The Directors of the Company are pleased to present their Sixty-Fifth Annual report together with the Standalone and Consolidated Audited Financial Statements of the Company for the year ended March 31, 2024.
FINANCIAL SUMMARY AND HIGHLIGHTS
|
Standalone
|
|
(H in Lakhs)
|
|
Particulars
|
FY 2023-24
|
FY 2022-23
|
|
Total Revenue
|
11,91,887
|
11,30,192
|
|
Total Expenses (excluding exceptional items)
|
11,01,114
|
10,99,429
|
|
Exceptional item
|
4,251
|
3,342
|
|
Profit Before Taxation
|
86,522
|
27,421
|
|
Tax expense:
|
|
- Current Tax
|
15,188
|
(368)
|
|
- Deferred Tax charge / (credit)
|
5,904
|
7,162
|
|
Profit for the period
|
65,430
|
20,627
|
|
Other Comprehensive Income
|
|
Items that will not be reclassified to profit or loss:
|
|
- Remeasurement gains / (losses) on defined benefit plans
|
237
|
(990)
|
|
- Income tax relating to the above
|
(60)
|
249
|
|
Items that will be reclassified to profit or loss:
|
|
- Effective portion of gains (losses) on hedging instruments in cash flow hedges
|
(268)
|
1,150
|
|
- Income tax relating to the above
|
67
|
(289)
|
|
Total Comprehensive Income for the year
|
65,406
|
20,747
|
|
Consolidated
|
|
(H in Lakhs)
|
|
Particulars
|
FY 2023-24
|
FY 2022-23
|
|
Total Revenue
|
11,96,321
|
11,33,182
|
|
Total Expenses (excluding exceptional items)
|
11,06,914
|
11,05,248
|
|
Exceptional item
|
5,817
|
3,342
|
|
Profit Before Taxation
|
85,670
|
25,414
|
|
Tax expense:
|
|
- Current Tax
|
15,777
|
186
|
|
- Deferred Tax charge / (credit)
|
6,365
|
6,989
|
|
Profit after tax, non-controlling interest and share of profit from Joint Venture
|
63,528
|
18,239
|
|
Other Comprehensive Income
|
|
|
|
Items that will not be reclassified to profit or loss:
|
|
|
|
- Remeasurement gains / (losses) on defined benefit plans
|
39
|
(817)
|
|
- Income tax relating to the above
|
(2)
|
197
|
|
Items that will be reclassified to profit or loss:
|
|
- Effective portion of gains (losses) on hedging instruments in cash flow hedges
|
(268)
|
1,150
|
|
- Exchange differences on translating the financial statements of a foreign operation
|
1,055
|
(918)
|
|
- Income tax relating to movement in cash flow hedges
|
67
|
(289)
|
|
Total Comprehensive Income for the year
|
64,419
|
17,562
|
In the preparation of Financial Statements, no treatment different from that prescribed in the relevant Accounting Standards has been followed.
During the year under review, on a standalone basis, the Company recorded revenue from operations of H 11,89,260 lakhs, higher by 5.59%, compared to H 11,26,326 lakhs of the last financial year. The Company recorded a net profit of H 65,430 lakhs against a net profit of H 20,627 lakhs of the last financial year. The Company's EBITDA stood at H 1,65,568 lakhs, an increase of 69.42% over EBITDA of H 97,726 lakhs of the last financial year.
On a consolidated basis, the Company recorded revenue from operations of H 11,94,348 lakhs, higher by 5.56%, compared to H 11,31,488 lakhs for the last financial year. The Company recorded a net profit of H 63,528 lakhs, against a net profit of H 18,239 lakhs of the last financial year. The Company's EBITDA stood at H 1,67,303 lakhs, an increase of 70.36% over EBITDA of H 98,203 lakhs of the last financial year.
STATE OF COMPANY'S AFFAIRS
The demand continued to be healthy, and the Company witnessed mid-single-digit growth in the topline across all three segments -replacement, OEMs, and international business. Key focus has been on improving the product mix and judicious pricing which has helped improve margins during the year. Growth during the year has been largely driven by OEMs and specialty & passenger category tyres. The Company has begun to see some recovery in exports and the replacement market, especially in the commercial category. The Company has managed to bring down the debt sharply throughout the financial year. Better sweating of assets, improved efficiencies through digital interventions and other measures, have improved margins during the year.
The Company's favourable raw material prices, improved product mix and procurement efficiencies has helped improve its gross margins.
The Company continued to grow its reach in India as well as global markets. The Company operates 6 (six) manufacturing facilities at Mumbai, Ambernath, Nashik, Nagpur, Halol and Chennai and has a network of more than 5,500 dealers, 600 distributors and over 59,000 sub-dealers. The Company currently has representative offices in Indonesia, United Arab Emirates, the Philippines and an R&D centre at Germany.
The Company is delighted to achieve an important global recognition in the form of the prestigious Deming Grand Prize awarded by the Union of Japanese Scientists and Engineers (JUSE) for excellence in Total Quality Management (TQM), making it the first tyre brand and 33rd Company in the world to achieve this recognition. The Deming Grand Prize is an illustrious honour for organisations that have achieved the Deming Prize and have continued to sustain and elevate their Total Quality Management (TQM) practices for more than three years. The Company has been on the TQM journey for over fifteen years and was the first tyre company outside Japan to win the prestigious Deming Prize in 2017.
With regard to sustainability, the Company had institutionalised its purpose through the organisation-wide adoption of its purpose statement in 2015 and has been working consistently towards its sustainability goals. Further progress on this front and various initiatives being taken under the ambit of Environment, Social
and Governance ('ESG') are more particularly described under the relevant sections as reported in this Integrated Annual Report as well as the Business Responsibility and Sustainability Report.
The Company achieved a score of 49 for FY 24, as assessed under the Corporate Sustainability Assessment by S&P Global.
More details on the Company's business vis-a-vis the overall Industry, economy, markets and future outlook, etc. are given in the Management Discussion and Analysis section which forms part of this Integrated Annual Report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments, affecting the financial position of the Company which has occurred between the close of the Financial Year as on March 31, 2024, to which the Financial Statement relate and the date of this Report.
DIVIDEND
Considering the profits for the year under review and keeping in view capital expenditure requirements of the Company, your Directors are pleased to recommend the dividend of H 30 (i.e. 300 %) per equity share of face value H 10/- each for the Financial Year ended March 31, 2024.
DIVIDEND DISTRIBUTION POLICY
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), the Company has adopted the Dividend Distribution Policy which is available at https://www.ceat.com/investors/ corporate-governance.html
TRANSFER TO RESERVE
As permitted under the Companies Act, 2013 ('the Act'), the Directors do not propose to transfer any sum to the General Reserve pertaining to FY 2023-24.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
At the end of the year under review, the Company had the following 9 (nine) subsidiaries namely:
^ Rado Tyres Limited, Kochi, India,
^ CEAT Auto Components Limited, Mumbai, India,
^ Taabi Mobility Limited, Mumbai, India,
^ Tyresnmore Online Private Limited, Delhi, India,
^ CEAT AKKHAN LTD, Dhaka, Bangladesh,
^ CEAT Specialty Tyres B.V, Netherlands,
^ CEAT Specialty Tires Inc., USA,
^ Associated CEAT Holdings Company (Private) Limited, Colombo, Sri Lanka
^ CEAT Brazil Tires Servicos Ltda., Brazil.
On August 4, 2023, Tyresnmore Online Private Limited became a wholly owned subsidiary of the Company by way of purchase of balance shares from the existing members.
On October 2, 2023, the Company incorporated a wholly owned subsidiary, 'CEAT Brazil Tires Servicos Ltda', in the Federative Republic of Brazil to provide business support to the Company in the jurisdiction of Brazil.
Rado Tyres Limited
Rado Tyres Limited ('RTL') having stopped its operations since 2018 did not report any operating income for FY 2023-24, however, reported other income of H 32.88 lakhs mainly from interest on Fixed Deposits (previous year H 24.75 lakhs) and a net profit of H 13.35 lakhs (previous year H 7.89 lakhs).
As RTL has no business activity, the accounts for the financial year under review have not been prepared on a going concern basis.
CEAT Auto Components Limited
CEAT Auto Components Limited ('CACL') did not have any operations during the year. CACL had no income and reported net loss of H 0.24 lakhs for FY 2023-24.
Taabi Mobility Limited
Taabi Mobility Limited ('TBL') reported other income of H 1.66 lakhs mainly from Interest from Banks and a net profit of H 0.11 lakhs for FY 2023-24.
Tyresnmore Online Private Limited
During the year under review, Tyresnmore Online Private Limited ('TNM') registered a total income of H 2,563.66 lakhs, a growth of 73.09% over the previous year revenue of H 1,481.15 lakhs and a net loss of H 1,182.24 lakhs in FY 2023-24 (previous year net loss H 655.24 lakhs).
OVERSEAS SUBSIDIARIES
CEAT Specialty Tyres B.V., Netherlands
During the year under review, CEAT Specialty Tyres B.V., Netherlands ('CSTBV') registered a total income of Euro 16.19 lakhs (H 1,453.06 lakhs) as compared to Euro 12.26 lakhs (H 1,025.67 lakhs) in FY 2022-23. The profit after tax for FY 2023- 24 has increased by 27.16 % to Euro 1.03 lakhs (H 92.36 lakhs) as compared to Euro 0.81 lakhs (H 68.14 lakhs) in FY 2022-23.
CEAT Specialty Tires Inc., USA
During the year under review, CEAT Specialty Tires Inc., USA ('CSTI') registered a total income of USD 26.94 lakhs (H 2,230.60 lakhs) as compared to USD 20.27 lakhs (H 1,629.81 lakhs) in FY 2022-23. The profit after tax for FY 2023-24 has decreased by 8.05% to USD 1.37 lakhs (H 113.15 lakhs) as compared to USD 1.49 lakhs (H 119.82 lakhs) in FY 2022-23.
CEAT Brazil Tires Servicos Ltda., Brazil
CEAT Brazil Tires Servicos Ltda., Brazil ('CBTSL') was incorporated on October 3, 2023 and did not have any operations during the year. CBTSL had no income reported for FY 2023-24.
"Details of Associated CEAT Holdings Company (Private) Limited, Colombo, Sri Lanka and CEAT AKKHAN LTD, Dhaka, Bangladesh are given below under the heads 'Joint Venture in Sri Lanka' and 'Joint Venture in Bangladesh''.
Joint Venture in Sri Lanka
Associated CEAT Holdings Company (Private) Limited ('ACHL'), the Company's investment arm in Sri Lanka, has a 50:50 joint venture company viz. CEAT-Kelani Holdings Private Limited which
operates 2 (two) manufacturing plants through its wholly owned subsidiaries in Sri Lanka.
During the year under review, ACHL's total income was LKR 49.87 lakhs (H 13.02 lakhs) as compared to LKR 237.56 lakhs (H 53.37 lakhs) in FY 2022-23. The profit after tax (excluding profit from JV) for FY 2023- 24 has decreased by 81.58% to LKR 31.05 lakhs (H 8.11 lakhs) as compared to LKR 168.58 lakhs (H 37.87 lakhs) in FY 2022-23. ACHL's joint venture continues to enjoy the overall market leadership in all categories oftyres in Sri Lanka. ACHL has been consistently paying dividends and during the year under review, paid a dividend to the Company of H 1,372 lakhs as compared to H 2,240 lakhs paid during the last year.
Joint Venture in Bangladesh
CEAT AKKHAN LTD ('CAL') is a 70:30 joint venture of the Company in Bangladesh. CAL is locally selling CEAT branded automotive tyres. For the year under review, the total income of CAL was BDT 15,775.49 lakhs (H 11,991.58 lakhs) as compared to BDT 16,318.25 lakhs (H 13,382.13 lakhs) in FY 2022-23. The net loss for the year under review was BDT 3,220.30 lakhs (H 2,475.86 lakhs) as compared to the net loss of previous year BDT 1,241.09 lakhs (H 1,271.76 lakhs).
A statement containing the salient features of the subsidiaries and joint ventures in the prescribed Form AOC-1 is annexed separately.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Section 129(3) of the Act and Regulation 34(2) of the SEBI Listing Regulations, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies, associate companies and joint ventures of the Company, forms part of this Integrated Annual Report. The Consolidated Financial Statements have been prepared as per the applicable Indian Accounting Standards issued by the Institute of Chartered Accountants of India ('ICAI').
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year, Mr. Vinay Bansal (DIN: 00383325), Non-executive Independent Director of the Company resigned from the Board owing to his advancing age and consequently also from membership of Committees of the Board he has been serving on, with effect from the close of business hours on June 1,2023.
The Board based on recommendation of the Nomination and Remuneration Committee ('NRC') appointed Ms. Sukanya Kripalu (DIN: 06994202) and Mr. Milind Sarwate (DIN: 00109854) as Nonexecutive Independent Director(s) of the Company w.e.f. March 14, 2024. The said appointments were approved by members by way of resolutions passed on June 6, 2024 via postal ballot.
Ms. Priya Nair (DIN: 07119070), Non-executive Independent Director of the Company resigned from the Board of the Company due to other pre-occupations and consequently also from the membership of the Sustainability and Corporate Social Responsibility Committee of the Board, with effect from the close of business hours on April 1, 2024.
Ms. Vallari Gupte, Company Secretary & Compliance Officer (Key Managerial Personnel) of the Company tendered resignation due to constraints of relocating out of Mumbai for family reasons w.e.f. close of business hours on May 7, 2024.
The Board based on recommendation of the NRC appointed Ms. Daisy Chittilapilly (DIN: 09577569) as Non-executive Independent
Director of the Company w.e.f. May 2, 2024. Shareholders have accorded their consent for the same vide Special resolution passed on June 6, 2024 via postal ballot.
The Board at its meeting held on June 17, 2024, on recommendation of the NRC, has proposed reappointment of Mr. Arnab Banerjee as the MD and CEO for a further term of 1 year from April 1, 2025 to March 31, 2026, subject to approval of Members of the Company.
The Board based on the recommendation of NRC appointed Mr. Praveen Pardeshi (DIN: 01658052) as Non-executive Independent Director of the Company w.e.f. June 17, 2024 subject to approval of Members of the Company. A proposal to this effect forms part of notice convening this annual general meeting.
The Board at the said board meeting approved appointment of Mr. Gaurav Tongia as the Company Secretary and Compliance Officer of the Company w.e.f. July 1,2024.
In accordance with the Companies Act, 2013 and Articles of Association of the Company, Mr. Paras K. Chowdhary (DIN: 00076807) retires by rotation and being eligible offers himself for re-appointment.
Remuneration received by Managing / Whole- time Director from holding or subsidiary company
Mr. Arnab Banerjee (DIN: 06559516), Managing Director and Chief Executive Officer does not receive any profit related commission from the Company or any of the subsidiaries of the Company as prescribed under Section 197(14) of the Act. No other remuneration is received by him from the subsidiary company(ies). Details of executive compensation are contained in the financial statements forming part of this annual report.
Company's Policy on Directors' appointment and remuneration
The Board has put in place a policy on appointment of Directors and remuneration including criteria for determining qualifications, positive attributes, independence of a Director as required under Section 178(3) of the Act.
The said Nomination and Remuneration Policy, inter-a/iais directed to work as guiding principles on qualifications, positive attributes and independence for appointment and remuneration of directors, Key Managerial / Senior Management Personnel performance evaluation of all Directors and achieving benefits of having a diverse Board.
The detailed policy is available at https://www.ceat.com/investors/ corporate-governance.html and is also annexed to this Report.
Declaration of independence and statement on compliance of Code of Conduct
All the Independent Directors of the Company have provided declaration of independence as required under Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, stating that they continue to meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16 of the SEBI Listing Regulations. Further, Independent Directors of the Company have also confirmed that they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.
The Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than as permitted under relevant regulations. The Board is of the opinion that the Independent Directors of the Company possess
requisite qualifications, experience and expertise and they hold highest standards of integrity. The Directors are compliant with the provisions of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as applicable.
Statement regarding the opinion of the Board concerning integrity, expertise and experience (including the proficiency) of the Independent Directors appointed during the year
In the opinion of the Board, Ms. Sukanya Kripalu (DIN : 06994202) and Mr. Milind Sarwate (DIN : 00109854) who were appointed during the year under review and Ms. Daisy Chittilapilly (DIN : 09577569) and Mr. Praveen Pardeshi (DIN : 01658052), who were appointed post March 31, 2024 are the person of integrity and have the relevant expertise and experience as required under the Nomination and Remuneration Policy of the Company.
Evaluation of Board, its Committees and Directors
As required under the provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its Committees, Chairperson and individual Directors.
For the purpose of evaluation for FY 2023-24, the Company engaged an external agency to facilitate the process of online confidential survey using the questionnaire finalised by the Nomination and Remuneration Committee. The results of the survey / feedback were then deliberated and evaluation of the Board, its Committees and the Directors was carried out by the Nomination and Remuneration Committee and the Board at their respective meetings, as prescribed under the Act.
Meetings of the Board of Directors
During the year, 6 (Six) Board Meetings were convened and held on May 4, 2023, May 12, 2023, July 25, 2023, October 16, 2023, January 24, 2024 and March 14, 2024. The details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and Regulation 17 of the SEBI Listing Regulations.
Board Committees
As required under the Act and the SEBI Listing Regulations, the Company has formed all the statutory committees namely, Audit Committee, Nomination and Remuneration Committee, Sustainability and Corporate Social Responsibility Committee, Stakeholders' Relationship Committee and Risk Management Committee. Besides, the Company also has a Finance and Banking Committee. Detailed information about these Committees and relevant information for the year under review are given in the Corporate Governance Report.
There have been no instances where the Board did not accept the recommendations of its committees, including the Audit Committee.
BUSINESS RISK MANAGEMENT
The Company has constituted a Risk Management Committee in compliance with the requirements of Regulation 21 of the SEBI Listing Regulations.
The Company has also formulated the Enterprise Risk Management Policy to identify risks and minimise their adverse impact on business and strives to create transparency which in turn enhances the Company's competitive advantage.
PARTICULARS OF EMPLOYEES
The statements required under Section 197 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ('the Rules'), as amended, form part of this Report and will be made available to any Member on request, as prescribed therein.
The prescribed particulars of employees required under Rule 5(1) of the said Rules are annexed to this Report.
FIXED DEPOSITS
The Company being eligible to accept deposits from the public, under Section 76 of the Act and Rules made thereunder, approved the Fixed Deposit Scheme during the FY 2014-15, for acceptance of deposits from Members and persons other than the Members, under the Special Resolution passed by Members at the AGM of the Company held on September 26, 2014. The Company thereafter discontinued its Fixed Deposit Schemes and repaid all the outstanding fixed deposits along with the interest accrued up to September 30, 2016, in FY 2016-17.
The Company has not accepted any fresh deposits covered under Chapter V of the Act during the year under review and as such”details of deposits which are not in compliance with the requirements of Chapter V of the Act" are not applicable. As on March 31, 2024, the Company has no deposits outstanding.
As such there were no defaults in respect of repayment of any deposits or payment of interest thereon.
DIRECTORS' RESPONSIBILITY STATEMENT
According to Section 134(3)(c) of the Act, the Board of Directors, to the best of its knowledge and belief, states that:
i. The applicable Accounting Standards have been followed in the preparation of the annual accounts along with the proper explanation relating to material departure, if any.
ii. Such accounting policies have been selected and applied consistently and such judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company in the Balance
According to the aforesaid business risk policy, the Company has identified the business risks associated with its operations and an action plan for mitigation of the same is put in place. The Risk Management Committee overviews the policy and the mitigation plans. The business risks and its mitigation have been dealt with in the Management Discussion and Analysis Section of this Integrated Annual Report.
SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board of Directors has constituted 'Sustainability and Corporate Social Responsibility' ('SCSR') Committee pursuant to Section 135 of the Companies Act, 2013.
Detailed information about composition of the Committee, details of meetings held, attendance etc. along with the details of the Corporate Social Responsibility Policy developed and implemented by the Company and CSR initiatives taken during the year pursuant to Section 135 of the Act, is given in the Annual Report on CSR activities, as annexed to this Report.
More details on CSR activities undertaken by the Company are provided under the Social and Relationship Capital and forms part of this Integrated Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
According to Section 177 of the Act and Regulation 22 of the SEBI Listing Regulations, the Board has adopted vigil mechanism in the form of Whistle Blower Policy, to deal with instances of fraud or mismanagement, if any. The Policy can be accessed at https://www. ceat.com/investors/corporate-governance.html
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details as applicable concerning particulars of Loans, Guarantees and Investments under Section 186 of the Act are provided in the Financial Statements.
RELATED PARTY TRANSACTIONS
The Company has formulated a Policy on Related Party Transactions for the identification and monitoring of such transactions. The said Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website.
Related Party Transactions were placed before the Audit Committee as prescribed under Section 177 of the Act, although no such transactions attracted the provisions of Section 188 of the Act. As such, there are no particulars to be disclosed in the prescribed Form AOC-2.
SHARE CAPITAL
The paid-up equity capital of the Company as on March 31,2024 was H 4,045 lakhs. The said shares are listed on the BSE Limited and the National Stock Exchange of India Limited. There was no change in the paid-up capital of the Company, during the year under review.
ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2024, is available on its website at https://www.ceat.com/investors/shareholder-information.html
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of Energy
CEAT has taken various initiatives on adoption of cleaner source of energy from conventional source of energy. The Company has undertaken several initiatives around process optimisation, power conservation, retrofitting of equipment across all the facilities. The Company's current share in renewable source of Energy is 36% through various power purchase agreements and solar rooftop installations. Through such initiatives, the Company has successfully contributed to 3,532 MT of CO2 emission reduction.
5 out of 6 plants in CEAT have hybrid input model, with the initiative of replacing Coal with Briquette, CEAT is successful in offsetting 1,69,233 MT of total CO2 from 93,499 MT of briquette. With steam conservation activities across all facilities, the Company has saved 4,642 MT of emission with net impact of 2,556 MT of CO2 reduction with improved energy efficiency initiatives and increased briquette consumption.
The Company has made a capital investment of H 2,154 lakhs on various energy conservation initiatives such as Retrofitting of Equipment, Process Modification, Enhancing Operational Efficiency, etc. More information on conservation of energy is provided under 'Natural Capital' section which forms part of this Integrated Annual Report.
Research and Development (R&D) and Technology Absorption
At CEAT, innovation stands as the greatest strength, while sustainability remains the prime focus. Company's Research and Development (R&D) division is pivotal to the overall growth and development of business operations, enhancing the efficiency of products and services and driving new opportunities for growth.
CEAT's R&D team comprises 290 dedicated professionals working at specialised centers in Halol, India, and Frankfurt, Germany. This team constantly tracks evolving customer requirements to develop tyres that are safer, more energy-efficient, and longer-lasting. These efforts significantly boost customer satisfaction and enable the Company to enter new markets.
R&D initiatives aim to make product development and manufacturing more efficient. By leveraging advanced digital and simulation methodologies, Company reduces the need for physical prototyping and testing. This approach decreases cycle times, costs, and energy consumption, thus enhancing sustainability. CEAT's commitment to innovation is demonstrated through its five-year technological and manufacturing roadmap, aligned with the purpose of 'Making Mobility Safer & Smarter. Every Day.'
CEAT's R&D efforts have led to the filing of 171 patent applications, with 46 patents granted till date. In the fiscal year 2023-24 alone, Company filed 21 patent applications, secured 41 design registrations, and launched 123 new products. These achievements highlight relentless pursuit of technological advancement and dedication to sustainability and customer satisfaction.
CEAT R&D has also started working on application of Gen AI for product development, optimisation and training of its employees.
In conclusion, CEAT's R&D is not only a cornerstone of current success but also a lighthouse for future growth, continuously pushing the boundaries of innovation while consistently focusing on sustainability.
Details of expenditure on Research and Development are as under:
|
Particulars
|
FY 2023-24 |
|
FY 2022-23
|
|
Capital expenditure
|
4,823
|
4,367
|
|
Revenue expenditure
|
12,493
|
11,906
|
|
Total |
|
17,316
|
16,273
|
More information on R&D and technology absorption is provided under 'Intellectual Capital' and 'Natural Capital' sections which forms part of the Integrated Annual Report.
Foreign Exchange Earnings and Outgo
|
(H in Lakhs)
|
|
Particulars
|
FY 2023-24 |
|
FY 2022-23
|
|
Foreign Exchange earned
|
2,35,159
|
2,06,292
|
|
Foreign Exchange outgo
|
2,10,198
|
1,88,043
|
Sheet as at March 31, 2024 and the Statement of Profit and Loss for the said Financial Year ended March 31,2024.
iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv. The annual accounts have been prepared on a going concern basis.
v. The proper internal financial controls were in place and that such internal financial controls are adequate and were operating effectively.
vi. The system to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and are operating effectively.
NOMINATION AND REMUNERATION POLICY
The Company has a Nomination and Remuneration Policy ('Policy') for nomination and remuneration of Directors, Key Managerial Personnel ('KMP'), Senior Management Personnel ('SMP') and other employees, pursuant to the Act and Listing Regulations, as amended from time to time.
The salient features of the Policy, are :
i. appointment and remuneration of Directors, Key Managerial and Senior Management Personnel;
ii. qualifications, positive attributes and independence for appointment of Director and assessment of independence of Independent Director (ID);
iii. performance evaluation of all Directors;
iv. core skills/expertise/competencies required of the Board of Directors of the Company;
v. Board Diversity.
The said policy is available on the website of Company at https:// www.ceat.com/investors/corporate-governance.html
INTEGRATED ANNUAL REPORT
In line with the SEBI Circular dated February 6, 2017 on Integrated Reporting by Listed Entities, since the Financial Year 2019-20, the Company has been publishing Integrated Annual Report, based on Value Reporting Foundation framework. Year on year, the Company through the Integrated Report is endeavoring to communicate its integrated thinking and how its business creates sustained value for stakeholders.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT
In compliance with Regulation 34 of the SEBI Listing Regulations, separate section on Management Discussion and Analysis, as approved by the Board, which includes details on the state of affairs of the Company, forms part of this Integrated Annual Report.
Further, the Corporate Governance Report including General Shareholder Information, as prescribed under Schedule V to the SEBI Listing Regulations, duly approved by the Board of Directors together with the certificate from Secretarial Auditor (Practising Company Secretaries) confirming compliance with the requirements of SEBI Listing Regulations also forms part of this Integrated Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2) (f) of the SEBI Listing Regulations, BRSR describing the initiatives taken by the Company from ESG perspective forms part of this Integrated Annual Report.
AUDITORS
Statutory Auditors
At the Sixty Third Annual General Meeting of the Company, the Members approved appointment of M/s B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/ W-100022) as the Statutory Auditors of the Company, to hold office for a period of 5 (five) years from the Sixty Third Annual General Meeting of the Company till the conclusion of the Sixty Eighth Annual General Meeting of the Company, in terms of the applicable provisions of Section 139(1) of the Act read with the Companies (Audit and Auditors) Rules, 2014.
Secretarial Auditors
The Company had appointed M/s Parikh & Associates, Practising Company Secretaries, to conduct Secretarial Audit for the Financial Year ended March 31, 2024, as prescribed under Section 204 of the Act and Rules made thereunder. The Secretarial Audit Report in the prescribed Form MR-3 for FY 2023-24 furnished by M/s Parikh & Associates is annexed to this Report.
There are no qualifications, disclaimers, reservations or adverse remarks made either by the Statutory Auditors in the Auditor's Report or by the Company Secretary in practice (Secretarial Auditor) in the Secretarial Audit Report.
Internal Auditors
M/s Deloitte Touche Tohmatsu India LLP were re-appointed as the internal auditors of the Company. Additionally, M/s. Singhi and Company (erstwhile Moore Singhi Advisors LLP) were also re-appointed as Internal Auditors of the Company at the Board meeting of the Company held on May 4, 2023 for the year 2023-24.
As prescribed under Section 138 of the Act, M/s Deloitte Touche Tohmatsu India LLP carried out internal audit of the Company. Additionally, M/s. Singhi and Company were engaged for internal audit of locations like CFA/DC/ Regional Office Zone and outsourcing units for FY 2023-24. The internal audit was completed as per the scope defined by the Audit Committee from time to time.
Cost Record and Cost Auditors
During the year under review, in accordance with Section 148(1) of the Act, the Company has maintained the accounts and cost records, as specified by the Central Government. Such cost accounts and records were subjected to audit by M/s D. C. Dave & Co., Cost Auditors of the Company for FY 2023-24.
The Board of Directors has re-appointed M/s D. C. Dave & Co., Cost Accountants, (Firm Registration No. 000611) as Cost Auditors of the Company and recommends ratification of the remuneration payable to the Cost Accountants for the year ending on March 31, 2025 by the Members at the ensuing AGM.
The Cost Auditors' Report of FY 2022-23 did not contain any qualifications, reservations, adverse remarks or disclaimers and no frauds were reported by the Cost Auditors to the Company under sub-section (12) of Section 143 of the Act.
SECRETARIAL STANDARDS
Pursuant to Section 205 of the Act, the Company complies with the applicable Secretarial Standards as mandated by the Institute of Company Secretaries of India ('ICSI') to ensure compliance with applicable provisions read together with the relevant circulars issued by MCA.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE COMPANIES ACT, 2013
During the year under review, no frauds were reported by the auditors to the Audit Committee or the Board under Section 143(12) of the Act read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS
There are no significant and material orders passed by the Regulators or Courts or Tribunals, Statutory and quasi-judicial bodies, impacting the going concern status and Company's operations in future. There is no corporate insolvency resolution process initiated under the Insolvency and Bankruptcy Code, 2016.
INTERNAL FINANCIAL CONTROL
Details in respect of adequacy on internal financial controls concerning the Financial Statements are stated in the Management Discussion and Analysis Section which forms part of this Integrated Annual Report.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
In accordance with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ('POSH Act'), the Company has put in place a Policy on Prevention of Sexual Harassment of women at Workplace and 8 (eight) Internal Complaints Committees ('ICC') have been set up to redress complaints. During the year under review, 4 complaints were received and 3 were resolved by the ICC and 1 complaint was under review as at March 31, 2024.
ACKNOWLEDGEMENT
Your Directors wish to express their grateful appreciation for the cooperation and continued support extended by its various stakeholders like the Central Government, State Government, Customers, Suppliers, Dealers, Value Chain partners, Banks, Financial Institutions, Communities, Employees and the Members towards conducting business of the Company.
|