Dear Member,
Your Directors have the pleasure in presenting the 50th Annual Report on the
business and operations of Apollo Tyres Ltd (the Company'), together with the
audited financial statements for the financial year ended March 31, 2023.
FINANCIAL PERFORMANCE
The financial performance of the Company for the financial year ended March 31, 2023 is
summarised below:
(Rs.Million)
|
Year Ended |
Year Ended |
Particulars |
March 31, 2023 |
March 31, 2022 |
March 31, 2023 |
March 31, 2022 |
|
Standalone |
Consolidated |
Sale of products |
168,899.09 |
143,067.87 |
241,223.24 |
205,808.14 |
Other operating income |
4,111.10 |
3,426.17 |
4,458.06 |
3,667.64 |
Revenue from operations |
173,010.19 |
146,494.04 |
245,681.30 |
209,475.78 |
Operating profit (EBITDA excluding other income) |
21,109.19 |
14,307.93 |
33,136.53 |
25,741.01 |
Other income |
751.26 |
1,268.96 |
410.92 |
1,234.81 |
Less: Finance costs |
4,672.28 |
3,821.56 |
5,312.35 |
4,444.23 |
Less: Depreciation & amortization expenses |
9,070.50 |
8,239.13 |
14,191.42 |
13,996.73 |
Profit before share of profit/ (loss) in associate / |
8,117.67 |
3,516.20 |
14,043.68 |
8,534.86 |
joint venture, exceptional items & tax |
|
|
|
|
Share of profit / (loss) in associate / joint venture |
0.00 |
0.00 |
2.42 |
0.96 |
Exceptional items |
0.00 |
(12.68) |
225.77 |
(59.08) |
Profit before tax |
8,117.67 |
3,503.52 |
14,271.87 |
8,476.74 |
Less: Provision for tax |
2,330.29 |
892.88 |
3,225.51 |
2,090.74 |
Profit after tax |
5,787.38 |
2,610.64 |
11,046.36 |
6,386.00 |
OPERATIONS
According to a data from the Rubber Board, for a six-month period of fiscal 23, the
tyre industry cumulatively produced more than 98 million units as against 90 million units
in first six months in FY23. The production of PV tyres (both radial and bias) grew 16% as
compared to the same period a year ago. Meanwhile, the Truck & Bus and LCV segment
witnessed a modest growth of 3.4%. The production volumes of two-wheelers also increased
by 5.7% in FY23. The tyre industry in Europe witnessed a positive trend in the first six
months for CY22 for the replacement consumer tyres with a 7.4% growth compared to CY21,
combined with 10.3% growth for Truck and Bus tyres. However, this could not be sustained
for the next six months. According to data released by the European Tyre and Rubber
Manufacturers' Association (ETRMA), the overall replacement consumer tyres segment in
Europe saw a decline of 2% in CY22 compared to a year ago, with a sharp decline of 10.1%
in the last six months in the 2nd half of the calendar year. The overall
replacement truck and bus tyre market remained stable (+1%), despite a sharp decline of
8.2% in the second half. Agricultural tyres also posted a decline of 22% in CY22.
The standalone revenue from operations of your Company was Rs173,010.19 million during
FY23 as against Rs146,494.04 million during the previous financial year. EBITDA (excluding
other income) was at Rs21,109.19 million as compared to Rs14,307.93 million during
the previous financial year. The Net Profit for the year under review was Rs5,787.38
million, as against Rs2,610.64 million in the previous fiscal. The consolidated revenue
from operations of your Company was Rs245,681.30 million during FY23, as compared to
Rs209,475.78 million in FY22. The consolidated EBITDA (excluding other income) was
Rs33,136.53 million for FY23 as compared to Rs25,741.01 million for the previous financial
year. On consolidated basis, the Company earned a Net Profit of Rs11,046.36 million for
FY23 as against Rs6,386.00 million for the previous financial year.
RAW MATERIALS
The year under review witnessed ~10% increase in the raw material cost, touching all
time new peaks. The first half of the year experienced significant raw material cost push
which was partially mitigated in the later half of the year.
The year 2022 has been a year of high inflation and steep rise in interest rates by
Central Banks across the world. The energy costs soared in Europe on the back of continued
Russia Ukraine conflict and the sanctions on Russia. China's Zero Covid Policy led to some
moderation in economic activity. The Rupee started the year at a level of 76 against the
US Dollar and weakened to a level of 82 by the end of the year. The Ocean Freight Rates
which had gone upto 10 times of pre covid levels now stands around 2 times of pre covid
levels. The year began with oil prices maintaining its strength due to geo-political
factors. Thereafter it witnessed a slide due to weakness in global demand, Fed interest
rate hikes and weak growth outlook in major global economies around the world. Brent Crude
Oil rose by 19% on a year-on-year basis in FY23 on account of geo-political factors,
supply disruptions, and rise in Natural Gas prices.
Natural Rubber availability in India continued to be deficient against the requirement
of the consuming industry and the shortfall was met through imports from ASEAN countries.
The port restriction on imports of natural rubber continued with imports allowed only at
Nhava Sheva and Chennai ports. The inverted duty structure on natural rubber @ 25% or
H30/kg whichever is lower continued during the year. The Company has partnered with the
Government of India in developing new natural rubber plantations in the Northeast region
of India under the Prime Ministers' Atma Nirbhar Bharat Scheme. The project is designed to
develop 200,000 hectares of rubber plantations financially supported by major tyre
companies with technical support and coordination by the Rubber Board under the Ministry
of Commerce. In the first 2 years of its operations till FY23, 27,000 hectares have been
planted already, and with a target of another 50,000 hectares in the FY24 under the
project. This is expected to increase the natural rubber availability in the next 5 years
in the country.
The Crude based raw materials Carbon Black, Synthetic Rubber, Fabric and
Chemicals also experienced high input cost inflation during the fiscal.
The Company held its virtual Global Partners Summit 2022 for its raw material business
partners with over 700 participants. During the summit, it shared its vision FY26. The
Company used the platform to stress the importance of technology and the use of
sustainable materials for the Company. The Company maintained the agility and resilience
in the supply chain amidst uncertain geo-political environment and volatile markets
globally to efficiently supply the raw materials to the plants as per requirements while
optimizing the inventory with a continued focus on near sourcing and leveraging raw
material business partner relationships.
DIVIDEND
Your Company has a consistent track record of dividend payment. The Directors are
pleased to recommend the Final Dividend of H4.00 per Equity Share and a Special Dividend
of H0.50 per Equity Share on occasion of 50th AGM of the Company, aggregating
to H4.50 (i.e. 450%) per Equity Share having face value of H1 each for FY23 for your
approval. The dividend, if approved, shall be payable to the Members holding shares as on
cut-off date i.e. July 14, 2023.
RESERVES
The amount available for appropriations, including surplus from previous year amounted
to Rs98,363.93 million. Surplus of Rs3,814.29 million has been carried forward to the
balance sheet. A general reserve of Rs17,006.63 million has been provided.
BOARD OF DIRECTORS
A) Appointment/ Re-appointment of Directors
Dr. Jaimini Bhagwati (DIN:07274047) was appointed as an Independent Director of the
Company, not liable to retire by rotation, to hold office for a term of 5 consecutive
years with effect from February 2, 2023 to February 1, 2028 by the Members on March 31,
2023 through Postal Ballot.
In line with the succession planning of the Company & to separate the roles of
Chairman and Managing Director, Mr. Onkar Kanwar (DIN:00058921) has stepped down from the
position of Managing Director and will continue to act as Non-Executive Director
designated as 'Chairman' with effect from February 1, 2023. The same was approved by the
Members of the Company at the Annual General Meeting held on July 11, 2022. Pursuant to
the provisions of Section 152(6) of the Companies Act, 2013, Mr. Robert Steinmetz
(DIN:00178792) and Mr. Sunam Sarkar (DIN:00058859), Directors of the Company, who retired
by rotation, were re-appointed by the Members of the Company at the Annual General Meeting
held during the year under review. Further, Mr. Vishal Mahadevia (DIN:01035771) and Mr.
Francesco Gori (DIN:07413105), Directors of the Company, are liable to retire by rotation
and being eligible offers themselves for re-appointment at the 50th Annual
General Meeting of the Company.
None of the aforesaid Directors are disqualified under Section 164(2) of the Companies
Act, 2013. Further, they are not debarred from holding the office of Director pursuant to
order of SEBI or any other authority.
The Board is of the opinion that the Independent Directors of the Company possess
requisite qualifications, experience and expertise and hold highest standards of
integrity.
B) Changes in Directors and Key Managerial Personnel
During the year under review and between the end of the financial year and on the date
of this report, apart from aforementioned appointment/ re-appointment/ continuation of
Directors, there were no changes in Directors/ Key Managerial Personnel of the Company.
C) Declaration by Independent Directors
In terms with Section 149(7) of the Companies Act, 2013, Independent Directors of the
Company have submitted declarations that they meet the criteria of Independence as
provided in Section 149(6) of the Companies Act, 2013 and also Regulation 16(I)(b) of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent
Directors have also complied with the Code for Independent Directors as per Schedule IV of
the Companies Act, 2013. All our Independent Directors are registered on the Independent
Directors Databank.
D) Formal Annual Evaluation
Pursuant to the provisions of the Companies Act, 2013, the Board is required to carry
out annual evaluation of its own performance and that of its Committees and individual
Directors. The Nomination and Remuneration Committee (NRC) of the Board also carries out
evaluation of every Director's performance. Accordingly, the Board and NRC of your Company
have carried out the performance evaluation during the year under review.
For annual performance evaluation of the Board as a whole, it's Committee(s) and
individual Directors including the Chairman of the Board, the Company has formulated a
questionnaire to assist in evaluation of the performance. Every Director has to fill the
questionnaire related to the performance of the Board, its Committees and individual
Directors except himself by rating the performance on each question on the scale of 1 to
5, 1 being Unacceptable and 5 being Exceptionally Good. On the basis of the response to
the questionnaire, a matrix reflecting the ratings was formulated and placed before the
Board for formal annual evaluation by the Board of its own performance and that of its
Committees and individual Directors. The Board was satisfied with the evaluation results.
E) Separate Meeting of Independent Directors
In terms of requirements under Schedule IV of the Companies Act, 2013 and Regulation
25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a
separate meeting of the Independent Directors was held on March 30, 2023. The Independent
Directors at the meeting, inter alia, reviewed the following:-
Performance of Non-Independent Directors and Board as a whole.
Performance of the Chairman of the Company, taking into account the views of
Executive Directors and Non-Executive Directors.
Assessed the quality, quantity and timeliness of flow of information between the
Company Management and the Board that is necessary for the Board to effectively and
reasonably perform their duties.
F) Remuneration Policy
The Board has, on the recommendation of the Nomination
& Remuneration Committee, laid down a Nomination
& Remuneration Policy for selection and appointment of the Directors, Key
Managerial Personnel and Senior Management and their remuneration. The extract of the
Nomination and Remuneration Policy covering the salient features are provided in the
Corporate Governance Report forming part of Board's Report.
The Nomination & Remuneration Policy of the Company is available on the website of
the Company and the web link is: https://corporate.apollotyres.com/content/dam/orbit/
apollo-corporate/investors/corporate-governance/
codes-policies/codes-policies/nrc-policy.pdf
G) Code of Conduct for Directors and Senior Management
The Company has formulated a Code of Conduct for Directors and Senior Management
Personnel and has complied with all the requirements mentioned in the aforesaid code. For
further details, please refer the Corporate Governance Report.
ISO 20400 CERTIFICATION
The Company's Raw Material Procurement Processes have been successfully validated in a
third-party process for ISO 20400:2017 Sustainable Procurement standard.
This standard provides organizations with guidelines for integrating sustainability
practices into their procurement processes. Sustainability has been one of the pillars of
Company's Vision FY26 and this is an important milestone in that journey. We are the first
Company in the automotive sector in India to get the ISO 20400.
PRODUCT & MARKETING
The Company continued to focus on its key regions India and Europe. Also, it
continued to build its presence in North America with product releases. In FY23, the APMEA
(Asia Pacific/ Middle East/ Africa) operation continued its focus on key themes for the
Indian market consolidating its leadership position and expanding market share by
introducing new products across segments. Committed investments in R&D and brand
building continued to fuel the growth journey of the region to attain market leadership
position. According to internal estimates, the Company retained its leadership position in
the PV replacement market, now for the third year in a row. With a sharp focus on its
Premiumisation strategy, EV leadership and dual brand strategy, the Company continued to
consolidate its leadership position in this segment. In the CV segment, it continued to
introduce new products to strengthen its market leadership. It launched the steer fitment
tyres - 295/90 R20 EnduRace RA and Endutrax MA in the regional and mixed categories.
Further, to cater to the growing ecommerce logistics and perishables sectors, it
introduced 9.00 R20 Endurace LD+ and 9.00 R20 Endurace RA, the LCV range's succession
products for superior performance delivery. During the fiscal, the Company achieved a huge
milestone for its flagship CV product, Endurace LD, posting sales of over 10 million units
since its inception in 2010. This feat has been possible with the decade long trust
customers have placed in the performance of the product. In the two-wheeler segment, the
Company expanded its radial portfolio by introducing a Moto-Cross Tyre brand
Tramplr'. Several products were added to the Tramplr' brand portfolio,
catering to varying motorcycles. With this addition, its two-wheeler tyre segment
addressability has gone up substantially. In Europe, the Company continued to expand its
offerings to meet the evolving needs of customers. During FY23, it focussed on building on
the expansion spree that happened in the past fiscals for PV All-Season tyres, light truck
tyres and winter ranges with Quatrac, Wintrac, Comtrac 2, strengthening its market
offering. It celebrated 30 years in the All-Season segment by launching a new key product
to extend its range in strategic segments. In the first half of the fiscal, Quatrac Pro EV
was launched, specifically designed for electric vehicles, commemorating the launch of its
first All-Season Tyre in 1993. In OHT, it completed 25 years journey of the remarkable and
extremely successful Vredestein
Traxion+ tractor tyres, which became a revolutionary tyre with a strong divergent
pattern compared to the usual tractor tyre patterns of its time.
A detailed analysis of the Company's key initiatives have been shared in the Management
Discussion and Analysis section of the annual report.
FUTURE OUTLOOK
According to data from International Monetary Fund (IMF), the global economy growth is
expected to fall from 3.4% in CY22 to 2.8% in CY23, before inching up to 3.0% in CY24.
Advanced economies are expected to see a muted growth from 2.7% in CY22 to 1.3% in CY23.
Euro Area will continue in line with the global slowdown as its growth drops to 0.8% in
CY23 and then move upwards to 1.4% in CY24.
According to Reserve Bank of India (RBI) and IMF, the overall growth rate for the
Indian economy for FY24 is forecasted to be between 6.0-6.5%. The Indian economy is likely
to benefit from increased infrastructure spend, banking credit growth, and a possible
rural bounce-back due to easing inflation and will continue to be the fastest growing
economy in the world. On the other side, risks include a lower-than-average monsoon, weak
global demand, slow pickup of private capex, and FII outflows due to rising US policy
rates. Amid such uncertain economic and geo-political conditions, the Company has adopted
a prudent fiscal approach. The focus continues to be on investing in good costs and
cutting down bad costs, employee safety and conserving cash. The Company will focus on
sustainable profitable growth as it focusses to achieve its Vision targets by FY26.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial position of your Company
have occurred between the end of the financial year of the Company to which the financial
statements relate and on the date of this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
The Competition Commission of India (CCI) issued an order on February 2, 2022
mentioning that it has held five tyre manufacturers and Automotive Tyre Manufactures
Association (ATMA) guilty of contravention of the provisions of Section 3 of the
Competition Act, 2002 and imposed a penalty of H425.53 Crores on the Company.
The Company filed an appeal against the aforesaid order before the National Company Law
Appellate Tribunal, New Delhi ('NCLAT'). The NCLAT through its judgement dated December 1,
2022 disposed off the appeals by remanding back the case to CCI for review. CCI has filed
an appeal in the Supreme Court against the Order passed by the NCLAT. Hearing to consider
admission of appeal is likely to come after September 2023.
Other than the aforesaid, no significant and material orders have been passed during
the year under review by the regulators or courts or tribunals impacting the going concern
status and Company's operations in future.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
There is no change in the nature of business of your Company during the year under
review.
INTERNAL FINANCIAL CONTROLS
Internal Financial Control (IFC) means the policies and procedures adopted by the
Company for ensuring the orderly and efficient conduct of its business, including
adherence to Company's policies, the safeguarding of its assets, timely prevention and
detection of frauds and errors, the accuracy and completeness of the accounting records,
and the timely preparation of reliable financial information. The Company's internal
financial control framework is commensurate with the size, nature and complexity of its
operations and is in line with the requirements of the Companies Act, 2013. The Company
has identified and documented key internal financial controls as part of standard
operating procedures (SOPs). The SOPs are designed for critical processes across all
plants, warehouses and offices wherein financial transactions are undertaken. The SOPs
cover the standard processes, risks, key controls and each process is identified to a
process owner. In addition, the Company has a well-defined Financial Delegation of
Authority (FDOA), which ensures approval of financial transaction by appropriate
personnel.
The Company uses SAP-ERP to process financial transactions and maintain its books of
accounts. The SAP has been setup to ensure adequacy of financial transactions and
integrity & reliability of financial reporting. SAP was implemented in the European
operations in year 2016. SAP was also implemented at Company's Greenfield plants in
Hungary and Andhra Pradesh.
The financial controls are evaluated for operating effectiveness through management's
ongoing monitoring and review process, and independently by Internal Audit. The testing of
controls by Internal Audit are divided into three separate categories viz. a) automated
controls within SAP, b) segregation of duties within SAP and restricted access to key
transactions, c) manual process controls. In our view, the SOPs, FDOA, SAP-ERP and
independent reviews by the Internal Audit help in establishing adequate internal financial
controls with reference to the financial statements and such internal financial controls
are operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required by Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, a detailed Management Discussion and Analysis Report is
presented in a separate section forming part of the Annual Report.
SUBSIDIARY/ ASSOCIATE COMPANIES
As the Company follows its vision to become a global tyre brand of choice, it has
multiple Subsidiaries for facilitating these operations in various countries. As on March
31, 2023, your Company had 33 Overseas Subsidiary Companies (including step subsidiaries),
1 wholly owned Subsidiary in India, 2 Associate Companies and 1 Joint Venture.
During the year under review, the Company had made an investment of Rs65 million in the
equity share capital of Apollo Tyres Centre of Excellence Ltd, a wholly owned Subsidiary
of the Company. The Company had also made a second tranche investment of H2.70 million by
purchasing 33,750 Equity Shares (0.07%) of CSE Deccan Solar Private Limited, an Associate
Company on May 26, 2022, post which, the total investment would aggregate to 12,00,000
Equity Shares (27.27%) amounting to H95.70 million to get a guaranteed supply of
electricity for its Chennai Plant. Apollo Tyres (Malaysia) Sdn. Bhd. (a wholly owned
Subsidiary of Apollo Tyres Holdings (Singapore) Pte. Ltd) is in the process of liquidation
from the Companies Commission of Malaysia as the Company had changed its business model in
Malaysia from multiple dealer network to Distributor model. During the year under review,
ATL Singapore Pte Ltd., (a wholly owned Subsidiary of Apollo Tyres Holdings (Singapore)
Pte. Ltd) was liquidated and its name got struck off from the Registrar and Accounting and
Corporate Regulatory Authority (ACRA). Apart from the above, no other Company has become
or ceased to be Subsidiary, Associate or Joint Venture of the Company during FY23.
MATERIAL SUBSIDIARIES
Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2018 defines a material Subsidiary' to mean a Subsidiary whose income
or net worth exceeds ten percent of the consolidated income or net worth respectively, of
the listed Company and its subsidiaries in the immediately preceding financial year.
In addition to the above, Regulation 24(1) of the abovementioned regulations requires
that at least one Independent Director on the Board of Directors of the listed Company to
be a Director on the Board of Directors of unlisted material Subsidiary, whether
incorporated in India or not. For this provision, material Subsidiary means a Subsidiary
whose income or net worth exceeds twenty percent of the consolidated income or net worth
respectively, of the listed entity and its Subsidiaries in the immediately preceding
financial year. Basis this definition, your Company has following five material unlisted
Subsidiaries viz. Apollo Tyres (NL) B.V. (Formerly Apollo Vredestein B.V.), Apollo Tyres
(Hungary) Kft., Apollo Tyres (Europe) B.V. (Formerly Apollo Tyres B.V.), Apollo Tyres
Cooperatief U.A. and Apollo Tyres Holdings (Singapore) Pte Ltd. as on March 31, 2023. Mr.
Akshay Chudasama, an Independent Director of the Company was nominated as Director on the
Board of Apollo Tyres (NL) B.V., Apollo Tyres (Hungary) Kft., Apollo Tyres Holdings
(Singapore) Pte Ltd. and Ms. Pallavi Shroff, an Independent Director of the Company was
nominated as Director on the Board of Apollo Tyres (Europe) B.V & Apollo Tyres
Cooperatief U.A, with effect from April 1, 2019. Other requirements of Regulation 24 of
SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 with
regard to Corporate Governance for Subsidiary Companies have been complied with.
a) Apollo Tyres (NL) B.V. (Formerly Apollo Vredestein B.V.)
Apollo Tyres (NL) B.V. is a 100% subsidiary of Apollo Tyres (Europe) B.V. and
ultimately held by Apollo Tyres Ltd, India, a listed multinational organisation, and a
global tyre manufacturer. The Company focuses on developing, manufacturing and sale of
various categories of passenger and agriculture tyres. The Company has its production
facility based in Enschede, Netherlands. The Company has Subsidiary Companies across
Europe, engaged in the sales and distribution of tyres.
b) Apollo Tyres (Hungary) Kft.
Apollo Tyres (Hungary) Kft. is one of the latest manufacturing facility within Apollo
Tyres group. The Company continued to ramp up its production capacity during the year for
both passenger & commercial tyres production line.
During FY23, the Company has made required investments for debottlenecking and line
balancing the capacity in passenger vehicle tyres.
c) Apollo Tyres Holdings (Singapore) Pte. Ltd.
The principal activities of the Company are of sourcing raw materials for Apollo Tyres
manufacturing plants in India and Europe besides the provision of other strategic services
to the group. 56% of the raw material procurement was Natural Rubber in the year FY23.
Major sourcing countries are Thailand and Indonesia. Global Supply Chain team based out of
Singapore consolidates and manages Global Ocean Freight, Transport Optimization, Offtake
activities, Supply Chain Cost Analysis, Mould Management and Certification Projects. The
team is also responsible for outsourcing finished goods for APMEA and Europe regions for
certain specific tyre categories.
In addition, Corporate HR team, based out of Singapore, is managing and facilitating
the effective deployment of HR systems and policies, in key areas such as Talent
Acquisition, Rewards & Mobility, Talent Management and core HR processes, which are
aligned to the business objectives of Apollo Tyres with the mandate of enhancing
organizational effectiveness and human capital utilization.
d) Apollo Tyres (Europe) B.V. (Formerly Apollo Tyres B.V.)
Apollo Tyres (Europe) B.V. incorporated in Netherlands is a Holding Company with two
Subsidiaries, Apollo Tyres (NL) B.V. and Apollo Tyres (Hungary) Kft. The Company focuses
on developing, sourcing, marketing, sales and distribution of tyres across various
categories including passenger car, truck & bus, agriculture, industrial vehicles and
bicycles. The group sells passenger vehicle tyres under two brands, Vredestein and Apollo.
The Company has its headquarters base at Amsterdam, Netherlands. Sales operations are
managed by various Subsidiary Companies across Europe.
e) Apollo Tyres Cooperatief U.A.
Apollo Tyres Cooperatief U.A., a direct Subsidiary of the Company, was incorporated in
the Netherlands. The Company is primarily acting as a Holding Company for all overseas
operations.
CONSOLIDATED FINANCIAL STATEMENTS
As stipulated by Regulation 33 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 the Consolidated Financial Statements have been prepared
by the Company in accordance with the applicable Accounting Standards. The audited
Consolidated Financial Statements, together with Auditors' Report, form part of the Annual
Report. As per the provisions of Section 129 of the Companies Act, 2013, the consolidated
financial statements of the Company, its Subsidiaries and Associates are attached in the
Annual Report. The annual accounts of Subsidiaries and Associates will be made available
to shareholders on request and will also be kept for inspection by any shareholder at the
Registered Office and Corporate Office of your Company. A statement in Form AOC-1
containing the salient features of the financial statements of the Company's Subsidiaries,
Associates and Joint Venture for the year ended March 31, 2023 is also attached with
financial statements.
DEBENTURES
The following series of Secured Redeemable Non-Convertible Debentures (NCDs) were
issued and allotted during the year under review through Private Placement: -
Sl. No. |
Series of NCDs |
No. of NCDs @ Face Value of J10,00,000 each |
Value (Rs in Million) |
Date of Allotment |
1 |
Apollo |
2,500 |
2,500 |
September |
|
Tyres 6.93% |
|
|
13, 2022 |
|
2023 Opt I |
|
|
|
2 |
Apollo |
2,500 |
2,500 |
September |
|
Tyres 7.53% |
|
|
13, 2022 |
|
2027 Opt II |
|
|
|
The aforesaid NCDs are listed on the debt segment of the National Stock Exchange of
India Limited (NSE).
DEPOSITS
During the year under review, your Company did not accept deposits covered under
Chapter V of the Companies Act, 2013.
AUDITORS
M/s. S.R. Batliboi & Co. LLP (Firm Registration No. 301003E/ E300005), Chartered
Accountants (Member firm of Ernst & Young Global) were appointed as the Statutory
Auditors of the Company for a period of 5 years, from the conclusion of 49th
AGM until the conclusion of the 54th AGM, at the AGM held on July 11, 2022.
AUDITORS' REPORT
The report given by M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, Statutory
Auditors on financial statements of the Company for FY23 forms part of the Annual Report.
The comments on statement of accounts referred to in the report of the Auditors are self
explanatory. The Auditors' Report does not contain any qualification, reservation or
adverse remark. During the year under review, the Auditors had not reported any matter
under Section 143(12) of the Companies Act, 2013. Therefore, no detail is required to be
disclosed under Section 134(3)(ca) of the Companies Act, 2013.
COST AUDIT
M/s. N.P. Gopalakrishnan & Co., Cost Accountants, were appointed with the approval
of the Board to carry out the cost audit in respect of the Company's plants at Perambra
(Kerala), Limda (Gujarat), Chennai (Tamil Nadu) and Chinnapandur (Andhra Pradesh) as well
as Company's leased operated plant at Kalamassery (Kerala) for FY23.
Based on the recommendation of the Audit Committee, M/s. N.P. Gopalakrishnan & Co.,
Cost Accountants, being eligible, have also been appointed by the Board as the Cost
Auditors for FY24 subject to Members' approval. The Company has received a letter from
them to the effect that their re-appointment would be within the limits prescribed under
Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for such
re-appointment within the meaning of Section 141 of the Companies Act, 2013. The
remuneration to be paid to M/s. N.P. Gopalakrishnan & Co., for FY24 is subject to
ratification by the shareholders at the ensuing AGM.
Cost records as specified by the Central Government under Sub-Section (1) of Section
148 of the Companies Act, 2013 are made and maintained by the Company.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had
re-appointed M/s. PI & Associates, Company Secretaries as Secretarial Auditor of the
Company for FY23 to undertake secretarial audit of the Company.
The Secretarial Audit Report does not contain any qualification, reservation or adverse
remark. Secretarial Audit Report given by Secretarial Auditor is annexed with the report
as Annexure I.
M/s. PI & Associates, Company Secretaries have been reappointed to conduct the
Secretarial Audit of the Company for FY24. They have confirmed that they are eligible for
the said appointment.
MEETINGS OF THE BOARD OF DIRECTORS
A calendar of meetings is prepared and circulated in advance to the Directors. During
the year, 5 (five) Board meetings were convened and held. The intervening gap between the
meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. The details of all Board/
Committee meetings held are given in the Corporate Governance Report.
AUDIT COMMITTEE
The details of the Audit Committee including its composition and terms of reference
mentioned in the Corporate Governance Report forms part of the Board's Report. The Board,
during the year under review, had accepted all recommendations made to it by the Audit
Committee.
VIGIL MECHANISM
The Company has formulated a vigil mechanism through Whistle Blower Policy to deal with
instances of unethical
119 behaviour, actual or suspected, fraud or violation of Company's code of conduct or
ethics policy. The details of the policy are explained in the Corporate Governance Report
and also posted on the website of the Company.
COMMITTEES OF BOARD
Pursuant to the requirement under Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Board of Directors has constituted various
Committees of Board such as Audit Committee, Nomination & Remuneration Committee,
Stakeholders Relationship Committee, Business Responsibility and Sustainability Committee,
Risk Management Committee and Corporate Social Responsibility Committee. The details of
composition and terms of reference of these Committees are mentioned in the Corporate
Governance Report.
SHARE CAPITAL
During the year under review the issued, subscribed and paid-up Equity Share Capital of
the Company was 635,100,946 equity shares of Rs 1/- each. There was no change in the
capital structure of the Company.
a) Issue of equity shares with differential rights
Your Company has not issued any equity shares with differential rights during the year
under review.
b) Issue of sweat equity shares
Your Company has not issued any sweat equity shares during the year under review.
c) Issue of employee stock options
Your Company has not issued any employee stock options during the year under review.
d) Provision of money by Company for purchase of its own shares by employees or by
trustees for the benefit of employees
Your Company has not made any provision of money for purchase of its own shares by
employees or by trustees for the benefit of employees during the year under review.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
During the year under review, your Company has not given any loan or guarantee which is
covered under the provisions of Section 186 of the Companies Act, 2013. However, details
of investments made during the year are given under notes to the financial statements.
RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered by the Company during the financial
year with related parties were in the ordinary course of business and on an arm's length
basis and do not attract the provisions of Section 188 of the Companies Act, 2013. 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.
Suitable disclosures as required by the Indian Accounting Standards have been made in
the notes to the financial statements. The policy on related party transactions as
approved by the Board is uploaded on the Company's website.
MANAGERIAL REMUNERATION
a) The details required pursuant to Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, are provided in the Corporate
Governance Report. b) During the year under review, Mr. Neeraj Kanwar (DIN:00058951), Vice
Chairman & Managing Director, also received remuneration from Apollo Tyres (UK)
Holdings Ltd. (Formerly Apollo Tyres (UK) Pvt. Ltd.), wholly owned Subsidiary of the
Company.
PARTICULARS OF EMPLOYEES
Particulars of employees as required in terms of the provisions of Section 197 of the
Companies Act, 2013, read with Rule 5(2) & (3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure A to the
Board's Report.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
Your Company has in place a formal policy for prevention of sexual harassment of its
employees at workplace and the Company has complied with provisions relating to the
constitution of Internal Committee under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. The Company conducts, from time to
time, awareness sessions on prevention of sexual harassment at workplace for its
employees.
During the year under review, there were no cases filed pursuant to the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Furthermore, there was no pending complaint/ case at the beginning as well as at the end
of financial year.
HEALTH, SAFETY AND ENVIRONMENT
As a firm commitment to Health, Safety and Environment (HSE), the year saw multiple
initiatives to implement and review the HSE plans and achieve the defined KPIs. For
details on HSE, please refer to Management Discussion and Analysis Report.
AWARDS AND RECOGNITIONS
In its constant quest for growth and excellence, your Company was honoured and
recognised at various forums.
The Chennai plant of your Company has been awarded the Deming Prize, perhaps the most
important recognition in the field of Quality. This award is sponsored by the Japanese
Union of Scientists and Engineers and since 1951 when it was instituted, it is the gold
standard in quality that all around the world aspire to. This was a moment of great pride
for all of us at Apollo Tyres. The Company bagged certification of Top Employers in
Singapore and the UK for 2023. The Top Employers Institute is the global authority on
recognising excellence in people practices. Other prominent Awards are listed below for
your reference.
Name of the Award |
Category |
Awarded by |
Compliance Team 2022 |
Compliance |
Legasis Services and Bombay Stock Exchange |
ASSOCHAM WORKVISION 2022 HR |
Effective Drivers of Recruitment, |
ASSOCHAM |
Excellence Award 18th Indo-American Corporate Excellence
(IACE) Awards 2022 |
Engagement & Retention |
Indo-American Chamber of Commerce (IACC) |
SEEM National Energy Management Award (SNEMA) |
Industries & Facilities (Tyres) |
Society of Energy Engineers and Managers (SEEM) |
Best Kaizen, Best Idea and Maximum |
Water Conservation and |
Confederation of Indian Industry (CII) |
Contributor of Ideas |
Management (Reduce, Recycle, |
|
|
Reuse and Regenerate) |
|
Green Champions Award 2021 |
|
Government of Tamil Nadu |
Good Design Awards 2021 |
Transportation category |
Chicago Athenaeum: Museum of architecture and design and the European Centre for
Architecture Art Design and Urban Studies |
ISO 20400 certification for |
Sustainable procurement |
|
Sustainable Procurement |
|
|
Best Organisation for Promoting QC |
|
Quality Circle Forum of India |
RISK MANAGEMENT
The Company has constituted a Risk Management Committee (RMC) of the Board comprising
of Directors and Senior Executives of the Company. The RMC has a Risk Management Charter
and Policy that is intended to ensure that an effective Risk Management framework is
established and implemented within the organisation. The Company has also formed Internal
Risk Committees (IRCs), which review risk registers for Asia Pacific Middle East Africa
(APMEA) region including India, Europe region, United States (US) region and Corporate
Functions headed by President (APMEA), President (Europe), Group Head (New Market &
Channels) and Chief Financial Officer as Chairperson of the respective Committees. The
IRCs review each risk on a quarterly basis and evaluate its impact and plans for
mitigation. Further details about the RMC including its composition are mentioned in the
Corporate Governance Report which forms part of the Board's Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company initiated its CSR activities way before the Companies Act, 2013 came in
existence. The Company has a well-defined CSR policy which is made as per the requirement
of Section 135 of the Companies Act, 2013. All the CSR activities are linked with National
Development Goals and globally with the Sustainable Development Goals (SDGs). The Company
has a CSR team, which exclusively works towards achievement of CSR goals of the
organisation. All the CSR activities of the Company are routed through a registered trust
(Apollo Tyres Foundation) and functions with close monitoring and guidance of the CSR
committee. In the reporting year, the Company has undertaken various initiatives related
to Healthcare Programme for Trucking Communities, Solid Waste Management and Sanitation
Programme for Communities, Livelihood for Underprivileged Women, Biodiversity Conservation
and Philanthropy Initiatives, focussing on eradicating hunger and poverty, preventive
health and promoting education. Corporate Social Responsibility Report, pursuant to clause
(o) of sub section (3) of Section 134 of the Act and Rule 9 of the Companies (Corporate
Social Responsibility) Rules, 2014 including salient features mentioned under outline of
Company's CSR policy forms part of this Report as Annexure II. The CSR Policy of
the Company is available on the website of the Company and the weblink is: -
https://corporate. apollotyres.com/content/dam/orbit/apollo-corporate/
investors/corporate-governance/codes-policies/codes-policies/atl-csr-policy.pdf
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
from time to time, has mandated the top 1000 Listed Companies by market capitalisation to
include Business Responsibility and Sustainability Report ('BRS Report') in their Annual
Report with effect from FY23. This BRS Report will replace the existing Business
Responsibility Report.
Accordingly, a BRS Report describing the initiatives taken by the Company from an
environmental, social and governance perspective, forms part of this Report as Annexure
III.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars required under Section 134(3)(m) of the Companies Act, 2013 read with Rule
8 of the Companies (Accounts) Rules, 2014, regarding conservation of energy, technology
absorption and foreign exchange earnings and outgo, are given in Annexure IV,
forming part of this report.
ANNUAL RETURN
As per Section 134(3)(a) of the Companies Act, 2013, the Annual Return referred to in
Section 92(3) of the said Act has been placed on the website of the Company www.apollotyres.com
under the Investors Section (Refer link:
https://corporate.apollotyres.com/investors/corporate-governance/#?activeTab=Others).
CORPORATE GOVERNANCE REPORT
Your Company always places major thrust on managing its affairs with diligence,
transparency, responsibility and accountability thereby upholding the important dictum
that an organisation's corporate governance philosophy is directly linked to high
performance.
The Company is committed to adopting and adhering to established world-class corporate
governance practices. The Company understands and respects its fiduciary role and
responsibility towards its stakeholders and society at large, and strives to serve their
interests, resulting in creation of value and wealth for all stakeholders.
The compliance report on corporate governance and a certificate from M/s. S.R. Batliboi
& Co. LLP, Chartered Accountants, Statutory Auditors of the Company, regarding
compliance of the conditions of corporate governance, as stipulated under Chapter IV of
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached
herewith as Annexure V to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 134(3)(c) of the Companies Act, 2013, your Directors state that:
(a) in the preparation of the annual accounts for the financial year ended March 31,
2023, the applicable accounting standards had been followed along with proper explanation
relating to material departures; (b) the Directors had selected such accounting policies
and applied them consistently and made 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 and loss of the Company for that period; (c)
the Directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities; (d)
the Directors had prepared the annual accounts on a going concern basis; (e) the Directors
had laid down internal financial controls to be followed by the Company and that such
internal financial controls are adequate and were operating effectively; and (f) the
Directors had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
SECRETARIAL STANDARDS
During the year under review, your Company had complied with all the applicable
Secretarial Standards.
ACKNOWLEDGEMENT
Your Company's organisational culture upholds professionalism, integrity and continuous
improvement across all functions, as well as efficient utilisation of the Company's
resources for sustainable and profitable growth. Your Directors wish to place on record
their appreciation to the respective State Governments of Kerala, Gujarat, Haryana, Tamil
Nadu and Andhra Pradesh and the National Governments of India, Netherlands and Hungary. We
also thank our customers, business partners, members, bankers and other stakeholders for
their continued support during the year. We place on record our appreciation for the
contribution made by all employees towards the growth of your Company.
For and on behalf of the Board of Directors
|
ONKAR KANWAR |
Place: Amsterdam |
Chairman |
Date: May 9, 2023 |
DIN: 00058921 |
|