5,852 4,652 4,854 CEAT Limited CEAT March 31, 2019 March 31, 2019 March 20,000 lacs on July 31, 2018 and accordingly, the balance ` 20,000 lacs on July 31, 2018 and accordingly, ` 11.50 per share) 12 per share (March 31, 2018 (March ` 12 per share nings ent year, the Company has prepaid its non-convertible debentures amounting to its non-convertible debentures the Company has prepaid ent year, eserve is used from time to time to transfer profits from retained earningsgeneral purposes. As the for appropriations from profits time to time to transfer from eserve is used
of debenture redemption reserve has been transferred to general reserve. to general has been transferred reserve redemption of debenture During the curr
At March 31, 2018 At March foot note 1) during the year (refer reserve redemption debenture from Add: Transfer 31, 2019 At March income Other comprehensive note 19) Payment of dividend (refer note 19) (DDT) (refer Payment of Dividend Distribution Tax reserve redemption to debenture Transfer 31, 2018 As at March for the year Profit income Other comprehensive note 19) Payment of dividend (refer note 19) (DDT) (refer Payment of Dividend Distribution Tax 31, 2019 As at March At April 1, 2017 As at April 1, 2017 for the year Profit reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items of other comprehensive of equity to another and is not an item one component by a transfer from is created reserve and loss. of profit subsequently to statement will not be reclassified reserve included in the general 1) Retained ear General Reserve r The general Notes:
Total Dividend Distribution Tax (DDT) on final dividend Dividend Distribution Tax Total Dividend distribution tax (DDT) on proposed dividend Dividend distribution tax (DDT) on proposed Cash dividend on equity shares declared and paid declared Cash dividend on equity shares 31, 2017: ` 11.50 per share) (March ` 11.50 per share 31, 2018: Final dividend for the year ended on March dividend on equity shares Proposed 31, 2019: ended on March dividend for the year Final cash Particulars Particulars Note 19: Distribution made and proposed
g) f) During the year ended March 31, 2019, the Company has paid dividend to its shareholders. This has resulted in payment of This has resulted 31, 2019, the Company has paid dividend to its shareholders. During the year ended March to payment additional represents The Company believes that DDT authorities. taxation to the (DDT) Distribution Tax Dividend Hence, DDT paid is charged to equity. taxation authority on behalf of the shareholders. Proposed dividend on equity shares which are subject to approval at the annual general meeting are not recognised as a liability not recognised at the annual general meeting are subject to approval which are dividend on equity shares Proposed in the year in which it is proposed. thereon) (including Dividend Distribution Tax Notes to Financial Statements for the year ended March 31, 2019
Note 20: Borrowings (At amortised cost) Refer note 2.17 for accounting policy on Financial instruments (` in lacs) Non-current Current Particulars As at As at As at As at March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 Interest bearing loans and borrowings I. Secured i) Debentures a) Non-convertible debentures (refer foot note 1) - 19,956 - - ii) Term loans a) Indian rupee loan from banks* Citibank N.A. (refer foot note 2) 21,500 - - - Citicorp Finance (India) Limited (refer foot note 3) 8,500 - - - HDFC Bank (refer foot note 4) 17,299 - - - Kotak Mahindra Bank (refer foot note 5) 29,971 - - - Bank of Baroda (refer foot note 6) 19,826 - - - b) Buyer's Credit (refer foot note 7 and 8) 619 4,512 4,143 22,225 II. Unsecured i) Public deposits (refer foot note 9) 0 0 - - ii) Deferred sales tax incentive (refer foot note 10) 2,557 2,762 205 269 1,00,272 27,230 4,348 22,494 Less: amount classified under other financial liabilities (refer note 26) - - (4,348) (22,494) Total 1,00,272 27,230 - -
Notes to Borrowings: 1 Non-Convertible Debentures (NCD) Nil (March 31, 2018: 4 Term Loan from HDFC Bank ` 17,300 lacs as on March 31, ` 20,000 lacs) allotted on July 31, 2015 on private 2019 (March 31, 2018: Nil) is secured by first pari passu placement basis was pre-paid in full including interest charge over the fixed and movable assets. It is payable thereon during the year. It was secured by a first pari passu in 12 equal quarterly installments payable after 2 years charge over the movable assets (except current assets) of Moratorium. and immovable assets of the Company situated at the Nasik Plant. It carried interest of 8.70% p.a at the time 5 Term Loan from Kotak Mahindra Bank Limited ` 30,000 of repayment. lacs as on March 31, 2019 (March 31, 2018: Nil) is secured by first pari passu charge over the Company's movable 2 Term Loan from Citibank N.A. ` 21,500 lacs as on March 31, and immovable assets situated at Halol, Nagpur & Chennai 2019 (March 31, 2018: Nil) is secured by pari passu charge Plant. It is payable as under: over the fixed and movable assets. It is payable as under: Repayment Repayment Year Schedule of Payment Year Schedule of Payment Schedule (In %) Schedule (In %) 2021 - 22 2.50% 2021 - 22 20.00% To be repaid in 3 annual 2022 - 23 10.00% To be repaid in 28 2022 - 23 30.00% installments at the end of 3rd, 2023 - 24 11.50% structured quarterly 2023 - 24 50.00% 4th & 5th year 2024 - 25 16.00% instalments commencing (March 2022) after 3 years 2025 - 26 16.00% 3 Term Loan from Citicorp Finance India Limited ` 8,500 lacs of moratorium from first 2026 - 27 16.00% dradown date (December as on March 31, 2019 (March 31, 2018: Nil) is secured by 2027 - 28 16.00% 2018) pari passu charge over the fixed and movable assets. It is 2028 - 29 12.00% payable as under: Repayment Year Schedule of Payment 6 Term Loan from Bank of Baroda ` 20,000 lacs as on Schedule (In %) March 31, 2019 (March 31, 2018: Nil) is secured by first 2021 - 22 20.00% To be repaid in 3 annual pari passu charge over the fixed assets of the Company's 2022 - 23 30.00% installments at the end of 3rd, movables and immovables situated at Halol, Nagpur & 2023 - 24 50.00% 4th & 5th year Chennai Plant. It is payable as under:
138 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
e - 61 139 313 323 146 177 886 As at As at ement 5,014 1,858 2,843 3,380 2,433 owings (` in lacs) (` in lacs) March 31, 2018 March 31, 2018 March
68 537 461 146 315 849 As at As at 9,985 4,917 1,032 3,499 3,683 2,766 CEAT Limited CEAT March 31, 2019 March 31, 2019 March ed long-term borrowings (includes non- (includes borrowings long-term ed assets) and immovable assets of the Company situated at of the Company situated immovable assets assets) and the date of from within 3 years It is repayable Nagpur plant. carries interest credit buyer’s disbursement. The long-term p.a. to 12 42 bps LIBOR plus of 12 months the range in plus LIBOR months 6 and p.a. bps 60 plus LIBOR months LIBOR plus 78 bps p.a. 42 bps p.a. to 6 months Unsecur under the long-term borr Public deposits included Inter notes above, ar Outstanding balances shown in foot measur Refer note 45 of information about fair value current portion and current maturities) portion and current current on thereon in full including interest pre-paid were September 30, 2016. April 26, 2011 and annual installment commencing from ending on April 30, 2025. up to the extent of unamortised transaction cost. grossed relating risk liquidity about information for 47(d) note and to borrowings.
9 10 11 12 equal ten in repayable is tax sales deferred est-free ement and note 47(d) for information about liquidity risk relating to other financial liabilities. risk relating ement and note 47(d) for information about liquidity Schedule of Payment Schedule of in 28 structured be repaid To quarterly instalments after commencing (June 2022) from 3 years of moratorium first dradown date (March 2019) 5.00% 5.00% 15.00% 15.00% 20.00% 20.00% 20.00% s credit is secured by first pari passu by first pari passu is secured s credit s credit is secured by way of first pari is secured s credit Repayment Repayment om Banks, carries floating interest rate ranging from rate ranging from interest om Banks, carries floating Schedule (In %) Schedule (In Year Long-term buyer’ Long-term buyer’ *Indian rupee loan fr passu charge on all movable assets (excluding current current passu charge on all movable assets (excluding charge on all movable assets (excluding current assets) current charge on all movable assets (excluding at Halol of the Company situated and immovable assets current charge over the plant and second pari passu from years 3 within repayable is It Company. the of assets credit buyer’s long-term The disbursement. date of the plus 52 LIBOR 6 months of range in the interest carries p.a. bps p.a. to 6 months LIBOR plus 125 bps 7.79% p.a. to 9.25% p.a. The Company is in the process of creating of creating The Company is in the process 7.79% p.a. to 9.25% p.a. security against these loans. 2022 - 23 2023 - 24 2025 - 26 2026 - 27 2027 - 28 2028 - 29 2024 - 25 Refer note 45 of information about fair value measur
Total Provision for indirect tax and labour matters (refer foot note d) tax and labour matters (refer for indirect Provision Provision for compensated absences (refer foot note b) for compensated absences (refer Provision Provision for gratuity (refer note 40) for gratuity (refer Provision Current provisions Current foot note a) obligation (refer for sales related Provision Provision for decommissioning liability (refer foot note c) for decommissioning liability (refer Provision Total At amortised cost Deposits foot note b) for compensated absences (refer Provision Non current income other comprehensive At fair value through Derivative financial instrument provisions Non-current foot note a) obligation (refer for sales related Provision Particulars Particulars Note 22: Provisions Refer note 2.15 for accounting policy on Provisions Notes: a) Note 21: Other financial liabilities Note 21: Other financial liabilities Financial instruments Refer note 2.17 for accounting policy on 8 7
Notes to Financial Statements for the year ended March 31, 2019
Notes: a) Provision for sales related obligation A provision is recognized for expected sales related obligation on product sold during the last three years, based on past experience of the level of returns and cost of claim. It is expected that significant portion of these costs will be incurred in the next financial year and within three years from the reporting date. Assumptions used to calculate the provision for sales related obligation were based on current sales levels and current information available about returns based on the three years period for all products sold. The table below gives information about movement in provision for sales related obligation. Movement in provision for sales related obligation (` in lacs) As at April 1, 2017 3,386 Additions during the year 5,166 Utilised during the year (4,823) As at March 31, 2018 3,729 Additions during the year 6,261 Utilised during the year (5,642) As at March 31, 2019 4,348 b) Compensated absences The Company encashes leaves of employees as per the Company's leave encashment policy. A provision has been recognised for leave encashment liability based on the actuarial valuation of leave balance of employees as at year end. Movement in provision for compensated absences (` in lacs) As at April 1, 2017 2,864 Additions during the year 161 Utilised during the year (279) As at March 31, 2018 2,746 Additions during the year 1,020 Utilised during the year (463) As at March 31, 2019 3,303 c) Provision for decommissioning liability The Company records a provision for decommissioning costs of land taken on lease at Nasik manufacturing facility for the production of tyres. Movement in provision for decommissioning liability (` in lacs) As at April 1, 2017 55 Additions during the year 6 As at March 31, 2018 61 Additions during the year 7 As at March 31, 2019 68 d) Indirect tax and labour matters The Company is party to various lawsuits that are at administrative or judicial level or in their intial stages, involving tax and civil matters. The Company contests all claims in the court / tribunals / appellate authority levels and based on their assessment and that of their legal counsel, records a provision when the risk or loss is considered probable. The outflow is expected on cessations of the respective events. Movement in provision for indirect tax and labour matters (` in lacs) As at April 1, 2017 1,556 Additions during the year 784 Utilised during the year (482) As at March 31, 2018 1,858 Additions during the year (refer note 36) 3,106 Utilised during the year (47) As at March 31, 2019 4,917
140 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 29 141 (40) 125 187 185 (361) (380) (402) (741) As at 3,915 2,867 2,686 (1,168) 17,815 10,408 13,094 40,966 14,178 13,094 (` in lacs) (` in lacs) 2017-18 (` in lacs) (` in lacs) 2017-18 2017-18 March 31, 2018 March
- 31 279 285 183 184 (128) As at 1,323 1,602 5,733 4,377 3,077 9,009 20,771 (1,281) (1,505) 12,086 14,317 12,086 40,977 2018-19 2018-19 2018-19 CEAT Limited CEAT March 31, 2019 March Non current tax assets (net) Non current (net of provision) Advance payment of tax tax liabilities (net) Current advance tax) for income tax (Net of Provision tax liabilities (net) Deferred Particulars Deferred tax Deferred and loss of profit in the statement Income tax expense reported Particulars 31, 2018: 34.61%) Income tax rate of 34.94% (March (R&D) expense and Development Additional deduction on Research Income tax at special rates of exempt incomes Effect for tax of earlier years) Refund for earlier years (Net of provision Income Tax Others Non-deductible expenses for tax purposes on revaluation Depreciation Corporate Social Responsibility (CSR) expenses Other non-deductible expenses 31, 2018: 31.96%) income tax rate of 29.49% (March At the effective Particulars Expense Tax tax Current Particulars on actuarial losses for Gratuity Income tax effect continuing operations tax from before Accounting profit Income tax effect on movement in cash flow hedges Income tax effect OCI Income tax (expense)/income charged to Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for March 31, 2019 and domestic tax rate for March multiplied by India’s accounting profit Reconciliation of tax expense and the 2018 31, March Other Comprehensive Income (OCI) section Other Comprehensive in OCI during the year to items recognised tax related Deferred Statement of profit and loss Statement of profit Note 23: Income taxes and deferred taxes deferred Income taxes and Note 23: on Taxes 2.7 for accounting policy Refer note Sheet Statement of Balance Notes to Financial Statements for the year ended March 31, 2019
Deferred tax Deferred tax relates to the following (` in lacs) Balance Sheet Profit and Loss Particulars As at As at 2018-19 2017-18 March 31, 2019 March 31, 2018 Accelerated depreciation for tax purposes (34,919) (30,751) 4,168 3,932 MAT Credit entitlement 5,764 7,245 - (1,332) Voluntary Retirement Scheme(VRS) 1,637 1,604 (33) (652) Allowance for doubtful debts/advances 2,021 940 (1,081) 390 Others 4,726 3,147 23 348 Deferred tax expense/(income) (20,771) (17,815) 3,077 2,686 Net deferred tax assets/(liabilities)
Reflected in the balance sheet as follows (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Deferred tax assets 14,148 12,936 Deferred tax liabilities (34,919) (30,751) Deferred tax liabilities (net) (20,771) (17,815)
Reconciliation of deferred tax liabilities (net) (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Opening balance as at April 1 (17,815) (13,459) Tax expense during the period recognised in statement of profit and loss (3,077) (2,686) Tax (expense)/income during the period recognised in other comprehensive income 1,602 (741) MAT credit utilisation (1,481) (929) Closing balance as at March 31 (20,771) (17,815)
The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities related to income taxes levied by the same tax authority.
Note 24: Borrowings Refer note 2.17 for accounting policy on Financial instruments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Current Secured Cash credit facilities from banks (repayable on demand) (refer foot note 1) 1,379 7,132 Export packing credit from banks (refer foot note 1) - 1,955 Buyer’s credit from banks (refer foot note 1) - 5,277 Term loans from banks (refer foot note 1) 200 - Unsecured Commercial paper (refer foot note 2) 19,852 - Total 21,431 14,364 Notes: 1 Cash credit facilities and working capital demand loan from banks is part of working capital facilities availed from consortium of banks secured by way of first pari passu charge on the current assets of the Company, wherever situated and by way of second pari passu charge on the movable assets (except current assets) and immovable assets of the Company situated at Bhandup, Nasik and Halol Plants. All short-term borrowings availed in Indian rupees during the current year carry interest in the range of 7.80% p.a. to 12.30% p.a. and all short-term borrowing availed in foreign currency during the year carry interest in the range of LIBOR plus 70 bps to LIBOR plus 140 bps.(LIBOR is set corresponding to the period of the loan).
2 The Company had issued commercial papers (total available limit ` 35,000 lacs) at regular intervals for working capital purposes with interest ranging from 6.90% p.a. to 8.75% p.a. The outstanding as at March 31, 2019 is ` 19,852 lacs (March 31, 2018: Nil)
3 Refer note 47(d) for information about liquidity risk relating to borrowings.
142 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
- - - - 4 12 71 143 129 225 117 360 360 As at As at As at 3,585 2,422 30,376 57,001 22,494 81,789 84,571 (` in lacs) (` in lacs) (` in lacs) March 31, 2018 March 31, 2018 March 31, 2018 March
- - - - - 0 443 101 538 547 547 As at As at As at 3,136 4,348 1,941 32,150 58,099 17,383 CEAT Limited CEAT 1,00,905 1,03,393 March 31, 2019 March March 31, 2019 March 31, 2019 March
elating to trade payables. ement and note 47(d) for information about liquidity risk relating to other financial liabilities. ement and note 47(d) for information about liquidity risk relating est remaining due and payable even in the succeeding years, until such due and payable even in the succeeding est remaining emaining unpaid to any supplier as at the end of each accounting year emaining unpaid to any supplier as at the end est paid by the buyer in terms of section 16 of the MSMED Act 2006 along with the est paid by the buyer in terms of section 16 of est due and payable for the year e required under the Micro, Small and Medium Enterprises Development Act, 2006 (the MSMED Act) are given Small and Medium Enterprises Development Act, 2006 (the MSMED Act) are under the Micro, e required T risk r Refer note 47(d) for information about liquidity Disclosur as follows: date when the interest dues as above are actually paid to the small enterprises for the purpose of actually paid to dues as above are date when the interest section 23 of the Act. under disallowance as a deductible expenditure amounts of the payment made to the supplier beyond the appointed day during each accounting year amounts of the payment made to the supplier The amount of inter The amount of inter Amount of further inter The principal amount r Inter Refer foot note (a) below note 13: Bank balances other than cash and cash equivalents. Refer note 45 of information about fair value measur
Deposits from dealers and others Deposits from Others Total Unpaid dividends a) foot note (refer accrued thereon deposits and interest Unpaid matured Payable to capital vendors Dues to micro and small enterprises (refer foot note a) (refer and small enterprises Dues to micro Overdue Particulars Current income other comprehensive At fair value through Derivative financial instrument At amortised cost note 20) (refer maturities of long-term borrowings Current accrued but not due on borrowings Interest Particulars Not due Other trade payables Particulars Trade payables to related parties* to related payables Trade Total The information disclosed above is to the extent available with the Company. available with the Company. The information disclosed above is to the extent iii) iv) v) i) ii) unpaidtoanysupplierasattheendofaccountingyear remaining est duethereon Notes: a) b) Note 26: Other financial liabilities Financial instruments Refer note 2.17 for accounting policy on b) c) normallysettledon60to105days bearingand noninterest rade payablesare * For terms and conditions with related parties, refer note 42 parties, refer with related * For terms and conditions Notes: a) Note 25: Trade payables Trade Note 25: instruments policy on Financial 2.17 for accounting Refer note Notes to Financial Statements for the year ended March 31, 2019
Note 27: Other current liabilities (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Statutory dues 7,369 7,935 Advance received from customers* 1,241 1,737 Total 8,610 9,672 * Balance as at March 31, 2019 represents contract liabilities
Note 28: Revenue from operations Refer note 2.4 for accounting policy on revenue recognition and 2.6 for government grant and export incentives Set out below is the disaggregation of the Company's revenue from contracts with customers: (` in lacs) Particulars 2018-19 2017-18* Revenue recognised at the point of time Automotive tyres (refer foot note a) 6,10,967 5,58,069 Tubes and others (refer foot note a) 64,826 71,525 Other revenues 863 4,710 Sale of scrap 2,909 2,195 Revenue recognised over the period of time Royalty income (refer note 42) 441 419 Total revenue from contracts with customers 6,80,006 6,36,918 Other Operating Income Government grants (refer foot note b) 3,124 1,273 Revenue from operations 6,83,130 6,38,191
Notes: a) Sale of goods includes excise duty collected from customers of Nil lacs (March 31, 2018: ` 16,891 lacs) (refer note 2.4.1). b) The Company has recognised a government grant as income on account of Export Incentive under Merchandise Exports from India Scheme (MEIS) from Directorate General of Foreign Trade, Government of India. c) Previous year figure of sales related obligations have been reclassified from 'Revenue from operations' to 'Other expenses' to conform to current year's classification.
(` in lacs) Particulars 2018-19 India 5,96,029 Outside India 83,977 Total revenue from contracts with customers 6,80,006
Contract assets and liabilities The Company has recognised the following revenue-related contract assets and liabilities: (` in lacs) As at Particulars March 31, 2019 Trade receivables (refer note 11) 72,646 Contract liabilities (refer note 27) 1,241
Contract liabilities includes payments received in advance of performance under the contract. Revenue recognised in the period from: (` in lacs) Amounts included in contract liability at the beginning of the period 1,737 Performance obligations satisfied in previous periods -
The Company receives payment from customers based on a billing schedule, as established in the contracts with customers. Trade receivable are recognised when the right to consideration becomes unconditional. Contract liability relates to payments received in advance of performance under the contract. Contract liabilities are recognised as revenue as (or when) the Company perform under the contract.
144 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 24 145 1,303 1,927 1,362 1,065 5,681 42,720 51,751 49,944 42,610 32,949 (35,876) (` in lacs) (` in lacs) (` in lacs) 2017-18 2017-18 2017-18 (19,559) (` in lacs) 2018-19 3,58,189 4,00,909 3,65,033 1,87,779 3,65,033 6,99,565 6,80,006 16 83 732 3,189 1,510 5,530 35,876 66,000 63,716 52,504 41,852 2018-19 (37,287) 2018-19 2018-19 4,28,775 4,64,651 4,27,364 CEAT Limited CEAT 2,03,292 4,27,364 e the time difference between receiving consideration and transferring consideration between receiving e the time difference efer note 42) est income Not to account for significant financing components wher Not to account for significant control of goods or services to its customer is one year or less; of control Subsidiaries (r Bank deposits Other inter
Rubber Details of raw materials consumed Fabrics Carbon black Chemicals Others Total Particulars income on Interest Dividend income from Other non-operating income Net gain on disposal of investments* Total
Particulars Particulars price Revenue as per contracted consideration components variable Reductions towards customers contracts with Revenue from Raw Material Opening stock Add: Purchases Less: Closing stock Total Reconciling the amount of revenue recognised in the statement of profit and loss with the contracted price: loss with the contracted and profit the statement of in recognised the amount of revenue Reconciling *Includes fair value gain/ (loss) as at March 31, 2019 amounting to Nil (March 31, 2018 ` 6 lacs) 31, 2019 amounting to Nil (March *Includes fair value gain/ (loss) as at March Note 30: Cost of material consumed Refer note 2.4 for accounting policy on Revenue recognition Refer note 2.4 for accounting policy on Revenue Note 29: Other Income - earnings. at the date of initial application as an adjustment to the opening balance of retained of initially applying Ind AS 115 is recognised *The cumulative effect note 2.2.2 for changes in accounting policy). under Ind AS 18 (refer and continues to be reported the comparative information was not restated Therefore, Practical expedients exemptions: advantage of the following practical The Company has taken The reduction towards variable consideration comprises of discounts, indexations etc. comprises of discounts, indexations variable consideration towards The reduction Notes to Financial Statements for the year ended March 31, 2019
(` in lacs) As at As at March 31, Details of closing inventories March 31, 2019 2018 Rubber 23,728 23,599 Fabrics 4,485 3,426 Carbon black 2,946 1,502 Chemicals 3,345 4,023 Others 2,783 3,326 Total (refer note 9(a)) 37,287 35,876
Note 31: Changes in inventories of finished goods, work-in-progress and stock-in-trade (` in lacs) Particulars 2018-19 2017-18 Opening Stock Work-in-progress 2,933 3,149 Finished goods 32,215 40,779 Stock in trade 1,280 2,405 36,428 46,333 Closing Stock Work-in-progress 3,273 2,933 Finished goods 51,751 32,215 Stock in trade 829 1,280 55,853 36,428 (19,425) 9,905 Differential excise duty on opening and closing stock of finished goods - (573) Total change in inventories (19,425) 9,332
Note 32: Employee benefit expense Refer note 2.16 for accounting policy on Retirement and other employee benefits (` in lacs) Particulars 2018-19 2017-18 Salaries, wages and bonus 41,009 33,739 Contribution to provident and other funds 1,899 1,860 Gratuity expenses (refer note 40) 631 610 Welfare expenses 5,656 5,102 Total 49,195 41,311
Note 33: Finance costs Refer note 2.11 for accounting policy on borrowing costs (` in lacs) Particulars 2018-19 2017-18 Interest on debts and borrowings 5,613 7,883 Other finance charges 408 375 Total interest expense 6,021 8,258 Unwinding of decommissioning liability 7 6 Unwinding of discount on provision of sales related obligation 424 381 Total 6,452 8,645
Note 34: Depreciation and amortization expenses Refer note 2.9 for accounting policy on Property, plant and equipment and 2.10 on Intangible assets (` in lacs) Particulars 2018-19 2017-18 Depreciation on property, plant and equipment (refer note 3) 16,171 14,959 Amortization of intangible assets (refer note 4) 1,259 1,209 Total 17,430 16,168
146 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 8 3 3 86 54 21 28 50 68 49 86 120 584 137 273 410 421 541 371 929 146 489 268 193 899 147 4,696 2,747 1,151 1,071 5,166 1,547 5,291 3,231 (1,497) 35,468 18,815 27,724 10,801 14,672 (` in lacs) (` in lacs) 2017-18 2017-18 1,36,898 4 6 3 10 89 21 54 74 50 53 89 76 128 177 418 693 438 320 480 167 338 197 653 135 598 225 (129) 5,602 1,271 6,261 3,160 1,051 5,603 3,489 40,315 21,286 32,415 13,623 16,892 2018-19 2018-19 1,56,151 CEAT Limited CEAT Machinery Buildings Others Pr Conversion charges Power and fuel for vehicles Lease rent Rates and taxes Insurance Repairs and maintenance: Particulars consumed and spares Stores and spares for obsolescence of stores Provision and delivery charges Freight Rent for premises Limited review In other capacity Other services (including certification fees) Reimbursement of expenses payment to auditor Total 1) Payments to the auditor* Particulars As auditor Audit fee
Training and conference expenses and conference Training obligations** Sales related Professional and consultancy charges Professional note 42) (refer Commission to directors foot note 2) (refer Corporate Social Responsibility (CSR) expenses Bank charges Miscellaneous expenses Total Loss on disposal of property, plant and equipment (net) plant Loss on disposal of property, Legal charges exchange fluctuations (net) Foreign Allowance for bad debts written back Directors' fees (refer note 42) fees (refer Directors' Communication expenses Bad debts and advances written off Travelling and conveyance Travelling Printing and stationery foot note 1) Payment to auditors (refer Cost audit fees expenses Advertisement and sales promotion Commission on sales *Exclusive of service tax/GST ** year'sclassification. from operations'to'Otherexpenses'conformcurrent from 'Revenue reclassified related obligationshavebeen ofsales evious yearfigure Notes: Note 35: Other expenses Note 35: Allowance for doubtful debts and advances Notes to Financial Statements for the year ended March 31, 2019
2) Details of Corporate Social Responsibility (CSR) expenditure (` in lacs) Particulars 2018-19 2017-18 a) Gross amount required to be spent during the year 1,051 1,071 (` in lacs) In cash Yet to be paid Total Particulars in cash b) Amount spent during the year ended on March 31, 2019 i) Construction/acquisition of any asset - - - ii) On purposes other than (i) above 1,051 - 1,051 Total 1,051 - 1,051
(` in lacs) In cash Yet to be paid Total Particulars in cash c) Amount spent during the year ended on March 31, 2018 i) Construction/acquisition of any asset - - - ii) On purposes other than (i) above 1,071 - 1,071 Total 1,071 - 1,071 Notes: a) The company does not carry any provisions for Corporate social responsibility expenses for current year and previous year.
Note 36: Exceptional items (` in lacs) Particulars 2018-19 2017-18 Voluntary retirement scheme (VRS) (refer foot note a) 1,195 2,640 Workmen's seperation expense (refer foot note b) 229 - Provision for indirect tax matters (refer foot note c) 3,000 - Total 4,424 2,640 Notes: a. The Company had introduced VRS for employees across the Company. During the year, 56 employees (March 31, 2018, 178 employees) opted for the VRS. b. The Company has paid compensation in respect of workmen's seperation. c. Provision for differential amount of Goods and Service Tax is attributable to the composite supply of Tyres and Tubes for the period from November 15, 2017 to January 11, 2019, aggregating to ` 3,000 lacs and in respect of which the Company is evaluating further legal options.
Note 37: Research and development costs (` in lacs) Particulars 2018-19 2017-18 Capital expenditure 2,917 2,964 Revenue expenditure 6,159 6,069 Total 9,076 9,033
The above expenditure of research and development has been determined on the basis of information available with the Company and as certified by the management.
Note 38: Earnings per share Refer note 2.23 for accounting policy on Earnings per share
Basic Earnings per share (EPS) amounts are calculated by dividing profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
148 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 149 68.90 68.90 ` 45 – 27,872 (` in lacs) 2017-18 e given in 4,04,50,092
71.42 71.42 28,891 2018-19 CEAT Limited CEAT 4,04,50,092 s obligation on account of gratuity, of gratuity, s obligation on account range of cost per square meter – meter square cost per range of Company has recognised a provision for a provision recognised Company has Estimated Discount rate – 11.50% ` 50 68 lacs (March 31, 2018: ` 61 lacs). The Company ` 68 lacs (March
• • The mortality rate is based on publicly available The mortality rate is based on publicly ar Further details about gratuity obligations Pr The Defined benefit plans (gratuity benefits) Defined benefit plans The Company’ is the discount The parameter most subject to change rate. In determining the appropriate discount rate, the rate. In determining the appropriate rates of government management considers the interest of the consistent with the currencies bonds in currencies post-employment benefit obligation. tend to change mortality tables. Those mortality tables to demographic changes. only at interval in response salary and gratuity is based on expected in future Increase rates. inflation future note 40. decommissioning obligations associated with a land taken on lease at Nasik manufacturing facility for the production In determining the fair value of the provision, of tyres. to discount made in relation assumptions and estimates are the rates, the expected cost to dismantle and remove the site and the expected timing of those costs. plant from 31, 2019 as at March The carrying amount of the provision was in year 2066 estimates that the costs would be realised at the expiration of the lease and calculates the provision using the Discounted Cash Flow (DCF) method based on the following assumptions: compensated absences and present value of gratuity and present compensated absences valuations. on actuarial based determined are obligation assumptions An actuarial valuation involves making various actual developments in the future. from that may differ discount rate, These include the determination of the and mortality rates. Due to the increases salary future and its long-term complexities involved in the valuation highly sensitive to changes in liabilities are these nature, at each reviewed these assumptions. All assumptions are date. reporting
c) liability ovision fordecommissioning b) espect to the interpretation of espect to the interpretation
Uncertainties exist with r Taxes complex tax regulations and the amount and timing of complex tax regulations taxable income. Given the wide range of business future and complexity and the long-term nature relationships arising differences of existing contractual agreements, and the assumptions made, or between the actual results changes to such assumptions, could necessitate future adjustments to tax income and expense already future based on establishes provisions, The Company recorded. estimates, for possible consequences of audits reasonable is by the tax authorities. The amount of such provisions based on various factors, such as experience of previous of tax regulations interpretations tax audits and differing authority. tax responsible and the entity taxable by the may arise on a wide interpretation of Such differences variety of issues depending on the conditions prevailing plans approved on Based domicile. Company’s the in and budgets, the Company has estimated that the future credit to absorb MAT taxable income will be sufficient entitlement, which management believes is probable. as credit MAT the Company has recognized Accordingly, disclosed in note 23 an asset. Further details on taxes are
Profit after tax for calculation of basic and diluted EPS after tax for calculation of Profit 10) in calculating basic EPS `10) in calculating basic (face value per share shares average number of equity Weighted and diluted EPS (of face value of ` 10 each) Basic earnings per share (of face value of ` 10 each) Diluted earnings per share Particulars The following reflects the income and share data used in the basic and diluted EPS computations: in the basic and data used the income and share reflects The following
when they occur. a) Estimates and assumptions and other key The key assumptions concerning the future have date, that estimation uncertainty at the reporting of sources carrying the to adjustment material a causing of risk significant a are year, financial next the within liabilities and assets of amounts assumptions and The Company has based its described below. the financial statements estimates on parameters available when and assumptions about Existing circumstances prepared. were market to due change may however, developments, future beyond the control arising that are changes or circumstances in the assumptions reflected Such changes are of the Company. The preparation of the financial statements requires management requires statements of the financial The preparation the that affect to make judgements, estimates and assumptions expenses, assets and liabilities, amounts of revenues, reported of and the disclosure and the accompanying disclosures, and assumptions about these Uncertainty liabilities. contingent adjustment an require that in outcomes result could estimates periods. in future to the carrying amount of assets or liabilities recognised and estimates are between actual results Difference known / materialised. are in the periods in which the results Note 39: Significant accounting judgements, accounting judgements, Note 39: Significant estimates and assumptions Notes to Financial Statements for the year ended March 31, 2019 d) Provision for sales related obligation b) Defined Benefit plan - Gratuity The estimated liability for sales related obligation is recorded The Company has a defined benefit gratuity plan which when products are sold. These estimates are established is funded with an Insurance Company in the form of using historical information on the nature, frequency and qualifying Insurance policy. The Company's defined benefit average cost of obligations and management estimates gratuity plan is a salary plan for employees which requires regarding possible future incidence based on corrective contributions to be made to a separate administrative fund. actions on product failure. The timing of outflows will vary as and when the obligation will arise - being typically up The gratuity plan is governed by the Payment of Gratuity to three years. The rate used for discounting provision for Act, 1972. Under the act, every employee who has sales related obligation is 11.50%. completed five years of service gets a gratuity on separation @ 15 days of last drawn salary for each completed year of e) Fair value measurement of financial instruments service. The scheme is funded with an insurance Company When the fair values of financial assets and financial in the form of qualifying insurance policy. liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value The fund has the form of a trust and it is governed by is measured using valuation techniques including the the Board of Trustees, which consists of employer and Discounted Cash Flow (DCF) model. The inputs to these employee representatives. The Board of Trustees is models are taken from observable markets where possible, responsible for the administration of the plan assets and for but where this is not feasible, a degree of judgement is the definition of the investment strategy. required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk Each year, the Board of Trustees reviews the level and volatility. Changes in assumptions about these factors of funding. Such a review includes the asset-liability could affect the reported fair value of financial instruments. matching strategy and investment risk management policy. (refer note 45 and 46 for further disclosures) This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides Note 40: Post-retirements benefit plan its contribution based on the results of this annual review. Refer note 2.16 for accounting policy on Retirement and other The Board of trustees have appointed LIC of India, Birla employee benefits Sun Life Insurance, India First Life Insurance & HDFC Life a) Defined Contribution plan Insurance to manage its funds. The Board of Trustees aim The Company has recognised and included in Note No.32 to keep annual contributions relatively stable at a level “Contribution to Provident and other funds” expenses such that no plan deficits (based on valuation performed) towards the defined contribution plan as under: will arise.
(` in lacs) In case of death, while in service, the gratuity is payable 2018-19 2017-18 irrespective of vesting. The Company makes annual Contribution to Provident contribution to the Company gratuity scheme administered 1,686 1,648 fund (Government) by LIC through its gratuity funds.
i) Change in present value of the defined benefit obligation are as follows (` in lacs) Sr. Particulars 2018-19 2017-18 No. 1 Opening present value of defined benefit obligation 9,301 9,543 2 Current service cost 631 610 3 Interest cost 698 648 4 Benefits paid (1,058) (600) 5 Remeasurement (gain) / loss in other comprehensive income - Actuarial changes arising from changes in financial assumption - (526) - Experience adjustments 709 (424) 6 Adjustment in the Opening Liability - 50 7 Closing present value of obligation 10,281 9,301
150 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 93 68 (93) 151 93 366 673 678 580 610 (526) (424) 580 678 (600) (365) 9,667 9,301 100% As at As at (1,043) 9,667 1,068 8,526 (1,043) (` in lacs) 2017-18 (` in lacs) (` in lacs) (` in lacs) 2017-18 2017-18 (` in lacs) (` in lacs) 2017-18 2017-18 March 31, 2018 March March 31, 2018 March - 5 89 (89) (28) (89) 709 798 635 603 724 631 724 798 603 9,249 As at As at 100% 9,249 1,401 9,667 (1,032) 10,281 (1,058) 2018-19 2018-19 2018-19 2018-19 2018-19 CEAT Limited CEAT March 31, 2019 March March 31, 2019 March centage of the Fair Value of Plan Assets are as follows of Plan Assets are centage of the Fair Value e as follows ecognized in Other Comprehensive Income (OCI) ecognized in Other Comprehensive ecognised during the period ecognised during the ecognized in the Income Statement eturn ended on plan assets for the year Fair value of plan assets as at March 31 as at March Fair value of plan assets Return on plan assets, excluding amount recognised in net interest expense interest in net Return assets, excluding amount recognised on plan Benefits paid Actual return on plan assets Actual return Total Expenses recognised during the period recognised Expenses Total Contributions made Net benefit expense in the Balance Sheet Net Assets / (Liability) recognized Actuarial (loss)/gain on plan assets Expected return on plan assets on Expected return Income In Other Comprehensive Cost on benefit obligation Interest Closing Fair value of plan Assets Particulars changes in financial assumptions arising from Remeasurement changes in experience variance arising from Remeasurement expense in net interest Return on plan assets, excluding amount recognized income in other comprehensive recognized Components of defined benefit costs Expected return on plan assets Expected return Particulars value of the defined benefit obligation Closing Present Particulars Particulars as at April 1 Fair value of plan assets Particulars In Income Statement Particulars note 32) Service Cost (refer Current The major categories of Plan Assets as a per Actual r Net Assets / (Liability) as at year end Expenses r Expenses r Expenses r Changes in Fair value of Plan Assets ar in Fair value of Plan Changes
6 5 4 3. 3 3 3 3. 2. 2 2 2 2. Sr. Sr. No. 1 2 3 4 Investment with Insurer Investment with Insurer Particulars 1. Sr. Sr. No. 1. Sr. No. Sr. Sr. No. 1 Sr. No. 1 Sr. No. 1 viii) vii) vi) v) iv) iii) ii) Notes to Financial Statements for the year ended March 31, 2019 ix) The principal assumptions used in determining Salary Escalation Risk gratuity and leave encashment for the Company’s The present value of the defined benefit plan is calculated plan are shown below with the assumption of salary increase rate of plan Description of Risk Exposures participants in future. Deviation in the rate of increase of Valuations are performed on certain basic set of salary in future for plan participants from the rate of increase predetermined assumptions and other regulatory frame in salary used to determine the present value of obligation work which may vary over time. Thus, the Company is will have a bearing on the plan's liability. exposed to various risks in providing the above gratuity benefit which are as follows: Demographic Risk The Company has used certain mortality and attrition Interest Rate risk assumptions in valuation of the liability. The Company is The plan exposes the Company to the risk of fall in interest exposed to the risk of actual experience turning out to be rates. A fall in interest rates will result in an increase in the worse compared to the assumption. ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in Regulatory Risk financial statements). Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time Liquidity Risk to time). There is a risk of change in regulations requiring This is the risk that the Company is not able to meet the higher gratuity payouts (e.g. Increase in the maximum limit short-term gratuity payouts. This may arise due to non- on gratuity in the previous year to ` 20 lacs). availability of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time. Asset Liability Mismatching or Market Risk The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.
Investment Risk The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Particulars 2018-19 2017-18 Discount Rates (per annum) 7.50% 7.50% Salary growth rate (per annum) 7.00% 7.00% Mortality rate (% of Indian Assured Lives Mortality (2006-08) Modified Ultimate) 100% 100% 5% of mortality 5% of mortality Disability Rate rate rate Withdrawal rates, based on service year: (per annum) - Below 5 years 22.70% 22.70% - Equal and above 5 years 5.67% 5.67%
The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority and other relevant factors, such as supply and demand in the employment market.
The sensitivity analysis below have been determined based on reasonably possible change of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below:
(` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Defined Benefit Obligation (Base) 10,281 9,301
152 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 62 153 104 8.2% 0.2% 0.0% 8,628 9,319 9,301 1,128 3,657 4,558 9,925 As at As at (7.2%) 10,064 19,268 (` in lacs) (` in lacs) (` in lacs) Increase March 31, 2018 March March 31, 2018 March - 75 2017-18 151 8.3% 0.0% 8,620 9,267 9,300 4,210 4,839 9,241 1,676 As at As at (7.3%) (0.4%) 10,069 19,966 CEAT Limited CEAT Decrease March 31, 2019 March March 31, 2019 March 7.4% 0.1% 0.0% 9,603 (6.6%) 11,043 10,286 10,280 Increase 2018-19 7.5% 0.0% 9,595 (6.7%) (0.2%) 11,048 10,261 10,279 Decrease
Leases
Discount Rate (- / + 1%) (% change compared to base due to sensitivity) to base (% change compared Rate (- / + 1%) Salary Growth due to sensitivity) to base (% change compared of attrition rates) Attrition Rate (- / + 50% due to sensitivity) to base (% change compared of mortality rates) Mortality Rate (- / + 10% due to sensitivity) to base (% change compared Within one year Between 2 and 5 years Between 6 and 10 years Beyond 10 years payments expected Total Particulars than five years After one year but not more than five years More Particulars Within period) reporting the next 12 months (next annual Particulars A quantitative sensitivity analysis for significant assumption as at March 31, 2019 is as shown below: 31, 2019 as at March for significant assumption sensitivity analysis A quantitative Future minimum rentals payable under non-cancellable operating leases as at March 31, 2019 are, as follows: 31, 2019 are, payable under non-cancellable operating leases as at March minimum rentals Future 137 Lacs) has been charged to Statement of Profit and Loss. 31, 2018 ` 137 Lacs) has been charged to Statement of Profit on the said lease of ` 128 Lacs (March Lease rental Operating lease commitments — Company as lessee in a non-cancellable operating lease. with the leasing Company for vehicles, resulting a lease agreement The Company has entered one year to five years and are placed upon the Company by entering these leases. The lease term range from is no restriction There at the option of the Company. renewable Refer note 2.12 for accounting policy on Leases Note 41: Commitments and contingencies a. The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate cash accumulation plan in which the interest is basically a year-on-year which insurance policy, The Company has purchased part of the policy rules, makes as The insurance Company, on yearly basis and is guaranteed for a period of one year. is declared thus, of funds under the policy). The policy, payment of all gratuity outflows happening during the year (subject to sufficiency to the duration of cash accumulation plan, the duration of assets is shorter compared being a mitigates the liquidity risk. However, rates, which should fall in interest the significant rate (in particular, liabilities. Thus, the Company is exposed to movement in interest in the asset). increase in liability without corresponding in an increase result The following payments are expected contributions to the defined benefit plan in future years: expected contributions to the defined benefit plan in future The following payments are The weighted average duration (based on discounted cash flows) of defined benefit obligation is 7 years. The weighted average duration (based on The Company’s best estimate of contribution during the next year is ` 1,655 lacs. The Company’s The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance for payment of gratuity to the employees. Every year, an insurance policy to provide The Company has purchased Any deficit in the assets the Company. by based on the latest employee data provided Company carries out a funding valuation of such valuation is funded by the Company. arising as a result The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation determined based on a method that extrapolates the impact on defined benefit The sensitivity analysis above have been period. at the end of the reporting changes in key assumptions occurring of reasonable as a result Notes to Financial Statements for the year ended March 31, 2019 b. Contingent Liabilities Refer note 2.25 for accounting policy on Contingent liabilities and assets (to the extent not provided for) (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 1. Direct and indirect taxation matters* Income tax 911 4,317 Wealth tax - 7 Excise duty / Service tax 7,083 6,633 Sales tax 5,345 5,193 Bills discounted with banks 10,586 8,052
2. Claims against the Company not acknowledged as debts* In respect of labour matters 586 750 Rental disputes - 180 Customer disputes 446 446 Vendor disputes 294 294 3. Other claims* 3,199 3,204 4. Corporate Guarantee upto ` 22,800 lacs to CEAT Specialty Tyres Limited as a collateral security for 22,800 22,451 raising the term loans *in respect of above matters, future cash outflows are determinable only on receipt of judgements pending at various forums / authorities. c. Commitments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Estimated amount of contracts remaining to be executed on Capital account and not provided for (net of 1,22,572 94,137 advance payments) d. Others of TT / TTF (Tyre and Tube / Tyre, Tube and Flap) is not 1. The Company has availed the Sales Tax Deferral pre-packaged commodity in terms of provisions of Legal Loan and Octroi refund from the Directorate of Metrology Act, 2009. The Company has a strong case Industries for Nasik Plant. Hence, the Company has on the ground that, the said issue has been clarified by to take prior permission of the appropriate authority the Controller of the Legal Metrology Department vide its for removal/transfer of any asset (falling under the letter dated May 1, 1991 that “Tyre with tube & flaps tied above Schemes) from Nasik Plant. In case of violation with three thin polythene strips may not be treated as a of terms & conditions, the Company is required to pre-packed commodity within the meaning of rule 2(l) refund the entire loan/benefit along with the interest @ of the Standards of Weights and Measures (Packaged 22.50% on account of Sales Tax deferral Loan and @ Commodities), Rules, 1977”. The above clarification has 15% on account of Octroi refund. been re-affirmed vide letter dated November 16, 1992 by the Legal Metrology authorities. 2. There are numerous interpretative issues relating to the Supreme Court (SC) judgement on Provident Fund 2. The Competition Commission of India (CCI) had, while (PF) dated February 28, 2019. The Company is in the considering the representation of the All India Tyres Dealers process of receiving further clarity on the subject. Federation (AITDF) made a prima facie finding that the major players of tyre industry (including the Company) had e. Material demands and disputes considered as some understanding amongst themselves, especially in “Remote” by the Company the replacement market, as they did not pass the benefit 1. The Company has been served with a Show Cause cum of corresponding reduction in prices of major raw material Demand Notice from the DGCEI (Directorate General of inputs for the period subsequent to the year 2011-12. Central Excise Intelligence) Mumbai, on the ground that, CCI had, vide its order passed on June 24, 2014 under the activity of making tyre set, i.e. inserting Tubes and Section 26(1) of the Act, directed the Office of the Director Flaps inside the Tyres and tied up through Polypropylene General (DG) to investigate the said alleged violation of Straps, amounts to manufacture / pre-packaged the Act. commodity under Section 2(f)(iii) of Central Excise Act, read with Section 2(l) of the Legal Metrology Act, 2009. DG submitted its investigation report to CCI in Accordingly, the authorities worked out the differential duty December 2015, based on which CCI directed the said amounting to ` 27,421 Lacs i.e., the amount of duty already tyre manufacturers to file their suggestions/objections by paid on the basis of transaction value and duty payable on May 5, 2016. Objections were filed as directed and the CCI the basis of MRP under Section 4A, for the period from had also heard the tyre manufacturers in detail. April-2011 to March-2017. The Company believes that Set
154 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 155 ectors, ectors,
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CEAT Limited CEAT
T Holdings Company (Pvt.) Limited es Limited (“Artemis”) (Directors, KMP es Limited (“Artemis”) (Directors, allari Gupte, Company Secretary w.e.f. w.e.f. allari Gupte, Company Secretary
echnologies Limited(“Zensar”) (Directors, (Directors, echnologies Limited(“Zensar”) national Limited (“KEC”) (Directors, KMP or national Limited (“KEC”) (Directors, . Paras K. Chowdhary, Independent Director . Paras K. Chowdhary, . Vinay Bansal, Independent Director . Hari L. Mundra, Non-Executive - Non . H. V. Goenka, Chairman . H. V. . Anant Goenka, Managing Director . Arnab Banerjee, Whole-time Director October 25, 2018 up to January 29, 2019 Independent Director June 11, 2018 11, June Ms. V Mr Mr Mr Mr Mr Mr Mr Kumar Subbiah, Chief Financial Of Ms. Shruti Joshi, Company Secr
Chattarpati Apartments LLP (“Chattarpati”) (Dir Chattarpati Apartments LLP (“Chattarpati”) Allwin Apartments LLP (“Allwin”) (Dir Amber Apartments LLP (“Amber”) (Dir Khaitan & Co. (“Khaitan”) (Dir CEA Rado T Associated CEA Artemis ventur Key Management Personnel (KMP): CEA Pvt Ltd. (“TNM”) (Associate TYRESNMORE Online (“RPGE”) (Dir RPG Enterprises Limited (“RPGLS”) (Dir RPG Lifesciences Limited Zensar T Limited (“Raychem”) (Dir Raychem RPG (Pvt.) KEC Inter V B.N. Elias & Co. LLP (“B.N. Elias”) (Dir Atlantus Dwellings & Infrastructur KMP or their relatives are interested) are KMP or their relatives interested) are their relatives interested) are their relatives interested) are relatives (“ACHL”) (Subsidiary Company) interested) are or their relatives Company) Company) interested) are their relatives interested) are or their relatives interested) are KMP or their relatives interested) are KMP or their relatives interested) are their relatives upto May 31, 2018 interested) are or their relatives interested) are their relatives interested) are KMP or their relatives (Directors, vi) vii) viii) ix) i) ii) iii) iv) v)
T AKKHANLimited(SubsidiaryCompany) Limited(“Rado”)(SubsidiaryCompany) yres (Subsidiary Limited(“CSTL”) T SpecialtyTyres KMP inar SystemsPvt.Limited(“Vinar”) (Directors, • • • • • • • • • • • • • • • • • • •
e manufactures having been e manufactures national Tyres (Pvt.) Limited (“CKITL”) national Tyres T Holdings Company (Pvt.) Limited T (Pvt.) Limited (“ACPL”) (Subsidiary e control exists e control
yres (Pvt.) Limited (“ATPL”) (Subsidiary of (Pvt.) Limited (“ATPL”) yres
of related parties and related party relationship party and related parties of related Ceat Kelani Radials Limited (“CKRL”) (Subsidiary of Asian T CEA Associated CEA Ceat-Kelani Inter CEA CEA Associated CEA CEA Rado T CEA CKHL) CKITL) venture of ACHL) venture of CKHL) (Subsidiary of CKHL) Company) (“ACHL”) (Subsidiary Company)
T KelaniHoldings(Pvt.)Limited(“CKHL”)(Joint T SpecialtyTires Inc.(SubsidiaryofCSTL) B.V(SubsidiaryofCSTL) T SpecialtyTyres T AKKHANLimited(SubsidiaryCompany) Limited(“Rado”)(SubsidiaryCompany) yres Limited(“CSTL”)(Subsidiary T SpecialtyTyres • • • • • Related parties with whom transactions have taken place Names Related parties wher Meanwhile, few other tyr Aggrieved by the conduct of the Investigation by the the Investigation by the conduct of Aggrieved during the current year and previous year year and previous during the current • • • • • • aggrieved by the decision of the Single Judge of the aggrieved by the decision of the Single Petition before Madras High Court, have filed Special Leave Court has admitted the Court. The Supreme the Supreme now pending for Special Leave Petition and the same is the before hearing. In light of the above pending Petitions Court, the CCI has Madras High Court and the Supreme decision till date. The Company’s not passed any Orders a business decision which to change the price is purely brand production, depends upon many factors like cost of quality margin of each product, profit value perception, in the market, demand and of each product perception and market category product of each situation supply targets of various product potential and market shares believes categories etc. In view of the above, Company as remote." case hence, considered that it has a strong DG, one of the other tyre manufacturer filed Writ Petition filed manufacturer the other tyre DG, one of Court, challenging the legality of in the Madras High General. by the Director the investigation conducted the Writ admitted initially Court had The Madras High till the not pass any Orders the CCI to Petition and directed Petition was the Writ Subsequently, disposal of the Petition. Aggrieved by the decision of 6, 2018. dismissed on March said above the Court, High Madras the of Judge Single the Bench on the Division filed Appeal before manufacturer tyre Appeal, the Division Bench 7, 2018. On hearing the March in keep its Orders the CCI to 8, 2018 directed on March disposal of the Appeal. The Appeal is sealed cover till the still pending.
a) Note 42: Related party transactions
Notes to Financial Statements for the year ended March 31, 2019
x) Mr. Atul C. Choksey, Independent Director xiii) Ms. Punita Lal, Independent Director xi) Mr. Mahesh S. Gupta, Independent Director xiv) Mr. S. Doreswamy, Independent Director up to March 12, 2019 xii) Mr. Haigreve Khaitan, Independent Director b) The following transactions were carried out during the year with the related parties in the ordinary course of business: (` in lacs) Transactions Related Party 2018-19 2017-18 ACPL (28) (25) CKITL (28) (23) Raychem (2) (8) Rado (2) - KEC (56) (51) Amber 2 2 Reimbursement / (recovery) of expenses (net) Zensar 9 9 RPGE 129 231 CSTL (42) (41) Vinar - 0 RPGLS (20) (16) Total (38) 78 Dividend income ACHL 732 1,927 ACPL 84 110 CKITL 137 113 Royalty income ATPL 82 70 CKRL 138 126 Total 441 419 ACPL 4,064 3,927 CKITL 767 502 ATPL - 24 Purchase of Traded goods CKRL - 24 CSTL 276 - Total 5,107 4,477 Purchase of MEIS License CSTL 116 - CKITL 551 246 TNM 403 26 ACPL 45 131 Sales KEC 1 - CEAT AKKHAN Limited 5,482 3,948 CSTL 23,398 21,565 Total 29,880 25,916 Conversion charges paid Rado - 17 Loan given CSTL 19,630 19,700 Repayment of loan given CSTL 18,730 19,800 Interest income on loan CSTL 405 377 TNM 300 400 Investments (including share application money) made CSTL 3,000 7,000 during the year Rado - 1,160 Total 3,300 8,560 Technical development fees received ATPL 65 - Allwin 16 15 KEC 1 9 Amber 16 15 Rent paid on residential premises / guest house Atlantus 19 18 Chattarpati 45 43 B N Elias 21 12 Total 118 112
156 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - - - 6 9 3 0 9 11 45 55 57 64 35 19 18 26 17 95 26 70 24 12 45 95 86 28 75 75 157 209 287 558 211 247 474 101 766 630 182 1,662 2,001 As at 1,228 1,409 1,657 (` in lacs) (` in lacs) 2017-18 March 31, 2018 March - - - - 1 1 8 2 11 27 15 43 60 66 35 62 18 95 29 96 25 13 46 48 45 209 163 425 204 780 116 132 393 496 103 819 110 130 662 181 1,503 As at 4,972 5,214 2,071 2018-19 CEAT Limited CEAT March 31, 2019 March Raychem KEC CSTL RPGE RPGLS Total KEC Raychem RPGE Total Raychem KEC Vinar zensar Total Artemis Khaitan & Co. RPGE CKITL Total CSTL CSTL Related Party ACPL AKKHAN Limited CEAT CKITL KEC CSTL Total ACPL CKITL CKRL ATPL Total ACPL Raychem Rado AKKHAN Limited CEAT CKITL KEC Zensar Vinar RPGE CSTL Total Related Party Balance outstanding at the year end
Building maintenance recovery premises on residential Rent recovery of capex/spares Purchase Consultancy fees paid Legal fees paid License fees paid Sale of capex/spares recovery Facililty agreement Corporate guarantee commission Advances recoverable in cash or kind Advances recoverable Royalty receivable payables Trade Transactions Transactions c) Notes to Financial Statements for the year ended March 31, 2019
(` in lacs) As at As at Transactions Related Party March 31, 2019 March 31, 2018 CKITL 231 88 CEAT AKKHAN Limited 596 357 CSTL 7,418 1,959 CKRL 0 - Trade receivables ACPL 26 38 RPGE 2 - RPGLS 1 - TNM 65 18 Total 8,339 2,460 CSTL 5,800 4,900 Loans given Total 5,800 4,900 Capital advance net of capital creditors KEC 1,643 476 d) Transactions with key management personnel and their relatives (` in lacs) Sr. No. Related Party 2018-19 2017-18 1) Mr. H. V. Goenka Commission* 373 373 Director sitting fees 5 5 Dividend 15 15 Total 393 393 2) Mr. Anant Goenka Salaries 313 286 Allowances and perquisites 34 9 Performance bonus* 96 77 Contribution to provident & superannuation fund 30 26 Dividend 2 2 Leave encashment 0 0 Total 475 400 3) Mr. Arnab Banerjee Salaries 212 192 Allowances and perquisites 0 2 Performance bonus* 67 51 Contribution to provident & superannuation fund 12 11 Leave encashment 0 0 Dividend 0 0 Total 291 256 4) Mr. Kumar Subbiah Salaries 150 138 Allowances and perquisites 0 3 Performance bonus* 46 35 Contribution to provident & superannuation fund 5 5 Leave encashment 0 0 Total 201 181 5) Ms. Vallari Gupte Salaries 26 - Contribution to provident & superannuation fund 2 - Total 28 - 6) Ms Shruti Joshi Salaries 7 35 Performance bonus* 8 7 Contribution to provident & superannuation fund 6 2 Leave Encashment 1 0 Total 22 44
158 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
8 9 6 3 9 6 3 6 8 6 4 6 6 6 6 6 0 6 6 6 6 6 6 6 6 6 6 14 14 10 12 12 12 159 373 421 1,366 As at (` in lacs) (` in lacs) 2017-18 March 31, 2018 March
8 6 5 6 4 6 8 6 4 6 8 6 5 6 0 6 6 8 7 8 8 8 8 8 8 14 11 10 14 10 14 11 12 375 438 1,506 As at 2018-19 CEAT Limited CEAT March 31, 2019 March Related Party Goenka H. V. Mr. Mr. Paras K. Chowdhary Mr. Mr. Hari L. Mundra Mr. Vinay Bansal Mr. Atul C. Choksey Mr. Mahesh S. Gupta Mr. Khaitan Haigreve Mr. Ms. Punita Lal S. Doreswamy Mr. Total Grand Total Total Director sitting fees Director Total Mr. S. Doreswamy Mr. Commission* Director sitting fees Director Total Ms. Punita Lal Commission* Director sitting fees Director Total Mr. Haigreve Khaitan Haigreve Mr. Commission* Director sitting fees Director Total Mr. Mahesh S. Gupta Mr. Commission* Director sitting fees Director Total Mr. Atul C. Choksey Mr. Commission* Director sitting fees Director Total Mr. Vinay Bansal Mr. Commission* Director sitting fees Director Total Mr. Hari L. Mundra Hari Mr. Commission* Dividend Director sitting fees Director Related Party K. Chowdhary Paras Mr. Commission* Balance outstanding at the year end for KMP
14) 13) 12) 11) 10) 9) 8) Transaction Commission Payable Sr. No. Sr. 7) Terms and conditions of transactions with related parties and conditions of transactions with related Terms length in arm’s made on terms equivalent to those that prevail parties are related and others from The sales to and purchases and settlement occurs in cash. free and interest unsecured are transactions. Outstanding balances at the year-end e) * Represents amount paid during the year. * Represents Notes to Financial Statements for the year ended March 31, 2019
The remuneration to the key managerial personnel does not include the provisions made for gratuity as it is determined on an actuarial basis for the Company as a whole.
Managerial remuneration is computed as per the provisions of section 198 of the Companies Act, 2013. The amount outstanding are unsecured and will be settled in cash.
Loan and guarantee to subsidiary Following are the details of loans and guarantee given to subsidiary companies in which directors are interested, as required under Schedule V read with Regulation 34 (3) and 53 (f) of the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015 and disclosure required under section 186 (4) of the Companies Act, 2013. i. The loan granted to CEAT Specialty Tyres limited is intended to finance their working capital requirements. The loan has been granted via two facilities i.e. Revolving Credit Facility and Short Term Bridge Finance. Both loans are unsecured. Loan given during the year was ` 19,630 lacs (March 31, 2018: ` 19,700 lacs). Loan repaid during the year ` 18,730 lacs (March 31, 2018: ` 19,800 lacs). The loan has been utilized for the purpose for which it was granted. Terms of both the facilities are as follows:
Facility Outstanding as on March 31, 2019 Terms of repayment Interest rate Outstanding loan to be repaid at April 1, 2018 to July 31, 2018 - 8.50% p.a. Short 3,400 the end of 1 year from the first term bridge finance August 1, 2018 to March 31, 2019 - 8.80%p.a date of drawal Revolving April 1, 2018 to July 31, 2018 - 10.20% p.a. 2,400 On demand credit facility August 1, 2018 to March 31, 2019 - 10.40%p.a
Maximum outstanding during the year as loan to CSTL was ` 5,900 lacs (March 31, 2018: ` 5,900 lacs). ii. CEAT has given a corporate guarantee up to `22,800 lacs to CEAT Specialty Tyres Limited as collateral security for raising the term loans. The outstanding guarantee as on March 31, 2019 is `22,800 lacs (March 31, 2018 ` 22,451 lacs).
Capital commitments with related parties The estimated amount of contracts remaining to be executed on Capital account and not provided for (net of advance payments) pertaining to the related parties are as follows:
(` in lacs) As at As at Related Party March 31, 2019 March 31, 2018 KEC 4,258 2,326 Raychem - 0
Note 43: Segment information Refer note 2.24 for accounting policy on Segment reporting The Company is primarily engaged in business of manufacturing and sales of Automotive Tyres, Tubes & Flaps.
Information about products (` in lacs) 2018-19 2017-18 Particulars Automotive Tyres Tubes and others Total Automotive Tyres Tubes and others Total Revenue from contracts with customers 6,10,967 69,039 6,80,006 5,58,069 78,849 6,36,918
Information about geographical areas (` in lacs) 2018-19 2017-18 Particulars In India Outside India Total In India Outside India Total Revenue from contracts with customers 5,96,029 83,977 6,80,006 5,62,755 74,163 6,36,918 Non-current assets 4,09,718 - 4,09,718 3,02,191 - 3,02,191
During the year 2018-19 and 2017-18, no single external customer has generated revenue of 10% or more of the Company’s total revenue.
During the year 2018-19 and 2017-18, no single country outside India has given revenue of more than 10% of total revenue.
160 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 3 0 3 4 0 0 161 41 30 16 165 2017-18 - - - 0 3 7 26 10 28 11 Purpose Hedge of foreign Hedge of foreign purchase currency Hedge of Foreign Hedge of Foreign Buyer's Credit Currency Hedge of sales Currency Foreign Hedge of Foreign Hedge of Foreign Firm Currency Commitment – PO based hedging Hedge of Currency Foreign sales High probable Hedge of Foreign Hedge of Foreign Buyer's Credit Currency Hedge of Foreign Hedge of Foreign Buyer's Credit Currency 614 - ` 15 2018-19 CEAT Limited CEAT 711 374 5,748 7,531 3,122 9,195 2,670 2,249 39,127 35,113 22,292 (Amount in foreign currency in lacs) currency (Amount in foreign 0 9 6 - 88 48 28 FC 116 600 437 141 342 (Amount in Foreign currency and ` in lacs) currency (Amount in Foreign 4,365 As at March 31,2018 As at March JPY AED AED EUR USD USD USD USD GBP EURO EURO Currency - - - ` 9 970 5,668 4,968 8,390 9,650 3,650 4,846 47,991 36,675 - - - 0 82 64 12 70 FC 121 694 472 140 5,847
As at March 31,2019 As at March
USD Currency EURO USD USD USD EUR EUR USD GBP JPY USD EURO USD
Derivative Forward Contract to buy foreign Currency Contract to buy foreign Forward Unhedged foreign currency Exposure* currency Unhedged foreign Receivables Trade Short Term borrowing borrowing Short Term Advances Recoverable in cash or kind Trade payables and other financial liabilities Trade Forward Contract to sell Foreign Currency (FC) Currency Contract to sell Foreign Forward Cross Currency Interest Rate Swap Interest Currency Cross Range forward to buy Foreign Currency (FC) Currency to buy Foreign Range forward * The trade payables / short term borrowings are naturally hedged (off-set) to the extent of exposure under trade receivables / advances for respective currencies. / advances for respective under trade receivables to the extent of exposure naturally hedged (off-set) are * The trade payables / short term borrowings The foreign exchange forward contract balances vary with the level of expected foreign currency sales and purchases and changes and sales and purchases currency the level of expected foreign contract balances vary with exchange forward The foreign April 1, 2016 onwards. hedging instrument from as effective rates. CCIRS has been designated exchange forward in foreign flow hedges for Foreign currency loan (Buyer’s Credit) in US Dollar. Credit) loan (Buyer’s currency flow hedges for Foreign Derivative options like Range Forwards, COS measured at Fair value through OCI are designated as hedging instruments in cash hedging instruments in designated as OCI are at Fair value through COS measured like Range Forwards, Derivative options Cross currency Interest Rate Swaps (CCIRS) measured at fair value through OCI are designated as hedging instruments in cash flow designated OCI are at fair value through Swaps (CCIRS) measured Rate Interest currency Cross in US Dollar. Credit) loan (Buyer’s currency hedges for Foreign Cash flow hedges risk currency Foreign in cash flow hedges designated as hedging instruments OCI are value through at fair contracts measured exchange forward Foreign Currency sales and Foreign forecast sales receivables, recognized purchases, future payables, committed purchase of recognized dollar and Euro. in US Credit) loan (Buyer’s Note 44: Hedging activities and derivatives and derivatives Hedging activities Note 44: instruments designated as hedging Derivatives risk currency foreign hedge to contracts forward currency foreign as such instruments financial derivative uses Company The transactions. forecast highly probable made or which are firm commitments are of which transactions in respect future arising from and rate (COS) to hedge interest and Coupon only Swap Range Forwards, (CCIRS), rate swaps interest currency uses cross It also as hedging designated are loans. All these instruments denominated currency variable rate foreign risk arising from currency foreign is made as per Ind AS 109. necessary documentation for the same instruments and the Notes to Financial Statements for the year ended March 31, 2019
The terms of the foreign currency forward contracts match the terms of the expected highly probable forecast transactions. As a result, no hedge ineffectiveness arise requiring recognition through statement of profit and loss.
The cash flow hedges as at March 31, 2019 were assessed to be highly effective and a net unrealised loss of ` 3,792 lacs, with a deferred tax asset of ` 1,323 lacs relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as at March 31, 2018 were assessed to be highly effective and a net unrealised gain of ` 1,098 lacs, with a deferred tax liability of ` 380 lacs relating to the hedging instruments, was included in OCI.
Note 45: Fair values Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values: (` in lacs) As at March 31, 2019 As at March 31, 2018 Carrying values Fair values Carrying values Fair values Financial assets At amortised cost Loans (Non-current) 408 408 304 304 Other financial assets (Non-current) 181 181 171 171 At fair value through profit and loss Current investment - - 4,006 4,006 Total 589 589 4,481 4,481 Financial liabilities At amortized cost Borrowings (Non-current) 1,00,272 99,662 27,230 26,294 Other financial liabilities (Non-current) 146 86 146 68 At fair value through other comprehensive income Other financial liabilities (Non-current) 315 315 177 177 Other financial liabilities (Current) 3,136 3,136 4 4 Total 1,03,869 1,03,199 27,557 26,543
The management assessed that fair values of cash and cash equivalents, trade receivables, trade payables, loans, bank overdrafts and other current financial assets and liabilities (except derivative financial instrument those being measured at fair value through other comprehensive income) which are receivable/payable within one year approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The foreign exchange forward contracts used for hedging the recognized import trade payables / export trade receivables have been valued based on the Closing spot value. The following methods and assumptions were used to estimate the fair values:
• The fair value of quoted mutual funds are based on price quotations at the reporting date.
• The Company enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. The foreign exchange forward contracts used for the expected future sales/expected future purchase have been valued using forward pricing, based on present value calculations. These values are the realisable values which could be exchanged with the counterparty. The foreign exchange forward contracts used for the recognized export receivables/recognized import payables have been measured using the closing currency pair spot. The forward premium is separately amortized over the period of the forward. These values are close estimations of the fair values which could be realised on immediate winding up of the deals. The swap contracts and the option contracts have been valued at the market realisable values obtained from the counterparty and the same have been valued using the swap valuation / option valuation, based on present value calculations
• The fair values of the Company’s interest-bearing borrowings and loans are determined by using DCF method using discount rate which is the highest incremental borrowing rate for the year 2018-19.
162 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy ------68 86 163 1,826 1,947 (` in lacs) (` in lacs) 3)* 3)* Significant Significant inputs (Level inputs (Level Unobservable Unobservable
4 - - - - 177 171 304 315 181 408 4,512 3,136 97,715 CEAT Limited CEAT Significant Significant Observable Observable inputs (Level 2) inputs (Level 2) ------4,006 19,956 markets markets (Level 1) (Level 1) in Active in Active Fair Value measurement using measurement Fair Value Fair Value measurement using measurement Fair Value Quoted prices Quoted prices 4 -
68 86 177 171 304 315 181 408 4,006 3,136 26,294 99,662
Total Total
Other financial liabilities (Current) - Derivative financial instrument Other financial liabilities (Current) -Derivative financial instrument At fair value through other comprehensive income other comprehensive At fair value through Other financial liabilities (Non-current) At fair value through other comprehensive income other comprehensive At fair value through Other financial liabilities (Non-current) Other financial liabilities (Non-current) Other financial liabilities (Non-current) Financial liabilities At amortized cost (Non-current) Borrowings Financial liabilities At amortized cost (Non-current) Borrowings At fair value through profit and loss profit At fair value through Investment (Current) - Investment in quoted mutual fund At fair value through profit and loss profit At fair value through Investment (Current) -Investment in quoted mutual fund Other financial assets (Non-current) Other financial assets (Non-current) Financial assets At amortised cost Loans (Non-current) Financial assets At amortised cost Loans (Non-current) Note 47: Financial risk management objectives and policies trade and other payables. principal financial liabilities, other than derivatives, comprise loans and borrowings, The Company’s principal financial assets operations. The Company’s The main purpose of these financial liabilities is to finance the Company’s its operations. from mutual fund investments, cash and cash equivalents that derive directly include trade and other receivables, The Company also enters into derivative transactions. *For valuation under Level 3 following assumptions were made: *For valuation under Level 3 following assumptions were will happen at end of financial year and not during the year. of borrowings a. All repayments rate. additional borrowing b. For valuation purpose we have taken rate of 9.25% which represents There have been no transfers between Level 1 and Level 2 during the period. have been no transfers between Level 1 and Level 2 during There Quantitative disclosures fair value measurement hierarchy for Assets / Liabilities as at March 31, 2018 for Assets / Liabilities as at March hierarchy fair value measurement Quantitative disclosures There have been no transfers between Level 1 and Level 2 during the period have There Quantitative disclosures fair value measurement hierarchy for Assets / Liabilities as at March 31, 2019 March for Assets / Liabilities as at hierarchy measurement fair value Quantitative disclosures Note 46: Fair value hierarchy Fair value hierarchy Note 46: liabilities. assets and of the Company’s hierarchy measurement the fair value table provides The following Notes to Financial Statements for the year ended March 31, 2019
The Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. The Board of Directors through its risk management committee reviews and agrees policies for managing each of these risks, which are summarised below. a. Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments. The sensitivity analysis in the following sections relate to the position as at March 31, 2019 and March 31, 2018. The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at March 31, 2019.
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations and provisions.
The following assumptions have been made in calculating the sensitivity analysis: • The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2019 and March 31, 2018 including the effect of hedge accounting • The sensitivity of equity is calculated by considering the effect of any associated cash flow hedges and hedges of a net investment in a foreign subsidiary at March 31 2019 for the effects of the assumed changes of the underlying risk i. Interest rate risk Inter est rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates.
The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. To manage this, the Company enters into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. At March 31, 2019, after taking into account the effect of interest rate swaps, approximately 22% of the Company’s total borrowings are at a fixed rate of interest (March 31, 2018: 46%).
The following table provides a break-up of Company’s fixed and floating rate borrowing (` in lacs) As at As at Related Party March 31, 2019 March 31, 2018 Fixed rate borrowings 27,377 29,768 Floating rate borrowings 98,674 34,320 Total borrowings 1,26,051 64,088
Interest rate sensitivity The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected, after the impact of hedge accounting. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows: (` in lacs) Increase/ Effect on profit Particulars decrease in before tax basis points March 31, 2019 ` 98,674 lacs +/- 100 bps -986.74 / +986.74 March 31, 2018 ` 34,320 lacs +/- 100 bps -343.2 / +343.2
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.
164 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 165 -8 / +8 (` in lacs) -11 / +11 before tax before -1.10 / +1.10 + 0.36 / - 0.36 Effect on profit on profit Effect ` +1/- 1 ` +1/- 1 ` +1/- 1 ` +1/- 1 CEAT Limited CEAT currency currency Change in
easonably possible change in USD and EURO rates, with all other easonably possible change in USD and
eign currency risk by hedging transactions that are expected to occur within a maximum expected to occur within transactions that are risk by hedging eign currency e susceptible to market price risk, mainly arising from changes in the interest rates or market changes in the interest e susceptible to market price risk, mainly arising from e-tax effect is a result of a change in the fair value of the financial asset/liability due to the exchange of a change in the fair value of the financial is a result e-tax effect s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the foreign of the inherent s opinion, the sensitivity analysis is unrepresentative fected by the price volatility of certain commodities. Its operating activities require the ongoing purchase the ongoing purchase fected by the price volatility of certain commodities. Its operating activities require s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk has developed and enacted a risk management strategy regarding of Directors s Board ch 31, 2019, the Company hedged 100% (March 31, 2018: 94%), of its foreign currency loans. This foreign loans. This foreign currency 31, 2018: 94%), of its foreign (March ch 31, 2019, the Company hedged 100% e is no material equity risk relating to the Company’s equity investments which are detailed in note 5. The Company The 5. note in detailed are which investments equity Company’s the to relating risk equity material no is e eign currency risk eign currency eign currency sensitivity eign currency eign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in will fluctuate because exposure cash flows of an or future risk that the fair value risk is the eign currency Particulars 31, 2019 March Recognized net payables – USD 1.10 Mio Recognized net payable – EUR 0.8 Mio 31, 2018 March Recognized net payables – USD 0.11 Mio – EUR 0.04 Mio Recognized net receivable Equity price risk For equity investments majorly comprises of strategic investments rather than trading purposes. equity investments majorly comprises of strategic investments rather than trading liquid schemes of mutual funds (liquid investments) and fixed deposits. liquid schemes of mutual funds (liquid investments) and fixed deposits. the very short tenor of the underlying and value of such investments. However due to yields which may impact the return portfolio in the liquid schemes, these do not pose any significant price risk. rate movement. The derivatives which have not been designated in a hedge relationship act as an economic hedge and an economic act as relationship a hedge in been designated not which have derivatives movement. The rate in the above table. not covered same derivatives are The the underlying transactions when they occur. will offset during the year. the exposure period does not reflect at the end of the reporting exposure currency risk is hedged by using foreign currency forward contracts. At March 31, 2019, the Company hedged 88% contracts. At March forward currency risk is hedged by using foreign currency receivables/payables. currency 2018: 95%) of its foreign 31, (March the fair value of monetary tax is due to changes in before profit Company’s variables held constant. The impact on the is not material. changes for all other currencies currency foreign to exposure assets and liabilities. The Company’s 6 month period for the foreign currency denominated trade payables and trade receivables. The foreign currency risk on risk currency foreign The receivables. payables and trade trade denominated currency foreign for the period month 6 into for is entered derivative When a Swaps. Currency into Cross entering by mitigated are loans currency foreign the of the hedged of those derivatives to match the terms a hedge, the Company negotiates the terms the purpose of being point the cash flows the from exposure the derivatives cover the period of transactions For hedges of forecast exposure. that is denominated or payable receivable the point of settlement of the resulting up to forecasted of the transactions are currency. in the foreign foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the exchange rates relates in foreign to the risk of changes exposure exchange rates. The Company’s foreign net and the Company’s currency) in a foreign or expense is denominated activities (when revenue operating Company’s subsidiaries. investments in foreign Ther The Company invests its surplus funds in various debt instruments and debt mutual funds. These comprise of mainly The Company invests its surplus funds in various debt instruments and debt mutual Mutual fund investments ar In management’ The movement in the pr At Mar For to a r The following tables demonstrate the sensitivity For its for The Company manages
The Company’ Commodity price risk The Company is af iii. ii. and its mitigation. of rubber and carbon black and therefore require a continuous supply of rubber and carbon black. Due to the significantly a continuous supply of rubber and carbon black. Due to the significantly require of rubber and carbon black and therefore for contracts various purchase into entered also Company the black, carbon and rubber the of price the of volatility increased is an active market). rubber and carbon black (for which there
b.
Notes to Financial Statements for the year ended March 31, 2019
Commodity price sensitivity The following table approximately details the Company’s sensitivity to a 5% movement in the input price of rubber and carbon black. The sensitivity analysis includes only 5% change in commodity prices for quantity sold or consumed during the year, with all other variables held constant. A positive number below indicates an increase in profit or equity where the commodity prices decrease by 5%. For a 5% increase in commodity prices, there would be a comparable impact on profit or equity, and the balances below would be negative. (` in lacs) Increase in profit due to decrease Decrease in profit due to in commodity price increase in commodity price Commodity As at As at As at As at March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 Natural rubber 5,500 5,400 (5,500) (5,400) Synthetic rubber 4,700 4,000 (4,700) (4,000) Carbon black 3,400 2,500 (3,400) (2,500) c. Credit risk Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Trade receivables Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally on 30 days to 60 days credit term. Credit limits are established for all customers based on internal rating criteria. Outstanding customer receivables are regularly monitored. Credit risk on receivables is also mitigated by securing the same against security deposit, letter of credit and advance payment.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically. (` in lacs) Particulars As at March 31, 2019 As at March 31, 2018 More than 180 More than 180 Less than More than 360 Less than 180 More than 360 Ageing but less than but less than 180 days days days days 360 days 360 days Expected loss rate 0.00% 50.00% 100.00% 0.00% 50.00% 100.00% Gross carrying amount 72,561 170 1,935 70,983 465 1,896 Loss allowance provision - 85 1,935 - 233 1,896
Export customers are against Letter of Credit, bank guarantees, payment against documents. For open credit exports insurance cover is taken. Generally deposits are taken from domestic debtors under replacement segment. The carrying amount and fair value of security deposit from dealers amounts to `32,150 lacs (March 31, 2018: ` 30,376 lacs) as it is payable on demand. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.
Other financial assets and cash deposits Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval as per the Investment policy. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31, 2019 and March 31, 2018 is the carrying amounts as illustrated in note 6 and note 11 except for derivative financial instruments. The Company’s maximum exposure relating to financial derivative instruments is noted in note 21 and 26. d. Liquidity risk The Company prepares cash flow on a daily basis to monitor liquidity. Any shortfall is funded out of short term loans. Any surplus is invested in liquid mutual funds. The Company also monitors the liquidity on a longer term wherein it is ensured that the long term assets are funded by long term liabilities. The Company ensures that the duration of its current assets is in line with the current assets to ensure adequate liquidity in the 3-6 months period.
The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.
166 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 167 337 548 Total Total 4,006 5,206 6,964 6,208 1,364 5,426 3,706 27,999 31,301 71,215 72,646 27,292 21,431 58,560 14,364 57,324 84,571 (` in lacs) (` in lacs) 1,17,091 1,19,835 1,00,473 1,03,393 2,83,857 1,83,551 ------146 146 27,999 31,301 11,112 27,999 31,301 41,081 11,258 40,935 >5 years >5 years CEAT Limited CEAT ------304 171 475 589 177 408 181 315 16,180 59,853 16,357 59,538 1-5 years 1-5 years - - - - - 337 548 4,006 4,902 6,964 5,800 5,426 1,193 3,525 71,215 72,646 88,617 14,364 87,945 21,431 58,099 57,001 84,571 1,03,393 1,82,923 1,55,936 < 1 year < 1 year operties and entire current assets to its consortium of bankers as current operties and entire e engaged in similar business activities, or activities in the same ent borrowings are before netting off of processing fees of processing netting off before are ent borrowings ent borrowings are before netting off of processing fees of processing netting off before are ent borrowings * Non-curr * Non-curr Particulars Particulars Current investments Current Loans receivables Trade Financial assets investments Non-current Financial assets investments Non-current Current investments Current Cash and cash equivalents Bank balances other than cash and cash equivalents Loans Trade receivables Trade Cash and cash equivalents Other financial assets assets financial Total borrowings* Non current borrowings Current Bank balances other than cash and cash equivalents Bank balances other than Other financial assets financial assets Total borrowings* Non current borrowings Current Other Financial Liabilities and Other payables Trade Other Financial Liabilities Total financial liabilities financial Total Trade and Other payables Trade Total financial liabilities financial Total Liquidity exposure as at March 31, 2019 at March as Liquidity exposure The Company has hypothecated the movable, immovable pr Collateral In or Excessive risk concentration Concentrations arise when a number of counterparties ar detailed in note 20 and 24. on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. and managed accordingly. are controlled credit risks of on the maintenance of a diversified portfolio. Identified concentrations and industry levels. both the relationship Selective hedging is used within the Company to manage risk concentrations at geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly or have economic features geographical region, the Company’s sensitivity of the relative indicate Concentrations other conditions. or economic, political in by changes affected a particular industry. performance to developments affecting Liquidity exposure as at March 31, 2018 as at March Liquidity exposure
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements and makes adjustments in light of changes in economic conditions and the requirements The Company manages its capital structure the Company may adjust the dividend payment to shareholders, To maintain or adjust the capital structure, of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided or issue new shares. return capital to shareholders less cash and cash bearing loans and borrowings by total capital plus net debt. The Company includes within net debt, interest equivalents. For the purpose of the Company capital management, capital includes issued equity capital, share premium and all other equity other and all premium issued equity capital, share includes capital management, capital Company the of purpose the For is to capital management The primary objective of the Company’s attributable to the equity holders of the Company. reserves value. maximise the shareholder Note 48: Capital management
includespecificguidelinestofocus policiesandprocedures der toavoidexcessiveconcentrationsofrisk,theCompany’s e.
Notes to Financial Statements for the year ended March 31, 2019
(` in lacs) March 31, 2019 March 31, 2018 Borrowings *(Note 20, 24 and 26) 1,26,051 64,088 Less: cash and cash equivalents (Note 12) (5,426) (6,964) Net debt 1,20,625 57,124 Equity (Note 17 and 18) 2,75,104 2,54,682 Equity and net debt 3,95,729 3,11,806 Gearing ratio 30% 18% *Includes current maturities of long term borrowings In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2019 and March 31, 2018.
Note 49: Events after the reporting period a. The board has recommended dividend of ` 12 per equity share (March 31, 2018 ` 11.50 per equity share) of face value ` 10 each for financial year 2018-19. b. On April 3, 2019, the Board of Directors of the Company has approved a Scheme of Amalgamation between the Company and its wholly owned subsidiary CEAT Specialty Tyres Limited (CSTL), subject to obtaining requisite approvals from statutory authorities and shareholders. The Scheme of Amalgamation has been filed with National Company Law Tribunal (NCLT) on April 22, 2019. The process of sanction of the Scheme by the Hon’ble NCLT is in progress.
Note 50: Material foreseeable losses The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of accounts.
Note 51: Standards issued but not yet effective The amendments to standards that are issued but not yet effective up to the date of issue of the financial statements are discussed below:
Ind AS 116 - Leases Ind AS 116 Leases was notified by MCA on March 30, 2019 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after April 1, 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees – leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.
Lessees will be also required to re-measure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the re-measurement of the lease liability as an adjustment to the right-of-use asset.
Lessor accounting under Ind AS 116 is substantially unchanged from today’s accounting under Ind AS 17. Lessors will continue to classify all leases using the same classification principle as in Ind AS 17 and distinguish between two types of leases: operating and finance leases.
The Company intends to adopt these standards from April 1, 2019. The Company continues to evaluate the available transition methods and its contractual arrangements. The Company has established an implementation team to implement Ind AS 116 and it continues to evaluate the changes to accounting system and processes, and additional disclosure requirements that may be necessary. The Company is currently evaluating the effect of this potential impact of Ind AS 116 on its financial statements.
Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments which is to be applied while performing the determination of taxable profit (or loss), tax bases,unused tax losses, unused tax credits and
168 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 169 CEAT Limited CEAT Anant Goenka Managing Director
For and on behalf of Board of Directors of CEAT Limited of CEAT of Directors For and on behalf of Board Goenka H. V. Chairman Mahesh S. Gupta Chairman- Audit Committee ent service cost and net interest for the remainder of the period after a plan of the for the remainder ent service cost and net interest
Kumar Subbiah Chief Financial Officer Gupte Vallari Company Secretary Place: Mumbai Date: May 7, 2019 to r to use updated assumptions to determine curr to use updated assumptions to determine amendment, curtailment or settlement; and amendment, curtailment or settlement; and for application of date the impact of the asset ceiling. Effective because of recognized if that surplus was not previously of this evaluating the effect on or after April 1, 2019. The Company is currently this amendment is annual period beginning amendment on the financial statements.
The accompanying notes are an integral part of the financial statements The accompanying notes are per Vinayak Pujare As per our report of even date As per our report For S R B C & CO LLP Accountants Chartered ICAI Firm Registration No.: 324982E/E300003 Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 The effective date for adoption of Ind AS 12 Appendix C is annual periods beginning on or after April 1, 2019. The Company will adopt adopt will Company The 2019. 1, April after or on beginning periods annual is C Appendix 12 AS Ind of adoption for date effective The initial application i.e. April 1, in equity on the date of cumulative effect to adjust the decided has on April 1, 2019 and the standard statements. of this amendment on the financial the effect evaluating comparatives. The Company is currently 2019 without adjusting The standard permits two possible methods of transition - i) Full retrospective approach – Under this approach, Appendix C will this approach, – Under approach methods of transition - i) Full retrospective permits two possible The standard Policies, Changes in with Ind AS 8 – Accounting in accordance period presented reporting to each prior be applied retrospectively applying Appendix of initially with cumulative effect and ii) Retrospectively using hindsight without and Errors, Accounting Estimates comparatives. on initial application, without adjusting by adjusting equity C recognized tax rates, when there is uncertainty over income tax treatments under Ind AS 12. According to the appendix, companies need to appendix, companies to the Ind AS 12. According under income tax treatments is uncertainty over when there tax rates, the companies that of tax treatments, or group treatment, accepting each tax tax authority of the relevant the probability determine expected the or amount likely the most compute to considered be should which filing tax income in their use to plan or used have rates. and tax unused tax losses, unused tax credits (tax loss), tax bases, determining taxable profit when value of the tax treatment On March 30, 2019, Ministry of Corporate Affairs issued amendments to Ind AS 23. The amendments clarifies that an entity treats issued amendments to Ind AS 23. The amendments clarifies that an entity treats 30, 2019, Ministry of Corporate Affairs On March originally made to develop a qualifying asset when substantially all of the activities any borrowing as part of general borrowings costs An entity applies those amendments to borrowing complete. that asset for its intended use or sale are necessary to prepare period in which the entity first applies those amendments. An entity applies on or after the beginning of the annual reporting incurred the effect evaluating currently is Company The 2019. 1, April after or on beginning periods reporting annual for amendments those of this amendment on the financial statements. Amendments to Ind AS 23: Borrowing Costs Amendments to Ind AS 23: Borrowing Amendments to Ind AS 109: Prepayment Features with Negative Compensation with Negative Features Amendments to Ind AS 109: Prepayment asset financial a that clarifies amendment The 109. AS Ind to amendments issued Affairs Corporate of Ministry 2019, 30, March On that causes the early of the event or circumstance criterion regardless & Interest) passes the SPPI (Solely Payments of Principal the of termination early the for compensation reasonable receives or pays party which of irrespective and contract the of termination of this amendment on the financial statements. evaluating the effect contract. The Company is currently • reduction inasurplus,even as partofpastservicecost,oragainlossonsettlement,any orloss ecognize inprofit • Amendment to Ind AS 19 – plan amendment, curtailment or settlement Amendment to Ind AS 19 – plan amendment, amendments to Ind AS 19, ‘Employee Benefits’, in connection with issued 30, 2019, Ministry of Corporate Affairs On March an entity: and settlements. The amendments require accounting for plan amendments, curtailments Amendment to Ind AS 12 – Income taxes in connection in Ind AS 12, ‘Income Taxes’, to the guidance issued amendments Affairs of Corporate Ministry 30, 2019, On March recognize the income tax consequences The amendment clarifies that an entity shall with accounting for dividend distribution taxes. recognized those originally entity the where to equity according or income comprehensive other loss, or profit in dividends of beginning on or after April 1, 2019. date for application of this amendment is annual period past transactions or events. Effective on the financial statements. of this amendment evaluating the effect The Company is currently Form AOC-1
Annexure-I Form AOC-1
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures Part “A”: Subsidiaries (Information in respect of each subsidiary to be presented with amounts in ` lacs) 1 Sl No. 1 2 3 4 5 6 CEAT Associated CEAT CEAT Specialty CEAT Specialty CEAT Holdings Specialty Rado Tyres Tyres Inc. 2 Name of the subsidiary AKKhan Tyres B.V Company Tyres Limited (RTL) (Subsidiary of Limited (Subsidiary of (Pvt.) Limited Limited CSTL) CSTL) The date since when subsidiary 3 was acquired (Date of 27.10.2009 30.05.2012 8.12.2014 27.09.2013 11.07.2017 24.07.2018 remittance of funds) Reporting period for the subsidiary concerned, if 4 Uniform Uniform Uniform Uniform Uniform Uniform different from the holding company’s reporting period Reporting currency and Exchange rate as on the last ` 1 LKR = ` 1 BDT = ` ` 1 EUR = ` 5 date of the relevant Financial Not 1 USD = ` 69.12 0.3941 0.8291 Not Applicable 77.63 year in the case of foreign Applicable subsidiaries. 6 Share capital 394 12,437 2,105 643 26 40 7 Reserves & surplus 18 (3,179) 7,987 (1,605) 55 18 8 Total assets 418 12,046 51,370 558 85 99 9 Total Liabilities 6 2,789 41,278 1,520 4 41 10 Investments 394 - 66 - - - 11 Turnover 628 8,446 36,856 2 509 299 12 Profit before taxation 649 192 (4,620) (147) 32 18 13 Provision for taxation (6) (368) - - 0 - 14 Profit after taxation 643 (176) (4,620) (147) 32 18 15 Proposed Dividend ------CSTL holding is CSTL holding is 16 % of shareholding 100% 70% 100% 58.56% 100% 100%
1. Names of subsidiaries which are yet to commence operations.- Not Applicable 2. Names of subsidiaries which have been liquidated or sold during the year. - Not Applicable Note: Above figures are based on standalone financial information of the subsidiary.
170 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 171
CEAT Limited CEAT Anant Goenka Managing Director
CEAT Kelani Holdings Company CEAT (Pvt.) Limited March 31, 2019 March 1,00,00,000 Shares ` 4,357.46 lacs (Investment the Company’swholly through owned subsidiary Associated CEAT Holdings Company (Pvt) Limited) 50% than 20% share By holding more Not Applicable ` 2,108 lacs ` 2,108 lacs ` 17,385 lacs 27.10.2009 For and on behalf of Board of Directors of CEAT Limited of CEAT of Directors For and on behalf of Board Goenka H. V. Chairman Mahesh S. Gupta Chairman- Audit Committee Tyresnmore Online Private Online Tyresnmore Limited ` (88) lacs ` (254) lacs March 31, 2019 March of ` 1 each 100 Equity shares 63,596 0.001% compulsory shares convertible preference Online Private of Tyresnmore Limited of ` 1 each ` 700 lacs 36.96% than 20% share By holding more Not Applicable ` 136 lacs 21.08.2017 Kumar Subbiah Chief Financial Officer Chief Financial Officer Gupte Vallari Company Secretary Place: Mumbai Date: May 7, 2019 enture Part “B”: Associates and Joint Ventures Associates and Part “B”: enture was enture e is not consolidated eholding as per latest e is a significant influence ed in Consolidation ed in Consolidation Not Consider Consider
audited Balance Sheet on the year end associated or acquired No. Pr i. ii. Reason why the associate/joint ventur Networth attributable to Shar Extent of holding % Description of how ther Amount of Investment in Associates/Joint V Shar Latest audited Balance sheet Date Latest audited Balance or Joint V Date on which the Associate
7. ofit /Lossfortheyear 5. 6. 4.
3. thecompany heldby es ofAssociate/JointVentures 1. 2. Name of Associates/Joint Ventures Name of Associates/Joint As per our report of even date As per our report For S R B C & CO LLP per Vinayak Pujare Chartered Accountants Chartered ICAI Firm Registration No.: 324982E/E300003 Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 1. Names of associates or joint ventures which are yet to commence operations. - Not Applicable yet to commence which are 1. Names of associates or joint ventures - Not Applicable which have been liquidated or sold during the year. 2. Names of associates or joint ventures Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures Joint Ventures to Associate Companies and Act, 2013 related to Section 129 (3) of the Companies Statement pursuant Independent Auditor’s Report
To the Members of CEAT Limited Basis for Opinion We conducted our audit of the consolidated Ind AS financial statements in accordance with the Standards on Auditing (SAs), Report on the Audit of the Consolidated Ind AS as specified under section 143(10) of the Act. Our responsibilities Financial Statements under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Consolidated Ind AS Opinion Financial Statements’ section of our report. We are independent We have audited the accompanying consolidated Ind AS of the Group in accordance with the ‘Code of Ethics’ issued by financial statements of CEAT Limited (hereinafter referred the Institute of Chartered Accountants of India together with the to as “the Holding Company”), its subsidiaries (the Holding ethical requirements that are relevant to our audit of the financial Company and its subsidiaries together referred to as “the statements under the provisions of the Act and the Rules Group”) its associate and jointly controlled entities comprising thereunder, and we have fulfilled our other ethical responsibilities of the consolidated Balance sheet as at March 31 2019, the in accordance with these requirements and the Code of Ethics. consolidated Statement of Profit and Loss, including other We believe that the audit evidence we have obtained is sufficient comprehensive income, the consolidated Cash Flow Statement and appropriate to provide a basis for our audit opinion on the and the consolidated Statement of Changes in Equity for the consolidated Ind AS financial statements. year then ended, and notes to the consolidated Ind AS financial statements, including a summary of significant accounting Key Audit Matters policies and other explanatory information (hereinafter referred Key audit matters are those matters that, in our professional to as “the consolidated Ind AS financial statements”). judgment, were of most significance in our audit of the consolidated Ind AS financial statements for the financial year In our opinion and to the best of our information and according ended March 31, 2019. These matters were addressed in to the explanations given to us and based on the consideration the context of our audit of the consolidated Ind AS financial of reports of other auditors on separate financial statements and statements as a whole, and in forming our opinion thereon, and on the other financial information of the subsidiaries, associate we do not provide a separate opinion on these matters. For each and jointly controlled entities, the aforesaid consolidated Ind matter below, our description of how our audit addressed the AS financial statements give the information required by the matter is provided in that context. Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with We have determined the matter described below to be a key the accounting principles generally accepted in India, of the audit matter to be communicated in our report. We have fulfilled consolidated state of affairs of the Group, its associate and jointly the responsibilities described in the Auditor’s responsibilities for controlled entities as at March 31, 2019, their consolidated profit the audit of the consolidated Ind AS financial statements section including other comprehensive income, their consolidated cash of our report, including in relation to this matter. Accordingly, our flows and the consolidated statement of changes in equity for audit included the performance of procedures designed to the year ended on that date. respond to our assessment of the risks of material misstatement of the consolidated Ind AS financial statements. The results of audit procedures performed by us, including those procedures performed to address the matter below, provide the basis for our audit opinion on the accompanying consolidated Ind AS financial statements.
Key audit matter Auditor’s Response Significant estimates and judgment relating to litigations, claims and contingencies (refer note 2.27 (accounting policy), note 24 (financial disclosures) and note 47(b) (financial disclosures) to the Ind AS financial statements) The Group is involved in legal proceedings including those relating Our audit procedures included the following: to direct and indirect taxes, contracts, and other regulatory matters • W e evaluated the design and tested the operating effectiveness of relating to conduct of its business. controls in respect of the identification and evaluation of tax and other demands, proceedings and investigations at different levels in The Group assesses the need to recognize provisions or disclose a the Group and re-assessment of the related liabilities, provisions and contingency on a case-to-case basis considering the underlying facts disclosures. of each litigation. The aforesaid assessment may result in an incorrect • W e obtained a list of litigations and claims from the respective disclosure or provision in the books of accounts. Company’s tax and legal head. We identified material litigations from the list and performed inquiries with the said tax and legal head on the The evaluation of management’s judgments, including those that management evaluation of these material litigations. involve estimations in assessing the likelihood that a pending claim • In relation to the material litigations, claims and contingencies will succeed, or a liability will arise, and the quantification of potential we involved our legal / tax specialists to perform an independent financial settlement have been a matter of most significance during assessment of the conclusions reached by management. the current year audit. Evaluation of the outcome of legal proceedings • We requested independent confirmations from the Company’s and whether the risk of loss is remote, possible or probable, requires external lawyers/advisors with respect to the material litigations and significant judgment by management given the complexities involved. demands. • W e evaluated management’s assumptions, estimates and judgments used in the calculations of provision for litigation, claims and contingencies and disclosures in the financial statements.
172 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 173 CEAT Limited CEAT of internal control relevant to relevant of internal control opriateness of management’s use opriateness of management’s opriateness of accounting policies used Identify and assess the risks of material misstatement of Identify and assess the risks of material Obtain an understanding Evaluate the appr Conclude on the appr the consolidated Ind AS financial statements, whether due the consolidated Ind AS financial statements, design and perform audit procedures to fraud or error, is risks, and obtain audit evidence that to those responsive a basis for our opinion. to provide and appropriate sufficient resulting The risk of not detecting a material misstatement as error, from is higher than for one resulting fraud from intentional omissions, fraud may involve collusion, forgery, or the override of internal control. misrepresentations, that are to design audit procedures the audit in order Under section 143(3) in the circumstances. appropriate our for expressing also responsible (i) of the Act, we are opinion on whether the Holding Company has adequate system in place and the operating internal financial controls of such controls. effectiveness and estimates of accounting and the reasonableness made by management. disclosures related of the going concern accounting and, based basis of on the audit evidence obtained, whether a material may that conditions or to events related exists uncertainty and its cast significant doubt on the ability of the Group entities to continue as a associate and jointly controlled going concern. a material uncertainty If we conclude that to draw attention in our auditor’s required exists, we are
• • • • Auditor’s Responsibilities for the Audit of the Responsibilities Auditor’s AS Financial Statements Consolidated Ind about assurance reasonable to obtain are Our objectives a as statements financial AS Ind consolidated the whether misstatement, whether due to material from free whole are our that includes report and to issue an auditor’s fraud or error, level of assurance, but opinion. Reasonable assurance is a high with in accordance is not a guarantee that an audit conducted when it exists. SAs will always detect a material misstatement considered and are fraud or error Misstatements can arise from reasonably could they aggregate, the in or individually if, material decisions of users taken be expected to influence the economic financial statements. on the basis of these consolidated Ind AS with SAs, we exercise As part of an audit in accordance skepticism judgment and maintain professional professional also: the audit. We throughout associate and jointly controlled entities to continue as a going to continue as a going entities and jointly controlled associate to going concern, related as applicable, matters disclosing, concern using the going concern and of accounting unless basis or to cease intends to liquidate the Group management either alternative but to do so. realistic operations, or has no included of the companies of Directors Board Those respective entities are and jointly controlled and of its associate in the Group of reporting process the financial for overseeing also responsible entities. jointly controlled and its associate and the Group In preparing the consolidated Ind AS financial statements, the In preparing of the companies included in Directors of Board respective entities and of its associate and jointly controlled the Group and of its assessing the ability of the Group for responsible are Responsibilities of Management for the Consolidated for Management of Responsibilities Ind AS Financial Statements responsible is Directors of Board Company’s Holding The of these consolidated and presentation for the preparation requirements of the Ind AS financial statements in terms consolidated the view of fair and true a give that Act the of financial performance financial position, consolidated income, consolidated cash including other comprehensive of the in equity of changes statement consolidated flows and in entities its associate and jointly controlled including Group with the accounting principles generally accepted accordance (Ind AS) Standards in India, including the Indian Accounting Companies the with read the Act 133 of section under specified Rules, 2015, as amended. (Indian Accounting Standards) of the companies included in of Directors Board The respective entities are and of its associate and jointly controlled the Group in for maintenance of adequate accounting records responsible of the of the Act for safeguarding with the provisions accordance and of its associate and jointly controlled assets of the Group and detecting frauds and other entities and for preventing accounting appropriate of application and selection irregularities; reasonable are estimates that judgments and policies; making and maintenance and prudent; and the design, implementation operating that were of adequate internalcontrols, financial the of completeness and the accuracy ensuring for effectively and presentation to the preparation relevant accounting records, of the consolidated Ind AS financial statements that give a true material misstatement, whether from free and fair view and are which have been used for the purpose of due to fraud or error, by statements financial AS Ind consolidated the of preparation as aforesaid. of the Holding Company, the Directors In connection with our audit of the consolidated Ind AS financial In connection with our audit of the consolidated and, the other information is to read statements, our responsibility information is materially in doing so, consider whether such other or statements financial AS Ind consolidated the with inconsistent appears to be our knowledge obtained in the audit or otherwise performed, work we have on the If, based misstated. materially is a material misstatement of this other we conclude that there have nothing that fact. We to report required information, we are in this regard. to report Our opinion on the consolidated Ind AS financial statements consolidated Ind AS financial statements Our opinion on the any information and we do not express does not cover the other thereon. form of assurance conclusion Other Information Other Information responsible is Directors of Board Company’s Holding The The other information comprises for the other information. in the Management Discussion and the information included Report, to Board’s including Annexures Report Analysis, Board’s Information, Report and Shareholder’s Business Responsibility the consolidated Ind AS financial statements but does not include thereon. report and our auditor’s Independent Auditor’s Report
report to the related disclosures in the consolidated Ind AS Other Matter financial statements or, if such disclosures are inadequate, We did not audit the financial statements and other financial to modify our opinion. Our conclusions are based on the information, in respect of three subsidiaries, whose Ind AS audit evidence obtained up to the date of our auditor’s financial statements include total assets of Rs 26,487 lacs as report. However, future events or conditions may cause the at March 31, 2019, and total revenues of Rs 8,380 lacs and Group and its associate and jointly controlled entities to net cash inflows of Rs 66 lacs for the year ended on that date. cease to continue as a going concern. These Ind AS financial statement and other financial information have been audited by other auditors, which financial statements, • Evaluate the overall presentation, structure and content of other financial information and auditor’s reports have been the consolidated Ind AS financial statements, including the furnished to us by the management. The consolidated Ind AS disclosures, and whether the consolidated Ind AS financial financial statements also include the Group’s share of net profit statements represent the underlying transactions and of ` 2020 lacs for the year ended March 31, 2019, as considered events in a manner that achieves fair presentation. in the consolidated Ind AS financial statements, in respect of one associate and five jointly controlled entities, whose financial • Obtain sufficient appropriate audit evidence regarding the statements, other financial information have been audited by financial information of the entities or business activities other auditors and whose reports have been furnished to us within the Group of which we are the independent by the Management. Our opinion on the consolidated Ind AS auditors, to express an opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and financial statements. We are responsible for the direction, disclosures included in respect of these subsidiaries, associate supervision and performance of the audit of the financial and jointly controlled entities, and our report in terms of statements of such entities included in the consolidated Ind sub-sections (3) of Section 143 of the Act, in so far as it relates AS financial statements of which we are the independent to the aforesaid subsidiaries, associate and jointly controlled auditors. For the other entities included in the consolidated entities, is based solely on the reports of such other auditors. Ind AS financial statements, which have been audited by other auditors, such other auditors remain responsible for Our opinion above on the consolidated Ind AS financial the direction, supervision and performance of the audits statements, and our report on Other Legal and Regulatory carried out by them. We remain solely responsible for our Requirements below, is not modified in respect of the above audit opinion. matters with respect to our reliance on the work done and the reports of the other auditors. We communicate with those charged with governance of the Holding Company and such other entities included in the Report on Other Legal and Regulatory Requirements consolidated Ind AS financial statements of which we are the As required by Section 143(3) of the Act, based on our audit and independent auditors regarding, among other matters, the on the consideration of report of the other auditors on separate planned scope and timing of the audit and significant audit financial statements and the other financial information of findings, including any significant deficiencies in internal control subsidiaries, associate and jointly controlled entities as noted in that we identify during our audit. the ‘other matter’ paragraph we report, to the extent applicable, that: We also provide those charged with governance with a statement that we have complied with relevant ethical requirements (a) We/the other auditors whose report we have relied regarding independence, and to communicate with them upon have sought and obtained all the information and all relationships and other matters that may reasonably be explanations which to the best of our knowledge and belief thought to bear on our independence, and where applicable, were necessary for the purposes of our audit of the aforesaid related safeguards. consolidated Ind AS financial statements;
From the matters communicated with those charged with (b) In our opinion, proper books of account as required by law governance, we determine those matters that were of most relating to preparation of the aforesaid consolidation of the significance in the audit of the consolidated Ind AS financial financial statements have been kept so far as it appears statements for the financial year ended March 31, 2019 and from our examination of those books and reports of the are therefore the key audit matters. We describe these matters other auditors; in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare (c) The Consolidated Balance Sheet, the Consolidated circumstances, we determine that a matter should not be Statement of Profit and Loss including the Statement of communicated in our report because the adverse consequences Other Comprehensive Income, the Consolidated Cash of doing so would reasonably be expected to outweigh the Flow Statement and Consolidated Statement of Changes in public interest benefits of such communication. Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements;
174 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 175 CEAT Limited CEAT e has been no delay in transferring amounts, e has been no delay in transferring The Pr Ther impact of pending litigations on its consolidated financial its consolidated financial litigations on impact of pending and jointly controlled associate position of the Group, – statements financial AS Ind consolidated its in entities 47(b) to the consolidated Ind AS Refer Note 24 and Note financial statements; the applicable under required as financial statements, for material foreseeable law or accounting standards, contracts including derivative on long-term losses, if any, 23, 28 and 56 to the consolidated contracts – Refer Note respect of such items as it in Ind AS financial statements controlled and jointly associate its Group, to the relates entities; to the Investor Education to be transferred, required its Fund by the Holding Company, and Protection in India during subsidiaries and associate incorporated 31, 2019. the year ended March
i. ii. iii.
the disclose statements financial AS Ind consolidated AS Ind the consolidated made in has been ovision For S R B C & CO LLP Accountants Chartered ICAI Firm Registration Number: 324982E/E300003 per Vinayak Pujare Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 eports epresentations received from the from received epresentations esaid consolidated Ind AS financial Ind AS financial esaid consolidated W In our opinion and based on the consideration of r In our opinion and based on the consideration W On the basis of the written r On the basis of the written In our opinion, the afor In our opinion, the Auditor’s Report in accordance with Rule 11 of the with Report in accordance the Auditor’s as amended, Companies (Audit and Auditors) Rules, 2014, information and in our opinion and to the best of our to the explanations given to us and based on the according separate on auditors other the of report the of consideration information of financial statements as also the other financial entities as the subsidiaries, associate and jointly controlled noted in the ‘Other matter’ paragraph: of other statutory auditors of the subsidiaries, incorporated incorporated of other statutory auditors of the subsidiaries, for the year ended in India, the managerial remuneration by the Holding 2019 has been paid / provided 31, March in India to their Company and its subsidiaries incorporated of section 197 with the provisions in accordance directors Schedule V to the Act; with read of the internal financial controls over financial reporting with over financial of the internal financial controls of to these consolidated Ind AS financial statements reference companies incorporated its subsidiary the Holding Company, 1” to to our separate Report in “Annexure in India, refer this report; directors of the Holding Company as on March 31, 2019 31, on March Company as of the Holding directors of the Holding of Directors by the Board taken on record the statutory auditors who are of Company and the reports 139 of the Act, of its subsidiary appointed under Section of the none of the directors companies and associate, its associate incorporated in India is companies and Group’s as being appointed 31, 2019 from as on March disqualified in terms of Section 164 (2) of the Act; a director statements comply with the Accounting Standards specified specified Standards comply with the Accounting statements with Companies (Indian the Act, read under Section 133 of as amended; Rules, 2015, Accounting Standards)
(h) in totheothermattersbeincluded ith respect (g) (f) effectiveness totheadequacyandoperating ith respect (e) (d) Annexure 1 to the Independent Auditor’s Report of even date on the Consolidated Ind AS Financial Statements of CEAT Limited
Report on the Internal Financial Controls under We believe that the audit evidence we have obtained and the Clause (i) of Sub-section 3 of Section 143 of the audit evidence obtained by the other auditors in terms of their Companies Act, 2013 (“the Act”) reports referred to in the Other Matters paragraph below, is In conjunction with our audit of the consolidated Ind AS financial sufficient and appropriate to provide a basis for our audit opinion statements of CEAT Limited as of and for the year ended on the internal financial controls over financial reporting with March 31, 2019, we have audited the internal financial controls reference to these consolidated Ind AS financial statements. over financial reporting of CEAT Limited (hereinafter referred to as the “Holding Company”) and its subsidiary companies, which Meaning of Internal Financial Controls over Financial are companies incorporated in India, as of that date. Reporting with Reference to these Consolidated Ind AS financial statements Management’s Responsibility for Internal Financial A Company’s internal financial control over financial reporting Controls with reference to these consolidated Ind AS financial statements The respective Board of Directors of the Holding Company and is a process designed to provide reasonable assurance its subsidiary companies, which are companies incorporated regarding the reliability of financial reporting and the preparation in India, are responsible for establishing and maintaining of financial statements for external purposes in accordance internal financial controls based on the internal control over with generally accepted accounting principles. A Company’s financial reporting criteria established by the Holding Company internal financial control over financial reporting with reference to considering the essential components of internal control stated these consolidated Ind AS financial statements includes those in the Guidance Note on Audit of Internal Financial Controls policies and procedures that (1) pertain to the maintenance of Over Financial Reporting issued by the Institute of Chartered records that, in reasonable detail, accurately and fairly reflect Accountants of India. These responsibilities include the design, the transactions and dispositions of the assets of the Company; implementation and maintenance of adequate internal financial (2) provide reasonable assurance that transactions are recorded controls that were operating effectively for ensuring the orderly as necessary to permit preparation of financial statements in and efficient conduct of its business, including adherence to the accordance with generally accepted accounting principles, and respective Company’s policies, the safeguarding of its assets, that receipts and expenditures of the Company are being made the prevention and detection of frauds and errors, the accuracy only in accordance with authorisations of management and and completeness of the accounting records, and the timely directors of the Company; and (3) provide reasonable assurance preparation of reliable financial information, as required under regarding prevention or timely detection of unauthorised the Act. acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Auditor’s Responsibility Our responsibility is to express an opinion on the Company’s Inherent Limitations of Internal Financial Controls internal financial controls over financial reporting with reference Over Financial Reporting With Reference to these to these consolidated Ind AS financial statements based on Consolidated Ind AS financial statements our audit. We conducted our audit in accordance with the Because of the inherent limitations of internal financial controls Guidance Note on Audit of Internal Financial Controls Over over financial reporting with reference to these consolidated Ind Financial Reporting (the “Guidance Note”) and the Standards AS financial statements, including the possibility of collusion on Auditing, both, issued by Institute of Chartered Accountants or improper management override of controls, material of India, and deemed to be prescribed under section 143(10) of misstatements due to error or fraud may occur and not be the Act, to the extent applicable to an audit of internal financial detected. Also, projections of any evaluation of the internal controls. Those Standards and the Guidance Note require that financial controls over financial reporting with reference to these we comply with ethical requirements and plan and perform the consolidated Ind AS financial statements to future periods are audit to obtain reasonable assurance about whether adequate subject to the risk that the internal financial control over financial internal financial controls over financial reporting with reference to reporting with reference to these consolidated Ind AS financial these consolidated Ind AS financial statements was established statements may become inadequate because of changes in and maintained and if such controls operated effectively in all conditions, or that the degree of compliance with the policies or material respects. procedures may deteriorate.
Our audit involves performing procedures to obtain audit Opinion evidence about the adequacy of the internal financial controls In our opinion, the Holding Company and its subsidiary over financial reporting with reference to these consolidated companies, which are companies incorporated in India, have, Ind AS financial statements and their operating effectiveness. maintained in all material respects, adequate internal financial Our audit of internal financial controls over financial reporting controls over financial reporting with reference to these included obtaining an understanding of internal financial controls consolidated Ind AS financial statements and such internal over financial reporting with reference to these consolidated financial controls over financial reporting with reference to Ind AS financial statements, assessing the risk that a material these consolidated Ind AS financial statements were operating weakness exists, and testing and evaluating the design effectively as at March 31,2019, based on the internal control and operating effectiveness of internal control based on the over financial reporting criteria established by the Holding assessed risk. The procedures selected depend on the auditor’s Company considering the essential components of internal judgement, including the assessment of the risks of material control stated in the Guidance Note on Audit of Internal Financial misstatement of the financial statements, whether due to fraud Controls Over Financial Reporting issued by the Institute of or error. Chartered Accountants of India.
176 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 177 CEAT Limited CEAT S R B C & CO LLP per Vinayak Pujare Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 For Accountants Chartered Number: 324982E/E300003 ICAI Firm Registration Other Matters the adequacy on of the Act 143(3) (i) under Section report Our over the internal of financial controls and operating effectiveness Ind AS to these consolidated reference reporting with financial relates it as insofar Company, Holding the of statements financial which is a company incorporated in to one subsidiary Company, of the auditors of reports corresponding India, is based on the in India. such subsidiary incorporated Consolidated Balance Sheet as at March 31, 2019 (` in lacs) As at As at Particulars Note no. March 31, 2019 March 31, 2018 Assets (1) Non-current assets (a) Property, plant and equipment 3 3,10,250 2,62,906 (b) Capital work-in-progress 3 80,159 30,935 (c) Intangible assets 4 7,703 8,018 (d) Intangible assets under development 4 3,132 61 (e) Investments accounted using equity method 5 18,140 17,346 (f) Financial assets (i) Investments 6 2 0 (ii) Loans 7 408 314 (iii) Other financial assets 8 195 202 (g) Non-current tax assets (net) 25 5,739 3,944 (h) Deferred tax assets (net) 25 60 - (i) Other non-current assets 9 14,638 9,457 Total non-current assets 4,40,426 3,33,183 (2) Current assets (a) Inventories 10 1,00,560 78,461 (b) Financial assets (i) Investments 11 - 4,006 (ii) Trade receivables 12 70,638 74,723 (iii) Cash and cash equivalents 13 6,755 8,218 (iv) Bank balances other than cash and cash equivalent 14 599 407 (v) Loans 15 75 36 (vi) Other financial assets 16 3,222 956 (c) Other current assets 17 17,699 14,654 (d) Assets held-for-sale 18 519 - Total current assets 2,00,067 1,81,461 Total assets 6,40,493 5,14,644 Equity and liabilities (1) Equity (a) Equity share capital 19 4,045 4,045 (b) Other equity 20 2,72,566 2,56,564 Equity attributable to equity holders of parent 2,76,611 2,60,609 (c) Non-controlling interest 2,379 2,337 Total equity 2,78,990 2,62,946 (2) Non-current liabilities (a) Financial liabilities (i) Borrowings 22 1,22,264 45,116 (ii) Other financial liabilities 23 461 323 (b) Provisions 24 3,840 3,438 (c) Deferred tax liabilities (net) 25 21,978 18,929 Total non-current liabilities 1,48,543 67,806 (3) Current liabilities (a) Financial liabilities (i) Borrowings 26 22,425 19,557 (ii) Trade payables 27 1,05,287 87,051 (iii) Other financial liabilities 28 61,462 59,428 (b) Provisions 24 10,053 5,038 (c) Current tax liabilities (net) 25 4,732 3,098 (d) Other current liabilities 29 9,001 9,720 Total current liabilities 2,12,960 1,83,892 Total equity and liabilities 6,40,493 5,14,644 Significant accounting policies 2 The accompanying notes are an integral part of the financial statements For and on behalf of Board of Directors of CEAT Limited As per our report of even date For S R B C & CO LLP Kumar Subbiah H.V. Goenka Anant Goenka Chartered Accountants Chief Financial Officer Chairman Managing Director ICAI Firm Registration No.:324982E/E300003 per Vinayak Pujare Vallari Gupte Mahesh S. Gupta Partner Company Secretary Chairman- Audit Committee Membership Number: 101143 Place: Mumbai Place: Mumbai Date: May 7, 2019 Date: May 7, 2019
178 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 179 646 528 (469) (412) (475) (368) (380) 2,764 3,396 2,301 7,112 8,674 9,735 1,042 58.83 58.83 2,946 23,857 23,329 10,639 36,732 40,128 37,827 43,827 16,861 16,891 23,798 24,332 (` in lacs) 2017-18 3,65,214 1,42,038 6,10,352 6,45,233 6,48,179 - 278 (114) (740) (522) (114) 2,020 9,400 3,112 4,479 7,579 8,804 62.35 1,323 62.35 3,900 25,108 37,620 40,079 21,313 (4,134) 42,099 53,006 19,271 25,222 21,427 (3,795) (19,947) 1,63,010 6,62,272 CEAT Limited CEAT 2018-19 4,30,549 6,98,451 7,02,351 Anant Goenka Managing Director 2 25 38 40 32 33 34 35 36 37 30 31 44, 45 Note no. For and on behalf of Board of Directors of CEAT Limited of CEAT of Directors For and on behalf of Board Goenka H.V. Chairman Mahesh S. Gupta Chairman- Audit Committee Kumar Subbiah Chief Financial Officer Gupte Vallari Company Secretary Place: Mumbai Date: May 7, 2019 eclassified subsequently to the statement of eclassified subsequently to the statement ent ent eign exchange fluctuation reserve eign exchange fluctuation eclassified subsequently to the statement of eclassified subsequently to the statement elating to above elating to above ement gains/(losses) on defined benefit plans `) olling interest olling interest `) Net movement on cash flow hedges Income tax r Net movement in for Remeasur Income tax r
(i) (ii) (iii) (i) (ii) profit and loss profit profit and loss profit Non-contr Equity holders of the par Basic (in Diluted (in Equity holders of the par Items that will not be r Items that will be r Non-contr
(a) (b) (a) (b) (b) (a) (b) (a)
Attributable to Profit for the year Profit Current tax Current tax Deferred Tax expense expense Tax Profit before tax before Profit Exceptional items Profit before exceptional items and tax before Profit Share of profit / (loss) of associate and joint venture of profit Share Profit before share of profit / (loss) of associate and joint venture, exceptional / (loss) of associate and joint venture, profit of share before Profit items and tax Total comprehensive income for the year (Comprising profit and other income for the year (Comprising profit comprehensive Total income for the year) comprehensive Attributable to Other comprehensive income (OCI) Other comprehensive (Face value of `10 each) Earnings per equity share
Purchase of stock-in-trade Purchase and stock-in trade of finished goods, work-in-progress Changes in inventories Employee benefit expense Finance costs and amortization expenses Depreciation Excise duty on sale of goods Other expenses Expenses Cost of material consumed Total expenses Total Total other comprehensive income for the year (net of tax) other comprehensive Total Significant accounting policies Other income income Total Income operations Revenue from
IX VIII VII VI V IV III XI X XII The accompanying notes are an integral part of the financial statements The accompanying notes are per Vinayak Pujare As per our report of even date As per our report For S R B C & CO LLP Accountants Chartered ICAI Firm Registration No.:324982E/E300003 Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 II Particulars I
for the year ended March 31, 2019 31, ended March for the year Consolidated Statement of Profit and Loss of Profit Statement Consolidated Consolidated Statement of Cash Flow for the year ended March 31, 2019 (` in lacs) Particulars 2018-19 2017-18 I) Cash flow from operating activities Profit before tax and share of profit / (loss) of associate and joint venture 35,600 34,431 Adjustments to reconcile profit before tax to net cash flows: Depreciation and amortization expenses 19,271 16,861 Interest income (2,942) (1,085) Finance costs 8,804 9,735 Dividend income - (2) Provision for obsolescence of stores and spares 107 120 Allowances for doubtful debts and advances 197 371 Credit balances written back (23) (248) Bad debts and advances written off (net) 7 50 Net gain on disposal of investments (83) (1,065) Loss on disposal of property, plant and equipment (net) 481 929 Unrealised foreign exchange (gain) / loss (net) 106 (42) Foreign currency translation reserve on consolidation (522) (412) Operating profit before working capital changes 61,003 59,643 Adjustments for: Decrease / (Increase) in inventory (22,205) 15,770 Decrease / (Increase) in trade receivables 3,811 (13,424) Decrease / (Increase) in other current assets (3,173) 2,352 Decrease / (Increase) in current loans and other financial assets 392 330 Decrease / (Increase) in non-current loans and other financial assets (94) (131) Decrease / (Increase) in other non current asset (248) 2,547 (Decrease) / Increase in trade payables 18,873 11,204 (Decrease) / Increase in current financial liabilites and other current liabilities 1,016 (1,322) (Decrease) / Increase in non-current financial liabilities and deferred revenue (702) (446) (Decrease) / Increase in current provisions 5,015 (343) (Decrease) / Increase in non-current provisions (338) 846 Cash flow from operating activities 63,350 77,026 Direct taxes paid (net of refunds) (8,083) (9,787) Net cash flow (used in) / genreated from operating activities (I) 55,267 67,239 II) Cash flow from investing activities - Pur chase of property, plant and equipment and intangible assets (including capital work-in (1,10,732) (48,385) progress, intangible assets under development and capital advance) (Withdrawal)/ Investment in bank deposits 20 798 (Withdrawal)/ Investment in margin money deposit with banks 17 99 Changes in other bank balances (212) (14) Purchase of non current investments (717) (613) Proceeds from sales of current investment (net) 4,089 3,486 Interest received 341 1,151 Share of profit from joint venture 2,020 2,301 Dividend received - 2 Net cash flow (used in) / genreated from investing activities (II) (1,05,174) (41,175)
180 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy (9) 181 (553) 3,267 5,817 2,401 8,218 (9,725) (4,727) 29,013 28,104 (18,522) (47,095) (` in lacs) (20,247) 2017-18 - - (829) 8,218 6,755 (8,889) (4,434) 13,315 48,444 (1,463) (10,484) (45,639) CEAT Limited CEAT 2018-19 1,05,404 Anant Goenka Managing Director For and on behalf of Board of Directors of CEAT Limited of CEAT of Directors For and on behalf of Board Goenka H.V. Chairman Mahesh S. Gupta Chairman- Audit Committee Kumar Subbiah Chief Financial Officer Chief Financial Officer Gupte Vallari Company Secretary Place: Mumbai Date: May 7, 2019
edit owings (net) owings Dividend distribution tax paid Pr buyers cr Repayment of short-term Pr borr Repayment of long-term Dividend paid Inter Repayment of public deposit borr Change in other short-term CASH FLOW FROM FINANCING ACTIVITIES CASH FLOW FROM FINANCING Net cash flows (used in)/generated from financing activities (III) Net cash flows (used in)/generated from Net increase / (decrease) in cash and cash equivalents (I+II+III) / (decrease) Net increase Cash and cash equivalents at the beginning of the year (refer note 13) of the year (refer Cash and cash equivalents at the beginning note 13) year (refer Cash and cash equivalents at the end of the short-termbuyerscredit oceeds from long-termborrowings oceeds from
est paid
Particulars III) The accompanying notes are an integral part of the financial statements The accompanying notes are As per our report of even date As per our report For S R B C & CO LLP per Vinayak Pujare Chartered Accountants Chartered ICAI Firm Registration No.:324982E/E300003 Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 Consolidated Statement of Changes in Equity for the year ended March 31, 2019 37 19 (13) 528 156 (103) (553) (829) 1,667 5,001 (4,652) (3,795) (4,652) (5,001) (1,667) 21,313 25,108 23,857 Total Total 23,329 equity ( ` in lacs) 2,78,990 2,62,946 2,44,410 ------(6) 156 (114) (103) (469) (114) (475) 2,379 2,337 2,915 Non- interest controlling controlling - - 37 19 (13) 534 (829) (553) 1,667 5,001 (4,652) (3,795) (4,652) (5,001) (1,667) 21,427 25,222 24,332 23,798 equity 2,72,566 2,56,564 2,37,450 Total other Total ------46 (522) (412) (522) (888) (366) (412) 20(f)) reserve reserve Foreign Foreign currency currency (refer note (refer translation ------income 474 266 266 208 Items of other comprehensive comprehensive (2,811) (2,811) (2,337) 20(d)) hedge reserve reserve Cash flow (refer note (refer ------37 680 (829) (462) (553) (4,652) (4,652) (1,667) 24,760 25,222 24,478 23,798 20(h)) 1,92,135 1,72,819 1,55,213 earnings Retained (refer note (refer ------5,001 Anant Goenka Managing Director 25,166 20,165 20,165 20(g)) reserve reserve General (refer note (refer ------5,001 1,667 3,334 Other equity (5,001) 20(e)) reserve reserve (refer note (refer Debenture Debenture redemption redemption ------390 390 390 20(c)) Capital reserve reserve (refer note (refer redemption redemption ------19 For and on behalf of Board of Directors of CEAT Limited of CEAT of Directors For and on behalf of Board H.V. Goenka H.V. Chairman Mahesh S. Gupta Chairman- Audit Committee (13) 1,397 1,378 1,391 20(b)) Capital reserve reserve (refer note (refer ------56,703 56,703 56,703 20(a)) premium premium Securities (refer note (refer ------4,045 4,045 4,045 (refer (refer share share Equity capital Kumar Subbiah Chief Financial Officer Gupte Vallari Company Secretary Company Secretary Place: Mumbai Date: May 7, 2019 note 19) Payment of dividend distribution tax (DDT) note 21) (refer Payment of dividend (refer note 21) Payment of dividend (refer Total comprehensive income comprehensive Total Other comprehensive income Other comprehensive Payment of dividend distribution tax (DDT) note 21) (refer Profit for the year Profit Payment of dividend (refer note 21) Payment of dividend (refer As at March 31, 2019 As at March As at March 31, 2018 As at March Total comprehensive income comprehensive Total Others Forex gain /(loss) on restatement of non- gain /(loss) on restatement Forex interest controlling Other comprehensive income Other comprehensive Forex gain /(loss) on restatement of non- gain /(loss) on restatement Forex interest controlling Decrease in capital reserve Decrease Profit for the year Profit Increase in capital reserve Increase Transfer from retained earnings retained from Transfer As at April 1, 2017 Transfer to general reserve (refer note 20((g)) (refer to general reserve Transfer Transfer to debenture redemption reserve redemption to debenture Transfer Particulars The accompanying notes are an integral part of the financial statements The accompanying notes are As per our report of even date As per our report For S R B C & CO LLP Accountants Chartered ICAI Firm Registration No.:324982E/E300003 per Vinayak Pujare Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 Transfer from debenture redemption reserve reserve redemption debenture from Transfer note 20(e)) (refer
182 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 183 50% 70.00% 58.56% *31.93% 100.00% 100.00% 100.00% 100.00% March 31, 2018 March March 31, 2018 March 50% 70.00% 58.56% *36.96% 100.00% 100.00% 100.00% 100.00% CEAT Limited CEAT % of equity interest % of equity interest March 31, 2019 March March 31, 2019 March nment Grant related to non- nment Grant related Country of incorporation Country of incorporation Sri Lanka India United States of America India Netherlands Sri Lanka Bangladesh India Accounting for Gover monetary assets Changes in accounting policies has chosen to adjust governmentThe Group grant from the carrying value of non-monetary asset pursuant to amendment in Ind AS 20 Accounting for Government Grants followed the policy the Group Previously, and Disclosure. asset and the grant at carrying the non-monetary recording and loss over the expected to profit amounts and released useful life in a pattern benefit of the of the of consumption underlying asset i.e. by equal annual instalments. continued to follow the erstwhile accounting Had the Group is as below to the policy the impact of restatement financial statements All amounts disclosed in the financial statements and notes All amounts disclosed in the financial statements lakhs as per the to the nearest off have been rounded of Schedule III of the Companies Act, 2013 requirements (Ind AS compliant Schedule III), unless otherwise stated. construes (zero) ‘0’ represented amount the Wherever value less than Rupees fifty thousand
started operations in 1958 as CEAT Tyres of India Limited and of Tyres CEAT in 1958 as started operations caters in 1990. The Company Limited as CEAT was renamed internationalto both domestic and company’s markets. The in India. stock exchanges listed on two recognised are shares RPG House, 463 of company is located at office The registered 400030. The financial Mumbai Worli Annie Beasant Road, Dr. with a for issue in accordance authorised statements were on May 7, 2019. of the directors resolution 2.2 2.2.1 Principal activities Principal activities Manufacturing of tyres Trading & manufacturing of tyres, & manufacturing of tyres, Trading tubes and flaps Trading of tyres, tubes and flaps of tyres, Trading Marketing Support Services Marketing Support Services Investing in companies engaged in manufacturing of tyres Trading of tyres, tubes and flaps of tyres, Trading Manufacturing of tyres ed at fair value (refer ed at fair value (refer eparation of financial e Derivative financial instruments and Certain financial assets measur accounting policy regarding financial instruments) accounting policy regarding
Subsidiaries • • Basis of accounting and pr Joint ventur statements have been prepared The financial statements of the group (Ind with Indian Accounting Standards in accordance AS) notified under the Companies (Indian Accounting time to time) and Rules, 2015 (as amended from Standards) to III Schedule of II Division of requirements presentation the Companies Act, 2013, (Ind AS compliant Schedule III). on accrual These financial statements have been prepared basis and under historical cost basis, except for the following assets and liabilities which have been measured at fair value: In addition, the carrying values of recognised assets and In addition, the carrying values of recognised liabilities designated as hedged items in fair value hedges that would otherwise be carried at amortised cost are attributable changes in the fair values adjusted to record hedge being hedged in effective to the risks that are are statements financial The consolidated relationships. in ` except when otherwise indicated. presented
CEAT Kelani Holding (Pvt) Limited Kelani Holding CEAT Name Name CEAT Specialty Tyres Limited Specialty Tyres CEAT TYRESNMORE Online Pvt Ltd CEAT Specialty Tyres Inc. (Subsidiary CEAT CEAT Inc. (Subsidiary Specialty Tyres CEAT Limited) Specialty Tyres CEAT Specialty Tyres B.V (Subsidiary CEAT CEAT B.V (Subsidiary Specialty Tyres CEAT Limited) Specialty Tyres Holdings Company (Pvt.) Ltd. Associated CEAT CEAT AKKHAN Limited CEAT Rado Tyres Limited Rado Tyres
Note 2: Basis of preparation and summary of and summary Note 2: Basis of preparation significant accounting policies 2.1 *Includes compulsory convertible preference shares (potential voting right) shares *Includes compulsory convertible preference b) The following subsidiaries, associate and Jointly controlled entities have been considered in the consolidated financial statements considered entities have been associate and Jointly controlled The following subsidiaries, a)
for the year ended March 31, 2019 31, ended March for the year information Note 1: Corporate financial statements comprise financial The consolidated subsidiaries its and Company”) (“the Limited CEAT of statements and jointly controlled associate “the Group”), (collectively, 31, 2019. The Company ended March entities for the year domiciled in India and incorporated is a public company Companies Act applicable in of the under the provisions of principal business is manufacturing India. The Company’s note 42). The Group flaps (refer tubes and automotive tyres, Notes to Consolidated Financial Statements Statements Financial to Consolidated Notes Notes to Consolidated Financial Statements for the year ended March 31, 2019
(` in lacs) • The Group’s voting rights and potential voting rights As at As at Particulars March 31, 2018 April 1, 2017 • The size of the Group’s holding of voting rights relative Decrease in property, (1,455) (1,547) to the size and dispersion of the holdings of the other plant and equipment voting rights holders Decrease in Non 1,352 1,465 current liabilities The Group re-assesses whether or not it controls an Decrease in current liabilities 103 82 investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. There is no impact on the statement of Profit and Loss. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the 2.2.2 Ind AS 115 'Revenue from Contracts with Customers' Group loses control of the subsidiary. Assets, liabilities, The Group has adopted Ind AS 115 'Revenue from income and expenses of a subsidiary acquired or disposed Contracts with Customers' with a date of initial application of during the year are included in the consolidated financial of April 1, 2018. As a result, the Group has changed its statements from the date the Group gains control until the accounting policy for revenue recognition as detailed below. date the Group ceases to control the subsidiary. The Group has applied Ind AS 115 using the cumulative Consolidated financial statements are prepared using effect method – i.e. by recognising the cumulative uniform accounting policies for like transactions and other effect of initially applying Ind AS 115 as an adjustment events in similar circumstances. If a member of the group to the opening balance of equity at April 1, 2018. uses accounting policies other than those adopted in the Therefore, the comparative information has not been consolidated financial statements for like transactions and restated and continues to be reported under Ind AS 18. events in similar circumstances, appropriate adjustments The details of the significant changes and quantitative are made to that group member’s financial statements in impact of the changes are set out below. preparing the consolidated financial statements to ensure conformity with the group’s accounting policies. Under cumulative effect method, there are no significant adjustments required to the retained earnings as at April 1, The financial statements of all entities used for the purpose 2018. Also, the application of Ind AS 115 did not have of consolidation are drawn up to same reporting date as any significant impact on recognition and measurement of that of the parent company, i.e., year ended on March 31. revenue and related items in the financial statements When the end of the reporting period of the parent is different from that of a subsidiary, the subsidiary prepares, 2.3 Current versus non-current classification for consolidation purposes, additional financial information The consolidated financial statements comprise the as of the same date as the financial statements of the financial statements of the Company and its subsidiaries parent to enable the parent to consolidate the financial as at March 31, 2019. The Group’s investment in jointly information of the subsidiary, unless it is impracticable to controlled entites and associate are accounted for using do so. the equity method. Control is achieved when the Group is exposed, or has rights, to variable returns from its Consolidation procedure: involvement with the investee and has the ability to a. Combine like items of assets, liabilities, equity, income, affect those returns through its power over the investee. expenses and cash flows of the parent with those of its Specifically, the Group controls an investee if and only if subsidiaries. For this purpose, income and expenses the Group has: of the subsidiary are based on the amounts of the • Power over the investee (i.e. existing rights that give assets and liabilities recognised in the consolidated it the current ability to direct the relevant activities of financial statements at the acquisition date. the investee) b. Offset (eliminate) the carrying amount of the parent’s • Exposure, or rights, to variable returns from its investment in each subsidiary and the parent’s portion involvement with the investee, and of equity of each subsidiary. Business combinations • The ability to use its power over the investee to affect policy explains how to account for any related goodwill. its returns c. Eliminate in full intragroup assets and liabilities, Generally, there is a presumption that a majority of voting rights equity, income, expenses and cash flows relating to result in control. To support this presumption and when the transactions between entities of the group (profits Group has less than a majority of the voting or similar rights or losses resulting from intragroup transactions that of an investee, the Group considers all relevant facts and are recognised in assets, such as inventory and fixed circumstances in assessing whether it has power over an assets, are eliminated in full). Intragroup losses may investee, including: indicate an impairment that requires recognition in the • The contractual arrangement with the other vote consolidated financial statements. Ind AS 12 Income holders of the investee Taxes applies to temporary differences that arise from the elimination of profits and losses resulting from • Rights arising from other contractual arrangements intragroup transactions.
184 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 185 CEAT Limited CEAT es and associate Goodwill is initially measured at cost, being the excess at cost, initially measured Goodwill is and transferred of the consideration of the aggregate and interests, for non-controlling the amount recognised identifiable assets held, over the net interest any previous bargain a on gain Any assumed. liabilities and acquired income in other comprehensive is recognised purchase exists if there equity as capital reserve and accumulated in for classifying the underlying reasons clear evidence, of the in a bargain purchase; as resulting business combination in equity as capital reserve. recognised otherwise the gain is at cost less is measured goodwill After initial recognition, losses. For the purpose any accumulated impairment in a business of impairment testing, goodwill acquired the acquisition date, allocated to each combination is, from expected to cash-generating units that are of the Group’s of whether other the combination, irrespective benefit from assigned to those are assets or liabilities of the acquiree units. been allocated A cash generating unit to which goodwill has when frequently or more is tested for impairment annually, If the indication that the unit may be impaired. is an there amount of the cash generating unit is less than recoverable is allocated first its carrying amount, the impairment loss the carrying amount of any goodwill allocated to reduce rata the unit pro to the unit and then to the other assets of asset in the unit. based on the carrying amount of each or in profit Any impairment loss for goodwill is recognised for goodwill is not loss. An impairment loss recognised in subsequent periods. reversed has been allocated to a cash-generating goodwill Where unit is disposed within that part of the operation unit and operation the disposed with associated goodwill of, the operation when is included in the carrying amount of the disposed determining the gain or loss on disposal. Goodwill based on the relative is measured in these circumstances values of the disposed operation and the portion of the cash-generating unit retained. Investment in joint ventur A joint venture is a type of joint arrangement whereby the is a type of joint arrangement whereby A joint venture have of the arrangement parties that have joint control Joint control rights to the net assets of the joint venture. of an sharing of control is the contractually agreed arrangement, which exists only when decisions about the unanimous consent of the parties activities require relevant sharing control. has An associate is an entity over which the Group significant influence. Significant influence is the power to participate in the financial and operating policy decisions over or joint control of the investee, but is not control those policies. The considerations made in determining whether joint to those necessary to determine control similar are control over the subsidiaries.
2.5 eceived etained ofit or loss ent’s share of components share ent’s Reclassifies the par Der r Recognises the fair value of the consideration r Recognises the fair value of any investment Recognises any surplus or deficit in pr Der Der previously recognised in OCI to profit or loss or in OCI to profit recognised previously be would as earnings, appropriate, as retained disposed of the directly had if the Group required or liabilities assets related recorded in equity recorded liabilities of the subsidiary interests non-controlling
A change in the ownership interest of a subsidiary, without of a subsidiary, interest A change in the ownership is accounted for as an equity transaction. a loss of control, it: over a subsidiary, loses control If the Group Profit or loss and each component of other comprehensive comprehensive component of other or loss and each Profit holders of the attributed to the equity are income (OCI) interests, and to the non-controlling of the Group parent having interests in the non-controlling even if this results made adjustments are necessary, a deficit balance. When of subsidiaries to bring their to the financial statements accounting into line with the Group’s accounting policies and liabilities, equity, assets policies. All intra-group to transactions relating flows and cash expenses income, eliminated in full are of the Group between members on consolidation. Business Combination Any contingent consideration to be transferred by the Any contingent consideration to be transferred at fair value at the acquisition date. is recognised acquirer liability or an asset classified as consideration Contingent that is a financial instrument and within the scope of Ind at fair value AS 109 Financial Instruments, is measured or loss. If the in profit with changes in fair value recognised AS of Ind scope the not within is consideration contingent Ind with the appropriate in accordance 109, it is measured equity as classified that is consideration Contingent AS. dates and at subsequent reporting is not re-measured subsequently its settlement is accounted for within equity. At the acquisition date, the identifiable assets acquired and At the acquisition date, the identifiable assets acquired at their acquisition recognised the liabilities assumed are date fair values. Business combinations are accounted for using the Business combinations are is measured acquisition method. The cost of an acquisition measured of the consideration transferred as the aggregate at fair value as on acquisition date and the amount of any For each business in the acquiree. interests non-controlling the elects whether to measure combination, the Group at fair value or at in the acquiree interests non-controlling identifiable net of the acquiree’s share the proportionate expensed as incurred. costs are assets. Acquisition-related • • • ecognises thecumulativetranslationdifferences • • • • ecognises theassets(includinggoodwill)and ecognises thecarryingamountofany
2.4 Notes to Consolidated Financial Statements for the year ended March 31, 2019
The Group’s investments in joint venture and associate are • It is held primarily for the purpose of trading accounted for using the equity method. Under the equity • It is due to be settled within twelve months after the method, the investment in a joint venture or associate reporting period, or is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the • There is no unconditional right to defer the settlement Group’s share of net assets of joint venture or associate of the liability for at least twelve months after the since the acquisition date. Goodwill relating to joint venture reporting period or associate is included in the carrying amount of the The Group classifies all other liabilities as non-current. investment and is not tested for impairment individually. Deferred tax assets and liabilities are classified as The statement of profit and loss reflects the Group’s share non-current assets and liabilities. of the results of operations of joint venture and associate. Any change in OCI of those investees is presented as part The operating cycle is the time between the acquisition of of the Group’s OCI. In addition, when there has been a assets for processing and their realisation in cash and cash change recognised directly in the equity of joint venture or equivalents. The Group has identified twelve months as its associate, the Group recognises its share of any changes, operating cycle. when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions 2.7 Revenue recognition between the Group and joint venture or associate are 2.7.1 Revenue from contract with customer eliminated to the extent of the interest in joint venture. Revenues from contracts with customers are recognized when the performance obligations towards customer The aggregate of the Group’s share of profit or loss of a have been met. Performance obligations are deemed to joint venture and associate is shown on the face of the have been met when control of the goods or services are statement of profit and loss. transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled The financial statements of joint venture and associate in exchange for those goods or services. The Group acts are prepared for the same reporting period as the Group. as the principal in all of its revenue arrangements since it When necessary, adjustments are made to bring the is the primary obligor in all the revenue arrangements as it accounting policies in line with those of the Group. has pricing latitude and is also exposed to inventory and credit risks. After application of the equity method, the Group determines whether it is necessary to recognise an An entity collects Sales tax/ Value added tax (VAT)/ Goods impairment loss on its investment in its joint venture or and Services Tax (“GST”) collected on behalf of the associate. At each reporting date, the Group determines government and not on its own account. Hence it should whether there is objective evidence that the investment be excluded from revenue, i.e. revenue should be net in joint venture or associate is impaired. If there is such of GST. evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of Based on the Educational Material on Ind AS 18 issued by joint venture or associate and its carrying value, and then the ICAI, the Group has assumed that recovery of excise recognises the loss as ‘Share of profit of a joint venture and duty flows to the group on its own account. This is for the associate’ in the statement of profit or loss. reason that it is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the 2.6 Current versus non-current classification goods are sold or not. Since the recovery of excise duty The Group presents assets and liabilities in the balance flows to the group on its own account, revenue includes sheet based on current/ non-current classification. An asset excise duty. is treated as current when it is: • Expected to be realised or intended to be sold or The disclosures of significant accounting judgements, consumed in normal operating cycle estimates and assumptions relating to revenue from contracts with customers are provided in Note 41. • Held primarily for the purpose of trading • Expected to be realised within twelve months after the 2.7.2 Sale of goods: reporting period, or Revenue from sale of goods (Tyres, tubes and flaps) is recognised at a point in time when control of the goods is • Cash or cash equivalent unless restricted from being transferred to customer depending on terms of sales. exchanged or used to settle a liability for at least twelve months after the reporting period The Group considers whether there are other promises All other assets are classified as non-current. in the contract that are separate performance obligations to which a portion of the transaction price needs to be A liability is current when: allocated (e.g., warranties). In determining the transaction • It is expected to be settled in normal operating cycle price for the sale of goods, the Group considers the effects
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nment grants and Export incentives Revenue is recognised when the Group’s right to receive right to receive when the Group’s recognised Revenue is which is generally when the payment is established, Current income tax assets and liabilities are measured measured are liabilities and tax assets income Current or paid from at the amount expected to be recovered to the taxation authorities. The tax rates and tax laws enacted those that are used to compute the amount are date in the or substantively enacted, at the reporting operates and generates taxable the Group countries where The Group also earns sales based royalty income which also earns sales based royalty The Group basis. time an over on typically as revenue recognised is gets customer the arrangements such in because is This as it intellectual property Group’s a right to access the to be period. The revenue the license exists throughout on a specified percentage is determined based recognised the customer. of the sales made by Taxes Gover appropriate. income. outside to items recognised income tax relating Current or loss (either in outside profit recognised or loss is profit tax items income or in equity). Current other comprehensive to the underlying transaction correlation in recognised are Management periodically in equity. either in P&L or directly with respect evaluates positions taken in the tax returns are to situations in which applicable tax regulations where and establishes provisions subject to interpretation shareholders approve the dividend. approve shareholders is there where Government recognised grants are and all assurance that the grant will be received reasonable When the grant attached conditions will be complied with. as income on a an expense item, it is recognised to relates costs, for related systematic basis over the periods that the expensed. which it is intended to compensate, are has chosen to adjust governmentThe Group grant from pursuant to the carrying value of non-monetary asset for Governmentamendment in Ind AS 20 Accounting When loans or similar assistance Grants and Disclosure. by governments institutions, with or related provided are applicable market rate below the current an interest as is regarded of this favourable interest rate, the effect a government grant. The loan or assistance is initially at fair value and the government and measured recognised between the initial as the difference grant is measured received. carrying value of the loan and the proceeds as per the accounting The loan is subsequently measured policy applicable to financial liabilities. India from Export Merchandise under Incentives Export and in the Statement of Profit Scheme (MEIS) is recognised Loss as a part of other operating revenues.
2.7.6 Dividends: 2.9 income tax 2.9.1 Current 2.7.7 Royalty and Technology Development fees: 2.7.7 Royalty and Technology 2.8 Generally, the Group receives short-term advances from short-term advances from receives the Group Generally, in Ind AS its customers. Using the practical expedient amount does not adjust the promised 115, the Group of a significant financing of consideration for the effects that the component if it expects, at contract inception, good or period between the transfer of the promised pays for service to the customer and when the customer that good or service will be one year or less. obligations for sales related normally provides The Group in line sold, products all its on years three a period of for are obligations related These sales practice. industry with Contingent accounted for under Ind AS 37 Provisions, 24 for more Liabilities and Contingent Assets. See Note does not have any extended sales information. The Group obligations. related Variable consideration includes volume discounts, price consideration includes volume discounts, Variable estimates the concessions, incentives, etc. The Group of historical variable consideration based on an analysis transaction price. experience and it is adjusted from of variable consideration, the existence of significant existence of significant consideration, the of variable components, if any. financing on the goods various forms of discounts offers The Group and distributors. In all such cases, sold to its dealers is used to estimate and provide accumulated experience using the expected value revenue, for the variability in it that extent the to recognised is revenue the and method in the amount reversal that a significant is highly probable on not occur in future will recognized of cumulative revenue or discounts. account of refund T A receivable represents the Group’s right to an amount of the Group’s represents A receivable consideration that is unconditional (i.e., only the passage payment of the consideration before of time is required is due). Refer to note 2.19 on financial instruments in accounting policies. either at amortised cost For all debt instruments measured income, interest other comprehensive or at fair value through rate (EIR). interest using the effective income is recorded EIR is the rate that exactly discounts the estimated future over the expected life of the cash payments or receipts appropriate, financial instrument or a shorter period, where carrying amount of the financial asset or to the to the gross the When calculating amortised cost of a financial liability. estimates the expected rate, the Group interest effective of the terms the contractual all by considering flows cash extension, financial instrument (for example, prepayment, call and similar options) but does not consider the expected income is included in finance income losses. Interest credit and loss. in the statement of profit 2.7.2.2 Significant financing component obligations 2.7.3 Sales related 2.7.4 Contract balances 2.7.2.1 Variable consideration 2.7.2.1 Variable rade receivables 2.7.5 Interest income: 2.7.5 Interest Notes to Consolidated Financial Statements for the year ended March 31, 2019
2.9.2 Deferred tax: Deferred tax relating to items recognised outside profit Deferred tax is provided using the liability method on or loss is recognised outside profit or loss (either in other temporary differences between the tax bases of assets and comprehensive income or in equity). Deferred tax items liabilities and their carrying amounts for financial reporting are recognised in correlation to the underlying transaction purposes at the reporting date. either in OCI or directly in equity.
Deferred tax liabilities are recognised for all taxable Deferred tax assets and deferred tax liabilities are offset if a temporary differences, except: legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate • When the deferred tax liability arises from the initial to the same taxable entity and the same taxation authority. recognition of an asset or liability in a transaction that is not a business combination and, at the time of the Minimum alternate tax (MAT) paid in a year is charged transaction, affects neither the accounting profit nor to the statement of profit and loss as current tax for the taxable profit or loss year. The deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the • In respect of taxable temporary differences associated concerned company will pay normal income tax during with investments in subsidiaries and interests in the specified period, i.e., the period for which MAT credit joint ventures, when the timing of the reversal of is allowed to be carried forward. In the year in which the the temporary differences can be controlled and it concerned company recognizes MAT credit as an asset, it is probable that the temporary differences will not is created by way of credit to the statement of profit and loss reverse in the foreseeable future and shown as part of deferred tax asset. The concerned company reviews the “MAT credit entitlement” asset at Deferred tax assets are recognised for all deductible each reporting date and writes down the asset to the temporary differences, the carry forward of unused tax extent that it is no longer probable that it will pay normal credits and any unused tax losses. Deferred tax assets are tax during the specified period. recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary 2.9.3 Sales tax/ value added taxes/GST paid on acquisition differences, and the carry forward of unused tax credits of assets or on incurring expenses and unused tax losses can be utilised, except: Expenses and assets are recognised net of the amount of sales tax/ value added taxes/GST paid, except: • When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition • When the tax incurred on a purchase of assets or of an asset or liability in a transaction that is not services is not recoverable from the taxation authority, a business combination and, at the time of the in which case, the tax paid is recognised as part of transaction, affects neither the accounting profit nor the cost of acquisition of the asset or as part of the taxable profit or loss expense item, as applicable
• In respect of deductible temporary differences • When receivables and payables are stated with the associated with investments in subsidiaries, amount of tax included associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is The net amount of tax recoverable from, or payable to, probable that the temporary differences will reverse the taxation authority is included as part of receivables or in the foreseeable future and taxable profit will be payables in the balance sheet. available against which the temporary differences can be utilised 2.10 Assets held for sale The Group classifies Non-current assets or disposal The carrying amount of deferred tax assets is reviewed at groups comprising of assets and liabilities are classified as each reporting date and reduced to the extent that it is no ‘held for sale’ when all of the following criterias are met: (i) longer probable that sufficient taxable profit will be available decision has been made to sell. (ii) the assets are available to allow all or part of the deferred tax asset to be utilised. for immediate sale in its present condition. (iii) the assets Unrecognised deferred tax assets are re-assessed at each are being actively marketed and (iv) sale has been agreed reporting date and are recognised to the extent that it has or is expected to be concluded within 12 months of the become probable that future taxable profits will allow the Balance Sheet date. deferred tax asset to be recovered. Subsequently, such non-current assets and disposal Deferred tax assets and liabilities are measured at the tax groups classified as ‘held for sale’ are measured at the rates that are expected to apply in the year when the asset lower of its carrying value and fair value less costs to is realised or the liability is settled, based on tax rates (and sell. Non-current assets held for sale are not depreciated tax laws) that have been enacted or substantively enacted or amortised. at the reporting date.
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materials like trollies, iron storage tacks skids – skids tacks storage iron trollies, like materials Intangible assets Air conditioner having capacity of > 2 tons – 15 years (Higher of > 2 tons – 15 years having capacity Air conditioner Serviceable lifts trucks - 5 years (Lower than Batteries used in fork Intangible assets with infinite useful lives are not amortised, Intangible assets with infinite useful lives are or individually either annually, impairment for tested are but at the cash-generating unit level. The assessment of infinite annually to determine whether the infinite life life is reviewed continues to be supportable. If not, the change in useful life prospective basis. infinite to finite is made on a from Intangible assets acquired separately are measured on measured separately are Intangible assets acquired at cost. Following initial recognition, initial recognition carried at cost less any accumulated intangible assets are losses. amortisation and accumulated impairment Internally generated intangibles, excluding capitalised not capitalised and the related development costs, are or loss in the period in in profit is reflected expenditure is incurred. which the expenditure assessed as either The useful lives of intangible assets are finite or infinite. amortised over the useful Intangible assets with finite lives are economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. for method amortisation and the period amortisation The at reviewed are useful life a finite an intangible asset with period. Changes in the least at the end of each reporting patternexpected the or life useful expected consumption of economic benefits embodied in the asset are of future to modify the amortisation period or method, considered in accounting as changes treated and are as appropriate, estimates. The amortisation expense on intangible assets and recognised in the statement of profit with finite lives is forms part of carrying value loss unless such expenditure of another asset. than those indicated in Schedule II of the Companies Act, II of the Companies indicated in Schedule than those 2013) those indicated in Schedule II of the 15 years (Higher than Companies Act, 2013) II of the Companies Act, 2013) those indicated in Schedule
2.12 • • • statement when the asset is derecognised. of depreciation and methods lives values, useful The residual at each financial reviewed plant and equipment are of property, if appropriate. year end and adjusted prospectively, The management believes that the depreciation rates fairly that the depreciation The management believes residual values of the lives and its estimation of the useful reflect fixed assets. plant and equipment and any significant An item of property, when upon disposal or is derecognised part initially recognised its use or expected from economic benefits are no future of the asset disposal. Any gain or loss arising on derecognition between the net disposal proceeds (calculated as the difference included in the income and the carrying amount of the asset) is
3 years 5 years 8 years 6 years 3 years 10 years 10 years 20 years 15 years 6-15 years Useful life 50 years - 60 years 15 years - 20 years
Installations – 20 years (Higher than those (Higher than years – 20 Installations Asset Class Buildings Plant & Machinery Moulds Computers & Fixtures Furniture Equipment Office Motor Vehicles Carpeted Roads- RCC Computer Servers Electrical Installations structure Temporary Hand Carts, Trollies Moulds – 6 years (Lower than those indicated in Schedule Electrical Plant & Machinery – 20 years (Higher than those indicated Factory buildings - 50 years (Higher than those indicated in Pr indicated in Schedule II of the Companies Act, 2013) II of the Companies Act, 2013) Schedule II of the Companies Act, 2013) in Schedule II of the Companies Act, 2013) Depreciation is calculated on a straight-line basis using Depreciation lives estimated the rates arrived at based on the useful has used the following by the management. The Group on its fixed assets. depreciation useful lives to provide over their depreciated The identified components are life the over is depreciated asset remaining the lives, useful of the principal asset. about the recorded decommissioning provision. about the recorded the over basis line straight a on amortised – land Leasehold 95 to 99 years. period of the lease ranging from Capital work in progress, plant and equipment is stated and equipment plant in progress, Capital work and accumulated depreciation at cost, net of accumulated Such cost includes the cost of any. impairment losses, if equipment and borrowing part of the plant and replacing if the recognition projects costs for long-term construction parts of plant and met. When significant criteria are the intervals, at replaced be to required are equipment on their specific them separately based depreciates Group when a major inspection is performed, useful lives. Likewise, carrying amount of the plant in the its cost is recognised criteria if the recognition replacement and equipment as a costs are repair and maintenance satisfied. All other are value The present or loss as incurred. in profit recognised of an asset of the expected cost for the decommissioning asset if respective after its use is included in the cost of the met. Refer to note are criteria for a provision the recognition significant accounting judgements, estimates 41 regarding for further information and assumptions and provisions
• • • • The management has estimated, supported by independent by supported estimated, has management The the useful lives of the following assessment by professional, class of assets. 2.11 plantandequipment operty, Notes to Consolidated Financial Statements for the year ended March 31, 2019
Gains or losses arising from derecognition of an intangible 2.13 Borrowing costs asset are measured as the difference between the net Borrowing costs directly attributable to the acquisition, disposal proceeds and the carrying amount of the asset construction or production of an asset that necessarily and are recognised in the statement of profit or loss when takes a substantial period of time to get ready for its the asset is derecognised. intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the Intangible assets are amortised on straight line method period in which they occur. Borrowing costs consist of as under: interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes • Software expenditure have been amortised over a exchange differences to the extent regarded as an period of three years. adjustment to the borrowing costs. • Technical Know-how and Brands are amortised over a period of twenty years. To the extent that the Group borrows funds specifically for the purpose of obtaining a qualifying asset, the Group 2.12.1 Technical know-how and Brand: determines the amount of borrowing costs eligible for The Group has originally generated technical know-how capitalisation as the actual borrowing costs incurred on and assistance for setting up of Halol radial plant. that borrowing during the period less any investment Considering the life of the underlying plant/facility, this income on the temporary investment of those borrowings. technical know-how, is amortised on a straight line basis over a period of twenty years. To the extent that the Group borrows funds generally and uses them for the purpose of obtaining a qualifying asset, The Group has acquired global rights of “CEAT” brand from the Group determines the amount of borrowing costs the Italian tyre maker, Pirelli. Prior to the said acquisition, eligible for capitalisation by applying a capitalisation rate the Group was the owner of the brand in only a few Asian to the expenditures on that asset. The capitalisation rate countries including India. With the acquisition of the brand is the weighted average of the borrowing costs applicable which is renowned worldwide, new and hitherto unexplored to the borrowings of the Group that are outstanding during markets will be accessible to the Group. The Group will be the period, other than borrowings made specifically for the in a position to fully exploit the export market resulting in purpose of obtaining a qualifying asset. increased volume and better price realization. Therefore, the management believes that the Brand will yield significant 2.14 Leases benefits for a period of at least twenty years. The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at 2.12.2 Research and development costs: the inception of the lease. The arrangement is, or contains, Research costs are expensed as incurred. a lease if fulfilment of the arrangement is dependent on Development expenditures on an individual project are the use of a specific asset or assets and the arrangement recognised as an intangible asset when the Group can conveys a right to use the asset or assets, even if that right demonstrate: is not explicitly specified in an arrangement. • The technical feasibility of completing the intangible 2.14.1 Group as a lessee: asset so that the asset will be available for use or sale 2.14.1.1 Finance lease • Its intention to complete and its ability and intention to A lease is classified at the inception date as a finance lease use or sell the asset or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Group • How the asset will generate future economic benefits is classified as a finance lease. • The availability of resources to complete the asset Finance leases are capitalised at the commencement of the • The ability to measure reliably the expenditure during lease at the fair value of the leased property at the inception development date or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between Following initial recognition of the development finance charges and reduction of the lease liability so as expenditure as an asset, the asset is carried at cost to achieve a constant rate of interest on the remaining less any accumulated amortisation and accumulated balance of the liability. Finance charges are recognised in impairment losses. Amortisation of the asset begins when finance costs in the statement of profit and loss, unless development is complete and the asset is available for use. they are directly attributable to qualifying assets, in which It is amortised over the period of expected future benefit. case they are capitalised in accordance with the Group’s Amortisation expense is recognised in the statement general policy on the borrowing costs. Contingent rentals of profit and loss unless such expenditure forms part of are recognised as expenses in the periods in which they carrying value of another asset. are incurred. During the period of development, the asset is tested for A leased asset is depreciated over the useful life of the impairment annually. asset. However, if there is no reasonable certainty that the
190 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
191 CEAT Limited CEAT
Impairment of non-financial assets Impairment of non-financial Net realisable value is the estimated selling price in the is the estimated value Net realisable costs of business, less estimated course of ordinary estimated costs necessary to make completion and the asset is used. Impairment losses of continuing operations, including in the statement recognised impairment on inventories, are and loss. of profit date to determine An assessment is made at each reporting recognised is an indication that previously whether there If such impairment losses no longer exist or have decreased. or CGU’s estimates the asset’s indication exists, the Group impairment recognised previously amount. A recoverable has been a change in the only if there loss is reversed recoverable assumptions used to determine the asset’s amount since the last impairment loss was recognised. is limited so that the carrying amount of the The reversal the sale. date, whether reporting assesses, at each The Group an asset may be impaired. is an indication that there testing impairment annual when or exists, indication any If asset’s estimates the the Group for an asset is required, amount is recoverable amount. An asset’s recoverable (CGU) or cash-generating unit’s the higher of an asset’s of disposal and its value in use. fair value less costs individual asset, Recoverable amount is determined for an inflows that are unless the asset does not generate cash other assets or groups of those from largely independent or CGU of an asset carrying amount When the of assets. amount, the asset is considered exceeds its recoverable amount. and is written down to its recoverable impaired cash flows future In assessing value in use, the estimated value using a pre-tax to their present discounted are of market assessments current discount rate that reflects asset. the to specific risks the and money of value time the disposal, recent In determining fair value less costs of taken into account. If no such market transactions are valuation an appropriate transactions can be identified, by corroborated model is used. These calculations are prices for publicly traded valuation multiples, quoted share companies or other available fair value indicators. bases its impairment calculation on detailed The Group prepared calculations, which are budgets and forecast to which the CGUs separately for each of the Group’s allocated. These budgets and individual assets are calculations generally cover a period of five years. forecast rate is calculated For longer periods, a long-term growth cash flows after the fifth future and applied to project beyond periods estimate cash flow projections To year. the Group budgets/forecasts, by the most recent covered in the budget using a extrapolates cash flow projections rate for subsequent years, steady or declining growth rate can be justified. In any case, this unless an increasing rate does not exceed the long-term average growth growth in countries or country or industries, products, the for rate which the entity operates, or for the market in which the
2.16
materials, components, stores and spares are are spares and stores components, materials,
ork-in-progress and finished goods are valued at finished goods are and ork-in-progress T W Raw realizable value. Cost includes cost of purchase and value. Cost includes cost of purchase realizable in bringing the inventories to their other costs incurred location and condition. Cost is determined on present a weighted average basis. lower of cost and net realizable value. Cost includes lower of cost and net realizable of materials and labour and a proportion direct manufacturing overheads based on normal operating costs. Cost is but excluding borrowing capacity, determined on a weighted average basis. valued at lower of cost and net realizable value. valued at lower of cost and net realizable in use for held items other and materials However, not written down of inventories are the production in which they will below cost if the finished products expected to be sold at or above be incorporated are cost. Cost is determined on a weighted average basis. Finance lease
Group will obtain ownership by the end of the lease term, by the end will obtain ownership Group of the estimated over the shorter is depreciated the asset • • • Inventories Operating lease payments are recognised as an expense an as recognised are payments lease Operating basis line straight a on loss and profit of statement the in unless payments to the lessor are over the lease term general inflation in line with expected to increase structured cost expected inflationary lessor’s to compensate for the Costs incurred in bringing each product to its present to its present in bringing each product Costs incurred accounted for as follows: location and conditions are which they are earned. which they are valued at the lower of cost and net Inventories are value. realisable Rental income from operating lease is recognised on a lease is recognised operating Rental income from payments to straight line basis over the lease term unless in line with expected increase to structured are the Group expected Group’s general inflation to compensate for the in costs incurred Initial direct inflationary cost increase. to added lease are negotiating and arranging an operating and recognised the carrying amount of the leased asset income. rental as basis same the on term lease the over in the period in as revenue recognised are Contingent rents There are no finance leases where the Group is a lessor. the Group no finance leases where are There increase. useful life of the asset and the lease term. useful life of the asset Initial cost of inventories includes the transfer of gains and recognised in other losses on qualifying cash flow hedges, of of the purchases income, in respect comprehensive raw materials.
net and cost of lower at valued are goods raded
2.15 2.14.2 Group as a lessor: 2.14.2 Group 2.14.2.1 2.14.1.2 Operating lease 2.14.1.2 Operating 2.14.2.2 Operating lease Notes to Consolidated Financial Statements for the year ended March 31, 2019
asset does not exceed its recoverable amount, nor exceed for service received before the balance sheet date exceeds the carrying amount that would have been determined, net the contribution already paid, the deficit payable to these of depreciation, had no impairment loss been recognised funds/schemes is recognized as a liability after deducting for the asset in prior years. Such reversal is recognised in the contribution already paid. If the contribution already the statement of profit and loss. paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized 2.17 Provisions as an asset to the extent that the pre-payment will lead to, Provisions are recognised when the Group has a present for example, a reduction in future payment or a cash refund. obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying 2.18.2 Defined benefit plan economic benefits will be required to settle the obligation The Group has a defined benefit gratuity plan, which requires and a reliable estimate can be made of the amount of contribution to be made to a separately administered fund. the obligation. When the Group expects some or all of The Group’s liability towards this benefit is determined on a provision to be reimbursed, for example, under an the basis of actuarial valuation using Projected Unit Credit insurance contract, the reimbursement is recognised as a Method at the date of balance sheet. separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in Remeasurement, comprising of actuarial gains and losses, the statement of profit and loss net of any reimbursement. the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the If the effect of the time value of money is material, return on plan assets (excluding amounts included in net provisions are discounted using a current pre-tax rate that interest on the net defined benefit liability), are recognised reflects, when appropriate, the risks specific to the liability. immediately in the balance sheet with a corresponding debit When discounting is used, the increase in the provision due or credit to retained earnings through OCI in the period in to the passage of time is recognised as a finance cost. which they occur. Remeasurement is not reclassified to the statement of profit and loss in subsequent periods. 2.17.1 Provisions for Sales related obligation The estimated liability for sales related obligations is Past service costs are recognised in the statement of profit recorded when products are sold. These estimates and loss on the earlier of: are established using historical information on the • The date of the plan amendment or curtailment and nature, frequency and average cost of obligations and management estimates regarding possible future incidence • The date that the Group recognises related based on corrective actions on product failure. The timing restructuring costs of outflows will vary as and when the obligation will arise - being typically up to three years. Initial recognition is based Net interest is calculated by applying the discount rate to the on historical experience. The initial estimate of sales related net defined benefit liability or asset. The Group recognises obligations-related costs is revised annually. the following changes in the net defined benefit obligation as an expense in the statement of profit and loss: 2.17.2 Decommissioning liability • Service costs comprising current service costs, Decommissioning costs are provided at the present value past-service costs, gains and losses on curtailments of expected costs to settle the obligation using estimated and non-routine settlements; and cash flows and are recognised as part of the cost of the particular asset. The cash flows are discounted at a • Net interest expense or income current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is 2.18.3 Compensated absences expensed as incurred and recognised in the statement of Accumulated leave, which is expected to be utilized within profit and loss as a finance cost. The estimated future costs the next 12 months, is treated as short-term employee of decommissioning are reviewed annually and adjusted as benefit and this is shown under short term provision in the appropriate. Changes in the estimated future costs or in Balance Sheet. The Group measures the expected cost the discount rate applied are added to or deducted from of such absences as the additional amount that it expects the cost of the asset. to pay as a result of the unused entitlement that has accumulated at the reporting date. 2.18 Retirement and other employee benefits 2.18.1 Defined Contribution plan The Group treats accumulated leave expected to be Retirement benefit in the form of Provident Fund, carried forward beyond twelve months, as long-term Superannuation, Employees State Insurance Contribution employee benefit for measurement purposes and this is and Labour Welfare Fund are defined contribution shown under long term provisions in the Balance Sheet. scheme. The Group has no obligation, other than the Such long-term compensated absences are provided for contribution payable to these funds/schemes. The Group based on the actuarial valuation using the projected unit recognizes contribution payable to these funds/schemes credit method at the year-end. Actuarial gains/losses are as expenditure, when an employee renders the related immediately taken to the Statement of Profit and Loss service. If the contribution payable to these funds/schemes and are not deferred. The Group presents the leave as a
192 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 193
model is achieved both
CEAT Limited CEAT
s contractual cash flows represent SPPI. represent s contractual cash flows The objective of the business The asset’ by collecting contractual cash flows and selling the by collecting contractual cash flows and financial assets, and
All equity investments in scope of Ind AS 109 are All equity investments in scope of Ind AS 109 are held are which instruments Equity value. fair at measured classified as at FVTPL. For all other equity for trading are election may make an irrevocable instruments, the Group subsequent changes in the fair value in other to present makes such election income. The Group comprehensive on an instrument-by-instrument basis. The classification is and is irrevocable. made on initial recognition A ‘debt instrument’ is classified as at the FVTOCI if both of A ‘debt instrument’ is met: the following criteria are category for debt instruments. FVTPL is a residual meet the criteria Any debt instrument, which does not for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. may elect to designate a debt In addition, the Group instrument, which otherwise meets amortized cost or election such FVTOCI criteria, as at FVTPL. However, or eliminates a is allowed only if doing so reduces to as inconsistency (referred or recognition measurement designated not has Group The mismatch’). ‘accounting any debt instrument as at FVTPL. Debt instruments included within the FVTPL category are in the at fair value with all changes recognized measured and loss. statement of profit After initial measurement, such financial assets are assets are such financial measurement, After initial cost using the at amortised measured subsequently Amortised cost is rate (EIR) method. interest effective into account any discount or premium calculated by taking an integral part of or costs that are on acquisition and fees is included in finance income the EIR. The EIR amortisation loss. The losses arising from and in the statement of profit and of profit in the statement recognised impairment are applies to trade and other generally loss. This category financial assets. loans and other receivables, a) b) FVTOCI category Debt instruments included within the date initially as well as at each reporting measured are in the recognized at fair value. Fair value movements are the group income (OCI). However, other comprehensive income, impairment losses & reversals interest recognizes exchange gain or loss in the statement of profit and foreign of the asset, cumulative gain or and loss. On derecognition the from in OCI is reclassified recognised loss previously earned and loss. Interest equity to the statement of profit as is reported whilst holding FVTOCI debt instrument Rate (EIR) Interest income using the Effective interest method. 2.19.1.2.4 Equity investments 2.19.1.2.2 Debt instrument at FVTOCI 2.19.1.2.2 Debt instrument 2.19.1.2.3 Debt instrument at FVTPL
Contractual terms of the asset give rise on specified The asset is held within a business model whose dates to cash flows that are solely payments of dates to cash flows that are (SPPI) on the principal amount principal and interest outstanding. objective is to hold assets for collecting contractual cash flows, and
current liability in the balance sheet, to the extent it does balance sheet, to liability in the current for to defer its settlement unconditional right not have an has the Group date. Where reporting 12 months after the and contractual right to defer the the unconditional legal beyond 12 months, the same is settlement for a period liability. as non-current presented benefit as a liability termination recognizes The Group obligation has a present the Group and an expense when of outflow an that probable is it event, past of result a as to required will be benefits economic embodying resources estimate can be made of a reliable settle the obligation and benefit falls the amount of the obligation. If the termination than 12 months after the balance sheet date, due for more cash flows value of the future at present measured they are to market using the discount rate determined by reference yields at the balance sheet date on the government bonds. Financial instruments b) a) For purposes of subsequent measurement, financial assets For purposes of subsequent measurement, classified in four categories: are cost if the amortised at measured is instrument’ ‘debt A met: both the following conditions are purchase or sell the asset. purchase All financial assets are recognised initially at fair value plus, recognised initially at fair value plus, All financial assets are at fair value recorded in the case of financial assets not attributable or loss, transaction costs that are profit through or sales Purchases to the acquisition of the financial asset. delivery of assets within require of financial assets that or convention in a time frame established by regulation on recognised way trades) are the market place (regular commits to the trade date, i.e., the date that the Group A financial instrument is any contract that gives rise to a A financial instrument is any contract that liability or equity financial asset of one entity and a financial instrument of another entity.
2.18.4 Termination benefits 2.18.4 Termination 2.19.1.2 Subsequent measurement 2.19.1 Financial assets and measurement 2.19.1.1 Initial recognition 2.19 2.19.1.2.1 Debt instruments at amortised cost other 2.19.1.2.2 Debt instruments at fair value through income (FVTOCI) comprehensive 2.19.1.2.3 Debt instruments, derivatives and equity and loss (FVTPL) profit instruments at fair value through at fair value through 2.19.1.2.4 Equity instruments measured income (FVTOCI) other comprehensive 2.19.1.2.1 Debt instruments at amortised cost Notes to Consolidated Financial Statements for the year ended March 31, 2019
In case of equity instrument classified as FVTOCI, all fair c) Lease receivables under Ind AS 17 value changes on the instrument, excluding dividends, are recognized in the other comprehensive income. There is d) Trade receivables or any contractual right to receive no recycling of the amounts from other comprehensive cash or another financial asset that result from income to the statement of profit and loss, even on sale transactions that are within the scope of Ind AS 115 of investment. However, the Group may transfer the cumulative gain or loss within equity. e) Loan commitments which are not measured as at FVTPL Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the f) Financial guarantee contracts which are not measured statement of profit and loss. as at FVTPL
2.19.1.3 Derecognition The Group follows ‘simplified approach’ for recognition of A financial asset (or, where applicable, a part of a financial impairment loss allowance on: asset or part of a group of similar financial assets) is primarily derecognised when: • Trade receivables • The rights to receive cash flows from the asset have • All lease receivables resulting from transactions within expired or the scope of Ind AS 17 • The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to The application of simplified approach does not require the pay the received cash flows in full without material delay Group to track changes in credit risk. Rather, it recognises to a third party under a ‘pass-through’ arrangement; impairment loss allowance based on lifetime ECLs at each and either (a) the Group has transferred substantially reporting date, right from its initial recognition. all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all For recognition of impairment loss on other financial assets the risks and rewards of the asset, but has transferred and risk exposure, the group determines that whether there control of the asset. has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, When the Group has transferred its rights to receive cash 12-month ECL is used to provide for impairment loss. flows from an asset or has entered into a pass-through However, if credit risk has increased significantly, lifetime arrangement, it evaluates if and to what extent it has ECL is used. If, in a subsequent period, credit quality of retained the risks and rewards of ownership. When it has the instrument improves such that there is no longer a neither transferred nor retained substantially all of the risks significant increase in credit risk since initial recognition, and rewards of the asset, nor transferred control of the then the entity reverts to recognising impairment loss asset, the Group continues to recognise the transferred allowance based on 12-month ECL. asset to the extent of the Group’s continuing involvement. In that case, the Group also recognises an associated Lifetime ECL are the expected credit losses resulting liability. The transferred asset and the associated liability are from all possible default events over the expected life of measured on a basis that reflects the rights and obligations a financial instrument. The 12-month ECL is a portion of that the Group has retained. the lifetime ECL which results from default events that are possible within 12 months after the reporting date. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the ECL is the difference between all contractual cash flows original carrying amount of the asset and the maximum that are due to the group in accordance with the contract amount of consideration that the Group could be required and all the cash flows that the entity expects to receive to repay. (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required 2.19.1.4 Impairment of financial assets to consider: In accordance with Ind AS 109, the Group applies expected • All contractual terms of the financial instrument credit loss (ECL) model for measurement and recognition (including prepayment, extension, call and similar of impairment loss on the following financial assets and options) over the expected life of the financial credit risk exposure: instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated a) Financial assets that are debt instruments, and reliably, then the entity is required to use the remaining are measured at amortised cost e.g., loans, debt contractual term of the financial instrument securities, deposits, trade receivables and bank balance • Cash flows from the sale of collateral held or other credit enhancements that are integral to the b) Financial assets that are debt instruments and are contractual terms measured as at FVTOCI
194 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 195
CEAT Limited CEAT
include financial liabilities held for trading and financial financial and for trading held liabilities financial include as at fair value recognition upon initial liabilities designated classified are and loss. Financial liabilities profit through for the purpose of incurred they are as held for trading if includes also category This term. near the in repurchasing into by the group entered derivative financial instruments instruments in hedge not designated as hedging that are AS 109. as defined by Ind relationships recognised held for trading are Gains or losses on liabilities This is the category most relevant to the Group. After initial After initial to the Group. This is the category most relevant are loans and borrowings interest-bearing recognition, at amortised cost using the subsequently measured Rate (EIR) method. Gains and losses Interest Effective or loss when the liabilities are in profit recognised are the EIR amortisation as well as through derecognised process. into account any Amortised cost is calculated by taking on acquisition and fees or costs that discount or premium part of the EIR. The EIR amortisation is an integral are and loss. included as finance costs in the statement of profit when the obligation A financial liability is derecognised under the liability is discharged or cancelled or expires. replaced by another When an existing financial liability is terms, or the the same lender on substantially different from substantially modified, such terms of an existing liability are as the derecognition an exchange or modification is treated of a new liability. of the original liability and the recognition carrying amounts is the respective in The difference and loss. in the statement of profit recognised determines classification of financial assets The Group After initial recognition, and liabilities on initial recognition. are is made for financial assets which no reclassification equity instruments and financial liabilities. For financial reclassification a instruments, debt are which assets is a change in the business model is made only if there for managing those assets. Changes to the business senior The Group’s expected to be infrequent. model are management determines change in the business model as of externala result or internal significant which are changes in the statement of profit and loss. in the statement of profit at fair upon initial recognition Financial liabilities designated designated as such at and loss are profit value through and only if the criteria in Ind the initial date of recognition, satisfied. For liabilities designated as FVTPL, AS 109 are changes in own fair value gains/ losses attributable to income. in other comprehensive recognized are risks credit to the not subsequently transferred These gains/ loss are may the Group and loss. However, statement of profit All other equity. transfer the cumulative gain or loss within in the recognised changes in fair value of such liability are not designated has Group The and loss. profit of statement and loss. profit any financial liability as at fair value through 2.19.2.2.2 Loans and borrowings 2.19.2.3 Derecognition 2.19.3 Reclassification of financial assets
ed as at amortised cost, ed at FVTOCI: Since financial
Debt instruments measur Financial assets measur assets are already reflected at fair value, impairment reflected already assets are its value. from allowance is not further reduced contractual revenue receivables and lease receivables: and lease receivables: receivables contractual revenue as an allowance, i.e., as an integral ECL is presented of those assets in the part of the measurement the net carrying balance sheet. The allowance reduces criteria, the amount. Until the asset meets write-off impairment allowance from not reduce does Group carrying amount. the gross
ECL impairment loss allowance (or reversal) recognized recognized allowance (or reversal) ECL impairment loss as income/ expense in the recognized during the period is reflected This amount is and loss (P&L). statement of profit expenses’ in the statement of profit under the head ‘other for various presentation sheet balance loss. The and financial instruments is described below: As a practical expedient, the Group uses a provision matrix a provision uses expedient, the Group As a practical of allowance on portfolio impairment loss to determine is based on its matrix The provision its trade receivables. of life expected the over rates default observed historically adjusted for forward-looking and is the trade receivables date, the historical reporting estimates. At every and changes in the updated are observed default rates analysed. estimates are forward-looking Financial liabilities at fair value through profit and loss profit Financial liabilities at fair value through Financial liabilities are classified, at initial recognition, classified, at initial Financial liabilities are and profit as financial liabilities at fair value through payables, or as derivatives loss, loans and borrowings, hedge, designated as hedging instruments in an effective • • classification, as described below: The measurement of financial liabilities depends on their The measurement directly attributable transaction costs. directly financial liabilities include trade and other The Group’s including bank overdrafts payables, loans and borrowings and derivative financial instruments. as appropriate. recognised initially at fair value and, All financial liabilities are and payables, net of in the case of loans and borrowings which are credit impaired on purchase/ origination. purchase/ on impaired credit which are The Group does not have any purchased or originated or purchased any have not does Group The (POCI) financial assets, i.e., financial assets credit-impaired For assessing increase in credit risk and impairment loss, risk and impairment loss, in credit For assessing increase basis on the instruments financial combines Group the risk characteristics with the objective of credit of shared enable significant facilitating an analysis that is designed to risk to be identified on a timely basis. in credit increases 2.19.2.2.1 Financial liabilities at fair value through profit and profit 2.19.2.2.1 Financial liabilities at fair value through loss 2.19.2 Financial liabilities and measurement 2.19.2.1 Initial recognition
2.19.2.2 Subsequent measurement Notes to Consolidated Financial Statements for the year ended March 31, 2019
to the Group’s operations. Such changes are evident to prospectively from the reclassification date which is the first external parties. A change in the business model occurs day of the immediately next reporting period following the when the Group either begins or ceases to perform an change in business model. The Group does not restate any activity that is significant to its operations. If the Group previously recognised gains, losses (including impairment reclassifies financial assets, it applies the reclassification gains or losses) or interest.
The followng table shows various reclassifications and how they are accounted for:
Original classification Revised classification Accounting treatment Fair value is measured at reclassification date. Difference between previous amortized Amortised cost FVTPL cost and fair value is recognised in the statement of profit and loss. Fair value at reclassification date becomes its new gross carrying amount. Effective FVTPL Amortised Cost Interest Rate (EIR) is calculated based on the new gross carrying amount. Fair value is measured at reclassification date. Difference between previous amortised Amortised cost FVTOCI cost and fair value is recognised in other comprehensive income. No change in EIR due to reclassification. Fair value at reclassification date becomes its new amortised cost carrying amount. However, cumulative gain or loss in other comprehensive income is adjusted against FVTOCI Amortised cost fair value. Consequently, the asset is measured as if it had always been measured at amortised cost. Fair value at reclassification date becomes its new carrying amount. No other FVTPL FVTOCI adjustment is required. Assets continue to be measured at fair value. Cumulative gain or loss previously FVTOCI FVTPL recognized in other comprehensive income is reclassified to the statement of profit and loss at the reclassification date.
2.19.4 Offsetting of financial instruments item ceases to be adjusted for changes in its fair value Financial assets and financial liabilities are offset and the attributable to the risk being hedged. net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised If the hedged item is derecognised, the unamortised fair amounts and there is an intention to settle on a net basis, value is recognised immediately in the statement of profit to realise the assets and settle the liabilities simultaneously. and loss. When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative 2.20 Derivative financial instruments: change in the fair value of the firm commitment attributable The Group uses derivative financial instruments, such as to the hedged risk is recognised as an asset or liability with forward currency contracts, to manage its foreign currency a corresponding gain or loss recognised in the statement risks. These derivative instruments are not designated of profit and loss. as cash flow, fair value or net investment hedges and are entered into for period consistent with currency. 2.20.2 Cash flow hedges Such derivative financial instruments are initially recognised The effective portion of the gain or loss on the hedging at fair value on the date on which a derivative contract instrument is recognised in other comprehensive income is entered into and are subsequently re-measured at fair (OCI) in the cash flow hedge reserve, while any ineffective value. Derivatives are carried as financial assets when the portion is recognised immediately in the statement of profit fair value is positive and as financial liabilities when the fair and loss. value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to the The Group uses forward currency contracts as hedges of statement of profit and loss. its exposure to foreign currency risk in forecast transactions and firm commitments. The ineffective portion relating to 2.20.1 Fair value hedges foreign currency contracts is recognised in other income/ The change in the fair value of a hedging instrument is other expenses. recognised in the statement of profit and loss as finance costs. The change in the fair value of the hedged item Amounts recognised as OCI are transferred to the attributable to the risk hedged is recorded as part of the statement of profit and loss when the hedged transaction carrying value of the hedged item and is also recognised in affects profit or loss, such as when the hedged financial the statement of profit and loss as finance costs. income or financial expense is recognised or when a forecast sale occurs. When the hedged item is the cost of For fair value hedges relating to items carried at amortised a non-financial asset or non-financial liability, the amounts cost, any adjustment to carrying value is amortised through recognised as OCI are transferred to the initial carrying profit or loss over the remaining term of the hedge using amount of the non-financial asset or liability. the EIR method. EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged If the hedging instrument expires or is sold, terminated
196 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 197 `, which
es, the Group has es, the Group e recognised in the in e recognised CEAT Limited CEAT e measured in terms of e measured
ferences arising on settlement or translation ferences oup recognises a liability to make cash distributions oup recognises oup’s financial statements are presented in presented financial statements are oup’s is also the Group’s functional currency. functional currency. is also the Group’s Dividend distribution to equity holders Dividend distribution to equity holders The Gr Foreign currencies The Gr T Exchange dif Non-monetary items that ar For assets and liabilities that ar and liabilities that For assets fair value disclosur For the purpose of Cash and cash equivalents sheet comprise Cash and cash equivalent in the balance flows, cash and For the purpose of the statement of cash to equity holders of the Group when the distribution to equity holders of the Group no longer at the is authorised and the distribution is As per the corporate laws in of the Group. discretion by is authorised when it is approved India, a distribution amount is recognised A corresponding the shareholders. equity. in directly at ` spot rate at the date the transaction by the Group and assets Monetary recognition. for qualifies first translated are currencies liabilities denominated in foreign at the exchange of rates spot currency the functional at date. reporting in the statement of profit recognised of monetary items are and loss. using translated are currency historical cost in a foreign the exchange rates at the dates of the initial transactions. at fair value in a foreign Non-monetary items measured rates at the the exchange using translated are currency date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured of the in line with the recognition at fair value is treated (i.e., item the of value fair in change the on loss or gain fair value gain or whose on items differences translation financial statements on a recurring basis, the Group basis, the Group recurring statements on a financial between transfers have occurred determines whether categorisation by re-assessing levels in the hierarchy the to significant is that input level lowest the on (based whole) at the end of each as a fair value measurement period. reporting of assets and liabilities on the basis of determined classes risks of the asset or liability characteristics and the nature, as explained above. value hierarchy and the level of the fair deposits with cash at banks and on hand and short-term months or less, which are an original maturity of three in value. subject to an insignificant risk of changes deposits, cash equivalents consist of cash and short-term as of outstanding bank overdrafts as defined above, net cash an integral part of the Group’s considered they are management.
2.23 2.24 initiallyrecorded are currencies ransactions inforeign 2.22 ed ed using
eceived to sell an
ement ement of a non-financial asset takes into ement of a non-financial asset takes into 3 - Valuation techniques for which the which for techniques Valuation - 3 2 - Valuation techniques for which the which for techniques Valuation - 2 oup measures financial instruments, such as, financial instruments, oup measures oup uses valuation techniques that are appropriate appropriate oup uses valuation techniques that are Level Level 1 - Quoted (unadjusted) market prices in active Level In the absence of a principal market, in the most In the absence of a principal market, In the principal market for the asset or liability or In the principal market for the asset or liability lowest level input that is significant to the fair value is unobservable measurement markets for identical assets or liabilities lowest level input that is significant to the fair value observable or indirectly is directly measurement advantageous market for the asset or liability
or exercised without replacement or rollover (as part of (as part or rollover replacement without or exercised is designation as a hedge strategy), or if its the hedging longer meets the criteria for or when the hedge no revoked, cumulative gain or loss previously hedge accounting, any in equity until the separately in OCI remains recognised firm currency or the foreign transaction occurs forecast commitment is met. • • • All assets and liabilities for which fair value is measur The Gr A fair value measur The fair value of an asset or a liability is measur The fair value of an asset or a liability is The principal or the most advantageous market must be The principal or the most advantageous • • Fair value is the price that would be r The Gr Fair value measur or disclosed in the financial statements are categorised or disclosed in the financial statements are described as follows, based within the fair value hierarchy, on the lowest level input that is significant to the fair value as a whole: measurement unobservable inputs. in the circumstances and for which sufficient data are data are and for which sufficient in the circumstances of use the maximising value, fair measure to available observable inputs and minimising the use of relevant account a market participant’s ability to generate economic account a market participant’s and best use or by benefits by using the asset in its highest would use the selling it to another market participant that asset in its highest and best use. participants act in their economic best interest. the assumptions that market participants would use the assumptions that market participants that market assuming the asset or liability, when pricing accessible by the Group. asset or paid to transfer a liability in an orderly transaction asset or paid to transfer a liability in an orderly date. between market participants at the measurement is based on the presumption The fair value measurement the liability that the transaction to sell the asset or transfer takes place either: derivatives, foreign denominated borrowings and assets, borrowings denominated derivatives, foreign at each balance sheet date. contracts at fair value forward
2.21 Notes to Consolidated Financial Statements for the year ended March 31, 2019
loss is recognised in other comprehensive income (OCI) or 2.26 Segment reporting the statement of profit and loss are also recognised in OCI Based on "Management Approach" as defined in Ind AS or the statement of profit and loss, respectively). 108 -Operating Segments, the Executive Management Committee evaluates the Group's performance and On consolidation, the assets and liabilities of foreign allocates the resources based on an analysis of various operations are translated into INR at the rate of exchange performance indicators by business segments. prevailing at the reporting date and their statements of profit and loss are translated at exchange rates prevailing at the Segment Policies: dates of the transactions. For practical reasons, the group The Group prepares its segment information in conformity uses a weighted average weekly rate to translate income with the accounting policies adopted for preparing and and expense items, if the average rate approximates presenting the financial statements of the Company as the exchange rates at the dates of the transactions. a whole. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a 2.27 Contingent liability and contingent assets foreign operation, the component of OCI relating to that Contingent liability is a possible obligation that arises from particular foreign operation is reclassified in statement of past events whose existence will be confirmed by the profit and loss. occurrence or non—occurrence of one or more uncertain future events not wholly within the control of the Group or 2.25 Earnings Per Share a present obligation that is not recognized because it is Basic Earnings per share (EPS) amounts are calculated not probable that an outflow of resources will be required by dividing the profit for the year attributable to equity to settle the obligation. A contingent liability also arises in holders by the weighted average number of equity shares extremely rare cases where there is a liability that cannot outstanding during the year. be recognized because it cannot be measured reliably. The Group does not recognize a contingent liability Diluted EPS amounts are calculated by dividing the profit but discloses its existence in the financial statements. attributable to equity holders by the weighted average A contingent asset is not recognised unless it becomes number of equity shares outstanding during the year plus virtually certain that an inflow of economic benefits will the weighted average number of equity shares that would arise. When an inflow of economic benefits is probable, be issued on conversion of all the dilutive potential equity contingent assets are disclosed in the financial statements. shares into equity shares. Contingent liabilities and contingent assets are reviewed at each balance sheet date.
198 Annual Report 2018-19
Corporate Overview Statutory Reports Financial Statements Notice & Proxy
Consequently, expenses disclosed under the respective notes are net of such amounts. such of net are notes respective the under disclosed expenses Consequently,
, the group has transferred the following expenses which are attributable to the construction activity and are included in the cost of capital work-in-progress (CWIP) / Fixed assets as the case may be. be. may case the as assets Fixed / (CWIP) work-in-progress capital of cost the in included are and activity construction the to attributable are which expenses following the transferred has group the , year the During 2.
199 0.10 Lacs) being value of unquoted fully-paid shares held in various co-operative housing societies. housing co-operative various in held shares fully-paid unquoted of value being Lacs) 0.10 2018 31, March at (As 2019 31, March at as Lacs 0.10 includes Building 1.
` `
Notes:
Capital work in progress in work Capital 30,935 30,935 80,159
Property, plant and equipment and plant Property, 2,62,906 2,62,906 3,10,250
March 31, 2018 31, March 2019 31, March
Particulars
As at at As at As
in lacs) in ( ` Net book value book Net
CEAT Limited CEAT
26 lacs) on account of leasehold land of CEAT Specialty Tyres Limited which has been included in capital work in progress. in work capital in included been has which Limited Tyres Specialty CEAT of land leasehold of account on lacs) 26 2018 31, (March Nil includes period the for depreciation The # `
1,547 lacs). Persuant to the amendment, the Group has now opted to adjust the Government grant from carrying amount of the asset. (refer note 2.2.1). note (refer asset. the of amount carrying from grant Government the adjust to opted now has Group the amendment, the to Persuant lacs). 1,547 2017: 31, (March 2018 31, March `
Adoption of amendment in Ind AS 20 Accounting for Gover for Accounting 20 AS Ind in amendment of Adoption ** nment grant and disclosures: as per the pre-amendment standard the Group had setup a deferred Government grant under other liabilities of of liabilities other under grant Government deferred a setup had Group the standard pre-amendment the per as disclosures: and grant nment 1,455 as on on as 1,455 `
*Adjustments include regrouping of certain assets into other class of assets (refer note 4) 4) note (refer assets of class other into assets certain of regrouping include *Adjustments
3,90,409 3,90,409 80,159 844 388 1,043 25 2,06,065 43,108 10,322 48,455 As at March 31, 2019 2019 31, March at As
As at March 31, 2018 2018 31, March at As 2,93,841 2,93,841 30,935 823 396 1,015 31 1,67,742 34,072 10,281 48,546
Net book value: book Net
54,019 54,019 - 356 367 539 2 47,573 4,680 502 - As at March 31, 2019 2019 31, March at As
Foreign exchange adjusment adjusment exchange Foreign 2 2 - 1 - - - 1 - - -
Adjustments during the year* year* the during Adjustments (1) (151) (21) - - (175) - (2) - -
On disposals disposals On (726) - (5) (1) (1) - (660) (59) - -
Depreciation for the year# year# the for Depreciation 17,557 17,557 - 255 101 171 - 15,405 1,480 145 -
As at March 31, 2018 2018 31, March at As 37,361 37,361 - 107 267 369 3 32,978 3,280 357 -
Foreign exchange adjusment adjusment exchange Foreign (1) - - - - - (1) - - -
Adjustments during the year* year* the during Adjustments 167 167 - (120) - 2 - 285 - - -
On disposals disposals On (1,242) - (389) (6) (4) - (768) (75) - -
Depreciation for the year# year# the for Depreciation 15,477 15,477 - 287 102 158 - 13,506 1,288 136 -
As at April 1, 2017** 2017** 1, April at As 22,960 22,960 - 329 171 213 3 19,956 2,067 221 -
Accumulated depreciation: Accumulated
4,44,428 4,44,428 80,159 1,200 755 1,582 27 2,53,638 47,788 10,824 48,455 As at March 31, 2019 2019 31, March at As
Foreign exchange adjusment adjusment exchange Foreign 399 399 395 1 - 1 - 2 - - -
Adjustments during the year* year* the during Adjustments (693) - (2) - - (7) (393) (199) - (92)
Transfers/ capitalised capitalised Transfers/ - - - - - (65,888) (65,888) - - - -
Disposals Disposals (1,197) - (6) (1) (2) - (1,117) (71) - -
Additions Additions 1,80,605 1,80,605 1,14,717 277 93 199 - 54,426 10,706 186 1
As at March 31, 2018 2018 31, March at As 3,31,202 3,31,202 30,935 930 663 1,384 34 2,00,720 37,352 10,638 48,546
Foreign exchange adjusment adjusment exchange Foreign (252) (249) (1) - (1) - (1) - - -
Adjustments during the year* year* the during Adjustments 176 176 - (450) - 12 - 614 - - -
Transfers/ capitalised capitalised Transfers/ (42,379) (42,379) ------
Disposals Disposals (2,183) - (393) (7) (11) (2) (1,586) (184) - -
Additions Additions 84,077 84,077 41,635 115 146 224 - 28,528 5,148 1,550 6,731
As at April 1, 2017** 2017** 1, April at As 41,815 41,815 9,088 9,088 1,73,165 1,73,165 32,388 1,160 1,160 36 524 524 2,91,763 2,91,763 31,928 1,659
Gross carrying amount carrying Gross
lease) note 1) note (Owned) fixtures (Leased) progress
land equipments
Particulars land (Financial (Financial land (refer foot foot (refer equipment equipment equipment equipment Vehicles and work in in work Total
Freehold Freehold Office Office
Buildings Leasehold Plant and and Plant Plant and and Plant Furniture Furniture Capital Capital
in lacs) in ( `
Refer note 2.11 for accounting policy on Property, plant and equipment and plant Property, on policy accounting for 2.11 note Refer Note 3: Property, plant and equipment and capital work-in-progress capital and equipment and plant Property, 3: Note Notes to Consolidated Financial Statements for the year ended March 31, 2019
(` in lacs) Particulars Note no. 2018-19 2017-18 Finance cost 35 3,224 1,360 Professional and consultancy charges 37 315 623 Miscellaneous expenses 37 2,785 485 Employee benefit expenses 34 1,448 960 Travelling and conveyance 37 512 67 Total 8,284 3,495 3. As a part of ongoing expansion project at Halol-Phase III, during the year the Group has capitalised and commissioned assets of ` 33,819 lacs (March 31, 2018 ` 79 lacs). This has resulted in the installed capacity as on March 31, 2019 to 35 MT per day (March 31, 2018 Nil). The planned expansion of 208 MT per day is expected to be commissioned, in phase. 4. At the Nagpur plant of the Group has capitalised and commissioned the assets of ` 7,409 lacs (March 31, 2018 ` 5,067 lacs). This has resulted in the installed capacity as on March 31, 2019 to 114 MT per day (March 31, 2018 91 MT per day). The additonal planned expansion of 140 MT per day is under construction and expected to be commissioned, in phase. 5. As a part of ongoing green field project at Chennai, during the year the Group has capitalised and commissioned the assets of` 7,233 lacs (March 31, 2018 ` 6,731 lacs). The planned capacity of 252 MT per day is expected to be commissioned in phases. 6. The amount of borrowing cost capitalised during the year ended March 31, 2019 is ` 3,224 lacs (March 31, 2018: ` 459 lacs). The rates used to determine the amount of borrowing cost eligible for capitalisation was in range of 7.4% to 8.9% (March 31, 2018: 7.79%) which is the effective interest rate of specific borrowings. 7. Refer note 22 and 26 for details on pledges and securities.
Note 4: Intangible assets and Intangible assets under development Refer note 2.12 for accounting policy on Intangible assets (` in lacs) Technical Brand Product Particulars Software knowhow Total (refer foot note 1) development (refer foot note 2) Cost As at April 1, 2017 2,485 4,404 704 1,032 8,625 Additions 2,119 - - 394 2,513 Disposals - - - - - Adjustments during the year* (176) - - - (176) Foreign exchange adjustments (1) - - - (1) As at March 31, 2018 4,427 4,404 704 1,426 10,961 Additions 700 - - 699 1,399 Disposals (0) - - - (0) Foreign exchange adjustments 1 - - - 1 As at March 31, 2019 5,128 4,404 704 2,125 12,361 Accumulated amortization As at April 1, 2017 1,029 529 82 61 1,701 Amortization for the year 891 265 41 213 1,410 Disposals - - - - - Adjustments during the year* (167) - - - (167) Foreign exchange adjustments (1) - - - (1) As at March 31, 2018 1,752 794 123 274 2,943 Amortization for the year 792 265 41 616 1,714 Disposals 0 - - - 0 Foreign exchange adjustments 1 - - - 1 As at March 31, 2019 2,545 1,059 164 890 4,658 Net book value As at March 31, 2018 2,675 3,610 581 1,152 8,018 As at March 31, 2019 2,583 3,345 540 1,235 7,703 *Adjustments include regrouping of certain assets into other class of assets (refer note 3) (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Intangible assets 7,703 8,018 Intangible assets under development 3,132 61 1. In an earlier year, the Group has acquired global rights of “CEAT” brand from the Italian tyre maker, Pirelli. Prior to the said acquisition, the Group was the owner of the brand in only a few Asian countries including India. With the acquisition of the brand which is renowned worldwide, new and hitherto unexplored markets are accessible to the Group. The Group will be in a position to fully exploit the export market resulting in increased volume and price realization. Therefore, the management believes that the Brand will yield significant benefits for a period of at least twenty years.
200 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - - - 0 0 0 0 0 16 201 371 314 128 298 As at As at As at (128) 16,975 17,346 (` in lacs) (` in lacs) (` in lacs) March 31, 2018 March March 31, 2018 March March 31, 2018 March 0 0 2 - - 1 2 2 0 584 408 121 407 As at As at As at (121) 17,556 18,140 CEAT Limited CEAT March 31, 2019 March March 31, 2019 March March 31, 2019 March ` 10 ` 10 ` 0.19 Face Value Nil) and Professional and consultancy charges of ` 3 Lacs and consultancy 2018 ` Nil) and Professional 31, ` 937 Lacs (March ement and note 53(g) for information about liquidity risk relating to loans ement and note 53(g) for information about liquidity risk relating elating to investments elating to investments , the Group has transfered employee benefit expenses of employee benefit expenses has transfered , the Group e Due from directors or promoters of the holding company either severally or jointly with any person or promoters directors e Due from T CEA Pledged as security for sales tax purpose Refer note 53(g) for information about liquidity risk r Refer note 53(g) for information about liquidity risk r The Gr During the year the life of the underlying plant / facility, this technical know-how, is amortized on a straight line basis over a period of twenty years. straight line basis over a is amortized on a this technical know-how, underlying plant / facility, the life of the No loans ar Refer note 51 for information about fair value measur Nil) which are attributable to the development activity and are included in the cost of intangible under development / intangible assets as the in the cost of intangible under development / intangible included activity and are attributable to the development 31, 2018 ` Nil) which are (March net of such amounts. expenses disclosed under note 34 are case may be. Consequently,
Total Less: Allowance for doubtful deposits Unsecured, considered doubtful considered Unsecured, Security deposits Unsecured, considered good considered Unsecured, Security deposits Non current (at amortised cost) Non current good considered Secured, Security deposits Investment in Joint venture (refer note 44) (refer Investment in Joint venture Total Investment in Associate (refer note 45) (refer Investment in Associate Rado Employees Co-operative Society value of unquoted investments Aggregate amount of quoted investments Aggregate Investment in others (at amortised cost) foot note a) National Saving Certificates VIII issue (refer Market value of quoted investments Aggregate amount of unquoted investments Aggregate 9,75,000 (as at March 31, 2018: Nil) equity shares of Bhadreshwar Vidyut Private Limited of Bhadreshwar 31, 2018: Nil) equity shares 9,75,000 (as at March limited) (formerly known as OPGS Power Gujarat private Particulars (at cost) (non trade) Unquoted equity shares limited (formerly known of RPG Ventures 31, 2018: 1,800) equity shares 1,800 (as at March Comtrade Private Limited) as Maestro OnlinePrivateLimited yresnmore (Pvt.)Limited T KelaniHoldingCompany
Particulars Particulars Notes: a) b) Note 7: Loans Refer note 2.19 for acccounting policy on financial instruments a) b) Notes: Note 6: Investments Notes: a) Note 5: Investments accounted using equity method Note 5: Investments 2. 3. International Considering LLC,forsettingupHalolradialplant. Tire technicalknow-howandassistancefrom Resources Engineering hasacquired oup Notes to Consolidated Financial Statements for the year ended March 31, 2019
Note 8: Other financial assets Refer note 2.19 for accounting policy on financial instruments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Non current (at amortised cost) Unsecured, considered good Margin money deposits (refer foot note b) 195 202 Total 195 202 Notes: a) Refer note 51 for information about fair value measurement and note 53 (g) for information about liquidity risk relating to other financial assets b) The margin deposit are for bank guarantees given to statutory authorities. Note 9: Other non-current assets (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Unsecured, considered good Capital advances (others) 11,018 7,252 Capital advances (related parties) (refer note 48) 1,643 476 Security deposits with statutory authorities 1,969 1,723 Others 8 6 Unsecured, considered doubtful Balances with government authorities and agencies 274 304 Less: Allowance for doubtful balances (274) (304) Total 14,638 9,457
Note 10: Inventories (At cost or net realisable value, whichever is lower) Refer note 2.15 for accounting policy on inventories (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 a) Raw materials 34,644 28,053 Goods in transit 3,399 8,114 38,043 36,167 b) Work-in-progress 3,342 3,095 c) Finished goods (refer note (a)) 51,878 32,416 d) Stock in trade 3,167 2,739 Goods in transit 604 793 3,771 3,532 e) Stores and spares 3,525 3,205 Goods in transit 1 46 3,526 3,251 Total 1,00,560 78,461 Details of finished goods Automotive tyres 42,702 27,042 Tubes and others 9,176 5,374 Total 51,878 32,416 Notes: a) Cost of inventory recognised as an expense as at March 31, 2019 includes ` 1,319 lacs (March 31, 2018 ` 808 lacs) in respect of write down due to net realisable value with respect to slow moving stock as per group policy. b) Loans are secured by first pari passu charge on stock (includes raw materials, finished goods and work in progress) (refer note 22 and 26)
202 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 203 352 144 801 As at As at As at As at 2,146 4,006 2,146 4,006 4,006 3,291 1,202 1,002 1,001 (2,146) (1,497) 74,723 76,869 74,723 49,409 74,579 25,314 (` in lacs) (` in lacs) (` in lacs) (` in lacs) March 31, 2018 March 31, 2018 March 31, 2018 March 31, 2018 March
------63 325 As at As at As at As at (129) 2,080 2,080 2,146 (2,080) 70,638 72,718 70,638 46,145 70,313 24,493 CEAT Limited CEAT March 31, 2019 March 31, 2019 March March 31, 2019 March 31, 2019 March ement and note 53(g) for information about liquidity risk relating to investments risk relating ement and note 53(g) for information about liquidity edit risk relating to trade receivables edit risk relating elated parties, refer to note 48 elated parties, refer `100 each, fully-paid up up `1,000 each, fully-paid eceivable are due from directors or other officers of the holding company either severally or jointly with any other person. Nor any trade or other of the holding company either severally or jointly with any other person. or other officers directors due from eceivable are e secured to the extent of security deposit obtained from the dealers. to the extent of security deposit obtained from e secured
Nil (Mar Unit of Face value Nil (Mar Nil (Mar Unit of Face value Nil (Mar Refer note 53(f) for information about cr The Gr T For terms and conditions with r These debts ar No trade or other r 4,894 lacs from the books. The Group has transferred substantially all the risks and rewards of the asset. substantially all the risks and rewards has transferred the books. The Group ` 4,894 lacs from receivable are due from firms or private companies respectively in which any director is a partner, a director or a member other than those disclosed in note no 48. a director is a partner, respectively in which any director firms or private companies from due are receivable Refer note 51 for information about fair value measur Refer note 51 for information about fair value
Grant total Allowance for doubtful debts Aggregate amount of unquoted investments Aggregate Total Balance as at end of the year Aggregate market value of quoted investments Aggregate during the year written off receivables Trade Total Doubtful Aggregate amount of quoted investments Aggregate note 48) parties (refer related from receivables Trade good considered Unsecured, Change in allowance for doubtful debts during the year Current (at fair value through profit and loss) and profit (at fair value through Current liquid mutual funds (quoted) Investment in units of others from receivables Trade for security details Break-up foot noot a) good (refer considered Secured, The movement in allowance for doubtful debts is as follows: Balance as at beginning of the year Total -Growth MarketFund-Direct ch 31,2018:3,34,470)unitsofICICIPrudentialMoney b) -Growth LiquidFund-Direct ch 31,2018:36,767)unitsofSBIPremier -Growth ch 31,2018:29,246)unitsofHDFCLiquidFund-Direct a) FloatingRateFund-STPDirGrowth unitsofAdityaBirlaSunLife ch 31,2018:5,18,176) Particulars Particulars Particulars Particulars Notes: e) f) c) d) days. periodwhichisgenerally30to60 withinthecredit bearing non-interest are rade receivables of tradereceivables hasderecognised TheGroup totheGroup. partiesonwithoutrecourse tothird tosellitreceivable intoanarrangement oup hasentered Notes: a) b) Note 12: Trade receivables Note 12: Trade financial instruments Refer note 2.19 for acccounting policy on a) Note 11: Investments Note 11: policy on financial instruments 2.19 for accounting Refer note Notes to Consolidated Financial Statements for the year ended March 31, 2019
Note 13: Cash and cash equivalents Refer note 2.22 for accounting policy on cash and cash equivalents (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Balances with Banks On current accounts 2,087 1,509 On remittance in transit 4,661 6,702 Cash on hand 7 7 Cash and cash equivalent as per statement of cash flow 6,755 8,218 Notes: a) Refer note 53(g) for information about liquidity risk relating to cash and cash equivalents
Changes in liabilities arising from financing activities (` in lacs) Current Non- current Particulars borrowings borrowings As at April 1, 2017 5,799 86,601 Cash flows 13,758 (18,991) Others - - As at March 31, 2018 19,557 67,610 Cash flows 2,830 59,767 Foreign Exchange Impact 38 - As at March 31, 2019 22,425 1,27,377
Note 14: Bank balances other than cash and cash equivalents (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Deposits with original maturity of more than 3 months but remaing maturity of less than 12 months 51 71 Balances held for unclaimed public deposits and interest thereon (refer foot note a) 105 111 Balances held for unpaid/unclaimed dividend accounts (refer foot note b) 443 225 Total 599 407 Notes : a) These balances are available for use only towards settlement of matured deposits and interest on deposits. Also includes ` 0.20 lacs (March 31, 2018 ` 0.20 lacs) outstanding for a period exceeding seven years, in respect of which a Government agency has directed to the Group to hold. b) These balances are available for use only towards settlement of corresponding unpaid dividend liabilities. c) Refer note 53(g) for information about liquidity risk relating to bank balances other than cash and cash equivalents
Note 15: Loans Refer note 2.19 for accounting policy on financial instruments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Current (at amortised cost) Unsecured, considered good Advance receivable in cash 70 36 Security deposits 5 - Unsecured, considered doubtful Loans advances and deposits 149 163 Less: Allowance for doubtful advances and deposits (149) (163) Total 75 36 Notes: a) Refer note 53(g) for information about liquidity risk relating to Loans. Note 16: Other financial assets Refer note 2.19 for accounting policy on financial instruments
204 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
------44 10 205 (44) 679 184 956 200 473 273 As at As at As at 7,689 6,102 1,000 1,000 1,000 14,654 ` in lacs (` in lacs) (` in lacs) (` in lacs) March 31, 2018 March 31, 2018 March 31, 2018 March - - 44 52 96 249 270 (44) 519 161 258 106 As at As at As at 2,584 3,222 4,916 2,601 17,699 10,147
Numbers Unclassified Shares Unclassified Shares CEAT Limited CEAT 1,00,00,000 1,00,00,000 1,00,00,000 March 31, 2019 March March 31, 2019 March 31, 2019 March - - 390 390 390 ` in lacs - - Preference Shares Shares Preference Numbers 39,00,000 39,00,000 39,00,000 - - 4,610 4,610 4,610 368 lacs).(refer note 46 for details). ` 368 lacs).(refer ` in lacs - - ch 31, 2018: yres limited (RADO) has received the order from Labour & Skills (A) Department, Government from of Kerala, the order limited (RADO) has received yres Equity Shares Equity Shares elating to Other financial assets. elating to Other financial Numbers ` 44 Lacs classified as assets held for sale by the holding company 4,61,00,000 4,61,00,000 4,61,00,000 d of directors of RADO has decided that the most appropriate course of action for RADO is to sell its assets such as plant and of RADO has decided that the most appropriate d of directors om group companies and joint ventures (refer note 48) (refer ventures companies and joint om group est due on income tax refunds. est due on income tax refunds. eceivable in cash
Others Other r Inter Receivable fr Advance r On the basis of the above the Boar Fr During this year the wholly owned subsidiary - RADO T granting permission under the Industrial Dispute Act, 1947 to close the Factory located at Nellikuzhi, near Kothamangalam. In the opinion of the management there at Nellikuzhi, near Kothamangalam. In the opinion of the management there granting permission under the Industrial Dispute Act, 1947 to close the Factory located no further business opportunities for RADO to explore. were to obtain quotation have also been initiated by the located at its factory near Kothamangalam. The process and such other assets equipment, spares machinery, of Shareholders. and they expect the sale to be concluded in the financial year 2019-20 after obtaining the approval RADO's Board Given these circumstances the RADO's Board has considered prudent to reclassify the above assets to the head assets held for sale. the above assets prudent to reclassify has considered the RADO's Board Given these circumstances Refer note 53(g) for information about liquidity risk r Refer note 53(g) for information assets for gratuity (net) of Nil (Mar Includes fair value of plan Includes inter
Total At March 31, 2019 At March Less: Allowance for advance receivable in kind or for value to be received in kind or Less: Allowance for advance receivable Increase / (decrease) during the year / (decrease) Increase Unsecured, considered doubtful considered Unsecured, in kind or for value to be received Advance receivable At March 31, 2018 At March Prepaid expense Prepaid Increase / (decrease) during the year / (decrease) Increase Total Advance to employees At April 1, 2017 Plant and equipment (refer foot note b) Plant and equipment (refer Balance with government authorities Current (at amortised cost) Current good considered Unsecured, Total good considered Unsecured, in kind or for value to be received Advance receivable foot note a and b) hold land and building (refer Free Authorised share capital Authorised share
footnoteb) eceivables (refer footnotec) (refer est receivable
Particulars Particulars Particulars Issued share capital Issued share Note 19: Equity share capital Note 19: Equity share
Notes: a) b) ee holdlandandbuildingincludesof Note 18: Assets held-for-sale Assets held-for-sale Refer note 2.10 for accounting policy on Note 17: Other current assets Note 17: Other current a) b) c) Notes: Notes to Consolidated Financial Statements for the year ended March 31, 2019
Equity shares of ` 10 each issued Numbers ` in lacs At April 1, 2017 (refer foot note a) 4,04,50,780 4,045 Alloted during the year - - At March 31, 2018 (refer foot note a) 4,04,50,780 4,045 Alloted during the year - - At March 31, 2019 (refer foot note a) 4,04,50,780 4,045
Subscribed and Paid-up share capital Equity shares of ` 10 each subscribed and fully paid Numbers ` in lacs At April 1, 2017 (refer foot note a) 4,04,50,092 4,045 Alloted during the year - - At March 31, 2018 (refer foot note a) 4,04,50,092 4,045 Alloted during the year - - At March 31, 2019 (refer foot note a) 4,04,50,092 4,045 Notes: a) Includes 688 (March 31, 2018- 688) equity shares offered on right basis and kept in abeyance. b) Terms/ rights attached to equity shares The Group has only one class of equity shares having face value of ` 10 per share. Each holder of equity shares is entitled to one vote per equity share. Dividend is recommended by the Board of Directors and is subject to the approval of the members at the ensuing Annual General Meeting except interim dividend. The Board of Directors have a right to deduct from the dividend payable to any member, any sum due from him to the Group.
In the event of winding-up, the holders of equity shares shall be entitled to receive remaining assets of the Group after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by shareholders.
The shareholders have all other rights as available to equity shareholders as per the provision of the Companies Act, applicable in India read together with the Memorandum of Association and Articles of Association of the Company, as applicable. c) Details of shareholders holding more than 5% shares in the company As at March 31, 2019 As at March 31, 2018 Name of the shareholders % holding in % holding in Numbers the class Numbers the class Equity shares of ` 10 each fully paid Instant Holdings Limited 1,18,16,662 29.21% 1,15,10,812 28.46% Swallow Associates LLP 44,84,624 11.09% 44,84,624 11.09% Jwalamukhi Investment Holdings 29,53,366 7.30% 32,53,841 8.04% Amansa Holdings Pvt Limited 24,09,373 5.96% 14,02,310 3.47% d) As per the records of the Company as at March 31, 2019 no calls remain unpaid by the directors and officers of the company. e) The Company has not issued any equity shares as bonus for consideration other than cash and has not bought back any shares during the period of 5 years immediately preceeding March 31, 2019.
Note 20: Other equity (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Securities premium (refer note a) 56,703 56,703 Capital reserve (refer note b) 1,397 1,378 Capital redemption reserve (refer note c) 390 390 Cash flow hedge reserve (refer note d) (2,337) 474 Debenture redemption reserve (DRR) (refer note e) - 5,001 Foreign currency translation reserve (refer note f) (888) (366) General reserve (refer note g) 25,166 20,165 Retained earnings (refer note h) 1,92,135 1,72,819 Total other equity 2,72,566 2,56,564 a) Securities premium
206 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 19 46 207 (13) 208 266 474 390 390 390 (412) (522) (366) (888) 3,334 1,667 5,001 1,391 1,378 1,397 (2,811) (5,001) 56,703 56,703 56,703 (2,337) (` in lacs) (` in lacs) (` in lacs) (` in lacs) (` in lacs) (` in lacs) CEAT Limited CEAT 20,000 lacs on July 31, 2018 and accordingly the balance ` 20,000 lacs on July 31, 2018 and accordingly eserve ent year, the group has prepaid its Non Convertible debentures ammounting to its Non Convertible debentures has prepaid the group ent year, e redemption reserve (DRR) reserve e redemption edemption reserve edemption reserve eserve e redemption reserve (DRR) is required to be created in accordance with section 71 of the Companies Act, 2013 read Act, 2013 read with section 71 of the Companies in accordance to be created (DRR) is required reserve e redemption eceived on issue of shares in excess of the par value has been classified as security share premium. share classified as security par value has been in excess of the issue of shares eceived on edemption reserve represents amount transferred from profit and loss account on redemption of preference shares shares redemption of preference and loss account on profit from amount transferred represents edemption reserve reserve includes profit on amalgamation of entities and on account of consolidation of the Company's Bangladesh Company's of the consolidation on account of and of entities amalgamation on profit includes reserve in DRR has been transferred to general reserve. in DRR has been transferred During the curr
At April 1, 2017 At March 31, 2018 At March 31, 2019 At March At April 1, 2017 Gain / (Loss) arising during the year 31, 2018 At March Gain / (Loss) arising during the year 31, 2019 At March At April 1, 2017 earnings during the year retained from Add: Transfer 31, 2018 At March foot note i) earnings during the year (refer retained from Add: Transfer 31, 2019 At March Gain / (Loss) arising during the year 31, 2018 At March Gain / (Loss) arising during the year 31, 2019 At March At April 1, 2017 At April 1, 2017 31, 2019 At March At April 1, 2017 Add: Foreign Exchange fluctuation on restatement of capital reserve restatement of capital on Exchange fluctuation Add: Foreign 31, 2018 At March reserve restatement of capital Exchange fluctuation on Add: Foreign 31, 2018 At March 31, 2019 At March For It r Debentur Debentur Cash flow hedge r It r Capital r Capital r Capital r Capital Amount r the balance sheet items are translated at closing exchange rate as at the balance sheet date and revenue items are translated items are translated at closing exchange rate as at the balance sheet date and revenue the balance sheet items are is currency of rupee and subsidiaries reporting at average exchange rate as at the date of transaction, including the difference translation reserve. currency accumulated to foreign Notes: i) with Companies (Share capital and Debenture) Rules, 2014 at equivalent to 25% of the value of the debentures issued. equivalent to 25% of the value of the debentures Rules, 2014 at capital and Debenture) with Companies (Share during FY 1998-99. Subsidiary, CEAT AKKHAN Limited (FY 2013-14) AKKHAN CEAT Subsidiary,
f) translationreserve eign currency subsidiaries.Forthepurposeofconsolidation, foreign arisingonconsolidationofour exchangedifference aggregate epresents e) d) byIndAS109. hedgesasrequired mark-to-marketvaluationofeffective epresents c) b)
Notes to Consolidated Financial Statements for the year ended March 31, 2019 g) General reserve The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to the statement of profit and loss. (` in lacs) At April 1, 2017 20,165 At March 31, 2018 20,165 Add: Transfer from debenture redemption reserve during the year (refer foot note i) 5,001 At March 31, 2019 25,166
Notes: i) During the current year, the group has prepaid its Non convertible debentures ammounting to ` 20,000 lacs on July 31, 2018 and accordingly the balance in DRR has been transferred to general reserve h) Retained earnings (` in lacs) At April 1, 2017 1,55,213 Profit for the year 23,798 Other comprehensive income 680 Transfer to debenture redemption reserve (DRR) (1,667) Payment of dividend (refer note 21) (4,652) Payment of dividend distribution tax (DDT) (refer note 21) (553) At March 31, 2018 1,72,819 Profit for the year 25,222 Other comprehensive income (462) Payment of dividend (refer note 21) (4,652) Payment of dividend distribution Tax (DDT) (refer note 21) (829) Others 37 At March 31, 2019 1,92,135
Note 21: Distribution made and proposed (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Cash dividend on equity shares declared and paid Final dividend for the year ended on March 31, 2018: ` 11.50 per share (March 31, 2017: ` 11.50 per share) 4,652 4,652 Dividend distribution tax (DDT) on final dividend 829 553 Total 5,481 5,205
(` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Proposed dividend on equity shares Final cash dividend for the year ended on March 31, 2019: ` 12 per share (March 31, 2018 ` 11.50 per share) 4,854 4,652 Dividend distribution tax (DDT) on proposed dividend 998 956 Total 5,852 5,608
Proposed dividend on equity shares which are subject to approval at the annual general meeting are not recognised as a liability (including Dividend distribution tax thereon) in the year in which it is proposed.
During the year ended March 31, 2019, the company has paid dividend to its shareholders. This has resulted in payment of Dividend distribution tax (DDT) to the taxation authorities. The Group believes that DDT (Dividend distribution tax) represents additional payment to taxation authority on behalf of the shareholders. Hence, DDT paid is charged to equity.
208 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy ------209 269 As at 22,494 22,225 (` in lacs) (22,494) ` 30,000 March 31, 2018 March
------Current Current 205 765 As at 5,113 4,143 ` 20,000 lacs as on (5,113) date (December 2018) CEAT Limited CEAT Schedule of repayment To be repaid in 28 structured in 28 structured be repaid To (March 2022) after 3 years of (March moratorium from first dradown moratorium from 17,300 lacs as on March 31, ` 17,300 lacs as on March March 31, 2019 March quarterly instalments commencing ------0 10% 16% 16% 16% 16% 12% 2.5% As at 11.5% 2,762 4,512 3,436 45,116 45,116 19,956 14,450 Repayment March 31, 2018 March
Schedule (In %) - - - 0 619 As at 8,500 7,410 Non-current Non-current 2,557 21,500 17,299 29,971 19,826 14,582 1,22,264 1,22,264 Year 2019 (March 31, 2018: NIL)is secured by first pari passu by first pari passu 31, 2018: NIL)is secured 2019 (March It is payable charge over the fixed and movable assets. after 2 years in 12 equal quarterly installments payable of Moratorium. T T T March 31, 2019 (March 31, 2018: NIL)is secured by first 31, 2018: NIL)is secured 31, 2019 (March March pari passu charge over the fixed assets of the holding company's movables and immovables situated at Halol, Nagpur & Chennai Plant. It is payable as under: lacs as on March 31, 2019 (March 31, 2018: NIL) is secured 31, 2018: NIL) is secured 31, 2019 (March lacs as on March by first pari passu charge over the holding Company's Halol, Nagpur at situated assets and immovable movable & Chennai Plant. It is payable as under: 2021 - 22 2022 - 23 2023 - 24 2024 - 25 2025 - 26 2026 - 27 2027 - 28 2028 - 29
March 31, 2019 March 6 4 HDFCBank Loanfrom erm 5 Bank Limited KotakMahindra erm Loanfrom BankofBaroda erm Loanfrom
` 8,500 lacs 20,000 lacs `20,000 & 5th year & 5th year ` 21,500 lacs as on To be repaid in 3 annual be repaid To in 3 annual be repaid To Schedule of repayment Schedule of repayment efer foot note 3) installment at the end of 3rd, 4th installment at the end of 3rd, installments at the end of 3rd, 4th installments at the end of 3rd, es (refer foot note 1) es (refer 20% 20% 30% 50% 30% 50% efer foot note 5) om banks*
Debentures (NCD) Debentures
efer foot note 9) efer foot note 8) Repayment Repayment efer foot note 2) efer foot note 12) efer foot note 4) efer foot note 7) # oda (refer foot note 6) oda (refer edit (refer foot note 10 & 11) edit (refer Schedule (In %) Schedule (In %) ICICI Bank Ltd. (r Citibank N.A. (r Citicorp Finance (India) Limited (r HDFC Bank (r Kotak Mahindra Bank (r Bank of Bar SVC Bank (r YES Bank Ltd. (r Buyer's Cr Non-convertible debentur Indian rupee loan fr Year
as on March 31, 2019 (March 31, 2018: NIL) is secured by 31, 2018: NIL) is secured 31, 2019 (March as on March pari passu charge over the fixed and movable assets. It is payable as under: T T Non-Convertible (March 31, 2018: ` 20,000 lacs) allotted on July 31, 2015 31, (March in full including on private placement basis was pre-paid by a first It was secured during the year. thereon interest current charge over the movable assets (except pari passu assets) and immovable assets of the holding company of 8.70% p.a situated at the Nasik Plant. It carried interest at the time of repayment. 2021 - 22 2021 - 22 Year March 31, 2019 (March 31, 2018: NIL) is secured by pari 31, 2018: NIL) is secured 31, 2019 (March March passu charge over the fixed and movable assets. It is payable as under: 2022 - 23 2022 - 23 2023 - 24 2023 - 24
b) Unsecured Public deposits (r Deferr T a) Secured Debentures a)
Total Total Interest bearing loans and borrowings Interest Less: amount classified under other current financial liabilities Less: amount classified under other current note 28) (refer Particulars footnote13) (refer ed salestaxincentive II. i) ii)
erm loans ii) I. i) 3 CiticorpFinanceIndiaLimited erm Loanfrom 2 CitibankN.A. erm Loanfrom Notes: 1 Refer note 2.19 for acccounting policy on financial instruments Refer note 2.19 for acccounting Note 22: Borrowings Note 22: cost) (at amortised Notes to Consolidated Financial Statements for the year ended March 31, 2019
Repayment Repayment Year Schedule of repayment Year Schedule of repayment Schedule (In %) Schedule (In %) 2022 - 23 5% 2019-20 2.50% 2023 - 24 5% To be repaid in 28 structured 2020-21 10.00% 2024 - 25 15% quarterly instalments commencing 2021-22 11.25% 2025 - 26 15% (June 2022) after 3 years of 2022-23 15.00% To be repaid in 28 structured moratorium from first dradown quarterly installment,commencing 2026 - 27 20% 2023-24 15.00% March 2020 2027 - 28 20% date (March 2019) 2024-25 15.63% 2028 - 29 20% 2025-26 17.50% 2026-27 13.12% 7 Term Loan from SVC Bank of ` 7,800 lacs (March 31, * Indian rupee term loan from banks, carries floating interest rate ranging 2018: Nil) is secured by first pari passu charge over the from 7.79% p.a. to 9.25% p.a. all movable and immovable fixed assets of the borrower # The subsidiary company is in process of creating security against the and second pari-passu, charge by way of hypothecation loan availed from SVC Bank. on all current assets of the CEAT Specialty Tyres Limited. The loan is guaranteed by corporate guarantee from the 10 Long-term buyer’s credit is secured by first pari passu Holding Company. It is repayable as under: charge on all movable assets (excluding current assets) Repayment Year Schedule of repayment and immovable assets of the holding company situated at Schedule (In %) Halol plant and second pari passu charge over the current 2019-20 5% assets of the holding company. It is repayable within 3 2020-21 10% years from the date of disbursement. The long-term buyer’s 2021-22 12.5% credit carries interest in the range of 6 months LIBOR plus 2022-23 15% To be repaid in 28 structured quarterly installment, commencing 52 bps p.a. to 6 months LIBOR plus 125 bps p.a. 2023-24 15% December 2019 2024-25 16.25% 11 Long-term buyer’s credit is secured by way of first pari 2025-26 17.5% passu charge on all movable assets (excluding current 2026-27 8.75% assets) and immovable assets of the holding Company situated at Nagpur plant. It is repayable within 3 years from 8 Term Loan from YES Bank of ` Nil (March 31, 2018: `3,500 the date of disbursement. The long-term buyer’s credit lacs) was pre-paid in full including interest thereon during carries interest in the range of 12 months LIBOR plus the year. It was secured by first pari passu charge over all 42 bps p.a. to 12 months LIBOR plus 60 bps p.a. and 6 the movable and immovable fixed assets of the borrower months LIBOR plus 42 bps p.a. to 6 months LIBOR plus situated at Ambernath and second pari-passu, charge 78 bps p.a. by way of hypothecation on all the current assets of the borrower. Unsecured long-term borrowings (includes non- current portion and current maturities) 9 Term Loan from ICICI Bank of ` 15,000 lacs (March 31, 12 Public deposits included under the long-term borrowings 2018:` 14,500 lacs) is secured by first pari passu charge were pre-paid in full including interest thereon on over the all movable and immovable fixed assets of the September 30, 2016. CEAT Specialty Tyres Limited and second pari-passu, 13 Interest-free deferred sales tax is repayable in ten equal charge by way of hypothecation on all current assets of the annual instalment commencing from April 26, 2011 and Borrower.The loan is guaranteed by corporate guarantee ending on April 30, 2025. from the holding company. It is repayable as under 14 Outstanding balances shown in foot notes above, are grossed up to the extent of unamortised transaction cost. 15 Refer note 51 for information about fair value measurement and note 53(g) for information about liquidity risk relating to Borrowings
210 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 61 10 211 318 323 146 177 886 158 As at As at (278) (470) 3,302 5,265 3,748 6,406 4,462 5,038 1,858 2,862 3,438 2,481 2,919 2,799 1,031 3,360 (4,819) (5,692) (` in lacs) (` in lacs) (` in lacs) (` in lacs) March 31, 2018 March 31, 2018 March - 68 547 461 146 315 959 As at As at 4,971 1,032 3,503 3,840 2,813 10,053 CEAT Limited CEAT March 31, 2019 March 31, 2019 March ement and note 53(g) for information about liquidity risk relating to other financial liabilities. about liquidity risk relating ement and note 53(g) for information oup encashes leaves of employees as per the Group's leave encashment policy. A provision has been recognised for has been recognised A provision leave encashment policy. oup encashes leaves of employees as per the Group's Additions during the year Utilised during the year 31, 2018 As at March Additions during the year Utilised during the year 31, 2019 As at March As at March 31, 2017 As at March for compensated absences Movement in provision 31, 2017 As at March Additions during the year Utilised during the year 31, 2018 As at March Additions during the year Utilised during the year 31, 2019 As at March Movement in provision for sales related obligation for sales related Movement in provision Pr The Gr Pr A pr leave encashment liability based on the actuarial valuation of leave balance of employees as at year end. leave encashment liability based on the actuarial valuation of leave balance of employees experience of the level of returns and cost of claim. It is expected that significant portion of these costs will be incurred in the of claim. It is expected that significant portion of these costs will be incurred experience of the level of returns and cost related for sales reporting date. Assumptions used to calculate the provision the years from next financial year and within three years period information available about returns based on the three sales levels and current based on current obligations were obligations. for sales related sold. The table below gives information about movement in provision for all products Refer note 51 of information about fair value measur Refer note 51 of information
Total Provision for indirect tax and labour matters (refer foot note d) tax and labour matters (refer for indirect Provision Provision for compensated absences (refer foot note b) for compensated absences (refer Provision Provision for gratuity (refer note 46) for gratuity (refer Provision Current provisions Current note a) obligations (refer for sales related Provision Provision for decommissioning liability (refer note c) for decommissioning liability (refer Provision Provision for compensated absences (refer foot note b) for compensated absences (refer Provision Total Total At amortised cost Security deposits note 46) for gratuity (refer Provision Non current income comprehensive other At fair value through Derivative financial instrument provisions Non-current note a) obligations (refer for sales related Provision Particulars Particulars b) ovision forcompensatedabsences Notes: a) obligation ovision forsalesrelated years,basedonpast soldduringthelastthree obligationsonproduct related forexpectedsales ovision isrecognized a) Note 24: Provisions Provisions Refer note 2.17 for accounting policy on Notes: Note 23: Other financial liabilities Other financial Note 23: policy on financial instruments 2.19 for accounting Refer note Notes to Consolidated Financial Statements for the year ended March 31, 2019 c) Provision for decommissioning liability The Group records a provision for decommissioning costs of land taken on lease at Nasik manufacturing facility for the production of tyres. Movement in provision for decommissioning liability (` in lacs) As at March 31, 2017 55 Additions during the year 6 Utilised during the year - As at March 31, 2018 61 Additions during the year 7 Utilised during the year - As at March 31, 2019 68 d) Provision for indirect tax and labour matters The Group is party to various lawsuits that are at administrative or judicial level or in their intial stages, involving tax and civil matters. The Group contests all claims in the court / tribunals / appellate authority levels and based on their assessment and that of their legal counsel, records a provision when the risk or loss is considered probable. The outflow is expected on cessations of the respective events. Movement in provision for tax and labour matters (` in lacs) As at March 31, 2017 1,556 Additions during the year 783 Utilised during the year (481) As at March 31, 2018 1,858 Additions during the year 3,161 Utilised during the year (48) As at March 31, 2019 4,971
Note 25: Income taxes and deferred taxes Refer note 2.9 for accounting policy on Taxes Statement of Balance Sheet (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Non current tax assets Advance income tax (net of provisions) 5,739 3,944 Current tax liabilities Provision for income tax (net of advance tax) 4,732 3,098 Deferred tax liabilities (net) 21,978 18,929 Deferred tax assets (net) 60 -
Statement of profit and loss (` in lacs) Particulars 2018-19 2017-18 Current tax 9,400 10,639 Deferred tax 3,112 2,764 Income tax expense reported in the statement of profit and loss 12,512 13,403
Other Comprehensive Income (OCI) section Deferred tax related to items recognised in OCI during the year (` in lacs) Particulars 2018-19 2017-18 Income tax effect on remeasurement of post employment benefit obligation 278 (368) Income tax effect on movement in cash flow hedges 1,323 (380) Income tax expense charged/(credited) to OCI 1,601 (748)
212 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 4 48 29 10 53 213 (40) 326 442 125 187 185 238 (748) (929) (652) (402) (806) As at As at 3,932 2,764 2,280 (2,764) (1,332) (1,168) 13,171 36,732 12,712 13,403 (32,100) (14,492) (` in lacs) (` in lacs) 2017-18 (` in lacs) (18,929) (18,929) 2017-18 (` in lacs) March 31, 2018 March March 31, 2018 March - 3 32 31 60 (33) 134 287 183 184 367 (128) (736) As at As at 1,601 4,152 1,481 3,112 1,873 (3,112) (1,481) (1,077) (1,545) 14,468 (1,281) (1,505) 13,145 12,512 37,620 Profit and Loss Profit (36,386) (18,929) 2018-19 (21,918) (21,918) 2018-19 CEAT Limited CEAT March 31, 2019 March March 31, 2019 March 946 As at 7,245 1,604 3,376 (1,349) (30,751) (18,929) March 31, 2018 March As at
5,764 1,637 2,023 5,044 Balance Sheet (1,483) (34,903) (21,918) March 31, 2019 March
60 lacs of CEAT Akkhan limited 60 lacs of CEAT ` e includes deferred tax asset of e includes deferred
This figur The Gr assets and deferred tax liabilities related to income taxes levied by the same tax authority. tax liabilities related assets and deferred
Deferred tax assets Deferred tax liabilities Deferred Deferred tax liabilities (net) Deferred Particulars Particulars Opening balance as of April 1 and loss statement of profit in the income/(expense) during the period recognised Tax income comprehensive in other income/(expense) during the period recognised Tax 31 Closing balance as at March MAT credit utilisation credit MAT Others Accelerated depreciation for tax purposes Accelerated depreciation Particulars foot note a) entitlement (refer Credit MAT Voluntary retirement scheme retirement Voluntary Provision for doubtful debts Provision foot note c & d) of subsidiary (refer Undistributed profit Others Deferred tax expense/(income) Deferred a) foot note tax assets/(liabilities) (refer Net deferred Deferred tax Deferred to the following tax relates Deferred Income tax rate of 34.94% (March 31, 2018: 34.61%) (March Income tax rate of 34.94% development (R&D) expense and research Additional deduction on rates Income taxable at special of exempt incomes Effect joint venture from of profit Impact of share for tax of earlier years) (Net of provision Refund for earlier years Income Tax Others for tax purposes Non-deductible expenses on revaluation Depreciation (CSR) Expenses Corporate social responsibility Other non-deductible expenses of losses Impact of subsidiaries with no tax on account losses Impact of associate with no tax on account of in tax rates for certain entities of the group Difference Other Ind AS adjustments 31, 2018: 36.49%) income tax rate of 33.26% (March At the effective Particulars operations continuing tax from before Accounting profit Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for March 31, 2018 and 31, 2018 tax rate for March domestic multiplied by India’s profit and the accounting of tax expense Reconciliation 31, 2019 March Reflected in the balance sheet as follows Notes: a) b) tax taxliabilitiesandthedeferred taxassetsandcurrent current righttosetoff ifandonlyithasalegallyenforceable taxassetsandliabilities oup offsets Reconciliation of deferred tax liabilities (net) Reconciliation of deferred Notes to Consolidated Financial Statements for the year ended March 31, 2019 c) At March 31, 2019, there was unrecognised deferred tax liability to the extent of ` 524 lacs (March 31, 2018: NIL) for taxes that would be payable on the unremitted earnings of the Group’s subsidiaries. The Group has determined that the portion of undistributed profits on which deferred tax liability is not recognised of its subsidiary will not be distributed in the foreseeable future. Note 26: Borrowings Refer note 2.19 for accounting policy on financial instruments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Current Secured Cash credit facilities from banks (repayable on demand) (refer foot note a) 2,373 7,156 Export packing credit from banks (refer foot note a) - 1,955 Buyer’s credit from banks (refer foot note a) - 10,446 Term loans from banks (refer foot note a) 200 - Unsecured Commercial paper (refer foot note b) 19,852 - Total 22,425 19,557 Notes: a) Cash credit facilities and working capital demand loan from banks is part of working capital facilities availed from consortium of banks secured by way of first pari passu charge on the current assets of the Group, wherever situated and by way of second pari passu charge on the movable assets (except current assets) and immovable assets of the Group situated at Bhandup, Nasik and Halol Plants. All short-term borrowings availed in Indian rupees during the current year carry interest in the range of 7.80% p.a. to 12.30% p.a. and all short-term borrowing availed in foreign currency during the year carry interest in the range of LIBOR plus 20 bps to LIBOR plus 140 bps. (LIBOR is set corresponding to the period of the loan). b) The Group had issued Commercial papers (total available limit ` 35,000 lacs) at regular intervals for working capital purposes with interest ranging from 6.90% p.a. to 8.75% p.a. The outstanding as at March 31, 2019 is ` 19,852 lacs (March 31, 2018: Nil) c) Refer note 53(g) for information about liquidity risk relating to Borrowings
Note 27: Trade payables Refer note 2.19 for accounting policy on financial instruments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Dues to micro and small enterprises (refer foot note a) Overdue 11 - Not due 565 360 Other trade payables 1,03,226 84,291 Trade payables to related parties (refer note 48) 1,485 2,400 Total 1,05,287 87,051 Notes: a) Disclosure required under the Micro, Small and Medium Enterprises Development Act, 2006 (the MSMED Act) are given as follows: (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 i) The principal amount remaining unpaid to any supplier as at the end of each accounting year 577 360 ii) Interest due thereon remaining unpaid to any supplier as at the end of accounting year 7 - iii) The amount of interest paid by the buyer in terms of section 16 of the MSMED Act 2006 along with the 7 12 amounts of the payment made to the supplier beyond the appointed day during each accounting year iv) The amount of interest due and payable for the year - - v) Amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprises for the purpose of - - disallowance as a deductible expenditure under section 23 of the Act. The information disclosed above is to the extent available with the Group. b) Trade payables are non interest bearing and normally settled on 30 to 105 days c) Refer note 53(g) for information about liquidity risk relating to trade payables.
214 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 2 71 23 13 215 419 214 225 117 As at As at 1,394 2,234 2,837 4,759 7,914 1,804 9,720 71,999 31,512 59,428 22,494 (` in lacs) (` in lacs) (` in lacs) 2017-18 5,66,350 6,45,233 6,43,839 March 31, 2018 March 31, 2018 March - 2 13 146 441 101 542 443 As at As at 3,515 3,012 7,640 1,359 9,001 3,473 5,113 79,912 33,246 61,462 18,531 2018-19 6,98,451 6,11,425 6,94,936 CEAT Limited CEAT
March 31, 2019 March March 31, 2019 March 16,891 lacs) (refer note 2.7.1). 16,891 lacs) (refer ` ement and note 53(g) for information about liquidity risk relating to other financial liabilities. risk relating ement and note 53(g) for information about liquidity om customers of Nil lacs (March 31, 2018: 31, 2018: om customers of Nil lacs (March Pr Sale of goods includes excise duty collected fr The Gr Refer foot note a) of note 14: Bank balances other than cash and cash equivalents. Refer foot note a) of note 14: Bank balances other than Refer note 51 of information about fair value measur General of Foreign Trade, Government of India. Trade, General of Foreign classification.
Revenue from operations Revenue from Revenue recognised at the point of time Revenue recognised foot note a) (refer Automotive Tyres foot note a) and others (refer Tubes with customers contracts from revenue Total Other operating income foot note b) Government grants (refer Sale of scrap Other revenues over the period of time Revenue recognised note 48) Royalty income (refer Deposits from dealers Deposits from Others Total Interest accrued but not due on security deposit accrued but not due on Interest foot note a) (refer accrued thereon deposits and interest Unpaid matured Payable to capital vendors Current Current income comprehensive other At fair value through Derivative financial instrument At amortised cost note 22) (refer borrowings maturities of long-term Current borrowings accrued but not due on Interest Unpaid dividends Particulars Statutory dues customers* from Advance received Other payables Total Particulars Particulars * Balance as at March 31, 2019 represents contract liabilities 31, 2019 represents * Balance as at March c) Notes: a) b) Directorate IndiaScheme(MEIS)from Exportsfrom agovernment ofExportIncentiveunderMerchandise grantasincomeonaccount oup hasrecognised year's from operations'to'Otherexpenses'conformcurrent from 'Revenue reclassified related obligationshavebeen ofsales evious yearfigure Note 30: Revenue from operations Note 30: Revenue from and 2.8 for government grant and export incentives recognition Refer note 2.7 for accounting policy on Revenue with customers: contracts from revenue of the Group's Set out below is the disaggregation Note 29: Other current liabilities Note 29: Other current Notes: a) b) Note 28: Other financial liabilities Other financial Note 28: instruments policy on Financial 2.19 for accounting Refer note Notes to Consolidated Financial Statements for the year ended March 31, 2019
(` in lacs) Particulars 2018-19 India 5,92,078 Outside India 1,02,858 Total revenue from contracts with customers 6,94,936
Contract assets and liabilities The Group has recognised the following revenue-related contract assets and liabilities: (` in lacs) As at Particulars March 31, 2019 Trade receivables (refer note 12) 70,638 Contract liabilities (refer note 29) 1,359
Contract liabilities includes payments received in advance of performance under the contract. (` in lacs) Particulars 2018-19 Revenue recognised in the period from Amounts included in contract liability at the beginning of the period 1,804 Performance obligations satisfied in previous periods -
The Group receives payment from customers based on a billing schedule, as established in the contracts with customers. Trade receivable are recognised when the right to consideration becomes unconditional. Contract liability relates to payments received in advance of performance under the contract. Contract liabilities are recognised as revenue as (or when) the Group perform under the contract.
Reconciling the amount of revenue recognised in the statement of profit and loss with the contracted price: (` in lacs) Particulars 2018-19 Revenue as per contracted price 6,97,733 Reductions towards variable consideration components (2,797) Revenue from contracts with customers 6,94,936
The reduction towards variable consideration comprises of discounts, indexations etc.
Practical expedients The Group has taken advantage of the following practical exemptions: - Not to account for significant financing components where the time difference between receiving consideration and transferring control of goods or services to its customer is one year or less;
*The cumulative effect of initially applying Ind AS 115 is recognised at the date of initial application as an adjustment to the opening balance of retained earnings. Therefore, the comparative information was not restated and continues to be reported under Ind AS 18 (refer note 2.2.2).
Note 31: Other Income Refer note 2.7 for accounting policy on revenue recognition (` in lacs) Particulars 2018-19 2017-18 Interest income on Bank deposits 96 158 Other interest income 2,846 927 Dividend income on current investment - 2 Other non-operating income 875 794 Net gain on disposal of investments (refer foot note a) 83 1,065 Total 3,900 2,946 Notes: a) Includes fair value gain/ (loss) as at March 31, 2019 amounting to Nil (March 31, 2018 ` 6 lacs)
216 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 217 627 (577) As at 3,149 4,366 3,095 3,532 9,251 8,674 5,444 3,513 1,513 4,031 3,432 1,932 40,779 48,294 32,416 39,043 42,720 43,827 23,678 36,167 35,824 51,933 49,944 42,610 32,948 (36,167) (` in lacs) (` in lacs) (` in lacs) (` in lacs) (` in lacs) 2017-18 2017-18 2017-18 2017-18 3,58,661 4,01,381 3,65,214 1,87,779 3,65,214 March 31, 2018 March - 667 3,095 3,532 3,342 3,770 6,147 4,557 3,040 3,443 2,821 2,024 As at 32,416 39,043 51,878 58,990 36,167 53,006 44,168 24,182 38,043 66,106 64,506 53,054 42,476 (19,947) (38,043) 2018-19 2018-19 4,32,425 4,68,592 4,30,549 2018-19 2018-19 2,04,407 (19,947) CEAT Limited CEAT 4,30,549 March 31, 2019 March Work-in-progress Work-in-progress Finished goods Stock in trade Stock in trade Finished goods Opening Stock Particulars Total Closing Stock excise duty on opening and closing stock of finished goods Differential Total Salaries, wages and bonus expenses welfare Staff Rubber Fabrics Carbon black Chemicals Others 10(a)) note (refer Total Particulars and other funds Contribution to provident note 46) Gratuity expenses (refer Details of raw materials consumed Details of raw materials Rubber Fabrics Details of closing inventories Carbon black Chemicals Others Total
Particulars Raw Material Opening stock of raw material Add: Purchases Less: Closing stock Total Note 34: Employee benefit expense and other employee benefits Refer note 2.18 for accounting policy on Retirement Note 33: Changes in inventories of finished goods, work-in-progress and stock-in-trade finished goods, work-in-progress Note 33: Changes in inventories of Note 32: Cost of material consumed Cost of material Note 32: Notes to Consolidated Financial Statements for the year ended March 31, 2019
Note 35: Finance costs Refer note 2.13 for acccounting policy on borrowing cost (` in lacs) Particulars 2018-19 2017-18 Interest on debts and borrowings 7,842 8,811 Other 531 537 8,373 9,348 Unwinding of decommissioning liability 7 6 Unwinding of discount on provision of sales related obligation 424 381 Total 8,804 9,735
Note 36: Depreciation and amortization expenses Refer note 2.11 for accounting policy on Property, plant and equipment and 2.12 on intangible assets (` in lacs) Particulars 2018-19 2017-18 Depreciation on property, plant and equipment (refer note 3) 17,557 15,451 Amortization of intangible assets (refer note 4) 1,714 1,410 Total 19,271 16,861
Note 37: Other expenses (` in lacs) Particulars 2018-19 2017-18 Conversion charges 40,315 35,481 Stores and spares consumed 5,786 4,752 Provision for obsolescence of stores and spares 107 120 Power and fuel 22,079 19,100 Freight and delivery charges 34,419 29,364 Rent for premises 944 801 Lease rent-vehicles 133 144 Rates and taxes 179 283 Insurance 511 469 Repairs - Machinery 5,717 4,951 - Buildings 610 489 - Others 62 77 Travelling and conveyance 4,010 3,755 Printing and stationery 246 279 Directors' fees (refer note 48) 53 49 Payment to auditors (refer foot note a) 112 109 Cost audit fees 3 3 Advertisement and sales promotion expenses 17,937 15,508 Rebates and discounts 0 94 Commission on sales 76 212 Communication expenses 801 982 Bad debts and advances written off 136 1,547 Allowance for doubtful debts written back (129) (1,497) 7 50 Allowance for doubtful debts and advances 197 371 Net loss on disposal of property, plant and equipment(net) 481 929 Legal charges 214 260 Foreign exchange fluctuations (net) 357 69 Professional and consultancy charges 3,406 3,058 Commission to directors (refer foot note 48) 438 421 Training and conference expenses 1,365 1,202 Miscellaneous expenses 14,505 11,692 Bank charges 483 628 Sales related obligations* 6,406 5,265 Corporate social responsibility (CSR) expenses (refer foot note b) 1,051 1,071 Total 1,63,010 1,42,038 * Previous year figure of sales related obligations have been reclassified from 'Revenue from operations' to 'Other expenses' to conform to current year's classification.
218 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - - - - 3 68 28 10 219 109 1,051 Total Total Total Total 1,071 1,051 1,071 1,071 3,540 6,540 3,396 3,396 10,080 (` in lacs) (` in lacs) (` in lacs) (` in lacs) (` in lacs) (` in lacs) 2017-18 2017-18 2017-18 2017-18
5 ------27 12 68 229 112 1,195 3,055 4,479 1,051 6,599 9,880 3,281 in cash in cash 2018-19 2018-19 2018-19 2018-19 CEAT Limited CEAT Yet to be paid Yet Yet to be paid Yet - - 1,071 1,051 1,051 1,071 In cash In cash ch 31, 2018 ch 31, 2019 esponsibility (CSR) expenditure Construction/acquisition of any asset On purposes other than (i) above Construction/acquisition of any asset On purposes other than (i) above
i) ii) i) ii) Amount spent during the year ended on Mar
Particulars III) II) Amount spent during the year ended on Mar II) Amount spent during the year ended on Details of Corporate social r I) Gr Payments to the auditor Payments Total Total The Gr Pr The Gr The Gr 3,055 lacs and in respect of which the Group is evaluating further legal options. of which the Group to ` 3,055 lacs and in respect January 11, 2019, aggregating
Revenue expenditure Total Capital expenditure Particulars foot note a) scheme (VRS) (refer retirement Voluntary foot note b) seperation expense (refer Workmen's Particulars Provision for indirect tax matters (refer foot note c) tax matters (refer for indirect Provision Total
b) tobespentduringtheyear oss amountrequired a) Limited review In other capacity certification fees) Other services (including Reimbursement of expenses Total Particulars As auditor Audit fee* Notes: The above expenditure of research and development has been determined on the basis of information available with the Group and on the basis of information available with the Group and development has been determined of research The above expenditure as certified by the management. Note 39: Research and development costs Note 39: Research b. c. November15,2017to fortheperiodfrom andTubes isattributabletothecompositesupplyofTyres amountofGoodsandServiceTax ovision fordifferential ofworkmen'sseperation. oup haspaidcompensationinrespect Notes: a. 31,2018,298employees)optedfortheVRS. 56employees(March Duringtheyear, theGroup. across VRSforemployees oup hadintroduced Note 38: Exceptional items Notes: a) year yearandprevious expensesforcurrent forcorporatesocialresponsibility oup doesnotcarryanyprovision
*Exclusive of service tax/GST Notes to Consolidated Financial Statements for the year ended March 31, 2019
Note 40: Earnings per share Refer note 2.25 for accounting policy on earnings per share
Basic earnings per share (EPS) amounts are calculated by dividing profit for the year attributable to equity holders of the Parent by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
The following reflects the income and share data used in the basic and diluted EPS computations:
(` in lacs) Particulars 2018-19 2017-18 Profit after tax for calculation of basic and diluted EPS 25,222 23,798 Weighted average number of equity shares (face value per share `10) in calculating basic EPS 4,04,50,092 4,04,50,092 and diluted EPS Basic earnings per share (Face value of ` 10 each) 62.35 58.83 Diluted earnings per share (Face value of ` 10 each) 62.35 58.83
Note 41: Significant accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require an adjustment to the carrying amount of assets or liabilities in future periods. Difference between actual results and estimates are recognised in the periods in which the results are known / materialised.
Judgements In the process of applying the Group’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the consolidated financial statements.
Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group has based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur. a) Taxes Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the Group’s domicile. Based on the approved plans and budgets, the concerned company has estimated that the future taxable income will be sufficient to absorb MAT credit entitlement which management believes is probable, accordingly The Group has recognised MAT credit as an asset. Further details on taxes are disclosed in note 25. b) Defined benefit plans (gratuity benefits) The Group’s obligation on account of present value (PV) of gratuity and compensated absences are determined based on actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
220 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 221 70.00% 58.56% 100.00% 100.00% 100.00% 100.00% 61 lacs). ` March 31, 2018 March 70.00% 58.56% 100.00% 100.00% 100.00% 100.00% CEAT Limited CEAT % of equity interest March 31, 2019 March
tend to change only at interval in tend to change only 68 lacs (March 31, 2018: 31, (March 68 lacs ` opriate discount rate, the management rate, the management opriate discount
Country of incorporation India United States of America Netherlands Sri Lanka Bangladesh India ecorded in the balance sheet cannot be measured based on based in the balance sheet cannot be measured ecorded ` 45 – ` 50 e given in note 46. Principal activities
Trading & manufacturing of tyres, & manufacturing of tyres, Trading tubes and flaps Marketing Support Services Marketing Support Services Investing in companies engaged in manufacturing of tyres Trading of tyres, tubes and flaps of tyres, Trading Manufacturing of tyres e meter – elated obligations is recorded when products are sold. These estimates are established using sold. These estimates are are when products elated obligations is recorded
ement of financial instruments Holdings Company (Pvt.) Ltd. (100% owned ‘subsidiary’) has a 50% interest in a joint arrangement called Holdings Company (Pvt.) Ltd. (100% owned ‘subsidiary’) has a 50% interest CEAT
oup has recognised a provision for decommissioning obligations associated with a land taken on lease at Nasik decommissioning obligations associated for a provision oup has recognised oup considers that such arrangement is a joint venture, as the agreement in relation to the CEAT Kelani Holding to the CEAT in relation as the agreement oup considers that such arrangement is a joint venture, Estimated range of cost per squar Discount rate – 11.50%
the CEAT Kelani Holding Company Pvt. Limited which was set up as a venture with Kelani Tyres Limited. The principal place Kelani Tyres with Pvt. Limited which was set up as a venture Kelani Holding Company the CEAT of business of the joint operation is in Sri Lank The Gr Classification of Joint arrangement: Fair value measur and financial liabilities r When the fair values of financial assets • Pr The estimated liability for sales r • Pr The Gr Further details about gratuity obligations ar Further details about The mortality rate is based on publicly available mortality tables. Those mortality tables based on publicly available mortality tables. The mortality rate is The parameter most subject to change is the discount rate. In determining the appr rate. In determining change is the discount most subject to The parameter is therefore classified as a joint venture and is consolidated using the equity method. and is consolidated using the as a joint venture classified is therefore Company Pvt. Limited requires unanimous consent from both parties for all relevant activities. The two partners have direct direct have partners two The activities. relevant all for parties both from consent unanimous requires Limited Pvt. Company by the partnership. This entity jointly and severally liable for the liabilities incurred rights to the assets of the partnership and are quoted prices in active markets except revaluation of hedging and current investment which are shown at fair value as per shown at investment which are of hedging and current revaluation quoted prices in active markets except Cash Flow (DCF) model. using valuation techniques including the Discounted quoted market price, their fair value is measured of this is not feasible, a degree possible, but where where observable markets taken from The inputs to these models are risk credit risk, liquidity as such inputs of considerations include Judgements values. fair establishing in required is judgement (refer instruments financial of value fair reported the affect could factors these about assumptions in Changes volatility. and note 51 and 52 for further disclosures). historical information on the nature, frequency and average cost of obligations and management estimates regarding possible cost of obligations and management estimates regarding and average frequency historical information on the nature, the obligation will The timing of outflows will vary as and when failure. on product actions corrective on incidence based future obligation is 11.50%. for sales related years. The rate used for discounting provisions arise - being typically up to three manufacturing facility for the production of tyres. In determining the fair value of the provision, assumptions and estimates of the provision, In determining the fair value of tyres. for the production manufacturing facility the site and the expected plant from the the expected cost to dismantle and remove to discount rates, made in relation are was 31, 2019 March at as provision the of amount carrying The costs. those of timing response to demographic changes. Increase in future salary and gratuity is based on expected future inflation rates. future salary and gratuity is based on expected in future Increase to demographic changes. response obligation. considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit of the post-employment the currencies consistent with rates of government currencies bonds in the interest considers The Group estimates that the costs would be realised in year 2066 at the expiration of the lease and calculates the provision 2066 at the expiration of the lease and calculates the provision in year estimates that the costs would be realised The Group based on the following assumptions: using the Discounted Cash Flow (DCF) method Associated
Name CEAT Specialty Tyres Limited Specialty Tyres CEAT CEAT Specialty Tyres Inc. (Subsidiary of CEAT Inc. (Subsidiary of CEAT Specialty Tyres CEAT Limited) Specialty Tyres CEAT Specialty Tyres B.V (Subsidiary of CEAT B.V (Subsidiary of CEAT Specialty Tyres CEAT Limited) Specialty Tyres Holdings Company (Pvt.) Ltd. Associated CEAT CEAT AKKHAN Limited CEAT Rado Tyres Limited Rado Tyres The consolidated financial statements of the Group include subsidiaries listed in the table below: The consolidated financial statements of the Group Note 42: Group information Note 42: Group
f) e) d) obligation ovision forsalesrelated
c) ovision fordecommissioningliability
Notes to Consolidated Financial Statements for the year ended March 31, 2019
Note 43: Material partly owned subsidiaries Financial information of subsidiaries that have material non-controlling interests is provided below: Proportion of equity interest held by non-controlling interests
% of equity interest Name Country of incorporation March 31, 2019 March 31, 2018 Rado Tyres Limited India 41.44% 41.44% CEAT AKKHAN Limited Bangladesh 30.00% 30.00%
Information regarding non-controlling interest
Particulars 2018-19 2017-18 Accumulated balances of material non-controlling interest: Rado Tyres Limited (398) (337) CEAT AKKHAN Limited 2,777 2,674 Total comprehensive income allocated to material non-controlling interest: Rado Tyres Limited (61) (366) CEAT AKKHAN Limited (53) (109)
The summarized financial information of these subsidiaries is provided below. This information is based on amounts before inter-company eliminations:
Summarised statement of profit and loss for the year ended March 31, 2019
(` in lacs) Particulars Rado Tyres Limited CEAT AKKHAN Limited Revenue 14 8,447 Profit/(Loss) for the year (147) (176) Other comprehensive income - - Total comprehensive income (147) (176) Attributable to: Equity holders of parent (86) (123) Non-controlling interest (61) (53)
Summarised statement of profit and loss for the year ended March 31, 2018
(` in lacs) Particulars Rado Tyres Limited CEAT AKKHAN Limited Revenue 31 6,017 Profit/(Loss) for the year (870) (363) Other comprehensive income (13) - Total comprehensive income (883) (363) Attributable to: Equity holders of parent (517) (254) Non-controlling interest (366) (109)
Summarised balance sheet as at March 31, 2019
(` in lacs) Particulars Rado Tyres Limited CEAT AKKHAN Limited Non current assets 513 7,832 Current assets 46 4,214 Non current liabilities 1,510 19 Current liabilities 10 2,770 Total equity (961) 9,257 Attributable to: Equity holders of parent (563) 6,480 Non-controlling interest (398) 2,777
222 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 72 223 (25) (27) 809 181 50% 50% (712) (388) (234) 7,347 3,202 1,635 8,914 6,240 2,674 2,106 As at 3,448 (4,034) (6,541) (1,924) 33,586 16,793 16,975 19,720 20,993 (` in lacs) (` in lacs) (` in lacs) (` in lacs) March 31, 2018 March March 31, 2018 March 50% 50% 1,982 As at 3,590 CEAT AKKHAN Limited CEAT CEAT AKKHAN Limited CEAT AKKHAN Limited CEAT (8,986) (4,722) (1,811) 21,635 23,252 34,769 17,385 17,556 CEAT Limited CEAT % of equity interest - - 16 12 12 (8) (20) 585 126 (478) (337) (815) 1,510 1,160 March 31, 2019 March March 31, 2019 March (1,148) Rado Tyres Limited Rado Tyres Rado Tyres Limited Rado Tyres Limited Rado Tyres Country of incorporation Sri Lanka Principal activities Manufacturing of tyres
Current Liabilities Current translation diffrences currency Foreign Particulars Assets Non Current Assets Current Liabilities Non Current Net Assets Percentage of the Group's ownership of the Group's Percentage Group's share in Net worth share Group's Goodwill on Consolidation Revaluation reserve Carrying amount of investments Name Kelani Holding (Pvt) Limited CEAT Particulars Particulars Particulars Current liabilities Current Operating Non current assets Non current assets Current liabilities Non current equity Total Attributable to: Equity holders of parent interest Non-controlling Operating Investing Financing in cash and cash equivalents / (decrease) Net increase Investing Financing in cash and cash equivalents / (decrease) Net increase Summarised balance sheet as at March 31, 2018 31, as at March balance sheet Summarised Summarised balance sheet Details of interest held by Group Details of interest statements are set out below. statements are Note 44: Interest in Joint Venture Note 44: Interest entity incorporated in Sri Lanka. The joint venture Kelani Holding (Pvt) Limited, a joint venture in CEAT has 50% interest The group Kelani Holdings (Pvt) Limited in CEAT interest The group of tyres. involved in the manufacture has wholly owned subsidiaries who are of the joint in the consolidated financial statements. Summarized financial information is accounted for using the equity method with the carrying amount of the investment in consolidated financial reconciliation on its financial statements, and based venture Summarised cash flow information as at March 31, 2019 as at March Summarised cash flow information Summarised cash flow information as at March 31, 2018 as at March Summarised cash flow information Notes to Consolidated Financial Statements for the year ended March 31, 2019
Summarised statement of profit and loss (` in lacs)
Particulars 2018-19 2017-18
Revenue 41,384 43,636 Finance Costs (212) (92) Depreciation and amortization (1,375) (1,284) Profit before tax 5,466 5,902 Income tax expenses (1,251) (1,243) Profit after tax (A) 4,215 4,659 Other comprehensive income 6 44 Total other comprehensive income 4,221 4,703 Percentage of the Group's ownership (B) 50% 50% Profit considered for consolidation [A x B] 2,108 2,330
The Group has no contingent liabilities or capital commitments relating to its interest in CEAT Kelani Holding (Pvt) Limited as at March 31, 2019 and March 31, 2018. The joint venture has no contingent liabilities or capital commitments as at March 31, 2019 and March 31, 2018.
Note 45: Interest in Associate During the year, the Group made additional investment of ` 300 lacs in TYRESNMORE Online Pvt Ltd. The group interest in TYRESNMORE Online Pvt Ltd is accounted for using the equity method in the consolidated financial statements. Summarized financial information of an associate for the year ended March 31, 2019 is based on its financial statements are set out below. Details of interest held by Group
Country of % of equity interest Name Principal activities incorporation March 31, 2019 March 31, 2018 TYRESNMORE Online Pvt Ltd Trading of tyres, tubes and flaps India *36.96% *31.93% *Includes compulsory convertible preference shares (potential voting right) Summarized statement of profit and loss (` in lacs) Particulars 2018-19 2017-18 Revenue 578 104 Finance costs 6 3 Depreciation and amortization 15 3 Profit/(Loss) for the period (254) (112) Other comprehensive income - - Total comprehensive income (254) (112) Profit/(Loss) considered for consolidation (254) *(91) Percentage of the Group's ownership 36.96% 31.93% Profit/(Loss) considered for consolidation# (88) (29) # 31.93% profit is considered for consolidation for period up to October 31, 2018. *Loss of associate up to the date of acquistion of shares is not considered for consolidation
The Group has no contingent liabilities or capital commitments relating to its interest in TYRESNMORE Online Pvt Ltd as at March 31, 2019 and March 31, 2018. The joint venture has no contingent liabilities or capital commitments as at March 31, 2019 and March 31, 2018.
224 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 0 - 59 38 50 225 299 320 102 269 371 627 671 (810) (520) (401) As at 9,790 9,407 31.93% (` in lacs) (` in lacs) 2017-18 March 31, 2018 March 3 - 3 98 132 338 369 136 448 584 (11) 667 706 658 As at 9,407 10,351 36.96% (1,079) 2018-19 CEAT Limited CEAT March 31, 2019 March espective of vesting. The Group makes annual contribution to the espective of vesting. The Group 1,720 (` in lacs) 2017-18 ned by the Board of Trustees, which consists of employer and employee which consists of employer of Trustees, ned by the Board 1,797 2018-19 ned by the Payment of Gratuity Act, 1972. Under the act, every employee who has completed five ned by the Payment of Gratuity Act, 1972.
esent value of the defined benefit obligation are as follows esent value of the defined benefit obligation , the Board of Trustees reviews the level of funding. Such a review includes the asset-liability matching strategy and the level of funding. Such a review reviews of Trustees , the Board oup has recognised and included in Note No. 34 “Contribution to Provident and other funds” expenses towards the and other funds” expenses towards and included in Note No. 34 “Contribution to Provident oup has recognised oup has a defined benefit gratuity plan which is funded with an Insurance Company in the form of qualifying Insurance oup has a defined benefit gratuity plan Opening present value of defined benefit obligation Opening present note 34) service cost (refer Current cost Interest Benefits paid income (Gain) / Loss in other comprehensive Remeasurement changes in demographic assumptions - Actuarial changes arising from - Actuarial changes arising from changes in financial assumption - Actuarial changes arising from Experience adjustments Adjustment in the Opening Liability value of obligation Closing present Particulars Contribution fund to Provident Change in pr In case of death, while in service, the gratuity is payable irr Each year The fund has the form of a trust and it is gover The fund has the form of a trust and it The gratuity plan is gover The Gr Defined Benefit plan - Gratuity Defined contribution plan The Gr Group gratuity scheme administered by LIC through its gratuity funds. by LIC through gratuity scheme administered Group investment risk management policy. This includes employing the use of annuities and longevity swaps to manage the risks. This includes investment risk management policy. of trustees have appointed The Board of this annual review. decides its contribution based on the results of Trustees The Board of to manage its funds. The Board LIC of India, Birla Sun Life Insurance, India First Life Insurance & HDFC Life Insurance performed) valuation on (based deficits plan no that such level a at stable relatively contributions annual keep to aim Trustees will arise. representatives. The Board of Trustees is responsible for the administration of the plan assets and for the definition of the for the administration of the plan assets and for the definition is responsible of Trustees The Board representatives. investment strategy. years of service gets a gratuity on separation @ 15 days of last drawn salary for each completed year of service. The scheme @ 15 days of last drawn salary for each completed year of service. The scheme years of service gets a gratuity on separation the form of qualifying insurance policy. is funded with an insurance Company in policy. The Group's defined benefit gratuity plan is a salary plan for employees which requires contributions to be made to a requires a salary plan for employees which defined benefit gratuity plan is The Group's policy. separate administrative fund. defined contribution plan as under:
1 2 3 4 5 6 7 8 Sr. Sr. No. Non Current Assets Non Current Particulars Assets Current Liabilities Non Current Liabilities Current equity Total ownership of the Group's Percentage in Net worth share Group's Goodwill on Consolidation Carrying amount of investments Summarised balance sheet Summarised i)
b) Refer note 2.18 for accounting policy on retirement and other employee benefits and other retirement Refer note 2.18 for accounting policy on a) Note 46: Post-retirements benefit plan Note 46: Post-retirements Notes to Consolidated Financial Statements for the year ended March 31, 2019
ii) Changes in Fair value of Plan Assets are as follows (` in lacs) Sr. Particulars 2018-19 2017-18 No. 1 Fair value of plan assets as at April 1 9,765 8,607 2 Expected return on plan assets 730 586 3 Contributions made 15 1,103 4 Benefits paid (1,078) (624) 5 Return on plan assets, excluding amount recognised in net interest expense (93) 93 6 Fair value of plan assets as at March 31 9,339 9,765 iii) Expenses/(Income) recognised during the period (` in lacs) Sr. Particulars 2018-19 2017-18 No. 1 In income statement 641 712 2 In other comprehensive income 740 (1042) 3 Total Expenses/(Income) recognised during the period 1,381 (330) iv) Expenses recognized in the income statement (` in lacs) Sr. Particulars 2018-19 2017-18 No. 1 Current service cost (refer note 34) 667 627 2 Interest cost on benefit obligation (19) 85 3 Expected return on plan assets (7) - 4 Net benefit expense 641 712 v) Expenses recognized in other comprehensive income (OCI) (` in lacs) Sr. Particulars 2018-19 2017-18 No. 1 Remeasurement arising from changes in demographic assumptions (12) - 2 Remeasurement arising from changes in financial assumptions 2 (563) 3 Remeasurement arising from changes in experience variance 658 (386) 4 Return on plan assets, excluding amount recognized in net interest expense 92 (93) 5 Components of defined benefit costs recognized in other comprehensive income 740 (1,042) vi) Net Assets / (Liability) (` in lacs) Sr. As at As at Particulars No. March 31, 2019 March 31, 2018 1. Closing present value of the defined benefit obligation 10,351 9,407 2. Closing fair value of plan assets 9,339 9,765 3. Net assets / (liability) recognized in the Balance Sheet (1,012)* 358
* Refer note 16 & 24 vii) Actual return on plan assets (` in lacs) Sr. Particulars 2018-19 2017-18 No. 1. Expected return on plan assets 730 586 2. Actuarial (loss)/gain on plan assets (93) 93 3. Actual return on plan assets 637 679 viii) The major categories of plan assets as a percentage of the fair value of plan assets are as follows
As at As at Particulars March 31, 2019 March 31, 2018 Investment with insurer 100% 100%
226 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 227 rate 9,301 100% As at 5.67% 7.50% 7.00% 22.70% (` in lacs) 2017-18
5% of mortality March 31, 2018 March rate As at 100% 5.67% 7.50% 7.00% 10,280 22.70% 2018-19 CEAT Limited CEAT oup’s plan are shown below plan are oup’s 5% of mortality March 31, 2019 March ed to duration of assets, exposing the Group to market risk for volatilities/fall in ed to duration of assets, exposing the Group dance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to 1972 (as amended from of the Payment of Gratuity Act, dance with the requirements es oup is not able to meet the short-term gratuity payouts. This may arise due to non availability of the short-term gratuity payouts. This oup is not able to meet oup to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost in the ultimate cost in an increase rates will result rates. A fall in interest in interest oup to the risk of fall oup has used certain mortality and attrition assumptions in valuation of the liability. The Group is exposed to the risk of Group The assumptions in valuation of the liability. oup has used certain mortality and attrition esent value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants is calculated with the assumption of salary increase esent value of the defined benefit plan CEA Asset Liability Mismatching or Market Risk Asset Liability Mismatching or Market The duration of the liability is longer compar Gratuity benefit is paid in accor The Gr Regulatory Risk Demographic Risk Salary Escalation Risk The pr Liquidity Risk the Gr This is the risk that Inter Gr The plan exposes the V The principal assumptions used in determining gratuity and leave encashment for the Gr encashment for the gratuity and leave in determining assumptions used The principal of Risk Exposur Description interest rate. interest time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity higher gratuity payouts (e.g. Increase requiring is a risk of change in regulations time). There year of ` 20 lacs). in the previous actual experience turning out to be worse compared to the assumption. actual experience turning out to be worse compared in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to the rate of increase for plan participants from of salary in future Deviation in the rate of increase in future. value of obligation will have a bearing on the plan's liability. determine the present enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time. equivalent to meet the liabilities or holding enough cash / cash of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements). in the value of the liability (as result in an increase and will thus the above benefit of providing over time. Thus, the Group is exposed to various risks in providing the above gratuity benefit which are as follows: benefit which are the above gratuity to various risks in providing is exposed Group over time. Thus, the
Withdrawal rates, based on service year: (per annum) - Below 5 years - Equal and above 5 years Defined Benefit Obligation (Base) Particulars Disability Rate Discount rates (per annum) rate (per annum) Salary growth lives mortality (2006-08) modified ultimate) Mortality rate (% of indian assured Particulars The sensitivity analysis below have been determined based on reasonably possible change of the assumptions occurring at the end possible change of the assumptions occurring at the end The sensitivity analysis below have been determined based on reasonably of sensitivity analysis is given below: period, while holding all other assumptions constant. The results of the reporting The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority and other relevant take account of inflation, seniority and other in actuarial valuation, considered salary increase, The estimates of future factors, such as supply and demand in the employment market. a) Investment Risk to the expected return on any particular investment. of losses relative or likelihood of occurrence The probability T Limited
risk est Rate work whichmayvary frame andotherregulatory assumptions predetermined setof basic certain on performed are aluations ix) Notes to Consolidated Financial Statements for the year ended March 31, 2019
A quantitative sensitivity analysis for significant assumption as at March 31, 2019 is as shown below:
(` in lacs) 2018-19 2017-18 Particulars Decrease Increase Decrease Increase Discount rate (- / + 1%) 11,048 9,603 10,069 8,628 (% change compared to base due to sensitivity) 7.5% (6.6%) 8.3% (7.2%) Salary growth rate (- / + 1%) 9,595 11,043 8,620 10,064 (% change compared to base due to sensitivity) (6.7%) 7.4% (7.3%) 8.2% Attrition rate (- / + 50% of attrition rates) 10,261 10,286 9,267 9,319 (% change compared to base due to sensitivity) (0.2%) 0.1% (0.4%) 0.2% Mortality rate (- / + 10% of mortality rates) 10,279 10,280 9,300 9,301 (% change compared to base due to sensitivity) 0.00% 0.00% 0.00% 0.00%
The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.
The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance Company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.
The Company’s best estimate of contribution during the next year is ` 1,655 lacs.
The weighted average duration (based on discounted cash flow) of defined benefit obligation is 7 years.
The following payments are expected contributions to the defined benefit plan in future years: (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Within the next 12 months (next annual reporting period) 1,676 1,128 Between 2 and 5 years 4,210 3,657 Between 6 and 10 years 4,839 4,558 Beyond 10 years 9,241 9,925 Total expected payments 19,966 19,268
The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outflows happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in an increase in liability without corresponding increase in the asset). b) CSTL Investment Risk The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Particulars 2018-19 2017-18 Discount rates (per annum) 7.60% 7.60% Salary growth rate (per annum) 7.00% 7.00% Mortality rate (% of indian assured lives mortality (2006-08) modified ultimate) 100% 100% 5% of mortality 5% of mortality Disability rate rate rate Withdrawal rates, based on service year (per annum) 15.00% 6.00% Retirement age 58 years 58 years
The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority and other relevant factors, such as supply and demand in the employment market.
228 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 0 4 97 58 229 118 106 107 148 210 106 As at As at (8.93%) (0.66%) 10.17% (` in lacs) (` in lacs) (` in lacs) Increase
March 31, 2018 March 31, 2018 March 0 5 97 38 39 82 71 2017-18 118 107 107 As at As at 0.62% (8.84%) 10.47% CEAT Limited CEAT Decrease March 31, 2019 March March 31, 2019 March 0 67 76 70 71 6.8% (6.1%) (1.6%) Increase 0 67 76 72 71 2018-19 6.8% 1.6% (6.2%) Decrease
(% change compared to base due to sensitivity) (% change compared rate (- / + 1%) Salary growth Discount rate (- / + 1%) (% change compared to base due to sensitivity) (% change compared Attrition rate (- / + 1% of attrition rates) (% change compared to base due to sensitivity) (% change compared Mortality rate (- / + 10% of mortality rates) (% change compared to base due to sensitivity) (% change compared Between 2 and 5 years Between 5 and 10 years expected payments Total Defined Benefit Obligation (Base) Defined Benefit Obligation Particulars Within period) the next 12 months (next annual reporting Particulars Particulars The sensitivity analysis below have been determined based on reasonably possible change of the assumptions occurring at the end occurring change of the assumptions possible based on reasonably been determined analysis below have The sensitivity The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate plan in which the interest cash accumulation which is basically a year-on-year insurance policy, The Company has purchased as part of the policy rules, makes The insurance Company, on yearly basis and is guaranteed for a period of one year. is declared thus, of funds under the policy). The policy, payment of all gratuity outflows happening during the year (subject to sufficiency to the duration of cash accumulation plan, the duration of assets is shorter compared being a mitigates the liquidity risk. However, rates, which should fall in interest the significant rate (in particular, liabilities. Thus, the Company is exposed to movement in interest in the asset). increase in liability without corresponding in an increase result The following payments are expected contributions to the defined benefit plan in future years: expected contributions to the defined benefit plan in future The following payments are The weighted average duration (based on discounted cash flow) of defined benefit obligation is 6 years. The weighted average duration (based on The Company’s best estimate of contribution during the next year is NIL The Company’s The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance for payment of gratuity to the employees. Every year, an insurance policy to provide The Company has purchased Any deficit in the assets the Company. by based on the latest employee data provided Company carries out a funding valuation of such valuation is funded by the Company. arising as a result The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation determined based on a method that extrapolates the impact on defined benefit The sensitivity analysis above have been period. at the end of the reporting changes in key assumptions occurring of reasonable as a result A quantitative sensitivity analysis for significant assumption as at March 31, 2019 is as shown below as at March analysis for significant assumption A quantitative sensitivity of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below: analysis is given of sensitivity constant. The results other assumptions while holding all period, of the reporting Notes to Consolidated Financial Statements for the year ended March 31, 2019
Note 47: Commitments and contingencies Refer note 2.14 for accounting policy on lease a) Leases Operating lease commitments — Group as lessee The Group has entered a lease agreement with the leasing Group for vehicles, resulting in a non-cancellable operating lease. There is no restriction placed upon the Group by entering these leases. The lease term range from one year to five years and are renewable at the option of the Group.
Lease rental on the said lease of ` 133 Lacs (March 31, 2018 ` 144 Lacs) has been charged to Statement of profit and loss.
Future minimum rentals payable under non-cancellable operating leases as at March 31, 2019 are, as follows: (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Within one year 81 70 After one year but not more than five years 169 133 More than five years - - b) Contingent Liabilities (to the extent not provided for) Refer note 2.27 for accounting policy on contingent liability and asset (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 1. Direct and indirect taxation matters (refer note a) Income tax 911 4,317 Wealth tax - 7 Excise duty / Service tax 7,083 6,633 Sales tax / VAT 5,360 5,205 Bills discounted with banks 10,586 8,052 2. Claims against the Group not acknowledged as debts (refer note a) In respect of labour matters 586 750 Rental disputes - 180 Customer disputes 446 446 Vendor disputes 294 294 3. Other claims (refer note a) 3,199 3,204 Notes: a) in respect of above matters, future cash outflows are determinable only on receipt of judgements pending at various forums / authorities. c) Commitments (` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Estimated amount of contracts remaining to be executed on Capital account and not provided for (net of 1,31,648 96,328 advance payments) d) Others 1. The Group has availed the Sales Tax Deferral Loan and Octroi refund from the Directorate of Industries for Nasik Plant. Hence, the Group has to take prior permission of the appropriate authority for removal/transfer of any asset (falling under the above Schemes) from Nasik Plant. In case of violation of terms & conditions, the Group is required to refund the entire loan/benefit along with the interest @ 22.50% on account of Sales Tax deferral Loan and @ 15% on account of Octroi refund.
2. There are numerous interpretative issues relating to the Supreme Court (SC) judgement on Provident Fund (PF) dated February 28, 2019. The Group is in the process of receiving further clarity on the subject.
230 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
231 CEAT Limited CEAT
e manufacturer filed Writ Petition in the Madras filed e manufacturer
ent year and previous year ent year and previous epresentation of the All India Tyres Dealers Federation of the All India Tyres epresentation
ectors, KMP or their relatives are interested) are ectors, KMP or their relatives ectors, KMP or their relatives are interested) are ectors, KMP or their relatives ed as “Remote” by the Group ed as “Remote” ectors, KMP or their relatives are interested) are ectors, KMP or their relatives e manufactures having been aggrieved by the decision of the Single Judge of the Madras High Court, having been aggrieved by the decision of the Single Judge of the Madras High e manufactures national Tyres (Pvt.) Limited (“CKITL”) (Subsidiary of CKHL) national Tyres T (Pvt.) Limited (“ACPL”) (Subsidiary of CKHL) national Limited (“KEC”) (Directors, KMP or their relatives are interested) are KMP or their relatives national Limited (“KEC”) (Directors, 27,421 Lacs i.e., the amount of duty already paid on the basis of transaction value and duty payable on the paid on the basis of transaction amount of duty already ` 27,421 Lacs i.e., the echnologies Limited (“Zensar”) (Directors, KMP or their relatives are interested) are KMP or their relatives echnologies Limited (“Zensar”) (Directors, elated parties and related party relationship elated parties and related oup has been served with a Show Cause cum Demand Notice from the DGCEI (Directorate General of Central Excise General of Central (Directorate the DGCEI Notice from Cause cum Demand served with a Show oup has been Raychem RPG (Pvt.) Limited (“Raychem”) (Dir KEC Inter Asian T TYRESNMORE Online Pvt Ltd. (“TNM”) (Associate Company) RPG Enterprises Limited (“RPGE”) (Dir RPG Lifesciences Limited (“RPGLS”) (Dir Zensar T CEA Associated CEA Ceat-Kelani Inter Ceat Kelani Radials Limited (“CKRL”) (Subsidiary of CKHL)
(SubsidiaryofCKITL) Limited(“ATPL”) (Pvt.) yres ofACHL) venture T KelaniHoldings(Pvt.)Limited(“CKHL”)(Joint Names of r Related parties with whom transactions have taken place during the curr Meanwhile, few other tyr Aggrieved by the conduct of the Investigation by the DG, one of the other tyr Aggrieved by the conduct of the Investigation The Competition Commission of India (CCI) had, while considering the r The Competition Commission of India (CCI) Material demands and disputes consider and disputes Material demands The Gr • • • • • • • • • • • have filed Special Leave Petition before the Supreme Court. The Supreme Court has admitted the Special Leave Petition and Petition Leave Special the admitted has Court Supreme The Court. Supreme the before Petition Leave Special filed have High Court and the Supreme the Madras light of the above pending Petitions before the same is now pending for hearing. In a business decision is purely decision to change the price till date. The Group’s Court, the CCI has not passed any Orders quality product, each of margin profit perception, value brand production, of cost like factors many upon depends which potential and category and market situation of each product in the market, demand and supply of each product perception case hence, believes that it has a strong of the above, Group categories etc. In view targets of various product market shares as remote. considered March 08, 2018 directed the CCI to keep its Orders in sealed cover till the disposal of the Appeal. The Appeal is still pending. in sealed cover till the disposal of the Appeal. The Appeal is the CCI to keep its Orders 2018 directed 08, March High Court, challenging the legality of the investigation conducted by the Director General. The Madras High Court had initially General. investigation conducted by the Director High Court, challenging the legality of the the Writ till the disposal of the Petition. Subsequently, any Orders the CCI to not pass Petition and directed admitted the Writ above the Court, High Madras the of Judge Single the of decision the by 2018. Aggrieved 6, March on dismissed was Petition On hearing the Appeal, the Division Bench on 7, 2018. the Division Bench on March filed Appeal before manufacturer said tyre (AITDF) made a prima facie finding that the major players of tyre industry (including the Group) had some understanding had some Group) the industry (including tyre of major players the facie finding that prima made a (AITDF) reduction benefit of corresponding market, as they did not pass the replacement amongst themselves, especially in the passed on the period subsequent to the year 2011-12. CCI had, vide its order in prices of major raw material inputs for alleged said the investigate to (DG) General Director the of Office the directed Act, the of 26(1) Section under 2014 24, June the said on which CCI directed to CCI in December 2015, based report violation of the Act. DG submitted its investigation and the CCI had also filed as directed 5, 2016. Objections were to file their suggestions/objections by May manufacturers tyre in detail. manufacturers tyre the heard Intelligence) Mumbai, on the ground that, the activity of making tyre set, i.e. inserting Tubes and Flaps inside the Tyres and and and Flaps inside the Tyres inserting Tubes set, i.e. that, the activity of making tyre on the ground Intelligence) Mumbai, Central of 2(f)(iii) Section under commodity pre-packaged / manufacture to amounts Straps, Polypropylene through up tied duty worked out the differential the authorities Act, 2009. Accordingly, 2(l) of the Legal Metrology with Section Excise Act, read amounting to believes that Set of TT / TTF (Tyre The Group April-2011 to March-2017. Section 4A, for the period from basis of MRP under Act, 2009. The Group Legal Metrology of commodity in terms of provisions is not pre-packaged and Flap) Tube / Tyre, and Tube Department vide of the Legal Metrology the said issue has been clarified by the Controller that, case on the ground has a strong as a pre-packed thin polythene strips may not be treated three with tube & flaps tied with 1991 that “Tyre its letter dated May 1, Commodities), Rules, 1977”. (Packaged and Measures of Weights meaning of rule 2(l) of the Standards commodity within the authorities. by the Legal Metrology vide letter dated November 16, 1992 re-affirmed has been The above clarification
a) Note 48: Related party transactions
2. e) 1. Notes to Consolidated Financial Statements for the year ended March 31, 2019
• Vinar Systems Pvt. Limited (“Vinar”) (Directors, KMP or their relatives are interested) upto May 31, 201 • B. N. Elias & Co. LLP (“B. N. Elias”) (Directors, KMP or their relatives are interested) • Atlantus Dwellings & Infrastructure LLP (“Atlantus”) (Directors, KMP or their relatives are interested) • Chattarpati Apartments LLP (“Chattarpati”) (Directors, KMP or their relatives are interested) • Allwin Apartments LLP (“Allwin”) (Directors, KMP or their relatives are interested) • Amber Apartments LLP (“Amber”) (Directors, KMP or their relatives are interested) • Khaitan & Co. (“Khaitan”) (Directors, KMP or their relatives are interested) • Artemis ventures Limited (“Artemis”) (Directors, KMP or their relatives are interested) • Mr. Kunal Mundra (relative of director) (up to February 28, 2018) • Key Management Personnel (KMP): i) Mr. H. V. Goenka, Chairman ii) Mr. Anant Goenka, Managing Director iii) Mr. Arnab Banerjee, Whole-time Director iv) Mr Kumar Subbiah, Chief Financial Officer v) Ms. Shruti Joshi, Company Secretary upto June 11, 2018 vi) Ms. Vallari Gupte, Company Secretary w.e.f. October 25, 2018 vii) Mr. Paras K. Chowdhary, Independent Director viii) Mr. Vinay Bansal, Independent Director ix) Mr. Hari L Mundra, Non-Executive - Non Independent Director up to January 29, 2019 x) Mr. Atul C. Choksey, Independent Director xi) Mr. Mahesh S. Gupta, Independent Director xii) Mr. Haigreve Khaitan, Independent Director xiii) Ms. Punita Lal, Independent Director xiv) Mr. S. Doreswamy, Independent Director up to March 12, 2019 b) The following transactions were carried out during the year with the related parties in the ordinary course of business: (` in lacs) Transactions Related Party 2018-19 2017-18 ACPL (28) (25) CKITL (28) (23) Raychem (2) (8) KEC (56) (51) Amber 2 2 Reimbursement / (recovery) of expenses (net) Zensar 9 9 RPGE 129 231 Vinar - 0 RPGLS (20) (16) Total 6 119 ACPL 84 110 CKITL 137 113 Royalty income ATPL 82 70 CKRL 138 126 Total 441 419 ACPL 4,064 3,927 CKITL 767 502 Purchase of traded goods ATPL - 24 CKRL - 24 Total 4,831 4,477
232 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
- - - - 6 9 0 9 9 11 45 62 55 57 64 35 18 26 17 26 15 15 18 43 12 95 70 24 12 45 95 86 28 75 233 211 247 246 131 403 400 112 474 101 740 630 101 766 1,662 1,979 As at 1,228 1,409 (` in lacs) (` in lacs) 2017-18 March 31, 2018 March
- 1 - - 1 1 8 2 11 27 15 53 43 61 66 35 18 45 65 16 16 19 45 21 95 96 25 13 46 48 45 205 780 116 132 551 403 300 118 496 103 790 110 130 662 103 819 1,047 As at 1,000 4,972 5,214 2018-19 CEAT Limited CEAT March 31, 2019 March CKITL TNM ACPL KEC Total TNM ATPL Allwin KEC Amber Atlantus Chattarpati B N Elias Total Raychem KEC RPGE RPGLS Total KEC Raychem RPGE Total Raychem KEC Vinar zensar Total Artemis Khaitan & Co. RPGE CKITL RPGLS Total Related Party ACPL CKITL KEC Total ACPL CKITL CKRL ATPL Total ACPL Raychem CKITL KEC Zensar Vinar RPGE Total Related Party Balance outstanding at the year end
Sales application money) made share Investments (including during the year development fees received Technical / guest house premises Rent paid on residential Building maintenance recovery premises on residential Rent recovery of capex/spares Purchase Consultancy fees paid Legal fees paid License fees paid Sale of capex/spares Advances recoverable in cash or kind Advances recoverable Trade payables Trade Royalty receivable Transactions Transactions c) Notes to Consolidated Financial Statements for the year ended March 31, 2019
(` in lacs) As at As at Transactions Related Party March 31, 2019 March 31, 2018 CKITL 231 88 CKRL 0 - ACPL 26 38 Trade receivables RPGE 2 - RPGLS 1 - TNM 65 18 Total 325 144 Capital advance net of capital creditors KEC 1,643 476 d) Transactions with key management personnel and their relatives (` in lacs) Sr. No. Related Party 2018-19 2017-18 1) Mr. H. V. Goenka Commission* 373 373 Director sitting fees 5 5 Dividend 15 15 Total 393 393 2) Mr. Anant Goenka Salaries 313 286 Allowances and perquisites 34 9 Performance bonus* 96 77 Contribution to provident & superannuation fund 30 26 Dividend 2 2 Leave encashment 0 0 Total 475 400 3) Mr. Arnab Banerjee Salaries 212 192 Allowances and perquisites 0 2 Performance bonus* 67 51 Contribution to provident & superannuation fund 12 11 Leave encashment 0 0 Dividend 0 0 Total 291 256 4) Mr. Kumar Subbiah Salaries 150 138 Allowances and perquisites 0 3 Performance bonus* 46 35 Contribution to provident & superannuation fund 5 5 Leave encashment 0 0 Total 201 181 5) Ms. Vallari Gupte Salaries 26 - Contribution to provident & superannuation fund 2 - Total 28 - 6) Ms Shruti Joshi Salaries 7 35 Allowances and perquisites 0 - Performance bonus* 8 7 Contribution to provident & superannuation fund 6 2 Leave Encashment 1 0 Total 22 44 7) Mr. Paras K. Chowdhary Commission* 6 6 Director sitting fees 6 6 Dividend 0 0 Total 12 12
234 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
4 1 0 8 9 6 3 9 6 3 6 8 6 4 6 6 6 6 6 6 6 6 6 6 6 6 6 31 14 91 14 10 12 12 235 127 373 421 1,493 As at (` in lacs) (` in lacs) 2017-18 March 31, 2018 March
8 6 5 6 4 6 8 6 4 6 8 6 5 6 ------8 7 8 8 8 8 8 8 14 11 10 14 10 14 11 375 438 1,506 As at 2018-19 CEAT Limited CEAT March 31, 2019 March
Related Party Goenka H. V. Mr. Mr. Paras K. Chowdhary Mr. Mr. Hari L. Mundra Mr. Vinay Bansal Mr. Atul C. Choksey Mr. Mahesh S. Gupta Mr. Khaitan Haigreve Mr. Ms. Punita Lal S. Doreswamy Mr. Total Grand Total Total Performance bonus Contribution to provident & superannuation fund Contribution to provident Leave encashment Total Mr. Kunal Mundra** Mr. Salaries Allowances and perquisites Director sitting fees Director Total Mr. S. Doreswamy Mr. Commission* Director sitting fees Director Ms. Punita Lal Commission* Total Director sitting fees Director Total Mr. Haigreve Khaitan Haigreve Mr. Commission* Director sitting fees Director Total Mr. Mahesh S. Gupta Mr. Commission* Director sitting fees Director Total Mr. Atul C. Choksey Atul Mr. Commission* Director sitting fees Director Total Mr. Vinay Bansal Mr. Commission* Director sitting fees Director Related Party L. Mundra Hari Mr. Commission* Balance outstanding at the year end for KMP
15) 14) 13) 12) 11) 10) 9) Transaction Commission Payable Sr. No. Sr. 8) *Represents amount paid during the year. *Represents Limited in the capacity of Managing Director. Specialty Tyres Subsidiary CEAT the company’s from ** Salary received e) Notes to Consolidated Financial Statements for the year ended March 31, 2019 f) Terms and conditions of transactions with related parties The sales to and purchases and others from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.
The remuneration to the key managerial personnel does not include the provisions made for gratuity as it is determined on an actuarial basis for the Company as a whole.
Managerial remuneration is computed as per the provisions of section 198 of the Companies Act, 2013. The amount outstanding are unsecured and will be settled in cash. g) Capital and other commitments with related parties i. The estimated amount of contracts remaining to be executed on Capital account and not provided for (net of advance payments) pertaining to the related parties are as follows: (` in lacs) As at As at Related Party March 31, 2019 March 31, 2018 KEC 4,258 2,326 Raychem - 0 Note 49: Segment information Refer note 2.26 for accounting policy on Segment reporting
For management purpose, the Group comprise of only one reportable segment – Automotive Tyres, Tubes & Flaps.
Information about products (` in lacs) 2018-19 2017-18 Particulars Automotive Tyres Tubes and others Total Automotive Tyres Tubes and others Total Revenue from contracts with customers 6,11,425 83,511 6,94,936 5,66,350 77,489 6,43,839
Information about geographical areas (` in lacs) 2018-19 2017-18 Particulars In India Outside India Total In India Outside India Total Revenue from contracts with customers 5,92,078 1,02,858 6,94,936 5,60,654 83,185 6,43,839 Non-current assets 4,18,735 21,691 4,40,426 3,12,605 20,578 3,33,183
During the year 2018-19 and 2017-18, no single external customer has generated revenue of 10% or more of the Group’s total revenue.
During the year 2018-19 and 2017-18, no single country outside India has given revenue of more than 10% of total revenue.
Note 50: Hedging activities and derivatives Derivatives designated as hedging instruments The Group uses derivative financial instruments such as foreign currency forward contracts to hedge foreign currency risk arising from future transactions in respect of which firm commitments are made or which are highly probable forecast transactions. It also uses cross currency interest rate swaps (CCIRS), Range Forwards, and Coupon only Swap (COS) to hedge interest rate and foreign currency risk arising from variable rate foreign currency denominated loans. All these instruments are designated as hedging instruments and the necessary documentation for the same is made as per Ind AS 109.
Cash flow hedges Foreign currency risk Foreign exchange forward contracts measured at fair value through OCI are designated as hedging instruments in cash flow hedges of recognized purchase payables, committed future purchases, recognized sales receivables, forecast sales and Foreign Currency loan (Buyer’s Credit) in US dollar and Euro.
Cross currency Interest Rate Swaps (CCIRS) measured at fair value through OCI are designated as hedging instruments in cash flow hedges for Foreign currency loan (Buyer’s Credit) in US Dollar.
Derivative options like Range Forwards, COS measured at Fair value through OCI are designated as hedging instruments in cash flow hedges for Foreign currency loan (Buyer’s Credit) in US Dollar.
236 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
5 1 0 0 4 0 4 30 21 43 237 165 ` 380 2017-18 - - - - ` 4,134 lacs, with a 5 0 7 7 39 22 602 Hedge of foreign Hedge of foreign purchase currency Hedge of foreign buyer's credit currency Hedge of foreign firm currency commitment – po based hedging Hedge of foreign Hedge of foreign buyer's credit currency Hedge of foreign Hedge of foreign buyer's credit currency Purpose Hedge of sales currency foreign Hedge of currency foreign sales high probable ` 2018-19 15 CEAT Limited CEAT 374 711 5,748 2,670 2,249 4,049 9,195 12,336 39,695 35,114 22,292 (Amount in foreign currency in lacs) currency (Amount in foreign - 6 9 88 28 61 FC 190 600 437 342 141 4,365 (Amount in foreign currency (FC) and ` in lacs) (FC) and currency (Amount in foreign As at March 31,2018 As at March JPY AED EUR CHF EUR USD USD USD USD CNY GBP 646 lacs, with a deferred tax liability of ` 646 lacs, with a deferred Currency ` - - - 8,448 7,001 3,649 4,914 8,985 1,299 9,648 48,071 36,558 - - - 71 17 FC 109 695 471 101 121 140 5,847 As at March 31,2019 As at March JPY EUR EUR EUR EUR USD USD USD USD USD USD USD Currency
1,323 lacs relating to the hedging instruments, is included in OCI. Comparatively, the cash flow hedges as the cash flow to the hedging instruments, is included in OCI. Comparatively, ` 1,323 lacs relating Cross currency interest rate swap interest currency Cross Range forward contract to buy foreign currency contract to buy foreign Range forward Forward contract to buy foreign currency contract to buy foreign Forward Derivative Exposure* currency Unhedged foreign borrowing Short Term Trade payables and other financial liabilities payables and other financial Trade Forward contract to sell foreign currency (FC) currency contract to sell foreign Forward Trade Receivables Trade Advances Recoverable in cash or kind The foreign exchange forward contract balances vary with the level of expected foreign currency sales and purchases and changes purchases sales and currency expected foreign vary with the level of contract balances forward exchange The foreign 2016 onwards. April 1, instrument from hedging designated as effective CCIRS has been rates. forward exchange in foreign The cash flow hedges as at March 31, 2019 were assessed to be highly effective and a net unrealised loss of and a net unrealised assessed to be highly effective 31, 2019 were The cash flow hedges as at March The terms of the foreign currency forward contracts match the terms of the expected highly probable forecast transactions. forecast of the expected highly probable contracts match the terms forward currency The terms of the foreign and loss. statement of profit through recognition arise requiring no hedge ineffectiveness As a result, tax asset of deferred gain of and an unrealised assessed to be highly effective 31, 2018 were at March lacs was included in OCI. * The trade payables / short term borrowings are naturally hedged (off-set) to the extent of exposure under trade receivables / advances for respective currencies. / advances for respective under trade receivables to the extent of exposure naturally hedged (off-set) are * The trade payables / short term borrowings Notes to Consolidated Financial Statements for the year ended March 31, 2019
Note 51: Fair values Set out below, is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values: (` in lacs) As at March 31, 2019 As at March 31, 2018 Carrying values Fair values Carrying values Fair values Financial assets At amortised cost Loans (Non-current) 408 408 314 314 Other financial assets (Non-current) 195 195 202 202 At fair value through profit and loss Current investment - - 4,006 4,006 Total 603 603 4,522 4,522 Financial liabilities At amortized cost Borrowings (Non-current) 1,22,264 1,21,539 45,116 44,180 Other financial liabilities (Non-current) 146 76 146 68 At fair value through other comprehensive income Other financial liabilities (Non-current) 315 315 177 177 Other financial liabilities (Current) 3,473 3,473 23 23 Total 1,26,198 1,25,403 45,462 44,448
The management assessed that fair values of cash and cash equivalents, trade receivables, trade payables, loans, bank overdrafts and other current financial assets and liabilities (except derivative financial instrument those being measured at fair value through other comprehensive income) which are receivable/payable within one year approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The foreign exchange forward contracts used for hedging the recognized import trade payables / export trade receivables have been valued based on the Closing spot value. The following methods and assumptions were used to estimate the fair values:
• The fair value of quoted mutual funds are based on price quotations at the reporting date.
• The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. The foreign exchange forward contracts used for the expected future sales/expected future purchase have been valued using forward pricing, based on present value calculations. These values are the realisable values which could be exchanged with the counterparty. The foreign exchange forward contracts used for the recognized export receivables/recognized import payables have been measured using the closing currency pair spot. The forward premium is separately amortized over the period of the forward. These values are close estimations of the fair values which could be realised on immediate winding up of the deals. The swap contracts and the option contracts have been valued at the market realisable values obtained from the counterparty and the same have been valued using the swap valuation / option valuation, based on present value calculations
• The fair values of the holding company’s interest-bearing borrowings and loans are determined by using DCF method using discount rate which is the highest incremental borrowing rate for the year 2018-19.
238 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
------68 76 239 1,826 1,833 inputs inputs (` in lacs) (` in lacs) (Level 3)* (Level 3)* Significant Significant Unobservable Unobservable
- - - - 23 177 315 202 195 314 408 3,473 22,398 inputs inputs 1,19,706 (Level 2) (Level 2) CEAT Limited CEAT Significant Significant Observable Observable
------4,006 19,956 markets markets (Level 1) (Level 1) in Active in Active Quoted prices Quoted prices Fair Value measurement using measurement Fair Value Fair Value measurement using measurement Fair Value -
23 68 76 177 315 202 195 314 408 3,473 4,006 44,180
1,21,539 Total Total
Other financial liabilities (Current) - Derivative financial instrument Other financial liabilities (Current) -Derivative financial instrument At fair value through other comprehensive income other comprehensive At fair value through Other financial liabilities (Non-current) At fair value through other comprehensive income other comprehensive At fair value through Other financial liabilities (Non-current) Other financial liabilities (Non-current) Other financial liabilities (Non-current) Financial liabilities At amortized cost (Non-current) Borrowings Financial liabilities At amortized cost (Non-current) Borrowings At fair value through profit and loss profit At fair value through Investment (Current) -Investment in quoted mutual fund At fair value through profit and loss profit At fair value through Investment (Current) - Investment in quoted mutual fund Other financial assets (Non-current) Other financial assets (Non-current) Other financial assets Financial assets At amortised cost Loans (Non-current) Financial assets At amortised cost Loans (Non-current) a. All repayments of borrowings will happen at end of financial year and not during the year. of borrowings a. All repayments rate. additional borrowing b. For valuation purpose we have taken rate of 9.25% which represents There have been no transfers between Level 1 and Level 2 during the period. have been no transfers between Level 1 and Level 2 during There made: *For valuation under Level 3 following assumptions were Quantitative disclosures fair value measurement hierarchy for Assets / Liabilities as at March 31, 2018 for Assets / Liabilities as at March hierarchy fair value measurement Quantitative disclosures There have been no transfers between Level 1 and Level 2 during the period have There Quantitative disclosures fair value measurement hierarchy for Assets / Liabilities as at March 31, 2019 March for Assets / Liabilities as at hierarchy measurement fair value Quantitative disclosures Note 52: Fair value hierarchy Fair value hierarchy Note 52: and liabilities. assets of the Group’s hierarchy measurement the fair value table provides The following Notes to Consolidated Financial Statements for the year ended March 31, 2019
Note 53: Financial risk management objectives and policies The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal financial assets include trade and other receivables, mutual fund investments, cash and cash equivalents that derive directly from its operations. The Group also enters into derivative transactions.
The Group’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. The Board of Directors through its risk management committee reviews and agrees policies for managing each of these risks, which are summarised below. a. Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.
The sensitivity analysis in the following sections relate to the position as at March 31, 2019 and March 31, 2018.
The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at March 31, 2019.
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations and provisions.
The following assumptions have been made in calculating the sensitivity analysis:
• The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2019 and March 31, 2018 including the effect of hedge accounting
• The sensitivity of equity is calculated by considering the effect of any associated cash flow hedges and hedges of a net investment in a foreign subsidiary at March 31 2019 for the effects of the assumed changes of the underlying risk b. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating interest rates.
The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. To manage this, the Group enters into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. At March 31, 2019, after taking into account the effect of interest rate swaps, approximately 18% of the Group's total borrowings are at a fixed rate of interest (March 31, 2018: 34%).
The following table provides a break-up of Group's fixed and floating rate borrowing (` in lacs) As at As at Related Party March 31, 2019 March 31, 2018 Fixed rate borrowings 27,377 29,768 Floating rate borrowings 1,22,425 57,399 Total borrowings 1,49,802 87,167
Interest rate sensitivity The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected, after the impact of hedge accounting. With all other variables held constant, the Group's profit before tax is affected through the impact on floating rate borrowings, as follows:
240 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy tax 241 (` in lacs) (` in lacs) -14 / +14 before tax before + 1.9 / -1.9 -12.2 / +12.2 - 3.92 / + 3.92 Effect on profit on profit Effect -573.99 / +573.99 -1,224.25 / +1,224.25 Effect on profit before before on profit Effect CEAT Limited CEAT ` +/- 1 ` +/- 1 ` +/- 1 ` +/- 1 currency currency Change in Increase/ decrease in decrease basis points +/- 100 bps +/- 100 bps easonably possible change in USD and EURO rates, with all other easonably possible change in USD and
in basis points for the interest rate sensitivity analysis is based on the currently observable market the currently based on analysis is sensitivity rate interest the for basis points in the pre-tax effect is a result of a change in the fair value of the financial asset/liability due to the exchange due to financial asset/liability of the fair value the change in of a is a result effect the pre-tax s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure exchange risk because the exposure foreign of the inherent s opinion, the sensitivity analysis is unrepresentative
oup is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase the ongoing purchase by the price volatility of certain commodities. Its operating activities require oup is affected oup manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 6 month expected to occur within a maximum that are risk by hedging transactions currency oup manages its foreign oup’s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and price risk commodity regarding enacted a risk management strategy developed and has Directors of Board oup’s ch 31, 2019, the Group hedged 100% (March 31, 2018: 94%,) of its foreign currency loans. This foreign currency risk currency loans. This foreign currency 94%,) of its foreign 31, 2018: hedged 100% (March ch 31, 2019, the Group 57,399 lacs 1,22,425 lacs Particulars 31, 2019 March Recognized net payable – USD 1.40 Mio Recognized net payable – EUR 1.22 Mio 31, 2018 March Recognized net payable – USD 0.39 Mio Recognized net receivable – EUR 0.19 Mio Recognized net receivable March 31, 2018 March ` March 31, 2019 March ` Particulars The Gr Commodity price risk The Gr In management’ The movement in The following tables demonstrate the sensitivity to a r The following tables demonstrate the sensitivity For At Mar The Gr For The assumed movement The assumed movement For its mitigation. of rubber and carbon black and therefore require a continuous supply of rubber and carbon black. Due to the significantly a continuous supply of rubber and carbon black. Due to the significantly require of rubber and carbon black and therefore for contracts purchase various into entered also Group the black, carbon and rubber the of price the of volatility increased is an active market). rubber and carbon black (for which there at the end of the reporting period does not reflect the exposure during the year. during the the exposure period does not reflect at the end of the reporting rate movement. The derivatives which have not been designated in a hedge relationship act as an economic hedge and will and hedge economic an as act relationship hedge a in designated been not have which derivatives The movement. rate in the above table. not covered The same derivatives are the underlying transactions when they occur. offset variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of monetary assets and assets monetary the fair value of in changes is due to tax before profit Group’s on the impact The constant. held variables is not material. changes for all other currencies currency to foreign exposure liabilities. The Group’s its foreign currency receivables/payables. receivables/payables. currency its foreign is hedged by using foreign currency forward contracts. At March 31, 2019, the Group hedged 88% (March 31, 2018: 93%) of hedged 88% (March the Group 31, 2019, contracts. At March forward currency is hedged by using foreign subsidiaries. the foreign risk on currency foreign The and trade receivables. trade payables denominated currency for the foreign period into for the purpose of a derivative is entered Swaps. When Currency mitigated by entering into Cross loans are currency For hedges the hedged exposure. negotiates the terms of those derivatives to match the terms of being a hedge, the Group transactions are the point the cash flows of the from transactions the derivatives cover the period of exposure of forecast currency. or payable that is denominated in the foreign receivable up to the point of settlement of the resulting forecasted foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s primarily to the Group’s exchange rates relates in foreign to the risk of changes exposure rates. The Group’s exchange foreign in foreign net investments and the Group’s currency) or expense is denominated in a foreign operating activities (when revenue environment, showing a significantly higher volatility than in prior years. showing a significantly environment,
d.
sensitivity eign currency
becauseofchangesin willfluctuate cashflowsofanexposure riskisthethatfairvalueorfuture eign currency c. risk eign currency Notes to Consolidated Financial Statements for the year ended March 31, 2019
Commodity price sensitivity The following table approximately details the Group’s sensitivity to a 5% movement in the input price of rubber and carbon black. The sensitivity analysis includes only 5% change in commodity prices for quantity sold or consumed during the year, with all other variables held constant. A positive number below indicates an increase in profit or equity where the commodity prices decrease by 5%. For a 5% increase in commodity prices, there would be a comparable impact on profit or equity, and the balances below would be negative.
(` in lacs) Increase in profit due to decrease Decrease in profit due to increase in commodity price in commodity price Commodity As at As at As at As at March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 Natural rubber 5,566 5,400 (5,566) (5,400) Synthetic rubber 4,747 4,000 (4,747) (4,000) Carbon black 3,444 2,500 (3,444) (2,500) e. Equity price risk The Group invests its surplus funds in various debt instruments and debt mutual funds. These comprise of mainly liquid schemes of mutual funds (liquid investments) and fixed deposits.
Mutual fund investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. However due to the very short tenor of the underlying portfolio in the liquid schemes, these do not pose any significant price risk.
There is no material equity risk relating to the Group’s equity investments which are detailed in note 5. The Group equity investments majorly comprises of strategic investments rather than trading purposes. f. Credit risk Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Trade receivables Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally on 30 days to 90 days credit term. Credit limits are established for all customers based on internal rating criteria. Outstanding customer receivables are regularly monitored. Credit risk on receivables is also mitigated by securing the same against security deposit, letter of credit and advance payment.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Group has no concentration of credit risk as the customer base is widely distributed both economically and geographically.
(` in lacs) Particulars As at March 31, 2019 As at March 31, 2018 More than 180 More than 180 Less than 180 More than 360 Less than 180 More than 360 Ageing but less than but less than days days days days 360 days 360 days Expected loss rate 0.00% 44.32% 99% 0.00% 50.51% 100% Gross carrying amount 70,511 194 2,013 74,483 485 1,901 Loss allowance provision - 86 1,994 - 245 1,901
Export customers are against Letter of Credit, bank guarantees, payment against documents. For open credit exports insurance cover is taken. Generally deposits are taken from domestic debtors under replacement segment. The carrying amount and fair value of security deposit from dealers amounts to ` 33,246 lacs (March 31, 2018: ` 31,512 lacs) as it is payable on demand. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.
Other financial assets and cash deposits Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department in accordance with the Group’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Group’s Board of Directors on an annual basis, and may be
242 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy - 243 350 483 599 407 Total Total 4,006 8,218 6,755 3,417 1,158 74,723 70,638 81,892 22,425 88,862 45,292 61,922 19,557 59,751 87,051 (` in lacs) (` in lacs) 1,18,359 1,05,287 3,07,993 2,11,651 ------146 146
22,006 49,878 50,024 22,152 >5 years >5 years CEAT Limited CEAT ------314 408 195 603 315 202 516 177 23,286 68,481 68,796 23,463 1-5 years 1-5 years - - - 36 75 407 599 956 4,006 8,218 6,755 3,222 74,723 70,638 81,289 61,461 88,346 19,557 22,425 59,428 87,051 1,05,287 1,89,173 1,66,036 < 1 year < 1 year e engaged in similar business activities, or activities in the same ofile of the Group’s financial liabilities based on contractual undiscounted payments. financial liabilities based ofile of the Group’s oup has hypothecated the movable, immovable properties and entire current assets to its consortium of bankers as current and entire oup has hypothecated the movable, immovable properties oup prepares cash flow on a daily basis to monitor liquidity. Any shortfall is funded out of short term loans. Any surplus Any shortfall is funded out to monitor liquidity. cash flow on a daily basis oup prepares oup’s maximum exposure to credit risk for the components of the balance sheet at March 31, 2019 and March 31, 2018 31, 2019 and March sheet at March risk for the components of the balance to credit exposure maximum oup’s Particulars Loans Particulars Financial assets investments Current Trade receivables Trade Financial assets investments Current Cash and cash equivalents Bank balances other than cash and cash equivalents Loans Trade receivables Trade Cash and cash equivalents Bank balances other than cash and cash equivalents Other financial assets assets financial Total borrowings Non current Other Financial Liabilities Other financial assets financial assets Total borrowings Non current borrowings Current Current borrowings Current Trade and Other payables Trade liabilities financial Total Other Financial Liabilities Trade and Other payables Trade Total financial liabilities Total updated throughout the year subject to approval as per the Investment policy. The limits are set to minimise the concentration the concentration set to minimise The limits are policy. per the Investment as approval the year subject to updated throughout Collateral The Gr In or Excessive risk concentration Concentrations arise when a number of counterparties ar The table below summarises the maturity pr The table below summarises the maturity Liquidity risk The Gr The Gr detailed in note 22 and 26. on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. and managed accordingly. are controlled credit risks of on the maintenance of a diversified portfolio. Identified concentrations and industry levels. to manage risk concentrations at both the relationship Selective hedging is used within the Group geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly or have economic features geographical region, sensitivity of the Group’s by changes in economic, political or other conditions. Concentrations indicate the relative affected a particular industry. performance to developments affecting Liquidity exposure as at March 31, 2018 31, 2018 as at March Liquidity exposure Liquidity exposure as at March 31, 2019 as at March Liquidity exposure is invested in liquid mutual funds. The Group also monitors the liquidity on a longer term wherein it is ensured that the long term it is ensured on a longer term wherein also monitors the liquidity funds. The Group is invested in liquid mutual current the with line in is assets current its of duration the that ensures Group The liabilities. term long by funded are assets in the 3-6 months period. adequate liquidity assets to ensure is the carrying amounts as illustrated in note 7 and note 12 except for derivative financial instruments. The Group’s maximum The Group’s for derivative financial instruments. as illustrated in note 7 and note 12 except is the carrying amounts instruments is noted in note 23 and 28. to financial derivative relating exposure of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments. to potential failure counterparty’s financial loss through mitigate therefore of risks and
includespecificguidelinestofocus policiesandprocedures ofrisk,theGroup’s der toavoidexcessiveconcentrations h.
g.
Notes to Consolidated Financial Statements for the year ended March 31, 2019
Note 54: Capital management For the purpose of the Group capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Group. The primary objective of the Group’s capital management is to maximise the shareholder value.
The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.
(` in lacs) As at As at Particulars March 31, 2019 March 31, 2018 Borrowings *(Note 22, 26 & 28) 1,49,802 87,167 Less: cash and cash equivalents (Note 13) (6,755) (8,218) Net debt 1,43,047 78,949 Equity attributable to equity holders of parent (refer note 19 and 20) 2,76,611 2,60,609 Capital and net debt 4,19,658 3,39,558 Gearing ratio 34% 23%
In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2019 and March 31, 2018.
Note 55: Events after the reporting period a. The board of directors of the company has recommended dividend of ` 12 per equity share of face value of `10 each (March 31, 2018 ` 11.50) for financial year 2018-19. b. On April 3, 2019, the Board of Directors of the CEAT Limited has approved a Scheme of Amalgamation between the CEAT Limited and its wholly owned subsidiary CEAT Specialty Tyres Limited (CSTL), subject to obtaining requisite approvals from statutory authorities and shareholders. The Scheme of Amalgamation has been filed with National Company Law Tribunal (NCLT) on April 22, 2019. The process of sanction of the Scheme by the Hon’ble NCLT is in progress.
Note 56: Material foreseeable losses The Group has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Group has reviewed and ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of accounts.
Note 57: Standards issued but not yet effective The amendments to standards that are issued but not yet effective up to the date of issue of the financial statements are discussed below:
Ind AS 116 - Leases Ind AS 116 Leases was notified by MCA on March 30, 2019 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after April 1, 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees – leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.
Lessees will be also required to re-measure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the re-measurement of the lease liability as an adjustment to the right-of-use asset.
244 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy
245 ent service
CEAT Limited CEAT
to use updated assumptions to determine curr to use updated assumptions to determine to r cost and net interest for the remainder of the period after a after period the of remainder the for interest net and cost and plan amendment, curtailment or settlement; any reduction cost, or a gain or loss on settlement, not previously in a surplus, even if that surplus was because of the impact of the asset ceiling. recognized date for application of this amendment is Effective April 1, 2019. annual period beginning on or after of this evaluating the effect is currently The Group amendment on the financial statements. income tax consequences of dividends in profit or loss, or of dividends in profit consequences income tax to where according income or equity other comprehensive or transactions past those recognized originally entity the of this amendment is date for application events. Effective on or after April 1, 2019. The Group annual period beginning this amendment on the of evaluating the effect is currently financial statements. AS 19 – plan amendment, curtailment Amendment to Ind Negative Compensation Negative issued 30, 2019, Ministry of Corporate Affairs On March a that 109. The amendment clarifies amendments to Ind AS Payments of Principal & financial asset passes the SPPI (Solely that circumstance or event the of regardless criterion Interest) of and irrespective causes the early termination of the contract the for compensation reasonable receives or pays party which evaluating is currently early termination of the contract. The Group of this amendment on the financial statements. the effect Costs Amendments to Ind AS 23: Borrowing issued 30, 2019, Ministry of Corporate Affairs On March amendments to Ind AS 23. The amendments clarify that an entity originally any borrowing as part of general borrowings treats made to develop a qualifying asset when substantially all of that asset for its intended the activities necessary to prepare complete. An entity applies those amendments use or sale are of the beginning the on or after incurred costs to borrowing those applies first entity which the in period reporting annual amendments. An entity applies those amendments for annual periods beginning on or after April 1, 2019. The Group reporting of this amendment on the evaluating the effect is currently financial statements. or settlement or issued of Corporate Affairs 30, 2019, Ministry On March AS 19, ‘Employee Benefits’, in connection amendments to Ind and curtailments amendments, plan for accounting with an entity: settlements. The amendments require • • orlossaspartofpastservice ecognize inprofit Amendments to Ind AS 109: Prepayment Features with Features Amendments to Ind AS 109: Prepayment
Lessor accounting under Ind AS 116 is substantially unchanged 116 is substantially under Ind AS Lessor accounting continue AS 17. Lessors will accounting under Ind today’s from as using the same classification principle to classify all leases distinguish between two types of leases: in Ind AS 17 and Amendment to Ind AS 12 – Income taxes issued 30, 2019, Ministry of Corporate Affairs On March amendments to the guidance in Ind AS 12, ‘Income Taxes’, in connection with accounting for dividend distribution taxes. the recognize shall entity an that clarifies amendment The The effective date for adoption of Ind AS 12 Appendix C is The effective annual periods beginning on or after April 1, 2019. The Group on April 1, 2019 and has decided to will adopt the standard in equity on the date of initial adjust the cumulative effect application i.e. April 1, 2019 without adjusting comparatives. of this amendment evaluating the effect is currently The Group on the financial statements. application, without adjusting comparatives. The standard permits two possible methods of transition - i) The standard Appendix – Under this approach, approach Full retrospective period to each prior reporting C will be applied retrospectively with Ind AS 8 – Accounting Policies, in accordance presented without using Errors, Changes in Accounting Estimates and of initially with cumulative effect hindsight and ii) Retrospectively by adjusting equity on initial applying Appendix C recognized Treatments has notified 30, 2019, Ministry of Corporate Affairs On March Treatments Income Tax Ind AS 12 Appendix C, Uncertainty over the determination of which is to be applied while performing (or loss), tax bases,unused tax losses, unused taxable profit is uncertainty over income and tax rates, when there tax credits to the appendix, under Ind AS 12. According tax treatments the relevant of probability the need to determine companies of tax or group tax authority accepting each tax treatment, that the companies have used or plan to use in their treatments, to compute the income tax filing which should be considered treatment tax the of value expected the or amount likely most (tax loss), tax bases, unused tax when determining taxable profit and tax rates. losses, unused tax credits Ind AS 12 Appendix C, Uncertainty over Income Tax over Income Tax Ind AS 12 Appendix C, Uncertainty The Group intends to adopt these standards from April 1, from these standards intends to adopt The Group to evaluate the available transition continues 2019. The Group has arrangements. The Group methods and its contractual team to implement Ind AS 116 established an implementation the changes to accounting system and it continues to evaluate may that requirements disclosure and additional and processes, of this the effect evaluating is currently The Group be necessary. statements. potential impact of Ind AS 116 on its financial operating and finance leases. finance and operating Notes to Consolidated Financial Statements for the year ended March 31, 2019 44 (29) (366) (517) (109) (211) 2,352 (4,254) 23,857 26,947 ` in lacs ( ` in lacs) 0% (0%) (2%) (2%) (0%) (1%) 10% (18%) 113% 100% As % of (after OCI) profit or loss profit consolidated 44 (29) (360) (510) (109) (211) 2330 (3,785) 23,329 25,959 ` in Lacs Share in profit or loss in profit Share 0% (0%) (2%) (2%) (0%) (1%) 10% (16%) 111% 100% FY 2017-18 As % of (before OCI) (before profit or loss profit consolidated 46 371 958 (337) 2,674 6,150 17,982 16,975 2,62,946 2,18,127 ` in Lacs 0% 0% 1% 7% 2% 0% 6% (0%) 84% liabilities 100% As % of assets minus total net assets Net assets i.e. total consolidated (88) (61) (86) (53) 155 (139) 2,108 (4,935) 21,313 24,412 ` in lacs Anant Goenka Managing Director 1% (0%) (0%) (0%) (0%) (1%) 10% (23%) 100% 115% As % of (after OCI) profit or loss profit consolidated (88) (61) (86) (53) 152 (139) 2,108 (4,647) 25,108 27,922 ` in Lacs Share in profit or loss in profit Share 0% 1% 8% (0%) (0%) (0%) (1%) (19%) 100% 111% FY 2018-19 As % of For and on behalf of Board of Directors of CEAT Limited of CEAT of Directors For and on behalf of Board Goenka H.V. Chairman Mahesh S. Gupta Chairman- Audit Committee (before OCI) (before profit or loss profit consolidated 13 584 947 (398) 2,777 6,106 14,507 17,556 2,78,991 2,36,899 ` in Lacs 0% 0% 1% 5% 2% 0% 6% (0%) 86% liabilities 100% As % of assets minus total net assets Net assets i.e. total consolidated Kumar Subbiah Chief Financial Officer Gupte Vallari Company Secretary Place: Mumbai Date: May 7, 2019 Relationship Associate Parent Indian subsidiary Indian subsidiary Foreign subsidiary Foreign Indian subsidiary Foreign subsidiary Foreign Foreign subsidiary Foreign Joint venture
Name of Entity Total As per our report of even date As per our report For S R B C & CO LLP Accountants Chartered ICAI Firm Registration No.:324982E/E300003 per Vinayak Pujare Partner Membership Number: 101143 Place: Mumbai Date: May 7, 2019 Tyresnmore Online Private Limited Tyresnmore CEAT Limited CEAT Minority Interest in all subsidiaries Minority Interest Limited Rado Tyres Rado Tyres Limited Rado Tyres CEAT AKKHAN Limited CEAT CEAT Specialty Tyres Limited Specialty Tyres CEAT CEAT AKKHAN Limited CEAT Associated CEAT Holding Associated CEAT Pvt Limited (ACHL) CEAT Kelani Holding Pvt Limited CEAT of ACHL)(As (Joint venture per Equity Method) Note 58: Information required for consolidated financial statement pursuant to Schedule III of the Companies Act, 2013 for consolidated financial statement pursuant to Schedule III of the Companies Note 58: Information required
246 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 247 pursuant to the provisions pursuant to the provisions CEAT Limited CEAT pursuant to the provisions pursuant to the provisions pursuant to the provisions of provisions pursuant to the T T resolution as a Special Resolution: resolution of Sections pursuant to the provisions THAT “RESOLVED of the Companies149, 152 and any other applicable provisions read thereunder Act, 2013 (‘the Act’) and the Rules made (Listing Obligationswith Schedule IV to the Act and the SEBI Regulations, 2015 (‘the Listing Requirements) and Disclosure by the NominationRegulations’) and as recommended Khaitan (DIN: Haigreve and Remuneration Committee, Mr. holding the position as a Non-Executive00005290), currently of the Company up to September 25,Independent Director 2019, having qualified the criteria of independence as provided in Section 149(6) of the Act and Regulation 16 of the Listing of whom a notice in writing pursuantRegulations and in respect into Section 160 of the Act, as amended, has been received as a re-appointed be and is hereby manner, the prescribed of the Company to holdNon-Executive Independent Director effect for a second term of five consecutive years with office September 26, 2019 up to September 25, 2024, whofrom by rotation. shall not be liable to retire THAT FURTHER RESOLVED of of Sections 149, 197 and any other applicable provisions Khaitan Haigreve Mr. the Act and Rules made thereunder, may Board fees and commission as the be paid such to time and subject to such limits, time from approve time to time.” from or as may be prescribed prescribed resolution as a Special Resolution: as a Special resolution THAT “RESOLVED THAT FURTHER RESOLVED of provisions of Sections 149, 197 and any other applicable Atul C. Choksey be Mr. the Act and Rules made thereunder, may approve paid such fees and commission as the Board or to time and subject to such limits, prescribed time from time to time.” from as may be prescribed Sections 149, 152 and any other applicable provisions of any other applicable provisions Sections 149, 152 and 2013 (‘the Act’) and the Rules madethe Companies Act, to the Act and the with Schedule IV read thereunder Requirements) and Disclosure SEBI (Listing Obligations as Regulations’) and 2015 (‘the Listing Regulations, and Remuneration by the Nomination recommended (DIN:00002102), currently Atul C. Choksey Committee, Mr. a Non-Executive Independent Director holding the position as September 25, 2019, having qualifiedof the Company up to in Section 149(6) of the criteria of independence as provided Regulations and inthe Act and Regulation 16 of the Listing 160Section to pursuant in writing notice a whom of respect in the prescribed of the Act, as amended, has been received as a Non-Executive re-appointed be and is hereby manner, for a of the Company to hold office Independent Director from with effect second term of five consecutive years 2024, who shallSeptember 26, 2019 up to September 25, by rotation. not be liable to retire
7. following andifthoughtfit,topassthe o consider 6. following fit,topassthe o considerandifthought Thursday, August 1, August Thursday, pursuant to the provisions of pursuant to the provisions pursuant to Section 148 of the at Ravindra Natya Mandir, P. L. Deshpande L. Deshpande P. at Ravindra Natya Mandir, Audited Financial Statements of the Company for Company the of Statements Financial Audited the Audited Consolidated Financial Statements of the the Audited Consolidated Financial Statements the Company for the financial year ended March 31, 2019, year ended March the financial Company for thereon. together with the Report of the Auditors the financial year ended March 31, 2019, together March the financial year ended and the of Directors the Board with the Reports of and Auditors thereon; 3.00 p.m.
Companies Act, 2013 and the Rules made thereunder, the Companies Act, 2013 and the Rules made thereunder, Lacs only) and of ` 3,00,000 (Rupees Three remuneration of out-of-pocket expenses at actual plus reimbursement of Directors by the Board applicable taxes, as approved Dave & Co., to be paid to Messrs D. C. of the Company, Cost Accountants (Firm Registration No. 000611), for of the Company cost records the audit of the conducting ratified year 2019-20, be and is hereby for the financial and confirmed.” T T T T b. a. T resolution as an Ordinary Resolution: as an Ordinary resolution resolution as an Ordinary Resolution: as an Ordinary resolution ended March 31, 2019. ended March in terms of section by rotation 00026726), who retires being eligible, 152(6) of the Companies Act, 2013 and for re-appointment. himself offers “RESOLVED “RESOLVED THAT “RESOLVED “RESOLVED THAT Section 143(8) and other applicable provisions of the provisions Section 143(8) and other applicable thereunder made Rules the and 2013 Act, Companies Directors, of Board the Act’), ‘the as to referred (hereinafter authorized to appoint Branch Auditor(s) be and is hereby or comingfor any Branch of the Company (either existing withconsultation in India), outside hereafter existence into the Company's Auditors, any person(s) qualified to act as of Section 143(8) Branch Auditor in terms of the provisions of the Act to audit the accounts of any of the Company’s Branches, on such terms and conditions and on such of as may be mutually decided by the Board remuneration of the Company and the Branch Auditors.” Directors
NOTICE is hereby given that the Sixtieth Annual General Annual General given that the Sixtieth hereby NOTICE is will be held on Limited CEAT Meeting of 2019 at Maharashtra Kala Academy, Sayani Road, Prabhadevi, Mumbai Maharashtra Kala Academy, the following business: 400 025 to transact
5. o considerandifthoughtfit,topassthefollowing
Special Business 4. andifthoughtfit,topassthefollowing o consider 3. Goenka(DIN: H.V. inplaceofMr. aDirector o appoint 2. forthefinancialyear dividendonequityshares o declare
Ordinary Business Ordinary 1. considerandadopt: o receive, Notice Notice
8. To consider and if thought fit, to pass the following 10. To consider and if thought fit, to pass the following resolution as a Special Resolution: resolution as a Special Resolution:
“RESOLVED THAT pursuant to the provisions of Sections “RESOLVED THAT pursuant to the provisions of Sections 149, 152 and any other applicable provisions of the 149, 152 and any other applicable provisions of the Companies Act, 2013 (‘the Act’) and the Rules made Companies Act, 2013 (‘the Act’) and the Rules made thereunder read with Schedule IV to the Act and the thereunder read with Schedule IV to the Act and the SEBI (Listing Obligations and Disclosure Requirements) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘the Listing Regulations’) and as Regulations, 2015 (‘the Listing Regulations’) and as recommended by the Nomination and Remuneration recommended by the Nomination and Remuneration Committee, Mr. Mahesh S. Gupta (DIN: 00046810), Committee, Mr. Vinay Bansal (DIN: 00383325), currently currently holding the position as a Non-Executive holding the position as a Non-Executive Independent Independent Director of the Company up to September 25, Director of the Company up to September 25, 2019, 2019, having qualified the criteria of independence as having qualified the criteria of independence as provided in provided in Section 149(6) of the Act and Regulation 16 Section 149(6) of the Act and Regulation 16 of the Listing of the Listing Regulations and in respect of whom a notice Regulations and in respect of whom a notice in writing in writing pursuant to section 160 of the Act, as amended, pursuant to section 160 of the Act, as amended, has has been received in the prescribed manner, be and is been received in the prescribed manner, be and is hereby hereby re-appointed as a Non-Executive Independent re-appointed as Non-Executive Independent Director Director of the Company to hold office for a second term of the Company to hold office for a second term of five of five consecutive years with effect from September 26, consecutive years with effect from September 26, 2019 up 2019 up to September 25, 2024, who shall not be liable to to September 25, 2024, who shall not be liable to retire retire by rotation. by rotation.
RESOLVED FURTHER THAT pursuant to the provisions RESOLVED FURTHER THAT pursuant to the Listing of Sections 149, 197 and any other applicable provisions Regulations, as amended, the Act and such other of the Act and Rules made thereunder, Mr. Mahesh S. applicable laws, rules, regulations, guidelines, approval of Gupta be paid such fees and commission as the Board the Members be and is hereby accorded for continuation may approve from time to time and subject to such limits, of directorship of Mr. Vinay Bansal (DIN: 00383325), as prescribed or as may be prescribed from time to time.” Non-Executive Independent Director of the Company after he attains the age of 75 (Seventy five) years during the 9. To consider and if thought fit, to pass the following aforesaid tenure of his directorship, i.e. up to September 25, resolution as a Special Resolution: 2024, with the Company.
“RESOLVED THAT pursuant to the provisions of RESOLVED FURTHER THAT pursuant to the provisions Sections 149, 152 and any other applicable provisions of of Sections 149, 197 and any other applicable provisions the Companies Act, 2013 (‘the Act’) and the Rules made of the Act and Rules made thereunder, Mr. Bansal be paid thereunder read with Schedule IV to the Act and the such fees and commission as the Board may approve from SEBI (Listing Obligations and Disclosure Requirements) time to time and subject to such limits, prescribed or as Regulations, 2015 (‘the Listing Regulations’) and as may be prescribed from time to time.” recommended by the Nomination and Remuneration Committee, Ms. Punita Lal (DIN: 03412604), currently 11. To consider and if thought fit, to pass the following holding the position as a Non-Executive Independent resolution as a Special Resolution: Director of the Company up to September 25, 2019, having qualified the criteria of independence as provided “RESOLVED THAT pursuant to the provisions of in Section 149(6) of the Act and Regulation 16 of the Regulation 17(6)(ca) of the SEBI (Listing Obligations and Listing Regulations and in respect of whom a notice in Disclosure Requirements) Regulations, 2015, as amended writing pursuant to Section 160 of the Act, as amended, and subject to the applicable provisions of the Companies has been received in the prescribed manner, be and is Act, 2013 and the Articles of Association of the Company, hereby re-appointed as a Non-Executive Independent approval of the Members be and is hereby accorded for Director of the Company to hold office for a second term payment of annual remuneration of ` 3,80,30,000/- for the of five consecutive years with effect from September 26, FY 2018-19 to Mr. H. V. Goenka (Non-Executive Director), 2019 up to September 25, 2024, who shall not be liable Chairman of the Company, being an amount exceeding fifty to retire by rotation. percent of the total annual remuneration payable to all the Non-Executive Directors of the Company.” RESOLVED FURTHER THAT pursuant to the provisions of Sections 149, 197 and any other applicable provisions 12. To consider and if thought fit, to pass the following of the Act and Rules made thereunder, Ms. Punita Lal be resolution as a Special Resolution: paid such fees and commission as the Board may approve from time to time and subject to such limits, prescribed or “RESOLVED THAT in supersession of the Special as may be prescribed from time to time.” Resolution passed at the Annual General Meeting of the
248 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 249 CEAT Limited CEAT T RESOLVED FURTHER THAT for the purpose of giving THAT FURTHER RESOLVED be and is hereby the Board to the said resolution, effect authorized to take all such actions and to do all such acts, deeds, matters and things as it may in its absolute or desirable and to proper deem necessary, discretion settle any question or doubt that may arise in this regard.” pursuant to Sections 23, 42, 71 42, 23, Sections to pursuant THAT “RESOLVED of the Companies and any other applicable provisions made thereunder Act, 2013 (‘the Act’) and the Rules of any other laws, rules, and applicable provisions by the prescribed if any, guidelines, circulars, regulations, Government of India, Reserve Bank of India, Securities time to of India, as amended from and Exchange Board of the Memorandum time and subject to the provisions and such and Articles of Association of the Company or permissions as may be required sanctions, approvals of time to time, approval authorities from regulatory from of Board the to accorded is hereby and be Members the which expression of the Company (‘the Board’ Directors for the time being shall also include a Committee thereof, by this on it by the Board the powers conferred exercising or invitation(s) to subscribe for making offer(s) resolution) non-convertible debentures/bonds secured/unsecured, private through securities’) (‘debt securities other such or series/tranches, for an placement basis in one or more Five Hundred (Rupees amount not exceeding ` 500 Crores price or on such terms and conditions only) at such Crores time to time determine and consider may from as the Board and beneficial to the Company including listing of proper and size Exchange(s), Stock with securities debt such rate, premium/ interest time of issue, issue price, tenure, proceeds the issue utilization of consideration, discount, and all matters connected with or incidental thereto. for the purpose of giving THAT FURTHER RESOLVED be and is hereby the Board the said resolution, to effect do all such deeds, authorized to take all such actions and to deem discretion matters and things as it may in its absolute or or desirable and to settle any question proper necessary, doubt that may arise in this regard.” as a Special Resolution: resolution or future and to create a mortgage and/or charge on such and/or charge a mortgage and to create or future and times and in such form conditions at such terms and in ranking as to priority as the Board manner and with such on the whole or substantially thinks fit its absolute discretion all undertaking or of the Company’s the whole of any one undertakings in favour of any bank(s), of the Company’s or body(ies) corporate or persons or financial institution(s) whether of debenture(s)/bond(s) or trustees for the holders any loan(s), borrowing(s) or not, for securing shareholder facilities whether fund based or including working capital debenture(s), loan(s), currency non-fund based, foreign instrument(s) availed or as may bond(s) or other financial costs, together with interest, time to time be availed from payable thereon. charges, expenses and any other monies
14. following andifthoughtfit,topassthe o consider 2,000 Crores (Rupees Two (Rupees Two ` 2,000 Crores Company on September 26, 2014 and pursuant to the to and pursuant 26, 2014 on September Company Act, 2013 180(1)(c) of the Companies of Section provisions and subject to the being in force (‘the Act’), for the time and Articles of Association of of the Memorandum provisions of the if any, other enabling provisions, the Company and all to accorded be and is hereby Act, consent of the Members to as the Board referred (hereinafter of Directors the Board for any Committee thereof shall include which expression on the powers conferred the the time being exercising for for borrowing of the Company by this resolution) Board time to time, any sum from Company, and on behalf of the to the any manner without prejudice or sums of money in any kind of loans, advances, by way of generality thereof, debentures of issue deposits, of acceptance credits, any bank or banks or any financial or otherwise from or persons and institution or any company or companies whether and if secured, or unsecured whether secured pledge or by way of mortgage, charge, hypothecation, of or in respect otherwise in any way whatsoever on, over and properties assets, effects all or any of the Company’s (including stock-in-trade (if any), uncalled capital including parts and components in stock or in raw materials, stores, notwithstanding that transit), book debts and receivables, together with the monies, if any, the monies so borrowed temporary by the Company (apart from borrowed already ordinary the bankers in Company’s the obtained from loans of the aggregate course of business) may exceed the that reserves, free paid-up capital of the Company and its purpose, specific any apart for set not reserves to say, is that the total amount outstanding at any time provided shall not exceed the limit of Thousand Crores only) in excess of the aggregate of the of aggregate the of excess in only) Crores Thousand as reserves, free paid-up capital of the Company and its time to time.’ from aforesaid T in supersession of the Special Resolution “RESOVED THAT passed at the Annual General Meeting of the Company held of provisions the to pursuant and 2014 26, September on of the Section 180(1)(a) and other applicable provisions modification statutory any Act, 2013 (including Companies (‘the for the time being in force) thereof, or re-enactment hereby is and be Company the of consent the Act’), to after referred (herein of Directors to the Board accorded shall include any Committee which expression as the Board the powers conferred for the time being exercising thereof of the Company to create by this resolution) on the Board addition in and/or hypothecation, mortgage and/or charge to the existing charges, mortgages and hypothecations on any of its movable and/or by the Company, created situated, whether present wherever immovable properties resolution as a Special Resolution: resolution for the purpose of giving THAT FURTHER RESOLVED be and is hereby the Board the said resolution, to effect authorized to take all such actions and to do all such deeds, deem matters and things as it may in its absolute discretion or desirable and to settle any question or proper necessary, doubt that may arise in this regard.”
13. o considerandifthoughtfit,topassthefollowing Notice
NOTES: Banking A/c no, MICR and IFSC codes with their respective 1. A MEMBER ENTITLED TO ATTEND AND VOTE Depository Participant (DP). Members holding shares in AT THE ANNUAL GENERAL MEETING (AGM) IS physical form are requested to kindly inform their bank ENTITLED TO APPOINT A PROXY TO ATTEND AND account details to the Company and/ or TSR Darashaw VOTE INSTEAD OF HIMSELF AND THE PROXY NEED Limited (‘the Registrar and Share Transfer Agents’) NOT BE A MEMBER OF THE COMPANY PROVIDED THE INSTRUMENT APPOINTING THE PROXY IS 10. Pursuant to the provisions of Section 91 of the Act, the DEPOSITED AT THE REGISTERED OFFICE OF THE register of members and the share transfer books of the COMPANY NOT LESS THAN FORTY-EIGHT HOURS Company will remain closed from Saturday, July 20, 2019 BEFORE THE COMMENCEMENT OF THE MEETING. to Thursday, August 1, 2019 (both days inclusive).
2. A person can act as proxy on behalf of the members not 11. Subject to the provisions of Section 126 of the Act, exceeding 50 (fifty) and holding in aggregate not more than dividend on equity shares, if declared at the AGM, will be 10% of the total share capital of the Company. In case, a credited/dispatched on or before Friday, August 30, 2019 proxy is appointed by a member holding more than 10% as under: of the total share capital carrying voting rights, such proxy shall not act as proxy for any other person or member. a. to all those beneficial owners holding shares in electronic form, as per the beneficial ownership data 3. During the business hours of the Company, proxies made available to the Company by National Securities are open for inspection for the period beginning before Depository Limited (NSDL) and the Central Depository 24 (twenty-four) hours from the commencement of the Services (India) Limited (CDSL) as of the close of Meeting and ending with the conclusion of the Meeting business hours on Friday, July 19, 2019; and provided that an advance notice of not less than 3 (three) days is given to the Company. b. to all those shareholders holding shares in physical form, whose names stand registered in the Company’s 4. Proxy in prescribed Form No. MGT-11 is enclosed herewith. Register of Members as Members on the end of Proxy shall not have a right to speak at the Meeting. business day on Friday, July 19, 2019.
5. The Company at its AGM held on August 8, 2017 appointed 12. As per Listing Regulations, the Company shall use any Messrs S R B C & CO LLP as the Statutory Auditors for a electronic mode of payment approved by the Reserve Bank second term of 5 (five) consecutive years from the conclusion of India for making payment to the Members. Where the of the 58th AGM to the conclusion of the 63rd AGM to be held dividend cannot be paid through electronic mode, the same in the year 2022 subject to ratification of their appointment will be paid by warrants with bank account details printed every year, if so required under the Act. The requirement thereon. In case of non-availability of bank account details, to place the matter relating to appointment of auditors address of the Members will be printed on the warrants. for ratification by Members at every AGM has been done away with by the Companies (Amendment) Act, 2017 with 13. To avoid fraudulent transactions, the identity/signature of effect from May 7, 2018. Accordingly, no resolution is being the Members holding shares in electronic form is verified proposed for ratification of appointment of statutory auditors with the specimen signatures furnished by NSDL/CDSL at the 60th AGM. and that of members holding shares in physical form is verified as per the record of the Registrar and Share 6. Brief details of the directors, who are seeking appointment/ Transfer Agents of the Company. Members are requested re-appointment, are annexed hereto as per requirement to keep the same updated. of Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘the 14. In case of any query relating to Financial Statements, Listing Regulations’). Members are requested to write to the Company at an early date, so as to enable the Management to keep the 7. The explanatory statement setting out material facts, information ready at the AGM. pursuant to Section 102 of the Companies Act, 2013, (‘the Act’) which sets out details relating to the special business 15. For the convenience of the Members and for the proper at the AGM is annexed hereto. conduct of the Meeting, the Members are required to deposit the Attendance Slip duly signed at the counter at 8. Corporate members are requested to bring along with them a entry place of the Meeting. Proxies kindly bring their identity duly certified copy of the Board Resolution/Power of Attorney proof to the Meeting for the purpose of identification. authorizing their representative to attend the AGM. 16. Pursuant to Section 72 of the Act, Members holding 9. Securities and Exchange Board of India (SEBI) has, through shares in physical form are advised to file nomination in a circular, directed all the companies to pay dividend through the prescribed Form SH-13 with the Company’s Registrar electronic mode. Accordingly, all the Members holding and Share Transfer Agents. In respect of shares held in shares in dematerialized form are requested to kindly electronic form, the Members may please contact their update their complete bank account details viz. their core respective depository participant.
250 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 251 AGM th ead together , the following inter alia under the www.ceat.com CEAT Limited CEAT eferred to in this Notice are open for to in this Notice are eferred ectors and Key Managerial Personnel ectors Register of Dir Register of Contracts or Arrangements in which and their shareholding under Section 170 of the Act. and their shareholding shall be kept open for inspection The said register at the AGM of the Company and shall be made accessible to any person attending the meeting. Directors are interested under Section 189 of the interested are Directors at the shall also be produced Act. The said register shall Company and AGM of the of the commencement open and accessible during the continuance remain of the meeting to any person having the right to attend the meeting.
ii. Members may also note that the Notice of the 60 Members may also note that the Notice Relevant documents r The Company has been maintaining, i. Shar 101 and 136 of the Act r In terms of Section T means, including annual reports and notices, Members Members notices, and reports including annual means, their email address to kindly register/update requested are held in electronic are shares where DP, with their respective form, in physical held are shares however, If, form. with their email address advised to register Members are Company of the Agents Transfer Registrar and Share the viz. TSR Darashaw Limited. of the Company on all Office inspection at the Registered working days between 11:00 a.m. and 1:00 p.m. up to the date of the ensuing AGM. period of 7 (seven) years, the corresponding shares shall shares corresponding 7 (seven) years, the period of IEPF demat account. to the be transferred requested are onwards 2011-12 from of the financial years Registrar and Share the Company/Company’s to approach possible, as early as same the claiming for Agents Transfer to the IEPF shares of the relevant to avoid the transfer demat account. to Regulation pursuant and made thereunder the Rules with the listed companies may 36(1) of the Listing Regulations, Report, including send the notice of AGM and the Annual Report, etc. by electronic Financial Statements, Board soft copies forwarding mode. The Company is accordingly documents to all those Members of the above-referred their email ids with their respective who have registered and Share depository participants or with the Registrar need Members who Agents of the Company. Transfer id email the on request a make to need copy physical a or [email protected]. [email protected] and the Annual Report for FY 2018-19 will also be available and the Annual Report for FY 2018-19 will website i.e. on the Company’s tab ‘Investors’ for download by the Members. statutory registers at its registered office, which are open which are office, at its registered statutory registers of the provisions for inspection in terms of the applicable Act on all working days between 11:00 a.m. and 1:00 p.m., by the Members and others, as specified below:
26. 27. 28. 24. 25. respect in dividends claimed not have who eholders electronic Members’communicationsthrough o receive es in the same name or in the name or in the es in the same es in dematerialized form are es in dematerialized form are es in physical form are requested requested es in physical form are Further in terms of Section 124(6) of the Act, in case of such In terms of Section 124(5) of the Act, dividend amount for SEBI has mandated the submission of Permanent Account Members holding shar Members holding shar In view of the Regulation 40 of Listing Regulations, as In view of the Regulation 40 of Listing T The Members holding shar The Members shareholders whose dividends are unpaid for a continuous whose dividends are shareholders the year ended March 31, 2012, remaining unclaimed for 31, 2012, remaining the year ended March a period of 7 (seven) years shall become due for transfer in October 2019 to the Investor Education and Protection Fund (IEPF) established by the Central Government. Number (PAN) by every participant in the securities market. Number (PAN) therefore are form electronic in shares holding Members whom they to their DP with to submit the PAN requested maintaining their demat accounts. Members holding are details to the in physical form can submit their PAN shares Agents. Transfer Registrar and Share Company’s to intimate such changes to the Company’s Registrar and to intimate such changes to the Company’s Agents. Transfer Share requested to intimate all changes pertaining to their bank requested bank the of name number, account bank as such details code, mandates, and branch details, MICR code and IFSC change of address, change nominations, power of attorney, contact numbers, etc. to their of name, email address, to the intimated (DP). Changes Participant Depository in the Company’s DP will then be automatically reflected which will help the Company and the Company’s records efficient Agents to provide Transfer Registrar and Share and better services. amended, securities of listed companies can be transferred can be transferred amended, securities of listed companies 2019, 1, April from effect with form dematerialized in only for transmission or received except in case of request in shares transposition of securities. Members holding their convert to requested therefore are form physical loss of shares holdings into dematerialized mode to avoid servicing. and fraudulent transactions and better investor approved electronic mechanism or dividend warrant/ mechanism or dividend electronic approved to requested Members are payment instruments, particulars of their bank or notify change of address, along with the 9 digit MICR account, if changed, depository details to the respective Code/relevant held in demat mode or participant in case of shares Agents of the Company Transfer Registrar and Share held in physical mode, on or before in case shares July 19, 2019. Friday, same order of names, under different folios are requested requested folios are under different of names, same order of the said holdings to TSR details to notify the relevant 6-10, Haji Moosa Patrawala Industrial Darashaw Limited at Road, Mahalaxmi, Mumbai 400 E. Moses Estate, 20, Dr. into single folio of their shareholding 011 for consolidation better. to help us serve you
23. 22. 21. 20. 19. 18. the through dividend of credit timely ensure o 17. Notice
29. The route map showing directions to reach the venue of the I. Remote e-voting 60th AGM is annexed. The instructions for Members for voting electronically are as under: 30. For more details on shareholder’s matter, please refer to the General Shareholder Information Section included in i. The voting period begins on 9.00 a.m. the Corporate Governance Report. on Monday, July 29, 2019 and will end at 5.00 p.m. on Wednesday, July 31, 2019. During this period, 31. Voting on resolutions: Members of the Company, holding shares either in Pursuant to Section 108 of the Act, read with the Rules physical form or in dematerialized form, as on the made thereunder and Regulation 44 of the Listing cut-off date of Thursday, July 25, 2019 may cast Regulations, the Company is pleased to provide the their vote electronically. The e-voting module shall be facility to Members to exercise their right to vote through disabled by CDSL for voting thereafter. electronic means (Remote e-voting), on all the resolutions set forth in this Notice. The e-voting period will commence ii. The Members should log on to the e-voting website at 9.00 a.m. on Monday, July 29, 2019 and will end at www.evotingindia.com. 5.00 p.m. on Wednesday, July 31, 2019. The Company has signed an agreement with Central Depository Services iii. Click on Shareholders. (India) Limited (CDSL) for facilitating remote e-voting. The Members desiring to vote through electronic mode may . iv Now Enter your User ID refer to the detailed procedure on e-voting given hereinafter. (a) For CDSL: 16 digits beneficiary ID, The voting rights of Members shall be in proportion to (b) For National Securities Depository Limited their shares in the paid-up equity share capital of the (NSDL): 8 Character DP ID followed by 8 Digits Company as on the cut-off date i.e. Thursday, July 25, Client ID, 2019. A person whose name is recorded in the register of (c) Members holding shares in Physical Form should Members or in the register of beneficial owners maintained enter Folio Number registered with the Company. by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting, as well as . v Next enter the Image Verification as displayed and voting at the meeting. Click on Login. Any person who acquires shares of the Company and vi. If you are holding shares in demat form and had becomes a member of the Company after dispatch of logged on to www.evotingindia.com and voted on the notice and holding shares as on the cut-off date, may an earlier voting of any company, then your existing obtain the login id and password by sending request to password is to be used. the Company and/or TSR Darashaw Limited and thereafter follow the same procedure as mentioned below for e-voting.
vii. If you are a first-time user follow the steps given below
For Members holding shares in Demat Form and Physical Form PAN • Enter your 10-digit alpha-numeric PAN issued by Income Tax Department (Applicable for both demat Members as well as physical Members) • Members who have not updated their PAN with the Company/Depository Participant are requested to use the first two letters of their name and the last 8 digits of the demat account/folio number in the PAN field. • In case the folio number is less than 8 digits enter the applicable number of 0’s before the number after the first two characters of the name in CAPITAL letters. e.g. If your name is Ramesh Kumar with folio number 100 then enter RA00000100 in the PAN field. Dividend Bank Details • Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your OR Date of Birth (DOB) demat account or in the Company records in order to login. • If both the details are not recorded with the depository or Company please enter the number of shares held by you as on the cut-off date in the Dividend Bank details field.
252 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 253 Floor, Marathon Marathon Floor, th d Resolution and CEAT Limited CEAT emote e-voting facility as and www.evotingindia.com Members (i.e. other than other (i.e. Members [email protected] or [email protected] and who have cast their votes by remote by remote votes cast their who have eceiving the login details a Compliance eceiving the login details scanned copy of the Registration Form Registration the of copy scanned described above, the Company shall make a voting facility available at the venue of the AGM, voting system or physical electronic through the and Members attending ballot paper cast their votes meeting, who have not already their e-voting shall be able to exercise by remote right at the Meeting. the attend may the Meeting prior to e-voting Meeting but shall not be entitled to cast their their in case Members cast vote again. However, e-voting and electronic vote both via remote voting system or physical ballot paper at AGM, and voting e-voting shall prevail then remote voting system or the electronic done through physical ballot paper at the AGM shall be treated as invalid. Individuals, HUF, NRI etc.) and Custodian are etc.) and Custodian are NRI Individuals, HUF, to log on to required themselves as Corporates. register sign of the entity should bearing the stamp and . be emailed to [email protected] using the admin login User should be created The Compliance User would be and password. wish to able to link the account(s) for which they vote on. mailed to of the accounts they would be able on approval to cast their vote. Power of Attorney (POA) which they have issued be should any, if Custodian, the of favour in for the uploaded in PDF format in the system scrutinizer to verify the same. In addition to the r Members Non-Individual A After r be The list of accounts linked in the login should A scanned copy of the Boar case you have any queries or issues regarding the regarding issues or queries any have you case
In V Note for Non – Individual Members and Custodians Note for Non – Individual remote e-voting, you may refer the Frequently Asked the Frequently you may refer e-voting, remote at and e-voting manual available Questions ("FAQs") under help section or contact www.evotingindia.com (CDSL) Central Depository Dalvi, Manager, Rakesh Mr. Services (India) Limited, A Wing, 25 instructions as prompted by the mobile app while by the mobile as prompted instructions mobile. voting on your i. ii. • • • • • Futurex, Mafatlal Mill Compounds, N. Mafatlal Futurex, M. Joshi (East), Mumbai 400 013 or send Marg, Lower Parel an email to call 1800225533.
xx. II. xix. oting facilityattheAGM opriately, click on click on opriately, elevant CEAT Limited on elevant CEAT your vote on the resolution, you on the resolution, your vote esolution, you have decided to can also cast their vote using CDSL’s CDSL’s using vote their cast also can holding shares in physical form will then then will form physical in shares holding Members holding shares in physical form, the form, physical in shares holding Members If a demat account holder has forgotten the login Members Once you ‘CONFIRM’ Y After selecting the r Click on the ‘RESOLUTIONS FILE LINK’ if you wish to Click on the ‘RESOLUTIONS FILE LINK’ Click on the EVSN for the r On the voting page, you will see ‘RESOLUTION For Members After entering these details appr these details After entering password, then enter the User ID and the image password, and verification code and click on Forgot Password by the system. enter the details as prompted based available for android mobile app m-Voting app can be downloaded from mobiles. The m-Voting WindowsApple and Play Store. Google users phone and the the App Store can download the app from Please follow the Windows respectively. Phone Store will not be allowed to modify your vote. page. to print’ option on the Voting on ‘Click here view the entire Resolution details. view the entire vote on, click on ‘SUBMIT’. A confirmation box will be displayed. If you wish to confirm your vote, click on and ‘OK’, else to change your vote, click on ‘CANCEL’ modify your vote. accordingly DESCRIPTION’ and against the same the option DESCRIPTION’ and against the same or NO as ‘YES/NO’ for voting. Select the option YES option YES implies that you assent to the The desired. dissent to Resolution and option NO implies that you the Resolution. which you choose to vote. details can be used only for e-voting on the resolutions resolutions details can be used only for e-voting on the contained in this Notice. ‘SUBMIT’ tab. ‘SUBMIT’ screen. the Company selection reach directly in demat form will shares Members holding However, they menu wherein Creation’ ‘Password now reach to mandatorily enter their login password required are Kindly note that this field. in the new password by the demat holders is to be also used password any other company on of for voting for resolutions that company provided eligible to vote, which they are platform. It is strongly CDSL e-voting through opts for any with password your share to not recommended to keep your other person and take utmost care confidential. password
xviii. xvii. xvi. xv xiv xiii. xii. Electr xi. x. ix. 190618003 viii.
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Notice
III. General Instructions iii. The Results declared along with the Scrutinizer’s i. The Company has appointed Mr. P. N. Parikh Report shall be placed on the Company’s (FCS 327, CP 1228), or failing him Mr. Mitesh website www.ceat.com and on the website of Dhabliwala (FCS 8331, CP 9511) of Messrs CDSL e-voting and communicated to the Stock Parikh & Associates, Practising Company Exchanges where the shares of the Company Secretaries, to act as the Scrutinizer, to scrutinize are listed. The results shall also be displayed the voting at the AGM and remote e-voting on the Notice Board at the registered office of process in a fair and transparent manner. the Company.
ii. The Scrutinizer shall immediately after the Under the Authority of the Board of Directors conclusion of voting at the AGM, first count the votes cast at the meeting, thereafter unblock Vallari Gupte the votes cast through remote e-voting in the Company Secretary presence of at least 2 (two) witnesses not in the employment of the Company and make Place: Mumbai not later than 48 hours of conclusion of the Date: May 7, 2019 meeting, a consolidated Scrutinizer’s report of the total votes cast in favour or against, if any, CEAT Limited to the Chairman and/ or Managing Director or a CIN: L25100MH1958PLC011041 Director or a person authorized by him in writing Registered Office: 463, Dr. Annie Besant Road, Worli, who shall countersign the same. Mumbai 400 030 Telephone no.:022-24930621 Fax: 022-25297423 Email Address: [email protected]; Website: www.ceat.com
Annexure to the Notice eligible for payment of sitting fees and commission, as payable to Non-Executive directors of the Company. Item No. 3 of the Notice: None of the Directors, Key Managerial Personnel of the Company or their relatives except Mr. H. V. Goenka himself and Mr. H. V. Goenka (DIN: 00026726) Mr. Anant Goenka, Managing Director is, in any way, concerned As regards re-appointment of Mr. H. V. Goenka referred to in or interested in the resolution set out in Item no. 3 of the Notice. Item no. 3 of the Notice, following necessary disclosures are made for the information of the Members. The Board recommends the Ordinary Resolution as set out in Item No. 3 of the Notice for approval of the Members. Mr. H. V. Goenka, 61, is the Chairman of RPG Enterprises, one of the largest industrial groups in India, active in key business EXPLANATORY STATEMENT PURSUANT TO SECTION segments such as tyres, infrastructure, information technology 102 OF THE COMPANIES ACT, 2013 IN RESPECT OF THE and other diversified segments having an annual turnover of SPECIAL BUSINESS IN THE NOTICE: about US $ 4 billion. Born in December 1957, Mr. Goenka is a graduate in Economics and MBA from the International Institute The following explanatory statement sets out all material facts of Management Development (IMD), Lausanne, Switzerland relating to the business mentioned under Item Nos.4 to 14 of the and is presently on the Foundation Board of IMD, Lausanne. accompanying Notice: Mr. Goenka is a past President of the Indian Merchants' Chamber, now known as the IMC Chamber of Commerce and Industry Item No. 4 of the Notice: and is a member of the Executive Committee of FICCI. He has For the expansion of business and markets, the Company may been the Chairman of the Board of the Company since 2013. propose to set up Branch Offices outside India. For carrying out the audit of the accounts of such branches, it is necessary to Other details as required pursuant to Regulation 36(3) of appoint Branch Auditors. Members are requested to authorize the SEBI (Listing Obligations and Disclosure Requirements) the Board of Directors of the Company to appoint Branch Regulations, 2015 (‘the Listing Regulations’) and the Secretarial Auditors in consultation with the Statutory Auditors of the Standards - 2 on General Meetings, as applicable is provided Company and to fix their remuneration. as an annexure to the Notice. More details are available in the Corporate Governance Report. None of the Directors, Key Managerial Personnel of the Company or their relatives is, in any way, concerned or interested in the Mr. Goenka is not disqualified from being appointed as a Director resolution set out in Item no. 4 of the Notice. in terms of section 164 of the Companies Act, 2013 and is
254 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 255 upon the inter alia, CEAT Limited CEAT recommendation of Nomination and Remuneration Committee, recommendation on directorship Vinay Bansal’s continuation of Mr. approved and years of 75 (seventy-five) attaining age after Board, the of Members, in terms to seek the approval further proposed of the Listing Regulations, as amended and of the provisions as may be applicable, provisions such other rules, regulations, Vinay Bansal, as an of Mr. for continuation of directorship till expiry of rotation, by not liable to retire Director, Independent his extant term to September 25, 2024. is of the opinion that the above-mentioned The Board skills, experience and possess requisite Independent Directors business and it would be to the Company’s knowledge relevant the with association their have to Company the of interest the in Company as Independent Directors. fulfill the Directors the aforesaid In the opinion of the Board, read with the Rules made conditions specified in the Act and the Listing Regulations for being appointed as thereunder independent of of the Company and are Independent Directors the management. pursuant to Regulation 36(3) of the Listing Details as required - 2 on General Standards Regulations and the Secretarial In respect of the appointment of the aforesaid Directors, notices Directors, of the aforesaid of the appointment In respect by Section 160 as required manner the prescribed in writing in been have thereunder Rules made and amended as Act the of for the their candidature regarding by the Company, received submitted have also The said Directors of the Director. office pursuant to independence, as required their declaration of of Act stating that they meet the criteria section 149(7) of the and the Act 149(6) of in Section provided as independence the Listing Regulations. Regulation 16(1)(b) of of Appointment of the Independent Copies of the draft Letters terms and conditions of their setting out the Directors the at Members by inspection for available are appointments 1.00 of the Company between 11.00 a.m. and Office Registered Sundays and Public p.m. on all working days except Saturdays, shall also be available Holidays up to the date of this AGM and meeting of Members for inspection at the venue of the proposed till the conclusion of the said meeting. Listing Regulations as In terms of Regulation 17(1A) of the amended by the Nomination as duly recommended and of Remuneration Committee, the re-appointment and Vinay Bansal, at the age of 74 (seventy-four) Mr. who is currently seeking of Directors by the Board years is proposed by way of Special Resolution for his Members' approval even Director, continuation as a Non-Executive Independent after attaining age of 75 (seventy-five) years. at its Committee Nomination and Remuneration the Accordingly, expertise his that view a formed 2019, 7, May on held meeting immensely beneficial to the Company, and valuable guidance are Board to the and hence recommended in its pursuit of growth of the on the Board continuation of his directorship to approve Company up to September 25, 2024. at its meeting held on May 7, 2019, The Board Annual General Meeting of the Company Annual General Meeting of the Company th 3,00,000/- (Rupees Three Lacs Only) plus Lacs Three (Rupees ` 3,00,000/- The Board recommends the Ordinary Resolution as set out in set as Resolution Ordinary the recommends The Board Members. of the of the Notice for approval Item No. 4 Pursuant to Section 149 of the Companies Act, 2013 Act, 2013 Pursuant to Section 149 of the Companies 49 of the Listing (‘the Act’) and erstwhile Clause Khaitan, Haigreve Mr. Atul C. Choksey, Mr. Agreement, Vinay Bansal, S. Gupta, Ms. Punita Lal and Mr. Mahesh Mr. ‘Independent be to qualifying Company the of Directors the of Directors Independent as appointed were Directors’ from years with effect Company for a term of 5 (Five) consecutive the date of the 55 Item No. 6 to 10 of the Notice: The Board recommends the Ordinary Resolution as set out in as Resolution Ordinary the recommends The Board of the Members. Item No. 5 of the Notice for approval None of the Directors, Key Managerial Personnel of the Company None of the Directors, in the concerned or interested is, in any way, or their relatives set out in Item no. 5 of the Notice. resolution Item No. 5 of the Notice: Item No. 5 of the 2014, Rules, Audit) and (Cost Records The Companies time, mandate audit of the cost time to as amended from of certain in respect of the Company accounting records the based on of Directors, the Board Accordingly, products. Committee, at its meeting held of the Audit recommendation Messrs D. C. Dave & Co., Cost on May 7, 2019, appointed No. 000611), as the Cost Auditor Accountants (Firm Registration 31, 2020 at the financial year ending March of the Company for of a remuneration at actuals, if any, applicable taxes and out-of-pocket expenses connection with the audit. In terms of the provisions in incurred with the 2013 read of Section 148(3) of the Companies Act, the remuneration Companies (Audit and Auditors) Rules, 2014, by the Members of payable to the Cost Auditor should be ratified of the Members is sought approval Accordingly, the Company. remuneration payable to the Cost Auditor for ratification of the above. for the financial year 2019-20, as stated Based on their performance evaluation and recommendation Based on their performance evaluation and recommendation in and Committee Remuneration and Nomination the of with of Sections 149, 152 read terms of the provisions of the Schedule IV and any other applicable provisions Act and the SEBI (Listing Obligations and Disclosure Regulations, 2015, (‘the Listing Regulations’) Requirements) Mahesh S. Khaitan, Mr. Haigreve Mr. Atul C. Choksey, Mr. Vinay Bansal, being eligible Gupta, Ms. Punita Lal and Mr. have offered as Independent Directors for re-appointment be to proposed are re-appointment, for themselves for another term of as Independent Directors re-appointed September 26, from 5 (Five) consecutive years with effect 2019 to September 25, 2024, who shall not be liable to retire by rotation. As per Section 149(10) of the Act, an Independent Director shall As per Section 149(10) of the Act, an Independent Director the on years consecutive (Five) 5 to up of term a for office hold for of a Company but shall be eligible for re-appointment Board another term of up to 5 (Five) consecutive years on passing a by the Company. special resolution (AGM), i.e. from September 26, 2014 to September 25, 2019. (AGM), i.e. from Notice
Meetings, as applicable are provided as an annexure to such amount as remuneration as it deems fair. Pursuant to the the Notice. terms of Regulation 17 (6)(ca) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, as amended Mr. Atul C. Choksey, Mr. Haigreve Khaitan, Mr. Mahesh S. vide Amendment notification issued by SEBI on May 9, 2018, Gupta, Ms. Punita Lal and Mr. Vinay Bansal are not disqualified necessitating Members’ approval for paying remuneration from being appointed as Directors in terms of Section 164 of the in excess of 50% of the total remuneration payable to the Act and are eligible for payment of sitting fees and commission, Non-Executive Directors. as payable to Non-Executive directors of the Company. None of the Directors, Key Managerial Personnel of the None of the Directors, Key Managerial Personnel of the Company Company or their relatives except Mr. H. V. Goenka himself and or their relatives except Mr. Atul C. Choksey, Mr. Haigreve Khaitan, Mr. Anant Goenka, Managing Director is, in any way, concerned Mr. Mahesh S. Gupta, Ms. Punita Lal and Mr. Vinay Bansal or interested in the resolution set out in Item no. 11 of the Notice. is, in any way, concerned with or interested in the respective resolutions at set out in Item No. 6 to Item No. 10 of the notice, in The Board recommends the Special Resolution as set out in so far as it concerns their respective appointment and payment Item No. 11 of the Notice for approval of the Members. of remuneration as a Non-Executive director. Item No 12 of the Notice: The Board recommends the resolutions set out in Item No. 6 to The Members of the Company had, by way of a Special Item No. 10 of the Notice before the Members for their approval Resolution passed under Section 180(1)(c) of the Companies by way of Special Resolution. Act, 2013 at the Annual General Meeting (‘AGM’) held on September 26, 2014, accorded consent to the Board of Item No.11 of the Notice: Directors to borrow money where the money to be borrowed, Pursuant to Sections 197, 198 and all other applicable provisions together with the money already borrowed by the Company of the Companies Act, 2013 read with Rules made thereunder, exceed aggregate of its paid-up capital and free reserves apart including any statutory modification or re-enactment thereof, from temporary loans obtained from the Company’s bankers in for the time being in force (hereinafter referred to as ‘the Act’), the ordinary course of business, such that the outstanding at approval of the Members was granted at the 59th Annual General any time, would not exceed the limit of ` 1,000 Crores (Rupees Meeting (‘AGM’) of the Company for payment of remuneration/ One Thousand Crores only) in excess of the aggregate of the commission to the Director(s) of the Company who is/are neither paid-up capital of the Company and its free reserves. in the whole-time employment with the Company nor Managing Director(s) of the Company, in such manner and up to such extent Considering the business plans and the growing fund as the Board of Directors of the Company may so determine requirements of the Company, as the Company has currently from time to time upon recommendation of the Nomination and embarked upon certain projects and may also need funds Remuneration Committee, but not exceeding 3 (Three) percent for carrying out any unforeseen capital expenditure in the of the net profits calculated pursuant to Section 198 of the Act future, it is proposed to increase the existing borrowing limit of and such payments shall be made in respect of profits of the the Company. Company for each financial year. Approval of the Members is therefore sought by way of a Special On the recommendation of Nomination and Remuneration Resolution pursuant to Section 180 (1) (c) of the Companies Act, Committee, the Board of Directors of the Company at its meeting 2013 for grant of power to the Board of Directors for borrowing held on May 7, 2019 approved a remuneration of ` 3,80,30,000/- money such that the total amount outstanding at any time shall (Rupees Three Crores Eighty Lacs Thirty Thousand only) payable not exceed the limit of ` 2,000 Crores (Rupees Two Thousand to Mr. H. V. Goenka, Non-Executive Director, Chairman of the Crores only) in excess of the aggregate of the paid-up capital Company for FY 2018-19, including sitting fees payable for the of the Company and its free reserves, as aforesaid from time meetings attended during the year. to time.
Mr. H. V. Goenka is a promoter of the Company and has about None of the Directors, Key Managerial Personnel of the Company four decades of experience with the tyre sector during which or their relatives is, in any way, concerned or interested in the he has also served as the Managing Director of the Company. resolution set out in Item no. 12 of the Notice. Mr. Goenka’s extensive experience in the tyre industry has been instrumental in helping guide the Company towards The Board recommends the Special Resolution as set out in both short term growth as well as long term sustainability. Item No. 12 of the Notice for approval of the Members. As Chairman of the Board, Mr. Goenka provides vision and thought leadership which has seen the Company achieve high Item No 13 of the Notice: standards of corporate governance, innovation, brand visibility The Members of the Company had, by way of Special Resolution and growth-oriented project investments. Mr. Goenka invests passed under Section 180(1)(a) of the Companies Act, 2013, considerable time reviewing the operations and performance at the Annual General Meeting held on September 26, 2014, of the Company and his interactions with the senior leaders accorded the consent to the Members for creating a charge and his role in building a talent pool in the Company has been or mortgage or hypothecation on its movable or immovable significant in maximizing stakeholder value. The Board deems properties. Consequent to increase in the borrowing limits of it appropriate to recognize his contribution and compensate the Company, it would be necessary to revise the approval for
256 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 257 Vallari Gupte Vallari Company Secretary CEAT Limited CEAT 500 Crores (Rupees Five ` 500 Crores Under the Authority of the Board of Directors Under the Authority of the Board Place: Mumbai Date: May 7, 2019 CEAT Limited CEAT CIN: L25100MH1958PLC011041 Worli, Annie Besant Road, 463, Dr. Office: Registered Mumbai 400 030 no.:022-24930621 Fax: 022-25297423 Telephone [email protected]; Email Address: www.ceat.com Website: unsecured, non-convertible debentures/bonds or such other or debentures/bonds non-convertible unsecured, on private series/tranches in one or more debt securities, exceeding placement basis, not Hundred Crores only). Crores Hundred Company had by passing a special The Members of the Meeting held on July 20, 2018, at the Annual General resolution Non-Convertible and issue to offer to the Board granted approval amount basis for an aggregate on private placement Debentures only) in one or Crores (Rupees Five Hundred up to ` 500 Crores until July 20, 2019. tranches, which is valid more Personnel of the Company Key Managerial None of the Directors, in the concerned or interested is, in any way, or their relatives set out in Item no. 14 of the Notice. resolution out in the Special Resolution as set recommends The Board of the Members. Item No. 14 of the Notice for approval , financing of the ongoing capital inter alia expenditure for expansion of capacity, reduction of overall reduction for expansion of capacity, expenditure purposes general for as well as cost finance and interest the of high cost debt, including the restructuring/replacement invitation for subscription for secured/ Company intends to offer The Board recommends the Special Resolution as set out in the Special Resolution as set recommends The Board of the Members. Item No. 13 of the Notice for approval None of the Directors, Key Managerial Personnel of the Company Key Managerial None of the Directors, in the concerned or interested is, in any way, or their relatives 13 of the Notice. set out in Item no. resolution It is therefore necessary for the Members to pass a Special necessary for the Members It is therefore Section 180(1)(a) and other applicable Resolution under set out in Item No. 13 of the of the Act, as provisions create to Directors of Board the enable to Notice accompanying or or mortgage on the movable any charge, hypothecation of the Company. immovable properties creation of charge on properties of the Company given by the of the Company on properties of charge creation 26, 2014. held on September in their General Meeting Members In order to augment long term resources and for general to augment long term resources In order corporate purposes Item No 14 of the Notice: applicable provisions Pursuant to Sections 23, 42, 71 and other with Rule 14 of the of the Companies Act, 2013 (‘the Act’) read 2014 Rules, Securities) of Allotment and (Prospectus Companies Capital and Debentures) and Rule 18 of the Companies (Share to obtain the previous Rules, 2014, the Company is required for Resolution Special a of means by Members its of approval or invitation to subscribe to non-convertible making any offer Resolution Special basis. placement private a on debentures or invitation(s) offer(s) can be obtained once in a year for all the during that year. for such debentures Notice
Details of Directors seeking Re-appoitnment at the Annual General meeting pursuant to Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard on General Meetings (SS-2) of The Institute of Company Secretaries of India
Details of Directors seeking appointment/re-appointment at Annual General Meting
Atul C. Mahesh S. Particulars H. V. Goenka Haigreve Khaitan Punita Lal Vinay Bansal Choksey Gupta
Date of current October 16, September 26, September 26, September 26, September 26, September 26, appointment on the 1981 2014 2014 2014 2014 2014 Board
Age 61 67 49 63 56 74
Qualifications Graduate in Economics Bachelor in LLB Honours Degree BA (Hons.) in Master’s degree in and MBA from IMD Chemical in B.Com; LLB Economics Science, Diploma Engineering from (Gen.), Fellow and MBA from in Business Illinois Institute Member of Indian Institute Management, of Technology ICAI and ICSI of Management, Petroleum Chicago (Third Rank and Calcutta Management from a Silver Medal Arthur D’ Little, in Company Massachusetts Secretaries Final Institute of examination). Development, US and Diplomas in French.
Directorship held • CEAT Limited • CEAT Limited • CEAT Limited • CEAT Limited • CEAT Limited • CEAT Limited in other public • Bajaj Electricals • Apcotex • Harrison • Peninsula Land • CIPLA Limited companies (Excluding Limited Industries Malayalam Limited • Airtel foreign companies Limited Limited and Section 8 • Breach Candy • RPG Life Payments companies) as on Hospital Trust • Mazda • Inox Leisure Sciences Bank Limited May 7, 2019 • Raychem RPG Colours Limited Limited Private Limited Limited • Torrent • Peninsula • RPG Enterprises • Shyamal Pharamaceuticals Investment Limited Fin-vest (India) Limited Management Limited • AVTEC Limited Company • Zensar Technologies Limited Limited • Aditya Birla Sun Life Insurance • Morarjee • Spencer International Textiles Limited Hotels Limited Company Limited • KEC International • Mahindra Limited Holdings Limited • RPG Life Sciences • JSW Steel Limited Limited • Gujarat Borosil Limited
258 Annual Report 2018-19 Corporate Overview Statutory Reports Financial Statements Notice & Proxy 259 AC SRC* NRC RMC
CEAT Limited CEAT • • • • Vinay Bansal None Nil CEAT Limited CEAT CSR NRC* CSR NRC*
Punita Lal None Nil CEAT Limited CEAT • CIPLA Limited • • Airtel Payments Bank Limited • SRC* RMC AC NRC AC* SRC NRC* RMC* SRC RMC SRC NRC
Mahesh S. Gupta None Nil • • • Peninsula Investment Management Company Limited • CEAT Limited CEAT • • • • Morarjee Textiles Limited • • Peninsula Land Limited • • RPG Life Sciences Limited AC AC* AC AC SRC* RMC NRC* AC* RMC AC* NRC AC NRC
• Inox Leisure Limited • JSW Steel Limited • Torrent Pharamaceuticals Limited • • Harrisons Malyalam Limited • • • Aditya Birla Sun Life Insurance Company Ltd • • Ltd AVTEC • • Mahindra Holdings Limited • Haigreve Khaitan Haigreve None Nil CSR* NRC
Atul C. Choksey None Nil Apcotex Industries Limited • • Details of Directors seeking appointment/re-appointment at Annual General Meting at seeking appointment/re-appointment Details of Directors H. V. Goenka H. V. Brief profile of the Directors are provided under Corporate Overview section of the Annual Report. Other details such provided are of the Directors Brief profile available in the Corporate etc., are drawn, remuneration attended during the year, as number of meetings of the board Governance Report. Mr. H. V. Goenka, H. V. Mr. Chairman is father of Anant Goenka, Mr. of Managing Director the Company 1,33,932**
Membership / Chairmanships of committees of all public companies Particulars Brief resume, Brief resume, expertise in specific functional and other details Relationships between directors and with Key inter-se Managerial Personnel Number of shares Number of shares held in the Company - only statutory committees, as required under the Companies Act, 2013 and Listing Regulations, viz. AC - Audit Committee, SRC - Stakeholders' Relationship Committee, NRC - Nomination and Remuneration Committee, RMC - Risk Management Committee, CSR - Corporate Social Responsibility Committee * Positions held as Chairman of the Committee held in the capacity of Trustee **Excluding shares Route Map for the 60th Annual General Meeting Venue
Proposed Siddhivinayak Metro Station
AGM Venue: Ravindra Natya Mandir, P. L. Deshpande Maharashtra Kala Academy, Sayani Road, Prabhadevi, Mumbai 400 025. Landmark: Shree Siddhivinayak Temple CEAT LIMITED Regd. Office: 463, Dr. Annie Besant Road, Worli, Mumbai 400 030. Corporate Identification Number (CIN): L25100MH1958PLC011041 Tel: +91-22-24930621(B)+91-22-25297423 (F) website:www.ceat.com. E-mail: [email protected]
ATTENDANCE SLIP (To be presented at the entrance of the meeting hall duly signed)
Registered Folio No./ DP ID/Client ID Name and address of the Member(s) No. of Share(s) Name of the Proxy/ Authorized Representative (In Block letters) Signature of the Member(s)/ Proxy/ Authorized Representative I hereby record my presence at the Sixtieth Annual General Meeting of the Company on Thursday, August 1, 2019 at 3.00 p.m. at Ravindra Natya Mandir, P. L. Deshpande Maharashtra Kala Academy, Sayani Road, Prabhadevi, Mumbai 400 025. Note: Individual members/Proxy may kindly bring identity proof at the meeting venue. Authorized Representatives of the corporate members may please bring copy of the board resolution/Power of Attorney duly authorizing them to attend the meeting.
CEAT LIMITED
Regd. Office: 463, Dr. Annie Besant Road, Worli, Mumbai 400 030. CIN: L25100MH1958PLC011041 Tel: +91-22-24930621(B) +91-22-25297423(F) website: www.ceat.com. E-mail: [email protected]
FORM NO. MGT-11 PROXY FORM [Pursuant to Section 105 (6) of the Companies Act, 2013 and Rule 105(6) and 19(3) of the Companies (Management and Administration) Rules, 2014] CIN: L25100MH1958PLC011041 Name of the Company: CEAT Limited Registered Office: 463, Dr. Annie Besant Road, Worli, Mumbai 400 030
Name of the Member(s): Registered Address: Email Address: Folio No.: DP ID/Client ID:
I/ We, being the Member(s) of ...... share(s) of the above named Company, hereby appoint; 1. Name: ...... Address: ...... Email Address: ...... Signature: ...... or failing him/ her 2. Name: ...... Address: ...... Email Address: ...... Signature: ...... or failing him/ her 3. Name: ...... Address: ...... Email Address: ...... Signature: ...... or failing him/ her Route Map for the 60th Annual General Meeting Venue
Proposed Siddhivinayak Metro Station
AGM Venue: Ravindra Natya Mandir, P. L. Deshpande Maharashtra Kala Academy, ayani Road, Prabhadevi, Mumbai 400 025. Landmark: Shree Siddhivinayak Temple
as my/ our proxy to attend and vote (on a poll) for me/ us and on my/ our behalf at the Sixtieth Annual General Meeting of the Company on Thursday, August 1, 2019 at 3.00 p.m. at Ravindra Natya Mandir, P. L. Deshpande Maharashtra Kala Academy, Sayani Road, Prabhadevi, Mumbai 400 025 and at any adjournment thereof in respect of such resolutions as are indicated below:
Item. Description For Against No. 1 Adoption of: a. Audited Financial Statements for the financial year ended March 31, 2019, together with the Reports of the Board of Directors and the Auditors thereon; b. Audited Consolidated Financial Statements for the financial year ended March 31, 2019, together with the Report of the Auditors thereon 2 Declaration of dividend on equity shares at the rate of ` 12 per share for the year ended March 31, 2019 3 Re-appointment of Mr. H. V. Goenka (DIN: 00026726) as a Director of the Company 4 Authority for appointment of Branch Auditor of the Company 5 Ratification of the Remuneration payable to Messrs D C Dave & Co., Cost Auditors of the Company 6 Re-appointment of Mr. Atul C. Choksey (DIN:00002102) as an Independent Director for the second term 7 Re-appointment of Mr. Mahesh S. Gupta (DIN: 00046810) as an Independent Director for the second term 8 Re-appointment of Mr. Haigreve Khaitan (DIN: 00005290) as an Independent Director for the second term 9 Re-appointment of Ms. Punita Lal (DIN: 03412604) as an Independent Director for the second term 10 Re-appointment of Mr. Vinay Bansal (DIN:00383325) (Age 74 years) as an Independent Director for the second term 11 Approval of remuneration payable to Mr. H. V. Goenka, Chairman, Non-Executive Director, for the year 2018-19 12 Approval under section 180 (1)(c) of the Act for borrowings in excess of the aggregate of the paid-up capital of the Company 13 Approval under section 180 (1)(a) of the Act for creation of mortgage/charge/hypothecation, on the movable or immovable properties of the Company 14 Issuance of Non-Convertible Debentures upto ` 500 Crores on private placement basis
Signed this ...... day of ...... 2019
Signature of the shareholder: ...... Affix Signature of Proxy holder(s): ...... Revenue Stamp ...... Signature across the stamp
Note: This form in order to be effective should be duly completed and deposited at the Registered Office of the Company at 463, Dr. Annie Besant Road, Worli, Mumbai 400 030, not less than 48 hours before the commencement of the Meeting. NOTES NOTES Corporate Information
BOARD OF DIRECTORS MANAGEMENT COMMITTEE AUDITORS H. V. Goenka Anant Goenka S R B C & CO LLP Chairman, Non-Executive Director Managing Director BANKERS Anant Goenka Arnab Banerjee Axis Bank Limited Managing Director Chief Operating Officer Bank of Baroda Arnab Banerjee Dilip Modak Bank of India Chief Operating Officer Sr. Vice President - Manufacturing Citibank N.A. Atul C. Choksey Kumar Subbiah Citicorp Finance India Limited Independent Director Chief Financial Officer HDFC Bank Limited ICICI Bank Limited Haigreve Khaitan Milind Apte IDBI Bank Limited Independent Director Sr. Vice President - Human Resources Kotak Mahindra Bank Limited Mahesh S. Gupta Peter Becker RBL Bank Limited Independent Director Sr. Vice President - R&D and Technology State Bank of India Paras K. Chowdhary Shekhar Ajgaonkar The Hongkong and Shanghai Banking Independent Director Sr. Vice President - Quality Based Corporation Limited Pierre E. Cohade Management Yes Bank Limited Non-Executive Director Tom Thomas REGISTRAR AND SHARE Punita Lal Executive Director - Projects & Chief TRANSFER AGENTS Independent Director Mentor Technology TSR Darashaw Consultants Private Ranjit V. Pandit Vijay Gambhire Limited Independent Director Managing Director - CSTL (earlier TSR Darashaw Limited) 6-10, Haji Moosa Patrawala Industrial Vinay Bansal COMPANY SECRETARY & Estate, 20, Dr. E. Moses Road, Independent Director COMPLIANCE OFFICER Mahalaxmi, Mumbai 400 011 Vallari Gupte
AUDIT COMMITTEE FINANCE AND BANKING COMMITTEE RISK MANAGEMENT COMMITTEE Mahesh S. Gupta (Chairman) Anant Goenka (Chairman) Mahesh S. Gupta (Chairman) Vinay Bansal (Member) H. V. Goenka (Member) Vinay Bansal (Member) Paras K. Chowdhary (Member) Arnab Banerjee (Member) Paras K. Chowdhary (Member)
CORPORATE SOCIAL NOMINATION AND STAKEHOLDERS’ RESPONSIBILITY COMMITTEE REMUNERATION COMMITTEE RELATIONSHIP COMMITTEE Anant Goenka (Chairman) Mahesh S. Gupta (Chairman) Vinay Bansal (Chairman) Vinay Bansal (Member) Paras K. Chowdhary (Member) Mahesh S. Gupta (Member) Punita Lal (Member) Vinay Bansal (Member) Paras K. Chowdhary (Member)
CEAT Limited Plants CIN: L25100MH1958PLC011041 • Village Road, Bhandup, Mumbai 400 078 463, Dr. Annie Besant Road, Worli, Mumbai 400 030 • 82, MIDC, Industrial Estate, Satpur, Nashik 422 007 Email: [email protected] • Village Gate Muvala, Halol, Panchmahal, Gujarat 389 350 Telephone: 022-24930621 • Plot No.SZ-39, Butibori MIDC, Nagpur 441108
CEAT Limited 33 ANNUAL REPORT 2018-2019 SAFER SMARTER BETTER
Company CEAT LIMITED CEAT Mumbai - 400 030 Annie Besant Road, Worli, 463, Dr. Tel - 022 24930621, www.ceat.com Tel A