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Updated:30 Oct, 2020, 15:59 PM IST

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Updated:30 Oct, 2020, 16:01 PM IST


Your Directors have pleasure in presenting to you the Fifty Fifth Annual Report and the Audited Financial Statements for the 18 months period ended 31st March, 2016.

As per section 2(41) of the Companies Act, 2013, all Companies are required to have a uniform financial year ending 31st March of every year. This requirement is to be complied within two years from the commencement of the Companies Act, 2013. Therefore, the Board of Directors have extended the financial year that commenced on 1st October 2014 to an eighteen months period ending 31st March, 2016 and the same has been approved by the Registrar of Companies, Chennai. Consequently, this Report which is attached to the financial statements is for a period of 18 months i.e., 1st October, 2014 to 31st March, 2016. Hence, the figures for the period under review are not comparable with the previous financial year ended 30th September, 2014.

Performance Overview

During the 18 months period ended 31st March, 2016, your Company’s total income increased to Rs. 22,706 crore from Rs. 14,714 crore in the previous 12 months period ended 30th September,2014. Across the board, there was an overall increase in production in all segments adding up to a 9% increase in total tyre production. During the period under review, the price of natural rubber and the fuel price have softened, resulting in lower raw material cost. Reduction in material cost has been passed on to customers by way of selling price reduction. This has finally resulted in lower top line growth. This apart, your Company could achieve improved results due to the various initiatives taken to improve its operating efficiencies and also through the cost reduction measures undertaken over a period of time.

The Company’s exports stood at Rs. 1,856 crore for the 18 months period ended 31st March, 2016 as against Rs. 1,332 crore for the 12 months period ended 30th September, 2014.

As required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the management discussion and analysis report is attached and forms part of this Annual Report.


Two interim dividends of Rs. 3 each per share (30% each) for the 18 months period ended 31st March, 2016 were declared by the Board of Directors on 27th July,2015 and on 29th October,2015. The Board of Directors is now pleased to recommend a final dividend of Rs. 94 per share (940%) on the paid up equity share capital of the Company, for consideration and approval of the shareholders at the annual general meeting. With this, the total dividend for the entire 18 months period works out to Rs. 100 per share (1000%). The total amount of dividends aggregates to Rs. 42.41 Crore.

The Directors recommend that after making provision for taxation, debenture redemption reserve and proposed dividend, an amount of Rs. 2,284.62 Crore be transferred to general reserve. With this, the Company’s Reserves and Surplus stands at Rs. 6,790.09 Crore.

Industrial Relations

Overall, the industrial relations in all our manufacturing units had been harmonious as well as cordial, except in Thiruvottiyur unit wherein longterm wage settlement is pending. Efforts are being made to resolve the issue. Both production & productivity were maintained at the desired satisfactory levels throughout the period under review.

Prospects for the Current Year

Two successive monsoon failures has hit the automobile industry quite hard in 2015–16, but Indian industry’s tenacity has seen off this sluggish phase with optimism and a modest level of success despite the agrarian distress that characterized the period. Further, hopes of recovery in the tyre industry are tied to a resurgence of growth in the overall economy. The positive sentiment shown by the manufacturing sector in recent months will definitely have an impact on the demand in the tyre industry, both for the Original Equipment Manufacturer [OEM] and the Replacement markets. The increased capacity built up by the various industry players will see heated competition with severe price discounting being the norm and it is critical to protect your Company’s turf in the commercial tyres and the two wheeler segments which will be under severe pressure.

A normal monsoon is predicted for the new season and it is believed this will help the farm sector to show stronger performance in the coming year, with an attendant spike in rural demand that will, hopefully, help drive an all–round recovery in the next fiscal. With the above, your Company hopes to record satisfactory results on account of MRF’s high brand preference and trust reposed by customers in MRF products.

Performance of Subsidiaries

The consolidated financial statements of the Company and its subsidiaries, prepared in accordance with the Companies Act, 2013 and applicable accounting standards form part of the Annual Report. The consolidated financial statements include the financial results of its subsidiary companies.

Pursuant to the provisions of section 136 of the Companies Act, 2013, the financial statements, consolidated financial statements alongwith the relevant documents and audited accounts of subsidiaries are available on the website of the Company.

A statement in Form AOC–1 containing the salient features of the financial statements of the Company’s subsidiaries is attached with the financial statements. The statement also provides details of performance and financial position of the subsidiaries.

Directors’ Responsibility Statement

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

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

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

c) 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;

d) Annual accounts have been prepared on a going concern basis; e) Internal financial controls had been laid down and followed by the company and such internal financial controls are adequate and were operating effectively; and

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

Risk Management

The Company has developed and implemented a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. The Board and the Audit Committee periodically undertake a review of the major risks affecting the Company's business and also the policies/measures evolved to mitigate these risks.

Adequacy of Internal Financial Control

Your Company has in place, adequate internal financial controls with reference to financial statements, commensurate with the nature and size of its business operations.

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

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

Corporate Social Responsibility

As required under section 135 of the Companies Act, 2013, the CSR Policy was formulated by the CSR Committee and thereafter approved by the Board. CSR Pol icy is available on the Company's website <http://www>. m rfty loads/down load.php?f ilename=csr–Policy.pdf.

The details of the CSR initiatives undertaken during the 18 months period ended 31st March, 2016 and other details required to be given under section 1 35 of the Companies Act, 201 3 read with rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure II forming part of this Report.


Mr. K M Philip, Whole–time Director of the Company stepped down from the Board of the Company with effect from 31 st March, 201 5 on account of his advancing age. Mr. K M Philip has been on the Board of MRF from its inception in 1 961. The Board places on record its sincere appreciation and gratitude to Mr. K M Philip for the valuable services rendered by him during his tenure on the Board and in his capacity as the Whole–time Director of the Company.

The Companies Act, 201 3 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 prescribe gender diversity in the Board. Accordingly, the Board has appointed Dr. (Mrs) Cibi Mammen and Mrs. Ambika Mammen as additional directors of the Company with effect from 12th February, 201 5 and 23rd April, 201 5, respectively and they will hold office till the ensuing annual general meeting. Notices along with the requisite deposit in terms of section 1 60 of the Companies Act, 201 3, have been received from members proposing their candidature for the office of director, liable to retire by rotation, at the forthcoming annual general meeting of the Company.

As required by section 1 52 of the Companies Act, 201 3, Mr. Rahul Mammen Mappillai, Whole–time Director of the Company, retires by rotation at the ensuing annual general meeting and is eligible for re–appointment.

The notice convening the annual general meeting includes the proposal for appointment/re–appointment of the above Directors.

The Company has received declarations of independence from all the Independent Directors confirming that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 201 5.

Performance evaluation of the Board, its Committees and Directors

The Board of Directors has made a formal annual evaluation of its own performance and that of its committees pursuant to the provisions of the Companies Act, 201 3. The evaluation was done based on the evaluation criteria formulated by nomination and remuneration committee which includes criteria such as fulfilment of specific functions prescribed by the regulatory framework, adequacy of board meetings, attendance and effectiveness of the deliberations etc.,

The Board and the nomination and remuneration committee also carried out an evaluation of the performance of the individual directors (excluding the director who was evaluated) based on their attendance, participation in deliberations, understanding the Company's business and that of the industry and in guiding the Company in decisions affecting the business and additionally in case of independent directors based on the roles and responsibilities as specified in Schedule IV of the Companies Act, 2013.

Corporate Governance

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

The information pertaining to the number of Board meetings held, the constitution of the Audit Committee, Remuneration Policy of the Company, criteria under section 178(3) of the Companies Act, 2013, Related Party Transactions and the Vigil Mechanism under the various provisions of the Companies Act, 2013, have been disclosed in the Corporate Governance Report which forms part of this report.

Particulars of Employees

The disclosures pertaining to remuneration and other details of directors and employees as required under section 197(12) of the Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been provided in the appendix forming part of this report. Having regard to the provisions of section 136(1) read with its relevant provisions of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished to the members.

The Company has put in place a formal policy in line with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the 18 months period under review, the Company has not received any complaint under the Act.


Your Company accepted deposits for an amount of Rs. 5.68 crore during the 18 months period ended 31st March, 2016. Four deposits aggregating Rs. 0.12 crore remain unclaimed as at the close of the 18 months period ended 31st March, 2016.

There were no defaults in respect of repayment of any deposits or payment of interest thereon during the 18 months period under review. The Company has not accepted any deposits which are not in compliance with the requirements of the Act.

Awards received during the period

Your Company won the Forbes Super 50 Company Award and the Brandz Top 50 Award for being one of the country’s most valuable brands, and has also been awarded the “Top Export Award” by the Chemical And Allied Products Export Promotion Council, India (CAPEXIL) and “Highest Export Award” by the All India Rubber Industries Association for 2015–2016.


As per the Companies Act, 2013, auditors are permitted to hold office for a maximum period of 10 years continuously. The law provides time of three years to comply with the new requirements. Messrs. Sastri & Shah, Chennai and M M Nissim & Co., Mumbai have been the Joint Statutory Auditors of the Company for more than 10 years. In order to comply with the requirements of law, Messrs. M M Nissim & Co., Chartered Accountants, Mumbai, have informed the Company that they do not wish to seek re–appointment at the forthcoming annual general meeting.

The Board of Directors, on the recommendations of the Audit Committee, at the meeting held on 3rd May, 2016, have decided to recommend to the shareholders, the appointment of Messrs. SCA AND ASSOCIATES, Mumbai (Firm Regn. No. 101174W), as the Statutory Auditors of the Company for a period of 5 years from the conclusion of the Fifty Fifth annual general meeting until the conclusion of the Sixtieth annual general meeting of the Company, subject to ratification annually by shareholders, if required by law. Messrs. SCA AND ASSOCIATES have given their consent to act as Joint Statutory Auditors and have also confirmed that their appointment, if made, shall be in accordance with the provisions of the Companies Act, 2013.

The Board has also decided to recommend re–appointment of Messrs. Sastri and Shah, Chennai (Firm Regn. No. 003643S), the other joint Statutory Auditor, who retire at the conclusion of the forthcoming 55th annual general meeting for a further period of one year till the conclusion of the 56th annual general meeting of the Company.

Cost Audit

The Board of Directors, on the recommendation of the Audit Committee, has approved the re–appointment of Mr. C Govindan Kutty, Cost Accountant, as Cost Auditor of the Company for the financial year ending 31st March, 2017, under section 148 of the Companies Act, 2013, and recommends ratification of his remuneration by the shareholders at the ensuing annual general meeting.

Secretarial Audit

Pursuant to provisions of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company engaged the services of Mr. K Elangovan, Elangovan Associates, Company Secretaries, Chennai to conduct the Secretarial Audit of the Company for the 18 months period ended 31st March, 2016. The Secretarial Audit Report (in Form MR–3) is attached as Annexure–III, to this Report. The Secretarial Auditor’s Report to the shareholders does not contain any qualification.

Voluntary Delisting of Company’s Equity Shares from the Madras Stock Exchange Limited

Consequent to the decision taken by Madras Stock Exchange for voluntary de–recognition and exit as a Stock Exchange, the equity shares of the Company have been removed from the list of Listed Securities of Madras Stock Exchange with effect from 04th February, 2015.

Extract of Annual Return

An extract of Annual Return in Form MGT–9 as on 31st March, 2016 is attached as Annexure–IV to this Report.

Extension of Annual General Meeting

Consequent to the approval granted by the Registrar of Companies, Chennai for extending the financial year of the Company to 31st March, 2016, Registrar of Companies has vide order dated 20th November, 2015, granted extension of time for conduct of the annual general meeting of the Company by 3 months.

Other Matters

There are no material changes and commitments affecting the financial position of the Company between the 18 months period ended 31st March, 2016 and the date of this Report. During the period under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

Details of loans, guarantees and investments covered by the provisions of section 186 of the Companies Act, 2013 are given in Note 27 of the Notes to the financial statements.


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

On behalf of the Board of Directors,


Chairman & Managing Director


3rd May, 2016

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