&
Management Discussion and Analysis
Dear Shareholders,
Your directors are pleased to present the 63rd Annual Report
of Balkrishna Industries Limited (the "Company") along with the audited
Financial Statements for the FY ended 31st March, 2025. The consolidated performance of
the Company and its subsidiaries for the year ended 31st March, 2025 has been referred to
wherever required.
1. FINANCIAL RESULTS:
(Rs in Crores)
|
Standalone |
Consolidated |
| Particulars |
Current Year ended 31st
March, 2025 |
Previous Year ended 31st
March, 2024 |
Current Year ended 31st
March, 2025 |
Previous Year ended 31st
March, 2024 |
| Revenue from Operations |
10,412.88 |
9,298.70 |
10,446.95 |
9,368.87 |
| Other Income |
534.55 |
447.74 |
538.79 |
449.22 |
| Total Income |
10,947.43 |
9,746.44 |
10,985.74 |
9,818.09 |
| Gross Profit |
2,829.82 |
2,542.85 |
2,868.05 |
2,591.72 |
| Less: Depreciation |
673.53 |
643.78 |
680.66 |
650.72 |
| Profit before tax |
2,156.29 |
1,899.07 |
2,187.39 |
1,941.00 |
| Less: Provision for tax |
|
|
|
|
| Current Tax |
472.83 |
402.00 |
477.62 |
406.02 |
| Income Tax of earlier years |
- |
- |
- |
5.03 |
| Deferred Tax |
55.09 |
59.48 |
54.81 |
58.46 |
| Profit after Tax |
1,628.37 |
1,437.59 |
1,654.96 |
1,471.49 |
2. INDUSTRY STRUCTURE AND DEVELOPMENT:
Your Company is one of the world's leading manufacturers of 'Off-
Highway Tires'. It has the widest product range with more than 3600 SKUs (Stock Keeping
Units). Your Company has made its mark in specialty segments like Agricultural, Mining,
Construction, Industrial, Earthmover, Port, ATV (All-Terrain Vehicle), Rubber Tracks, and
Turf care applications in both cross ply and radial construction.
Your Company is always paying close attention when it comes to the
latest market trends as well as the technological developments.
Despite the global economic slowdown and ongoing geopolitical
uncertainties impacting exports, it is encouraging to observe early signs of improvement.
There is an optimistic outlook for increasing demand in the upcoming quarters, alongside
expectations of easing inflationary pressures. Effectively managing these dynamics will be
key to ensuring resilience and stability during these challenging times.
3. OPERATIONS AND STATE OF AFFAIRS: Standalone: During the year
under review, on a standalone basis, your Company achieved Revenue from Operations of Rs
10,412.88 Crores, as against Rs 9,298.70 Crores during the previous financial year. EBITDA
increased to Rs 2,955.03 Crores from Rs 2,651.78 Crores in the previous year, and Net
Profit rose to Rs 1,628.37 Crores from Rs 1,437.59 Crores. Revenue from exports
constituted around 71%.
Consolidated: On a consolidated basis, your Company achieved
Revenue from Operations of Rs 10,446.95 Crores, compared to Rs 9,368.87 Crores in the
previous financial year. EBITDA increased to Rs 2,996.39 Crores from Rs 2,704.59 Crores,
and Net Profit increased to Rs 1,654.96 Crores from Rs 1,471.49 Crores.
4. EXPORT HOUSE AND AUTHORISED ECONOMIC OPERATOR STATUS:
In accordance with the provisions of the Foreign Trade Policy, your
Company has continued to hold the prestigious 'Five Star Export House' status since
September 2021. Additionally, the Company is recognised as an Authorised Economic Operator
(AEO) Tier III, which facilitates faster cargo processing and clearance, deferred duty
payments, direct port delivery and entry, along with various other operational benefits.
5. PROJECTS AND EXPANSION:
During the year under review, your Company successfully completed the
construction of a Mould Plant at Bhuj with a capital expenditure of Rs 300 Crores. In
addition, it completed the capex for a high-value advanced carbon material production
facility with a capacity of 30,000 metric tonnes per annum (MTPA), which has since been
commissioned.
Your Company is also undertaking a capital expenditure of up to Rs
1,300 Crores for the expansion of its Off-Highway tire manufacturing facility at Bhuj.
This project aims to establish a production capacity of 35,000 MTPA and is expected to be
completed by the end of FY 2025-26.
Further, your Company has approved capital expenditure of approximately
Rs 3,500 Crores over the next three years for setting up additional production facilities
at Bhuj, including for Carbon Black, Power Plant, Commercial Vehicle Tires, Rubber Tracks,
and Premium Passenger Car Radial Tires.
6. DIVIDEND:
Your Company has maintained a strong track record of consistent
dividend payments over the past three decades. In continuation of this trend, the Board of
Directors is pleased to recommend a final dividend of Rs 4 (200%) per equity share for FY
2024-25. This is in addition to three interim dividends of Rs 4 (200%) per equity share
each, amounting to an aggregate of Rs 12 (600%) per equity share. As a result, the total
dividend for the year stands at Rs 16 (800%) per equity share.
The final dividend is subject to approval by the shareholders at the
upcoming Annual General Meeting, scheduled for 26th July 2025. Once approved, it will be
disbursed within the stipulated timeframe, after deduction of applicable taxes at source.
The Record Date for payment of the final dividend is set as 12th July 2025.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing Regulations, 2015"), the
Dividend Distribution Policy is available on the Company's website at:
https://www.bkt-tires.com/in/en/investors-desk.
7. SHARE CAPITAL:
The paid-up Share Capital of the Company as on 31st March 2025 remains
unchanged at Rs 38.66 Crores. The Company has neither issued shares with differential
voting rights, nor granted stock options or sweat equity. None of the Directors of the
Company holds any shares with differential voting rights or convertible instruments.
8. RESERVES:
The Company proposes to transfer Rs 500 Crores to General Reserves.
9. OUTLOOK FOR THE FINANCIAL YEAR 2025-26:
Your Company continues to navigate a challenging global economic
environment but remains optimistic about growth opportunities, particularly within the
Off- Highway Tire (OHT) segment. This segment is expected to experience steady growth in
FY 2025-26, driven by infrastructure development, technological innovation, and
sustainability efforts across the construction, mining, and agricultural sectors.
Key factors influencing the outlook include:
a. Global Economic Slowdown and Risks:
The ongoing global slowdown, coupled with geopolitical tensions and the
threat of stagflation, poses significant risks to industry-wide stability. These factors
may impact external demand, economic confidence, and consumer sentiment.
b. Technological Advancements: The adoption of smart tire
technologies, including real-time monitoring through sensors and loT, is enhancing tire
performance, safety, and lifecycle management.
c. Sustainability Initiatives: Manufacturers are increasingly
investing in eco-friendly materials and recycling technologies to reduce environmental
impact and align with global sustainability goals.
d. Emerging Markets: Urbanisation and industrialisation in
developing regions, especially across Asia-Pacific, are driving higher demand for tires.
e. Rising Demand in the Automotive Sector:
Despite macroeconomic headwinds, the global rise in vehicle demand is
directly fuelling tire requirements, opening new avenues for growth.
f. Focus on Off-Highway Tire Segment: Your
Company's strategic emphasis on the OHT segment offers resilience
against mainstream automotive cyclicality and reflects a sharper focus on specialised
customer requirements.
g. Strength in Research and Development:
BKT's robust R&D capabilities support product innovation,
differentiation, and responsiveness to evolving market trends — an essential strength
in a dynamic landscape.
h. Infrastructure Investments: Investments in the Carbon Black
Plant and Captive Power Plant at Bhuj provide cost and energy advantages, reinforcing
sustainable and efficient operations.
i. Customer-centric Approach: A sharp focus on customer
satisfaction and responsiveness underpins BKT's ability to retain and grow its market
share amidst economic uncertainty.
j. Technological Advancements: Advanced tread patterns and
improved durability are making offroad tires more efficient and desirable, contributing to
increased adoption.
k. Raw Material Fluctuations: Volatility in the prices of rubber
and chemicals can impact production costs.
l. Regulatory Compliance: The tightening of environmental
regulations worldwide could lead to increased compliance costs and operational
adjustments.
In summary, while macroeconomic challenges persist, your Company is
well-positioned through its investments in infrastructure, innovation, and niche segments
like OHT. These strengths, combined with a customer-first mindset, support BKT's growth
ambitions and resilience in a volatile market landscape.
10. MATERIAL CHANGES AND COMMITMENTS:
Pursuant to Section 134(3)(l) of the Companies Act, 2013, there have
been no material changes or commitments affecting the financial position of your Company
between the close of the financial year on 31st March 2025 and the date of this report.
11. OPPORTUNITIES AND THREAT:
Opportunities:
a. Segment Specialisation in Large Variety -
Low Volume:
- Your Company operates in a segment characterised by a wide product
range but relatively lower production volumes. This allows the Company to address diverse
application needs with agility and customisation.
b. Market Leadership and Robust Product
Portfolio:
- A strong, well-diversified product portfolio has bolstered your
Company's market leadership, providing a competitive edge and enabling effective service
to varied customer segments across global markets.
c. Technological Stability and Demand
Consistency:
- The OHT segment is relatively stable in terms of technological shifts
and demand cycles. Over time, your Company has earned customer loyalty through consistent
quality and service, supporting business predictability and strategic planning.
d. Expansion into Niche Markets:
- Your Company's strategic foray into niche segments, such as
Ultra-Large Earthmover and Mining Radial Tires, and the transition from Bias to Radial
tires, demonstrates foresight and positions the Company for long-term value creation.
e. Infrastructure and Capacity Expansion:
- Your Company is advancing its growth through three levers: expansion
of OHT capabilities, scaling of Carbon Black production, and modular investments in
Commercial Vehicle and Premium Passenger Car Radial Tires. This multi-pronged strategy is
designed to strengthen capacity and seize emerging opportunities in India and beyond.
Threats:
f. Competitive Pressures:
- Competition within the industry continues to pose a significant
threat, affecting both market share and pricing strategies. Continuous innovation and
differentiation remain essential to mitigate this risk and maintain a competitive edge.
g. Talent Management:
- Challenges such as talent attrition, employee retention, and labour
disputes can impact operational continuity and efficiency. Effective human resource
strategies are essential to address these issues.
h. Raw Material Price Volatility and Availability:
- Fluctuations in raw material prices and supply disruptions pose
financial risks and operational challenges. Strategic sourcing and supply chain management
are critical to mitigate these impacts.
i. Economic Downturns and Market Demand:
- Economic slowdowns, particularly in key markets like Europe, could
lead to reduced demand and capacity utilisation. This underscores the importance of
diversification and resilience in market exposure.
j. Geo-political and Regulatory Risks:
- Geo-political uncertainties, regulatory changes, and volatile
exchange rates can increase operational costs and affect profitability. Escalation of
Tariff war and ESG regulations in certain markets may pose a threat to the market share.
Adherence to the regulatory requirements and maintaining financial prudence are essential
to combat the risk.
In navigating these opportunities and threats, your Company's emphasis
on innovation, diversification, operational efficiency, and strategic investments in
infrastructure and technology. Proactive management of risks, along with leveraging
strengths in product differentiation and customer-centric approaches, will help sustain
growth and competitiveness in the dynamic tire industry landscape.
12. SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS & RETURN ON NET
WORTH:
As per Schedule V read with Regulation 34(3) of Listing Regulations,
details of significant changes (i.e. change of 25% or more as compared to the immediate
previous financial year) in Key Financial Ratios and any changes in Return on Net Worth of
the Company including explanations thereof are provided in Note No. 52 of Standalone and
Note No.54 of Consolidated financial statement respectively forming part of the Annual
report.
13. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
Strengths in Internal Control and Governance:
a. Comprehensive Internal Control Framework:
- Your Company emphasises internal controls as a pillar of governance,
providing a framework of checks and balances. This framework covers financial and
operational functions, ensuring that transactions are properly authorised, recorded, and
reported.
b. Adherence to Policies and Procedures:
- Your Company has well-defined procedures, delegation of authority,
and segregation of duties, which are essential for ensuring transparency and
accountability in financial transactions.
c. Integration of IT Policies and Processes:
- IT policies and processes are robustly integrated to mitigate
business risks. This includes implementing an ERP system supported by SAP software,
ensuring credibility of data, compliance with regulations, and managing IT security risks.
d. Continuous Improvement and Audit:
- The Company continuously improves its systems and processes through
best practices, automation, and adoption of the latest IT tools. Regular audits and
reviews reinforce the effectiveness of internal controls.
e. Cybersecurity and Data Privacy:
- Recognising the importance of cybersecurity, the Company has adopted
a Cybersecurity and Data Privacy Policy. This safeguards IT assets and ensures responsible
handling of personal and sensitive data in accordance with applicable laws.
f. Assessment and Audit Committee Review:
- M/s. Deloitte Haskins & Sells LLP has been appointed to assess
the effectiveness of internal financial controls for the management. The Audit Committee
reviews reports from management and internal auditors, confirming the adequacy and
effective operation of internal financial controls as of the assessment date.
Limitations and Future Considerations:
g. Inherent Limitations of Internal Controls:
- The Company acknowledges that internal financial controls cannot
provide absolute assurance due to inherent limitations. Changes in conditions or
compliance may impact the effectiveness of controls over time.
h. Risk Management and Compliance:
- Managing risks associated with economic conditions, regulatory
changes, and cybersecurity threats remain critical. Continuous adaptation and
reinforcement of internal controls are necessary to mitigate these risks effectively.
i. Future Adaptation and Enhancement:
- As the business environment evolves, the Company should remain
proactive in adapting internal controls to new challenges and opportunities. This includes
staying updated with regulatory requirements and technological advancements.
In conclusion, your Company demonstrates a strong commitment to
governance through its comprehensive internal control framework, IT integration,
cybersecurity measures, and regular assessment processes. Moving forward, maintaining
vigilance and agility in responding to emerging risks will be crucial for sustaining
effective internal controls and ensuring long-term business resilience.
14. HUMAN RESOURCES:
Your Company views its people as its most valuable asset and places
them at the centre of its human resource strategy. BKT has built an agile organisational
structure that is aligned with its strategic objectives and designed to deliver measurable
results. Regular and transparent communication ensures that employees remain aligned with
business goals and are informed about evolving priorities. Young talent is nurtured
through structured mentoring and development programmes. Employees are consistently
offered opportunities to grow, upskill, and thrive in a culture that rewards performance
and innovation. BKT's people-centric approach continues to foster a motivated,
future-ready workforce.
Key Strengths and Approaches:
Adapting to a Changing Workforce:
With the launch of a bold five-year strategic plan and our foray into
new product categories such as Truck and Bus Radial (TBR) and Passenger Car Radial (PCR)
tires, your Company is aligning its talent management strategies with emerging business
needs. This includes maintaining a balanced talent mix across functions and proactively
hiring from campuses to nurture future-ready professionals.
Employee Well-being
Your Company places a strong emphasis on employee well-being.
Initiatives such as routine medical check-ups, Mediclaim top-up facilities, wellness
sessions, periodic vaccination drives, and support for work-life balance foster a
positive, healthy, and high-performing work environment.
Talent Management and Development:
The Company emphasises continuous learning and development of its
employees. This approach ensures that employees are equipped with the skills needed for
Company's specialty product range and are prepared for evolving business demands.
Recognition and Career Development:
Your Company believes in rewarding and recognising its workforce
through accelerated career paths and ensuring employees feel valued and motivated. This
supports a high-performance culture and employee satisfaction.
The digitisation journey:
Your Company has fast tracked its journey towards digitisation by
transforming traditional HR functions with digital technologies and data analytics,
focusing on automation, data-driven decision-making, and improved employee experience. All
this is achieved by implementating employee self-service, multiple modules of Darwinbox
HRMS, online PMS process, implementation of Contract Labour Management System.
15. SUBSIDIARY COMPANIES:
At the end of the year under review, the Company had four Overseas
Wholly Owned Subsidiary Companies (WOS). The Overseas WOS are BKT EUROPE S.R.L., BKT TIRES
(CANADA) INC.,BKT USA INC., BKT TIRES INC. The Company does not have any material
subsidiary as per the thresholds laid down under the Listing Regulations, 2015. A policy
on material subsidiaries has been formulated by the Company and posted on the website of
the Company and can be accessed at: https://www.bkt-tires.com/ww/us/investors-desk..
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5
of the Companies (Accounts) Rules, 2014, a statement containing the salient features of
the financial position of subsidiary companies in Form AOC- 1 attached as Annexure-I.
Update on Amalgamation:
Your Directors at their meeting held on 24th January, 2024 have
approved the Scheme of Amalgamation of its wholly owned subsidiary Company M/s BKT Tyres
Limited into itself under Sections 230 to 232 and other relevant provisions of the
Companies Act, 2013. The Company has filed the necessary petition before the Hon'ble
National Company Law Tribunal (NCLT), Mumbai.
Subsequently, the Hon'ble NCLT sanctioned and approved the Scheme of
Amalgamation through its order dated 25th March, 2025. The appointed date of the Scheme
was 1st April, 2024.
16. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013,
your Directors, to the best of their knowledge and belief, make the following statements:
(i) That in the preparation of the annual accounts for the year ended
31st March, 2025, the applicable accounting standards have been followed and there are no
material departures from the same;
(ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as at 31st March, 2025
and the Statement of Profit and Loss of the Company for the FY ended 31st March, 2025;
(iii) The Directors have taken proper and sufficient care for
maintenance of adequate accounting records in accordance with provisions of the Companies
Act, 2013, for safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities;
(iv) The Directors have prepared the annual accounts of the Company on
a 'Going Concern' basis;
(v) The Directors have laid down internal financial controls to be
followed by the Company and such internal financial controls are adequate and are
operating effectively; and
(vi) The Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that systems are adequate and operating
effectively.
17. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
All contracts/arrangements/transactions entered by the Company during
the financial year with related parties were in ordinary course of business and on an
arm's length basis. During the year, the Company has not entered into any
contracts/arrangements/transactions with related parties which could be considered
material in accordance with the policy of the Company on materiality of related party
transactions.
Accordingly, the disclosure of related party transactions as required
under Section 134(3)(h) of the Companies Act, 2013 in Form AOC - 2 is not applicable to
your Company.
The Policy on materiality of related party transactions and dealing
with related party transactions are approved by the Board and can be accessed on the
Company's website at https://www.bkt-tires.com/ww/us/investors-desk. The details of
transactions / contracts / arrangements entered by the Company with related parties during
the financial year are set out in the notes to the Financial Statement.
The Board of Directors of the Company has approved the criteria for
making the omnibus approval by the Audit Committee within the overall framework of the
policy on related party transactions. Prior omnibus approval is obtained for related party
transactions which are of repetitive nature and proposed to be entered in the ordinary
course of business and at arm's length during the financial year. All related party
transactions are placed before the Audit Committee for review and approval.
18. CORPORATE SOCIAL RESPONSIBILITY:
The Company's social initiatives empower society at large and provide a
holistic growth platform. The Company believes that Corporate Social Responsibility (CSR)
projects undertaken by it should be sustainable with the long-term purpose of improving
the quality of livelihood of the less privileged. The funds on CSR projects/activities are
spent very carefully to ensure that the desired objectives are achieved. CSR activities
have been segregated to have a reach in different areas such as promoting education,
improving healthcare, sustainability, rural development.
The Board of Directors of the Company has approved a Corporate Social
Responsibility (CSR) Policy based on the recommendation of the CSR Committee. The brief
outline of the CSR policy of the Company and the initiatives undertaken by the Company on
CSR activities during the year are set out in Annexure-II. The Board of Directors
has formed a committee on CSR in accordance with the Companies Act, 2013. The terms of
reference of the Corporate Social Responsibility Committee, number and dates of meetings
held, composition and attendance of the Directors during the FY ended 31st March, 2025 are
given separately in the Corporate Governance Report. During the year under review, the
Company was required to spend Rs 32.94 Crores and considering the past excess CSR amount
of Rs 2.73 Crores the Company was required to spend Rs 30.21 Crores during FY 202425. The
Company has spent Rs 21.52 Crores for FY 202425. In terms of Amendment to Companies
(Corporate Social Responsibility Policy) Amendment Rules, 2021 (the CSR Rules 2021")
effective from 22nd January, 2021, the Company in FY 2024-25 has spent Rs 21.52 Crores on
identified Project and further Company had deposited Rs 8.69 Crores in separate Bank
account opened with a Scheduled Bank in Compliance with CSR Rules 2021 and out of Rs 8.69
Crores, Company had spent already Rs 1.35 Crores towards ongoing Project in FY 2025-26.
The CSR policy of the Company is available on the Company's website and
can be accessed at: https://www.bkt-tires.com/in/en/investors-desk.
19. RISKS RELATED TO BUSINESS:
Risk is inevitable in every business. BKT's nature and scale of the
business operations calls for a robust risk mechanism framework to deal with impacts of
external and internal environment. In today's challenging and competitive environment,
mitigating risks is imperative. The key risks include dynamic geopolitical and
macroeconomic situation, volatile commodity prices, talent attrition, growing demand of
customers, cybersecurity risks, etc. Common risks include changing regulations,
competition, business risk, technology obsolescence. Business risk, inter alia, further
includes financial risk, social risk, political risk, environmental risk and legal risk.
These ranges of risks have been meticulously addressed through a comprehensive discussion
with all the key stakeholders across the
Company. For managing risks more efficiently, the Company has
undertaken a detailed risk management program and has identified key risks that can have a
critical impact on the Company's performance. Risks, once identified, are periodically
monitored, along with emerging risks on the dual scale of impact of probability. The
Company has inter alia identified the following key risks:
Operational Risk:
Operational risks like equipment obsolescence can impact production. To
mitigate such risks, the Company continuously monitors to ensure equipment upkeep and
upgrades the equipment in a timely manner. The Company has also made significant
investment in equipment modernisation.
The Company's major raw materials are Natural and Synthetic Rubber,
Carbon Black, Nylon fabric and Chemicals. The overall supply dynamics keep changing due to
which at times an increase in cost is experienced, which gets set off by an increase in
prices over a period of time.
Market Risk:
Your Company manages market risk by expanding its presence in different
markets, deeper penetration into existing markets and launching new product lines.
Furthermore, the Company spends adequate amount on marketing and promotional activities to
ensure customer retention and brand-building. Your Company has also invested in building a
wide network of distributors and dealers across the market to avoid the risk in case of
fluctuations in market.
Talent Attrition and retention of skilled manpower:
Like other players in the industry, the Company is also exposed to this
risk, more particularly when there is lack of skilled manpower in the industry.
Additionally, the manufacturing process of the Company is labour
intensive, it requires lot of skilled as well as unskilled workers. Maintaining a large
workforce is a challenging task. In order to mitigate the said risk, the Company follows
good HR practices to promote the welfare and safety of its workmen and maintain a cordial
working environment. All workers are provided with fair wage structure, and the Company
provides various opportunities to its employees for career development.
Currency Fluctuation:
The Company derives most of its revenue from exports. Given that a
substantial portion of raw materials and capital equipment is imported, the Company is
exposed to foreign currency risk. However, this exposure is offset by a natural hedge, as
Company's revenues are denominated in foreign currencies. Since the Company is a net
foreign exchange earner and hedges its net exposure in advance mostly by way of forward
contracts,
it is relatively less susceptible to foreign exchange fluctuations
Cyber Security/Technology Risk:
Due to growing digitalisation, your Company is exposed to vulnerability
to cyber-attacks. To mitigate such risks your Company has implemented policies and
procedures for cybersecurity and data privacy. Independent review of the systems and
procedures is being conducted to reinforce effectiveness of the systems. Additionally,
targeted efforts are being made to create awareness about cyber security through trainings
and interactions including Board members.
Climate Risk:
Assessing climate change risks is essential for our Company to manage
potential impacts and capitalise on emerging opportunities proactively. Understanding the
physical, transition, and supply chain risks associated with climate change, we can
develop robust strategies to enhance our resilience, ensure business continuity, and
contribute to a more sustainable future. Hence, we are in the process of undertaking a
comprehensive assessment to outline the critical climate change risks specific to our
business and propose strategies to build resilience and sustainability.
This comprehensive assessment will serve as a foundational guide for
integrating climate change considerations into our business strategy, fostering
innovation, and ensuring your Company's long-term success in an evolving global landscape.
Geopolitical and Macroeconomic Risk:
Given the current global landscape, this has emerged as one of the key
risks. Ongoing military conflicts and trade/tariff wars between countries continue to
create uncertainty in demand conditions. The Company has a well-diversified product
portfolio and a strong presence across multiple markets, which helps to mitigate this
risk. This strategy is further reinforced by the Company's resilient and agile business
model.
RISK MANAGEMENT AND MITIGATION:
'Risk Management' is the identification, assessment, and prioritisation
of risks followed by coordinated and economical application of resources to minimise,
monitor and control the probability and/or impact of uncertain events or to maximise the
realisation of opportunities. Risk management also enables your Company for setting up
priorities when there are competing demands on limited resources. Risk management also
attempts to identify and manage threats that could severely impact the organisation. With
an endeavour to augment the risk mitigation efforts, your Company has formulated and
implemented a detailed Business Continuity Plan. An overarching coverage of the same is
also available on the Company's website.
The Company's Board of Directors has an overall responsibility for the
establishment and overseeing of the Company risk management framework. Pursuant to
Regulation 21 of Listing Regulations, 2015 Risk Management Committee was constituted
comprising of Mr. Pannkaj Ghadiali, an Independent Director as Chairman of the Committee,
Mr. Arvind Poddar and Mr. Vipul Shah, Directors of the Company are members of the
Committee. The primary objective of the Committee is to oversee the various risks and
mitigation plan that the Company is exposed to, with a view to prevent unacceptable
losses, to provide an effective means of identifying, measuring and monitoring credit
exposure risks by the Company and to keep such risk at or below acceptable levels. The
Company has framed an Enterprise Risk Management Policy (the "Policy") to
realise the following benefits for the Company:
a. Augment risk management for the organisation including strategy
setting.
b. Facilitate risk-based decision making.
c. Improve governance and accountability.
d. Enhance credibility with key stakeholders such as investors,
employees, government, regulators, society, etc.
e. Create, protect and enrich stakeholder value.
The Company's Risk Management Policy outlines the objectives, approach,
and organisational structure for the identification, assessment, management, and reporting
of risks. It clearly defines the roles and responsibilities of key stakeholders and
relevant personnel in relation to risk management and ensures that the process aligns with
the provisions of the Companies Act, 2013.
The Risk Management programme of the Company is designed to achieve the
following objectives:
a. Enable organisational sustainability by recognising the impact of
its products, services, and operations on society and the environment
b. Minimise potential gaps in achieving corporate objectives
c. Align and integrate risk management practices across the
organisation.
d. Build the confidence of the investment community and stakeholders.
e. Strengthen corporate governance practices.
f. Respond effectively to a dynamic business environment.
The Company's risk management policies and systems are reviewed
periodically to reflect evolving market conditions and business activities.
During the year under review, the Company conducted statutory audits
relating to safety, occupational health and environment, fire safety, and electrical
safety. Significant improvements were observed in the Safety Index and Fire Safety Index,
owing to new initiatives and focused efforts on critical processes and operations.
Furthermore, the Company has worked to raise awareness within its
supplier community, encouraging their active participation and engagement to help mitigate
current and future business risks.
The Audit Committee monitors the Company's compliance with its risk
management framework and assesses the adequacy of systems in place. The Internal Audit
team conducts both scheduled and ad hoc reviews of the risk management controls and
procedures, with findings reported to the Audit Committee.
There are no risks, in the opinion of the Board, that threaten the
existence of the Company.
20. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the year under review, Mr. Vipul Shah (DIN 05199526) retires by
rotation and being eligible, offers himself for re-appointment. A resolution seeking
Shareholders' approval for his re-appointment along with other required details forms part
of the Notice.
The Company has received declaration from all Independent Directors of
the Company confirming that they meet with the criteria of independence as laid down under
Section 149(6) of the Companies Act, 2013 as well as Regulation 16(1)(b) of the Listing
Regulations, 2015.
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirement set out by the SEBI. The
Company has complied with the requirements of Corporate Governance as stipulated under the
Listing Regulations, 2015 and accordingly, the Report on Corporate Governance forms part
of this Annual Report. A certificate from the Statutory Auditors confirming compliance
with the conditions of corporate governance is annexed to the said report.
21. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
Your Company has established a Nomination and Remuneration Policy to
guide the selection, appointment, and remuneration of Directors, Key Managerial Personnel
(KMP), and other employees, including senior management. This policy is designed to ensure
that individuals with the skills, leadership ability, and vision necessary to drive
sustainable growth are appointed to key roles.
An extract of the Nomination and Remuneration Policy is included in the
Corporate Governance Report, which forms an integral part of the Board's Report.
The Criteria for appointment and remuneration of Directors is as under:
(i) Criteria for Appointment of Managing Director/ Whole Time
Director/Director:
The Nomination and Remuneration Committee shall identify persons of
integrity who possess relevant expertise and experience particularly in the tire industry,
leadership qualities required for the position and shall take into consideration
recommendation, if any, received from any member of the Board.
(ii) Criteria for Appointment of Independent Director:
The Independent Director shall be of high integrity with relevant
expertise and experience so as to have a diverse Board with Directors having expertise in
the fields of manufacturing, marketing, finance, taxation, law, governance and general
management.
22. PERFORMANCE EVALUATION:
The Board of Directors has conducted its annual evaluation, assessing
the performance of the Board, its Committees, and individual Directors in accordance with
the applicable provisions of the Companies Act and the corporate governance requirements
outlined in the Listing Regulations, 2015.
This evaluation ensures adherence to regulatory standards while
fostering continuous improvement in leadership effectiveness, decision-making, and
corporate governance practices.
The Board of Directors operates cohesively, fostering a collaborative
and efficient decision-making environment. Each Committee performs effectively within its
designated scope, with their recommendations thoroughly reviewed and accepted by the
Board.
The Directors bring valuable expertise and experience, contributing
significantly to the strategic direction of the Company. Independent Directors are highly
regarded for their deep understanding of the business and their ability to express their
views freely during deliberations. NonExecutive Directors excel in various aspects,
ensuring balanced perspectives, while Executive Directors demonstrate strong
action-orientation and effectiveness in implementing Board decisions.
The Chairman plays a pivotal role in leading the Board, encouraging
active participation and meaningful contributions from all members, thereby reinforcing a
dynamic and engaged governance structure.
The Board's performance evaluation was conducted after gathering
insights from all Directors present in the meeting. The assessment was based on key
criteria such as board composition and structure, the effectiveness of board processes,
access to information, and overall functioning.
Additionally, the Nomination and Remuneration Committee carried out an
evaluation of individual Directors. This assessment focused on various aspects, including
the Director's preparedness for discussions, their meaningful and constructive
contributions in board and committee meetings, and their ability to provide valuable
inputs that enhance decision-making processes.
This rigorous evaluation ensures that governance standards remain
strong, fostering accountability and effectiveness across all levels of leadership.
The performance evaluation of Independent Directors was conducted by
the entire Board. As part of this process, a dedicated meeting of the Independent
Directors for the FY 2024-25, chaired by Mr. Pannkaj Ghadiali, was held on 22nd
March, 2025.
During this meeting, the Independent Directors reviewed the performance
of Non-Independent Directors, the Board as a whole, and the Chairman based on key
parameters of effectiveness. Additionally, they assessed the quality, quantity, and
timeliness of information flow between Management and the Board, ensuring transparency and
efficiency in governance practices.
The findings from this discussion were further deliberated in the
subsequent Board meeting, where the overall performance of the Board, its Committees, and
individual Directors was evaluated. The Directors expressed satisfaction with the
evaluation process, reaffirming the Company's commitment to robust corporate governance
and continuous improvement in leadership effectiveness.
23. AUDITORS:
Statutory Auditor:
In accordance with Section 139 of the Companies Act, 2013, read with
the Companies (Audit and Auditors) Rules, 2014, the members of the Company, at the Annual
General Meeting (AGM) held on July 7, 2022, approved the appointment of M/s Jayantilal
Thakkar & Co. (Firm Registration Number 104133W) as Statutory Auditors for a five-year
term, commencing from the conclusion of the 60th AGM and extending until the conclusion of
the 65th AGM.
M/s Jayantilal Thakkar & Co. has confirmed that they continue to
meet eligibility criteria and are not disqualified from serving as Auditors of the
Company.
The Notes on Financial Statements referred to in the Auditors' Report
are self-explanatory and do not call for any further comments. The Auditors' Report does
not contain any qualification, reservation, adverse remark or disclaimer.
Internal Auditor:
The Board of Directors has appointed M/s. RTD & Associates,
Chartered Accountants as the Internal Auditors for a one-year term for the FY 2025-26, in
accordance with Section 138 of the Companies Act, 2013.
The appointed auditors have successfully completed the Internal Audit
in line with the scope defined by the Audit Committee, ensuring compliance with regulatory
requirements and strengthening governance and financial oversight.
Secretarial Auditor:
In accordance with Regulation 24A of the SEBI Listing Regulations and
Section 204 of the Companies Act, the
Company is required to appoint a Secretarial Auditor, subject to
approval by Members at its Annual General Meeting (AGM).
Based on the Board's recommendation, the Company has proposed the
appointment of Mr. G.B.B Babuji, Company Secretary in Whole Time Practice (Certificate of
Practice No. 8131) as the Secretarial Auditor for a five- year term, covering FY 2025-26
to FY 2029-30.
Following approval at the ensuing AGM, he will conduct the secretarial
audit as mandated by the Act and SEBI Listing Regulations and provide the necessary audit
report for the designated period.
Mr. G.B.B Babuji, Company Secretary in Whole Time Practice (Certificate
of Practice No.8131) has confirmed that their appointment, if made, will comply with the
eligibility criteria in terms of SEBI Listing Regulations. Further, the Secretarial
Auditor has confirmed that they have subjected themselves to Peer Review process by the
Institute of Company Secretaries of India ("ICSI") and hold valid certificate
issued by the Peer Review Board of ICSI.
Pursuant to the provisions of Section 204 of the Act, the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 201 4 and Regulation 24A of
the SEBI Listing Regulations, the Company had appointed Mr. G.B.B Babuji, Company
Secretary in Whole Time Practice (Certificate of Practice No.8131) to undertake the
Secretarial Audit of the Company for FY25. The Company's assistance in facilitating the
audit process ensures transparency and adherence to regulatory expectations.
Further, pursuant to SEBI Circular CIR/CFD/ CMD1/27/2019 dated 8th
February, 2019, Mr. G.B.B Babuji, has also conducted the Annual Secretarial Compliance.
The Secretarial Audit Report for the FY ended 31st March, 2025 is annexed
herewith marked as Annexure-III.
Cost Auditor:
Your Company is required to make and maintain cost records as specified
by the Central Government under sub-section (1) of section 148 of the Act. Accordingly,
your Company has been making and maintaining such cost records as per the requirements.
The cost records are maintained in such manner which enable the Company to exercise, to
the extent possible, control over the various operating costs to achieve optimum economies
in utilisation of resources.
During the year, Company's revenue from exports, in foreign exchange,
does not exceeds 75% per cent of the Company's total revenue and pursuant to Rule 4 of
Cost Records Rules of Companies Act, 2013 as amended from time to time, Cost Audit is
applicable to the Company for the FY 2024-25.
In terms of Section 148 of the Act read with Companies (Cost Records
and Audits) Rules, 2014, the Audit Committee recommended and the Board of Directors
appointed M/s. RA and Co., Cost Accountants
(Registration No. 000242) being eligible, as Cost Auditors of the
Company, to carry out the cost audit of products manufactured by the Company in relation
to the FY ending 31st March 2025. Your Company has received their written
consent that the appointment is in accordance with the applicable provisions of the Act
and Rules framed thereunder. The Cost Auditor has confirmed that their appointment is
within the limits of section 141(3)(g) of the Companies Act, 2013 and have also certified
that they are free from any disqualifications specified under section 141(3) and proviso
to section 148(3) read with section 141(4) of the Companies Act, 2013. The Audit Committee
has also received a Certificate from the Cost Auditors certifying their independence and
arm's length relationship with the Company. The remuneration of Cost Auditors has been
approved by the Board of Directors on the recommendation of the Audit Committee. As per
the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is
required to be placed before the Members in a General Meeting for their ratification. In
terms of the Act and Rules thereunder requisite resolution for ratification of
remuneration of the Cost Auditors by the members has been set out in the Notice of the 63rd
AGM of your Company. In the opinion of the Directors, considering the limited scope of
audit, the proposed remuneration payable to the Cost Auditors would be reasonable and fair
and commensurate with the scope of work carried out by them.
24. AUDITOR'S QUALIFICATION:
There are no qualifications in the reports of the Statutory Auditors
and Secretarial Auditor. There was no instance of fraud during the year under review,
which is required to be reported by Statutory Auditors in their reports as mentioned under
sub-section (12) of Section 143 of the Act.
The Cost Auditors' Report of FY 2023-24 did not contain any
qualifications, reservations, adverse remarks or disclaimers and no fraudulent activities
were reported by the Cost Auditors to the Company under sub-section (12) of Section 143 of
the Act.
25. INDUSTRIAL RELATIONS:
The industrial relations with staff and workers during the year under
review continue to be cordial.
26. 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.
27. DISCLOSURES:
i. Non-Convertible Debentures: During the FY 2024-25, your Company
has successfully repaid Non-Convertible Debentures amounting to Rs 350 Crore out of total
Rs 500 Crores. Further, your Company has repaid remaining Rs 150 Crore in the month of
April 2025. Hence, your Company has repaid fully Rs 500 Crore along with all the Interest
amount on respective due date in terms of Information Memorandum.
ii. Vigil Mechanism/Whistle Blower Policy:
The Vigil Mechanism of the Company which also incorporates a whistle
blower policy in the terms of SEBI (Listing Obligations and Disclosure Requirements), 2015
deals with instances of fraud and mismanagement, if any. Adequate safeguards have been
provided against victimisation of persons who use the vigil mechanism. The Policy on vigil
mechanism and whistle blower policy may be accessed on the Company's website at:
https://www.bkt-tires.com/ww/us/investors-desk.
iii. Audit Committee:
All the recommendations made by the Audit Committee have been accepted
by the Board. All the members have relevant experience in financial matters.
iv. Number of Board Meetings:
The Board of Directors of the Company met five times in the year, the
details of which are provided in the Corporate Governance Report.
v. Particulars of loans given, investment made, guarantees given and
securities provided:
Particulars of loans given, investments made, guarantees given and
securities provided along with the purpose for which the loan or guarantee or security is
proposed to be utilised by the recipient are provided in Note Nos. 5,10,14,46 and 48 to
the financial statement forming part of this Annual Report.
vi. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and outgo:
The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be disclosed under Section
134(3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts)
Rules, 2014 are provided in Annexure-IV and forms an integral part of this report.
vii. Annual Return:
Pursuant to Section 92(3) read with section 134(3)(a) of the Companies
Act, 2013, copies of the Annual Returns of the Company prepared in accordance with Section
92(1) of the Act read with Rule 11 of the Companies (Management and Administration) Rules,
2014 may be accessed on the Company's website at: https://www.bkt-tires.
com/ww/us/investors-desk.
viii. Particulars of Employees and related disclosures:
The information required under Section 197(12) of the Companies Act,
2013 read with Rules 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is attached as Annexure-V.
A statement comprising the names of top 10 employees in terms of
remuneration drawn and every person employed throughout the year, who were in receipt of
remuneration in terms of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, are provided in the Report.
However, having regard to the provisions of the first proviso to
Section 136 of the Act, the details are excluded in the report sent to members. Members
who are interested in obtaining the particulars may write to the Company Secretary at
registered/ corporate office of the Company. The aforesaid information is available for
inspection 21 days before and up to the date of the ensuing AGM during the business hours
on working days.
ix. Sexual Harassment of Women at Workplace (Prevention, Prohibition
& Redressal) Act, 2013:
The Company has formulated and implemented a policy of prevention of
sexual harassment at the workplace with mechanism of loading/redressal complaints. During
the year under review, there were no complaints reported to the Board.
x. Business Responsibility and Sustainability Committee Report:
Your Company is committed to conducting business in a manner that
delivers long-term value to shareholders while contributing positively to society. The
Company continues to align its operations with national priorities and the United Nations
Sustainable Development Goals (UN SDGs), reinforcing its commitment to responsible and
inclusive growth.
With regard to sustainability, several initiatives have been undertaken
under the ambit of Environment, Social and Governance (ESG). These are detailed in the
relevant sections of this Annual Report and further elaborated in the Business
Responsibility and Sustainability Report (BRSR).
In accordance with Regulation 34 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, and relevant SEBI circulars, new reporting
requirements relating to ESG parameters have been prescribed under the BRSR framework. The
BRSR requires disclosures against the nine principles of the National Guidelines on
Responsible Business Conduct (NGRBCs).
Accordingly, for the financial year ended 31st March, 2025,
your Company has prepared and published its BRSR, which outlines the initiatives taken
from an environmental, social, and governance perspective. The BRSR, in the prescribed
format, is annexed as Annexure VI and forms an integral part of this Annual Report.
The Company has imparted the training on BRSR and ESG to all the Board of Directors.
xi. Compliance with the Institute of Company Secretaries of India
("ICSI") Secretarial Standards:
The relevant Secretarial Standards issued by the ICSI related to the
Board Meetings and General Meeting have been complied with by the Company.
No disclosure or reporting is required in respect of the following
items as there was no transaction on these items during the year under review.
a. Details relating to deposit and unclaimed deposits or interest
thereon.
b. I ssue of equity shares with differential rights as to dividend or
voting.
c. Issue of shares (including sweat equity shares) and Employee Stock
Option Scheme of the Company under any scheme.
d. None of the managerial personnel i.e. Managing Director, Joint
Managing Director and Whole-time Director of the Company are in receipt of remuneration /
commission from Subsidiary Companies of the Company.
e. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern and Company's operation in future.
xii. IBC Code & One-time Settlement:
The Board of Directors confirms that there are no proceedings pending
against the Company under the Insolvency and Bankruptcy Code, 2016 (IBC Code).
Furthermore, the Company has not engaged in any one-time settlement with any bank or
financial institution during the financial year.
28. CAUTIONARY STATEMENTS:
Certain statements in the "Director's Report & Management
Discussion and Analysis" describing the Company's views about the Industry,
expectations/ predictions, objectives etc., may be forward looking within the meaning of
applicable laws and regulations. Actual results may differ materially from those expressed
in the Statement. Company's operations may inter-alia affect with the supply and demand
stipulations, input prices and their availability, changes in Government regulations,
taxes, exchange fluctuations and other factors such as Industrial relations and economic
developments, etc. Investors should bear the above in mind.
29. APPRECIATION:
Your Company continues to operate efficiently, driven by a strong
culture of professionalism, creativity, integrity, and continuous improvement across all
functions and areas. This commitment, combined with the efficient utilisation of
resources, has enabled sustainable and profitable growth, ensuring long-term value for
stakeholders.
The Board of Directors expresses its sincere appreciation for the
invaluable assistance and cooperation received from financial institutions, banks,
government authorities, customers, vendors, and members during the year under review.
Their support has been instrumental in the Company's continued growth and success.
The Board also wishes to place on record its deep sense of appreciation
for the dedicated and committed services of the Company's executives, staff, and workers,
whose efforts have been pivotal in driving operational excellence and achieving strategic
objectives.
Last but not the least, your Directors wish to place on record their
warm appreciation to you for your continuous support and encouragement.
|
For and on behalf of the Board of
Directors |
|
ARVIND PODDAR |
| PLACE: Mumbai |
Chairman & Managing Director |
| DATED: 23rd May, 2025 |
DIN: 00089984 |
|