d) The rights, preferences and restrictions attached to equity shares of the Company
The Company has only one class of issued shares referred to as equity shares having a par value of H 1 each. The holder of equity shares are entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
e) Over the period of five years immediately preceding March 31, 2025 and March 31, 2024, neither any bonus shares were issued nor any shares were allotted for consideration other than cash. Further, no shares were bought back during the said period.
6. Description of nature and purpose of each reserve
i. Securities premium
Securities premium is used to record the premium on issue of shares. The same will be utilised in accordance with provisions of the Act.
ii. General reserve
General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purpose. General reserve is created by transfer from one component of equity to another and is not an item of other comprehensive income.
iii. Capital reserve on Apollo (Mauritius) Holdings Private Limited (''AMHPL'') merger
AMHPL erstwhile (subsidiary company) was merged with the Company resulting in a capital reserve.
iv. Debenture redemption reserve
The Company is required to create a Debenture Redemption Reserve (DRR) of 25% of the value of debentures issued out of the profits which are available for redemption of debentures, either by a public issue or on a private placement basis as per the Companies Act, 2013. The amounts credited to the debenture redemption reserve may not be utilised by the Company except to redeem debentures. No DRR is required to be created after August 16, 2019.
v. Capital subsidy
This balance represents subsidy received in earlier years under New Industrial Policy 2007 of the Government of Tamil Nadu for expansion and employment generation within SIPCOT Industrial park.
vi. Capital redemption reserve
This balance has been created in accordance with provision of the Act for the buy back of equity shares from the market.
vii. Capital reserve on forfeiture of shares
This reserve was created on forfeiture of shares by the Company. The reserve is not available for the distribution to the shareholders.
viii. Retained earnings
Retained earnings are created from the profits of the Company, as adjusted for distribution to owners, transfer to other reserve, remeasurement of defined benefit plan, etc.
ix. Cash Flow Hedge
It represents mark-to-market valuation of effective hedges as required by Ind AS 109 - Financial Instruments.
x. Revaluation surplus
Revaluation surplus represents increase in carrying amount arising on revaluation of land and building recognised in other comprehensive income and accumulated in reserves.
8. Leases
i. Nature of leasing activities
The Company has entered into lease arrangements for various warehouses, plant and equipments, and offices that are renewable on a periodic basis with approval of both lessor and lessee.
ii. The Company does not have any lease commitments towards variable rent as per the contract.
iii. Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublet the asset to another party, the right-of-use asset can only be used by the Company. Leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. The Company is prohibited from selling or pledging the underlying leased assets as security. For leases over office buildings and factory premises the Company must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease.
10. Employee benefit liability
A. Defined contribution plans
a. Superannuation plan: The Company contributes a sum equivalent to 15% of the eligible employees' basic salary to a superannuation fund administered and maintained by the Life Insurance Corporation of India (LIC). The Company has no liability for future superannuation fund benefits other than its annual contribution and recognizes such contributions as an expense in the year incurred. The amount of contribution made by the Company to Superannuation Fund is J 167.51 Million (H 145.22 Million).
b. Provident fund: Contributions are made to the Company's employees' provident fund trust / regional provident fund in accordance with the fund rules. The interest rate payable to the beneficiaries every year is being notified by the Government.
In the case of contributions to the trust, the Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate and recognises such obligation as an expense.
The amount of contributions made by the Company to employees' provident fund trust / regional provident fund is ? 426.92 Million (H 395.46 Million).
c. National Pension Scheme (NPS): Company make contributions towards National Pension Scheme (“NPS”) which is a defined contribution retirement benefit plans for employees who have opted for the contribution towards NPS.
B. Defined benefit plans
Gratuity
The Company operates a defined benefit gratuity plan. Every employee who has completed five years or more of service receives gratuity on leaving the Company as per the Payments of Gratuity Act, 1972. The scheme is funded with LIC.
The following table summarizes the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the respective plan:
iii. The Company has concluded that the deferred tax assets including assets on carry forward of losses and MAT entitlement will be fully recoverable using the estimated future taxable income based on the approved business plans and budgets for the Company.
12. Government grants
(a) Investment promotion subsidy
The Government of Tamil Nadu (GoTN) has sanctioned a structured package of assistance to the Company for setting up/expansion of their project in the state of Tamil Nadu, pursuant to which a Memorandum of Understanding (MoU) executed between GoTN and the Company.
The Company is entitled, interalia, for refund of an amount equal to Net Output (VAT CST)/SGST paid by the Company to GoTN in the form of Investment Promotion Subsidy (referred to as Phase I). As the Company has fulfilled the relevant obligations, the Company has recognized subsidy income of J 935.39 Million (H 947.67 Million) as other operating income, being the eligible amount of refund of Net Output (VAT CST) /SGST paid by the Company to GoTN.
In addition to above, the Company is entitled, for refund of an amount equal to 1% of the capital investment for a period of 12 years to be payable in equal annual instalments in the form of Investment Promotion Capital Subsidy (referred to as Phase II). Accordingly, the Company has recognised grant receivable at its fair value, amounting to J 1.405.72 Million (H 1,551.59 Million) under non-current financial assets and J270 Million (H 270 Million) under current financial assets. Deferred grant income amounting J 1,220.84 Million (H 1,356.49 Million) is recognised under other non-current liabilities and J 135.65 Million (H 135.65 Million) under other current liabilities. Deferred income will be recognised in the statement of profit or loss on a systematic basis over the useful life of the asset (15 years). During the year, the Company has recorded grant income amounting to J 135.65 Million (H 135.65 Million) under Other operating income and accretion of grant recoverable as finance income amounting to J 124.13 Million (H 133.39 Million) under Other income.
In addition to above, the Company is entitled, for refund of an amount equal to 1% of the capital investment for a period of 15 years to be payable in equal annual instalments in the form of Investment Promotion Capital Subsidy (referred to as Phase III). Accordingly, the Company has recognised grant receivable at its fair value, amounting to J 370.91 Million (H 388.39 Million) under non-current financial assets and J 50.50 Million (H 50.50 Million) under current financial assets. Deferred grant income amounting J 317.83 Million (H 346.72 Million) is recognised under other non-current liabilities and J 28.89 Million (H 28.89 Million) under other current liabilities. Deferred income will be recognised in the statement of profit or loss on a systematic basis over the useful life of the asset (15 years). During the year, the Company has recorded grant income amounting to J 28.89 Million (H 79.39 Million) under Other operating income and accretion of grant recoverable as finance income amounting to J 33.01 Million (H 34.38 Million) under Other income.
Also, the Government of Andhra Pradesh (GoAP) has sanctioned a structured package of assistance to the Company for setting up of their project in the state of Andhra Pradesh, pursuant to which a Memorandum of Understanding (MoU) executed between GoAP and the Company. The Company is entitled, interalia, for refund of an amount equal to Net SGST paid by the Company to GoAP in the form of Investment Promotion Subsidy. As the Company has fulfilled the relevant obligations which is established upon receipt of sanction letter approving the incentive amount, the Company has recognized subsidy income of J 218.63 Million (H 214.62 Million) as other operating income, being the eligible amount of refund of Net SGST paid by the Company to GoAP. Also the company has netted off power expenses by J 93.59 Million (H 102.24 Million), being receivable from government under the aforesaid MoU. Since there is a delay in receipt of these amounts, the Company has applied expected credit loss (ECL) model for the investment promotion subsidy receivable and accordingly provided for an amount of J 38.11 Million (H 174.64 Million) in miscellaneous expenses. The gross amount of closing balance of Investment Promotion Subsidy is J 1,111.71 Million (H 799.49 Million) and Expected credit loss with respect to time value of money is J 212.75 Million (H 174.64 Million).
(b) Export Promotion Capital Goods
The Company had imported Property, plant and equipment under the Export Promotion Capital Goods (EPCG) scheme wherein the Company is allowed to import capital goods including spares without payment of customs duty, subject to certain export obligations which should be fulfilled within specified time period. During the year, the custom duty benefit received amounts to J 96.51 Million (H 21.74 Million) with a corresponding increase in the value of property, plant and equipment and Capital Work in Progress. The grant amounting to J 912.19 Million (H 843 Million) where export obligations have been met, have been recognized in Statement of Profit and Loss as other operating income. At the year end, the portion of grant for which the export obligation has not been met is retained in deferred revenue under other current liabilities.
13. Financial instrument
A. Capital risk management
The capital structure of the Company consists of debt, cash and cash equivalents and equity attributable to equity shareholders of the Company which comprises issued share capital (including premium) and accumulated reserves disclosed in the statement of changes in equity.
The Company's capital management objective is to achieve an optimal weighted average cost of capital while continuing to safeguard the Company's ability to meet its liquidity requirements (including its commitments in respect of capital expenditure) and repay loans as they fall due.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is debt divided by total equity. The Company's policy is to keep an optimum gearing ratio. The Company includes within debt, interest bearing loans and borrowings.
B. Financial risk management
a) Market risk
The Company's activities expose it primarily to the financial risk of changes in foreign currency exchange rates and changes in interest rates. The Company enters into a variety of derivate financial instrument to manage its exposure to foreign currency and interest rates. There have been no changes to the Company's exposure to market risk or the manner in which it manages and measures the risk in recent past.
i) Currency risk
The Company's exposure arises mainly on import of raw material and capital items and export of finished goods. The Company follows a policy of matching of import and export exposures (natural hedge) to reduce the net exposure in any foreign currency. Whenever the natural hedge is not available or is not fully covering the foreign currency exposure of the Company, management uses certain derivative instruments to manage its exposure to the foreign currency risk. Foreign currency transactions are managed within approved policy parameters.
ii) Interest rate risk
The Company is exposed to interest rate risk as the Company borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings. The use of interest rate swaps are also entered into, especially to hedge the floating rate borrowings or to convert the foreign currency floating interest rates to the domestic currency floating interest rates.
Interest on variable rate borrowings are converted at fixed rate since the Company has hedged interest rate risk fully and effectively with the hedging instruments.
b) Credit risk
Credit risk is the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company had adopted a policy of only dealing with creditworthy customers.
In many cases an appropriate advance or letter of credit / bank guarantee is taken from the customers to cover the risk. In other cases credit limit is granted to customer after assessing the credit worthiness based on the information supplied by credit rating agencies, publicly available financial information or its own past trading records and trends. At the year end, the Company did not consider there to be any significant concentration of credit risk which had not been adequately provided for. The carrying amount of the financial assets recorded in the financial statements, grossed up for any allowances for losses, represents the maximum exposure to credit risk.
c) Liquidity risk
The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities for the Company.
The Company had established an appropriate liquidity risk management framework for it's short term, medium term and long term funding requirement.
d) Commodity risk
The Company has risk of price volatility and supply against its major raw materials and management is mitigating this risk by taking strategic decision on regular basis.
The below tables summarise the maturity profile of the Company's financial assets and financial liabilities
Interest rate swap
The Company has an interest rate swap agreement that allows it to convert the floating EURIBOR EUR asset to fixed INR asset. Under this transaction the Company will be receiving INR principal and coupon on the respective exchange dates. The ineffectiveness recognised in March 31, 2025 is insignificant.
Foreign exchange forward contracts
While the Company entered into other foreign exchange forward contracts with the intention of reducing the foreign exchange risk of expected sales and purchased, these other contracts are not designated in hedge relationships and are measured at fair value through profit or loss.
iii. Fair value of financial assets / liabilities (other than investment in subsidiaries) that are not measured at fair value
The management considers that the carrying amount of financial assets and financial liabilities recognised at amortised cost in the balance sheet approximates their fair value.
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Company receives payment from customers based on a billing schedule, as established in the contracts with customers. Trade receivable are recognised when the right to consideration becomes unconditional. Contract liability relates to payments received in advance of performance under the contract. Contract liabilities are recognised as revenue as (or when) the Company perform under the contract.
The company carries out research and development activities to bring cutting edge technology and innovation in relation to tyre manufacturing.
18. a) The Ministry of Environment, Forest and Climate Change vide Notification dated 21st July 2022, notified Regulations on Extended Producer Responsibility (EPR) for waste tyre. Under the said Regulations, the Company was required to meet specified waste recycling targets (levy) from the financial year ended March 31, 2023 onwards. Basis management's internal assessment of Hazardous and Other Wastes (Management and Transboundary Movement) Amendment Rules 2022, Management believes that the Company has an obligation to complete the Extended Producer Responsibility targets for waste tyres, only if it is a participant in the market during a financial year. The obligation for a financial year is measured based on sales made in the preceeding years. The obligations are to be fulfilled by purchasing certificates from the recyclers
who are registered with the Central Pollution Control Board. The calculation of the levy was based on the domestic revenue, generated in FY 20-21 (used for computing obligation in FY 22-23) and in FY 21-22 (used for computing obligation in FY 2324). Due to lack of necessary mechanism for the fulfilment of aforesaid obligation in the previous years, the Company had recognized the provision for the financial year ended March 31, 2023, amounting to J 312.16 Million in the year ended March 31, 2024 (which has been disclosed as an exceptional item).
b) The Company had carried out an employee re-organisation exercise for its employees. The full and final amount paid to the employees who opted for this scheme aggregated to J 245.21 Million (H 445.77 Million) has been disclosed as an exceptional item.
c) The Board of Directors of the wholly owned subsidiary Company, “Trusted Mobility Services Limited” had passed a resolution for closure of the operations on July 24, 2024. Consequent to the effect of above said resolution, the Company has written off its investment of H 230.00 Million, impaired intangible assets of J 122.43 Million and recognised corresponding costs for closure of operations of H 15.30 Million and disclosed the same as an exceptional item.
d) During the year ended March 31, 2025, the Company has received J 103.32 Million and 400,000 units of Roadstar Infra Investment Trust having face value of H 100 each, which is recorded at a nominal value of H 1 each from IL&FS Financial Services Ltd (“IL&FS”) as an interim distribution with respect to the unsecured short-term inter corporate deposits of J 2,000 Million with IL&FS which has already been written off in earlier years. The same has been disclosed as an exceptional item.
Certain KMPs also participate in post employment benefits plans provided by the Company. The amount in respect of these towards the KMPs can not be segregated as these are based on actuarial valuation for all employees of the Company.
*This represents undiscounted value.
21. Segment reporting
The Company has opted to provide segment information in its consolidated Ind AS financial statements in accordance with para 4 of Ind AS 108 - Operating Segments.
22. Contingent liabilities
In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an on-going basis, with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.
The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company's financial condition, results of operations or cash flows.
(a) The Company does not expect any outflows in respect of the above contingent liabilities.
(b) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.
b The Competition Commission of India ('CCI') on February 2, 2022 has released its order dated August 31, 2018 on the Company, other Tyre Manufacturers and Automotive Tyre Manufacturer Association alleging contravention of the provisions of the Competition Act, 2002 in the year 2011-12 and imposed a penalty of H 4,255.30 Million on the Company. The Company had filed an appeal against the CCI Order before the Honourable National Company Law Appellate Tribunal (NCLAT). NCLAT in its order dated December 1, 2022, has remanded the matter back to the CCI to hear the parties again and review its findings. CCI has filed an Appeal before the Supreme Court against the Order passed by the NCLAT. Company is also a Respondent in the said Appeal. Pending disposal of the matter and based on legal advice, the Company believes that it has a strong case and accordingly no provision is considered in these standalone financial statements.
24. Reconciliation of liabilities from financing activities
Effective April 01, 2017, the Company adopted the amendment to Ind AS-7, which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirements. The required disclosure are presented below:
26. Events after the balance sheet date
The Board of Directors have recommended a final dividend of H 5.00 per share amounting to H 3,175.50 Million on equity shares of H 1/- each for the year, subject to approval from Shareholders.
27. During the year, the Company has reassessed presentation in line of certain pronuncements and regulatory changes. Accordingly, amounts aggregating to J 1,007.98 Million (H 1,772.83 Million), previously classified under 'Trade payables', have been reclassified under the head 'Other financial liabilities'. The above changes do not impact recognition and measurement of items in the financial statements and consequentially, there is no impact on total equity and/ or profit (loss) for the current or any of the earlier periods.
32. The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except the feature of a concurrent real time audit trail does not exist for the direct changes using privileged user accounts in the database. Further, no instance of audit trail feature being tampered with was noted in respect of accounting software wherein the audit trail was enabled. Additionally, the audit trail of prior year has been preserved as per the statutory requirements for record retention to the extent it was enabled and recorded in the respective year.
33. The Company had invested H 96.00 Million by purchasing 1,200,000 equity shares of CSE Deccan Solar Private Limited, totalling equity stake 27.27% as on March 31, 2025, to get a guaranteed supply of 40 Million units of electricity per annum for its Chennai Plant. This amount is refundable after the tenure. Consequent to this investment, CSE Deccan Solar Private Limited has been considered as an Associate Company as per the requirement of Companies Act, 2013.
However, as per the provisions of IND AS 28 - Investment in Associates and Joint Ventures, the said investment made by the Company is in the form of a deposit which will be returned to the Company at the end of the tenure with no residual interest. Therefore, this investment has been accounted for as per the provisions of IND AS 109 Financial Instruments.
34. Other Statutory Information
(i) There are no proceedings that has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules thereunder.
(ii) There are no transactions with companies that are struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956.
(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 have 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 Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) The Company does not have any such transaction which is not recorded 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 wilful defaulter by any bank or financial institution or any of the lender.
(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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