1. The Company has incurred ' 26.70 Crores (Previous year - ' 27.34 Crores) for the year ended 31st March, 2025 towards expenses relating to short-term leases and leases of low-value assets (Refer Note 23). The total cash outflow for leases is ' 207.32 Crores (Previous year - ' 179.80 Crores) for the year ended 31st March, 2025, including cash outflow of short-term leases and leases of low-value assets. Interest on lease liabilities is '77.67 Crores (Previous year - ' 65.84 Crores) for the year ended 31st March, 2025 (Refer Note 22).
2. The Company's leases mainly comprise of land,buildings and Vehicles. The Company mainly leases land and buildings for its manufacturing, warehouse facilities and sales offices. The Company has leased vehicles for its Goods Transporation.
A. Capital Management
For the purpose of Company's Capital Management, capital includes Issued Equity Capital, Securities Premium and all other Equity Reserves attributable to the Equity Holders of the Company. The primary objective of the Company's Capital Management is to maximise the Share Holder Value.
The Company manages its capital structure and makes adjustments in the light of changes in economic conditions and requirements of the financial covenants and to continue as a going concern. The Company monitors using a gearing ratio which is net debts divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and short term deposit.
B. Financial Risk Management
The Company's principal financial liabilities comprise loans and borrowings, lease liability, trade and other payables. The main purpose of these financial liabilities is to finance the operations of the Company. The principal financial assets include trade and other receivables, investments in mutual funds, bonds, cash and short term deposits.
The Company has assessed market risk, credit risk and liquidity risk to its financial instruments.
i) Market Risk
Is the risk of loss of future earnings, fair values or cash flows that may result from a change in the price of a financial instrument, as a result of interest rates, foreign exchange rates and other price risks. Financial instruments affected by market risks, primarily include loans & borrowings, investments and foreign currency receivables, payables and borrowings.
a) Interest Rate Risk :
The Company borrows funds in Indian Rupees to meet both the long term and short term funding requirements. The Company due to its AAA rated status commands one of the cheapest source of funding. Interest rate is fixed for the tenor of the Long term loans availed by the Company. Interest on Short term borrowings is subject to floating interest rate and are repriced regularly. The sensitivity analysis detailed below have been determined based on the exposure to variable interest rates on the average outstanding amounts due to bankers over a year.
The Company had issued floating interest rate Non convertible debenture linked to 6 month T-Bill rate, to meet the long term funding requirements.
If the interest rates had been 1% higher / lower and all other variables held constant, the Company's profit for the year ended 31st March, 2025 would have been decreased/increased by ' 2.96 crores. (Previous year - ' 8.14 crores).
The Company is mainly exposed to changes in US Dollar. The sensitivity to a 1.25% (Previous year - 0.74%) increase or decrease in US Dollar against INR with all other variables held constant will be /(-) '0.20 Crores (previous year - '0.95 Crores)
The Sensitivity analysis is prepared on the net unhedged exposure of the Company at the reporting date.
Hedged Foreign Currency exposures :
Foreign Exchange forward Contracts on certain highly probable forecast transactions, are measured at fair value through OCI on being designated as Cash Flow Hedges.
The Company also enters into foreign exchange forward contracts with the intention to minimise the foreign exchange risk of expected purchases, these contracts are not designated in hedge relationships and are measured at fair value through profit or loss.
Figures in brackets are in respect of Previous year.
The terms of the foreign currency forward contracts match the terms of the transactions. As a result, no hedge ineffectiveness arises requiring recognition through profit or loss.
c) Price Risk :
The Company is affected by the price stability of certain commodities. Due to the significantly increased volatility of certain commodities like Natural Rubber, Synthetic Rubber, Compound Rubber and other Chemicals, the Company enters into purchase contracts on a short to medium Term and forward foreign exchange contracts are entered into to bring in stability of price fluctuations.
The Company's investments in Quoted and Unquoted Securities are susceptible to market price risk arising from uncertainties about future values of investment securities. The Company manages the securities price risk through investments in debt and arbitrage funds and diversification by placing limits on individual and total investments. Reports on Investment Portfolio are reviewed on regular basis and all approvals of investment decisions are done in concurrence with the senior management.
As at 31st March 2025 the investments in debt, arbitrage mutual funds and bonds amounts to '4517.88 Crores (Previous year - '3366.16 Crores). A 1% point increase or decrease in the NAV with all other variables held constant would have lead to approximately an additional '45 Crores (Previous year - ' 34 Crores) on either side in the statement of profit and loss.
ii) Credit Risk
Is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. It arises from credit exposure to customers, financial instruments viz., Bonds, Debt and Arbitrage Funds, Fixed Deposits Others and Balances with Banks.
The Company's marketing policies are well structured and all replacement sales are predominantly through dealers and the outstanding are secured by dealer deposits. As regards sales to O.E., and other institutional sales, the Company carries out periodic credit checks and also limits the exposure by establishing maximum payment period for customers and by offering prompt payment discounts. The outstanding trade receivables due for a period exceeding 180 days as at the year ended 31st March,2025 is 0.10%(31st March, 2024 0.02%) of the total trade receivables.
There are no transactions with single customer which amounts to 10% or more of the Company's revenue.
The Company uses Expected Credit Loss (ECL) Model to assess the impairment loss or gain. The allowance for lifetime ECL on customer balances for the year ended 31st March 2025 is '1.02 Crores and for the previous year 31st March 2024 was ' 1.63 Crores.
The Company holds cash and deposits with banks which are having highest safety rankings and hence has a low credit risk.
Investments in mutual funds are primarily debt and arbitrage funds, which have high safety ratings and are monitored on a monthly basis. The Company is of the opinion that its mutual fund investments have low credit risk.
iii) Liquidity Risk
The Company manages liquidity risk by maintaining adequate surplus, banking facilities and reserve borrowing facilities by continuously monitoring forecasts and actual cash flows.
The Company has a system of forecasting rolling three months cash inflow and outflow and all liquidity requirements are planned.
All Long term borrowings are for a fixed tenor and generally these cannot be foreclosed.
The Company has access to various source of Short term funding and debt maturing within 12 months can be rolled over with existing lenders/new lenders, or repaid based on short term requirements.
Trade and other payables are plugged into the three months rolling cash flow forecast to ensure timely funding, if required.
All payments are made along due dates and requests for early payments are entertained after due approval and availing early payment discounts.
The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The Fair Value of financial assets and liabilities included is the amount at which the instrument could be exchanged in a current transaction between willing parties. The following methods and assumptions were used to estimate the fair value.
1. The Fair values of Debt and Arbitrage Mutual Funds and Quoted Equities are based on NAV / Quoted Price at the reporting date. Further, the Company had invested in Co-operative Societies and in certain other companies towards the corpus. These are non participative shares and normally no dividend is accrued. The Company has carried these investments at it transaction value considering it to be its fair value.
2. The Company enters into Derivative financial instruments with counterparties principally with Banks with investment grade credit ratings. The foreign exchange forward contracts are valued using valuation techniques which employs the use of market observable inputs namely, Marked-to-Market.
NOTE 27 ADDITIONAL/EXPLANATORY INFORMATION :a) Disclosure required by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; and section 186(4) of the Companies Act, 2013 :
1. Details of Investments made are given in Note 3
2. Amount of Loans and advances in the nature of loans outstanding from /to subsidiaries - ' Nil (Previous year - ' Nil)
3. Loans to employees have been considered to be outside the purview of disclosure requirements.
4. Investment by Loanee in the shares of the Parent company- Nil ( Previous year - Nil)
(d) Terms and conditions of transactions with related parties;
The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31st March 2025, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (Previous Year: ' Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
d. Disclosures under Ind AS 108 - "Operating Segment" :
The Company is engaged interalia in the manufacture of Rubber Products such as Tyres, Tubes, Flaps, Tread Rubber. These in the context of IND AS - 108 - 'Operating Segment' are considered to constitute one single primary segment. The Company's operations outside India do not exceed the quantitative threshold for disclosure envisaged in the IND AS. Non-reportable segments has not been disclosed as unallocated reconciling item in view of its materiality. In view of the above, operating segment disclosures for business/geographical segment are not applicable to the Company.
h. Terms of Repayment and Security Description of Borrowings:(refer note 11)
a) Current Borrowings
i) Loans repayable on demand from banks are secured by hypothecation of Inventories and book debts, equivalent to the outstanding amount and carries interest rates at the rate of 7% to 9% (Previous year 6.88% to 7.90%).
b) Non Current Borrowings
i) Indian Rupee Term Loan (Unsecured) from the HSBC Bank.
Indian Rupee Term Loan of ' 150 crores availed in July,2021 is for capital expenditure. Interest is payable at a rate equal to the three months T-Bill rate plus a margin of 1.33% payable monthly. The said Loan is repayable in three equal annual installment in July, 2025/July, 2026/July, 2027.
ii) Indian Rupee Term Loan (Unsecured) from the HDFC Bank.
a) Indian Rupee Term Loan of ' 300 crores availed in June, 2020 is for capital expenditure. Interest is payable at a rate equal to repo rate plus a margin of 1.70% payable monthly. The said Loan is repayable in three equal annual installment in June, 2024/June, 2025/June, 2026.
b) Indian Rupee Term Loan of ' 150 crores availed in June, 2021 is for capital expenditure. Interest is payable at a rate equal to repo rate plus a margin of 0.75% payable monthly. The said Loan is repayable in three equal annual installment in June, 2025/June, 2026/June, 2027.
iii) 15,000 [Floating Interest rate linked to 6 month T-Bill rate] Listed Unsecured rated redeemable Taxable Non Convertible Debentures of ' 1,00,000/- each aggregating to ' 150 crore issued on 24th February 2023, are to be redeemed on 24th February, 2026.
iv) Secured Loan of '80.92 Crores was availed under SIPCOT soft loan in March 2020, further, additional SIPCOT Loan (secured) of ' 7.75 Crores was availed in March 2023. Interest is payable quartely at a rate of 0.10% (Previous year - 0.10%). These loans are secured by way of second charge on the Fixed Assets created at the company's plants at Perambalur, near Trichy,Tamil Nadu. These loans will be repaid in full in April 2033 and April 2036 respectively.
v) Deferred payment credit is repayable along with interest (at varying rates) in 240 consecutive monthly instalments ending in March 2026.
i. Inventories
I nventories written down for obsolescence and Non-moving stocks for the year amounts to '14.33 crores (Previous Year-'4.47 crores) net of reversal. The amount of write down of inventories to net realizable value recognised as an expenses was ' 8.99 crores (Previous Year-'9.83 crores). The reversal of write-down is on account of offtake/usage and better price realization.The cost of inventories recognised as an expense during the year in respect of continuing operations was '18293.03 crores (Previous Year- '15352.46 crores).
j. Extended Producer Responsibility (EPR)
Vide Notification dated 21st July 2022, The Ministry of Environment, Forest and Climate Change notified Regulations on Extended Producer Responsibilities (EPR) for waste tyres applicable to tyre manufacturers.The Company has a present legal obligation as at the year end to recognize a liability with respect to the levy. The Company has recognized a provision for 2024-25, amounting to '120.89 crores (net of reversal of '37.46 crores relating to earlier years). The obligations are to be fulfilled by purchasing certificates from recyclers who are registered with the Central Pollution Control Board. The calculation of the levy is based on the domestic revenue, generated in 2022-23 ( used for computing obligation in 2024-25).
k. The amount due and paid during the year to "Investor Education and Protection Fund" is '0.46 crores (Previous year - '0.80 crores).
l. Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceeding three financial years on corporate social responsibility (CSR) Activities, which for the financial year ended 31st March 2025 amounts to ' 29.82 crores (Previous year - ' 25.08 crores). A CSR Committee has been formed by the Company as per the Act. During the financial year ended 31st March 2025, the Company has incurred an amount of '14.47 crores.
n. Events Occuring after the Balance Sheet date
The proposed final dividend for Financial Year 2024-25 amounting to '97.12 Crores will be recognised as distribution to owners during the financial year 2025-26 on its approval by Shareholders. The proposed final dividend amounts to '229/- per share.
o. Capital and Other Commitments
(i) Estimated amount of contracts remaining to be executed on Capital Account, net of advances and not provided for - '714.11 Crores (Previous Year ' 1334.36 Crores)
(ii) Guarantees given by the Banks - '65.03 Crores (Previous Year - ' 56.10 Crores)
(iii) Letters of Credit issued by the Banks - ' 168.23 Crores (Previous Year - ' 373.82 Crores)
(iv) Commitments relating to Lease arrangements - Refer Note 2(c)( 3)
(v) Commitment to Rubber Board towards Promotion of Rubber Plantations in North East and Other Parts of India- ' 208.04 Crores(net of payments) (Previous Year-'294.01 crores)
(vi) Derivative contract related commitments -Refer Note 24B(i)(b)
q. (i) Contingent Liabilities not provided for:
Claims not acknowledged as debts:
(a) Competition Commission of India (CCI) matter - Refer Note 1 below
(b) Disputed Sales Tax demands pending before the Appellate Authorities /High Court - ' 241.39 Crores ( Previous Year- ' 254.46 Crores).Against the said demand the Company has deposited an amount of '3.63 Crores (Previous Year - ' 3.50 Crores)
(c) Contractual claims not acknowledged-' 7.76 Crores (Previous Year - '7.76 Crores)
(d) Disputed Excise/Customs Duty demands pending before the Appellate Authorities/High Court - ' 594.43 Crores (Previous Year - ' 594.47 Crores). Against the said demand the Company has deposited an amount of ' 18.21 Crores (Previous Year - '18.15 Crores)
(e) Disputed Income Tax Demands - ' 103.44 Crores (Previous Year - ' 417.27 Crores). Against the said demand the Company has deposited an amount of '117.12 Crores (Previous Year - ' 162.18 Crores). Reduction in Tax demands is on account of favourable orders received during the year.
(f) Disputed Goods and Service Tax demands pending before the Appellate Authorities - ' 69.66 Crores ( Previous Year- ' 37.12 Crores ). Against the said demand the Company has deposited an amount of ' 3.59 Crores (Previous Year - ' 2.69 Crores)
Note 1: The Competition Commission of India (CCI) had on 2nd February,2022 released its order dated 31st August,2018,imposing penalty on certain Tyre Manufacturers including the Company and also the Automotive Tyre Manufacturers' Association, concerning the breach of the provisions of the Competition Act 2002, during the year 2011-12. A penalty of '622.09 Crores was imposed on the Company. The appeal filed by the Company before National Company Law Appellate Tribunal (NCLAT) has been disposed off by remanding the matter to CCI for review after hearing the parties. CCI has in February 2023 filed an appeal against the Order of NCLAT before the Hon'ble Supreme Court. Pending disposal, the Company has filed an appeal before the Hon'ble Supreme Court against the order of NCLAT, which has been tagged with the appeal filed by CCI in the Supreme Court. The Company is of the view that no provision is considered necessary in respect of this matter in the Standalone Financial Statements.
r. Other Statutory Information
(i) The Company does not have any Benami property nor any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company does not have any transactions with companies struck off.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vii) The Company has not recorded any transaction in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(viii) The Company has not been declared a wilful defaulter by any bank or financial institution or any of the lenders.
(ix) The quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.
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