Annual Report 2019-20 SMART TYRE BUILDING A FUTURE-READY TYRE COMPANY Forward-looking statement In this Annual Report we have disclosed forward-looking information to enable investors to comprehend our prospects and take informed 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 ‘anticipates’, ‘estimates’, ‘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 assumptions. The achievement of results is 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 bear this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Contents Board of Directors ......................................................................................................................................................... 2 Corporate Snapshot ..................................................................................................................................................... 4 Key partner to leading OEMs ..................................................................................................................................... 6 Highlights during the year ........................................................................................................................................... 8 Chairman’s overview .................................................................................................................................................. 10 How JK Tyre addressed challenging market realities, 2019-20 ..................................................................... 14 ‘Smart Tyre’ – The tyre with a ‘mind’ that cares for you ....................................................................................15 At JK Tyre, ‘Smart’ was not an attribute built overnight .................................................................................... 16 At JK Tyre, ‘Smart’ means initiatives rewiring our DNA to build an exciting new company .................. 18 At JK Tyre, ‘Smart’ is an organisational framework supported by cutting-edge technologies .............22 The ‘Smart’ focus is helping JK Tyre make the world a better place ...........................................................24 Raghupati Singhania Centre Of Excellence (RPSCoE) .....................................................................................33 At JK Tyre, ‘Smart’ is the capacity to get equipment to ‘talk’ to each other ............................................... 37 Growing our global business in a ‘Smart’ way ....................................................................................................42 Bringing a ‘Smart’ touch to our Indian business .................................................................................................46 Putting ‘Smart’ into our marketing ..........................................................................................................................52 Strengthening the ‘Smartness’ of our knowledge capital ................................................................................58 A culture of financial outperformance ..................................................................................................................62 The JK Tyre brand. Visible. Digital. Connected ...................................................................................................64 JK Tyre and Motorsport .............................................................................................................................................67 JK Tyre. A socially responsible corporate ............................................................................................................. 72 Board’s Report ..............................................................................................................................................................84 Annexures ......................................................................................................................................................................89 Sustainability & Business Responsibility Report ................................................................................................ 116 Auditor’s Report on Standalone Financial Statements ...................................................................................128 Standalone Financial Statements ..........................................................................................................................134 Auditor’s Report on Consolidated Financial Statements ............................................................................... 167 Consolidated Financial Statements ...................................................................................................................... 174 SMART TYRE At JK Tyre, we are engaged beyond the manufacture of conventional tyres. We are engaged in building a future-ready tyre company driven by service and solutions. We believe that this proactive approach will empower the Company to address the impact of any business challenge with speed and sustainability. JK Tyre & Industries Limited Annual Report 2019-20 Board of Directors DR. RAGHUPATI SINGHANIA BHARAT HARI SINGHANIA VIMAL BHANDARI Chairman & Managing Director Managing Director Director BAKUL JAIN ANSHUMAN SINGHANIA DR. WOLFGANG HOLZBACH Director Dy. Managing Director Director ADMINISTRATIVE OFFICE REGISTERED OFFICE AUDITORS 3, Bahadur Shah Zafar Marg, Jaykaygram, PO – Tyre Factory, S S Kothari Mehta & Company New Delhi – 110 002 Kankroli – 313 342, Rajasthan Chartered Accountants 2 JK Tyre & Industries Limited Annual Report 2019-20 KALPATARU TRIPATHY ARVIND SINGH MEWAR SUNANDA SINGHANIA Director Director Director SHREEKANT SOMANY MEERA SHANKAR ARUN K. BAJORIA Director Director Director & President – International Operations VICE PRESIDENT (LEGAL) & CIN: L67120RJ1951PLC045966 Website: www.jktyre.com COMPANY SECRETARY Pawan Kumar Rustagi 3 JK Tyre & Industries Limited Annual Report 2019-20 CORPORATE SNAPSHOT JK Tyre & Industries Limited. Built being around smart solutions. Where tyres ‘communicate’ with humans. Where machines ‘talk’ with machines. Where the tyre has graduated from being an A-class product to an A-class service. Where customers are provided comprehensive solutions for their needs. Making the Company one of the most exciting amongst the 25 leading tyre manufacturers the world over. Vision Core values To be amongst the most admired companies in India, Excellence comes not from committed to excellence mere words or procedures. It comes from an urge to strive and deliver the best. A mindset that says, when it is good enough, improve it. It is a way of thinking that comes only from a power within. No. 1 Tyre Be a Most Profitable Brand in India Customer tyre company Obsessed and amongst in India – Deliver Caring for Mission Leading tyre Company – Enhanced value brands people Customer First to all stakeholders 24x7 globally Integrity including intellectual honesty, openness, fairness and Enhance Lead with Be a trust global Be a Socially Premium Learning presence through Responsible products through & Innovative Acquisition/ Corporate Technological organisation Commitment Citizen Edge JV/ Strategic with Motivated to excellence Partnerships team 4 JK Tyre & Industries Limited Annual Report 2019-20 Group pedigree for Racing, Military/ Defence, Industrial >4500 dealers and >550 dedicated Headquartered in India, the and Farm applications. brand shops known as Steel Wheels, J.K. Organization is an eminent Xpress Wheels and Truck Wheels, Competitive advantage manufacturing Group that has a providing complete solutions to heritage of more than 125 years. JK Tyre’s manufacturing operations customers. With more than 40,000 employees comprise 12 state-of-the-art Environment-friendly the Group has multi-business, multi- manufacturing facilities. The Company product and multi-location operations has nine modern plants in India All of JK Tyre’s plants are ISO- with footprints in over 100 countries (three plants in Mysuru, three plants 14001 certified for environmental across the six continents. JK Group in Haridwar and one plant each in conservation. Over the years, it has products enjoy significant market Banmore, Kankroli and Chennai) and undertaken several ‘green’ initiatives share in their respective segments on three plants in Mexico – an aggregate to reduce its carbon footprint. the back of visible brands, cutting-edge production capacity of ~32 million The Company’s Mysuru plant is a technologies and futuristic Research & tyres per annum. recipient of the Golden Peacock Development institutes that promote Environment Award. As a validation Thought leader innovation. of the Company’s commitment to The Company pioneered radial plant safety, it was recently awarded Leadership technology in India in the