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EQUITY - MARKET SCREENER

MRF Ltd
Industry :  Tyres
BSE Code
ISIN Demat
Book Value()
500290
INE883A01011
31764.6698113
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
MRF
27.76
32585.84
EPS(TTM)
Face Value()
Div & Yield %
2768.14
10
0.2
 

As on: Jan 18, 2022 04:11 PM

(Rs. in Crores)

Ten Year Financial Summary 2021 2020 2019 2018 2017 2014-16 2014 2013 2012 2011
Sales 15921.35 15991.14 15837.00 15181.05 14749.40 22162.04 13198.12 12131.16 11870.18 9743.17
Other Income 207.23 330.50 417.47 328.50 328.61 321.17 65.08 29.03 32.01 25.31
Total Income 16128.58 16321.64 16254.47 15509.55 15078.01 22483.21 13263.20 12160.19 11902.19 9768.48
Profit before Taxation 1700.27 1399.32 1608.89 1601.91 2066.37 3605.95 1338.89 1226.80 833.12 893.65
Provision for Taxation 451.21 4.34 512.02 509.63 615.29 1132.05 441.00 424.59 260.76 274.23
Profit after Taxation 1249.06 1394.98 1096.87 1092.28 1451.08 2473.90 897.89 802.21 572.36 619.42
Share Capital 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24
Reserves 13174.62 12000.11 10649.06 9599.96 8540.18 7156.97 4513.40 3640.90 2853.56 2293.53
Net Worth 13178.86 12004.35 10653.30 9604.20 8544.42 7161.21 4517.64 3645.14 2857.80 2297.77
Fixed Assets Gross 15018.09 14132.66 10779.79 9027.88 7560.09 6306.56 6954.43 5834.14 5477.16 4874.07

Your Directors have pleasure in presenting to you the Sixtieth Annual Report and the Audited Financial Statements for the financial year ended 31st March, 2021.

Financial Results

Rs. in Crores

2020 - 2021 2019 - 2020
Total Income 16129 16322
Profit before tax 1700 1399
Provision for taxation 451 4
Profit for the year 1249 1395

Performance Overview

During the financial year ended 31st March, 2021, your Company's total income is Rs. 16129 crores as against Rs. 16322 crores in the previous year. The profit before tax stood at Rs. 1700 crores for the year as against Rs. 1399 crores for the previous financial year. The net provision for tax (current tax and deferred tax) for the year is Rs. 451 crores (previous year Rs. 4 crores). After making provision for income tax, the net profit for the year ended 31st March 2021 is Rs. 1249 crores as against Rs. 1395 crores for the previous financial year.

Across the board, there was an overall decrease of 12% in total tyre production.

Your Company's manufacturing facilities, sales offices, godowns and administrative offices remained closed from 25th of March, 2020, due to lockdowns announced by Central and State Governments on account of Covid 19 pandemic. Operations, however, commenced after the 3rd week of April, 2020 and the activities progressively attained normal level of operations during the year. Consequently the operations of the first quarter of the year was adversely impacted.

The Company's exports (including Indian Rupee Exports) stood at Rs. 1333 crores for the financial year ended 31st March, 2021, as against Rs. 1651 crores for the previous year.

As required under regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is attached and forms part of this Report.

Dividend

Two interim dividends of Rs. 3/- each per share (30% each) for the financial year ended 31st March, 2021 were declared by the Board of Directors on 6th November, 2020 and on 11th February, 2021. The Board of Directors is now pleased to recommend a final dividend of Rs. 94/- (940%) per share of Rs. 10 each. In addition to the final dividend, the Board has recommended a special dividend of Rs. 50/- (500%) per share of Rs. 10 each in connection with the 60th Annual General Meeting of the Company. The year 2021 also marks the completion of 75 years of establishment of Madras Rubber Factory (which was originally established in 1946 as a proprietorship concern for manufacture of toy balloons). Madras Rubber Factory later took up manufacture of tread rubber at which time it was converted into a partnership concern. Subsequently during the year 1960, it was converted into a limited company after which it started manufacture of automotive tyres and tubes. The total dividend for the financial year ended 31st March 2021 (including the special dividend) works out to Rs. 150/- (1500%) per share of Rs. 10 each. Both final dividend and special dividend are subject to the approval of the shareholders at the forthcoming Annual General Meeting of the Company and shall be subject to deduction of income tax at source. The above dividend declared by the Company is in accordance with dividend distribution policy of the Company.

The Directors recommend that after making provision for taxation and dividend, an amount of Rs. 1207 crores be transferred to general reserve. With this, the Company's Reserves and Surplus stands at Rs. 13175 crores.

Industrial Relations

Overall, the industrial relations in all our Manufacturing Units have been harmonious and cordial. Long Term Settlements have been concluded in Kottayam, Puducherry & Goa Plants. Both production & productivity were maintained at the satisfactory levels except production losses because of Covid lockdowns and related issues.

Performance of Subsidiaries

The consolidated financial statements of the Company prepared in accordance with the Companies Act, 2013 and applicable accounting standards form part of the Annual Report. The consolidated financial statements include the financial results of its subsidiary Companies. Pursuant to the provisions of section 136 of the Companies Act, 2013, the financial statements, consolidated financial statements along with the relevant documents and audited accounts of subsidiaries are available on the website of the Company.

The Company has four subsidiaries viz. MRF Corp Limited, MRF International Limited, MRF Lanka (P) Ltd and MRF SG PTE. LTD. The aggregate turnover of all four subsidiaries in equivalent Indian Rupees during the financial year ended 31st March, 2021 was 1424.33 crores and the aggregate profit after tax was Rs. 28.81 crores.

A statement in Form AOC-1, containing the salient features of the financial statements of the Company's subsidiaries is attached with the financial statements. The statement provides details of performance and financial position of each of the subsidiaries.

The contribution of the subsidiaries to the overall performance of the company is given in note 25d of the consolidated financial statements. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Hence disclosure as required under section 134(3) (b) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is not applicable for the financial year ended 31st March, 2021.

Directors' Responsibility Statement

As required under section 134(3)(c) of the Companies Act, 2013, your Directors state that:

a) In the preparation of the annual accounts, the applicable Accounting Standards have been followed and that there are no material departures;

b) They have, in selection of the accounting policies, consulted the statutory auditors and applied them consistently, making judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year ended 31st March, 2021;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) Annual accounts have been prepared on a going concern basis;

e) Internal financial controls had been laid down and followed by the Company and such internal financial controls are adequate and were operating effectively; and

f) Proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively.

Risk Management

The Company has developed and implemented a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. The "Risk Management Committee" which was constituted as required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 met on 29.03.2021. The Committee reviewed the risk management initiatives taken by the Company.

Adequacy of Internal Financial Control

The Company has put in place well defined procedures, covering financial and operating functions. Delegation of authority and segregation of duties are also addressed to ensure that the financial transactions are properly authorized. Further the Company has an integrated ERP system connecting head office, plant and other locations to enable timely processing and proper recording of transactions. Physical verification of fixed assets is carried out on a periodical basis. The Internal audit department reviews the effectiveness of the internal control systems and key observations are reviewed by the Audit Committee. These, in the view of the Board, are designed to collectively provide an adequate system of internal financial control with reference to the financial statements commensurate with the the size and nature of business of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Information as required to be given under section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure I, forming part of this Report.

Corporate Social Responsibility (CSR)

As required under section 135 of the Companies Act, 2013, the CSR Policy was formulated by the CSR Committee and thereafter approved by the Board. CSR Policy is available on the Company's https://www.mrftyres. com/shareholder-info. The details of the CSR initiatives undertaken during the financial year ended 31st March, 2021 and other details required to be given under section 135 of the Companies Act, 2013 read with of the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended are given in Annexure II forming part of this Report.

Board and Key Management Personnel

During the year under review, there was no change in the composition of the Board of Directors and Key Managerial Personnel of the Company. As required under Section 152 of the Companies Act, 2013, Mrs. Ambika Mammen (DIN: 00287074), Director and Mr. Samir Thariyan Mappillai (DIN: 07803982), Whole-time Director of the Company, retire by rotation at the forthcoming Annual General Meeting and being eligible have offered themselves for re-appointment.

The Company has received declarations of independence from all the Independent Directors confirming that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and that they are independent from Management. The Board is of the opinion that all the Independent Directors of the Company are person's of integrity and possess relevant expertise and experience to act as Independent Directors of the Company. The Independent Directors of the Company have confirmed that they have registered with the Indian Institute of Corporate Affairs, Manesar and have included their name in the databank of Independent Directors within the statutory timeline as required under Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014. Two Independent Directors were required to appear for the online proficiency test. During the financial year, both of them passed the test within the statutory timelines.

Performance evaluation of the Board, its Committees and Directors

The Board of Directors has made a formal annual evaluation of its own performance and that of its committees pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The evaluation was done based on the evaluation criteria formulated by Nomination and Remuneration Committee which includes criteria such as fulfilment of specific functions prescribed by the regulatory framework, adequacy of meetings, attendance and effectiveness of the deliberations etc.

The Board also carried out an evaluation of the performance of the individual Directors (excluding the Director who was evaluated) based on their attendance, participation in deliberations, understanding the

Company's business and that of the industry and in guiding the Company in decisions affecting the business and additionally in case of Independent Directors based on the roles and responsibilities as specified in Schedule IV of the Companies Act, 2013 and fulfilment of independence criteria and independence from management.

Corporate Governance

In accordance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with the Auditors' Certificate confirming compliance is attached and forms part of this Report.

Following information required to be disclosed as per the Companies Act, 2013 are set out in the Corporate Governance Report: a) Number of Board meetings held - Para 2(c) of the Corporate Governance Report. b) Constitution of the Audit Committee and related matters - Para 3(ii) and 14(o) of the Corporate Governance Report. c) Remuneration Policy of the Company (including directors remuneration)- Para 7a of the Corporate Governance Report. d) Company's policy on directors' appointment including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 - Para 5, 6 of the Corporate Governance Report. e) Related Party Transactions -Para 14(a) of the Corporate Governance Report. f) Vigil Mechanism - Para 14 (c) of the Corporate Governance Report. The details of related party transactions are given in note 27d of the financial statements.

Business Responsibility Report

Business Responsibility Report as per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailing the various initiatives taken by the Company on the environment, social and governance aspects of business, forms part of this Annual Report.

Particulars of Employees

The disclosures pertaining to remuneration and other details of Directors and employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been provided in the appendix forming part of this report. Having regard to the provisions of Section 136(1) read with relevant provisions of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished to the members. During the financial year under review, the Company has not received any complaint under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Further, Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Deposits

Your Company had discontinued acceptance of fixed deposits with effect from 31st March, 2019 and all deposits have been repaid. No fresh deposits have been accepted subsequently.

Awards received during the year

During the Financial year, your Company has been awarded the "Highest Export Award 2019-2020" by the All India Rubber Industries Association (AIRIA).

Auditors

Messrs SCA AND ASSOCIATES, Mumbai (Firm Regn. No.101174W) and Messrs Mahesh, Virender & Sriram, Hyderabad (Firm Regn. No.001939S) were appointed joint statutory auditors of the Company for a term of 5 (five) consecutive years, at the Annual General Meeting (AGM) of the company held on 11th August, 2016 and 4th August, 2017.

Messrs. SCA AND ASSOCIATES, Chartered Accountants will complete their present term on conclusion of this AGM in terms of the said approval and as per Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

Messrs. SCA AND ASSOCIATES have expressed their intention not to seek reappointment as Joint Statutory Auditor of the Company on conclusion of the present term vide their letter dated 24th May, 2021 addressed to the Audit Committee and to the Board of Directors of the Company. The Audit Committee and the Board of Directors at their meeting held on 7th June, 2021 took note of the above and accepted their request.

The Board of Directors of the Company at its meeting held on 7th June, 2021 on the basis of the recommendations of the Audit Committee, recommended for the approval of the Members, the appointment of Messrs. M M NISSIM & CO LLP, Chartered Accountants, Mumbai (Firm Regn. No.107122W), as the Joint Statutory Auditors of the Company, for a period of 5 (five) consecutive financial years from the conclusion of this AGM till the conclusion of the Sixty Fifth Annual General Meeting on remuneration, terms and conditions as may approved by the Board.

The proposal for appointment of Messrs. M M NISSIM & CO LLP as Joint Statutory Auditor of the Company is listed as an item in the Notice convening the forthcoming Annual General Meeting of the Company, for necessary approval of the shareholders.

Auditors Report to the shareholders for the financial year ended 31st March, 2021, does not contain any qualification.

Cost Audit

The Board of Directors, on the recommendations of the Audit Committee, has approved the re-appointment of Mr. C. Govindan Kutty, Cost Accountant (Mem. No. 2881), as Cost Auditor of the Company for the financial year ending 31st March, 2022, under section 148 of the Companies Act, 2013, and recommends ratification of his remuneration by the shareholders at the forthcoming Annual General Meeting of the Company.

Secretarial Audit

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company engaged the services of Mr K Elangovan, Elangovan Associates, Company Secretaries, Chennai to conduct the Secretarial Audit of the Company for the financial year ended 31st March, 2021. The Secretarial Audit Report (in Form MR-3) is attached as Annexure-III, to this Report. The Secretarial Auditor's Report to the shareholders does not contain any qualification.

Annual Return

The Annual Return as required under Section 92 and Section 134 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the Company's website : www.mrftyres.com. Weblink : https://www.mrftyres.com/downloads/ download.php?filename=Form-MGT-7-for-the-financial-year-ended-31st-March-2021.pdf.

Material changes and commitments affecting the financial position since 31st March, 2021.

Given the severity in which the second wave COVID-19 has affected people and the resultant lock down by various states to control the pandemic, it is difficult to accurately assess the impact on the financial position of the Company till this date and the future performance at this point of time. Demand is however expected to be less than normal. The company has a strong net worth, low levels of debt and favourable liquidity position. The Company have also serviced all its debt obligations in a timely manner. The Company does not foresee any incremental risk with regard to its ability to service financial arrangements and recoverability of its assets including inventory and receivables at this point in time.

Other Matters

During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future.

Details of investments as required under section 134 of the Companies Act, 2013 is given in note 3 to the financial statements.

During the year under review, the Board confirms that the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

During the year under review, no fraud has been reported by the auditors to the audit committee or the board.

For Cost Audit Records, we wish to confirm that we are covered by Cost Audit Records Rules under section 148(1) of the Companies Act, 2013 and accordingly, such accounts and all relevant records are maintained by us.

Appreciation

Your Directors place on record their appreciation of the invaluable contribution made by the Company's employees which made it possible for the Company to achieve these results. They would also like to take this opportunity to thank customers, dealers, suppliers, bankers, financial institutions, business associates and valued shareholders for their continued support and encouragement.

On behalf of the Board of Directors
Chennai K M MAMMEN
7th June, 2021 Chairman & Managing Director