Annual Report 2022-23

ANNUAL REPORT 2022-23

THE MASTERS OF

INDIAN ROADS

MRF Limited

No.114, Greams Road, Chennai - 600 006.

Tel: +91 44 28292777 Fax: +91 44 28295087

CIN: L25111TN1960PLC004306

E-mail: [email protected] | Website: www.mrftyres.com

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PAGE

1. CHAIRMAN’S MESSAGE 1

2. NEW PRODUCT LAUNCH 2-4

3. MRF T & S 5

4. AWARDS AND ACCOLADES 6

5. ESG 7

6. MRF CORP 8

7. MOTORSPORT 9

8. GROWTH STORY 10-11

9. BOARD OF DIRECTORS 12

10. 13

PAGE

12. REPORT ON CORPORATE GOVERNANCE 37

13. BUSINESS RESPONSIBILITY

AND SUSTAINABILITY REPORT 54

14. STANDALONE FINANCIAL STATEMENTS 80

15. BALANCE SHEET 92

16. STATEMENT OF PROFIT AND LOSS 93

17. NOTES FORMING PART OF THE

FINANCIAL STATEMENTS 102

18. CONSOLIDATED FINANCIAL STATEMENTS 150

19. FORM AOC-1 212

CONTENT

ANNUAL REPORT 2022 - 2023

MANAGEMENT DISCUSSION AND ANALYSIS

BOARD’S REPORT

11. 33

K.M. MAMMEN

Chairman & Managing Director

Dear Shareholders,

In the closing stages of last financial year we were still in the midst of a raw material crisis. The prices of raw

materials were continually increasing necessitating increasing our prices too. Fortunately, over a period of time the

raw material prices have stabilised and this has helped business in the current year.

In the current year we have recorded an all-time high consolidated total income of Rs.23,261 crores which is an

increase of Rs.3,627 crores over the previous year. This huge increase in consolidated total income reveals

the strength of MRF and its products. One of the resounding success of last year was the launching of our Scooter

tyre Zapper C1. It has received excellent response from the customers and it has helped in increasing our

2 wheeler tyre sales.

Last year’s problem of the semi-conductors shortage has more or less disappeared and the production level of

automobile industries have reflected this. Electric vehicles are now coming out in each of the categories and it will

take some time before we can see how this trend plays out.

The Tractor tyre sales, which was rather muted last year, has shown encouraging results in the current year. With

MRF leading in product preference in Farm tyres, this has also helped increase our sale.

Brand Finance, the world’s leading brand valuation consultancy has released the Automotive Industry 2023 study

and ranked MRF Tyres as the 2nd Strongest Tyre Brand in the World.

As we continue to be the market leader, it is essential for us to play an active role in decarbonizing our operations

thereby helping India meet the target of Net Zero emission by 2070. To support this goal, we have set phase-wise

targets and commitments to improve our sustainability performance in the coming years.

I wish to thank the Shareholders, Investors, Central and State Governments, Lenders, Suppliers and Customers for

their great support during these trying times. I also thank all my colleagues on the board for their continued

support.

Best Wishes,

CHAIRMAN’S MESSAGE

∙ 01 ∙ ANNUAL REPORT 2022 - 2023

∙

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MRF PERFINZA

New sizes were introduced in the premium and luxury MRF Perfinza

series of tyres for Audi, BMW, Jaguar, Mercedes-Benz and Volvo cars in

245/50 ZR18, 245/40 ZR18 and 235/55 ZR17 sizes.

PASSENGER CAR TYRES

NEW PRODUCT LAUNCH

∙ 02 ∙ANNUAL REPORT 2022 - 2023 ∙

MRF MARKUS

New sizes were introduced in the premium SUV tyre brand MRF Markus

for the premium SUV’s of Audi, BMW, Mercedes-Benz, Volvo, Jeep, Hyundai

and VW in 225/50 R18, 225/55 R18 and 235/50 R18 sizes.

MRF CITIBUS

MRF Citibus was introduced exclusively for the Force Traveller and Toyota

Innova. The tyre delivers outstanding comfort, superior grip in all road

conditions and high mileage.

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110/70-12, 90/90-12, 100/80-12

MRF ZAPPER N TL

Tubeless tyre developed for Electric Scooters.

TWO WHEELER TYRES

NEW PRODUCT LAUNCH

Block pattern rear tube-type tyre developed for Royal Enfield Classic 350.

110/90-18

MRF MOGRIP METEOR M TT

∙ 03 ∙ ANNUAL REPORT 2022 - 2023

∙

Tubeless rear tyre for Yamaha Fascino125 BS6 scooter.

110/90-10

MRF ZAPPER TL

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COMMERCIAL VEHICLE TYRES

NEW PRODUCT LAUNCH

MRF SUPER LUG FIFTY PLUS R

7.00-15 and 195/80 D15 tyres were launched under the Super Lug Fifty

Plus R brand, improving on overall tyre life and load carrying capability.

MRF SAVARI EXTRA

MRF Savari Extra is a long-life tyre for SCV’s with a premium skid depth

and dual tread compound for cooler running. The footprint has been

optimised for even wear. The sipe integrated 5-rib pattern delivers

excellent dry and wet traction.

MRF SUPER MILER 99 PLUS

Steer-axle tyre with a superior compound for cooler running and higher

tread mileage. Strong casing for better retreadability. Specially designed

shoulder and tread for faster heat dissipation. Available in 10.00-20 and

295/95-D20 sizes.

∙ 04 ∙ANNUAL REPORT 2022 - 2023 ∙

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∙ 05 ∙

ANNUAL REPORT 2022 - 2023

∙

MRF T&S

DELIGHTING THE CUSTOMER

WITH WORLD-CLASS TYRE

CARE SERVICES

MRF T&S (Tyres & Service) is a world-class sales

and service outlet offering a unique tyre buying

and service experience. MRF T&S outlets stock

the entire range of MRF tyres and tubes and are

equipped to provide services like computerized

wheel balancing and alignment, automated tyre

changing, nitrogen filling and tubeless tyre

repairs by MRF trained service personnel in a

comfortable air-conditioned ambience.

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∙ 06 ∙

ANNUAL REPORT 2022 - 2023

∙

AWARDS AND ACCOLADES

ISUZU MOTORS INDIA

MRF received the Supplier Quality Award 2023 for Best Quality

Performance for the year 2022-23.

BRAND FINANCE AUTOMOTIVE

INDUSTRY 2023

Brand Finance an International Brand Valuation consultancy

has ranked MRF Tyres as the 2nd strongest tyre brand in the

world and the most valuable Indian tyre brand. MRF Tyres was

also ranked as the second fastest growing tyre brand in the

world. In Sustainability Perceptions Value, Brand MRF is

ranked among the Top 10 brands globally in the Tyre Sector.

MARUTI SUZUKI INDIA LIMITED

MRF was recognized for Overall Performance for the year

2022-23.

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ESG

∙ 07 ∙

ANNUAL REPORT 2022 - 2023

∙

SOCIAL

MRF continued its focus on employee well-being including their health, safety and upskilling. As a responsible

corporate citizen, MRF carried out several CSR projects in education, health care, skill development and

infrastructure for the communities in which it operates.

Formal processes are in place to oversee key ESG initiatives. MRF continues to work towards creating

sustained long-term value for its stakeholders by adopting prudent fiscal practices and sound business

strategy.

GOVERNANCE

ENVIRONMENT

Renewable Energy

Agreements have been signed for purchasing solar power for the plants in Tamil Nadu and hybrid power

(solar and wind) for the Gujarat plant which will reduce the carbon footprint.

Alternative Fuel

Replacement of furnace oil-based steam generation with alternate gas-based steam generation and use

of biomass as alternate fuel for boilers have been initiated.

Water Conservation

Construction of waste water treatment facility in several plants is underway. Agreements have been signed

for using treated municipal sewage water at the Perambalur plant. The treated water will be used in the

manufacturing process.

Sustainable Sourcing

Most of MRF's purchases are from suppliers in the A and A+ categories (who are governed by MRF’s

Supplier Sustainable Policy and Green Procurement Policy) as well as from B category suppliers who are

ISO 14001 certified.

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MRF Corp has achieved a value growth of 32% over the

preceding year. The annual plant capacity utilization

rose by 35% over the previous year. MRF Corp launched

various new products like Zameen 2KPU Floor Coat,

Altura Metalic, Vilasa Wall Putty, WoodCoat Total Matt

and Italia.

MRF CORP

THE PAINT DIVISION

∙ 08 ∙

ANNUAL REPORT 2022 - 2023

∙

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MOTORSPORT

MRF TRIUMPHS IN EUROPE

Motorsports in 2022-2023 saw Team MRF Tyres win the acclaimed FIA

European Rally Championship (ERC) for the first time against

International competition in the third year of participating in this top

level competition. Efren Llarena and Sara Fernandez created history for

MRF Tyres by winning the Championship.

DOMESTIC NATIONAL

CHAMPIONSHIPS

MRF Drivers not only shone abroad but were able to bring home

the prestigious Indian National Rally Championships for the third

consecutive Championship in 2022 thereby proving their mettle both

abroad and at home.

MRF promoted motorsports across the country by conducting the

National Championships for Indian Motorcycles in the Indian National

Motorcycle Racing Championship, Indian National 2-Wheeler Rally

Championship, the MRF Mogrip National Supercross Championship and

the ever growing Indian National Car Racing Championships. This was

promoting our Indian riders and drivers to achieve National level highs

before going on to attempt International Championships.

∙ 09 ∙

ANNUAL REPORT 2022 - 2023

∙

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GROWTH STORY

PROFIT BEFORE TAXATION

Standalone

in crores

RESERVES

Standalone

2013

SEP

2016*

MAR

2018

MAR

2020

MAR

2022

MAR

2014

SEP

2019

MAR

2021

MAR

2023

MAR

2017

MAR

13773

1227

1339

1602

1609

1399

1700

879

1119

2013

SEP

2016*

MAR

2018

MAR

2020

MAR

2022

MAR

2014

SEP

2019

MAR

2021

MAR

2023

MAR

2017

MAR

For the 18 months period ended 31.03.2016

14505

13175

12000

10649

9600

8540

7157

4513

3641

2066

3606

∙ 10 ∙

ANNUAL REPORT 2022 - 2023

∙

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GROWTH STORY

in crores

For the 18 months period ended 31.03.2016

REVENUE FROM OPERATIONS

Standalone

NET WORTH

Standalone

12131

22162

15991

18989

15181

13198

15837

15922

22578

14749

2013

SEP

2016*

MAR

2018

MAR

2020

MAR

2022

MAR

2014

SEP

2019

MAR

2021

MAR

2023

MAR

3645

7161

12004

13777

9604

4518

8544

10653

13179

14509

2013

SEP

2016*

MAR

2018

MAR

2020

MAR

2022

MAR

2014

SEP

2019

MAR

2021

MAR

2023

MAR

2017

MAR

2017

MAR

∙ 11 ∙

ANNUAL REPORT 2022 - 2023

∙

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BOARD OF DIRECTORS

K.M. MAMMEN

Chairman & Managing Director

ARUN MAMMEN

Vice Chairman & Managing Director

RAHUL MAMMEN MAPPILLAI

Managing Director

SAMIR THARIYAN MAPPILLAI

Whole-Time Director

VARUN MAMMEN

Whole-Time Director

Company Secretary

S. DHANVANTH KUMAR

Auditors

M M NISSIM & CO LLP, Mumbai

SASTRI & SHAH, Chennai

Registered Office: No.114, Greams Road, Chennai - 600 006.

ASHOK JACOB

V. SRIDHAR

VIJAY R. KIRLOSKAR

RANJIT I. JESUDASEN

Dr. SALIM JOSEPH THOMAS

JACOB KURIAN

Dr. CIBI MAMMEN

AMBIKA MAMMEN

VIMLA ABRAHAM

VIKRAM TARANATH HOSANGADY

RAMESH RANGARAJAN

DINSHAW KEKU PARAKH

ARUN VASU*

VIKRAM CHESETTY*

PRASAD OOMMEN*

*w.e.f. 09.05.2023

∙ 12 ∙

ANNUAL REPORT 2022 - 2023

∙

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Ten Year Financial Summary (Standalone) 2023 2022 2021 2020 2019 2018 2017 2014-16 2014 2013

` Crores Revenue from Operations 22578 18989 15922 15991 15837 15181 14749 22162 13198 12131

Other Income 248 315 207 331 417 329 329 321 65 29

Total Income 22826 19304 16129 16322 16254 15510 15078 22483 13263 12160

Profit Before Taxation 1119 879 1700 1399 1609 1602 2066 3606 1339 1227

Provision for Taxation 303 232 451 4 512 510 615 1132 441 425

Profit after Taxation 816 647 1249 1395 1097 1092 1451 2474 898 802

Share Capital 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24

Reserves 14505 13773 13175 12000 10649 9600 8540 7157 4513 3641

Net Worth 14509 13777 13179 12004 10653 9604 8544 7161 4518 3645

Fixed Assets Gross 19930 16442 15018 14133 10780 9028 7560 6307 6954 5834

BOARD’S REPORT

Your Directors have pleasure in presenting to you the Sixty Second Annual

Report and the Audited Financial Statements for the financial year ended

31st March, 2023.

Standalone Financial Results

` Crores

2022-2023 2021-2022

Total Income 22826 19304

Profit before tax 1119 879

Provision for taxation 303 232

Profit for the year 816 647

Performance Overview

During the financial year ended 31st March, 2023, your Company’s total

income was ` 22826 crores as against ` 19304 crores in the previous year,

recording a growth of 18%. The profit before tax stood at ` 1119 crores

for the year as against ` 879 crores for the previous financial year. The net

provision for tax (current tax and deferred tax) for the year is `303 crores

(previous year ` 232 crores). After making provision for income tax, the

net profit for the year ended 31st March, 2023 is ` 816 crores as against

` 647 crores for the previous financial year.

The Company’s exports (including Indian Rupee Exports) stood at ` 1866

crores for the financial year ended 31st March, 2023, as against ` 1779

crores for the previous year.

Revenue from operations for 2022-23 registered good growth over the

previous year. The increase in sales was a result of growth in all product

groups. The unprecedented increase in raw material prices, which was

witnessed during financial year 2021-22 due to the COVID pandemic and

also the war in Ukraine, extended into the current financial year. Despite

efforts being taken to pass on the cost increases in a graduated manner,

the profitability continued to be low during the first three quarters of the

year. With easing of raw material prices during the later part of the year,

the benefits of lower raw material cost resulted in better profitability in the

fourth quarter.

It is a matter of pride that Brand Finance, which is one of the world’s

leading independent brand valuation and strategy consultancy, with

headquarters in London, has rated MRF as the second strongest Tyre brand

in the world besides being the most valued Tyre brand in India.

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 Report.

Dividend

Two interim dividends of ` 3/- each per share (30% each) for the financial

year ended 31st March, 2023 were declared by the Board of Directors on

8th November, 2022 and on 9th February, 2023. The Board of Directors

is pleased to recommend a final dividend of ` 169/- (1690%) per share

of ` 10 each on the paid up equity share capital of the Company, for

consideration and approval of the shareholders at the forthcoming Annual

General Meeting which shall be subject to deduction of applicable

income tax at source. The total dividend for the financial year ended

31st March, 2023 works out to ` 175/- (1750%) per share of ` 10 each.

The above dividend declared by the Company is in accordance with

dividend distribution policy of the Company.

The Directors recommend that after considering provision for taxation

and the dividend paid during the year, an amount of ` 753 crores be

transferred to general reserve. With this, the Company’s Reserves and

Surplus stands at ` 14505 crores.

Industrial Relations

Overall, the industrial relations in all our manufacturing units have been

harmonious and cordial. Long term wage settlements have been concluded

in our factories at Thiruvottiyur in Tamil Nadu, Goa and Ankenpally in

Telangana. Both production and productivity were maintained at the

desired levels throughout the year in all Plants.

Consolidated Financial Results and Performance of Subsidiaries

The consolidated financial statements of the Company prepared in accordance

with the Companies Act, 2013 and applicable accounting standards form part

of the Annual Report. The consolidated total income for 2022-23 was `23261

Crores and consolidated profit before tax was `1070 Crores.

Pursuant to the provisions of section 136 of the Companies Act, 2013,

the financial statements, consolidated financial statements along with the

relevant documents and audited accounts of subsidiaries are available on

the website of the Company.

The Company has four subsidiaries viz. MRF Corp Limited,

MRF International Limited, MRF Lanka (P) Ltd. and MRF SG PTE. LTD.

The aggregate turnover of all four subsidiaries in equivalent Indian Rupees

during the financial year ended 31st March, 2023 was `2326 crores and

the aggregate Loss for the year was ` 48 crores. This is due to MRF SG

PTE. LTD, paying a sum of ` 82 crores, being the price adjustment under

Bilateral Advance Pricing Arrangement (BAPA) payable to MRF Limited for

the financial year 2015-16 to 2023-24.

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 provides details of performance and financial

position of each of the subsidiaries.

The contribution of the subsidiaries to the overall performance of the

company is given in note 25d of the consolidated financial statements.

During the year under review, your Company has entered into transactions

with MRF SG PTE. LTD, a wholly owned subsidiary of your Company for

purchase of raw materials and the total value of transactions executed

during financial year 2022-2023, exceeded the materiality threshold

adopted by the Company. These transactions were in the ordinary course

of business and were on an arms length basis, details of which are provided

in Annexure IV of the Board’s Report as required under Section 134(3)

(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies

(Accounts) Rules, 2014.

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 of the Company for the year ended

31st March, 2023;

c) Proper and sufficient care has been taken for the maintenance of

adequate accounting records in accordance with the provisions

of the Companies Act, 2013 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 detailed 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 as required under the Companies Act, 2013 read with

Regulation 21 of the Listing regulations. The Company has constituted

a Risk Management Committee of the Board comprising of executive

directors and an independent director of the Company as required

under Securities and Exchange Board of India (Listing Obligations and

Disclosure Requirements) Regulations, 2015. The Committee reviews the

risk management initiatives taken by the Company on a half yearly basis

and evaluate its impact and the plans for mitigation. During the year the

Committee met on 9th September, 2022 and 3rd March, 2023.

Adequacy of Internal Financial Control

Internal financial control means the policies and procedures adopted by

the Company for ensuring the orderly and efficient conduct of its business,

including adherence to Company’s policies, the safeguarding of its assets,

timely prevention and detection of frauds and errors, the accuracy and

completeness of the accounting records, and the timely preparation of

reliable financial information. The Company has put in place well defined

procedures, covering financial and operating functions. Delegation of

authority and segregation of duties are also addressed to ensure that the

financial transactions are properly authorized. Further the Company has

an integrated ERP system connecting head office, plant and other locations

to enable timely processing and proper recording of transactions. Physical

verification of fixed assets is carried out on a periodical basis. The Internal

audit department reviews the effectiveness of the internal control systems

and key observations are reviewed by the Audit Committee. These, in the

view of the Board, are designed to collectively provide an adequate system

of internal financial control with reference to the financial statements

commensurate with the size and nature of business of the Company.

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 (CSR)

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 Policy is available on the Company’s website:

https://www.mrftyres.com/investor-relations/corporate-social-

responsibilty The details of the CSR initiatives undertaken during the

financial year ended 31st March, 2023 and other details required

to be given under section 135 of the Companies Act, 2013 read with

the Companies (Corporate Social Responsibility Policy) Rules, 2014 as

amended are given in Annexure II forming part of this Report.

Board and Key Management Personnel

During the year under review, the following Managing Directors / Whole-

time Directors were re-appointed:

1. Mr. Rahul Mammen Mappillai (DIN: 03325290) as Managing

Director for a term of five years with effect from 4th May, 2022. The

aforesaid appointment was approved by the shareholders by postal

ballot on 3rd May, 2022.

2. Mr. Samir Thariyan Mappillai (DIN: 07803982) and Mr.Varun

Mammen (DIN: 07804025) as Whole-time Directors of the

Company for a term of five years with effect from 4th August, 2022.

The aforesaid appointment was approved by the shareholders at the

Annual General Meeting of the Company held on 4th August, 2022.

3. Mr. Arun Mammen (DIN: 00018558) as Managing Director of the

Company (with the designation “Vice Chairman and Managing

Director” or such other designation as approved by the Board from

time to time) for a term of five years with effect from 1st April 2023.

The aforesaid appointment was approved by the shareholders by

postal ballot on 31st March, 2023.

Further, in November 2022, the Board decided to induct new Independent

Directors taking into consideration that six of the serving Independent

Directors (viz. Mr. Ashok Jacob, Mr. V Sridhar, Mr. Vijay R Kirloskar,

Mr. Ranjit I Jesudasen, Dr. Salim Joseph Thomas and Mr. Jacob Kurian) are

due to retire in September 2024. Since these six Independent Directors are

serving their second term, they will retire in September 2024 and will be

stepping down from the Board. Therefore, as part of the plan for orderly

succession to the Board of Directors and to facilitate a smooth transition,

the Board at its meeting held on 8th November 2022 decided to induct

three new Independent Directors and subsequently at its meeting held on

9th February 2023 three more Independent Directors. The details of these

new Independent Directors are given below:

1. Mr. Vikram Taranath Hosangady (DIN: 09757469), Mr. Ramesh

Rangarajan (DIN: 00141701) and Mr. Dinshaw Keku Parakh

(DIN: 00238735) were appointed as Independent Directors by the

shareholders of the Company by postal ballot on 21st December

2022. The appointment of the said Independent Directors took effect

from 7th February 2023.

2. Mr. Arun Vasu (DIN: 00174675), Mr. Vikram Chesetty (DIN:

01799153) and Mr. Prasad Oommen (DIN: 00385082) were also

appointed as Independent Directors by the shareholders of the

Company by postal ballot on 31st March, 2023. The appointment

of the said Independent Directors will take effect upon receipt of

requisite regulatory approvals.

As required under Section 152 of the Companies Act, 2013, Mr Varun

Mammen (DIN: 07804025), Whole time Director and Mrs. Ambika

Mammen (DIN: 00287074), Director of the Company, retire by rotation at

the forthcoming Annual General Meeting and being eligible have offered

themselves for re-appointment.

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, 2015 and that they are independent from Management.

The Board is of the opinion that all the Independent Directors of the

Company are person’s of integrity and possess relevant expertise and

experience (including the proficiency) to act as Independent Directors

of the Company. The Independent Directors of the Company have

confirmed that they have been registered with the Indian Institute of

Corporate Affairs, Manesar and have included their name in the databank

of Independent Directors within the statutory timeline as required under

Rule 6 of the Companies (Appointment and Qualification of Directors)

Rules, 2014. Out of the above new Independent Directors, two Directors

are required to appear for the online proficiency test within a period of

two years.

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, 2013 and SEBI (Listing Obligations and Disclosure

Requirements) Regulation, 2015. 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 meetings, attendance

and effectiveness of the deliberations etc.

The Board 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 and fulfilment of independence criteria

and independence from management.

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 Report.

Following information required to be disclosed as per the Companies Act,

2013 are set out in the Corporate Governance Report:

a) Number of Board meetings held - Para 2(c) of the Corporate

Governance Report.

b) Constitution of the Audit Committee and related matters - Para 3(ii)

and 14(o) of the Corporate Governance Report.

c) Remuneration Policy of the Company (including directors

remuneration)- Para 7a of the Corporate Governance Report.

d) Company’s policy on directors’ appointment including criteria

for determining qualifications, positive attributes, independence

of a director and other matters provided under sub-section (3) of

section 178 - Para 5, 6 of the Corporate Governance Report. The

nomination and remuneration policy is also available on the website

of the Company. https://www.mrftyres.com/downloads/download.

php?filename=nominatio-%20and-remuneration-policy.pdf

e) Related Party Transactions - Para 14(a) of the Corporate Governance

Report.

f) Vigil Mechanism - Para 14 (c) of the Corporate Governance Report

The details of related party transactions are given in note 28d of the

financial statements.

Business Responsibility and Sustainability Report

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015, the Business Responsibility and

Sustainability Report of the Company for the financial year ended

31st March 2023 in the prescribed format, giving an overview of the

initiatives taken by the Company from an environmental, social and

governance perspective, forms part of this Annual Report.

Particulars of Employees

Disclosures with respect to the remuneration of the Directors, KMP’s

and Employees as required under Section 197(12) of the Companies

Act, 2013 read with Rule 5 (1) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014 are given in

Annexure V to this Report.

Further, the disclosures pertaining to remuneration of employees as

required under Section 197(12) of the Companies Act, 2013 read with

Rule 5 (2) and (3) 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 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.

During the financial year under review, the Company has not received

any complaint under The Sexual Harassment of Women at Workplace

(Prevention, Prohibition and Redressal) Act, 2013. Further, Company

has complied with provisions relating to the constitution of Internal

Complaints Committee under the Sexual Harassment of Women at

Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Deposits

Your Company had discontinued acceptance of fixed deposits with

effect from 31st March, 2019 and all deposits have been repaid. No fresh

deposits have been accepted subsequently.

Auditors

M M Nissim & CO LLP, Chartered Accountants, (Firm Regn No. 107122W

/ W100672), Mumbai and Messrs. Sastri & Shah, Chartered Accountants

(Firm Regn No.: 003643S), Chennai were appointed as joint statutory

auditors of the Company for a term of 5 (five) consecutive years, at the

Annual General Meeting of the company held on 12th August, 2021 and

4th August, 2022.

Auditors Report to the shareholders for the financial year ended

31st March, 2023, does not contain any qualification.

Cost Audit

The Board of Directors, on the recommendations of the Audit Committee,

has approved the re-appointment of Mr. C. Govindan Kutty, Cost Accountant

(Mem. No. 2881), as Cost Auditor of the Company for the financial year

ending 31st March, 2024, under section 148 of the Companies Act, 2013,

and recommends ratification of his remuneration by the shareholders at the

forthcoming Annual General Meeting of the Company.

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 financial year

ended 31st March, 2023. 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.

Annual Return

The Annual Return as required under Section 92 and Section 134

of the Companies Act, 2013 read with Rule 12 of the Companies

(Management and Administration) Rules, 2014 is available on the

Company’s website: www.mrftyres.com. Weblink:https://www.

mrftyres.com/investor-relations/annual-return

Other Matters

There are no material changes and commitments affecting the financial

position of the Company between the financial year ended 31st March,

2023 and the date of this report.

During the year 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.

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

of by remanding the matter to CCI for review after hearing the parties. In

February 2023 CCI has filed an appeal against the order of NCLAT before

the Hon’ble Supreme Court and the same is pending disposal.

Details of investments as required under section 134 of the Companies

Act, 2013 is given in note 3 to the financial statements.

During the year under review, the Board confirms that the Company has

complied with the applicable Secretarial Standards issued by the Institute

of Company Secretaries of India.

During the year under review, no fraud has been reported by the auditors

to the audit committee or the board.

During the year under review, there is no change in the nature of business

of your Company.

During the year under review, the Company has allotted 15,000 listed,

unsecured, rated, redeemable, taxable, non-convertible debentures

aggregating to ` 150 Crores on a private placement basis.

As regards Cost Audit Records, it is confirmed that the Company is covered

by Cost Audit Records Rules under section 148(1) of the Companies

Act, 2013 and accordingly, such accounts and all relevant records are

maintained by the Company.

Appreciation

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

Chennai K M MAMMEN

03rd May, 2023 Chairman & Managing Director

DIN: 00020202

ANNEXURE I TO THE BOARD’S REPORT

A. CONSERVATION OF ENERGY

Energy Conservation continuous to be a key focus area for the

manufacturing plants and related functions. Scheduled monthly

performance review, continuous improvement program help to

optimize, reduce specific consumption of fuel, power and water.

Benchmarking of best performance, base lining of best consumption

and identification of losses is considered for setting targets. Energy

Monitoring system section wise data is analysed to arrive at

mitigation plans and improvements on renewable energy, alternate

fuels, bio-fuels and clean sources of energy are being evaluated for

immediate and future requirements.

(i) The steps taken or impact on energy conservation:

The following measures implemented to reduce specific fuel

consumption.

a) Identifying losses in process lines and correction of leaks

to reduce the steam consumption.

b) Improving utilization by isolation of lower utilized

process lines to minimize thermal energy losses.

c) Targets were set based on best shift energy consumption

from energy monitoring system.

d) Deployment of nitrogen based cure process to minimize

the process energy requirement.

e) Reduction of process steam requirement by modifying

the reduced process pipe lines.

f) Participation of process owners in data analysis

from energy monitoring system to improve energy

performance.

g) Utilization of process waste heat to improve steam

generation efficiency.

The following measures were implemented to reduce specific

power consumption.

a) Introduction of energy efficient air compressors for base

load operation to optimize power requirements.

b) Air leak study, continuous monitoring and correction of

air leaks in plants to reduce the compressor energy.

c) Replacement of old motors with new energy efficient

motors.

d) Close monitoring of optimized scheduling in production

equipment to avoid equipment idle time and to reduce

the specific energy through Energy monitoring system.

e) Parallel implementation of pneumatic based system to

hydraulic based system to reduce the compressor energy.

(ii) The following steps were taken by company to increase

utilization/ alternate source of energy.

• a) Usage of clean fuels like CNG for boilers.

• b) Sourcing of more power from renewable energy and

clean fuels with focus on reduction of carbon foot prints.

c) Installation of solar based outdoor lightings under

consideration.

d)• Evaluation of bio mass based steam generation in place

of coal based steam generation.

e) Installation of waste water treatment plants to reuse in the

process.

(iii) Capital Investment on Energy conservation projects:

Investments have been carried out for energy conservation

proposals resulting in long term saving impact and reduction

of losses in the system.

Key projects initiated are listed below.

a) Extension of nitrogen system to reduce the energy

consumption.

b) Reduction of process steam and power consumption by

process changes.

c) PLC based control system for evacuating hot air from the

process.

d) Conversion of pneumatic based system to hydraulic

based system to reduce the compressor energy.

Key On-going proposals are as listed below

a) Recycling of municipal waste water, effluent treatment

plant (ETP) and sewage treatment plant (STP) to reuse in

process.

b) Blending of bio fuel in coal based steam generation system.

c) Identifying lower specific energy consuming machines

and utilizing to maximum level to reduce total energy

consumption.

d) Increased rain water recovery to optimize the sourcing

water requirement.

e) Undertaking of sustainability and net zero carbon

initiatives to achieve targets.

B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATIONS

1. Efforts made towards technology absorption, adaptation and

innovation:

a. Joint R&D with Indian and foreign universities and research

institutes:

Our company has a robust in-house R&D for technology and

product excellence. However, towards continued excellence

in the ever-evolving tyre technology, we work on R&D

projects with Institutions of Eminence in India and abroad.

The projects cover a broad range of comprehensive scientific

understanding of the interfaces in tyres, materials and design

parameters on noise-vibration-harshness (NVH), exploration

of new-and sustainable (bio-derived) materials, and nano-

and nanostructured materials with the overall stated aim of

the company to continuously advance green and sustainable

tyre technologies. The joint R&D programs result in PhDs,

international publications and patents.

b. New product and material development, elimination of

hazardous materials, etc.:

To improve sustainability of products, our company is working

on the multipronged 4R strategy, that is reduce (reduction in

emission by low RR tyres) – recycle (usage of recycled

materials from end-of-life tyres as raw materials for new tyres)

– reuse (by making multiple re-treadable tyres and doing

the retreading process by itself) and renewable (critical raw

materials with lower carbon footprint from environmentally

sustainable sources such as biomass, waste, etc.).

Towards import substitution, we have initiated joint

development programs for raw materials such as sulphur,

resource-formaldehyde resin, accelerators, antioxidants, butyl

rubber, halo butyl rubber, microcrystalline wax, super tackifier

resin, etc. with domestic suppliers.

c. Key product developments:

Our company has adopted sustainability as an integral part

of our business policy. We have improved the share of

sustainable raw materials in all our tyres. To meet the emission

norms under R117 and AIS 142 standards, we developed

several low RR tyres which were approved by Indian and

global passenger car OEMs. Similar activities are underway in

tyres for commercial vehicles as well. Our company is in the

process of adopting sustainability goals and targets in-line with

the net-zero target of Govt. of India, Paris Climate Change

Agreement and COP resolutions.

2. Benefits derived as a result of the above efforts:

The in-house and joint R&D programs resulted in knowledge and

confidential information to maintain technological superiority in

the market. Development of low rolling resistance tyres with an

increased share of renewable materials resulted in more sustainable

tyres. Efforts towards import substitution of raw materials such as

resins, rubber, accelerators, antioxidants, wax, process aids, etc.

resulted in cost-saving as well as a positive direction towards the

Atmanirbhar Bharat initiative of the Govt. of India.

3. Details of imported technology (imported during last 3 years

reckoned from the beginning of the financial year).

No technology was imported during the last 3 years and MRF is self

reliant with regard to tyre technology for several decades.

4. Expenditure incurred on Research and Development:

(` Crores)

2022-2023

R & D Expenses

(a) Capital 25.15

(b) Recurring 109.92

C. FOREIGN EXCHANGE EARNINGS & OUTGO

(` Crores)

2022-2023

Foreign Exchange Earnings 1763.33

Foreign Exchange Outgo 5117.88

On behalf of the Board of Directors

K M MAMMEN

Chennai Chairman & Managing Director

03rd May, 2023 DIN: 00020202

ANNEXURE II TO THE BOARD’S REPORT

ANNUAL REPORT ON CSR ACTIVITIES FOR FINANCIAL YEAR ENDED 31ST MARCH, 2023

1. Brief outline on CSR Policy of the Company:

The CSR activities carried out by the Company are in accordance with the CSR Policy, as formulated by the CSR Committee and approved by the Board.

The broad objectives, as stated in the CSR Policy, includes supporting causes concerning healthcare, education, rural development, provide safe drinking

water, skill development, sports training, disaster management and environmental protection.

2. Composition of CSR Committee:

Sl. No. Name of Director Designation/Nature of Directorship Number of meetings

of CSR Committee

held during the year

Number of meetings of

CSR Committee attended

during the year

1 Mr. K M Mammen Chairman & Managing Director & Chairman of CSR

Committee

4 4

2 Mr. Arun Mammen Vice Chairman & Managing Director & Member of CSR

Committee

4 4

3 Mr. Rahul Mammen Mappillai Managing Director & Member of CSR Committee 4 4

4 Mr. Ranjit I Jesudasen Independent Director & Member of CSR Committee 4 4

3. Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the

company : https://www.mrftyres.com/investor-relations/corporate-social-responsibilty

4. Provide the executive summary along with the web link of Impact assessment of CSR projects carried out in pursuance of sub rule (3) of rule 8, if

applicable: Weblink : https://www.mrftyres.com/investor-relations/corporate-social-responsibilty

As per Rule 8(3) of the Companies (CSR) Policy Rules, 2014, an impact assessment is required to be carried for projects whose outlay exceeds `1 crore

after a period 12 months from the completion of the project. Accordingly impact assessment was carried out in respect of the MRF Pace Foundation and

MRF Institute of Driver Development for the financial year 2020-21. The executive summary in respect of these assessments are given below:-

Executive Summary of Impact Assessment Report

Pace Foundation: Cricket is a religion and the most followed sport in India. MRF Pace Foundation was established by MRF Limited, as an Academy

in 1988 to train pace bowlers, who eventually will get a chance to represent the country. This is the only exclusive pace academy in the world. Many

trainees have represented the country or state. Mr. Glenn McGrath came to Pace Foundation as trainee (under exchange programme). Eventually now,

he heads the academy as Director.

From the beginning of 2020-21, the Foundation’s activities were impacted by Covid Pandemonium. Despite the same, the Foundation continued its

training activities in a limited way by taking the support of digital platform to monitor training activities of wards, correcting, motivating and fine tuning

their abilities for betterment. These initiatives helped to keep the bowling skills of the trainees honed and thereby helped them get back to pre-COVID

levels of fitness and performance within a short time after COVID restrictions were eased and tournaments restarted.

Three trainees represented country in 2021 viz. Mr. Prasidh Krishna, Mr. Chetan Sakariya and Mr. Sandeep Warrier.

9 trainees represented various franchisees in the Indian Premier League in 2021 viz. Mr. K M Asif, Mr. Avesh Khan, Mr. Chetan Sakariya, Mr. Kaleel

Ahmed, Mr. Prasidh Krishna, Mr. Akash Singh, Mr. Sandeep Warrier, Mr. Basil Thampi and Mr. Kamalesh Nagarkoti.

Driver Development: Having understood the risk of road driving and encouraging safe driving for commercial vehicles, MRF Ltd. started an institute MRF

Institute of Driver Development (“MIDD”) in 1988. The objective was to improve the driving skills especially of commercial vehicle drivers. They lacked

basic awareness and etiquettes for safe driving despite having better road conditions and sophisticated vehicles.

From the beginning of 2020-21, MIDD could not conduct the regular courses due to lockdowns and Covid restrictions between March 2020 and October

2020. The new governmental regulations restricted the intake of students per course as all driving schools had to implement social distancing norms due

to Covid.

During 2020-21, 9 courses were conducted and 69 trainees were imparted training. The trainees benefited in terms of improved driving skills and

personal etiquette. The trainees displayed higher levels of confidence after the training. Their chances of employability also improved significantly.

5. (a) Average net profit of the company as per section 135(5) : `1456,60,56,631

(b) Two percent of average net profit of the company as per section 135(5) : ` 29,13,21,133

(d) Amount required to be set off for the financial year, if any : Not Applicable

(e) Total CSR obligation for the financial year ((b)+(c)-(d)) : ` 29,13,21,133

6. (a) Amount spent on CSR projects (both Ongoing project and other than ongoing project): ` 16,56,88,195

(b) Amount spent in Administrative Overheads: ` 82,84,400

(d) Total amount spent for the Financial Year ( (a) + (b) + (c) ): `17,48,80,723

(e) CSR Amount spent or unspent for the Financial Year:

Total Amount Spent for

the Financial Year

(in `)

Amount Unspent

Total Amount transferred to Unspent CSR

Account as per section 135(6)

Amount transferred to any fund specified under Schedule VII as per

second proviso to section 135(5).

Amount

(in `)

Date of transfer Name of the Fund Amount Date of Transfer

17,48,80,723 11,64,40,410 25.04.2023 NIL NA NA

(f) Excess amount for set off, if any: NIL

7. Details of Unspent Corporate Social Responsibility amount for the preceding three financial years:

Sl.

Preceding Financial

Year(s)

Amount transferred

to Unspent CSR

Account u/s 135 (6)

( In `)

Balance amount

in unspent CSR

account u/s 135(6)

(In `)

Amount spent in the

reporting financial

year ( In `)

Amount transferred to any fund specified

under schedule VII as per section 135(5),

if any

Amount remaining

to be spent in

succeeding financial

years (In `)

Deficiency If any

Amount (In `)

Date of transfer

1 2021-22 16,30,55,986 7,21,40,000 9,09,15,986 NIL NA 7,21,40,000 NA

2 2020-21 NIL NIL NIL NIL NA NIL NA

3 2019-20

NIL

NIL NIL NIL

NIL

8. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the financial year: Yes.

If yes, enter the number of capital assets created/ acquired – 29 nos.

Furnish the details relating to such assets so created or acquired through corporate social responsibility amount spent in the Financial Year:

Sl.

No.

Short Particulars of the Asset(s)

[including complete address and location of

the property]

PIN code of

the Property/

Assets

Date of

Creation/

Acquisition of

Assets

CSR amount

spent

(In `)

Details of Entity or Authority or

Beneficiary of the registered owner

CSR Registration

number, if applicable

Name Registered Address

School Bus.

Satguru Foundations, Educational

Institute, Kundaim, Ponda, Goa.

403115 24.03.2023 25,01,673 CSR00007732

The Principal,

Satguru

Foundations

Satguru Foundations ,

Reg. No.1083/Goa/2011,

Kundaim Industrial Estate,

Kundaim, Ponda, Goa,

Pin-403115, India.

Construction of Building.

(Lower Ground Floor)

Sai Nursing Institute, Near PHC,

Bicholim Taluka, Sanquelim, Goa, India

403505 17.01.2023 94,70,000 CSR00016606

The Director Sai

Nursing Institute

Director, Sai Nursing

Institute, Sanquelim, Goa,

Pin-403505.

India

Vehicle, Kichen Appliances, Furniture

& Digital Attendance Register.

MRF Pace Foundation, Plot No. 3144,

2nd Street, AH Block, Anna Nagar,

Chennai.

600040 23.03.2023 10,69,055 CSR00001396 The Trustee

MRF Foundation, No.114,

Greams Road, Chennai

600006, Tamil Nadu, India.

Medical Equipment.

Mundakapadam Mandiram Hospital,

Manganam, Kalathilpady, Puthuppally

Road, Kottayam, Kerala.

686018 22.12.2022 15,00,000 CSR00006814 Chairman

Mundakapadam Mandirams

Society, Manganam PO,

Kottayam – 686018

Kerala State, India.

Ambulance.

Dr.Roque Ferreiras Memorial Hospital,

Vascoda Gama, Verna S.O, Sacete,

Goa, India

403722 23.01.2023 17,41,334 CSR00054656

President,

Dr.Roque Ferreiras

Memorial Hospital

Congregation of SRS of

St. Joseph of Cluny, Cluny

Convent, Vascoda Gama,

Verna S.O, Sacete, Goa,

Pin-403722, India

6(a)

E-Auto Rickshaw for imparting

Training to Women Drivers.

Government Automobile Workshops,

Gnanapragasam Nagar, Saram,

Puducherry, Tamil Nadu, India.

605013

16.01.2023 6,70,330 NA

Transport

Commissioner

The Transport

Commissioner, Govt. of

Puducherry, 100 feet Road,

Mudaliyarpet, Puducherry

605004, India.

6(b)

E-Auto Rickshaw for imparting training

to Women Drivers.

Government Automobile Workshop,

No. 7, Kirambuthottam Street,

Karaikal, Puducherry, India

609602

7(a)

Medical Equipment.

Government Hospital Arakonam,

Ranipet District, Tamil Nadu.

631001

08.05.2022 18,61,875 NA

Chief Medical

Officer

The Chief Medical Officer,

Government Hospital,

Gandhi Road, Arakonam,

Pin-631001, Tamil Nadu,

India.

7(b)

Medical Equipment.

Govt. Primary Health Centre,

Banavaram, Ranipet District,

Tamil Nadu.

632505

Motorized Wheelchair.

Rehabilitation Institute, Department of

Physical Medicine & Rehabilitation,

Christian Medical College, Vellore.

Tamil Nadu, India

632002 25.04.2022 10,46,450 CSR00001924

Head of

Department-

Department of

Physical Medicine

& Rehabilitation

Head of Department,

Department of Physical

Medicine & Rehabilitation,

Christian Medical College,

Ida Scudder Road, Vellore.

632002, Tamil Nadu, India.

Smart Class Room Equipment.

Tagore Educational Institute, Surla

Village, Kothambi, Amona, Bicholim,

North Goa, Goa, India

403105 28.03.2023 7,13,438 NA Chairman

Tagore Educational Institute,

Kothambi-Surla Village,

Kothambi, Amona, Bicholim

District, North Goa, Goa,

Pin-403105, India

Construction of School Building

including Computer Lab, Dining Hall

& Turf playground.

KG to PG School, Gambhiraopet,

Rajanna, Siricilla Dist, Karimnagar,

Telangana State, India.

505301 15.11.2022 4,00,00,000 NA The Principal

KG to PG School,

Gambhiraopet, Rajanna,

Siricilla District,

Pin-505301,

Telangana, India

Computer Systems.

Indira Gandhi Medical College &

Research Institute, Vazhudavur Road,

Kadthirkaman, Puducherry, India.

605009 29.03.2023 27,53,530 NA Director

Director, IGMC & RI, Govt.

of Puducherry Institution,

Vazhudavur Road,

Kadthirkaman,

Puducherry-605009, India

Drinking Water Facility.

Venkata Subba Reddiar Government

Girls Higher Secondary School,

Maducarai, Puducherry, India

605105 08.03.2023 1,77,281 NA Vice Principal

Venkata Subba Reddiar

Government Girls Higher

Secondary School,

Maducarai, Puducherry,

Pin-605105, India

Construction of Class Rooms.

Government Arts and Science College

For Women, Veppur, Perambalur Dist,

Tamil Nadu, India.

621717 02.02.2023 85,00,000 NA

Regional Joint

Director of

College Education

Regional Joint Director

of Collegiate Education,

Khajamlai, Trichy 620023,

Tamil Nadu, India.

96 CCTV Cameras in Arakonam Sub-

division.

Deputy Superintendent of Police,

Arakonam Sub-Division, Arakonam,

Ranipet District, Tamil Nadu, India

631001 23.08.2022 13,69,824 NA

Assistant

superintendent of

Police.

Assistant Superintendent of

Police, Arakonam Sub-

Division, Arakonam-631001,

Ranipet District,

Tamil Nadu, India.

Computer Systems & Accessories,

Tables, Benches, Construction of

toilets and bore-well.

Government Higher Secondary School,

Kumbinipet, Arakonam Taluka,

Ranipet District. Tamil Nadu, India.

631003 21.03.2023 16,08,472 NA Head Master

Government Higher

Secondary School,

Kumpinipet-631003,

Arakonam. TK. Ranipet

District, Tamil Nadu, India.

100 CCTV Cameras & its Surveillance

System.

Police Station, Sadashivpet,

Sangareddy District, Telangana, India

502291 21.03.2023 36,26,140 NA Inspector of Police

Inspector of Police, S.H O ,

Sadasivpet P S, Sangareddy-

District, Telangana State,

Pin-502291, India

Office Equipment & Electronic

Equipment.

Police Office Control Room, Deputy

Superintendent of Police Office,

Arakonam Sub-Division, Arakonam,

Ranipet District. Tamil Nadu, India

631001 25.03.2023 6,42,876 NA

Assistant

superintendent of

Police

Assistant Superintendent of

Police, Arakonam Sub-

Division, Arakonam-631001,

Ranipet District,

Tamil Nadu, India

College Bus.

Ponda Educational Society, Farmagudi,

Ponda, Goa, India

403401 03.02.2023 19,37,451 NA

Secretary, Ponda

Education Society

Ponda Educational Society,

Farmagudi, Ponda,

Pin-403401, Goa, India

Computer Systems & Furniture.

Tara Government College

(Autonomous), Sangareddy District,

Jogipet, Sangareddy Road, Medak,

Telangana, India.

502001 28.03.2023 33,48,250 NA

The Principal,

Tara Government

College

Tara Government College

(Autonomous), Sangareddy

District, Jogipet Sangareddy

Road, Medak,

Telangana 502001, India

Smart Class Room Equipment.

Govt. Primary School, Maducaraipet.

Zone- IV, Villianur, Puducherry, India.

605105 23.03.2023 6,99,083 NA Head Mistress

Head Mistress,

Subramani Govt. Primary

School, Maducaraipet,

Zone-IV, Villianur,

Puducherry-605105, India.

Medical Equipment.

Government Primary Health Centre,

Thuraiyur Road, Super Nagar,

Perambalur, Tamil Nadu., and 19 other

Primary Health Centres in Perambalur

District.

621212 16.02.2023 4,95,600 NA

Deputy Director of

Medical Services

(TB)

Deputy Director of Medical

Services (TB), Government

Primary Health Centres-

Peramblur District,

Pin -621212, Tamil Nadu,

India

Mobile Toilet Facility and Rectification

of Rain Water Gutter.

Upper Bazar, Ponda Market, Ponda

Municipality, Goa, India.

403401 17.01.2023 6,67,608 NA

Municipal

Commissioner

Municipal Commissioner,

Ponda Municipal Council,

Upper Bazar, Ponda Market.

Pin-403401

Garbage Collection Vans.

Greater Chennai Corporation,

Zone-7, (Ambattur) Division-88,

No.536,Thiruvalluvar Road, Ambattur,

Chennai, Tamil Nadu, India.

600053 03.03.2023 12,93,798 NA

The

Commissioner,

Greater Chennai

Corporation

The Commissioner, Greater

Chennai Corporation, Ripon

Building, Chennai, 600003,

Tamil Nadu, India.

Battery Operated Garbage Disposal

Vehicle.

Tiruttani Municipality, Tiruttani, Tamil

Nadu, India.

631209 10.11.2022 6,10,500 NA

Municipal

Commissioner

Municipal Commissioner,

Tiruttani Municipality,

Tiruttani-631209, Tiruvallur

District, Tamil Nadu, India.

Steel Barricade Trollies.

Ponda Police Station, Usgao

Panchayat, Goa, India

403406 29.07.2022 3,87,335 NA Inspector of Police

Ponda Police Station,

Usgao Panchayat, Goa,

Pin-403406, India

Computer Systems & Printer.

Puducherry Fire Station, Subbaiya

Salai, (Beach Road), Puducherry and

9 other offices of Fire Department in

Puducherry.

605001 20.12.2022 6,77,320 NA

Divisional Fire

Officer

Divisional Fire Officer,

Fire Service Department,

Puducherry, 607402, India.

Computers Systems & Laser Printer.

Office of the Commissioner,

Nettapakkam Commune Panchayat,

Nettapakkam, Puducherry, India

605106 03.08.2022 1,38,969 NA

Panchayat

Commissioner

Commissioner, Office of the

Panchayat Commissioner,

Nettapakkam Commune

Panchayat, Nettapakkam,

Puducherry-605106, India

Setting up of Public Park (Civil &

Horticultural Work).

Arakonam Municipality, Jothi Nagar,

Near Taluk Office Arakonam, Ranipet

District, Tamil Nadu, India.

631001 10.04.2022 47,87,552 NA

Municipal

Commissioner

Municipal Commissioner,

Arakonam Municipality,

Jothi Nagar, Near Taluk

Office Arakonam,

Pin-631001, Ranipet District,

Tamil Nadu, India

Construction of Dining Room

including Furniture & Equipment.

Office of The Superintendent of Police,

Perambalur Dist. Perambalur, Tamil

Nadu, India.

621212 06.12.2022 29,71,713 NA

Superintendent of

Police

Superintendent of Police, SP

Office, Dist. Collectorate,

Perambalur Dist. Perambalur

621212,Tamil Nadu, India

9. Specify the reasons, if the company has failed to spend two percent of the average net profit as per sub-section (5) of section 135.

The shortfall in CSR expenditure was on account of delay in implementation of projects and the project duration extending beyond one financial year

as per their original schedule of implementation. The unspent amount has been transferred to the Unspent CSR Account and the same will be spent in

accordance with the CSR rules on the ten Ongoing projects.

K M MAMMEN ARUN MAMMEN

Chairman and Managing Director Vice Chairman & Managing Director

Chennai and Chairman of CSR Committee and Member of CSR Committee

03rd May, 2023 DIN: 00020202 DIN: 00018558

ANNEXURE III TO THE BOARD’S REPORT

FORM NO. MR - 3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2023

(Pursuant to Section 204(1) of the Companies Act, 2013 and

Rule 9 of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014)

To,

The Members,

MRF Limited, Chennai - 600 006.

I have conducted the secretarial audit of the compliance of applicable

statutory provisions and the adherence to good corporate practices by

MRF LIMITED, Chennai – 600 006 (CIN: L25111TN1960PLC004306)

(hereinafter called the Company), in a manner that provided me

a reasonable basis for evaluating the corporate conducts/statutory

compliances and I am expressing my opinion thereon.

Based on my verification of the Company’s books, papers, minutes books,

forms and returns filed and other records maintained by the company

and also the information provided by the company, its officers, agents

and authorized representatives during the conduct of secretarial audit,

I hereby report that in my opinion, the Company has, during the audit

period covering the financial year ended 31st March, 2023 has complied

with the statutory provisions listed hereunder and also that the Company

has proper Board processes and compliance mechanism in place to the

extent and in the manner subject to the reporting made hereunder.

I have examined the books, papers, minutes books, forms and returns

filed and other records maintained by the Company for the financial year

ended 31st March, 2023 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 and the rules made

thereunder;

(iii) The Depositories Act, 1996 and the Regulations and bye-laws

framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and

regulations made thereunder to the extent of Foreign Direct

Investment, Overseas Direct Investment and external commercial

borrowings;

(v) The following Regulations and Guidelines prescribed under the

Securities and Exchange Board of India Act, 1992 (wherever

applicable):

a) The Securities and Exchange Board of India (Substantial Acquisition

of Shares and Takeovers) Regulations, 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider

Trading) Regulations, 2015;

c) The Securities and Exchange Board of India (Issue of capital and

disclosure requirements) Regulations, 2018;

d) The Securities and Exchange Board of India (Issue and Listing of

Non-Convertible Securities) Regulations, 2021;

e) The Securities and Exchange Board of India (Registrars to an issue

and Share Transfer Agents) Regulations, 1993 regarding the Act and

dealing with client;

f) The Securities and Exchange Board of India (Delisting of Equity

Shares) Regulations, 2021; and

g) The Securities and Exchange Board of India (Buy Back of Securities)

Regulations, 2018.

I have also examined compliance with the applicable clauses of the

following:

1. Secretarial Standards issued by the Institute of Company Secretaries

of India;

2. The Listing Agreements entered into by the Company with Bombay

Stock Exchange Ltd. and National Stock Exchange of India Ltd.;

3. The Securities and Exchange Board of India (Listing Obligations and

Disclosure Requirements) Regulations, 2015.

During the period under review, the Company has complied with the

provisions of the Act, Rules, Regulations, Guidelines, Standards etc.,

mentioned above.

I have reviewed the systems and mechanisms established by the Company

for ensuring compliance under applicable Acts, Rules, Regulations and

other legal requirements of the Central, State and other Government and

local authorities concerning the business and affairs of the Company

categorized under the following major heads/groups, and report that there

are adequate systems and processes in the Company, commensurate with

the size and operations of the Company to monitor and ensure compliance

with applicable laws, rules, regulations and guidelines:

1. Factories Act, 1948;

2. Labour laws and other incidental laws related to labour and

employees appointed by the Company including those on

contractual basis as relating to wages, gratuity, prevention of sexual

harassment, dispute resolution, welfare, provident fund, insurance,

compensation etc.;

3. Industries (Development & Regulation) Act, 1951;

4. The Rubber Act, 1947 & Rubber Rules, 1955;

5. Acts and Rules relating to consumer protection;

6. Acts and Rules prescribed under prevention and control of pollution;

7. Acts and Rules relating to environmental protection and energy

conservation;

8. Acts and Rules relating to hazardous substances and chemicals;

9. Acts and Rules relating to electricity, fire, petroleum, motor vehicles,

explosives, boilers etc.;

10. Acts and Rules relating to protection of IPR;

11. Acts and Rules relating to the industry to which this Company

belongs;

12. Other local laws as applicable to various plants and offices.

I further report that –

The Board of Directors of the Company is duly constituted with proper

balance of Executive Directors, Non-Executive Directors, Independent

Directors and Women Directors in compliance with Rules and provisions

of the Companies Act, 2013, the regulations and directives of Securities

Exchange Board of India (SEBI).

Special Resolutions were passed by Postal Ballot by voting through

electronic means on 21st December 2022 for appointment of the following

Independent Directors:

Sl. No. DIN Name of the Director Designation

1. 09757469 Mr Vikram Taranath

Hosangady

Independent Director

2. 00141701 Mr Ramesh Rangarajan Independent Director

3. 00238735 Mr Dinshaw Keku

Parakh

Independent Director

Special Resolutions were passed by Postal Ballot by voting through

electronic means on 31st March 2023 for appointment of the following

Independent Directors:

Sl.No DIN Name of the Director Designation

1. 00174675 Mr. Arun Vasu Independent Director

2. 01799153 Mr. Vikram Chesetty Independent Director

3. 00385082 Mr. Prasad Oommen Independent Director

Adequate notice was given to all directors on schedule of the Board

Meetings, agenda and detailed notes on agenda were sent at least seven

days in advance, and a system exists for seeking and obtaining further

information and clarification on the agenda items before the meeting and

for meaningful participation at the meeting. All decisions carried are duly

recorded in the minutes of the Meeting.

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 of by remanding the matter to CCI for review after hearing the

parties. In February 2023, CCI has filed an appeal against the order of

NCLAT before Hon’ble Supreme Court and the same is pending disposal.

I further report that there are adequate systems and processes in the

Company commensurate with the size and operations of the Company to

monitor and ensure compliance with applicable laws, rules, regulations

and guidelines.

K ELANGOVAN

Company Secretary in Practice

Place: Chennai FCS No.1808, CP No. 3552, P R No. 892/2020

Date: 03rd May, 2023 UDIN: F001808E000217463

This report is to be read with my testimony of even date which is annexed

as Annexure A and forms an integral part of this report.

Annexure A

To,

The Members

MRF Limited, Chennai 600006.

My report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the

management of the company. My responsibility is to express an

opinion on these secretarial records based on our audit.

2. I have followed the audit practices and processes as were appropriate

to obtain reasonable assurance about the correctness of the contents

of the Secretarial records. The verification was done on test basis to

ensure that correct facts are reflected in secretarial records. I believe

that the processes and practices I followed provide a reasonable

basis for my opinion.

3. I have not verified the correctness and appropriateness of financial

records and Books of Accounts of the company.

4. Wherever required, I have obtained the Management representation

about the compliance of laws, rules and regulations and happening

of events etc.

5. The compliance of the provisions of Corporate and other

applicable laws, rules, regulations, standards is the responsibility

of management. My examination was limited to the verification of

procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to

the future viability of the company nor of the efficacy or

effectiveness with which the management has conducted the

affairs of the company.

K ELANGOVAN

Company Secretary in Practice

Place: Chennai FCS No.1808, CP No. 3552, P R No. 892/2020

Date: 03rd May, 2023 UDIN: F001808E000217463

ANNEXURE IV TO THE BOARD’S REPORT

Form No. AOC–2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188

of the Companies Act, 2013 including certain arms length transactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arms length basis-

There were no contracts or arrangements or transactions entered into during the year ended 31st March, 2023, which were not at arms length basis.

2. Details of material contracts or arrangement or transactions at arms length basis-

The details of material contracts or arrangements or transactions at arms length basis for the year ended 31st March, 2023 is as follows:

(a) Name(s) of the related party & Nature of Relationship: MRF SG PTE. LTD (Wholly Owned Subsidiary of the Company).

(b) Nature of transactions: Purchase of raw materials.

(d) Salient terms of transactions including transactions value: `1970.03 Crores. Price - Transactional Net Margin Method (TNMM), Payment – As per

applicable credit terms.

(e) Date of approval by the board: Since these related party transactions are in the ordinary course of business and are at arms length basis, approval of

the Board is not required. Necessary approvals were granted by the Audit Committee on 10th February, 2022, 10th May, 2022, 9th August, 2022

and 8th November, 2022.

(f) Amount paid in advance: Nil.

On behalf of the Board of Directors

K M MAMMEN

Chennai Chairman & Managing Director

03rd May, 2023 DIN: 00020202

ANNEXURE V TO THE BOARD’S REPORT

Remuneration details as required under Section 197(12) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel)

Rules, 2014 for the year ended 31st March, 2023.

1. The ratio of the remuneration of the Managerial Personnel to the median remuneration of the employees are as follows: Mr. K M Mammen, Chairman

& Managing Director (488.27), Mr. Arun Mammen, Vice Chairman & Managing Director (407.86), Mr. Rahul Mammen Mappillai, Managing Director

(357.83), Mr. Samir Thariyan Mappillai, Whole-time Director (107.91) and Mr. Varun Mammen, Whole-time Director (108.23).

The percentage increase in remuneration for 2022-23 of the Managerial Personnel are as follows: Mr. K M Mammen (14.53%), Mr. Arun Mammen,

Vice Chairman & Managing Director (14.57%), Mr. Rahul Mammen Mappillai, Managing Director (8.90%), Mr. Samir Thariyan Mappillai, Whole-time

Director (15.92%) and Mr. Varun Mammen, Whole-time Director (15.91%). It may be noted that in the previous financial year 2021-22, because of

lower profits, the commission paid to Mr. K M Mammen, Mr. Arun Mammen and Mr. Rahul Mammen Mappillai was lower than the maximum limit as

permitted under the shareholders’ approval. If this is adjusted, the percentage increase in remuneration for 2022-23 of Mr. K M Mammen is only 1.85%,

Mr. Arun Mammen 3.13% and Mr. Rahul Mammen Mappillai 3.50%.

2. The percentage increase in the remuneration of S Dhanvanth Kumar, Company Secretary and Madhu P Nainan, Executive Vice President – Finance were

9% and 12% respectively.

3. The percentage increase in the median remuneration of employees during the financial year ended 31.03.2023 – 11.67%.

4. The total number of permanent employees as on 31.03.2023 is 19050.

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison

with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial

remuneration – Average percentage increase in salaries of employees other than managerial personnel in the last financial year was 11.73%. Percentage

increase in the managerial remuneration (i.e. Chairman & Managing Director, Vice Chairman & Managing Director, Managing Director and Whole-time

Directors) was 13.31%. It may be noted that in the previous financial year 2021-22, because of lower profits, the commission paid to the Managing

Directors was lower than the maximum limit as permitted under the shareholders’ approval. If this is adjusted, the percentage increase in total managerial

remuneration for 2022-23 is only 4.48%. The remuneration of the managerial personnel is consistent with the industry standards and also the size,

complexity of operations and market position of the Company.

6. It is affirmed that the remuneration paid to the directors, key managerial personnel, senior management and employees is as per the Remuneration Policy

of the Company.

Notes:-

a. Employees who are covered by collective bargaining mechanism (in whose case revision in remuneration is effected only upon conclusion of long term settlements),

have not been considered for this purpose.

b. The non-executive directors of the Company are only paid sitting fees and no remuneration in the form of salary or commission is being paid to them. As such,

considering that the remuneration is attendance based and not a definite period linked remuneration and the amounts in question not being material, the

information regarding ratio of remuneration and percentage is being furnished only in respect of the executive directors and other key managerial personnel.

Details of sitting fees paid to directors have been furnished in the Corporate Governance Report.

On behalf of the Board of Directors

K M MAMMEN

Chennai Chairman & Managing Director

03rd May, 2023 DIN: 00020202

MANAGEMENT DISCUSSION AND ANALYSIS

(Within the limits set by Company’s competitive position)

MRF maintained its leadership in the Indian market in the year gone by. Brand

Finance rated MRF as the second strongest tyre brand in the world, besides

rating MRF the most valued Indian tyre brand.

The world was largely free of the impact of Covid in 2022-23. The war in

Ukraine dragged on with progressive reduction in the impact on commodities

during the course of the year. Supply chain disruptions are receding

while impact on food and energy markets have reduced. War on inflation

continued with Central Banks around the world raising interest rates and

tightening monetary conditions. Inflation appears to have peaked and seem

to be slowly receding. However, tight labour markets in advanced economies

ensured demand did not slacken even with multiple interest rate hikes which

leaves us with prospects of more rate increases to rein in inflation. US Federal

Reserve raised interest rates by a cumulative 3.5% in the past one year

ending March 2023. The terminal rate that was initially thought to be around

4.6% is now seen crossing 5%, which shows that inflation is entrenched.

The consistent rate increases have led to stress in some parts of the Banking

system. Tighter financial conditions lead to forecasts of recession for parts of

the western world. World Bank warned in a paper in September, 2022 that

the world wide slow down and tightening financial conditions will give rise

to significant financial stress and trigger a global recession in 2023. World

economy performed better in the second half than what was forecasted in the

earlier part of the year.

International Monetary Fund (“IMF”) has estimated that world economy grew

by 3.4% in calendar year 2022. As per IMF forecasts, growth will reduce to

2.8% in 2023 and improve modestly to 3% in 2024. Growth would depend

on the trajectory of Inflation and the extent to which Central Banks would hike

interest rates to combat inflation. The challenge before the world is to sustain

growth in a situation where inflation is still not under control despite consistent

rate hikes by Central Banks.

Market & Industry Overview

India retained the tag of the fastest growing major economy in the year gone by.

During the year, India became the 5th largest economy in the world, overtaking

Britain. RBI in its March, 2023 projection estimated India’s Gross Domestic

Product (“GDP”) to grow at 7% in financial year 2023. Growth was led by

the construction and infrastructure sectors while weakness in consumption

impacted growth in manufacturing.

Global slow down acted as a drag on exports. India’s merchandise exports

grew by 6% while overall exports including both Goods and Services grew by

13.8%. Service exports was a bright spot with a growth of 27%. Electronics

exports picked up showing the effectiveness of the make in India program and

Production Linked (“PLI”) scheme.

The year saw RBI continuously increasing interest rates, with a cumulative

increase of 2.5% in financial year 2023. Inflation peaked in the 1st quarter and

thereafter we saw a declining trend, reflecting the pass through in commodity

prices. Government took several measures in the first quarter to rein in prices

and improve availability of key products.

The budget was presented against a backdrop of a challenging global

environment. The budget aims to give a bold push to growth with a 33%

increase in the Capital expenditure budget to `10 lacs crore. The high Capex

should further strengthen the private sector recovery. As in the past, this budget

too aligned indirect tax rates to encourage domestic manufacturing. Import

duty exemption on capital goods and machineries used for manufacture of

lithium ion cells for batteries will give a further fillip to sales of Electric Vehicles.

budget also nearly doubled allocation to subsidies under the FAME 2 scheme.

RBI has projected financial year 2024 growth for India at 6.5% while IMF

has projected growth at 5.9%. The moderating inflation prompted RBI to

pause interest rate hike in April, 2023. Monsoon is forecasted to be a little

less than normal but spatial distribution is key. The Economic Survey noted a

rebound in private consumption which together with strong public spending by

Government is leading to private investments.

Union budget’s focus on infrastructure spending coupled with moderating

inflation should be a positive for growth. Export performance being linked to

global economy is unlikely to be a growth driver. RBI in its monthly state-

of-the-economy report (March, 2023 RBI Bulletin) said that India will likely

maintain its growth trajectory. It said “The Indian economy is intrinsically

better positioned than many parts of the world to head into a challenging

year ahead, mainly because of its demonstrated resilience and its reliance on

domestic drivers“.

Global auto industry which was recovering from the effects of the Covid

pandemic had further supply chain shocks arising from the war in Ukraine,

with consequent adverse impact on input costs. Second half of calendar

year 2022 showed improvement in supply chain issues with commodity

prices moderating. Growth of Electric Vehicles (“EV”) was robust in an

otherwise challenging market. Along with managing the supply chain, Auto

industry has to also manage the transition to Electric Vehicles and handle

the regulatory push to meet the deadlines on phasing out the internal

combustion engines.

Improvement in component supplies, consumer demand and new launches

helped the Indian auto industry to improve volumes in financial year 2023.

Industry had a good festive season with 2 million vehicles retailed in October,

2022, a nearly 50% growth over previous year. The industry reflected the

overall trend in the economy where demand for the higher end of the product

range is stronger than mass selling categories. Auto Industry was impacted by

muted demand in its biggest export markets for 2 wheelers and 3 wheelers due

to economic crisis in these markets.

The overall Medium and Heavy Commercial Vehicle (M&HCV) production

increased by about 35% over 2021-22. Haulage and tippers segment saw

robust growth during the year. The bus segment grew by almost three times

with public transport recovering post Covid. Many state transport undertakings

(STU) added Electric buses into their fleet for mainly city operations. 2023-24

should be a good year for the category with all segments expected to grow.

Increased commercial activities is expected to positively impact the tipper

and haulage segment. The push towards higher axle load vehicles is likely to

continue. The bus segment should also get the benefit of the vehicle scrappage

policy that is to be implemented during the year. The industry will continue to

work on initiatives to meet the various regulatory requirements expected to be

implemented during the year.

The passenger vehicle production has seen a growth of 25% in the year ended

March, 2023 and the domestic car sales also recorded the highest ever sale in

a financial year. The segment continued to witness preference for Sports Utility

Vehicles (SUVs) and this is now the largest selling segment with a share of

52%. Despite price increases, a mix of improved chip supply, higher incomes

and pent-up demand, especially for SUVs supported this sales. Though the

supply bottlenecks have eased, there are still some challenges on components

like semiconductor chips that are expected to continue for some more time.

The waiting period for many car models have come down, with improvement

in supply and inventory. From April 2023, the Phase 2 of the BS6 regulation

and RDE (Real Drive Emission) requirements will come into effect which may

impact the price of new vehicle. The shift to electric vehicle has intensified in

2022-23 with demand for EV coming from both big and small towns and also

from rural areas.

Two wheeler production has seen a revival in the current year with a growth of

close to 12% after 3 consecutive years of decline. In motorcycles, the growth

has been fueled by domestic sales. Exports have declined because of various

internal issues in some of the key markets. Scooter continues to be more of

a domestic phenomenon with negligible exports. Electric vehicles business

especially in the scooter segment made significant gains during the year. The

subsidies under the FAME 2 scheme of the Government continues to ensure

that these vehicles are price competitive. Companies also seem to be investing

in developing the charging infrastructure. We continue to be a preferred choice

of fitment of Original Equipment Manufacturer (“OEMs”) in most of the new

launches. During the year, we have also further strengthened our after market

portfolio with new products both in the motorcycle and scooter segment.

Tractor production in financial year 2023 has shown a substantial increase of

11% and touched one million tractors for the first time. Various Government

schemes and a better monsoon helped the tractor industry to register a robust

growth during financial year 2023. Even though the IMD predicts a hotter

climate during 2023-24, a healthy water reservoir level should ensure enough

water for agriculture and good start to financial year 2024.

Growth in the automobile industry and replacement demand enabled Tyre

industry to show a healthy growth in financial year 2023. However, export

performance was muted considering the slowdown in the world markets.

Higher volumes and price hikes taken by the Industry helped to maintain

margins for the industry in financial year 2023.

Product wise Performance

During fiscal 2022-23, your company achieved a total income of `22826 crores.

There was an overall increase of 8% in tyre production in financial year 2023, with

all product groups showing growth. In the Heavy Commercial Vehicle product

group, there was an increase of 7% over the previous year while Light Commercial

Vehicle Tyres increased by around 2%. Small Commercial Vehicle tyres increased

by 14%. Passenger & SUV showed a growth of 13%. The Farm product group grew

by 9%. The Motorcycle and Scooter product group increased by 2% and 16%

respectively. The Off the Road (“OTR”) product group grew by 11%.

Exports

Exports business for the year 2022-23 was muted due to unexpected headwinds

seen in Indonesia & Bangladesh and a few countries of Africa. Although exports

revenue grew by only 5% in 2022-23, there were substantial growth in a few

strong markets.

Export turnover for the year 2022-23 was `1866 crores as against `1779 crores

in the previous year.

Our key markets of Bangladesh and Indonesia saw unforseen headwinds

which impacted the total revenue for the year. The unprecedented forex crisis

in Bangladesh since August 2022 led to a serious drop in the Letter of credit

availability thus impacting exports and total revenue. Although the forex crisis

has receded a bit we are yet to see the robust levels of early 2022.

Business from Indonesia was impacted due to the sudden suspension of quotas

being released by the Ministry of Trade & Industry since September 2022.

The Philippines in the far east & the middle eastern region showed substantial

growth and continue to maintain the momentum for brand MRF. Categories of

Truck Radial, Light truck & passenger car tyres showed good growth in these

markets and consumer preferences continue to be high.

Going forward we see immense opportunities in our existing strong markets

of Middle East, Africa, Far East, Bangladesh and emerging markets of Europe,

South America & USA.

Discussion on Financial Performance with respect to Operational Performance

and Key financial Ratios

(` Crores)

2022 - 2023 2021 - 2022

Revenue from operations 22578 18989

Other Income 248 315

Total Income 22826 19304

Profit before tax 1119 879

Provision for tax 303 232

Profit after tax 816 647

The revenue from operations of the Company for the 2022-2023 stood at `22578

Crores against `18989 Crores for the previous year ended 31st March, 2022. During

the year ended 31st March, 2023, the earnings before interest and depreciation

(EBIDTA) stood at `2666 Crores as against `2328 Crores in the previous year ended

31st March, 2022. After providing for depreciation and interest, the profit before

tax for the year ended 31st March, 2023 is `1119 Crores as compared to `879

Crores in the previous year ended 31st March 2022. After making provision for

income tax, the net profit for the year ended 31st March, 2023 is `816 Crores

as against `647 Crores in the previous year ended 31st March, 2022.

There is no significant change (i.e. 25% or more) in key financial ratios viz.

debtors turnover, inventory turnover, current ratio, debt equity ratio and

Interest coverage ratio, net profit margin (%), operating profit margin and return

on net worth.

The return on net worth increased from 4.80% in 2021-2022 to 5.77% in

2022-2023. This is due to the increase in current year’s profit.

Opportunities and Threats

Macro indicators point to continued growth of the Indian economy.

Infrastructure spending and continued emphasis to manufacture in India will

provide impetus for growth. Private sector Capex is also picking up steam.

Inflation continues to be near the upper end of the RBIs tolerance band and is

forecast for a gradual reduction. High Bank interest rates are likely to sustain.

Monsoon forecast is a little to the lower side of normal and El Nino has been

predicted. Any shortfall in the monsoon can impact rural demand. Extreme

weather events can impact agriculture and other activities.

Outlook

Pent up demand in passenger vehicles will cool in financial year 2024 but

secular economic growth should provide steady growth to the auto industry.

Higher capital expenditure by the auto industry points to high levels of capacity

utilization and is a pointer to higher levels of production in the future.

With new BS VI phase-2 transition effective 1st April, 2023, vehicle costs will go

up. However, the reduction in input costs will be a positive for the auto industry.

Impact on the tyre industry would also be similar as outlined above.

Internal Control Systems and their Adequacy

Your Company has established internal control systems commensurate with

the size and nature of business. It has put in place systems and controls across

the Company covering various financial and operational functions. Company

through its own Internal Audit Department carries out periodical audits at

various locations and functions based on the audit plan as approved by the Audit

Committee. Some of the salient features of the Internal control systems are:-

(i) An integrated ERP system connecting all plants, sales offices, head

office, etc.

(ii) Systems and procedures are periodically reviewed to keep pace with the

growing size and complexity of company’s operations.

(iii) Assets are recorded and system put in place to safeguard against any

losses or unauthorized disposal.

(iv) Periodic physical verification of fixed assets and Inventories.

(v) Key observati

ons arising out of the Internal Audit are reviewed at the

Audit Committee meeting and follow up action taken.

Risks and Concerns

World economy continues to face uncertainties due to geopolitical tensions,

forecasts of recession / slow down in growth in certain major economies of the

world, impact of climate change and macro economic structural challenges.

The overall scenario has triggered a spate of downsizing exercises across

several organisations setting off a nervousness which could impact demand,

both domestic and export. If the prediction of a lower than average monsoon

in India materialises, it could adversely impact off-take from rural markets.

While raw material prices are currently favourably positioned, any reversal in

this trend could once again put pressure on profits. Uncertainty remains with

regard to the price of crude oil which impacts the cost of several raw materials

used by tyre industry. Availability of natural rubber towards the end of March

2023 was a concern and if this trend continues, prices would increase in the

near future.

Human Resources

MRF is a value driven organization and the company has a rich organizational

culture rooted in its core values of respect for people and belief in empowerment.

The core value underlying our corporate philosophy is “trusteeship” and

“proprietary interest”. In dealing with each other, the values which are at the

core of our HR Philosophy - trust, teamwork, mutuality and collaboration,

objectivity, self-respect and human dignity are upheld. The management is

committed to the development and growth of its people and the core focus

is on human resources for its continued success. We owe our success and

dominance in the market to the dedication and hard work of our employees

who have overcome all challenges to meet the daunting challenges of the

market and the ever increasing quality expectations, customer taste and

preferences of the customers across the length and breadth of the country as

well as in overseas market.

The COVID-19 pandemic has arguably been the largest global shock to human

capital, we together combated and efforts have been taken for building agile,

resilient and adaptive Human Capital System.

We have focused on hiring the best resources available in tune with our growth

needs, retaining and developing our existing talent pool to strengthen our

human capital for meeting the future challenges. We leverage human capital

for competitiveness by nurturing knowledge, entrepreneurship and creativity.

Our human resource development is focussed on our company’s mission

to have competitive edge in technology and excellence in manufacturing.

All our training programs are designed and tailor made to meet our specific

requirements. We continued imparting teambuilding and collaboration training

to our workmen to enhance the team cohesiveness. Leadership training for

union leaders and opinion makers also continued through the year, keeping

with our commitment of shaping the future of our plants.

The total employee strength as on 31st March 2023 was 19,050.

We maintained cordial and harmonious Industrial relations in all our

manufacturing units through our various employee engagement initiatives and

focus on improving the work culture, enhancing productivity and enriching the

quality of life of the workforce and maintaining our supremacy in the market.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the

Company’s objectives, expectations or forecast may be forward looking

within the meaning of applicable laws and regulations. Actual results may

differ materially from those expressed in the statement. Important factors

that could influence the Company’s operations include global and domestic

supply and demand conditions affecting selling prices of finished goods, input

availability and prices, changes in government regulations, tax laws, economic

developments within the country and other factors such as litigation and

industrial relations.

On behalf of the Board of Directors

K M MAMMEN

Chennai Chairman & Managing Director

3rd May, 2023 DIN: 00020202

REPORT ON CORPORATE GOVERNANCE

1. Company’s Philosophy on Code of Governance

As always, your Company continues to remain committed to good corporate governance practices by maintaining the highest levels of fairness,

transparency, accountability, ethics and values in all facets of its operations and in all its interactions with its stakeholders.

Your Company’s Corporate Governance framework is all about maintaining valuable relationship and trust with all stakeholders. We ensure that timely

and accurate disclosure on all material matters including the financial situation, performance and regulatory requirements, leadership and governance of

the company are shared with all the stakeholders. It encourages cooperation between the Company and the stakeholders for better participation in the

Corporate Governance processes.

Your Company continues to believe that good corporate governance is essential for achieving long-term corporate goals of the Company and for meeting

the needs and aspirations of its stakeholders, including shareholders.

2. Board of Directors

(a) Composition of the Board as on 31.03.2023

The Board comprises of 17 Directors which includes a Chairman & Managing Director, a Vice Chairman and Managing Director, a Managing

Director, 2 Whole-time Directors, 2 Non-Executive Directors and 10 Independent Directors. None of the Directors on the Board is a member of more than 10

committees or act as Chairman of more than 5 committees across all listed Companies and unlisted public limited Companies in which he/ she is a Director.

(b) Attendance of Directors at Board Meetings during the financial year ended 31.03.2023 and at the last Annual General Meeting, outside

directorships and board committee memberships and number of shares held as on 31.03.2023:

Name Composition

and Category

No. of

Directorships

in other

Public Ltd.

Companies

No. of Board

Meetings attended

during the

financial year

ended 31.03.2023

Names of the other

listed entities where

the person is a director

and the category of

directorship

No. of Committee

Memberships

in other

Public Limited

Companies

Attended

last AGM

held on

04.08.2022

No. of

held

Mr. K M Mammen

Chairman & Managing

Director

Promoter

Executive

Director

4 4 Nil Nil Yes 16048

Mr. Arun Mammen

Vice Chairman and

Managing Director

Promoter

Executive

Director

3 4 Nil 1 –Chairman Yes 27560

Mr. Rahul Mammen

Mappillai

Managing Director

Promoter

Executive

Director

Nil 4 Nil Nil Yes 4538

Mr. Samir Thariyan

Mappillai

Whole-time Director

Promoter

Executive

Director

Nil 4 Nil Nil Yes 4470

Mr. Varun Mammen

Whole-time Director

Promoter

Executive

Director

Nil 4 Nil Nil Yes 8706

Name Composition

and Category

No. of

Directorships

in other

Public Ltd.

Companies

No. of Board

Meetings attended

during the

financial year

ended 31.03.2023

Names of the other

listed entities where

the person is a director

and the category of

directorship

No. of Committee

Memberships

in other

Public Limited

Companies

Attended

last AGM

held on

04.08.2022

No. of

held

Mr. Ashok Jacob Independent

Director

Nil 4 Nil Nil Yes 1856

Mr. V Sridhar Independent

Director

Nil 4 Nil Nil Yes Nil

Mr. Vijay R Kirloskar Independent

Director

2 2 Kirloskar Electric

Company Limited -

Executive Chairman

1 Yes 355

Mr. Ranjit I Jesudasen Independent

Director

Nil 4 Nil Nil Yes Nil

Dr. Salim Joseph

Thomas

Independent

Director

Nil 4 Nil Nil Yes Nil

Mr. Jacob Kurian Independent

Director

Nil 4 Nil Nil Yes 129

Dr. (Mrs.) Cibi

Mammen

Promoter

Non-Executive

Director

2 4 Nil Nil Yes 500

Mrs. Ambika Mammen Promoter

Non-Executive

Director

2 4 Nil Nil Yes 2489

Mrs. Vimla Abraham Independent

Director

Nil 4 Nil Nil Yes Nil

Mr. Vikram Taranath

Hosangady*

Independent

Director

Nil 1 Nil Nil NA Nil

Mr. Ramesh

Rangarajan*

Independent

Director

2 1 Nil Nil NA Nil

Mr. Dinshaw Keku

Parakh*

Independent

Director

2 1 Nil Nil NA 150

*Appointed as Independent Directors of the Company with effect from 07.02.2023.

For Committee memberships, the chairmanship and membership in Audit / Stakeholders Relationship Committee in all public limited Companies,

alone are considered. The Committee memberships of Directors are within the limits prescribed under the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 (herein after referred to as “Listing Regulations”).

Mr. K M Mammen and Mr. Arun Mammen are brothers.

Mrs. Ambika Mammen is the wife of Mr. K M Mammen.

Dr. (Mrs) Cibi Mammen is the wife of Mr. Arun Mammen.

Mr. Rahul Mammen Mappillai and Mr Samir Thariyan

Mappillai are the sons of Mr K M Mammen and Mrs Ambika

Mammen. None of the other Directors are related to any

Board Member.

During the financial year ended 31st March, 2023, four Board

Meetings were held on 10.05.2022, 09.08.2022, 08.11.2022

and 09.02.2023.

(d) Information placed before the Board

The Board of Directors periodically reviews reports regarding

operations, capital expenditure proposals, statutory

compliance and other required information as enumerated in

Part A of Schedule II of the Listing regulations and as required

under relevant provisions of the Companies Act, 2013.

(e) Familiarization Programme

Presentations/briefings are made at the meeting of the Board

of Directors/Committees by KMP’s/ Senior Executives of the

Company on industry scenario, Company’s operating and

financial performance, raw material scenario, industrial

relations status, risk management etc. The details of

familiarization programme are available on the Company’s

web site at https://www.mrftyres.com/investor-relations/

familiarization-programme-for-independent-director

3. Audit Committee

(i) Reference

The powers, role and terms of reference of the Audit Committee

covers the areas as mentioned under Regulation 18 of the

Listing Regulations and Section 177 of the Companies Act,

2013, besides other terms as may be referred by the Board of

Directors. These, inter alia, include oversight of Company’s

financial reporting process, internal financial controls,

reviewing the adequacy of the internal audit function,

reviewing with management the quarterly/annual financial

statements before submission to the Board, recommending

the appointment of statutory auditors and fixation of their

remuneration, approval of related party transactions,

evaluation of risk management systems etc.

(ii) Composition

The Audit Committee comprises of 3 Directors and all of them

being Independent Directors. The members of the Committee

are as follows:

Mr. Jacob Kurian Chairman

Mr. V Sridhar Member

Mr. Ranjit I Jesudasen Member

Mr. S Dhanvanth Kumar, Company Secretary, is the Secretary

of the Committee.

Mr. K M Mammen, Chairman & Managing Director, Mr.

Arun Mammen, Vice Chairman and Managing Director and

Mr. Rahul Mammen Mappillai, Managing Director are

permanent invitees. The Executive Vice President Finance, Head

of Internal Audit, Statutory Auditors and other Executives, as

considered appropriate, also attend the meetings by invitation.

(iii) Meetings and Attendance

During the financial year ended 31st March, 2023, the

Audit Committee met on the following dates: 10.05.2022,

09.08.2022, 08.11.2022 and 09.02.2023. All the members of

the Committee were present for all the meetings.

4. Nomination and Remuneration Committee

(i) Reference

In accordance with Section 178 of the Companies Act, 2013

and Regulation 19 of the Listing Regulations, the terms of

reference of the Committee include the following namely

formulation of criteria for determining qualifications, positive

attributes and independence of director, recommending

to the Board a policy relating to remuneration of directors,

key managerial personnel and other employees, formulation

of criteria for evaluation of directors performance, devising

a policy on Board diversity, identifying persons who are

qualified to become directors and who may be appointed in

senior management positions in accordance with the criteria

laid down and recommend to the Board their appointment

and removal and also recommend to the Board remuneration

payable to Senior Management.

(ii) Composition

The Committee comprises of 3 Non-Executive Independent

Directors and an Executive Director. The Chairman is a Non-

Executive Independent Director. The Committee comprises of:

Mr. Ranjit I Jesudasen Chairman

Mr. V Sridhar Member

Mr. Jacob Kurian Member

Mr. K M Mammen Member

Mr. S Dhanvanth Kumar, Company Secretary, is the Secretary

of the Committee.

(iii) Meetings and Attendance

During the financial year ended 31st March, 2023, the

Committee met on the following dates: 10.05.2022,

09.08.2022, 08.11.2022 and 09.02.2023. All the members of

the Committee were present for all the meetings.

5. Criteria for determining the qualifications, positive attributes and

Independence of a Director

Candidates for the position of a Director shall be a person of

integrity and possess requisite education, experience and capability

to make a significant contribution to the deliberations of the Board

of Directors. Apart from the above, the Board candidate should

be of the highest moral and ethical character. The candidate must

exhibit independence, objectivity and be capable of serving as a

representative of the stakeholder. The candidate should have the

personal qualities to be able to make an active contribution to Board

deliberations. These qualities include intelligence, inter-personal

skills, independence, communication skills and commitment. The

Board candidate should not have any subsisting relationships with

any organization which is a competitor to the Company. The Board

candidate should be able to develop a good working relationship

with other Board members. This apart, the Directors must satisfy

the qualification requirements laid down under the Companies Act,

2013, the Listing Regulations and any other applicable law and in

case of Independent Directors, the criteria of independence as laid

down in those laws.

6. Performance evaluation of Independent Directors

The criteria for evaluation of the Independent Directors is

attendance, participation in deliberations, understanding the

Company’s business and that of the industry and guiding the

Company in decisions affecting the business and additionally based

on the roles and responsibilities as specified in Schedule IV of the

Companies Act, 2013 and fulfilment of independence criteria and

independence from management.

The Board carried out evaluation of the performance of the

Independent Directors on the basis of the criteria laid down. The

evaluation was done by the Board of Directors except the Director

who was evaluated.

7. Remuneration of Directors

a. Remuneration Policy:

A policy on remuneration of Directors, Key Managerial

Personnel (“KMP”) and Senior Management and other staff

was put in place by Nomination and Remuneration Committee

on 23.07.2014 and approved by the Board of Directors at its

meeting held on 30.10.2014.

The Policy provides as follows:

(i) Non-Executive Directors:

The Non-Executive Directors (including Independent

Directors) may be paid remuneration by way of sitting

fees for attending meetings of Board or Committee

thereof.

The Directors may also be reimbursed any expenses in

connection with attending the meetings of the Board or

Committee or in connection with the business of the

Company.

The quantum of fees shall be determined, from time

to time, by the Board subject to ceiling / limits as

provided under Companies Act, 2013 and rules made

thereunder.

(ii) Chairman & Managing Director, Managing Director(s) /

Whole-time Director(s):

The level and composition of remuneration will be

reasonable and sufficient to attract, retain and motivate

directors of quality to run the Company successfully. The

remuneration package should adequately compensate

them for the high level of responsibilities shouldered

by them and sensitivity of the position held. The level

of remuneration shall take into consideration the

professional expertise, past credentials and potential of

the person concerned. The compensation package may

comprise of a fixed compensation package in the nature

of monthly and annual pay-out, provision of perquisites,

contribution to retirement benefits, health and insurance

and any other benefits (including provision of loans on

such terms as to interest, repayment and security as

determined by the Board) and commission on profits,

in such proportion and quantum as decided from time

to time based on the Company’s business needs and

requirements and prevailing practices in industry.

Besides the above, the remuneration to be paid to

Chairman & Managing Director, Managing Director(s) and

Whole-time Director(s) shall be governed by the provisions

of the Companies Act, 2013 and rules made thereunder

or any other enactment for the time being in force.

(iii) KMP’s (other than MD’s and WD’s), Senior Management

Personnel and other Staff:

The level and composition of remuneration will be

reasonable and sufficient to attract, retain and motivate

persons of the quality required to handle appropriate

management roles in the Company successfully. The

level of remuneration may be based on the qualification,

experience and expertise and potential of the person

concerned and also the responsibilities to be shouldered,

criticality of the job to the Company’s business and

any other criteria as considered appropriate. The

compensation package may comprise of a fixed

compensation package in the nature of monthly and

annual payout, provision of perquisites, contribution to

retirement benefits, health and insurance and any other

benefits (including provision of loans on such terms as

to interest, repayment and security as determined by the

Board) and variable pay (having a clear relationship to

performance which will meet appropriate benchmarks

relevant to the working of the Company and its goals),

in such proportion and quantum as decided from time

to time based on the Company’s business needs and

requirements and prevailing practices in industry.

(iv) Directors and Officers Insurance:

Where any insurance is taken by the Company on behalf

of its Directors, KMP’s / Senior Management Personnel,

Staff etc., for indemnifying them against any liability, the

premium paid on such insurance shall not be treated as

part of the remuneration payable to any such personnel.

b. Details of Remuneration to all the Directors for the financial

year ended 31.03.2023

(i) The remuneration of the Managing / Whole-time

Directors comprises of a fixed component (viz., salary,

allowances, perquisites and retirement benefits) and

variable components (viz., commission on profit).

Commission is paid as a percentage of net profits

computed as per Section 198 of the Companies Act, 2013

and accordingly the performance metric for payment of

commission is net profits computed as per section 198

of the Companies Act, 2013. The Commission is paid

to the Managing Directors/Whole-time Directors only

after adoption of the audited financial statements by the

shareholders at the Annual General Meeting.

The details of remuneration for the financial year ended

31.03.2023 are as follows:

(a) Name (b) Designation (c) Salary and perquisites

(`) (d) Commission (`) (e) Total (`)

(a) Mr. K M Mammen (b) Chairman & Managing Director

(a) Mr. Arun Mammen (b) Vice Chairman and Managing

Director (c) 133910866 (d) 115227000 (e) 249137866;

(a) Mr Rahul Mammen Mappillai (b) Managing

Director (c) 117005024 (d) 101570400 (e) 218575424;

(a) Mr Samir Thariyan Mappillai (b) Whole-time Director

Mammen (b) Whole-time Director (c) 40908506 (d)

25200000 (e) 66108506.

Note: Salary and perquisites include all elements of

remuneration i.e., salary, allowances and benefits

but excluding gratuity and leave benefits. The above

aggregate remuneration to the extent it exceeds 5% of

the net profits of the Company calculated as per Section

198 of the Companies Act, 2013, will be paid subject

to the approval of the shareholders as per Regulation

17(6)(e)(ii) of the Listing Regulations at the forthcoming

Annual General Meeting of the Company.

The Company has not issued any stock options to any

of the directors. The Managing Directors/ Whole-time

Directors are appointed by shareholders for a period of

five years at a time. Notice period and severance fees

are not applicable.

(ii) The Non-Executive Directors are paid sitting fees for

each meeting of the Board or Committee attended by

them and also reimbursed expenses in connection

with attending the meetings. The sitting fees paid for

the financial year ended 31.03.2023 to Non-Executive

Directors are as follows:

(a) Name (b) Sitting fees (`)

(a) Mr. Ashok Jacob (b)100000; (a) Mr. V Sridhar

(b) 230000; (a) Mr. Vijay R Kirloskar (b) 50000;

(a) Mr. Ranjit I Jesudasen (b) 290000; (a) Dr. Salim

Joseph Thomas (b) 100000; (a) Mr. Jacob Kurian (b)

220000; (a) Dr. (Mrs) Cibi Mammen (b) 100000; (a)

Mrs. Ambika Mammen (b) 100000; (a) Mrs. Vimla Abraham

(b) 100000; (a) Mr. Dinshaw Keku Parakh (b) 25000;

(a) Mr. Ramesh Rangarajan (b) 25000; (a) Mr. Vikram

Taranath Hosangady (b) 25000.

Sitting fees are paid to Non-Executive Directors within

the limits prescribed under the Companies Act, 2013.

There were no material pecuniary relationships or

transactions by Non-Executive Directors vis-à-vis

the Company as per the materiality threshold laid

down in Listing Regulations and also as per the

Policy on Materiality of and dealing with Related

Party Transactions framed pursuant to the said

Regulations.

As required under the Listing Regulations, the Company

has taken a Directors and Officers Liability Insurance

(D&O) on behalf of all Directors including Independent

Directors of the Company.

8. Stakeholders’ Relationship Committee

(i) Reference

The Committee looks into redressal of grievances of the

investors namely shareholders. The Committee deals with

grievances pertaining to non-receipt of annual report, non-

receipt of dividend, dematerialisation/rematerialisation of

shares, complaint letters received from Stock Exchanges,

SEBI, etc. The Board of Directors has delegated the power of

approving transmission of shares.

(ii) Composition

The Committee comprises of 3 Directors. The Chairman of

the Committee is a Non-Executive Independent Director. The

members of the Committee are:

Mr. V Sridhar Chairman

Mr. Ranjit I Jesudasen Member

Mr. K M Mammen Member

Mr. S Dhanvanth Kumar, Company Secretary, is the Secretary

of the Committee and the Compliance Officer.

(iii) Meeting and Attendance

During the financial year ended 31st March, 2023, the

Stakeholders’ Relationship Committee met on 09.08.2022. All

the members of the Committee were present for the meeting.

9 investor complaints were received during the financial year

ended 31.03.2023. All the complaints were redressed and no

complaints were pending at the year end.

9. Risk Management Committee

(i) Reference

In accordance with Regulation 21 of the Listing Regulations,

the terms of reference of the Committee include the following

namely formulation of detailed risk management policy,

ensuring that appropriate methodology, processes and

systems are in place to monitor and evaluate risks associated

with the business of the Company, monitoring and overseeing

implementation of the risk management policy, including

evaluating the adequacy of risk management systems,

periodically reviewing the risk management policy, at least

once in two years, including by considering the changing

industry dynamics and evolving complexity recommendations

and actions to be taken etc.

(ii) Composition

The Committee comprises of 3 Executive Directors and an

Independent Director. The Chairman of the Committee is an

Executive Director. The members of the Committee are:

Mr. K M Mammen Chairman

Mr. Arun Mammen Member

Mr. Rahul Mammen Mappillai Member

Mr. Ranjit I Jesudasen Member

(iii) Meeting and Attendance

During the financial year ended 31st March, 2023, the Risk

Management Committee met on 09.09.2022 and 03.03.2023.

All the members of the Committee were present for all the

meetings.

10. General Body Meetings

a. The Company held its last three Annual General Meetings as

under:

AGM for

the Year

Date Time Venue

2019-2020 24-09-2020 11.00 A.M Through Video

Conferencing (“VC”)/

Other Audio Visual

Means (“OAVM”).

2020-2021 12-08-2021 11.00 A.M Through Video

Conferencing (“VC”)/

Other Audio Visual

Means (“OAVM”).

2021-2022 04-08-2022 11.00 A.M Through Video

Conferencing (“VC”)/

Other Audio Visual

Means (“OAVM”).

b. Details of Special resolution passed during the last 3 Annual

General Meetings:

Date of AGM Particulars of Special Resolution passed

24-09-2020 Nil

12-08-2021 Nil

04-08-2022 Nil

c. Postal Ballot:

During the financial year ended 31st March, 2023, the Board

sought the consent of the shareholders of the Company for

passing the following Special Resolutions through postal ballot

as per the notice to the shareholders dated 08th November

2022 and 24th February 2023:

Date of Postal

Ballot Notice

Particulars of Special Resolution passed

08.11.2022 1. Appointment of Mr.VikramTaranath Hosangady

(DIN:09757469) as an Independent Director of

the Company

2. Appointment of Mr.Ramesh Rangarajan

(DIN: 00141701) as an Independent Director of

the Company.

3. Appointment of Mr.Dinshaw Keku Parakh

(DIN: 00238735) as an Independent Director of

the Company.

The above special resolutions were passed with

requisite majority on 21st December 2022.

Voting pattern of the special resolutions passed through postal ballot

on 21st December 2022, through the e-voting process, are as follows:

Date of Postal

Ballot Notice

Particulars of Special Resolution passed

24.02.2023 1. Appointment of Mr. Arun Vasu (DIN: 00174675)

as an Independent Director of the Company.

2. Appointment of Mr. Vikram Chesetty (DIN:

01799153) as an Independent Director of the

Company.

3. Appointment of Mr. Prasad Oommen (DIN:

00385082) as an Independent Director of the

Company.

The above special resolutions were passed with requi-

site majority on 31st March 2023.

Voting pattern of the special resolutions passed through postal ballot on

31st March 2023, through the e-voting process, are as follows:

Mr. N C Sarabeswaran (Membership No. 009861) Senior Partner,

Messrs. Jagannathan & Sarabeswaran, Chartered Accountants was

appointed as the Scrutinizer for conducting the above postal ballots

as per the notice to the shareholders dated 08th November 2022

and 24th February 2023 through the e-voting process in a fair and

transparent manner.

d. As on date of this report, the company does not propose to pass any

special resolution by way of Postal Ballot.

Particulars Resolution

No. 1

Resolution

No. 2

Resolution

No. 3

Votes in favour of the resolution

Number of members 791 790 786

Number of votes cast by them 3170165 3170184 3166560

% of total number of valid

votes cast

100 100 99.88

Votes against the resolution

Number of members 22 21 25

Number of votes cast by them 245 217 3944

% of total number of valid

votes cast

0.00 0.00 0.12

Invalid Votes Nil Nil Nil

Particulars Resolution

No. 1

Resolution

No. 2

Resolution

No. 3

Votes in favour of the resolution

Number of members 719 720 719

Number of votes cast by them 3283941 3283920 3283943

% of total number of valid

votes cast

99.96 99.96 99.96

Votes against the resolution

Number of members 26 24 26

Number of votes cast by them 1237 1233 1235

% of total number of valid

votes cast

0.04 0.04 0.04

Invalid Votes Nil Nil Nil

11. Means of Communication

Quarterly/half yearly results are disclosed to Stock Exchanges and

also published in daily newspapers viz., Business Standard (all over

India) and Makkal Kural (Vernacular). As per the requirements of

Regulation 46 of the Listing Regulations, the quarterly/half yearly

results and the press release issued annually are displayed on the

Company’s website www.mrftyres.com. The Company provides

information to the Stock Exchanges as per the requirements of the

Listing Regulations. No presentations were made to institutional

investors / analysts. The Company has a designated e-mail address

viz., [email protected], exclusively for investor servicing.

12. Dividend Distribution Policy

Pursuant to Regulation 43A of the Listing Regulations, the Company

is required to formulate a dividend distribution policy. The Policy is

available on the website of the Company https://www.mrftyres.com/

downloads/download.php?filename=Dividend-Distribution-Policy.pdf

13. General Shareholder Information

a) Annual General Meeting:

Date and Time : Thursday, 27th July, 2023 at 11 A.M.

Venue : The company is conducting meeting

through Video Conference (VC) / Other

Audio Visual Means (OAVM)

b) Financial Year : 1st April to 31st March.

c) Dividend payment date:

Interim Dividend : 02.12.2022

` 3 per share (30%)

II Interim Dividend : 06.03.2023

` 3 per share (30%)

Final Dividend : 21.08.2023, ` 169/- per share (1690%)

(subject to approval of shareholders)

d) Listing on Stock Exchanges:

Equity

1. National Stock Exchange of India Ltd., (NSE) Exchange Plaza,

5th Floor, Plot No. C/1, 5 G Block, Bandra-Kurla Complex,

Bandra (E), Mumbai 400 051.

2. Bombay Stock Exchange Ltd., (BSE) Phiroze Jeejeebhoy

Towers, 25th Floor, Dalal Street, Mumbai 400 001.

Equity ISIN : INE883A01011

Debt

National Stock Exchange of India Ltd., (NSE) Exchange Plaza, 5th Floor, Plot

No. C/1, 5 G Block, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051.

Debt ISIN: INE883A08016

Details of Debenture Trustee: Axis Trustee Services Limited, Corporate

Office: The Ruby, 2nd Floor, SW 29, Senapati Bapat Marg, Dadar (West),

Mumbai – 400028, Tel No.: +91-22-62300451, Email: debenturetrustee@

axistrustee.in

Listing fees upto the year ending 31st March, 2024 have been paid to the

above mentioned Stock Exchanges.

During the financial year, none of the securities of the Company have

suspended for trading.

During the year under review, the Company has allotted 15,000 listed,

unsecured, rated, redeemable, taxable, non-convertible debentures

aggregating to `150 crores on a private placement basis.

e) Stock Code

Bombay Stock Exchange Code 500290

National Stock Exchange Symbol MRF

f) Market Price Data

Month

Bombay Stock Exchange [BSE] National Stock Exchange [NSE]

High (`) Low (`) No. of

Apr-2022 73317.50 65085.50 6138 73400.00 65099.95 196973

May-2022 78138.50 66685.10 13271 78165.65 66680.00 244859

Jun-2022 77500.00 65900.05 6918 77570.00 65878.35 178487

Jul-2022 83957.60 70294.25 10037 83970.00 70300.00 182364

Aug-2022 89333.00 82185.50 14803 89499.90 82101.00 274556

Sep-2022 93855.00 78000.00 19012 93887.00 78689.95 376855

Oct-2022 91200.00 80110.10 18096 91250.00 80100.00 227585

Nov-2022 95954.35 85208.80 16150 96000.00 85100.00 334533

Dec-2022 95150.00 85148.95 5891 95243.65 85201.05 177834

Jan-2023 94402.95 87000.00 6781 94480.00 86911.35 205933

Feb-2023 93219.90 84612.20 6404 93449.00 84640.00 180094

Mar-2023 87777.75 81390.95 4265 87399.40 81380.05 115080

g) Stock Performance: (Monthly Closing Price) Performance in

comparison to BSE Sensex

46000

48000

50000

52000

54000

56000

58000

60000

62000

64000

Apr-22

May-23

Jun-22

Jul-22

Aug-22

Sep-22

Oct-22

Nov-22

Dec-22

Jan-23

Feb-23

Mar-23

10000

20000

30000

40000

50000

60000

70000

80000

90000

10000

MRF SHARE PRICE BSE SENSEX

h) Registrars and Transfer Agents :

Equity

In-house Share Transfer

MRF Limited No. 114, Greams Road,

Chennai - 600 006

Tel: 044-28292777,

Website: www.mrftyres.com;

E-mail: [email protected]

In terms of SEBI Circular No. O&CC/FITTC/CIR-15/2002 dated

27th December, 2002, your Company is carrying out both

physical share registry work as well as electronic connectivity,

in-house. In-house Investor relations department provides various

services viz., dematerialisation and rematerialisation of shares, share

transmissions, disbursement of dividend, processing claims for

unclaimed dividend/shares, issue of duplicate share certificates,

dissemination of information etc. Members are therefore requested

to communicate on matters pertaining to physical shares to

Secretarial Department, MRF Limited, No. 114, Greams Road,

Chennai 600 006.

Debt

Cameo Corporate Services Limited

“Subramanian Building”, 1, Club House Road,

Chennai – 600 002. Tel: +91-44-28460390

Website: www.cameoindia.com

E-Mail: [email protected]

i) Share Transfer System

SEBI has mandated that, effective from 1st April, 2019, no share can

be transferred in physical mode. Moreover, SEBI has also mandated

that resubmitted cases shall not be accepted / taken up for transfer

after 31st March, 2021. Dematerialisation requests received by the

Company are normally processed within 10 days of its receipt.

j) Distribution of shareholding: (as at 31.03.2023)

Shareholding

No. of

Shareholders

No. of

Upto 100 41952 96.44 333914 7.87

101 - 500 1159 2.67 241995 5.71

501 - 1000 135 0.31 94004 2.22

1001 - 2000 101 0.23 145191 3.42

2001 - 3000 31 0.07 76062 1.79

3001 - 4000 22 0.05 80683 1.90

4001 - 5000 10 0.02 46460 1.10

5001 - 10000 31 0.07 213970 5.05

10001 and

above

59 0.14 3008864 70.94

TOTAL 43500 100.00 4241143 100.00

k) Dematerialization of Shares and Liquidity

89.72% of total equity capital is held in dematerialized form

with NSDL and CDSL as on 31st March, 2023. All requests for

dematerialization of shares were processed within the stipulated time

period and no share certificates were pending for dematerialization.

Trading in equity shares of the Company is permitted only in

dematerialized form as per prevailing law.

Electronic Form NSDL,

34,24,231

80.74%

Electronic Form CDSL,

3,81,084

8.98%

Physical Form,

4,35,828

10.28%

l) Outstanding GDR/Warrants/any other convertible instruments

The Company does not have any outstanding GDR / Warrants / any

other convertible instruments.

m) Commodity price risk or foreign exchange risk and hedging

activities:

i) Risk Management Policy of the Company with respect to

commodities including through hedging:

The Company’s purchasing strategy does not involve hedging

activities and speculative buying. The risks are limited by

sourcing from different countries and regions and having long

term contracts with prices linked to well accepted market

indices and published reports.

ii) Exposure of the Company to commodity risks faced by the

entity throughout the year.

A) Total exposure of the Company to commodities in INR:

4286.67 Crores

B) Exposure of the Company to various commodities:

Commodity

Name

Exposure in

INR towards

the particular

commodity

Exposure in

Quantity terms

towards the

particular

commodity

% of such exposure hedged through

commodity derivatives

Domestic market International

market

Total

OTC Exchange OTC Exchange

Natural

Rubber

` 4286.67

Crores

268445MT NIL NIL NIL NIL NIL

iii) Foreign Currency Risks:

The Company’s policy on hedging foreign currency risks is

explained in the notes to the financial statements.

n) Disclosures in relation to the Sexual Harassment of Women at

Workplace (Prevention, Prohibition and Redressal) Act, 2013:

i. Number of complaints filed during the financial year: Nil

ii. Number of complaints disposed of during the financial year:

Nil

iii. Number of complaints pending as on end of the financial year:

Nil

o) Plant Locations

1. Tiruvottiyur — Tiruvottiyur High Road, Chennai, Tamil Nadu.

2. Kottayam — No. 2, Vadavathoor, Kottayam, Kerala.

3. Goa — No. 1, Ponda, Goa.

4. Arkonam — Arkonam – Tiruttani Road, Ichiputhur,

Arkonam, Tamil Nadu.

5. Medak — No. 2, Sadasivapet, Sangareddy,

Telangana.

6. Puducherry — Eripakkam Village, Nettapakkam Commune,

Puducherry.

7. Ankenpally — No. 2, Sadasivapet, Sangareddy,

Telangana.

8. Perambalur — Naranamangalam Village & Post, Alathur

(2 plants) Taluk, Perambalur District, Tamil Nadu.

9. Dahej — Plot No. D-II-16, Dahej Industrial Area,

Galenda Village, Taluka - Vagara Dist.

Bharuch, Gujarat

p) Address for Correspondence: MRF Limited

No. 114, Greams Road,

Chennai – 600 006.

Tel: (044) 28292777

Fax: (044) 28295087

E-mail: [email protected]

14. Other Disclosures

(a) As required under applicable Listing Regulations, your

Company has adopted a policy on materiality of and

dealing with related party transactions which was approved

by the Board of Directors and uploaded on the Company’s

Website: https://www.mrftyres.com/downloads/download.

php?filename=policy-on-materiality-of-and-dealing-with-

related-party-transactions.pdf

Requisite approvals from the Audit Committee / Board

have been obtained for the transactions as stipulated under

applicable law.

The details of related party transactions during the financial

year ended 31st March, 2023 are given in note 28d of the

financial statements.

During the year under review, your Company has entered

into transactions with MRF SG PTE. LTD, a wholly owned

subsidiary of your Company for purchase of raw materials

and the total value of transactions executed during financial

year 2022-2023 exceed the materiality threshold adopted

by the Company. These transactions were in the ordinary

course of business and were on an arms length basis, details

of which are provided in Annexure IV of the Board’s Report

as required under section 134(3)(h) of the Companies Act,

2013 read with Rule 8(2) of the Companies (Accounts) Rules,

2014.

There are no transactions with any person or entity belonging

to the promoters/promoter group which hold(s) 10% or more

shareholding in the Company.

During the year under review, there are no materially

significant related party transactions that may have potential

conflict with the interests of listed entity at large.

(b) The Company has complied with the requirements of the

Stock Exchanges/SEBI and statutory authority on all matters

related to capital markets during the last three years. No

penalties, strictures were imposed on the Company by the

Stock Exchange/SEBI or any other statutory authority in respect

of the same.

to the requirements of Section 177(9) of the Companies

Act, 2013 and Regulation 22 of the Listing Regulations.

No personnel have been denied access to the chairman

of the Audit Committee to report genuine concerns.

Establishment of vigil mechanism is hosted on the

website of the Company under the web link: https://www.

mrftyres.com/downloads/download.php?filename=Vigil-

Mechanism.pdf

(d) The Company has complied with the mandatory requirements

of Corporate Governance prescribed in Schedule II, Part A to

D of the Listing Regulations.

(e) The Company has complied with all the applicable mandatory

requirements specified in Regulations 17 to 27 and Clauses

(b) to (i) of sub-regulation (2) of Regulation 46 of the Listing

Regulations.

(f) The Board has laid down a Code of Conduct for all Directors

and senior management staff of the Company. The code

suitably incorporates for the Independent Directors their

duties as Independent Directors as laid down in Schedule IV of

the Companies Act, 2013. The code of conduct is available on

the website: www.mrftyres.com. All Directors and members of

the senior management have affirmed their compliance with

the code of conduct.

Your Company has also adopted a Code of Conduct to

regulate, monitor and report trading by Designated persons

and their Immediate Relatives as per SEBI (Prohibition

of Insider Trading) Regulations, 2015. All Directors and

designated persons who could have access to unpublished

price sensitive information of the Company are governed

by the Code. An annual disclosure was taken from the

Directors and designated persons, as at the end of the

year.

(g) The Audit Committee reviews the financial statements of the

unlisted subsidiary companies. The minutes of the Board

Meetings of the unlisted subsidiary companies are placed at

the Board meeting of the Company including statement of all

significant transactions and arrangements entered into by then

unlisted subsidiary companies.

Your Company has formulated a policy on material subsidiary

as required under Regulation 16 of the Listing Regulations

and the policy is hosted on the website of the Company

under the web link: https://www.mrftyres.com/downloads/

download.php?filename=material-subsidary-policy.pdf The

Company does not have any material unlisted subsidiary

Company.

(h) The Company has issued a formal letter of appointment to

all the Independent Directors. The terms and conditions of

their appointment have been disclosed on the Company’s

website under the web link: https://www.mrftyres.com/

investor-relations/terms-and-conditions-of-appoinment-of-

independent

During the year, a meeting of the Independent Directors

was held as prescribed under applicable Listing Regulations

and the Companies Act, 2013. In the opinion of the Board,

Independent Director(s) fulfils the conditions specified

in the Listing Regulations and are Independent of the

Management.

During the financial year, none of the Independent Directors

of the Company have resigned before the expiry of their

tenure.

(i) As required under the Listing Regulations, the Board of

Directors have identified the following core skills / expertise/

competencies as required in the context of its business and

sector for it to function effectively.

Core skills / expertise / competencies

General Business / Industry awareness

Functional Knowledge / General Management /

Administration

Communication and collaborative approach

The Board collectively has the abovementioned skills /

expertise / competence. The names of directors and the skills

they possess are given below:

Name of the Director General

Business/

Industry

awareness

Functional

knowledge/

General

Management/

Administration

Communication

and

Collaborative

approach

Mr. K M Mammen

  

Mr. Arun Mammen

  

Mr. Rahul Mammen

Mappillai

  

Mr Samir Thariyan Mappillai

  

Mr. Varun Mammen

  

Mr. Ashok Jacob

  

Mr. V Sridhar

  

Mr. Vijay R Kirloskar

  

Mr. Ranjit I Jesudasen

  

Dr. Salim Joseph Thomas

  

Mr. Jacob Kurian

  

Dr. (Mrs) Cibi Mammen

  

Mrs. Ambika Mammen

  

Mrs. Vimla Abraham

  

Mr. Vikram Taranath

Hosangady

  

Mr. Ramesh Rangarajan

  

Mr. Dinshaw Keku Parakh

  

(j) A Certificate has been received from Mr. K Elangovan,

Elangovan Associates, Company Secretaries, Chennai, that

none of the Directors on the Board of the Company has been

debarred or disqualified from being appointed or continuing

as Directors of Companies by the Securities and Exchange

Board of India / Ministry of Corporate Affairs or any such

Statutory Authority.

(k) Pursuant to the SEBI circular no. CIR/CFD/ CMD1/27/2019

dated February 8, 2019, the Company has obtained an

Annual Secretarial Compliance Report from Mr. K Elangovan,

Elangovan Associates, Company Secretaries, Chennai,

confirming compliance of SEBI Regulations / Circulars /

Guidelines issued thereunder and applicable to the Company.

There are no observations or adverse remarks in the said

report.

(l) Total fees for all services paid by the Company and its

subsidiaries, on a consolidated basis, to the Statutory Auditors

for the financial year ended 31st March, 2023 is `1.61 crores.

(m) List of Credit ratings obtained by the Company: The Ratings

given by CARE Ratings Limited for Long term Bank Facilities

to the extent of ` 2940 crores and Long term/ Short term Bank

Facilities to the extent of ` 1000 crores of the Company are

CARE AAA; Stable (Triple A; Outlook : Stable) and CARE AAA;

Stable / CARE A1+ (Triple A; Outlook: Stable / A One Triple

Plus), respectively.

CARE Ratings Limited has also given CARE A1+ (A One Plus)

for Short term Bank Facilities, to the extent of `1500 crores.

All the above credit ratings were reaffirmed by CARE Ratings

Limited.

Further, CARE Ratings Limited has also given CARE AAA;

Stable (Triple A; Outlook : Stable) Ratings for the Non-

Convertible Debentures of the Company aggregating to `150

Crores.

(n) There was no preferential allotment or qualified institutions

placement as specified under Regulation 32 (7A) of Listing

Regulations.

(o) There was no instance during the financial year 2022-

2023, where the Board of Directors has not accepted the

recommendation of any committee of the Board which it was

mandatorily required to accept.

(p) Your Company has formulated a policy for determination

of materiality of any event or information as required under

Regulation 30 of the Listing Regulations and the policy is hosted

on the website of the Company under the web link: https://www.

mrftyres.com/downloads/download.php?filename=Policy-for-

determination-of-Materiality.pdf

(q) Details of utilization of funds raised through preferential

allotment or qualified institutions placement as specified

under Regulation 32 (7A). – Nil

(r) Disclosure by listed entity and its subsidiaries of ‘Loans and

advances in the nature of loans to firms/companies in which

directors are interested by name and amount’: Nil

(s) Details of material subsidiaries of the listed entity; including

the date and place of incorporation and the name and date of

appointment of the statutory auditors of such subsidiaries. –

Nil

15. Discretionary requirements

The Company has adopted the following discretionary requirements:-

a. The Company’s quarterly and half yearly results are published

in the newspapers and also uploaded on its website: www.

mrftyres.com and in Stock Exchange websites namely https://

neaps.nseindia.com and listing.bseindia.com. Therefore, no

individual communications are sent to the shareholders in this

regard.

b. There are no qualifications in the Auditors’ Report on the

accounts for the financial year ended 31.03.2023.

c. The internal audit head presents the internal audit observations

to the Audit Committee.

16. CEO / CFO Certification

Mr. Rahul Mammen Mappillai, Managing Director and Mr. Madhu

P Nainan, Executive Vice President Finance, have certified to the

Board regarding the financial statements for the financial year ended

31st March, 2023 in accordance with Regulation 17(8) of Listing

Regulations.

17. Equity shares in MRF - Unclaimed Suspense Account

As required by the provisions of Regulation 39 (4) read with

Schedule V (F) of Listing Regulations, the Company has transferred

the unclaimed shares lying in possession of the Company to MRF –

Unclaimed Suspense Account. The status of unclaimed shares lying in

MRF - Unclaimed Suspense Account as on 31.03.2023 are as under:

Particulars Number of

Members

Number of

Aggregate number of shareholders

and the outstanding shares lying in the

suspense account at the beginning of the

financial year.

221 5697

Number of shareholders who

approached the Company for transfer of

the shares from suspense account during

the financial year 2022-23

7 389

Shareholders to whom shares were

transferred from the suspense account

during the year.

7 389

Shares transferred to Investor Education

and Protection Fund Authority as

required by Section 124 (6) of the

Companies Act, 2013 read with rules

thereunder.

- -

Aggregate number of shareholders

and the outstanding shares lying in the

suspense account as on 31.03.2023.

214 5308

The voting rights on these shares shall remain frozen till the rightful owner

of such shares claims the shares.

18. Transfer of shares to Investor Education and Protection Fund (IEPF)

Pursuant to the Companies Act, 2013 read with the Investor

Education and Protection Fund Authority (Accounting, Audit,

Transfer and Refund) Rules, 2016 (hereinafter referred to as “IEPF

Rules”), dividends that are unpaid or unclaimed for a period

of seven years from the date of their transfer are required to be

transferred by the Company to the IEPF, administered by the Central

Government. Further, according to the said IEPF Rules, shares in

respect of which dividend has not been claimed by the shareholders

for seven consecutive years or more shall also be transferred to the

demat account of the IEPF Authority.

During the financial year 2022-23, the Company has transferred

a total of 1115 Shares to IEPF Authority. The Company has also

transferred a sum of ` 4,87,038 being unclaimed dividend to IEPF.

The dividend amount and shares transferred to the IEPF Authority

can be claimed by the concerned members from the IEPF Authority

after complying with the procedure prescribed under the IEPF

Rules.

19. Declaration

As required by Para D of Schedule V to the Listing Regulations, it is

hereby confirmed and declared that all the members of the Board

and senior management have affirmed compliance with the Code of

Conduct of the Company for the financial year ended 31st March,

2023.

On behalf of the Board of Directors

K M MAMMEN

Place: Chennai Chairman & Managing Director

Date: 03rd May, 2023 DIN: 00020202

INDEPENDENT AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

TO THE MEMBERS OF MRF LIMITED

1. We, M M NISSIM & CO LLP and SASTRI & SHAH, Chartered Accountants, the Statutory Auditors of MRF LIMITED (“the Company”), have examined

the compliance of conditions of Corporate Governance by the Company, for the year ended 31 March, 2023, as stipulated in regulations 17 to 27 and

clauses (b) to (i) of regulation 46(2) and Paras C, D and E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

(the Listing Regulations)

MANAGEMENT’S RESPONSIBILITY

2. The compliance of conditions of Corporate Governance is the responsibility of the Management. This responsibility includes the design, implementation

and maintenance of internal control and procedures to ensure compliance with the conditions of the Corporate Governance stipulated in the Listing

Regulations.

AUDITORS’ RESPONSIBILITY

3. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring compliance with the

conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

4. We have examined the books of account and other relevant records and documents maintained by the Company for the purposes of providing reasonable

assurance on the compliance with Corporate Governance requirements by the Company.

5. We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on Certification of Corporate

Governance issued by the Institute of the Chartered Accountants of India (the ICAI), the Standards on Auditing specified under Section 143(10) of the

Companies Act, 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special

Purposes (Revised 2016) issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.

6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits

and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.

OPINION

7. Based on our examination of the relevant records and according to the information and explanations provided to us and the representations provided

by the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in regulations 17 to 27 and

clauses (b) to (i) of regulation 46(2) and Paras C and D of Schedule V of the Listing Regulations during the year ended 31st March, 2023.

8. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the

Management has conducted the affairs of the Company.

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Regn. No. 107122W/W100672 Firm Regn. No. 003643S

N Kashinath C.R.Kumar

Partner Partner

Mem. No. 036490 Mem. No. 026143

UDIN: 23036490BGXRXQ6423 UDIN: 23026143BGZEEH6111

Place: Chennai Place : Chennai

Date: 03rd May, 2023 Date: 03rd May, 2023

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

SECTION A – GENERAL DISCLOSURES

Details of the Listed Entity:-

1. Corporate Identity Number

(CIN) of the Listed Entity

L25111TN1960PLC004306

2. Name of the company MRF Limited

3. Year of incorporation 05/11/1960

4. Registered office address 114, Greams Road, Chennai

600006

5. Corporate address 114, Greams Road, Chennai

600006

6. E-mail [email protected]

7. Telephone 044-28292777

8. Website www.mrftyres.com

9. Financial year for which

reporting is being done

01-04-2022 to 31-03-2023

10. Name of the Stock Exchange(s)

where shares are listed

(a) National Stock Exchange of

India Ltd. (b) BSE Limited.

11 Paid-up Capital

`42411430

12. Name of contact details of the

person who may be contacted

in case of any queries on the

BRSR Report

(a) Mr. K M Mammen

(DIN: 00020202),

Chairman & Managing Director,

Tel. No.: +91 44 28292777,

E-mail Id: [email protected]

(b) Mr. Arun Mammen

(DIN: 00018558),

Vice Chairman and

Managing Director,

Tel. No.: +91 44 28292777,

E-mail Id: [email protected]

13. Reporting boundary Standalone Basis

Products and Services

14. Details of business activities (accounting for 90% of the turnover):

Sr.

No.

Description of

Main Activity

Description of

Business Activity

% Of Turn-

over of the

entity

1 Manufacturing

and sale of Au-

tomotive Tyres,

Tube, Flap etc

Manufacturing and Sale

of Truck, Farm, Passenger,

Two-wheeler and other tyres,

tubes, flaps etc.

100%

15. Products/Services sold by the entity (accounting for 90% of the

entity’s Turnover):

Sr.

No.

Product/Service NIC

Code

% Of total Turn-

over contributed

1 Manufacturing and sale of Auto-

motive Tyres, Tube, Flap etc.

2211 100%

Operations

16. Number of locations where plants and/or operations/offices of the

entity are situated:

Location Number of

Manufacturing Units

Number of

offices

Total

National 10 192 202

International 0 3 3

17. Markets served by the entity:

The company operates in the following markets mentioned below:

a. Number of locations

Locations Number

National

(No. of States)

The Company sells its products in all the 28 states

and 8 Union territories in the country

International

(No. of Countries)

The Company serves in more than 60+

countries

b. What is the contribution of exports as a percentage of the

total turnover of the entity?

8.27%

c. A brief on types of customers

Institutional Customers (Orginal Equipments Manufacturers,

State Transport Undertakings, Defence, Govt. Departments,

Contractors) and Retail Markets.

Employees

18. Details as at the end of Financial Year:

a. Employees and workers (including differently abled):

Employees

Sr.

No.

Particulars Total

(A)

Male Female

No. (B) % (B/A) No. (C) % (C/A)

1. Permanent (D) 6804 6762 99 42 1

2. Other than Permanent (E)

126 125 99 1 1

3. Total employees (D + E)

6930 6887 99 43 1

Workers

4. Permanent (F)

12246 12246 100 0 0

5. Other than Permanent (G)

15420 15121 98 299 2

6. Total workers (F + G)

27666 27367 99 299 1

b. Differently abled Employees and workers:

Differently abled employees:

Sr. No. Particulars Total (A) Male Female

No.(B) % (B/A) No. (C) % (C/A)

1. Permanent (D) 12 12 100 0 0

2. Other than Permanent (E) 0 0 0 0 0

3. Total differently abled

employees (D + E)

12 12 100 0 0

Differently abled workers:

4. Permanent (F) 56 56 100 0 0

5. Other than permanent (G) 0 0 0 0 0

6. Total differently abled

workers (F + G)

56 56 100 0 0

19. Participation/Inclusion/Representation of women

Total (A) No. and percentage of Females

No. (B) % (B / A)

Board of Directors 17 3 17.64

Key Management Personnel

(KMPs)

2* 0 0

Note: * Excluding Managing Directors / Wholetime Directors

20. Turnover rate for permanent employees and workers

(Disclose trends for the past 3 years)

FY 2022-23 FY 2021-22 FY 2020-21

Male Female Total Male Female Total Male Female Total

Permanent

Employees

16% 7% 16% 13% 7% 13% 6% 5% 6%

Permanent

Workers

4% 0 4% 1% 0 1% 0.34% 0 0.34%

Holding, subsidiary and associate companies (including joint ventures)

21. (a) Names of holding / subsidiary / associate companies /

joint ventures

The company has a total of 4 subsidiaries.

Sr.

No.

Name of the holding

/ subsidiary / associ-

ate companies / joint

ventures

(A)

Indicate

whether

holding/

Subsid-

iary/

Associate/

Joint

Venture

% Of

held by

listed

entity

Does the entity

indicated at

column A,

participate in

the Business

Responsibility

initiatives of the

listed entity?

(Yes/No)

1 MRF Corp. Ltd. Subsidiary 100%

-No-

2 MRF International Ltd. Subsidiary 94.66%

3 MRF Lanka (P) Ltd. Subsidiary 100%

4 MRF SG PTE. LTD Subsidiary 100%

CSR

22. (i) Whether CSR is applicable as per section 135 of Companies Act, 2013: (Yes/No) - Yes

(ii) Turnover (Revenue from Operations) (in `) – 22578.23 Crores

(iii) Net worth (in `) – 14508.87 Crores

Transparency and Disclosure Compliances

23. Complaints/Grievances on any of the principles (Principles 1 to 9) under the National Guidelines on Responsible Business Conduct:

Stakeholder group from

whom complaint is received

Grievance Re-

dressal Mech-

anism in Place

(Yes/No) (If yes,

then provide

web-link for

grievance re-

dress policy)

FY 2022-23

Current Financial Year

FY 2021-22

Previous Financial Year

Number of

complaints

filed during

the year

Number of

complaints

pending reso-

lution at close

of the year

Remarks Number of

complaints

filed during

the year

Number of

complaints

pending reso-

lution at close

of the year

Remarks

Communities

Yes 0 0 - 1 0

Shareholders and Investors

Yes 9 0 - 16 0 -

Employees and workers

Yes 2 1 - 0 0 -

Customers

Yes 47837 1 - 35311 3 -

Value Chain Partners -

Supplier

No 0 0 - 0 0 -

Other (please specify)

- - - - - - -

Weblink: https://www.mrftyres.com/investor-relations/mrf-mechanism-for-grievance-redressal

Note:

a A litigation is pending before the National Green Tribunal (‘NGT’) at Chennai alleging that the constructions of the new Warehouse and the R&D Centre at Tiruvottiyur, Chennai

have not received requisite government approvals. The Committee appointed by the NGT has concluded that required approvals are in place. The matter is awaiting disposal

by the National Green Tribunal.

24. Please indicate material responsible business conduct and sustainability issues pertaining to environmental and social matters that present a risk or an

opportunity to your business, rationale for identifying the same, approach to adapt or mitigate the risk along-with its financial implications, as per the

following format .

Overview of the entity’s material responsible business conduct issues:

Sr.

No.

Material identified

issue

Indicate

whether risk

or opportunity

(R/O)

Rationale for identifying the risk / oppor-

tunity

In case of risk, approach

to adapt or mitigate

Financial impli-

cations of the risk

or opportunity

(Indicate positive

or negative impli-

cations)

1 Carbon

Emissions

R MRF is currently in the process of

evaluating both direct and indirect green

house gas emissions. MRF aspires to

contribute to the national and international

goal of reducing environmental impact.

MRF has taken multiple measures to reduce

its emission through utilization of biofuels,

renewable energy and improving its efficiency

across operation.

Negative

2 Water

Management

O Water is a critical resource for our

operations. We see it as an opportunity

to improve our water efficiency and to

minimise our water costs.

Positive

3 Energy

Management

O Better energy management would enable

reduction in the cost of energy.

Positive

4 Opportunities in

Renewable Energy

O As we are in the process of reducing

our carbon footprint, we are exploring

renewable energy interventions apart from

our consistent initiatives around improving

energy efficiencies and improving conser-

vation of resources year-on-year.

Positive

5 Toxic Emission

& Waste

R The hazardous waste generation and toxic

emission from our operations are minimal

in quantity and nature. These needs to be

disposed and controlled responsibly.

The hazardous waste is disposed of through

the authorised agencies prescribed under the

respective State Pollution Control Board. In our

operation, toxic emissions are at negligible level.

We have adopted adequate engineering controls

in our system to control toxic emission.

Negative

6 Occupational

Health and Safety

O Occupational Health and Safety System

is an integral part of MRF operations. Our

objective is to drive down accidents and

ill health by monitoring health and safety

performance and producing guidance.

Positive

SECTION B – MANAGEMENT AND PROCESS DISCLOSURES

This section is aimed at helping businesses demonstrate the structures, policies and processes put in place towards adopting the NGRBC Principles and Core Elements.

At MRF, we have a robust management framework in place which enables us to align with the NGRBC Principles with respect to structure and policies

to ensure we continue to deliver our best in an ethical and responsible way. This encompasses transparent and principled business practices that hold us

accountable, as well as protects the interests of our stakeholders, including customers and employees.

Disclosure Questions P1 P2 P3 P4 P5 P6 P7 P8 P9

Policy and Management Processes

1. a) Whether your entity’s policy/policies cover each principle and its core elements of

the NGRBCs. (Yes/No)

Y Y Y Y Y Y Y

Y Y

b) Has the policy been approved by the Board? (Yes/No) Y Y Y Y Y Y

Y Y Y

c) Web Link of the Policies, if available https://www.mrftyres.com/downloads/download.

php?filename=Business-Responsibility-Policy.pdf

2. Whether the entity has translated the policy into procedures. (Yes / No) Y Y Y Y Y Y Y

Y Y

3. Do the enlisted policies extend to your value chain partners? (Yes/No)

(Note: Currently the coverage is extended to all our A+ and A category suppliers)

Y Y Y Y Y Y Y

Y Y

4. Name of the national and international codes/certifications/labels/ standards

(e.g. Forest Stewardship Council, Fairtrade, Rainforest Alliance, Trustea) standards

(e.g. SA 8000, OHSAS, ISO, BIS) adopted by your entity and mapped to each principle.

9 of our 10 plants are certified for

ISO 45001:2018 - Occupational Health & Safety Management

System Standard & ISO 14001:2015 Environmental Management

System Standard.

Since the 10th Plant (Dahej in Gujarat) is a new plant, it is in the

process of being certified.

5. Specific commitments, goals and targets set by the entity with defined timelines, if any. The company is in the process of comprehensively evaluating and

setting up its sustainability related goals and targets with a definitive

timeline/implementation plan to achieve those in the near future.

6. Performance of the entity against the specific commitments, goals and targets along-with reasons in

case the same are not met.

Performance with respect to these targets would be tracked and

assessed once these targets are set.

Governance Leadership and Oversight

7. Statement by director responsible for the business responsibility report, highlighting ESG related challenges, targets and achievements.

Sustainability in the automotive space is a sectoral activity, where a synergised approach with a common goal across the value chain could yield the necessary impact. As we

continue to be the leader in the space of automotive tyre manufacturing in India, it becomes essential for us to play an active role in helping the sector decarbonize thereby meeting

India’s target of net zero emission by 2070.

To support the national goal, we plan to set phase-wise targets and commitments to improve our sustainability performance in the coming years. While we have embarked on this

journey towards embedding sustainability in our business practices, we conducted our first materiality assessment to understand the key material issues of our business. We have

also conducted an extensive exercise of understanding our environmental footprint across our 10 manufacturing sites in India in the current reporting period. Going forward MRF

will continue to embark on this journey towards a sustainable future through the utilisation of clean energy, improving the efficiency of processes and optimisation of resources.

Further, key performance regarding the 9 NGRBC principles are mentioned in section C of our Business Responsibility and Sustainability Report.

8. Details of the highest authority responsible for implementation and oversight of the Business

Responsibility policy (ies).

(a) Mr. K M Mammen (DIN : 00020202), Chairman &

Managing Director, Tel. No. : +91 44 28292777,

E-mail Id : [email protected]

(b) Mr. Arun Mammen (DIN : 00018558), Vice Chairman

and Managing Director, Tel. No. : +91 44 28292777,

E-mail Id : [email protected]

9. Does the entity have a specified Committee of the Board/ Director responsible for decision making

on sustainability related issues? (Yes / No). If yes, provide details.

Yes, refer point 8 for the details.

Policy and management processes

10. Details of Review of NGRBCs by the Company:

Subject for Review Indicate whether review was undertaken by Director /

Committee of the Board/ Any other Committee

Frequency (Annually/ Half - yearly/ Quarterly/

Any other – please specify)

P1 P2 P3 P4 P5 P6 P7 P8 P9 P1 P2 P3 P4 P5 P6 P7 P8 P9

Performance against above

policies and follow up action

Y Y Y Y Y Y Y

Y Y

Q Q Q Q Q Q Q Q Q

Compliance with statutory

requirements of relevance

to the principles and,

rectification of any non-

compliances

Y Y Y Y Y Y Y

Y Y

Q Q Q Q Q Q Q Q Q

11. Has the entity carried

out independent assessment/

evaluation of the working

of its policies by an external

agency? (Yes/No). If yes,

provide the name of the

agency.

Regular reviews of our company policies are conducted by the internal audit team of MRF. Additionally, certain policies

like Health and Safety and Quality are subjected to external audits and certification processes.

12. If answer to question (1) above is “No” i.e. not all Principles are covered by a policy, reasons to be stated:

Questions P1 P2 P3 P4 P5 P6 P7 P8 P9

The entity does not consider the Principles material to its business (Yes/No)

Not Applicable

The entity is not at a stage where it is in a position to formulate and implement the policies

on specified principles (Yes/No)

The entity does not have the financial or/human and technical resources available for the task

(Yes/No)

It is planned to be done in the next financial year (Yes/No)

Any other reason (please specify)

SECTION C – PRINCIPLE WISE PERFORMANCE DISCLOSURE

Principle 1 – Businesses should conduct and govern themselves with integrity, and in a manner that is ethical, transparent, and accountable

MRF is committed to conduct its business in accordance with the applicable laws, rules and regulations along with highest standards of business ethics. MRF

has laid down a Code of Conduct for its operations which covers issues, inter alia, related to ethics etc and extends to all dealings between the Company and

its stakeholders. The Board’s commitment to governance is echoed throughout the organisation ensuring necessary procedures in place to uphold highest

standards of ethical conduct, transparency and accountability while dealing with stakeholders.

Essential Indicators

1. Percentage coverage by training and awareness programmes on any of the principles during the financial year:

Segment Total number of

training and aware-

ness programmes held

Topics/principles covered under

the training and its impact

% of persons in respective

category covered by the

awareness programmes

Board of directors 3 Training and awareness program on Sustainability 100

Key managerial personnel* 3 Training and awareness program on Sustainability 100

Employees other than Board of

Directors and KMPs

278 Code of conduct, workplace ethics, Leadership

training, environmental Training, Safety Training,

Skill upgradation Training

Workers 244 Safety Training, Quality Training, Process Training,

Behavioural Training and Upskilling

* Excludes Managing Directors / Wholetime Directors

2. Details of fines / penalties /punishment/ award/ compounding fees/ settlement amount paid in proceedings (by the entity or by directors / KMPs) with

regulators/ law enforcement agencies/ judicial institutions, in the financial year:

Monetary

NGRBC Principle Name of the regulatory/ enforcement

agency/ judicial institutions

Amount (In INR) Brief of the Case Has an appeal been

preferred? (Yes/No)

Penalty/ Fine Nil Nil Nil Nil Nil

Settlement Nil Nil Nil Nil Nil

Compounding fee Nil Nil Nil Nil Nil

Non-Monetary

NGRBC Principle Name of the regulatory/ enforcement

agency/ judicial institutions

Amount (In INR) Brief of the Case Has an appeal been

preferred? (Yes/No)

Penalty/ Fine Nil Nil Nil Nil Nil

Settlement Nil Nil Nil Nil Nil

Compounding fee Nil Nil Nil Nil Nil

3. Of the instances disclosed in Question 2 above, details of the Appeal/ Revision are preferred in cases where monetary or non-monetary action has

been appealed.

Case Details Name of the regulatory/ enforcement agencies/ judicial institutions

Nil Nil

4. Does the entity have an anti-corruption or anti-bribery policy? If yes, provide details in brief and if available, provide a web link to the policy.

Yes. The “MRF Principles of Sustainability and Responsible Business Conduct” declares the Company’s commitment to conduct its business in all

respects, according to ethical, professional and legal standards, which prevail in the industrial sector in which the Company conducts its normal business.

Further it mandates every employee of the Company to ensure that the interests of the Company are not adversely impacted on account of their personal

interests/dealings and avoid engaging in illegal practices.

Please refer the “MRF Principles of Sustainability and Responsible Business Conduct” which is available on our website in the following link:

https://www.mrftyres.com/downloads/download.php?filename=Business-Responsibility-Policy.pdf

5. Number of Directors/KMPs/employees/workers against whom disciplinary action was taken by any law enforcement agency for the charges of

bribery/ corruption.

FY 2022-23 FY 2021-22

Directors Nil Nil

KMPs Nil Nil

Employees Nil Nil

Workers Nil Nil

There have been no complaints against our Board of Directors, KMPs, Employees and Workers.

6. Details of complaints with regard to conflict of interest:

FY 2022-23 Remarks FY 2021-22 Remarks

Number of complaints received in relation to issues of Conflict of Interest of the Directors Nil NA Nil NA

Number of complaints received in relation to issues of Conflict of Interest of the KMPs Nil NA Nil NA

7. Provide details of any corrective action taken or underway on issues related to fines/penalties/action taken by regulators/ law enforcement agencies/

judicial institutions, on cases of corruption and conflicts of interest.

Not applicable

Principle 2 – Businesses should provide goods and services in a manner that is sustainable and safe.

MRF has adopted sustainability as a key business objective and protecting the environment is key to achieve this. MRF is committed to improve its sustainability

index and is working on a multipronged 4R strategy “reduce, recycle, reuse & renewable” as its axiom. MRF demonstrates business excellence through process

efficiency improvements and raw material circularity.

Essential Indicators

1. Percentage of R&D and capital expenditure (capex) investments in specific technologies to improve the environmental and social impacts of product

and processes to total R&D and capex investments made by the entity, respectively.

FY 2022-23

(Current financial year)

FY 2021-22

(Previous financial year)

Details of improvements in environmental and social impacts

R&D 17.5% 17.25% The expenditure is for R&D related to product improvements in

emission reduction and carbon footprint.

Capex 4.23% 4.54% Conservation of water, energy, reduction of emission and

carbon footprint, wastewater recycling and reusing across plants.

2. (a) Does the entity have procedures in place for sustainable sourcing? (Yes/No) -

Yes. MRF promotes sustainable sourcing and continually works towards increasing the value of purchases made from such suppliers. To support

sustainable sourcing, we encourage our suppliers and vendors to adopt suitable practices in their operations. Majority of our raw materials are

naturally sourced and we further expect our suppliers to adhere to our Supplier Sustainability Policy & Green Procurement Policy.

(b) If yes, what percentage of inputs were sourced sustainably?

79.3% (% by value procured) for the financial year 2022-23. These are emanating out of purchase from A+ and A category suppliers, who are

covered under Supplier Sustainable Policy & Green Procurement Policy and from B category suppliers who have ISO 14001 certification.

3. Describe the processes in place to safely reclaim your products for reusing, recycling and disposing at the end of life, for (a) Plastics (including

packaging) (b) E-waste (c) Hazardous waste and (d) other waste.

All the plastic waste, E-waste, hazardous waste and other wastes are systematically segregated and disposed in accordance with regulatory requirements.

4. Whether Extended Producer Responsibility (EPR) is applicable to the entity’s activities (Yes / No). If yes, whether the waste collection plan is in line

with the EPR plan submitted to Pollution Control Boards?

Yes. The waste collection and processing plans are in line with the EPR plan submitted to Central Pollution Control Board.

Principle 3: Businesses should respect and promote the well-being of all employees, including those in their value chains

MRF considers well-being of employees and fair workplace practices crucial for the sustainable business growth. MRF has zero tolerance for any kind of

workplace harassment, bullying or intimidation, including sexual, physical, verbal and psychological abuse. MRF is committed to holistic growth of the

employees by imparting suitable training for skill upgradation and to establish a participative culture. Through effective communication, consultation and

engagement with employees, MRF ensures safe and healthy working conditions for the workforce along with fair wages and focuses towards zero occupational

injuries and ill-health.

Essential Indicators

1. a. Details of measures for the well-being of employees.

Category % of employees covered by

Total (A) Health insurance Accident insurance Maternity benefits Paternity benefits Day care facilities

Number

(B)

(B / A)

Number

(C)

(C / A)

Number

(D)

(D / A)

Number

(E)

(E / A)

Number

(F)

(F / A)

Permanent employees

Male 6762 6762 100 6762 100 NA - NA - NA -

Female 42 42 100 42 100 42 100 NA - NA -

Total 6804 6804 100 6804 100 42 - NA - NA -

Other than Permanent employees

Male 125 81 65 0 0 0 - NA - NA -

Female 1 1 100 0 0 0 0 NA - NA -

Total 126 82 65 0 0 0 - NA - NA -

b. Details of measures for the well-being of workers:

Category

% of workers covered by

Total (A)

Health insurance Accident insurance Maternity benefits Paternity benefits Day care facilities

Number

(B)

(B / A)

Number

(C)

(C / A)

Number

(D)

(D / A)

Number

(E)

(E / A)

Number

(F)

(F / A)

Permanent employees

Male 12246 12246 100 12246 100 0 0 NA 0 NA 0

Female 0 0 0 0 0 0 0 NA 0 NA 0

Total 12246 12246 100 12246 100 0 0 NA 0 NA 0

Other than Permanent employees

Male 0 0 0 0 0 0 0 0 0 0 0

Female 0 0 0 0 0 0 0 0 0 0 0

Total 0 0 0 0 0 0 0 0 0 0 0

2. Details of retirement benefits.

Benefits FY 2022-23 FY 2021-22

No. of employees

covered as a %

of total

employees

No. of workers

covered as a %

of total workers

Deducted and

deposited with

the authority

(Y/N/N.A.)

No. of employees

covered as a %

of total

employees

No. of workers

covered as a %

of total workers

Deducted and

deposited with

the authority

(Y/N/N.A.)

PF 100% 100% Yes 100% 100% Yes

Gratuity 100% 100% Yes 100% 100% Yes

ESI* 100% 100% Yes 100% 100% Yes

Others – please specify - - - - - -

*based on applicability

3. Accessibility of workplaces

Are the premises / offices of the entity accessible to differently abled employees and workers, as per the requirements of the Rights of Persons with

Disabilities Act, 2016? If not, whether any steps are being taken by the entity in this regard.

Yes, MRF’s offices are accessible to differently abled employees and workers. Steps and ramps, corridors, entry gates, emergency exits, parking – as well

as indoor and outdoor facilities including lighting, signage, alarm systems and toilets have been made across our offices. Further initiatives to improve

accessibility across our plants are being assessed.

4. Does the entity have an equal opportunity policy as per the Rights of Persons with Disabilities Act, 2016? If so, provide a web link to the policy.

Yes, MRF is an equal opportunity employer. Aspects of equal opportunity and rights of persons with disabilities have been included in our Human

Resource policies and further emphasised in our MRF Principles of Sustainability and Responsible Business Conduct.

Weblink: https://www.mrftyres.com/downloads/download.php?filename=Business-Responsibility-Policy.pdf

5. Return to work and Retention rates of permanent employees and workers that took parental leave.

Gender Permanent employees Permanent workers

Return to work rate Retention rate Return to work rate Retention rate

Male NA NA NA NA

Female No Female staff have

availed maternity benefits

during the period

NA NA* NA

Total - - - -

*There are no permanent woman workers.

6. Is there a mechanism available to receive and redress grievances for the following categories of employees and workers? If yes, give details of the

mechanism in brief.

(If yes, then give details of the mechanism in brief)

Permanent workers Grievances of workmen are submitted either to the reporting supervisory authority or through recognised

unions or as per the procedure set out in the Standing Orders.

Employees can submit their grievances to their reporting supervisory authority or head of Human Resources

function.

Employees/workmen concerned can also use the Whistle Blower Policy / Vigil Mechanism or in case of

grievances under the Prevention of Sexual Harassment Act, using the mechanism provided under the Act.

Other than permanent workers

Permanent employees

Other than permanent employees

7. Membership of employees and workers in association(s) or Unions recognized by the listed entity:

Category

FY 2022-23 FY 2021-22

Total employees /

workers in respec-

tive category (A)

No. of employees/work-

ers in the respective

category, who are part

of the association(s) or

Union (B)

% (B/A) Total employ-

ees/workers in

the respective

category (C)

No. of employees/

workers in the respec-

tive category, who are

part of the associa-

tion(s) or Union (D)

% (D/C)

Employees

Male 6762 0 0 6597 0 0

Female 42 0 0 44 0 0

Total permanent Employees 6804 0 0 6641 0 0

Workers

Male 12246 10024 82 12093 9875 82

Female 0 0 0 0 0 0

Total permanent Workers 12246 10024 82 12093 9875 82

8. Details of training given to employees and workers:

Category

FY 2022-23 FY 2021-22

Total (A) On health and safety

measures

On skill upgradation Total

(D)

On health and safety

measures

On skill upgradation

No. (B) %(B/A) No.(C) %(C/A) No. (E) % (E/D) No.(F) % (F/D)

Employees

Male 6762 1735 26 3151 47 6597 1442 22 3508 53

Female 42 5 12 18 43 44 2 5 5 11

Total 6804 1740 26 3169 47 6641 1444 22 3513 53

Workers

Male 12246 1600 13 6195 51 12093 811 7 3916 32

Female 0 0 0 0 0 0 0 0 0 0

Total 12246 1600 13 6195 51 12093 811 7 3916 32

9. Details of performance and career development reviews of employees and workers:

Category

FY 2022-23 FY 2021-22

Total (A) No. (B) % (B / A) Total (C) No. (D) % (D / C)

Employees

Male 6597 6597 100 5594 5594 100

Female 44 44 100 40 40 100

Total 6641 6641 100 5634 5634 100

Workers

Male Workers are covered by Long Term Settlements between the Workers Union (on behalf of the workmen) and the Company which

are renewed at a fixed periodicity. The remuneration terms are revised at the time of renewal and as such there is no annual

performance appraisal process. However, workmen are considered for promotion to supervisor/staff category on a need basis

based on their performance.

Female

Total

* The data pertains to July 2022 and July 2021 as our annual appraisal cycle is completed in the month of July of the respective financial year.

10. Health and safety management system:

a. Whether an occupational health and safety management system has been implemented by the entity? (Yes/ No). If yes, what is the coverage of such a system?

Yes, an Occupational Health & Safety Management system is extended to all our manufacturing facilities.

b. What are the processes used to identify work-related hazards and assess risks on a routine and non-routine basis by the entity?

Hazard Identification & Risk Assessment (HIRA) is used to identify all the hazards, assess risks based on the probability & severity and take controls based

on the hierarchy of risk control.

c. Whether you have processes for workers to report the work-related hazards and to remove themselves from such risks.

Yes. The following processes are available for the workers to report work related hazards.

1. Safety inspection is conducted by workmen representatives. Actions are tracked till closure using action trackers.

2. Near miss /Hazard reporting forms and registers are available through which the employees report the workplace hazards & near misses.

3. All our Manufacturing plants have Safety Committee which has participation from workers. This committee meets every quarter to discuss health & safety

hazards issues. The discussed points are documented as minutes and tracked till closure. The feedback of this closure is shared with the workers.

d. Do the employees/ workers of the entity have access to non-occupational medical and healthcare services?

Yes. All our Occupational Health centres extend services for non-occupational related medical services.

11. Details of safety related incidents, in the following format:

Safety incident/number Category FY 2022-23 FY 2021-22

Lost Time Injury Frequency Rate (LTIFR) (per one-million-person hour worked) Employees 0.096 0.072

Workers 0.82 0.88

Total recordable work-related injuries Employees 8 6

Workers 103 108

No. of fatalities Employees 0 0

Workers 1 1

High consequence work-related injury or ill-health (excluding fatalities) Employees 0 0

Workers 0 0

12. Describe the measures taken by the entity to ensure a safe and healthy workplace.

l• Organisation’s Safety Performance is reviewed by the Top Management every month in the Corporate Steering Council Safety Meeting and the leadership

directives are transferred through these meetings.

l• Monthly Safety Review Meetings are held every month for all the Plants with participation from Vice President Manufacturing, Cluster heads and Plant heads.

l• Safety Inspections are being carried out in the Plants jointly by Safety Officers and Worker Members of Safety Committee.

l• Weekly Safety Review Meetings are conducted at all the plants and is being chaired by the respective Factory Managers.

l• All Area In-charges at plant carry out safety audits on alternate days.

l• MRF Safety week campaigns organised at all the plants to bring awareness among workforces. This is in addition to National Safety Day / Month Celebrations.

13. Number of complaints on the following made by employees and workers

Category

FY 2022-23 FY 2021-22

Filed during the

year

Pending resolution

at the end of year

Remarks Filed during the

year

Pending resolution

at the end of year

Remarks

Working conditions 0 0 - 0 0 -

Health & safety 0 0 - 0 0 -

14. Assessments for the year

% of your plants and offices that were assessed (by entity or statutory authorities or third parties)

Health and safety practices 100%

Working conditions 100%

15. Provide details of any corrective action taken or underway to address safety-related incidents (if any) and on significant risks/concerns arising from

assessments of health & safety practices and working conditions.

l Activity based training modules have been prepared to impart training for all employees in addition to the existing training modules.

l Behavioural interventions carried out for all high risk and unsafe acts observed during night shift audits.

l Dock levellers have been installed to load and unload materials from trucks with the help of forklifts instead of doing it manually.

l In flap presses, both upper and lower moulds have been secured with two clamped wire ropes to prevent fall.

l Safety guards provided in battery operated pallet truck footrest platform.

l Sticky rubber stock fall protection guard provided in Hot Feed Extruder.

l Material handling equipment related near miss and unsafe act reporting campaign conducted.

Principle 4: Businesses should respect the interests of and be responsive to all its stakeholders

MRF believes stakeholder participation is pivotal for any organisation’s success and hence endeavours to create long-term, sustainable value for all our stakeholders,

including investors, customers, suppliers, employees, value chain partners, communities, regulatory agencies and policy makers. To accomplish this, MRF engages

with various stakeholder groups both directly or through collective groups in a periodical manner to understand their expectations and requirements.

Essential Indicators

1. Describe the processes for identifying key stakeholder groups of the entity.

Any individual or group of individuals or institutions that adds value to the value chain of the Company or is materially affected by entity’s decision

is identified as a core stakeholder. At present, the given stakeholder groups identified have immediate impact on the operations and working of the

company. MRF has recognized both, internal stakeholder (i.e employees and leadership) and external stakeholder (i.e. regulators, investors, suppliers,

customers and community).

We strive to create long-term value for all our stakeholders. In order to do so, we regularly engage and collaborate with our stakeholders to develop an

understanding of their needs and expectations.

2. List stakeholder groups identified as key for your entity and the frequency of engagement with each stakeholder group.

Stakeholder group Whether identified

as vulnerable &

marginalised group

(Yes/No)

Channels of communication (Email,

SMS, Newspaper, Pamphlets, Adver-

tisement, Community meetings, Notice

board, Website), Other

Frequency of en-

gagement (Annually/

half-yearly/ quarterly

/ others – please

specify)

Purpose and scope of engagement

including key topics and concerns

raised during such engagement

Employees No

l Intranet Portal

l Functional and cross-functional

committees

l Leader’s talk

l Regular Employee Communication

Forums

l Notice Board

On a regular basis l Employee benefits

l Equal opportunities

l Recognition

l• Learning and development

l• Safety and well-being

l• Performance review and career

• development

l• Business update

l• Vision of the organisation

Customers No l Customer Service Support

l Customer Satisfaction Survey

On a regular basis

l Customer feedback

l Resolution of their queries

l Advertising

Suppliers and

Vendors

l Supplier and Vendor meets

l Face-to-face and electronic

correspondence

l Supplier Audits

Half-yearly

l Resolving queries

l Assessing performance

l Recognition and engagement

activities

l Undertaking discussion on

sustainability parameters

Investors /

Shareholders

No Newspaper advertisement, website,

Annual General Meetings, disclosures

to stock exchanges

Quarterly/ Annual /

Event Based

To update them about

developments in the Company

Email, paper correspondence, physical

meetings, telephone

Need based Address their grievances

Community Yes

l Community consultations

l Community events

l Government Authorities

Periodic l Community development

Regulatory and

government

bodies

l Annual reports

l Making representations whenever

needed through trade associations

l Formal dialogues

On a need basis

l Policy Advocacy

l Deliberations and inputs on

regulations and policies that

have bearing on our operations

Principle 5: Businesses should respect and promote human rights

Respect for human rights is part of the core values of MRF. In dealing with each other, the values which are at the core of our HR Philosophy i.e trust,

teamwork, mutuality and collaboration, objectivity, self-respect and human dignity are upheld.

Essential Indicators

1. Employees and workers who have been provided training on human rights issues and policy(ies) of the entity, in the following format:

Category

FY 2022-23 FY 2021-22

Total (A) No. of employees /

workers covered (B)

% (B / A) Total (C) No. of employees

/ workers covered (D)

% (D / C)

Employees

Permanent 6804 2347 34 6641 2309 35

Other than permanent 0 0 - 0 0 -

Total employees 6804 2347 34 6641 2309 35

Workers

Permanent 12246 2847 23 12093 2533 21

Other than permanent 0 0 - 0 0 -

Total workers 12246 2847 23 12093 2533 21

2. Details of minimum wages paid to employees and workers

Category

FY 2022-23 FY 2021-22

Total (A) Equal to minimum

wage

More than minimum

wage

Total (D) Equal to minimum

wage

More than minimum

wage

No. (B) % (B / A) No. (C) % (C / A) No. (E) % (E / D) No. (F) % (F / D)

Employees

Permanent 6804 - 0 6804 100 6641 - 0 6641 100

Other than

permanent

0 - 0 0 0 0 - 0 0 0

Total employees 6804 - 0 6804 100 6641 - 0 6641 100

Workers

Permanent 12246 - 0 12246 100 12093 - 0 12093 100

Other than

permanent

0 - 0 0 0 0 - 0 0 0

Total workers 12246 - 0 12246 100 12093 - 0 12093 100

3 Details of remuneration/salary/wages

Male Female

Number Median remuneration/ salary/ wages of

respective category (In `)

Number Median remuneration/ salary/ wages of

respective category (In `)

Board of Directors (BoD)

Non-Executive

9 The non-executive board members

receive only sitting fees for attending

meetings of the board/ committee.

Hence, computation of median

remuneration is not relevant

3 The non-executive board members receive

only sitting fees for attending meetings of

the board/ committee. Hence, computation

of median remuneration is not relevant

Board of Directors (BoD) Executive 5 218575424 0 -

Key managerial personnel 2 19206821 0 -

Employees other than BoD and KMP 6760 607169 42 905659

Workers 12246 543600* - -

* Median of Yearly Gross across Plants

4. Do you have a focal point (individual/ committee) responsible for addressing human rights impacts or issues caused or contributed to by the business?

(Yes/No)

Yes, Head of Human Resources is the designated focal point for addressing human rights impacts or issues.

5. Describe the internal mechanisms in place to redress grievances related to human rights issues.

Human rights related issues can be reported by our employees, workers, senior management and other stakeholders to their superiors (or through the

whistle blower mechanism). Further we have internal committee to address any issues related to sexual harassments.

6. Number of complaints on the following made by employees and workers:

FY 2022-23 FY 2021-22

Filed during the

year

Pending resolution

at the end of year

Remarks Filed During the

year

Pending resolution at

the end of year

Remarks

Sexual harassment Nil - - Nil - -

Discrimination at workplace Nil - - Nil - -

Child labour Nil - - Nil - -

Forced labour/Involuntary labour Nil - - Nil - -

Wages Nil - - Nil - -

Other human rights-related issues Nil - - Nil - -

7. Mechanisms to prevent adverse consequences to the complainant in discrimination and harassment cases.

MRF strives to maintain a healthy, safe and productive work environment that is free from discrimination or any form of harassment for all internal and external

stakeholders. An Internal Complaints Committee has been constituted for resolution for any complaints that may arise in this regard. Further our Code of Conduct

and the mechanism under the Prevention of Sexual Harassment Act ensures that any discrimination and harassments are avoided.

8. Do human rights requirements form part of your business agreements and contracts? (Yes/No)

Yes, aspects of human rights are covered as part of our agreements with Vendors.

9. Assessments of the year

% of your plants and offices that were assessed (by the entity or statutory authorities or third parties)

Child labour 100%

Forced/involuntary labour 100%

Sexual harassment 100%

Discrimination at workplace 100%

Wages 100%

Others – please specify -

10. Provide details of any corrective actions taken or underway to address significant risks/concerns arising from the assessments at Question 9 above.

Nil

Principle 6: Businesses should respect and make efforts to protect and restore the environment

MRF believes that commitment to sustainable development is a key component of responsible corporate citizenship and therefore deserves to be accorded the

highest priority. MRF continuously endeavours to use sustainably sourced ingredients in products and manufacture products that are not only safe to use but

also environment friendly. MRF is committed to progressively adopt best practices prevailing in industry. MRF also believes in protecting the environment by

efficient use of resources, reduction of emissions and minimizing wastage.

Essential Indicators

1. Details of total energy consumption (in Joules or multiples) and energy intensity

Parameter FY 2022-23 FY 2021-22

Total electricity consumption (A) Giga Joules (“GJ”) 3150668 2999572

Total fuel consumption (B) GJ 4974712 4956037

Energy consumption through other sources (C) GJ - -

Total energy consumption (A+B+C) GJ 8125380 7955609

Energy intensity per rupee of turnover: GJ /Cr.

(Total energy consumption/ turnover in rupees)

359.88 418.96

Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency.

No independent assessment/ evaluation/assurance has been carried out.

2. Does the entity have any sites/facilities identified as designated consumers (DCs) under the performance, achieve and trade (PAT) Scheme of the

Government of India? (Y/N) If yes, disclose whether targets set under the PAT scheme have been achieved. In case targets have not been achieved,

provide the remedial action taken if any.

Not applicable.

There are no sites/facilities that have been identified as Designated Consumers (DCs) under the Performance, Achieve and Trade (PAT) Scheme of the

Government of India.

3. Provide details of the following disclosures related to water, in the following format

Parameter FY 2022-23 FY 2021-22

Water withdrawal by source (in kilolitres)

(i) Surface water 0 0

(ii) Groundwater 1183267 1151083

(iii) Third-party water (municipal water supplies) 1595494 1574315

(iv) Seawater / desalinated water 0 0

(v) Others 119035 95193

Total volume of water withdrawal (in kilolitres) (i + ii + iii + iv + v) 2897796 2820591

Total volume of water consumption (in kilolitres) 2897796 2820591

Water intensity per rupee of turnover: Kilolitres/ Cr. (water consumed / turnover) 128.34 148.53

Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency.

No independent assessment/ evaluation/assurance has been carried out.

4. Has the entity implemented a mechanism for zero liquid discharge? If yes, provide details of its coverage and implementation.

All our units have Zero Liquid discharges mechanism as specified by the Pollution Control Board of respective states in their consent except Kottayam

unit. In rainy seasons, Kottayam unit is permitted to discharge excess treated effluent if any as specified in their consent.

5. Please provide details of air emissions (other than Greenhouse Gas emissions (“GHG”)) by the entity:

Parameter Unit FY 2022-23 FY 2021-22

NOx µg/m3 Min: 11 - Max: 62 Min: 3 - Max: 39

SOx µg/m3 Min: 4 - Max: 39 Min: 4 - Max: 38

Particulate matter (PM) µg/m3 PM2.5- Min: 10 - Max: 58 / PM10 -

Min: 29 - Max: 98

PM2.5- Min:10 - Max: 77 / PM10 -

Min: 25 - Max: 96

Persistent organic pollutants (POP) - NA NA

Volatile organic compounds (VOC) mg/m3 We are in the process of establishing monitoring systems across all our plants.

Hazardous air pollutants (HAP) - Below Detection Level Below Detection Level

Others – ozone-depleting substances

(HCFC - 22 or R-22)

- NA NA

6. Provide details of greenhouse gas emissions (Scope 1 and Scope 2 emissions) and its intensity:

Parameter Unit FY 2022-23 FY 2021-22

Total Scope 1 emissions (Break-up of the GHG into CO

, CH

, N

O, HFCs,

PFCs, SF6, NF3, if available)

Metric tonnes of CO

equivalent

567325 526290

Total Scope 2 emissions (Break-up of the GHG into CO

, CH

, N

O, HFCs,

PFCs, SF6, NF3, if available)

Metric tonnes of CO

equivalent

603254 633588

Total Scope 1 and Scope 2 emissions per rupee of turnover Metric tonnes of CO

equivalent/ Cr. `

51.85 61.08

7. Does the entity have any project related to reducing greenhouse gas emission? If yes, then provide details.

Yes, following are the overview of current projects and initiatives in reducing greenhouse gas emission:

•

l All plants are adopting specific power consumption and specific fuel consumption measures for the reduction of GHG emissions.

•

l Horizontal deployment of nitrogen gas-based process in place of hot water system.

•

l All plants are adopting specific water consumption reduction.

Future Endeavours:

•

l MRF has signed agreement for purchasing of 20MW solar power for Tamil Nadu plants and 7.5MW hybrid (Solar and Wind) power for Gujarat

plant which will reduce its carbon footprint in future.

l• Replacement of furnace oil-based steam generation with alternate gas-based fuel.

l• MRF initiated usage of Biomass as alternate fuel for Boilers

l• Installation of wastewater treatment plants with an aggregated capacity of 1200 KLD is in progress.

8. Provide details related to waste management by the entity, in the following format:

Parameter FY 2022-23 FY 2021-22

Total waste generated (in metric tonnes)

Plastic waste (A) 2881.14 3211.32

E-waste (B) 13.56 48.52

Bio-medical waste (C) 0.50 0.55

Construction and demolition waste (D) 0.00 100.00

Battery waste (E) 78.92 246.00

Radioactive waste (F) 0 0

Other Hazardous waste. Please specify, if any. (G) 1611.34 1503.84

Other Non-hazardous waste generated (H). 51675.20 52859.81

Total (A+B + C + D + E + F + G + H) 56260.66 57970.04

For each category of waste generated, total waste recovered through recycling, re-using or other recovery operations (in metric tonnes)

Category of waste

(i) Recycled 17132 23147

(ii) Re-used 3519 2745

(iii) Other recovery operations 30571 25187

Total 51222 51079

For each category of waste generated, total waste disposed of by nature of disposal method (in metric tonnes)

Category of waste

(i) Incineration 134 315.5

(ii) Landfilling 2390 3392.5

(iii) Other disposal operations 0.00 0.00

Total 2524 3708

9. Briefly describe the waste management practices adopted in your establishments. Describe the strategy adopted by your company to reduce the usage

of hazardous and toxic chemicals in your products and processes and the practices adopted to manage such wastes.

Wastes are segregated and stored properly. Hazardous wastes are disposed to authorized agency as per the regulatory norms and the remanining wastes

are disposed off to scrap vendors.

10. If the entity has operations/offices in/around ecologically sensitive areas (such as national parks, wildlife sanctuaries, biosphere reserves, wetlands,

biodiversity hotspots, forests, coastal regulation zones, etc.) where environmental approvals/clearances are required, please specify details in the

following format:

Sr. No. Location of operations/

offices

Type of operations Whether the conditions of environmental approval / clearance are being com-

plied with? (Y/N) If no, the reasons thereof and corrective action taken, if any.

1 Tiruvottiyur, Chennai Warehouse and R&D

facility

Yes

11. Details of Environmental Impact Assessments of projects undertaken by the entity based on applicable laws, in the current financial year:

Name and brief

details of project

EIA Notification No. Date Whether conducted by

independent external

agency (Yes / No)

Results communicat-

ed in public domain

(yes/no)

Relevant Web link

Expansion of manufac-

turing facility adjacent

to existing location

at Goa

SIA/GA/

MIN/235032/2021

22.10.2022 Yes Yes

https://environmentclearance.nic.

in/TrackState_proposal.aspx?-

type=EC&status=EC_new&stat-

ename=Goa&pno=SIA/GA/

MIN/235032/2021&pid=192451

12. Is the entity compliant with the applicable environmental law/ regulations/ guidelines in India, such as the Water (Prevention and Control of Pollution) Act,

Air (Prevention and Control of Pollution) Act, Environment Protection Act, and rules there under (Y/N). If not, provide details of all such non-compliances:

Sr. No. Specify the law / regulation

/ guidelines which was not

complied with

Provide details of the

non-compliance

Any fines / penalties /

action taken by regulatory

agencies such as pollution

control boards or by courts

Corrective action taken if any

All plants are complying

with the norms prescribed

by the concerned Pollution

Control Board.

NA NA NA NA

Principle 7: Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent

MRF is a member of several industry associations and contributes to these forums to represent industry concerns and support in implementing measures to

foster growth of industry. MRF is aware of its actions and is fully cognizant of its effects on the public and society at large. We ensure our actions bring forth a

positive influence on the society and its various stakeholders.

Essential Indicators

1. a. Number of affiliations with trade and industry chambers/ associations.

MRF is a member of the following four industry chambers and associations.

b. List the top 10 trade and industry chambers/ associations (determined based on the total members of such a body) the entity is a member of/ affiliated

to.

Sr.

No.

Name of the trade and industry chambers/ associations Reach of trade and industry chambers/ associations (State/National)

1 Automotive Tyre Manufacturers Association National

2 Confederation of Indian Industry National

3 Federation of Indian Chambers of Commerce and Industry National

4 The Madras Chamber of Commerce and Industry State

2. Provide details of corrective action taken or underway on any issues related to anti-competitive conduct by the entity, based on adverse orders from

regulatory authorities.

Name of authority Brief of the case Corrective action taken

No case was filed by any stakeholder against MRF regarding unfair trade practices, irresponsible advertising and anti-competitive behaviour during

the financial year.

Principle 8: Businesses should promote inclusive growth and equitable development

As a responsible corporate entity, MRF believes in fulfilling its responsibility towards the community through its Corporate Social Responsibility projects. MRF

strives to procure inputs and services from Micro, Small and Medium Enterprises. The Company has in place a Corporate Social Responsibility Policy framed

as per the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014. MRF’s CSR projects have

been primarily focused on disaster management including relief, promotion of education, livelihood enhancement, vocational skill development, promoting

health care, safe drinking water, training for sports, sanitation and hygiene and rural development projects.

Essential Indicators

1. Details of Social Impact Assessments (SIA) of projects undertaken by the entity based on applicable laws, in the current financial year - Not applicable

Name and brief details

of project

SIA notification No. Date of notification Whether conducted by

independent external

agency (Yes/No)

Results communicated

in public domain(Yes/

No)

Relevant web

link

- - - - - -

2. Provide information on the project(s) for which ongoing Rehabilitation and Resettlement (R&R) is being undertaken by your entity:

S. No. Name of project

for which R&R is

ongoing

State District No. of project

affected families

(PAFs)

% of PAFs covered

by R&R

Amounts paid to

PAFs in the FY (In `)

Not Applicable

3. Describe the mechanisms to receive and redress grievances of the community.

1. Meeting with the representatives of the community to understand the requirements.

2. Interactions with government agencies.

4. Percentage of input material (inputs to total inputs by value) sourced from suppliers:

FY 2022-23 FY 2021-22

Directly sourced from MSMEs/ small producers 23% 27%

Sourced directly from within the district and neighbouring districts 29% 28%

Principle 9: Businesses should engage with and provide value to their consumers in a responsible manner

MRF strives to adopt customer-oriented processes for achieving customer satisfaction including privacy of their data. MRF endeavours to offer products that

are most appropriate to the customers. We ensure that products supplied are as per stated quality and specifications to ensure customer satisfaction. We strive

to promptly respond to all queries, handle complaints in a fair manner and ensure that products comply with regulatory requirements including packaging,

labelling and adopt fair standards of advertising and promotion.

Essential Indicators

1. Describe the mechanisms in place to receive and respond to consumer complaints and feedback.

Customer complaints are addressed by the local sales offices by inspection of the tyre by an accredited trained person. Such complaints are normally

disposed of in about 3 days’ time.

2. Turnover of products and/or services as a percentage of turnover from all products/services that carry information about:

As a % to total turnover

Environmental and social parameters relevant to the product -

Safe and responsible usage -

Recycling and/or safe disposal -

3. Number of consumer complaints in respect of the following:

FY 2022-23 Remarks FY 2021-22 Remarks

Receive during

the year

Pending reso-

lution at end of

year

Received during

the year

Pending reso-

lution at end of

year

Data privacy Nil - Nil -

Advertising Nil - Nil -

Cyber-security Nil - Nil -

Delivery of essential

services

Nil - Nil -

Restrictive trade practices Nil - Nil -

Unfair trade practices Nil - Nil -

Other Nil - Nil -

4. Details of instances of product recalls on account of safety issues.

Number Reasons for Recall

Voluntary Recalls 0 N/A

Forced Recalls 0 N/A

5. Does the entity have a framework/policy on cyber security and risks related to data privacy? If available, provide a web link to the policy.

Yes, MRF’s Cyber Security framework and privacy policy are published on the company’s website. https://www.mrftyres.com/privacy-policy

6. Provide details of any corrective actions taken or underway on issues relating to advertising, and delivery of essential services; cyber security and data

privacy of customers; re-occurrence of instances of product recalls; penalty/action taken by regulatory authorities on the safety of products/services.

Not applicable

On behalf of the Board of Directors

K M MAMMEN

Chennai Chairman & Managing Director

03rd May, 2023 DIN: 00020202

STANDALONE

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MRF

LIMITED

1. Opinion

We have audited the Separate financial statements (also known as

Standalone Financial Statements) of MRF Limited (“the Company”),

which comprise the Balance Sheet as at 31st March 2023, the

Statement of Profit and Loss (including Other Comprehensive

Income), Statement of Changes in Equity and Statement of Cash

Flows for the year ended on that date, and a summary of significant

accounting policies and other explanatory information.

In our opinion and to the best of our information and according

to the explanations given to us, the aforesaid Standalone Financial

Statements give the information required by the Companies Act,

2013 (“the Act”) in the manner so required and give a true and

fair view in conformity with the Indian Accounting Standards (IND

AS) prescribed under Section 133 of the Act read with Companies

(Indian Accounting Standards) Rules, 2015, as amended and other

accounting principles generally accepted in India, of the state of

affairs (financial position) of the Company as at 31st March 2023,

and its profit (financial performance including Other Comprehensive

Income), the Changes in Equity and its Cash Flows for the year

ended on that date.

2. Basis for Opinion

We conducted our audit of the Standalone Financial Statements in

accordance with the Standards on Auditing (SAs) specified under

Section 143(10) of the Act. Our responsibilities under those Standards

are further described in the Auditor’s Responsibilities for the Audit

of the Standalone Financial Statements section of our report. We

are independent of the Company in accordance with the Code of

Ethics issued by the Institute of Chartered Accountants of India (ICAI)

together with the independence requirements that are relevant to our

audit of the Standalone Financial Statements under the provisions of

the Act and the Rules thereunder, and we have fulfilled our other

ethical responsibilities in accordance with these requirements and the

ICAI’s Code of Ethics. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our audit

opinion on the Standalone Financial Statements.

3. Emphasis of Matter

We draw attention to Note 28(r(i)(a)) to the Standalone Financial

Statement which describe the following matter :

In terms of the Order dated 31st August 2018 the Competition

Commission of India (CCI) has on 2nd February 2022 released its

Order imposing penalty on the Company concerning the breach of

provisions of the Competition Act, 2002 during the year 2011-2012

and imposed a penalty of `622.09 Crores on the Company. The

appeal filed by the Company has been disposed of by the National

Company Law Appellate Tribunal (NCLAT) in December 2022, 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 of the same,

the Company is of the view that no provision is considered necessary

in respect of this matter in the Standalone Financial Statements.

Our opinion is not modified in respect of this matter.

4. Key Audit Matters

Key audit matters are those matters that, in our professional

judgment, were of most significance in our audit of the financial

statements of the current year. These matters were addressed in

the context of our audit of the financial statements as a whole, and

in forming our opinion thereon, and we do not provide a separate

opinion on these matters.

Sr.

No.

Key Audit Matter Our Response

1 Defined Benefit Obligation

The valuation of the retirement benefit schemes

in the Company is determined with reference

to various actuarial assumptions including

discount rate, future salary increases, rate of

inflation, mortality rates and attrition rates.

We have examined the key controls over the process involving member data, formulation of

assumptions and the financial reporting process in arriving at the provision for retirement benefits.

We tested the controls for determining the actuarial assumptions and the approval of those

assumptions by senior management. We found these key controls were designed, implemented

and operated effectively, and therefore determined that we could place reliance on these key

controls for the purposes of our audit.

Sr.

No.

Key Audit Matter Our Response

Due to the size of these schemes, small changes

in these assumptions can have a material impact

on the estimated defined benefit obligation.

We tested the employee data used in calculating the obligation and where material, we also

considered the treatment of curtailments, settlements, past service costs, remeasurements, benefits

paid, and any other amendments made to obligations during the year. From the evidence obtained,

we found the data and assumptions used by management in the actuarial valuations for retirement

benefit obligations to be appropriate.

2. Warranty Provision

The Company makes an estimated provision for

assurance type warranties at the point of sale.

This estimate is based on historical claims data.

We understood and tested the controls over the assumptions applied in arriving at the warranty

provision, particularly vouching of relevant data elements with provision calculations; validation

of formula used in the warranty spread sheet; management review control of the relevant internal

and external factors impacting the provision.

3. Litigation, Claims and Contingent Liabilities

(Refer Note 28(r), to be read along with Emphasis

of matter in Independent Auditor’s Report)

The Company is exposed to variety of different

laws, regulations and interpretations thereof.

Consequently, in the normal course of business,

Provisions and Contingent Liabilities may arise

from legal proceedings, constructive obligations

and commercial claims.

 Management applies significant judgement

when considering whether and how much

to provide for the potential exposure of each

matter.

• These estimates could change substantially

over time as new facts emerge as each legal

case or matters progresses.

• Given the different views possible, basis the

interpretations, complexity and the magnitude

of potential exposures and the judgement

necessary to estimate the amount of provision

required or determine required disclosures.

 We understood the processes, evaluated the design and implementation of controls and tested

the operating effectiveness of the Company’s controls over the recording and re-assessment of

uncertain legal positions, claims and contingent liabilities.

 We held discussions with senior management including the person responsible for legal

and compliance to obtain an understanding of the factors considered by management in

classification of the matter as ‘probable’, ‘possible’ and ‘remote’.

 Examined the Company’s legal expenses on sample basis and read the minutes of the board

meetings in order to ensure completeness.

• With respect to tax matters, involving our tax specialists, and discussing with the Company’s

tax officers, their views and strategies on significant cases, as well as the related technical

grounds relating to their conclusions based on applicable tax laws.

• Assessing the decisions and rationale for provisions held or for decisions not to record

provisions or make disclosures.

• For those matters where management concluded that no provisions should be recorded,

considering the adequacy and completeness of the Company’s disclosures.

Sr.

No.

Key Audit Matter Our Response

4. Property, Plant & Equipment (Including Capex)

• Tracking and monitoring capex requires more

attention to ensure reasonable accurateness

and completeness of financial reporting in

respect of Property, plant and equipment.

• Further, technical complexities require

management to assess and make estimates/

judgements about capitalization, estimated

useful life, impairment etc. which has material

impact on Balance sheet and operating results.

• Refer note 1 to Standalone financial statements.

Principal Audit Procedures

Our audit approach consisted testing of the design and operating effectiveness of the internal

controls and substantive testing as follows:

• We assessed company’s process regarding maintenance of records and accounting of

transactions pertaining to Property, plant and equipment including capital work-in-progress

with reference to Indian Accounting Standard 16.

• We have carried out substantive audit procedures at financial and assertion level to verify the

capitalization of assets as Property, plant & equipment.

• We have reviewed management judgement pertaining to estimation of useful life and

depreciation of the Property, plant and equipment in accordance with Schedule II of the

Companies Act, 2013.

• We have relied on physical verification conducted by management and management

representations.

Standalone Financial Statements that give a true and fair view of

the financial position, financial performance including Other

Comprehensive Income, Changes in Equity and Cash Flows of the

Company in accordance with the IND AS and other accounting

principles generally accepted in India. This responsibility also

includes maintenance of adequate accounting records in accordance

with the provisions of the Act for safeguarding of the assets of

the Company and for preventing and detecting frauds and other

irregularities; selection and application of appropriate accounting

policies; making judgments and estimates that are reasonable and

prudent; and design, implementation and maintenance of adequate

internal financial controls, that were operating effectively for

ensuring the accuracy and completeness of the accounting records,

relevant to the preparation and presentation of the Standalone

Financial Statements that give a true and fair view and are free from

material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, management is

responsible for assessing the Company’s ability to continue as a

going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless

management either intends to liquidate the Company or to cease

operations, or has no realistic alternative but to do so.

5. Information Other than the Standalone Financial Statements and

Auditor’s Report thereon

The Company’s Board of Directors is responsible for the preparation of the

other information. The other information comprises the information included

in the Board’s Report including Annexures to Board’s Report, Management

Discussion and Analysis, Report on Corporate Governance, Business

Responsibility and Sustainability Report, but does not include the Standalone

Financial Statements and our auditor’s report thereon. Our opinion on

the Standalone Financial Statements does not cover the other information

and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements,

our responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent with

the Standalone Financial Statements or our knowledge obtained during

the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is

a material misstatement of this other information, we are required to

report that fact. We have nothing to report in this regard.

6. Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated

in section 134(5) of the Act with respect to the preparation of these

The Board of Directors is responsible for overseeing the Company’s

financial reporting process.

7. Auditor’s Responsibility for the audit of the Standalone Financial

Statements

Our objectives are to obtain reasonable assurance about whether

the Standalone Financial Statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue

an auditor’s report that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with SAs will always detect a material

misstatement when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic

decisions of users taken on the basis of these Standalone financial

statements.

As part of an audit in accordance with SAs, we exercise professional

judgement and maintain professional scepticism throughout the

audit. We also:

•  Identify and assess the risks of material misstatement of the

Standalone Financial Statements, whether due to fraud or

error, design and perform audit procedures responsive to

those risks, and obtain audit evidence that is sufficient and

appropriate to provide a basis for our opinion. The risk of

not detecting a material misstatement resulting from fraud is

higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations,

or the override of internal control.

•  Obtain an understanding of internal financial controls relevant

to the audit in order to design audit procedures that are

appropriate in the circumstances. Under Section 143(3)(i) of

the Act, we are also responsible for expressing our opinion

on whether the Company has adequate internal financial

controls with reference to financial statements in place and

the operating effectiveness of such controls.

•  Evaluate the appropriateness of accounting policies used

and the reasonableness of accounting estimates and related

disclosures made by the management.

 Conclude on the appropriateness of management’s use of the

going concern basis of accounting and, based on the audit

evidence obtained, whether a material uncertainty exists

related to events or conditions that may cast significant doubt

on the Company’s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are

required to draw attention in our auditor’s report to the

related disclosures in the Standalone Financial Statements

or, if such disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained

up to date of our auditor’s report. However, future events or

conditions may cause the Company to cease to continue as a

going concern.

•  Evaluate the overall presentation, structure and content of the

Standalone Financial Statements, including the disclosures,

and whether the Standalone Financial Statements represent

the underlying transactions and events in a manner that

achieves fair presentation.

We communicate with those charged with governance regarding,

among other matters, the planned scope and timing of the audit and

significant audit findings, including any significant deficiencies in

internal control that we identify during our audit.

We also provide those charged with governance with a statement

that we have complied with relevant ethical requirements regarding

independence, and to communicate with them all relationships

and other matters that may reasonably be thought to bear on our

independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance,

we determine those matters that were of most significance in the

audit of the Standalone Financial Statements of the current year and

are therefore the key audit matters. We describe these matters in our

auditor’s report unless law or regulation precludes public disclosure

about the matter or when, in extremely rare circumstances, we determine

that a matter should not be communicated in our report because the

adverse consequences of doing so would reasonably be expected to

outweigh the public interest benefits of such communication.

8. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order, 2020 (“the

Order”) issued by the Central Government in terms of Section

143(11) of the Act, we give in “Annexure A” a statement on the

matters specified in paragraphs 3 and 4 of the Order.

As required by Section 143(3) of the Act, based on our audit, we

report that:

a) We have sought and obtained all the information and

explanations which to the best of our knowledge and belief

were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law

have been kept by the Company so far as it appears from our

examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss including

Other Comprehensive Income, the Statement of Changes in

Equity and the Cash Flow Statement dealt with by this Report

are in agreement with the books of account.

d) In our opinion, the aforesaid Standalone Financial Statements

comply with the IND AS specified under section 133 of the

Act.

e) On the basis of the written representations received from

the directors as on 31st March, 2023 taken on record by the

Board of Directors, none of the directors are disqualified as on

31st March, 2023 from being appointed as a director in terms

of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls

with reference to standalone financial statements of the

Company and the operating effectiveness of such controls,

refer to our separate Report in “Annexure B”. Our report

expresses an unmodified opinion on the adequacy and

operating effectiveness of the Company’s internal financial

controls with reference to standalone financial statements.

g) As required by section 197(16) of the Act, based on our

audit, we report that the Company has paid and provided for

remuneration to its directors during the year in accordance

with the provisions of and limits laid down under section 197

read with Schedule V to the Act.

h) With respect to the other matters to be included in the Auditor’s

Report in accordance with Rule 11 of the Companies (Audit

and Auditors) Rules, 2014, as amended in our opinion and to

the best of our information and according to the explanations

given to us:

i. The Company has disclosed the impact of pending

litigations on its financial position in its Standalone

Financial Statements – Refer Note 28 (r) to the Standalone

Financial Statements;

ii. The Company has long-term contracts including

derivative contracts for which there were no material

foreseeable losses;

iii. There has been no delay in transferring amounts,

required to be transferred to the Investor Education and

Protection Fund by the Company.

iv. (a) As represented to us by the management and to

the best of its knowledge and belief, no funds have

been advanced or loaned or invested (either from

borrowed funds or share premium or any other

sources or kind of funds) by the Company to or in

any other person(s) or entity(ies), including foreign

entities (“intermediaries”), with the understanding

whether recorded in writing or otherwise that the

Intermediary shall, whether, 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 provide

any guarantee, security or the like on behalf of the

Ultimate Beneficiaries; and

(b) As represented to us by the management and to

the best of its knowledge and belief, no funds

have been received by the Company from any

person(s) or entity(ies), including foreign entities

(“Funding Parties”), with the understanding,

whether recorded in writing or otherwise, that the

Company shall, whether, 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 provide

any guarantee, security or the like on behalf of the

Ultimate Beneficiaries; and

considered reasonable and appropriate in the

circumstances, nothing has come to our notice that

causes us to believe that the above representations

under sub-clause (i) and (ii) of Rule 11(e) as

provided under (a) and (b) above, contain any

material misstatement.

v. The Company has complied with the provisions with

respect to Section 123 of the Companies Act, 2013 in

respect of final dividend proposed in the previous year,

interim dividends declared and paid by the company during

the year and the proposed final dividend for the year which

is subject to the approval of members at the ensuing Annual

General Meeting; and

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014

for maintaining books of account using accounting software

which has a feature of recording audit trail (edit log) facility is

applicable to the Company with effect from April 1, 2023, and

accordingly, reporting under Rule 11(g) of Companies (Audit

and Auditors) Rules, 2014 is not applicable for the financial

year ended March 31, 2023.

For M M NISSIM & CO. LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N KASHINATH C R KUMAR

Partner Partner

Mem. No. 036490 Mem. No. 026143

UDIN: 23036490BGXRXO3653 UDIN: 23026143BGZEEF8566

Place: Chennai Place: Chennai

Date: 3rd May 2023 Date: 3rd May 2023

ANNEXURE ”A” TO THE INDEPENDENT AUDITOR’S REPORT OF

EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF MRF

LIMITED

(i) (a) A. The Company has maintained proper records showing

full particulars, including quantitative details and

situation of Property, Plant and Equipment and right-of-

use assets;

B. The Company has maintained proper records showing

full particulars of intangible assets.

(b) The Assets have been physically verified by the management

in accordance with a phased programme of verification,

which in our opinion is reasonable, considering the size and

the nature of its business. The frequency of verification is

reasonable and no material discrepancies have been noticed

on such physical verification. All discrepancies have been

properly dealt with in the books of accounts.

deed / conveyance deed / property tax paid documents

(which evidences title) provided to us, we report that, the

title in respect of self–constructed buildings and title deeds

of all other immovable properties, (other than immovable

properties where the Company is the lessee and where the

lease agreements are duly executed in favour of the Company)

disclosed in the financial statements included in property,

plant and equipment are held in the name of the Company as

at the balance sheet date.

(d) The Company has not revalued any of its Property, plant and

equipment (including of right-of-use assets) and intangible

assets during the year.

(e) No proceedings have been initiated during the year or are

pending against the Company as at 31st March 2023 for

holding any benami property under the Benami Transaction

(Prohibition) Act, 1988, as amended and rules made

thereunder.

(ii) (a) The inventory, except for goods in transit and stocks held

with third parties, has been physically verified by the

management during the year at reasonable intervals. In our

opinion, the coverage and procedure of such verification by

the management is appropriate having regard to the size of the

Company and the nature of its operation. For stocks held with

third parties at the year end, written confirmations have been

obtained and in respect of goods in transit, the goods have

been received subsequent to the year-end or confirmation

have been obtained. No discrepancies of 10% or more in the

aggregate for each class of inventory were noticed on such

physical verification of inventory when compared with books

of account.

(b) According to the information and explanations given to us, the

Company has been sanctioned working capital limits in excess

of `5 crores, in aggregate, at any point of time during the year,

from banks on the basis of security of current assets. In our

opinion and according to the information and explanations

given to us, the quarterly returns and other stipulated financial

information filed by the Company with such banks are

in agreement with the unaudited books of account of the

Company for the first three quarters and with the audited

books of account in respect of fourth quarter ending 31st

March 2023 and there are no material discrepancies.

(iii) The Company has made investments in companies and other

entities. The Company has not provided any guarantee or security,

and granted any loans or advances in the nature of loans, secured or

unsecured, to companies, firms, Limited Liability Partnerships or any

other parties during the year.

(a) The Company has not provided any loans or advances in the

nature of loans or stood guarantee or provided security to any

other entity during the year and hence reporting under clauses

(iii) (a), (c), (d), (e) and (f) of the order are not applicable.

(b) In our opinion, the investments made in companies are, prima

facie, not prejudicial to the company’s interest.

(iv) In our opinion, in respect of investments made, the Company has

complied with the provisions of Section 186 of the Act.

(v) The Company has not accepted any deposits or amounts which are

deemed to be deposits within the meaning of Sections 73 to 76 of

the Act and the Companies (Acceptance of Deposits) Rules, 2014 as

amended. Accordingly, the provisions of clause 3(v) of Para 3 of the

Order are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the

Company pursuant to the rules made by the Central Government for

the maintenance of cost records under section 148 (1) of the Act,

and are of the opinion that prima facie, the prescribed accounts and

records have been made and maintained.

(vii) (a) The Company is regular in depositing undisputed statutory

dues, including Goods and Service Tax, Provident Fund,

Employees’ State Insurance, Income Tax, Sales-Tax, Service

Tax, duty of customs, duty of excise, value added tax, cess

and any other statutory dues with appropriate authorities,

where applicable. There are no undisputed amounts payable

in respect of such statutory dues which have remained

outstanding as at 31st March, 2023 for a period of more than

six months from the date they became payable.

(b) According to the records of the Company, the statutory dues

referred to in sub-clause (a) above which have not been

deposited as on 31st March 2023 on account of any dispute,

are as follows:

Statute and nature of dues Financial year to which the

matter pertains

Forum where

dispute is pending

Crores

CENTRAL SALES TAX ACT, 1956 and VAT LAWS

Sales tax / VAT and

Penalty

1996-97 to 2004-05, 2006-07,

2009-10 to 2018-19

Appellate

Commissioner

161.12

2003-04, 2005-06 to 2009-10,

2011-12, 2014-15 and 2016-17

Appellate

Tribunal/Board

15.26

1996-97, 2006-07 to 2017-18 High Court 22.06

CUSTOMS ACT, 1962

Customs Duty and Penalty 2021-22 Appellate

Commissioner

0.29

2010-11 to 2019-20, 2021-22 Appellate Tribunal 56.42

1992-93 to 1994-95 High Court

74.70

CENTRAL EXCISE ACT, 1944 and FINANCE ACT 1994

Excise duty, Service tax

and penalty

2012-13 to 2016-17 Director General

Goods and

Service Tax

221.31

1997-98, 1998-99, 2006-07 to

2010-11, 2014-15 to 2017-18

Appellate

Commissioner

0.28

2008-09 to 2017-18 Appellate Tribunal 24.51

2001-02 Supreme Court 0.33

INCOME TAX ACT 1961

Income Tax 2013-14 to 2015-16 Appellate

Commissioner

24.06

2014-15, 2018-19 and 2019-20 Appellate Tribunal 116.44

2002-03 to 2005-06, 2008-09

to 2011-12

High Court 3.53

GOODS & SERVICES TAX

GST 2017-18, 2019-20, 2020-21

and 2022-23

Appellate

Commissioner

0.42

2017-18 Appellate

Tribunal

0.14

(viii) There were no transactions relating to previously unrecorded income

that were surrendered or disclosed as income in the tax assessments

under the Income Tax Act, 1961 (43 of 1961) during the year.

(ix) (a) The Company has not defaulted in repayment of loans or other

borrowings or in the payment of interest thereon to any lender

during the year.

(b) According to the information and explanations given to us and

on the basis of our audit procedures, we report that the Company

has not been declared wilful defaulter by any bank or financial

institution or government or any government authority.

availed by the Company were, applied by the Company during

the year for the purposes for which the loans were obtained.

(d) According to the information and explanations given to

us, and the procedures performed by us, and on an overall

examination of the financial statements of the Company, funds

raised on short-term basis have, prima facie, not been used

during the year for long-term purposes by the Company.

(e) According to the information and explanations given to us and on

an overall examination of the financial statements of the Company,

the Company has not taken any funds from any entity or person on

account of or to meet the obligations of its subsidiaries.

(f) According to the information and explanations given to us and

procedures performed by us, we report that the Company has

not raised loans during the year on the pledge of securities

held in its subsidiaries.

(x) (a) The Company has not raised any moneys by way of Initial

public offer or further public offer (Including debt instruments),

during the year and hence reporting under Clause (x) (a) of

Para 3 of the Order is not applicable to the Company.

(b) The Company has not made any preferential allotment or

private placement of share or fully convertible debentures

(fully, partially or optionally convertible) during the year and

accordingly provisions of clause (x)(b) of Para 3 of the Order

are not applicable to the Company.

(xi) (a) On the basis of our examination and according to the

information and explanations given to us, no fraud by the

Company or any material fraud on the Company has been

noticed or reported during the year, nor have we been

informed of any such case by the management.

(b) To the best of our knowledge, no report under sub-section (12) of

section 143 of the Companies Act has been filed in Form ADT-4

as prescribed under rule 13 of Companies (Audit and Auditors)

Rules, 2014 with the Central Government, during the year.

blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and accordingly provisions of

clause (xii) of Para 3 of the order are not applicable to the Company.

(xiii) On the basis of our examination and according to the information

and explanations given to us, we report that all the transaction with

the related parties are in compliance with Section 177 and 188

of the Act, and the details have been disclosed in the Standalone

Financial Statements in Note 28(d) as required by the applicable

Indian Accounting standards.

(xiv) (a) In our opinion the Company has an adequate internal audit

system commensurate with the size and the nature of its business.

(b) We have considered, the internal audit reports for the year under

audit, issued to the Company during the year and till date, in

determining the nature, timing and extent of our audit procedures.

(xv) According to the information and explanations given to us, in our

opinion during the year the Company has not entered into any non

-cash transactions with directors or persons connected with the

directors and hence provisions of Sec.192 of the Companies Act,

2013 are not applicable to the company.

(xvi) (a) The Company is not required to be registered under section

45-IA of the Reserve Bank of India Act, 1934 and accordingly,

provisions of clause (xvi) (a) of Para 3 of the Order are not

applicable to the Company.

(b) During the year, the Company has not conducted any

Non-Banking Financial or Housing Finance activities and

accordingly, provisions of clause (xvi) (b) of Para 3 of the

Order are not applicable to the Company.

defined in the Regulations made by the Reserve Bank of India

and accordingly the provisions of clause (xvi) (c) of Para 3 of

the Order is not applicable to the Company.

(d) The group does not have any CIC as a part of the group and

accordingly reporting under clause (xvi) (d) of Para 3 of the

Order is not applicable to the Company.

(xvii) The Company has not incurred cash losses during the Financial Year

covered by our audit and in the immediately preceding Financial Year.

(xviii) There has been no resignation of the statutory auditors of the

Company during the year.

(xix) On the basis of the financial ratios, ageing and expected dates of

realization of financial assets and payment of financial liabilities, other

information accompanying the financial statements and our knowledge

of the Board of Directors and Management plans and based on our

examination of the evidence supporting the assumptions, nothing has

come to our attention, which causes us to believe that any material

uncertainty exists as on the date of the audit report indicating that

Company is not capable of meeting its liabilities existing at the date

of balance sheet as and when they fall due within a period of one year

from the balance sheet date. We, however, state that this is not an

assurance as to the future viability of the Company. We further state

that our reporting is based on the facts up to the date of the audit report

and we neither give any guarantee nor any assurance that all liabilities

falling due within a period of one year from the balance sheet date, will

get discharged by the Company as and when they fall due.

(xx) (a) There are no unspent amounts towards Corporate Social

Responsibility (CSR) on ‘other than ongoing‘ projects requiring

a transfer to a Fund specified in Schedule VII to the Companies

Act in compliance with the provision of sub-section (5) of

section 135 of the said Act. Accordingly, reporting under clause

(xx) (a) of Para 3 of the Order is not applicable for the year.

(b) In respect of ‘ongoing‘ projects, the company has transferred

unspent CSR amount, to a special account within a period of 30

days from the end of the said financial year in compliance with

the provisions of sub-section (6) of section 135 of the said Act.

For M M NISSIM & CO. LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N KASHINATH C R KUMAR

Partner Partner

Mem. No. 036490 Mem. No. 026143

UDIN: 23036490BGXRXO3653 UDIN: 23026143BGZEEF8566

Place: Chennai Place: Chennai

Date: 3rd May 2023 Date: 3rd May 2023

“ANNEXURE B” TO THE INDEPENDENT AUDITOR’S REPORT OF

EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF MRF

LIMITED.

REPORT ON THE INTERNAL FINANCIAL CONTROLS WITH REFERENCE

TO STANDALONE FINANCIAL STATEMENTS UNDER CLAUSE (I) OF

SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013

(“the Act”)

1. OPINION

We have audited the internal financial controls with reference to

Standalone Financial Statements of MRF Limited (“the Company”) as

of March 31, 2023 in conjunction with our audit of the Standalone

Financial Statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, an

adequate internal financial controls with reference to Standalone

Financial Statements and such internal financial controls with

reference to standalone financial statements were operating

effectively as at March 31, 2023, based on the internal financial

control with reference to standalone financial statements criteria

established by the Company considering the essential components

of internal control stated in the Guidance Note on Audit of Internal

Financial Controls over Financial reporting issued by the Institute of

Chartered Accountants of India (ICAI).

2. MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL

CONTROLS

The Company’s management is responsible for establishing and

maintaining internal financial controls with reference to Standalone

Financial Statements based on the internal control over financial

reporting criteria established by the Company considering the

essential components of internal control stated in the Guidance

Note on Audit of Internal Financial Controls over Financial

Reporting issued by the Institute of Chartered Accountants of India

(ICAI). These responsibilities include the design, implementation

and maintenance of adequate internal financial controls that were

operating effectively for ensuring the orderly and efficient conduct

of its business, including adherence to Company’s policies, the

safeguarding of its assets, the prevention and detection of frauds and

errors, the accuracy and completeness of the accounting records

and the timely preparation of reliable financial information, as

required under the Act.

3. AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on the Company’s internal

financial controls with reference to Standalone Financial Statements

based on our audit. We conducted our audit in accordance with

the Guidance Note on Audit of Internal Financial Controls over

Financial Reporting (the “Guidance Note”) issued by Institute of

Chartered Accountants of India and the Standards on Auditing

prescribed under section 143(10) of the Companies Act, 2013, to

the extent applicable to an audit of Internal Financial Controls with

reference to Standalone Financial Statements. Those Standards and

the Guidance Note require that we comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance

about whether adequate internal financial controls with reference

to Standalone Financial Statements was established and maintained

and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence

about the adequacy of the internal financial controls with reference

to Standalone Financial Statements and their operating effectiveness.

Our audit of internal financial controls with reference to Standalone

Financial Statements includes obtaining an understanding of internal

financial controls with reference to Standalone Financial Statements,

assessing the risk that a material weakness exists, and testing and

evaluating the design and operating effectiveness of internal control

based on the assessed risk. The procedures selected depend on the

auditor’s judgement, including the assessment of the risks of material

misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion on the

Company’s internal financial controls system with reference to

Standalone Financial Statements.

4. MEANING OF INTERNAL FINANCIAL CONTROLS WITH

REFERENCE TO STANDALONE FINANCIAL STATEMENTS

A Company’s internal financial control with reference to Standalone

Financial Statements is a process designed to provide reasonable

assurance regarding the reliability of financial reporting and

the preparation of financial statements for external purposes in

accordance with generally accepted accounting principles. A

Company’s internal financial control with reference to Standalone

Financial Statements includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable

detail, accurately and fairly reflect the transactions and dispositions

of the assets of the Company; (2) provide reasonable assurance

that transactions are recorded as necessary to permit preparation

of financial statements in accordance with generally accepted

accounting principles, and that receipts and expenditures of the

Company are being made only in accordance with authorisations

of management and directors of the Company; and (3) provide

reasonable assurance regarding prevention or timely detection of

unauthorised acquisition, use, or disposition of the Company’s

assets that could have a material effect on the financial statements.

5. INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS

WITH REFERENCE TO STANDALONE FINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls over

financial reporting, including the possibility of collusion or improper

management override of controls, material misstatements due to

error or fraud may occur and not be detected. Also, projections of

any evaluation of the internal financial controls with reference to

Standalone Financial Statements to future periods are subject to the

risk that the internal financial control with reference to Standalone

Financial Statements may become inadequate because of changes

in conditions, or that the degree of compliance with the policies or

procedures may deteriorate.

For M M NISSIM & CO. LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N KASHINATH C R KUMAR

Partner Partner

Mem. No. 036490 Mem. No. 026143

UDIN: 23036490BGXRXO3653 UDIN: 23026143BGZEEF8566

Place: Chennai Place: Chennai

Date : 3rd May 2023 Date : 3rd May 2023

MRF LIMITED

BALANCE SHEET AS AT 31ST MARCH, 2023

(` Crores)

Note As at 31.03.2023 As at 31.03.2022

ASSETS

Non-Current Assets

Property, Plant and Equipment 2 (a (1, 2)) 10024.10 9445.06

Capital Work-in-Progress 2 (b) 3045.22 1225.81

Other Intangible Assets 2 (c) 25.94 21.21

Financial Assets

- Investments 3 1130.92 1155.53

- Loans 4 1.19 0.82

- Other Financial Assets 5 24.08 72.94

Non Current Tax Asset (Net) 263.24 241.77

Other Non-current Assets 6 547.90 586.05

Current Assets

Inventories 7 4042.68 4061.72

Financial Assets

- Investments 3 1974.84 2509.69

- Trade Receivables 8 2442.36 2283.26

- Cash and Cash Equivalents 9 146.31 113.11

- Bank Balances other than Cash and Cash Equivalents 10 9.98 1.74

- Loans 4 2.95 3.18

- Other Financial Assets 5 103.66 757.72

Other Current Assets 6 238.38 213.79

TOTAL ASSETS 24023.75 22693.40

EQUITY AND LIABILITIES

Equity

Equity Share Capital SOCE 4.24 4.24

Other Equity SOCE 14504.63 13773.03

Total Equity 14508.87 13777.27

LIABILITIES

Non-Current Liabilities

Financial Liabilities

- Borrowings 11 823.58 817.21

- Lease Liability 508.62 350.87

- Other Financial Liabilities 16 - 106.83

Provisions 12 215.02 218.67

Deferred Tax Liabilities (Net) 13 381.67 393.30

Other Non-current Liabilities 14 234.79 182.54

Current Liabilities

Financial Liabilities

- Borrowings 11 1153.50 1186.51

- Lease Liability 75.49 60.08

- Trade Payables

(A) total outstanding dues of micro enterprises and small enterprises; 15 72.72 58.26

(B) total outstanding dues of creditors other than micro enterprises and small enterprises 15 2684.73 2716.06

- Other Financial Liabilities 16 807.08 399.47

Other Current Liabilities 14 2324.74 2246.29

Provisions 12 232.94 180.04

Total Liabilities 9514.88 8916.13

TOTAL EQUITY AND LIABILITIES 24023.75 22693.40

Significant Accounting Policies 1

Accompanying Notes are an integral part of these Financial Statements

This is the Balance Sheet referred to in our report of even date

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N. KASHINATH C R KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Partner Partner MADHU P NAINAN S DHANVANTH KUMAR Director Director Chairman &

Mem. No. 036490 Mem. No. 026143

Chennai Chennai

Executive Vice

President Finance

Company Secretary

Chennai

DIN: 00860095 DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N. KASHINATH C R KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Partner Partner MADHU P NAINAN S DHANVANTH KUMAR Director Director Chairman &

Mem. No. 036490 Mem. No. 026143

Chennai Chennai

Executive Vice

President Finance

Company Secretary

Chennai

DIN: 00860095 DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

MRF LIMITED, CHENNAI

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2023

(` Crores)

Note Year ended

31.03.2023

Year ended

31.03.2022

INCOME

Revenue from Operations 17 22578.23 18989.51

Other Income 18 248.21 314.92

TOTAL INCOME 22826.44 19304.43

EXPENSES

Cost of materials consumed 19 15526.90 13254.45

Purchases of Stock-in-Trade 28(s(2)) 35.23 17.01

Changes in inventories of Finished Goods, Stock-in-Trade and Work-in-Progress 20 (339.63) (844.92)

Employee Benefits Expense 21 1558.87 1471.94

Finance Costs 22 298.06 247.01

Depreciation and Amortisation Expense 2 (a (1, 2)) and (c) 1248.60 1201.41

Other Expenses 23 3459.54 3078.37

TOTAL EXPENSES 21787.57 18425.27

PROFIT BEFORE EXCEPTIONAL ITEMS AND TAX 1038.87 879.16

Exceptional Items 24 80.33 -

PROFIT BEFORE TAX 1119.20 879.16

TAX EXPENSE

Current Tax (Includes provision for earlier years `23.30 Crores (Previous year - `7.78 Crores)) 309.10 221.95

Deferred Tax (6.13) 9.87

TOTAL TAX EXPENSE 302.97 231.82

PROFIT FOR THE YEAR 816.23 647.34

OTHER COMPREHENSIVE INCOME (OCI)

Items that will not be reclassified to Profit or Loss net of tax

Remeasurements of Defined benefit plans 28(g(iv)) (1.80) 10.53

Items that may be reclassified to Profit or Loss net of tax

Fair value of cash flow hedges through other comprehensive income 0.25 1.69

Fair value of debt instruments through other comprehensive income (19.46) 2.45

TOTAL OTHER COMPREHENSIVE (LOSS) / INCOME FOR THE YEAR, NET OF TAX (21.01) 14.67

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 795.22 662.01

EARNINGS PER EQUITY SHARE 28 (n)

Basic After Exceptional Item 1924.56 1526.34

Basic Before Exceptional Item 1735.15 1526.34

Diluted After Exceptional Item 1924.56 1526.34

Diluted Before Exceptional Item 1735.15 1526.34

Significant Accounting Policies 1

Accompanying Notes are an integral part of these Financial Statements

This is the Statement of Profit and Loss referred to in our report of even date

STATEMENT OF CHANGES IN EQUITY (SOCE) FOR THE YEAR ENDED 31ST MARCH, 2023

(` Crores)

EQUITY SHARE CAPITAL As at

31 March 2023

As at

31 March 2022

As at

31 March 2023

As at

31 March 2022

Number Number Amount Amount

Authorised Share Capital 9000000 9000000 9.00 9.00

Issued Share Capital

(Excludes 71 bonus shares not issued and not allotted on non-payment of call monies)

4241143 4241143 4.24 4.24

Subscribed Share Capital 4241143 4241143 4.24 4.24

Fully Paid-up Share Capital 4241143 4241143 4.24 4.24

Balance at the beginning of the reporting year 4241143 4241143 4.24 4.24

Changes in equity share capital due to prior period errors - - - -

Restated balance at the beginning of the reporting year 4241143 4241143 4.24 4.24

Changes in equity share capital during the year - - - -

Balance at the end of the reporting year 4241143 4241143 4.24 4.24

Rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital

The company has one class of equity shares having a par value of `10 per share. Each shareholder is eligible for one vote per share held. The dividends

proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts,

in proportion to their shareholding.

The Company has declared two interim dividends aggregating to ` 2.54 Crores (Previous year - ` 2.54 Crores) which has already been distributed during the

Financial Year 2022-23.

Shares in the Company held by each shareholder holding more than

five percent shares

As at

31 March 2023

As at

31 March 2022

No. % No. %

Comprehensive Investment and Finance Company Private Limited

441834 10.42% 441834 10.42%

MOWI Foundation

507984 11.98% 507984 11.98%

SBI Mutual Fund (Through its various Funds)

212453 5.01% 158010 3.73%

(` Crores)

OTHER EQUITY

Reserves and Surplus Other Comprehensive

Income (OCI)

TOTAL

Securities

Premium

General

Reserve

Remeasure-

ments of

Defined

Benefit Plans

Retained

Earnings

Cash Flow

Hedges

through OCI

Debt

Instruments

through OCI

Balance at the beginning of the comparative reporting year -

1st April 2021

9.42 13243.13 (72.78) - 1.59 (6.74) 13174.62

Changes in Accounting Policy or Correction of Prior Period Errors - - - - - - -

Restated balance as at 1st April 2021 9.42 13243.13 (72.78) - 1.59 (6.74) 13174.62

Profit for the Comparative Year ending 31st March 2022 - - - 647.34 - - 647.34

Other Comprehensive (Loss) / Income for the Year ending 31st

March 2022

- - 10.53 - 1.69 2.45 14.67

Total Comprehensive Income for the Comparative year - - 10.53 647.34 1.69 2.45 662.01

Transactions with owners in their capacity as owners:

- Interim Dividends (`6 per share)

- - - (2.54) - - (2.54)

- Final Dividend and Special Dividend (`144 per share)

- - - (61.06) - - (61.06)

Transfer to General Reserve - 583.74 - (583.74) - - -

Balance at the beginning of the reporting year 9.42 13826.87 (62.25) - 3.28 (4.29) 13773.03

Changes in Accounting Policy or Correction of Prior Period Errors - - - - - -

Restated balance as at 1st April 2022 9.42 13826.87 (62.25) - 3.28 (4.29) 13773.03

Profit for the reporting year ending 31st March 2023 - - - 816.23 - - 816.23

Other Comprehensive (Loss) / Income - - (1.80) - 0.25 (19.46) (21.01)

Total Comprehensive Income for the Reporting year - - (1.80) 816.23 0.25 (19.46) 795.22

Transactions with owners in their capacity as owners:

- Interim Dividends (` 6 per share)

- - - (2.54) - - (2.54)

- Final Dividend (`144 per share)

- - - (61.08) - - (61.08)

Transfer to General Reserve - 752.61 - (752.61) - - -

Balance at the end of the reporting year ending 31st March 2023 9.42 14579.48 (64.05) - 3.53 (23.75) 14504.63

Securities Premium Amounts received in excess of par value on issue of shares is classified as Securities Premium

General Reserve General Reserve represents accumulated profits and is created by transfer of profits from Retained Earnings and it is not an item of

Other Comprehensive Income and the same shall not be subsequently reclassified to Statement of Profit and Loss

Retained Earnings Retained earnings are the Profits that the company has earned till date, less any transfer to General reserve and Dividend.

Cash Flow Hedges Gains / Losses on Effective portion of cashflow hedges are initially recognized in Other Comprehensive Income as per IND AS 109.

These gains or losses are reclassified to the Statement of Profit or Loss when the forecasted transaction affects earnings,except for

hedge transactions resulting in recognition of non financial assets which are included in the carrying amount of the asset (" Basis

Adjustments")

Debt Instruments The fair value change of the debt instruments measured at fair value through Other Comprehensive Income is recognised in

Debt instruments through Other Comprehensive Income. Upon derecognition, the cumulative fair value changes on the said

instruments are reclassified to the Statement of Profit and Loss.

Remeasurements of

Defined Benefit Plans

Gains/Losses arising on Remeasurements of Defined Plan at the end of each reporting period is separately disclosed under Reserves

and Surplus and shall not be reclassified to the Statement of Profit or Loss in the Subsequent years.

Significant Accounting Policies 1

Accompanying Notes are an integral part of these Financial Statements

This is the Statement of Changes in Equity (SOCE) referred to in our report of even date

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N. KASHINATH C R KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Partner Partner MADHU P NAINAN S DHANVANTH KUMAR Director Director Chairman &

Mem. No. 036490 Mem. No. 026143

Chennai Chennai

Executive Vice

President Finance

Company Secretary

Chennai

DIN: 00860095 DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

Disclosure of Shareholding of Promoters and Promoter Group

SI.

No.

Name As at 31st March, 2023 % Change during

the year as

compared to

31st March, 2022

As at 31st March, 2022 % Change during

the year as

compared to

31st March, 2021

No. of

% of total

No. of

% of total

1 ACCAMMA KURUVILLA 2,328 0.05 (0.01) 2,338 0.06 (0.00)

2 ADARSH MAMMEN VERGHESE 2,000 0.05 - 2,000 0.05 -

3 ADITH POULOSE MAMMEN 1,185 0.03 (0.01) 1,635 0.04 -

4 ADITI MAMMEN GUPTA 4,744 0.11 - 4,744 0.11 -

5 AMBIKA MAMMEN 2,489 0.06 - 2,489 0.06 -

6 AMIT MATHEW 3,570 0.08 (0.03) 4,520 0.11 -

7 AMMU MATHEW 2,650 0.06 - 2,650 0.06 -

8 ANITA MANI 1,304 0.03 (0.00) 1,334 0.03 (0.00)

9 ANNA PHILIP 350 0.01 - 350 0.01 -

10 ANNA RAPHAEL 258 0.01 - 258 0.01 -

11 ANNA THOMAS CHACKO 1,291 0.03 - 1,291 0.03 -

12 ANNAMMA MAMMEN 3,755 0.09 (0.18) 11,265 0.27 -

13 ANNAMMA PHILIP 8,900 0.21 (0.01) 9,500 0.22 0.11

14 ANNU KURIEN 15,695 0.37 0.08 12,490 0.29 (0.01)

ARJUN JOSEPH

1,850

0.04 - 1,850 0.04 -

16 ARUN MAMMEN

27,560

0.65 -

27,560

0.65 -

17 ASHOK KURIYAN

1,878

0.04 -

1,878

0.04 -

18 ASHWATHI JACOB

151

0.00 -

151

0.00 -

19 ASWATHY VARGHESE

9,450

0.22 -

9,450

0.22 -

20 BADRA ESTATES AND INDUSTRIES LIMITED

6,530

0.15 -

6,530

0.15 -

21 BEEBI MAMMEN

20,237

0.48 -

20,237

0.48 -

22 BINA MATHEW

1,568

0.04 -

1,568

0.04 -

23 BRAGA INDUSTRIES LLP

29,457

0.69 -

29,457

0.69 0.11

24 CHALAKUZHY POULOSE MAMMEN

530

0.01 -

530

0.01 -

25 CIBI MAMMEN

500

0.01 -

500

0.01 -

26 COMPREHENSIVE INVESTMENT AND FINANCE COMPANY

PVT. LTD.

441,834

10.42 -

441,834

10.42 0.03

27 DEVON MACHINES PVT LTD

1,000

0.02 -

1,000

0.02 -

28 ELIZABETH JACOB MATTHAI

4,000

0.09 -

4,000

0.09 -

29 GEETHA ZACHARIAH

6,113

0.14 -

6,113

0.14 -

30 GEETHA MAMMEN MAPPILLAI

250

0.01 -

250

0.01 -

31 GEORGE MAMMEN

808

0.02 -

808

0.02 -

32 HANNAH KURIAN

600

0.01 -

600

0.01 -

33 HARSHA MATHEW

2,000

0.05 0.02

1,250

0.03 -

34 JACOB MAMMEN

35,120

0.83 -

35,120

0.83 -

35 JACOB MATHEW

20,027

0.47 (0.02)

20,977

0.49 -

36 JAYANT MAMMEN MATHEW

2,190

0.05 -

2,190

0.05 -

SI.

No.

Name As at 31st March, 2023 % Change during

the year as

compared to

31st March, 2022

As at 31st March, 2022 % Change during

the year as

compared to

31st March, 2021

No. of

% of total

No. of

% of total

37 JCEE MANUFACTURING AND SERVICES PVT LTD

13,415

0.32 0.03

12,415

0.29 0.03

38 JOSEPH KANIANTHRA PHILIPS

1,000

0.02 -

1,000

0.02 -

39 K C MAMMEN

9,043

0.21 -

9,043

0.21 -

40 K K MAMMEN MAPPILLAI

7,399

0.17 -

7,399

0.17 -

41 K M MAMMEN

16,048

0.38 -

16,048

0.38 -

42 K S JOSEPH

483

0.01 -

483

0.01 -

43 K Z KURIYAN

650

0.02 -

650

0.02 -

44 KARUN PHILIP

4,000

0.09 -

4,000

0.09 -

45 KAVITA PHILIP

- -

- (0.12)

46 KAVYA VERGHESE

2,000

0.05 -

2,000

0.05 -

47 KIRAN JOSEPH

1,850

0.04 -

1,850

0.04 -

48 KIRAN KURIYAN

403

0.01 -

403

0.01 -

49 KMMMF PVT. TRUST

37,387

0.88 0.01

36,987

0.87 -

50 LATHA MATTHEW 5,723

0.13 -

5,723

0.13 -

51 M A MATHEW 6,595

0.16 -

6,595

0.16 -

52 M M HOUSING PRIVATE LIMITED 179

0.00 -

179

0.00 -

53 M.M.PUBLICATIONS LIMITED 300

0.01 -

300

0.01 -

54 MALINI MATHEW 2,000

0.04 0.00

1,800

0.04 -

55 MAMMEN EAPEN 4,128

0.10 -

4,128

0.10 -

56 MAMMEN MAPPILLAI INVESTMENTS LTD 1,209

0.03 -

1,209

0.03 -

57 MAMMEN MATHEW 11,015

0.26 -

11,015

0.26 -

58 MAMMEN PHILIP 8,480

0.20 0.01

7,880

0.19 (0.02)

59 MAMY PHILIP 6,922

0.16 (0.01)

7,350

0.17 -

60 MARIA MAMMEN 84

0.00 -

61 MARIAM MAMMEN MATHEW 100

0.00 -

100

0.00 -

62 MARIEN MATHEW 160

0.00 -

160

0.00 -

63 MARIKA MAMMEN APPIAH 100

0.00 -

100

0.00 -

64 MARY KURIEN 14,594

0.34 0.08

10,839

0.26 -

65 MEERA NINAN 6,167

0.15 -

6,167

0.15 -

66 MEERA PHILIP 23,441

0.55 (0.24)

33,627

0.79 -

67 MEERA MAMMEN 15,840

0.37 -

15,840

0.37 -

68 MICAH MAMMEN PARAMBI 100

0.00 -

100

0.00 -

69 NISHA SARAH MATTHEW 164

0.00 -

164

0.00 -

70 NITHYA SUSAN MATTHEW 169

0.00 -

169

0.00 -

71 OMANA MAMMEN 4,703

0.11 -

4,703

0.11 -

72 PENINSULAR INVESTMENTS PRIVATE LIMITED 124,367

2.93 -

124,367

2.93 -

73 PETER K PHILIPS 240

0.01 (0.05)

2,341

0.06 -

74 PETER PHILIP 12,538

0.30 0.24

2,352

0.06 -

SI.

No.

Name As at 31st March, 2023 % Change during

the year as

compared to

31st March, 2022

As at 31st March, 2022 % Change during

the year as

compared to

31st March, 2021

No. of

% of total

No. of

% of total

75 PHILIP MATHEW 11,762

0.28 -

11,762

0.28 -

76 PREMA MAMMEN MATHEW 10,881

0.26 -

10,881

0.26 -

77 PREMINDA JACOB 98

0.00 -

78 RACHEL KATTUKARAN 16,647

0.39 (0.02)

17,247

0.41 -

79 RADHIKA MARIA MAMMEN 600

0.01 -

600

0.01 -

80 RAHUL MAMMEN MAPPILLAI 4,538

0.11 -

4,538

0.11 -

81 RAMANI JOSEPH 2,509

0.06 -

2,509

0.06 -

82 RANJEET JACOB 28

0.00 -

0.00 0.00

83 REENU ZACHARIAH 517

0.01 -

517

0.01 -

84 RIYAD MATHEW 4,520

0.11 -

4,520

0.11 -

85 ROHAN MATHEW MAMMEN 1,635

0.04 -

1,635

0.04 -

86 ROSHIN VARGHESE 6,679

0.16 -

6,679

0.16 -

87 ROY MAMMEN 12,439

0.29 (0.01)

12,894

0.30 -

88 SAMIR THARIYAN MAPPILLAI 4,470

0.11 -

4,470

0.11 -

89 SARA KURIYAN 1,880

0.04 -

1,880

0.04 -

90 SARAH CHERIAN TRUST 4,950

0.12 -

4,950

0.12 -

91 SARAH THOMAS 12,433

0.29 (0.01)

12,608

0.30 (0.00)

92 SARASU JACOB 13,984

0.33 (0.00)

14,114

0.33 (0.00)

93 SHANTA MAMMEN 4,938

0.12 -

4,938

0.12 -

94 SHILPA MAMMEN 4,412

0.10 -

4,412

0.10 -

95 SHIRIN MAMMEN 1,450

0.03 -

1,450

0.03 -

96 SHONA BHOJNAGARWALA 50

0.00 -

97 SHREYA JOSEPH 5,120

0.12 -

5,120

0.12 -

98 SOMA PHILIPS -

- -

- (0.05)

99 STABLE INVESTMENTS AND FINANCE COMPANY LTD. 3,964

0.09 -

3,964

0.09 -

100 SUSAN ABRAHAM 68

0.00 -

101 SUSAN KURIAN 9,137

0.22 -

9,137

0.22 -

102 SUSY THOMAS 5,278

0.12 -

5,278

0.12 -

103 TARA JOSEPH 3,150

0.07 -

3,150

0.07 -

104 THANGAM MAMMEN 5,981

0.14 -

5,981

0.14 -

105 THE MALAYALA MANORAMA COMPANY LIMITED 6,109

0.14 -

6,109

0.14 -

106 USHA EAPEN GEORGE 1,210

0.03 (0.00)

1,220

0.03 -

107 VARUN MAMMEN 8,706

0.21 -

8,706

0.21 -

108 VIKRAM KURUVILLA 109

0.00 -

109

0.00 -

109 ZACHARIAH KURIYAN 3,411

0.08 -

3,411

0.08 -

Total 1,180,831 1,185,320

Note : Figures in brackets represents reduction in percentage change as compared to previous period.

100

MRF LIMITED, CHENNAI

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2023

(` Crores)

Year ended 31.03.2023 Year ended 31.03.2022

A. CASH FLOW FROM OPERATING ACTIVITIES :

NET PROFIT BEFORE TAX 1119.20 879.16

Adjustment for :

Depreciation 1248.60 1201.41

Unrealised Exchange (Gain) / Loss (1.28) (0.37)

Government Grant Accrued (1.35) (0.99)

Impairment of Financial Assets - 0.30

Finance Cost 298.06 247.01

Interest Income (101.59) (99.08)

Dividend Income (0.12) (0.15)

Loss / (Gain) on Sale / Disposal of Property,Plant and Equipment 7.65 2.20

Provision for Impairment of Assets( other than Financial Assets) - 7.10

Fair Value changes in Investments (103.85) (155.43)

Fair Value changes in Financial Instruments 21.86 34.39

Loss / (Gain) on Sale of Investments (2.64) (6.83)

Bad debts written off - 1365.34 0.21 1229.77

OPERATING PROFIT/(LOSS) BEFORE WORKING CAPITAL CHANGES 2484.54 2108.93

Trade Receivables (159.71) (171.82)

Other Receivables 30.88 (94.55)

Inventories - Finished goods (354.05) (775.34)

Inventories - Raw materials and Others 373.09 (406.05)

Trade Payable

- Supplier Finance - (983.40)

- Import acceptance and Others (16.14) (352.33)

Provisions 39.88 1.80

Other Liabilities 348.73 262.68 222.53 (2559.16)

CASH GENERATED FROM OPERATIONS 2747.22 (450.23)

Direct Taxes paid (330.57) (207.12)

NET CASH FROM OPERATING ACTIVITIES 2416.65 (657.35)

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Property,Plant and Equipment (3280.42) (1690.76)

Proceeds from sale of Property,Plant and Equipment 1.05 2.36

Purchase of Investments (135.99) (649.97)

Proceeds from sale of Investments 775.30 3025.80

Fixed Deposits Others - Proceeds / (Placed) 600.00 (600.00)

Loans (Financial assets) repaid / (given) (0.76) 1.29

Interest Income 112.85 86.85

Dividend Income 0.12 0.15

NET CASH USED IN INVESTING ACTIVITIES (1927.85) 175.72

101

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2023 (Contd.) (` Crores)

Year ended 31.03.2023 Year ended 31.03.2022

C. CASH FLOW FROM FINANCING ACTIVITIES

(Repayments) / Proceeds from Working Capital Facilities (Net) 112.34 844.98

Proceeds from Term Loans - 299.99

Proceeds from SIPCOT Loan 7.76 -

Repayment of Term Loans (288.59) (86.00)

(Repayments) / Proceeds of Debentures 150.00 (180.00)

Government Grant Accrued 1.35 0.99

Deferred payment Credit (0.78) (0.68)

Payment of Lease Liability (121.30) (96.78)

Interest paid (253.90) (228.04)

Dividend (63.62) (63.62)

NET CASH FROM FINANCING ACTIVITIES (456.74) 490.84

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 32.06 9.21

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR Refer Note 9 113.11 102.80

Unrealised Gain / (Loss) on Foreign currency Cash & Cash equivalents 1.14 1.10

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR Refer Note 9 146.31 113.11

Refer Note No. 28m for amount spent during the year ended 31st March, 2023 and 31st March, 2022 on construction / acquisition of assets relating to

CSR activities

Note to Cash Flow Statement:

1. The above Cash Flow Statement has been prepared under the Indirect Method.

2. Reconciliation of Financing Liabilities (Refer Note 11)

This is the Cash Flow statement referred to in our report of even date

MRF LIMITED, CHENNAI

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N. KASHINATH C R KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Partner Partner MADHU P NAINAN S DHANVANTH KUMAR Director Director Chairman &

Mem. No. 036490 Mem. No. 026143

Chennai Chennai

Executive Vice

President Finance

Company Secretary

Chennai

DIN: 00860095 DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

102

Note 1 - Significant Accounting Policies under IND AS

A) General Information

MRF Limited (the “Company”) is a limited company, incorporated

on 5th November, 1960 in India, whose shares are publicly traded.

The Company is India’s largest tyre manufacturer and ranked

amongst the top 20 Global Manufacturers, with 10 state-of-the-

art factories across India with an expansive tyre range from two-

wheelers to fighter aircrafts.

The Registered Office is located at No. 114, Greams Road,

Chennai - 600 006.

The Company is the ultimate parent of MRF Group.

B) Basis of preparation of Financial Statements

The principal accounting policies applied in the preparation of these

Financial Statements are set out in Para C below. These policies

have been consistently applied to all the years presented.

i. Statement of Compliance

These separate Financial Statements (also known as

Standalone Financial Statements) have been prepared in

accordance with IND AS as prescribed under Section 133 of

the Companies Act, 2013 read with Rule 3 of the Companies

(Indian Accounting Standards) Rules, 2015 and subsequent

amendments thereto.

ii. Basis of Preparation and Presentation

The Financial Statements have been prepared on historical

cost basis considering the applicable provisions of Companies

Act, 2013, except for the following material item that has

been measured at fair value as required by relevant IND

AS. Historical cost is generally based on the fair value of the

consideration given in exchange for goods and services.

a) Certain financial assets/liabilities measured at fair value

(Refer Note 1 (C 20)) and

b) Any other item as specifically stated in the accounting

policy. (Refer Note 28 (g))

The Financial Statement are presented in INR and all values are

rounded off to Rupees Crores unless otherwise stated.

The Company reclassifies comparative amounts, unless

impracticable and whenever the Company changes the presentation

or classification of items in its Financial Statements materially. No

such material reclassification has been made during the year.

The Financial Statements of the Company for the year ended

31st March, 2023 were authorised for issue in accordance with a

resolution of the directors on 03rd May, 2023.

iii. Major Sources of Estimation Uncertainty

In the application of accounting policy which are described in note

and assumptions about the carrying amount of assets and liabilities,

income and expenses, contingent liabilities and the accompanying

disclosures that are not readily apparent from other sources. The

estimates and associated assumptions are based on historical

experience and other factors that are considered to be relevant and

are prudent and reasonable. Actual results may differ from those

estimates. The estimates and underlying assumptions are reviewed

on ongoing basis. Revisions to accounting estimates are recognised

in the period in which the estimates are revised if the revision affects

only that period or in the period of revision and future periods if the

revision affects both current and future period.

The few critical estimations and judgments made in applying

accounting policies are:

Property, Plant and Equipment:

Useful life of Property, Plant and Equipment and Intangible Assets

are as specified in Schedule II to the Companies Act, 2013 and

on certain assets based on technical advice which considered

the nature of the asset, the usage of the asset, expected physical

wear and tear, the operating conditions of the asset, anticipated

technological changes, manufacturers warranties and maintenance

support. The Company reviews the useful life of Property, Plant and

Equipment at the end of each reporting period. This reassessment

may result in change in depreciation charge in future periods. (Refer

Note 1 (C 1))

Impairment of Non-financial Assets:

For calculating the recoverable amount of non-financial assets, the

Company is required to estimate the value-in-use of the asset or the

103

Cash Generating Unit and the fair value less costs to disposal. For

calculating value in use the Company is required to estimate the

cash flows to be generated from using the asset. The fair value of

an asset is estimated using a valuation technique where observable

prices are not available. Further, the discount rate used in value in

use calculations includes an estimate of risk assessment specific to

the asset. (Refer Note 1 (C 4))

Impairment of Financial Assets:

The Company impairs financial assets other than those measured

at fair value through profit or loss or designated at fair value

through other comprehensive income on expected credit losses.

The estimation of expected credit loss includes the estimation

of probability of default (PD), loss given default (LGD) and the

exposure at default (EAD). Estimation of probability of default

apart from involving trend analysis of past delinquency rates

includes an estimation on forward-looking information relating

to not only the counterparty but also relating to the industry and

the economy as a whole. The probability of default is estimated

for the entire life of the contract by estimating the cash flows that

are likely to be received in default scenario. The lifetime PD is

reduced to 12 months PD based on an assessment of past history

of default cases in 12 months. Further, the loss given default

is calculated based on an estimate of the value of the security

recoverable as on the reporting date. The exposure at default is

the amount outstanding at the balance sheet date. (Refer Note 1

(C 21(a))

Defined Benefit Plans:

The cost of the defined benefit plan and other post-employment

benefits and the present value of such obligations are determined

using actuarial valuations. An actuarial valuation involves making

various assumptions that may differ from actual developments in

the future. These include the determination of the discount rate,

future salary increases, mortality rates and attrition rate. Due to the

complexities involved in the valuation and its long-term nature, a

defined benefit obligation is highly sensitive to changes in these

assumptions. All assumptions are reviewed at each reporting date.

(Refer Note 28 (g))

Fair Value Measurement of Financial Instruments:

When the fair values of financial assets and financial liabilities

recorded in the balance sheet cannot be measured based on quoted

prices in active markets, their fair value is measured using valuation

techniques including the Discounted Cash Flow (DCF) model. The

inputs to these models are taken from observable markets where

possible, but where this is not feasible, a degree of judgement is

required in establishing fair values. (Refer Note 1 (C 20))

Income Taxes

Significant judgments are involved in determining the provision for

income taxes, including amount expected to be paid/recovered for

uncertain tax positions. (Refer Note 1 (C 17))

In assessing the realizability of deferred income tax assets,

management considers whether some portion or all of the deferred

income tax assets will not be realized. The ultimate realization of

deferred income tax assets is dependent upon the generation of future

taxable income during the periods in which the temporary differences

become deductible. Management considers the scheduled reversals

of deferred income tax liabilities, projected future taxable income

and tax planning strategies in making this assessment. Based on the

level of historical taxable income and projections for future taxable

income over the periods in which the deferred income tax assets are

deductible, management believes that the Company will realize the

benefits of those deductible differences. The amount of the deferred

income tax assets considered realizable, however, could be reduced

in the near term if estimates of future taxable income during the

carry forward period are reduced.

Leases

IND AS 116 requires lessees to determine the lease term as the non-

cancellable period of a lease adjusted with any option to extend or

terminate the lease, if the use of such option is reasonably certain.

The Company makes an assessment on the expected lease term on

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a lease-by-lease basis and thereby assesses whether it is reasonably

certain that any options to extend or terminate the contract will be

exercised. In evaluating the lease term, the Company considers

factors such as any significant leasehold improvements undertaken

over the lease term, costs relating to the termination of the lease

and the importance of the underlying asset to Company’s operations

taking into account the location of the underlying asset and the

availability of suitable alternatives. The lease term in future periods

is reassessed to ensure that the lease term reflects the current

economic circumstances. After considering current and future

economic conditions, the Company has concluded that no changes

are required to lease period relating to the existing lease contracts.

(Refer Note 1 (C 6))

Allowance for credit losses on receivables :

The Company determines the allowance for credit losses based on

historical loss experience adjusted to reflect current and estimated

future economic conditions. The Company considered current

and anticipated future economic conditions relating to industries

the Company deals with and the countries where it operates. In

calculating expected credit loss, the Company has also considered

credit reports and other related credit information for its customers

to estimate the probability of default in future.

C) Summary of Significant Accounting Policies:

1) Property, Plant and Equipment (PPE)

The Company has elected to continue with the carrying value

of Property, Plant and Equipment (‘PPE’) recognised as of the

transition date, measured as per the previous GAAP and use

that carrying value as its deemed cost of the PPE.

Property, Plant and Equipment are stated at cost less

accumulated depreciation and accumulated impairment

losses except for freehold land which is not amortised. Cost

includes purchase price after deducting trade discount /

rebate, import duties, non-refundable taxes, cost of replacing

the component parts, borrowing costs (Refer Note C (15)) and

other costs that are directly attributable and necessary to bring

the asset to its working condition in the manner intended

by the management, and the initial estimates of the cost of

dismantling /removing the item and restoring the site on which

it is located.

Spare parts procured along with the Plant and Equipment

or subsequently which has a useful life of more than 1

year and considering the concept of materiality evaluated

by management are capitalised and added to the carrying

amount of such items. The carrying amount of items of PPE

and spare parts that are replaced is derecognised when no

future economic benefits are expected from their use or upon

disposal. Other machinery spares are treated as ‘stores and

spares’ forming part of the inventory. If the cost of the replaced

part is not available, the estimated cost of similar new parts is

used as an indication of what the cost of the existing part was

when the item was acquired.

An item of PPE is derecognised on disposal or when no future

economic benefits are expected from use or disposal. Any gain

or loss arising on derecognition of an item of property, plant

and equipment is determined as the difference between the

net disposal proceeds and the carrying amount of the asset

and is recognised in Statement of Profit and Loss when asset is

derecognised.

The depreciable amount of an asset is determined after

deducting its residual value. Where the residual value of

an asset increases to an amount equal to or greater than the

asset’s carrying amount, no depreciation charge is recognised

till the asset’s residual value decreases below the asset’s

carrying amount. Depreciation of an asset begins when it is

available for use, i.e., when it is in the location and condition

necessary for it to be capable of operating in the intended

manner. Depreciation of an asset ceases at the earlier of the

date that the asset is classified as held for sale and the date

when the asset is derecognised.

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Description of the Asset Estimated Useful life (On

Single shift working)

Tangible (Owned Assets) :

Building – Factory

– Other than factory buildings

30 Years

60 Years

Plant and Equipment 5-21 Years

Moulds 6 Years

Furniture and Fixtures 5 Years

Computer Servers 5 Years

Computers 3 Years

Office Equipment 5 Years

Other Assets, viz., Electrical Fittings, Fire

Fighting/Other Equipments and Canteen

Utensils

10 Years

Renewable Energy Saving Device – Windmills 22 Years

Vehicles 5 Years

Aircraft 10 and 20 Years

Right of Use Assets (Leased Assets) :

- Buildings - Other than factory buildings 1-21 Years

- Vehicles 2 Years

- Land – Leasehold Primary period of lease

Intangible (Owned Assets):

Software 5 Years

Depreciation on the property, plant and equipment, is

provided over the useful life of assets based on management

estimates which is in line with the useful life indicated in

Schedule II to the Companies Act, 2013. Depreciation on all

assets except Renewable Energy Saving Devices is provided

on straight line basis whereas depreciation on renewable

energy saving devices is provided on reducing balance basis.

Plant and Machinery, Moulds, Vehicles, Furniture and Fixtures

and Computer Servers are depreciated based on management

estimate of the useful life of the assets, and is after considering

the nature of the asset, the usage of the asset, expected

physical wear and tear, the operating conditions of the asset,

anticipated technological changes, manufacturers warranties

and maintenance support.

Depreciation on property, plant and equipment added/

disposed off during the year is provided on pro rata basis with

reference to the date of addition/disposal.

The assets’ residual values, useful lives and methods of

depreciation are reviewed at each financial year end and

adjusted prospectively, if appropriate.

Further, the Company has identified and determined separate

useful life for each major component of Property, Plant and

Equipment, if they are materially different from that of the

remaining assets, for providing depreciation.

2) Intangible Assets:

Intangible assets acquired separately are measured on initial

recognition at cost. After initial recognition, intangible assets

are carried at cost less any accumulated amortisation and

accumulated impairment losses.

Software (not being an integral part of the related hardware)

acquired for internal use are treated as intangible assets.

An item of Intangible asset is derecognised on disposal or

when no future economic benefits are expected from its use

or disposal. Any profit or loss arising from derecognition of an

intangible asset are measured as the difference between the

net disposal proceeds and the carrying amount of the asset

and are recognised in the Statement of Profit and Loss when

the asset is derecognised.

Intangible Assets are amortised over 5 years on straight-

line method over the estimated useful economic life of the

assets.

The Company undertakes Research and Development

activities for development of new and improved products.

All expenditure incurred during Research and Development

are analysed into research phase and development phase.

The Company recognises all expenditure incurred during the

research phase in the profit or loss whereas the expenditure

incurred in development phase are presented as Intangible

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Assets under Development till the time they are available for

use in the manner intended at which moment they are treated

as Intangible Assets and amortised over their estimated useful

life.

3) Assets held for Sale:

Non-current assets are classified as held for sale if their carrying

amount is intended to be recovered principally through

sale rather than through continuing use. The condition for

classification of held for sale is met when the non-current

asset is available for immediate sale and the same is highly

probable of being completed within one year from the date

of classification as held for sale. Non-current assets held for

sale are measured at the lower of carrying amount and fair

value less cost to sell. Non-current assets that cease to be

classified as held for sale shall be measured at the lower of

carrying amount before the non-current asset was classified as

held for sale adjusted for any depreciation/amortization and

its recoverable amount at the date when it no longer meets the

“Held for Sale” criteria.

4) Impairment of tangible (PPE) and intangible assets:

At the end of each reporting period, the Company reviews

the carrying amounts of its PPE and other intangible assets

to determine whether there is any indication that these assets

have suffered an impairment loss. If any such indication exists,

the recoverable amount of the asset is estimated in order to

determine the extent of the impairment loss. Where it is not

possible to estimate the recoverable amount of an individual

asset, the Company estimates the recoverable amount of the

cash-generating unit (CGU) to which the asset belongs. When

the carrying amount of an asset or CGU exceeds its recoverable

amount, the asset is considered impaired and is written down

to its recoverable amount. The resulting impairment loss is

recognised in the Statement of Profit and Loss.

Recoverable amount is the higher of fair value less costs of

disposal and value in use. In assessing value in use, the estimated

future cash flows are discounted to their present value using a

pre-tax discount rate that reflects current market assessments

of the time value of money and the risks specific to the asset.

In determining fair value less costs of disposal, recent market

transactions are taken into account. If no such transactions can

be identified, an appropriate valuation model is used.

Where an impairment loss subsequently reverses, the carrying

amount of the asset or CGU is increased to the revised estimate

of its recoverable amount, but so that the increased carrying

amount does not exceed the carrying amount that would have

been determined had no impairment loss been recognised for

the asset or CGU in prior years. A reversal of an impairment

loss is recognised in the Statement of Profit and Loss.

5) Inventories:

Inventories consisting of stores and spares, raw materials,

Work in progress, Stock in Trade and finished goods are valued

at lower of cost and net realisable value. However, materials

held for use in production of inventories are not written down

below cost, if the finished products are expected to be sold at

or above cost.

The cost is computed on FIFO basis except for stores and

spares which are on daily moving Weighted Average Cost

basis and is net of inputs tax credits under various tax laws.

Goods and materials in transit include materials, duties and

taxes (other than those subsequently recoverable from tax

authorities) labour cost and other related overheads incurred

in bringing the inventories to their present location and

condition.

Traded goods include cost of purchase and other costs

incurred in bringing the inventories to their present location

and condition.

Net realisable value is the estimated selling price in the

ordinary course of business, less estimated cost of completion

and estimated cost necessary to make the sale.

Inventory obsolescence is based on assessment of the future

uses. Obsolete and slow-moving items are subjected to

continuous technical monitoring and are valued at lower of cost

and estimated net realisable value. When Inventories are sold,

the carrying amount of those items are recognised as expenses

in the period in which the related revenue is recognised.

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6) Leases:

The Company has applied IND AS 116 using the modified

retrospective approach.

The Company as a lessee

The Company’s lease asset classes primarily consist of leases

for land, buildings and vehicles. The Company assesses

whether a contract contains a lease, at inception of a contract.

A contract is, or contains, a lease if the contract conveys the

right to control the use of an identified asset for a period

of time in exchange for consideration. To assess whether a

contract conveys the right to control the use of an identified

asset, the Company assesses whether: (i) the contract involves

the use of an identified asset (ii) the Company has substantially

all of the economic benefits from use of the asset through the

period of the lease and (iii) the Company has the right to direct

the use of the asset.

At the date of commencement of the lease, the Company

recognizes a right-of-use asset (“ROU”) and a corresponding

lease liability for all lease arrangements in which it is a lessee,

except for leases with a term of twelve months or less (short-

term leases) and low value leases. For these short-term and

low value leases, the Company recognizes the lease payments

as an operating expense on a straight-line basis over the term

of the lease.

Certain lease arrangements include the options to extend or

terminate the lease before the end of the lease term. ROU

assets and lease liabilities includes these options when it is

reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which

comprises the initial amount of the lease liability adjusted for

any lease payments made at or prior to the commencement

date of the lease plus any initial direct costs less any lease

incentives. They are subsequently measured at cost less

accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement

date on a straight-line basis over the shorter of the lease term

and useful life of the underlying asset. Right-of-use assets are

evaluated for recoverability whenever events or changes in

circumstances indicate that their carrying amounts may not

be recoverable. For the purpose of impairment testing, the

recoverable amount (i.e. the higher of the fair value less cost to

sell and the value-in-use) is determined on an individual asset

basis unless the asset does not generate cash flows that are

largely independent of those from other assets. In such cases,

the recoverable amount is determined for the Cash Generating

Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the

present value of the future lease payments. The lease payments

are discounted using the interest rate implicit in the lease or,

if not readily determinable, using the incremental borrowing

rates. Lease liabilities are remeasured with a corresponding

adjustment to the related right-of-use asset if the Company

changes its assessment if whether it will exercise an extension

or a termination option.

Lease liability and ROU asset have been separately presented

in the financial statements and lease payments have been

classified as financing cash flows.

The Company as a lessor

Leases for which the Company is a lessor is classified as a

finance or operating lease. Whenever the terms of the lease

transfer substantially all the risks and rewards of ownership to

the lessee, the contract is classified as a finance lease. All other

leases are classified as operating leases.

When the Company is an intermediate lessor, it accounts for

its interests in the head lease and the sublease separately.

The sublease is classified as a finance or operating lease by

reference to the right-of-use asset arising from the head lease.

For operating leases, rental income is recognized on a straight-

line basis over the term of the relevant lease.

7) Government Grants:

Grants and subsidies from the government are recognised

when there is reasonable assurance that (i) the Company will

comply with the conditions attached to them, and (ii) the

grant/subsidy will be received.

108

When the grant or subsidy relates to revenue, it is recognised

as income on a systematic basis in the Statement of Profit

and Loss over the periods necessary to match them with the

related costs, which they are intended to compensate. Where

the grant relates to an asset, it is recognised as income in equal

amounts over the expected useful life of the related asset or by

deducting the grant in arriving at the carrying amount of the

assets. Where the assets have been fully depreciated with no

future related cost, the grant is recognised in profit or loss.

When loans or similar assistance are provided by governments

or related institutions, with an interest rate below the current

applicable market rate, the effect of this favourable interest

is regarded as a government grant. The loan or assistance

is initially recognised and measured at fair value and the

government grant is measured as the difference between the

initial carrying value of the loan and the proceeds received.

The loan is subsequently measured as per the accounting

policy applicable to financial liabilities in respect of loans/

assistance received subsequent to the date of transition.

8) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when there is a present legal

or constructive obligation as a result of a past event and it

is probable (i.e. more likely than not) that an outflow of

resources embodying economic benefits will be required to

settle the obligation and a reliable estimate can be made of

the amount of the obligation. Such provisions are determined

based on management estimate of the amount required to

settle the obligation at the balance sheet date. When the

Company expects some or all of a provision to be reimbursed,

the reimbursement is recognised as a standalone asset only

when the reimbursement is virtually certain.

If the effect of the time value of money is material, provisions

are discounted using a current pre-tax rate that reflects,

the risks specific to the liability. When discounting is used,

the increase in the provision due to the passage of time is

recognised as a finance cost.

Present obligations arising under onerous contracts are

recognised and measured as provisions. An onerous

contract is considered to exist when a contract under which

the unavoidable costs of meeting the obligations exceed

the economic benefits expected to be received from it.

Unavoidable cost is determined based on cost that are directly

attributable to having and executing the contracts.

Contingent liabilities are disclosed on the basis of judgment

of management / independent experts. These are reviewed at

each balance sheet date and are adjusted to reflect the current

management estimate.

Provisions for warranty-related costs are recognised when the

product is sold to the customer. Initial recognition is based on

scientific basis as per past trends of such claims. The initial

estimate of warranty-related costs is revised annually.

Contingent Assets are not recognised, however, disclosed

in Financial Statement when inflow of economic benefits is

probable.

9) Foreign Currency Transactions:

The Financial Statements of Company are presented in INR,

which is also the functional currency. In preparing the financial

statements, transactions in currencies other than the entity’s

functional currency are recognised at the rates of exchange

prevailing at the dates of the transactions. At the end of each

reporting period, monetary items denominated in foreign

currencies are translated at the rates prevailing at that date.

Non-monetary items denominated in foreign currency are

reported at the exchange rate ruling on the date of transaction.

10) Share Capital and Securities Premium:

Ordinary shares are classified as equity, incremental costs

directly attributable to the issue of new shares are shown in

equity as a deduction net of tax from the proceeds. Par value

of the equity share is recorded as share capital and the amount

received in excess of the par value is classified as securities

premium.

11) Dividend Distribution to Equity Shareholders:

The Company recognises a liability to make cash distributions

to equity holders when the distribution is authorized and the

distribution is no longer at the discretion of the Company.

109

A distribution is authorized when it is approved by the

shareholders. A corresponding amount is recognised directly

in other equity.

12) Cash Flows and Cash and Cash Equivalents:

Statement of cash flows is prepared in accordance with the

indirect method prescribed in the relevant IND AS. For the

purpose of presentation in the statement of cash flows, cash

and cash equivalents includes cash on hand, cheques and

drafts on hand, deposits held with Banks, other short-term,

highly liquid investments with original maturities of three

months or less that are readily convertible to known amounts

of cash and which are subject to an insignificant risk of changes

in value, and book overdrafts. However, Book overdrafts are

to be shown within borrowings in current liabilities in the

balance sheet for the purpose of presentation.

13) Revenue Recognition:

The Company derives revenues primarily from sale of goods

comprising of Automobile Tyres, Tubes, Flaps and Tread

Rubber. The following is a summary of significant accounting

policies related to revenue recognition:

Revenue from contract with customers is recognised upon

transfer of control of promised products or services to

customers in an amount that reflects the consideration the

Company expects to receive in exchange for those products or

services.

Revenue from the sale of goods is recognised at the point in

time when control is transferred to the customer.

Revenue towards satisfaction of a performance obligation is

measured at the amount of transaction price (net of variable

consideration) allocated to that performance obligation. The

transaction price of goods sold and services rendered is net

of variable consideration on account of turnover/product/

prompt payment discounts and schemes offered by the

company as part of the contract with the customers. When

the level of discount varies with increase in levels of revenue

transactions, the Company recognises the liability based on

its estimate of the customer’s future purchases. The Company

recognises changes in the estimated amounts of obligations

for discounts in the period in which the change occurs.

Revenue also excludes taxes collected from customers.

Revenue in excess of invoicing is classified as contract assets

while invoicing in excess of revenues are classified as contract

liabilities.

The Company provides warranties for general repairs and does

not provide extended warranties or maintenance services in its

contracts with customers and are assurance type warranties.

Claims preferred during the year against such obligations are

netted off from revenue, consistent with its current practice.

Provision for warranties is made for probable future claims

on sales effected and are estimated based on previous claim

experience and are accounted for under IND AS 37 Provisions,

Contingent Liabilities and Contingent Assets, consistent with its

current practice.

Use of significant judgements in Revenue Recognition:

•

l Judgement is also required to determine the transaction

price for the contract. The transaction price could

be either a fixed amount of consideration or variable

consideration with elements such as turnover/product/

prompt payment discounts. Any consideration payable

to the customer is adjusted to the transaction price,

unless it is a payment for a distinct product or service

from the customer. The estimated amount of variable

consideration is adjusted in the transaction price only

to the extent that it is highly probable that a significant

reversal in the amount of cumulative revenue

recognised will not occur and is reassessed at the end

of each reporting period.

•

l The Company exercises judgement in determining

whether the performance obligation is satisfied at a point

in time or over a period of time. The Company considers

indicators such as how customer consumes benefits as

services are rendered or who controls the asset as it is

being created or existence of enforceable right to payment

for performance to date and alternate use of such product

or service, transfer of significant risks and rewards to the

customer, acceptance of delivery by the customer.

110

14) Other Income:

Dividend Income:

Dividend Income is accounted for when the right to receive

the same is established, which is generally when shareholders

approve the dividend.

Interest Income:

Interest Income on financial assets measured at amortised cost

is recognised on a time-proportion basis using the effective

interest method.

15) Borrowing costs:

Borrowing cost includes interest, commitment charges,

brokerage, underwriting costs, discounts / premiums, financing

charges, exchange difference to the extent they are regarded

as interest costs and all ancillary / incidental costs incurred in

connection with the arrangement of borrowing.

Borrowing costs which are directly attributable to acquisition/

construction of qualifying assets that necessarily takes a

substantial period of time to get ready for its intended use are

capitalised as a part of cost pertaining to those assets. All other

borrowing costs are recognised as expense in the period in

which they are incurred.

The capitalisation of borrowing costs commences when the

Company incurs expenditure for the asset, incurs borrowing

cost and undertakes activities that are necessary to prepare

the asset for its intended use or sale. The capitalisation of

borrowing costs is suspended during extended periods in

which active development of a qualifying asset is suspended.

The capitalisation of borrowing costs ceases when substantially

all the activities necessary to prepare the qualifying asset for its

intended use or sale are complete.

16) Employee Benefits:

a) Short term Employee Benefits:

All employee benefits payable wholly within twelve

months of rendering services are classified as short-term

employee benefits. Benefits such as salaries, wages, short-

term compensated absences and performance incentives,

are recognised during the period in which the employee

renders related services and are measured at undiscounted

amount expected to be paid when the liabilities are settled.

b) Long Term Employee Benefits:

The cost of providing long term employee benefit such as

earned leave is measured as the present value of expected

future payments to be made in respect of services provided

by employees upto the end of the reporting period. The

expected costs of the benefit is accrued over the period

of employment using the same methodology as used for

defined benefits post employment plans. Actuarial gains

and losses arising from the experience adjustments and

changes in actuarial assumptions are charged or credited

to the Statement of Profit or Loss in which they arise except

those included in cost of assets as permitted. The benefit is

valued annually by independent actuary.

c) Post Employment Benefits:

The Company provides the following post employment

benefits:

i) Defined benefit plans such as gratuity, trust

managed Provident Fund and post-retirement

medical benefit (PRMB); and

ii) Defined contribution plans such as provident fund,

pension fund and superannuation fund.

d) Defined benefits Plans:

The cost of providing benefits on account of gratuity

and post retirement medical benefits / obligations are

determined using the projected unit credit method on

the basis of actuarial valuation made at the end of each

balance sheet date, which recognises each period of

service as given rise to additional unit of employees

benefit entitlement and measuring each unit separately

to build up the final obligation. The yearly expenses on

account of these benefits are provided in the books of

accounts.

The net interest cost is calculated by applying the

discount rate to the net balance of the defined benefit

obligation and the fair value of plan assets. This cost is

111

included in employee benefit expense in the Statement

of Profit and Loss except those included in cost of assets

as permitted.

Re-measurements comprising of actuarial gains and

losses arising from experience adjustments and change

in actuarial assumptions, the effect of change in assets

ceiling (if applicable) and the return on plan asset

(excluding net interest as defined above) are recognised

in other comprehensive income (OCI) except those

included in cost of assets as permitted in the period in

which they occur. Re-measurements are not reclassified

to the Statement of Profit and Loss in subsequent periods.

Service cost (including current service cost, past service

cost, as well as gains and losses on curtailments and

settlements) is recognised in the Statement of Profit and

Loss except those included in cost of assets as permitted

in the period in which they occur.

Eligible employees of the Company receive benefits from a

provident fund trust which is a defined benefit plan. Both

the eligible employee and the Company make monthly

contributions to the provident fund plan equal to a specified

percentage of the covered employees salary. The Company

contributes a part of the contribution to the provident fund

trusts. The trusts invests in specific designated instruments

as permitted by Indian Law. The remaining portion is

contributed to the Government Administered Pension

Fund. The rate at which the annual interest is payable

to the beneficiaries by the trusts is administered by the

Government. The Company has obligation to make good

the shortfall, if any, between the return from investments of

the Trusts and the notified interest rate. However, as at the

year-end no shortfall remains unprovided for.

e) Defined Contribution Plans:

Payments to defined contribution retirement benefit

plans, viz., Provident Fund for certain eligible

employees, Pension Fund and Superannuation benefits

are recognised as an expense when employees have

rendered the service entitling them to the contribution.

17) Taxes on Income:

Income tax expense represents the sum of tax currently payable

and deferred tax. Tax is recognised in the Statement of Profit

and Loss, except to the extent that it relates to items recognised

directly in equity or in other comprehensive income.

a) Current Tax:

Current tax is the expected tax payable/ receivable on

the taxable income/ loss for the year using applicable

tax rates for the relevant period, and any adjustment to

taxes in respect of previous years. Interest expenses and

penalties, if any, related to income tax are included in

finance cost and other expenses respectively. Interest

Income, if any, related to Income tax is included in

Other Income.

b) Deferred Tax:

Deferred tax is recognised on temporary differences

between the carrying amounts of assets and liabilities

in the balance sheet and the corresponding tax bases

used in the computation of taxable profit. Deferred

tax liabilities are generally recognised for all taxable

temporary differences. Deferred tax assets are generally

recognised for all deductible temporary differences,

unabsorbed losses and unabsorbed depreciation to the

extent that it is probable that future taxable profits will

be available against which those deductible temporary

differences, unabsorbed losses and unabsorbed

depreciation can be utilised.

The carrying amount of deferred tax assets is reviewed

at each balance sheet date and reduced to the extent

that it is no longer probable that sufficient taxable profits

will be available to allow all or part of the asset to be

recovered.

Deferred tax assets and liabilities are measured at the

tax rates that are expected to apply in the period in

which the liability is settled or the asset realised, based

on tax rates (and tax laws) that have been enacted or

substantively enacted by the balance sheet date. The

measurement of deferred tax liabilities and assets reflects

112

the tax consequences that would follow from the manner

in which the Company expects, at the reporting date, to

recover or settle the carrying amount of its assets and

liabilities.

Deferred tax assets and liabilities are offset when there

is a legally enforceable right to set off current tax assets

against current tax liabilities and when they relate to

income taxes levied by the same taxation authority and

the Company intends to settle its current tax assets and

liabilities on a net basis.

18) Earnings per Share:

Basic earnings per share is calculated by dividing the

profit from continuing operations and total profit, both

attributable to equity shareholders of the Company by the

weighted average number of equity shares outstanding

during the year.

19) Current versus Non-current classification:

The Company presents assets and liabilities in the Balance

Sheet based on current/non-current classification.

a) An asset is current when it is:

•

l Expected to be realized or intended to be sold or

consumed in the normal operating cycle,

•

l Held primarily for the purpose of trading,

•

l Expected to be realised within twelve months after the

reporting period, or

•

l Cash or cash equivalent unless restricted from being

exchanged or used to settle a liability for at least twelve

months after the reporting period.

l All other assets are classified as non-current.

b) A liability is current when:

•

l It is expected to be settled in the normal operating

cycle,

•

l It is held primarily for the purpose of trading,

•

l It is due to be settled within twelve months after the

reporting period, or

• l There is no unconditional right to defer the settlement of

the liability for at least twelve months after the reporting

period.

l All other liabilities are classified as non-current.

c) Deferred tax assets and liabilities are classified as non-

current.

20) Fair value measurement:

Fair value is the price that would be received to sell an

asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date,

regardless of whether that price is directly observable or

estimated using another valuation technique. In estimating

the fair value of an asset or a liability, the Company takes

into account the characteristics of asset and liability if market

participants would take those into consideration. Fair value for

measurement and / or disclosure purposes in these Financial

Statements is determined on such basis except for Inventories,

Leases and value in use of non-financial assets. Normally at

initial recognition, the transaction price is the best evidence of

fair value.

The fair value of an asset or a liability is measured using the

assumptions that market participants would use when pricing

the asset or liability, assuming that market participants act in

their economic best interest. A fair value measurement of a

non-financial asset takes into account a market participant’s

ability to generate economic benefits by using the asset in

its highest and best use or by selling it to another market

participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in

the circumstances and for which sufficient data are available to

measure fair value, maximizing the use of relevant observable

inputs and minimizing the use of unobservable inputs.

All financial assets and financial liabilities for which fair

value is measured or disclosed in the Financial Statements

are categorized within the fair value hierarchy, described as

follows, based on the lowest level input that is significant to

the fair value measurement as a whole:

113

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.

Financial assets and financial liabilities that are recognised

at fair value on a recurring basis, the Company determines

whether transfers have occurred between levels in the

hierarchy by re-assessing categorization at the end of each

reporting period.

21) Financial Instruments:

A financial instrument is any contract that gives rise to a

financial asset of one entity and a financial liability or equity

instrument of another entity. The Company recognises a

financial asset or financial liability in its balance sheet only

when the entity becomes party to the contractual provisions of

the instrument.

A) Financial Assets

A financial asset inter-alia includes any asset that is cash,

equity instrument of another entity or contractual rights to

receive cash or another financial asset or to exchange financial

asset or financial liability under condition that are potentially

favourable to the Company.

Investments in subsidiaries

Investments in equity shares of subsidiaries are carried at cost

less impairment. Impairment is provided for on the basis

explained in Paragraph (4) of Note C above.

Financial assets other than investment in subsidiaries

Financial assets of the Company comprise trade receivable,

cash and cash equivalents, Bank balances, Investments

in equity shares of companies other than in subsidiaries,

Investment in units of Mutual Funds, loans/Debt instrument/

advances to employee / related parties / others, security

deposit, claims recoverable etc.

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in

the case of financial assets not recorded at fair value through

profit or loss, transaction costs that are attributable to the

acquisition of the financial asset. However, Trade receivables

that do not contain a significant financing component are

measured at Transaction Price. Transaction costs of financial

assets carried at fair value through profit or loss are expensed

in Statement of Profit and Loss. Where transaction price is not

the measure of fair value and fair value is determined using

a valuation method that uses data from observable market,

the difference between transaction price and fair value is

recognised in Statement of Profit and Loss on the date of

recognition if the fair value pertains to Level 1 or Level 2 of the

fair value hierarchy and in other cases spread over life of the

financial instrument using effective interest method.

Subsequent measurement

For purposes of subsequent measurement financial assets are

classified in three categories:

•

l Financial assets measured at amortized cost

•

l Financial assets at fair value through OCI – Debt

Instruments

•

l Financial assets at fair value through profit or loss

Financial assets measured at amortized cost

Financial assets are measured at amortized cost if the financials

asset is held within a business model whose objective is to hold

financial assets in order to collect contractual cash flows and

the contractual terms of the financial asset give rise on specified

dates to cash flows that are solely payments of principal and

interest on the principal amount outstanding. These financials

assets are amortized using the effective interest rate (EIR)

method, less impairment. Amortized cost is calculated by taking

into account any discount or premium on acquisition and fees

or costs that are an integral part of the EIR. The EIR amortization

is included in finance income in the statement of profit and

loss. The losses arising from impairment are recognised in the

statement of profit and loss in finance costs.

114

Financial assets at fair value through OCI (FVTOCI)

Financial assets are mandatorily measured at fair value

through other comprehensive income if the financial asset is

held within a business model whose objective is achieved by

both collecting contractual cash flows and selling financial

assets and the contractual terms of the financial asset give rise

on specified dates to cash flows that are solely payments of

principal and interest on the principal amount outstanding.

At initial recognition, an irrevocable election is made (on

an instrument-by-instrument basis) to designate investments

in equity instruments other than held for trading purpose

at FVTOCI. Fair value changes relating to financial

assets measured at FVTOCI are recognised in the other

comprehensive income (OCI). However, the Company

recognises interest income, impairment losses and reversals

and foreign exchange gain or loss in the income statement.

On derecognition of the financial asset other than equity

instruments, cumulative gain or loss previously recognised in

OCI is reclassified to Profit or Loss.

Financial assets at fair value through profit or loss (FVTPL)

Any financial asset that does not meet the criteria for

classification as at amortized cost or as financial assets at fair

value through other comprehensive income, is classified as

financial assets at fair value through profit or loss. Further,

financial assets at fair value through profit or loss also include

financial assets held for trading and financial assets designated

upon initial recognition at fair value through profit or loss.

Financial assets are classified as held for trading if they are

acquired for the purpose of selling or repurchasing in the near

term. Financial assets at fair value through profit or loss are fair

valued at each reporting date with all the changes recognised

in the Statement of profit and loss.

Derecognition

The Company derecognises a financial asset only when the

contractual rights to the cash flows from the asset expire, or

when it transfers the financial asset and substantially all the

risks and rewards of ownership of the asset to another entity. If

the Company neither transfers nor retains substantially all the

risks and rewards of ownership and continues to control the

transferred asset, the Company recognises its retained interest

in the asset and an associated liability for amounts it may have

to pay.

Impairment of financial assets

The Company assesses impairment based on expected credit

loss (ECL) model on the following:

•

l Financial assets that are measured at amortised cost.

•

l Financial assets (excluding equity instruments) measured

at fair value through other comprehensive income

(FVTOCI).

ECL is measured through a loss allowance on a following basis

after considering the value of recoverable security:-

•

l The 12 month expected credit losses (expected credit

losses that result from those default events on the

financial instruments that are possible within 12 months

after the reporting date)

•

l Full life time expected credit losses (expected credit

losses that result from all possible default events over the

life of financial instruments).

The Company follows ‘simplified approach’ for recognition of

impairment on trade receivables or contract assets resulting

from normal business transactions. The application of

simplified approach does not require the Company to track

changes in credit risk. However, it recognises impairment

loss allowance based on lifetime ECLs at each reporting date,

from the date of initial recognition.

For recognition of impairment loss on other financial assets,

the Company determines whether there has been a significant

increase in the credit risk since initial recognition. If credit

risk has increased significantly, lifetime ECL is provided. For

assessing increase in credit risk and impairment loss, the

Company assesses the credit risk characteristics on instrument-

by-instrument basis.

ECL is the difference between all contractual cash flows that

are due to the Company in accordance with the contract and

115

all the cash flows that the entity expects to receive (i.e., all

cash shortfalls), discounted at the original EIR.

Impairment loss allowance (or reversal) recognised during the

period is recognised as expense/income in the statement of

profit and loss.

B) Financial Liabilities

The Company’s financial liabilities includes borrowings,

trade payable, lease liabilities, accrued expenses and other

payables.

Initial recognition and measurement

All financial liabilities at initial recognition are classified as

financial liabilities at amortized cost or financial liabilities at

fair value through profit or loss, as appropriate. All financial

liabilities are recognised initially at fair value and, in the

case of loans and borrowings and payables, net of directly

attributable transaction costs. Any difference between the

proceeds (net of transaction costs) and the fair value at initial

recognition is recognised in the Statement of Profit and Loss

depending upon the level of fair value.

Subsequent measurement

The subsequent measurement of financial liabilities depends

upon the classification as described below:-

Financial Liabilities classified as Amortised Cost:

Financial Liabilities that are not held for trading and are not

designated as at FVTPL are measured at amortised cost at

the end of subsequent accounting periods. Amortised cost is

calculated by taking into account any discount or premium

on acquisition and fees or costs that are an integral part of the

Effective Interest Rate. Interest expense that is not capitalised

as part of costs of assets is included as Finance costs in the

Statement of Profit and Loss.

Financial Liabilities at Fair value through profit and loss

(FVTPL):

FVTPL includes financial liabilities held for trading and

financial liabilities designated upon initial recognition as

FVTPL. Financial liabilities are classified as held for trading

if they are incurred for the purpose of repurchasing in the

near term. Financial liabilities have not been designated upon

initial recognition at FVTPL.

Derecognition

A financial liability is derecognised when the obligation

under the liability is discharged / cancelled / expired. When

an existing financial liability is replaced by another from the

same lender on substantially different terms, or the terms of an

existing liability are substantially modified, such an exchange

or modification is treated as the de recognition of the original

liability and the recognition of a new liability. The difference in

the respective carrying amounts is recognised in the statement

of profit and loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net

amount is reported in the balance sheet if there is a currently

enforceable legal right to offset the recognised amounts and

there is an intention to settle on a net basis, to realise the assets

and settle the liabilities simultaneously.

C) Derivatives

Derivative instruments are initially recognised at fair value

on the date a derivative contract is entered into and are

subsequently re-measured to their fair value at the end of each

reporting period. The accounting for subsequent changes in

fair value depends on whether the derivative is designated as

a hedging instrument, and if so, the nature of the item being

hedged and the type of hedge relationship designated. The

resulting gain or loss is recognised in the Statement of Profit

and Loss immediately unless the derivative is designated and

effective as a hedging instrument and is recognised in Other

Comprehensive Income (OCI). Cash flow hedges shall be

reclassified to profit or loss as a reclassification adjustment in

the same period or periods during which the hedged expected

future cash flows affect profit or loss. If hedge of a forecast

transaction results in the recognition of a non-financial asset

116

or a non-financial liability, then the gain or loss that are

accumulated in the cash flow hedge reserve is recognised in

the initial cost or other carrying amount of the asset or liability

(this is also referred to as “Basis Adjustment”).

D) Ministry of Corporate Affairs (MCA) vide notification dated

24th March 2021, has amended Schedule III to the Companies

Act, 2013 to enhance the disclosure requirements in financial

statements. The financial statements have been prepared

after incorporating the amendments to the extent they are

applicable.

E) Recent accounting pronouncements

The Ministry of Corporate Affairs (MCA) on 31st March 2023

through Companies (Indian Accounting Standards) Amendment

Rules, 2023 has notified the following amendments to IND AS

which are applicable for the annual periods beginning on or

after 1st April, 2023.

a) IND AS 1 – Presentation of Financial Statements – This

amendment requires the Company to disclose its material

accounting policies rather than their significant accounting

policies.

The Company will carry out a detailed review of accounting

policies to determine material accounting policy information

to be disclosed going forward.

The Company does not expect this amendment to have any

material impact in its financial statements.

b) IND AS 8 – Accounting Policies, Changes in Accounting

Estimates and Errors This amendment has changed the

definition of a “change in accounting estimates” to a

definition of “accounting estimates”. The amendment

clarifies how companies should distinguish changes in

accounting policies from changes in accounting estimates.

The Company does not expect this amendment to have any

material impact in its financial statements.

c) IND AS 12 – Income Taxes - This amendment has done

away with the recognition exemption on initial recognition

of assets and liabilities that give rise to equal and offsetting

temporary differences.

The Company does not expect this amendment to have any

material impact in its financial statements.

117

NOTES TO THE FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 2 (a) : PROPERTY, PLANT AND EQUIPMENT (` Crores)

Property, Plant and Equipment As at 31.03.2023 As at 31.03.2022

Owned Assets 9414.12 8999.09

Leased Assets 609.98 445.97

Total 10024.10 9445.06

NOTE 2 (b) : CAPITAL WORK-IN-PROGRESS (CWIP) 3045.22 1225.81

CWIP Ageing Schedule (` Crores)

CWIP

Amount in CWIP for a period of Total

Less than

1 year

1-2 years 2-3 years More than

3 years

Projects in progress 2492.73 306.07 116.46 127.14 3042.40

(833.09) (199.73) (164.84) (25.18) (1222.84)

Projects temporarily suspended 0.11 - 0.07 2.64 2.82

- - (0.75) (2.22) (2.97)

Figures in brackets are in respect of Previous year

Note: There were no material projects which have exceeded their original planned cost and timelines.

118

NOTES TO THE FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

(` Crores)

NOTE 2 (a 1) : Owned Assets

NOTE 2 (c)

INTANGIBLES

Particulars Land

Freehold

Buildings Plant and

equipment

Furniture

and

fixtures

Vehicles Air

Craft

Office

equipment

Computers Moulds Other

Assets

Total Computer

Software

GROSS BLOCK

Carrying Value as at 31 March 2021 577.26 3029.71 8396.45 31.65 53.38 83.98 40.07 53.33 705.00 440.55 13411.38 61.25

Additions 0.87 141.73 828.07 3.77 9.91 - 3.83 6.22 124.44 45.43 1164.27 6.73

Disposals - (2.57) (39.62) (0.72) (2.20) - (1.15) (4.17) (4.77) (2.62) (57.82) (9.25)

Carrying Value as at 31 March 2022 578.13 3168.87 9184.90 34.70 61.09 83.98 42.75 55.38 824.67 483.36 14517.83 58.73

Additions 2.70 384.16 949.86 3.67 11.39 - 5.50 15.20 158.81 41.01 1572.30 13.46

Disposals - (0.02) (73.06) (1.60) (3.28) - (3.24) (5.29) (56.95) (4.25) (147.69) (0.60)

Carrying Value as at 31 March 2023 580.83 3553.01 10061.70 36.77 69.20 83.98 45.01 65.29 926.53 520.12 15942.44 71.59

Accumulated depreciation /

Amortisation as at 31 March 2021

- 358.51 3388.51 17.42 25.51 16.23 25.40 34.75 365.63 221.97 4453.93 36.94

Depreciation / Amortisation for the year

100.27 828.64 4.87 6.93 5.92 6.08 9.49 105.84 50.02 1118.06 9.83

Disposals - (0.70) (37.62) (0.65) (1.84) - (1.12) (4.16) (4.77) (2.39) (53.25) (9.25)

Accumulated depreciation /

Amortisation as at 31 March 2022

- 458.08 4179.53 21.64 30.60 22.15 30.36 40.08 466.70 269.60 5518.74 37.52

Depreciation / Amortisation for the year

107.17 845.45 4.96 7.64 5.91 5.76 9.47 113.28 48.93 1148.57 8.73

Disposals - (0.01) (70.83) (1.52) (3.04) - (3.24) (5.29) (51.09) (3.97) (138.99) (0.60)

Accumulated depreciation /

Amortisation as at 31 March 2023

- 565.24 4,954.15 25.08 35.20 28.06 32.88 44.26 528.89 314.56 6528.32 45.65

Net Block

As at 31 March 2022 578.13 2710.79 5005.37 13.06 30.49 61.83 12.39 15.30 357.97 213.76 8999.09 21.21

As at 31 March 2023 580.83 2987.77 5107.55 11.69 34.00 55.92 12.13 21.03 397.64 205.56 9414.12 25.94

Note:

1. Freehold land includes agricultural land - `0.12 Crores (31st March, 2022 - `0.12 Crores).

2. Other assets represents Electrical Fittings, Fire Fighting/Other Equipments and Canteen Utensils.

3. The amount of Borrowing Cost capitalised during the year ended 31st March, 2023 - `6.38 Crores (31st March, 2022 - ` 1.85 Crores.)

4. Capital expenditure on Research and Development during the year - `25.15 Crores (31st March, 2022, - `6.71 Crores)

Refer Note 28 h (ii).

5. Title deeds of Freehold Land are held in the name of the Company. Title deeds in respect of Buildings which are constructed on company’s Freehold

Land is based on documents constituting evidence of legal ownership of the Buildings.

119

NOTES TO THE FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 2 (a 2): Leased Assets (` Crores)

Particulars Land Buildings Vehicles Total

Gross Block

Carrying Value as at 31 March 2021 97.84 421.66 24.93 544.43

Additions - 123.03 9.14 132.17

Disposals - (36.84) - (36.84)

Carrying Value as at 31 March 2022 97.84 507.85 34.07 639.76

Additions 3.11 250.69 26.12 279.92

Disposals - (48.73) - (48.73)

Carrying Value as at 31 March 2023 100.95 709.81 60.19 870.95

Depreciation Block

Accumulated depreciation / Amortisation as at 31 March 2021 4.46 110.93 19.66 135.05

Depreciation / Amortisation for the year 1.06 63.03 9.43 73.52

Disposals - (14.78) - (14.78)

Accumulated depreciation / Amortisation as at 31 March 2022 5.52 159.18 29.09 193.79

Depreciation / Amortisation for the year 1.06 81.39 8.85 91.30

Disposals - (24.12) - (24.12)

Accumulated depreciation / Amortisation as at 31 March 2023 6.58 216.45 37.94 260.97

Net Block

As at 31 March 2022 92.32 348.67 4.98 445.97

As at 31 March 2023 94.37 493.36 22.25 609.98

Note:

1. The Company has incurred `27.89 Crores (Previous year `21.94 Crores) for the year ended 31st March, 2023 towards expenses relating to short-term

leases and leases of low-value assets (Refer Note 23). The total cash outflow for leases is `149.19 Crores (Previous year `118.72 Crores) for the year ended

31st March, 2023, including cash outflow of short-term leases and leases of low-value assets. Interest on lease liabilities is ` 48.70 Crores (Previous year

`36.29 Crores) for the year ended 31st March, 2023 (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.

120

NOTES TO THE FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 3: INVESTMENTS

Particulars

Face

Value

No. of Shares / Units

(` Crores)

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Non-Current Investments

Fully Paid-up

Quoted

Equity Shares (at fair value through Profit or Loss) 13.04 11.00

In Debt Instruments-Bonds (at fair value through OCI) 1096.16 1122.81

Unquoted

Non-Trade - Unquoted

Others: (at fair value through Profit or Loss) * 0.07 0.07

* Note: The Company had invested in Co-operative Societies, MRF Foundation 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 its transaction value considering it to be its fair value.

Unquoted

Subsidiary Companies: (At Cost)

Ordinary Shares in MRF SG PTE LTD - 1273200 1273200 6.11 6.11

Equity Shares in MRF Corp Ltd. - ` 1500 (31.03.2022- ` 1500) 10 50100 50100 - -

Equity Shares in MRF International Ltd. 10 532470 532470 0.53 0.53

Equity Shares in MRF Lanka Pvt. Ltd. Sri Lankan Rupee 10 34160324 34160324 15.01 15.01

Total 1130.92 1155.53

Aggregate Market Value of Quoted Investments 1109.20 1133.81

Aggregate Amount of Unquoted Investments 21.72 21.72

Current Investments

Fully paid up - Unquoted

In Mutual Fund Units: (at fair value through Profit or Loss)

Income Plan: Growth Option 1974.84 2509.69

Aggregate Amount of Unquoted Investments 1974.84 2509.69

NOTE 4 : LOANS (Unsecured, considered good) (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Loans to employees 1.19 0.82 2.95 3.18

Total 1.19 0.82 2.95 3.18

121

NOTES TO THE FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 5 : OTHER FINANCIAL ASSETS (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Carried at Amortised cost:

Bank deposits with more than 12 months maturity 0.06 0.06 - -

Export Benefits Receivables - - 1.72 0.85

Interest Accrued on Loans and Deposits - - 39.09 51.50

Fixed Deposits - others - - - 600.00

Others - 52.69 62.85 105.37

Carried at Fair value through Profit & Loss:

Security Deposits 2.06 2.72 - -

Deposits 21.96 17.47 - -

Total 24.08 72.94 103.66 757.72

NOTE 6 : OTHER ASSETS (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Capital Advances 454.24 527.94 - -

Advances other than capital advances;

Security Deposits (excludes Interest accrued and due – ` 2.51 Crore, Previous year - ` 1.71 Crore)

87.36 54.97 - -

Advances to Employees - - 26.24 19.82

Sub Total 541.60 582.91 26.24 19.82

Others

Advances recoverable in cash or kind 6.30 3.14 120.23 100.39

Salary and Wage Advance - - 4.32 9.25

Prepaid Expenses - - 44.35 41.24

Others - - 43.24 43.09

Sub Total 6.30 3.14 212.14 193.97

Total 547.90 586.05 238.38 213.79

NOTE 7 : INVENTORIES (VALUED AT LOWER OF COST AND NET REALISABLE VALUE) (` Crores)

As at

31.03.2023

As at

31.03.2022

Raw Materials 1210.28 1616.15

Raw Materials in transit 112.78 98.38

Work-in-progress 365.03 394.46

Finished goods 1915.17 1561.12

Stock-in-trade 51.33 36.32

Stores and Spares 388.09 355.29

Total 4042.68 4061.72

122

NOTES TO THE FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 8 : TRADE RECEIVABLES (` Crores)

As at

31.03.2023

As at

31.03.2022

Trade receivables

Secured, considered good 1683.63 1580.15

Unsecured, considered good 758.73 703.11

Trade Receivables - credit impaired 2.08 2.08

Less: Expected Credit Loss Provision (Refer Note 25 (B) ii) (2.08) (2.08)

Total 2442.36 2283.26

Of the above, trade receivables due from a subsidiary Company (Refer Note 28 d ) 2.93 0.66

Note: The Company has used a practical expedient for computing expected credit loss allowance for trade receivables, taking into account historical credit

loss experience and accordingly, provisions are made for expected credit loss for amounts due from customers where necessary.

Trade Receivables Ageing Schedule (` Crores)

Particulars

Outstanding for following periods from

due date of payment

Total

Less than

6 months

6 months -

1 year

1-2 Years 2-3 years More than 3

years

(i) Undisputed Trade Receivables – considered good

209.67 0.57 - - - 210.24

(270.93) (6.51) - - - (277.44)

(ii) Undisputed Trade Receivables – credit impaired

- - 0.07 0.09 1.92 2.08

- (0.07) (0.09) (1.92) - (2.08)

(iii) Amount Not Due

- - - - - 2232.12

- - - - - (2005.82)

Total Gross

2444.44

(2285.34)

Allowance for Expected Credit Loss

2.08

(2.08)

Total

2442.36

(2283.26)

Figures in brackets are in respect of Previous year

123

NOTES TO THE FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 9 : CASH AND CASH EQUIVALENTS (as per Cash Flow Statement) (` Crores)

As at

31.03.2023

As at

31.03.2022

Balances with Banks

- In Current accounts 107.94 81.80

Cheques, drafts on hand; and 37.62 30.55

Cash on hand 0.75 0.76

Total 146.31 113.11

NOTE 10 : BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS (` Crores)

As at

31.03.2023

As at

31.03.2022

Unclaimed Dividend Account 2.76 1.74

Unspent CSR Account 7.22 -

Total 9.98 1.74

NOTE 11 : BORROWINGS (` Crores)

As at

31.03.2023

As at

31.03.2022

NON CURRENT

Secured

Term loans from Banks;

Soft loan from SIPCOT (At amortised cost) 71.37 64.12

Unsecured

Debentures;

Floating Rate linked to 6 months T Bill - 15000 Nos. Unsecured Redeemable

Non-convertible Debentures of `1,00,000/- each.

150.00 -

Term loans from Banks;

- Rupee Term Loan (At amortised cost) 599.99 749.99

Others

Deferred Payment Liabilities (At amortised cost) 2.22 3.10

Sub Total 823.58 817.21

CURRENT

Secured (At amortised cost)

Loans repayable on demand

- From banks 997.34 885.00

- Interest accrued on above 1.11 1.31

Unsecured

Current maturities of long-term debt 150.88 291.69

- Interest accrued on above 4.17 8.51

Sub Total 1153.50 1186.51

Total 1977.08 2003.72

Note: Security and terms of repayment in respect of above borrowings are detailed in Note 28 i

124

NOTES TO THE FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

Reconciliation of Financing Liabilities (` Crores)

As at

31.03.2023

As at

31.03.2022

Opening balance

- Long Term Borrowings 817.21 811.76

- Current borrowings 885.00 40.02

- Current maturities of long term debt 291.69 267.11

- Interest accrued on debt 9.82 27.14

Total - A 2003.72 1146.03

a) Cash flow movements

- Proceeds from borrowings 270.10 1,144.97

- Repayment of borrowings (289.37) (266.68)

b) Non-cash movements

- Effect of amortization of loan origination costs (0.51) 0.99

- Foreign exchange translation (2.32) (4.27)

- Interest Accrued on debt (4.54) (17.32)

Total - B (26.64) 857.69

Closing Balance (A+B) 1977.08 2003.72

Closing Balance Break Up

- Long Term Borrowings 823.58 817.21

- Current borrowings 997.34 885.00

- Current maturities of long term debt 150.88 291.69

- Interest accrued on debt 5.28 9.82

NOTE 12 : PROVISIONS (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Provision for employee benefits (Refer Note 28 c) 53.62 51.09 45.92 17.65

Others:

- Warranty and others (Refer Note 28 c) 161.40 167.58 187.02 162.39

Total 215.02 218.67 232.94 180.04

125

NOTES TO THE FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 13 : DEFERRED TAX LIABILITIES - (NET) (` Crores)

As at

31.03.2023

As at

31.03.2022

Deferred Tax Liabilities:

- Arising on account of difference in carrying amount and tax base of PPE and Intangibles 424.90 428.45

- Unrealised gain/(loss) on FVTPL debt Mutual Funds 45.29 30.20

- Other adjustments 13.73 12.11

Sub Total 483.92 470.76

Deferred Tax Asset:

- Accrued Expenses allowable on Actual Payments 42.35 28.69

- On remeasurements of defined benefit plans 28.48 26.74

- Unrealised gain/(loss) on FVTOCI Debt Instruments 7.98 1.44

- On revaluation of designated cash flow hedges 6.38 6.29

- On Right of Use Asset 17.06 14.30

Sub Total 102.25 77.46

Total 381.67 393.30

NOTE 14 : OTHER LIABILITIES (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Contract Liabilities - - 32.82 43.27

Others;

Dealers' Security Deposit - - 1770.68 1679.81

Retention Money 13.18 16.90 139.02 76.23

Statutory Dues - - 341.26 410.51

Deferred Income 220.62 164.27 21.84 23.54

Others 0.99 1.37 19.12 12.93

Total 234.79 182.54 2324.74 2246.29

Movement of contract liabilities is as under:

(` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

As at beginning of the year 43.27 31.41

Recognised as revenue from contracts with customers (43.27) (31.41)

Advance from customers received during the year 32.82 43.27

Balance at the close of the year 32.82 43.27

126

NOTES TO THE FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 15 : TRADE PAYABLES (` Crores)

As at

31.03.2023

As at

31.03.2022

Outstanding dues of Micro and Small Enterprises (Refer Note 28 f) 72.72 58.26

Outstanding dues of Creditors other than Micro and Small Enterprises 2,684.73 2,716.06

Total 2,757.45 2,774.32

Of the above;

- Acceptances 413.00 427.14

- Payable to Subsidiary Companies (net of receivables of ` 0.60 Crores, Previous year - ` 0.74) (Refer Note 28 d)

437.15 808.28

Trade Payables ageing schedule (` Crores)

Particulars Outstanding for following periods from

due date of payment

Total

Less than 1

year

1-2 years 2-3 years More than 3

years

(i) MSME 2.15 0.03 0.14 0.01 2.33

(1.58) - - - (1.58)

(ii) Others 186.67 7.70 6.70 32.30 233.37

(374.34) (2.46) (14.02) (20.67) (411.49)

(iii) Amounts not due 2521.75

- - - - (2361.25)

Figures in brackets are in respect of Previous year

NOTE 16 : OTHER FINANCIAL LIABILITIES (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Carried at Amortised Cost :

Unclaimed dividends - - 2.76 1.74

Employee benefits - - 121.86 101.15

Liabilities for expenses - 106.83 187.38 111.62

Others - - 493.99 180.95

Carried at Fair Value :

Derivative Financial Liabilities (FVTOCI ) - - (0.53) 3.59

Derivative Financial Liabilities (FVTPL) - - 1.62 0.42

Total - 106.83 807.08 399.47

127

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 17 : REVENUE FROM OPERATIONS (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Revenue from Contracts with Customers:

Sale of Goods (Refer note 28 e) 22395.20 18679.33

Sale of Services 26.44 20.87

Other Operating Revenues:

Scrap Sales 138.89 121.91

Subsidy from State Government 17.70 167.40

Total

22578.23 18989.51

The Management determines that the segment information reported is sufficient to meet the disclosure objective with respect to disaggregation of revenue

under IND AS 115 “Revenue from contracts with customers”. Hence no separate disclosure of disaggregate revenues are reported. (Refer Note 28 e)

Reconciliation of revenue recognised with the contracted price is as follows:

(` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Gross Sales (Contracted Price) 23345.01 19635.01

Reductions towards variable consideration (Product, Turnover and Prompt payment discount) (446.24) (399.53)

Claims preferred against obligation(Note 1(C-13) and 28(c(i))) (320.54) (245.97)

Revenue recognised 22578.23 18989.51

NOTE 18 : OTHER INCOME (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Interest Income 101.59 99.08

Dividend Income from Non-Current Investment

- From a Subsidiary 0.10 0.10

- Others 0.02 0.05

Government Grant :

- Export Incentives 6.52 15.09

- Others 20.15 17.40

Net gain on sale of Investments classified as FVTPL 2.64 6.83

Net gain on fair value changes on financial assets classified as FVTPL 103.85 155.43

Miscellaneous Income 13.34 20.94

Total 248.21 314.92

Net gains (losses) on fair value changes

(` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Equity Investments designated at FVTPL 2.04 2.57

Debt Mutual Fund Investments designated at FVTPL 101.81 152.86

Total Net gains (losses) on fair value changes 103.85 155.43

128

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 19 : COST OF MATERIALS CONSUMED (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Opening Stock of Raw Materials 1714.53 1402.32

Purchases during the year 15135.43 13566.66

Closing Stock of Raw Materials (1323.06) (1714.53)

Total 15526.90 13254.45

NOTE 20 : CHANGES IN INVENTORIES OF FINISHED GOODS, STOCK-IN-TRADE AND WORK-IN-PROGRESS (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Closing Stock:

Finished Goods 1915.17 1561.12

Stock-in-Trade 51.33 36.32

Work-in-Progress 365.03 394.46

2331.53 1991.90

Less: Opening Stock:

Finished Goods 1561.12 785.78

Stock-in-Trade 36.32 36.15

Work-in-Progress 394.46 325.05

1991.90 1146.98

Total (339.63) (844.92)

NOTE 21 : EMPLOYEE BENEFITS EXPENSE (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Salaries and Wages 1274.22 1189.24

Contribution to provident and other funds 119.00 112.15

Staff welfare expenses 165.65 170.55

Total 1558.87 1471.94

NOTE 22 : FINANCE COSTS (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Interest on Loans and Deposits 244.27 203.00

Interest on Debentures* - 2.78

Interest on Deferred Payment Credit 0.41 0.50

Interest on Lease liabilities (Refer Note 2 (a 2)) 48.70 36.29

Other Borrowing Costs;

Unwinding of discount relating to Long Term Liabilities 4.36 3.98

Other Charges 0.32 0.46

Total 298.06 247.01

*Interest on Debenture capitalised during the year `0.90 Crores (Previous year `Nil).

129

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 23 : OTHER EXPENSES (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Stores and Spares 414.54 386.20

Power and Fuel 1134.47 930.93

Processing Expenses 255.82 266.42

Rent (Refer Note 2 (a 2)) 27.89 21.94

Rates and Taxes 15.41 14.18

Insurance 58.15 61.30

Printing and Stationery 10.05 9.36

Repairs and Renewals:

Buildings 25.70 20.39

Plant and Machinery 159.08 152.33

Other Assets 91.48 82.38

Travelling and Conveyance 41.82 25.00

Communication Expenses 7.61 6.72

Vehicle Expenses 12.25 10.93

Auditors' Remuneration:

As Auditors:

Audit fee 0.89 0.79

Tax Audit fee 0.16 0.14

Other Services 0.12 0.06

Reimbursement of Expenses 0.13 0.06

1.30 1.05

Cost Auditors Remuneration:

Audit fee 0.08 0.08

Directors' Fees 0.14 0.13

Directors' Travelling Expenses 9.04 2.81

Advertisement 223.29 178.62

Warranty (Refer note 28c) 18.99 14.06

VAT absorbed by the company - 0.02

Bad debts written off - 0.21

Commission 1.35 1.75

Freight and Forwarding (Net) 714.14 693.45

Loss on Sale of Fixed Asset (Net) 7.65 2.20

Net Loss on Foreign Currency Transactions 26.87 46.23

Bank Charges 6.00 7.56

Provision for Impairment of Assets (other than Financial Assets) - 7.10

Provision for Impairment of Financial Assets - 0.30

Corporate Social Responsibility Expenditure (Refer Note 28m) 29.13 33.92

Miscellaneous Expenses 167.29 100.80

Total 3459.54 3078.37

130

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 24 : (` Crores)

Exceptional Items Year Ended

31.03.2023

Year Ended

31.03.2022

Additional Income arising out of Arm’s Length Pricing on Covered Transaction as per the Bilateral Advance Pricing

Agreement (Refer Note)

80.33 -

Total

80.33 -

Consequent to the Bilateral Advance Pricing Agreement (BAPA) signed by the Company with the Central Board of Direct Taxes (CBDT) for the financial years

2015-16 to 2023-24, with respect to Arm’s Length Price (ALP) of the transactions under the Income Tax Act, with MRF SG PTE LTD (MRF SG), the wholly

owned subsidiary, the amount determined as payable by MRF SG to the Company is `80.33 Crores (net of interest on tax of `2.10 Crores), which has since

been received by the company. The income tax impact on account of this refund has been disclosed as relating to earlier years.

NOTE 25 :

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.

(` Crores)

Particulars 31.03.2023 31.03.2022

Interest bearing Loans and Borrowings 1989.10 2008.38

Less: Cash and Short Term Deposits (146.31) (113.11)

Net Debt 1842.79 1895.27

Equity

4.24 4.24

Other Equity 14504.63 13773.03

Total Capital

14508.87 13777.27

Capital and Net Debt

16351.66 15672.54

Gearing Ratio % 11.27% 12.09%

B. Financial Risk Management

The Company’s principal financial liabilities comprise loans and borrowings, 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.

131

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

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 and Foreign currency, to meet both the long term and short term funding requirements.The Interest

rate risk in terms of Foreign currency is managed through financial instruments available to convert floating rate liability into fixed rate liability. 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 0.50% to 1% higher / lower and all other variables held constant, the company’s profit for the year ended 31st March,

2023 would have been decreased / increased by `10.66 Crores (Previous year `4.54 Crores).

b) Currency Risk :

Foreign currency risks from financial instruments at the end of the reporting period expressed in INR:

Unhedged Short Term Exposures: (` Crores)

31.03.2023 31.03.2022

Financial Assets 199.27 253.61

Financial Liabilities 178.79 212.40

The company is mainly exposed to changes in US Dollar. The sensitivity to a 4% (Previous year 2%) increase or decrease in US Dollar against INR

with all other variables held constant will be +/( - ) `1.37 Crores (previous year `0.87 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 External Commercial borrowings and 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.

The outstanding position and exposures are as under :

i) Foreign Currency forward contracts designated as Hedge Instruments:

Currency Amount

` Crores

Nature Cross Currency

Currency/Interest Rate Swap USD - Million - ECB Loan

INR

(45.00) Million (288.59)

Forward Contract USD 101.68 Million 844.11 Import purchase

(135.18) Million (1042.38)

Figures in brackets are in respect of Previous year

132

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

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.

ii) Other Forward Contract Outstanding :

Currency Amount

` Crores

Nature Cross Currency

Forward Contract USD 30.49 Million 252.84 Import purchase INR

(24.96) Million (190.91)

Figures in brackets are in respect of Previous year

iii) The following table provides the reconciliation of cash flow hedge for the year ended 31st March, 2023:

(` Crores)

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

Balance at the beginning of the year 3.28 1.59

Gain / (Loss) recognized in other comprehensive income during the year net of tax 0.25 1.69

Balance at the end of the year 3.53 3.28

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 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 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 2023 the investments in debt mutual funds and bonds amounts to `3071 Crores (Previous year `3632.50 Crores). A 1% point increase

or decrease in the NAV with all other variables held constant would have lead to approximately an additional `31 Crores (Previous year `36 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., Investments in Equity Shares, Bonds, Debt 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, 2023 is 0.02%(31st March, 2022 0.25%) of the total trade receivables.

133

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

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 31 March, 2023 was ` 2.08 Crores and for the year ended 31 March, 2022 was ` 2.08 Crores.

(` Crores)

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

Balance at the beginning 2.08 2.45

Impairment loss recognised - 0.30

Impairment loss reversed - 0.67

Balance at the end 2.08 2.08

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 funds, which have high safety ratings and are monitored on a monthly basis and 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 borrowings 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 details of the contractual maturities of significant financial liabilities as at 31st March, 2023 are as under:

(` Crores)

Particulars Refer Note Less than 1 year 1-3 years 3-5 years More than 5 years

Borrowings Note 11 and 14 1153.50 452.22 299.99 88.67

(1186.51) (251.87) (401.21) (180.92)

Trade Payable Note 15 2757.45 - - -

(2774.32) (-) (-) (-)

Other Financial Liabilities Note 16 682.46 - - -

(296.58) (106.83) (-) (-)

Employee Benefit liabilities Note 16 121.86 - - -

(101.15) (-) (-) (-)

134

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 26 :

A) Fair Values and Hierarchy

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments, other than those with carrying

amounts that are reasonable approximations of fair values:

(` Crores)

Particulars Hierarchy

Carrying Value/ Fair Value

As at

31.03.2023

As at

31.03.2022

Financial Assets

- Investments Level One 3084.04 3643.50

- Others financial assets Level One 21.96 17.47

Financial Liabilities

- Borrowings Level Two - 290.91

- Derivative Financial Liabilities (Net) Level Two 1.09 4.01

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 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

Interest Rate swaps, foreign exchange forward contracts are valued using valuation techniques which employs the use of market observable inputs

namely, Marked-to-Market.

Particulars Refer Note Less than 1 year 1-3 years 3-5 years More than 5 years

Unclaimed dividends Note 16 2.76 - - -

(1.74) (-) (-) (-)

Lease Liabilities 75.49 155.79 151.01 201.82

(60.08) (108.02) (106.63) (136.22)

Figures in brackets are in respect of Previous year

135

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 27 : Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate (` Crores)

Particulars Year Ended

31.03.2023

Year Ended

31.03.2022

Accounting Profit before Income Tax 1119.20 879.16

At statutory income tax rate of 25.168% 281.68 221.27

Short provision of tax for earlier assessment years 13.18 -

Effect of non-deductible expenses/other adjustments 9.15 11.59

Effect of deductions available under Income Tax Act (1.04) (1.04)

Total 302.97 231.82

NOTE 28: 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).

b. Lease Disclosure:

Maturity analysis of lease liabilities

(` Crores)

Maturity Analysis - Contractual undiscounted cash flows 31.03.2023 31.03.2022

Less than 1 year 127.17 100.80

1-5 years 467.96 369.82

More than 5 years 238.85 158.24

Total undiscounted lease liabilities as at 31st March, 2023 833.98 628.86

c. Movement in provisions as required by IND AS - 37 - “Provisions, Contingent Liabilities and Contingent Asset”.

(` Crores)

As at

31.03.2022

Provided

during the year

Used during

the year

Reversed during

the year

Unwinding

discounts

As at

31.03.2023

(i) Warranty 255.58 338.84 320.54 - (3.46) 277.34

(238.82) (263.86) (245.97) - (1.13) (255.58)

(ii) Employee Benefits 68.74 30.80 - - - 99.54

(102.16) (12.58) (46.00) - - (68.74)

(iii) Litigation and related disputes 58.09 0.20 0.71 5.35 - 52.23

(70.00) (4.20) - (16.11) - (58.09)

(iv) Corporate Social Responsibility (CSR) 16.30 11.64 9.09 - - 18.85

- (16.30) - - - (16.30)

136

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

Notes :

(i) Cash outflow towards warranty provision would generally occur during the next two years.

(ii) Provision for employee benefits includes gratuity, post retirement benefits and compensated absence.

(iii) Litigation and related disputes represents estimates mainly for probable claims arising out of litigation/disputes pending with authorities under

various statutes (i.e. Service Tax, Excise and Customs Duty, Electricity/Fuel Surcharge, Cess). The probability and the timing of the outflow with

regard to these matters will depend on the final outcome of the litigations/disputes.

(iv) Cash outflow towards CSR provision would generally occur during the next three years.

(v) Figures in brackets are in respect of Previous year.

d. Related party disclosures:

(a) Names of related parties and nature of relationship where control exists are as under:

Subsidiary Companies : i) MRF Corp Ltd.

ii) MRF International Ltd.

iii) MRF Lanka (Private) Ltd.

iv) MRF SG PTE. LTD

(b) Names of related parties and nature of relationship with whom transactions have taken place:

Key Management Personnel (KMP) : i) Mr. K.M. Mammen, Chairman and Managing Director

ii) Mr. Arun Mammen, Vice Chairman and Managing Director

iii) Mr. Rahul Mammen Mappillai, Managing Director

iv) Mr. Samir Thariyan Mappillai, Whole-time Director

v) Mr. Varun Mammen, Whole-time Director

vi) Mr. S. Dhanvanth Kumar, Company Secretary

vii) Mr. Madhu P Nainan, Executive Vice President Finance

Close Members of the family of KMP : i) Mrs. Ambika Mammen, Director (Wife of Chairman and Managing Director)

ii) Dr. (Mrs) Cibi Mammen, Director (Wife of Vice Chairman and Managing Director)

iii) Mrs. Meera Mammen (Mother of Mr. Varun Mammen)

Companies in which Directors Badra Estate & Industries Limited, Devon Machines Pvt. Ltd., Coastal Rubber Equipments Pvt. Ltd.

are interested : Braga Industries LLP, Jcee Manufacturing & Services Pvt Ltd, Balanoor Plantations

and Industries Limited, Funskool (India) Ltd., VPC Freight Forwarders Pvt. Ltd, The Malayala

Manorama Co. Private Limited, Tarapore and Company, Tarapore Constructions Private Limited,

The J.H Tarapore Foundation.

Other Related Parties Mr.Jacob Kurian-Director, MRF Ltd. Executives Provident Fund Trust, MRF Management Staff

Gratuity Scheme, MRF Employees Gratuity Scheme, MRF Managers’ Superannuation Scheme,

MRF Foundation. Mr. Philip Eapen, Mr. Mammen Eapen, Mr. Zachariah Kurian, Mr. George Mammen,

Mr. Mammen A Mathew

137

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

Nature of Transaction

Subsidiary

Companies

KMP Close member of

the KMP

Companies in

which Directors

are interested

Other Related

Parties

Year Ended

31 March 2023

Year Ended

31 March 2023

Year Ended

31 March 2023

Year Ended

31 March 2023

Year Ended

31 March 2023

i) Sale of Materials 3.95 - - 0.90 0.15

(0.01) - - (5.00) (0.55)

ii) Purchase of Materials/Machinery 1971.55 - - 249.78 -

(2049.50) - - (180.84) -

iii) Sale of Finished Goods 2.10 - - - -

(1.43) - - - -

iv) Payment towards Service - - - 16.24 -

- - - (17.82) -

v) Selling and Distribution Expenses - - - 1.48 -

- - - (1.72) -

vi) Dividend Received 0.10 - - - -

(0.10) - - - -

vii) Other Receipts 82.58 - - 2.02 -

(0.15) - - (1.84) -

viii) Professional charges - - - - 0.49

- - - - (0.17)

ix) Contribution to Retirement Benefit fund /Others - - - - 60.91

- - - - (94.87)

Compensation*

x) Short term Employee benefit (including

Commission payable to KMP)

- 93.86 2.63 - 1.52

- (82.96) (2.40) - -

xi) Sitting fees - - 0.02 - -

- - (0.02) - -

* Remuneration does not include provisions made for Gratuity and Leave benefits as they are determined on an actuarial basis for the Company as a whole.

138

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

Nature of Transaction

Subsidiary

Companies

KMP Close member of

the KMP

Companies in

which Directors

are interested

Other Related

Parties

Year Ended

31 March 2023

Year Ended

31 March 2023

Year Ended

31 March 2023

Year Ended

31 March 2023

Year Ended

31 March 2023

Outstanding as at Year End

xii) Investments 21.65 - - - -

(21.65) - - - -

xiii) Trade Receivables 2.93 - - - -

(0.66) - - - -

xiv) Other Receivables 0.60 - - 1.78 0.04

(0.74) - - (26.55) (0.04)

xv) Trade Payables 437.75 - - 29.34 -

(809.02) - - (16.44) -

xvi) Commission Payable - 38.28 - - -

- (30.57) - - -

xvii) Contribution payable to Retirement Benefit fund/

Others

- - - - 40.61

- - - - (13.43)

Figures in brackets are in respect of Previous year

(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 2023, 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.

e. 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.

Entity wide disclosure required by IND AS 108 are as detailed below: (` Crores)

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

(i) Products:

Automobile Tyres 20665.22 17048.83

Automobile Tubes 1336.42 1233.43

Others 393.56 397.07

22395.20 18679.33

139

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

(ii) Revenue from Customers:

India 20529.08 16900.00

Outside India 1866.12 1779.33

22395.20 18679.33

(iii) Non Current Assets:

India 15062.53 12749.13

Outside India 0.06 0.06

(iv) There are no transactions with single customer which amounts to 10% or more of the Company’s revenue.

f. Disclosures under The Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED’):

The details of liabilities to Micro and Small Enterprises, to the extent information available with the Company are given under:

(` Crores)

Particulars 31.03.2023 31.03.2022

(i) Principal amounts remaining unpaid to suppliers as at the end of the accounting year 72.72 58.26

(ii) Interest accrued and due to suppliers on above amount, unpaid 0.19 0.18

(iii) The amount of interest paid by the buyer in terms of Section 16 of the MSMED Act, 2006, along with the

amounts of the payment made to the Supplier beyond the appointed day during the accounting year

0.23 -

(iv) The amount of interest due and payable for the period of delay in making payment (which have been paid

but beyond the appointed day during the year) but without adding the interest specified under MSMED Act, 2006

0.05 0.04

(v) The amount of interest accrued and remaining unpaid at the end of the accounting year 0.01 0.22

(vi) The amount of further interest remaining due and payable even in succeeding years, until such date when

the interest dues are actually paid to the small enterprise for the purpose of disallowance as a deductible

expenditure under section 23 of MSMED Act, 2006

1.10 1.09

g. Disclosures as per IND AS - 19 - Employee Benefits

1) The contributions to MRF Limited Executives Provident Fund Trust is a defined benefit plan in terms of the definition mentioned in para 7 of IND

AS -19 the accounting for which is to be done on an actuarial basis. The actuary has provided a valuation of provident fund liability based on the

assumptions listed below and determined that there is no shortfall as at 31st March, 2023 and for the year ended 31st March 2022.

The details of fund and plan assets are given below :

(` Crores)

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

Fair value of plan assets 371.01 326.07

Present value of defined benefit obligations 355.94 317.59

Net excess/(Shortfall) 15.07 8.48

The plan assets have been primarily invested in Government securities, Corporate bonds and Exchange Traded Funds

140

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

The principal assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Projection is restricted to five years or earlier, if retirement occurs.

Expected guaranteed interest rate - 8.15%( Previous Year -8.10%)

Discount rate -7.50% (Previous Year - 7.30%)

2) During the year, the company has recognised the following amounts in the Statement of Profit and Loss:

(` Crores)

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

i) Employer's contribution to Provident Fund and Family Pension Fund 68.02 63.34

ii) Employer's contribution to Superannuation Fund 20.64 18.74

iii) Leave Encashment - Unfunded 13.83 10.62

iv) Defined benefit obligation:

a) Post Retirement Medical Benefit - Unfunded 0.24 0.23

b) The valuation results for the defined benefit gratuity plan as at 31-3-2023 are produced in the tables below:

i) Changes in the Present Value of Obligation

(` Crores)

Particulars Year Ended

31.03.2023

Year Ended

31.03.2022

Present Value of Obligation as at the beginning 450.87 434.13

Current Service Cost 24.24 23.21

Interest Expense or Cost 32.89 29.50

Re-measurement (or Actuarial) (gain) / loss arising from:

- change in demographic assumptions - -

- change in financial assumptions (8.66) (21.36)

- experience variance (i.e. Actual experience vs assumptions) 9.38 8.18

Past Service Cost - -

Benefits Paid (24.25) (22.79)

Present Value of Obligation as at the end 484.47 450.87

ii) Changes in the Fair Value of Plan Assets

(` Crores)

Particulars Year Ended

31.03.2023

Year Ended

31.03.2022

Fair Value of Plan Assets as at the beginning 438.67 388.28

Investment Income 32.00 26.38

141

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

(` Crores)

Particulars Year Ended

31.03.2023

Year Ended

31.03.2022

Employer's Contribution - 46.00

Benefits Paid (24.25) (22.79)

Return on plan assets, excluding amount recognised in net interest expense (1.29) 0.80

Fair Value of Plan Assets as at the end 445.13 438.67

iii) Expenses Recognised in the Income Statement

(` Crores)

Particulars Year Ended

31.03.2023

Year Ended

31.03.2022

Current Service Cost 24.24 23.21

Past Service Cost - -

Net Interest Cost / (Income) on the Net Defined Benefit Liability / (Asset) 0.89 3.12

Payable/(Recoverable) to/ from a subsidiary company (0.74) (0.64)

Expenses Recognised in the Income Statement 24.39 25.69

iv) Other Comprehensive Income

(` Crores)

Particulars Year Ended

31.03.2023

Year Ended

31.03.2022

Actuarial (gains) / losses

- change in demographic assumptions - -

- change in financial assumptions (8.66) (21.36)

- experience variance (i.e. Actual experience vs assumptions) 9.38 8.18

Return on plan assets, excluding amount recognised in net interest expense 1.29 (0.80)

Payable/(Recoverable) from a subsidiary company 0.14 (0.09)

Components of defined benefit costs recognised in other comprehensive income 2.15 (14.07)

v) Major categories of Plan Assets (as percentage of Total Plan Assets)

Particulars As at

31.03.2023

As at

31.03.2022

Funds managed by Insurer 100% 100%

- In the absence of detailed information regarding Plan assets which is funded with Insurance Company, the composition of each major

category of Plan assets, the percentage or amount for each category to the fair value of Plan assets has not been disclosed.

- The group gratuity Policy with LIC includes employees of MRF Corp Ltd., a Subsidiary Company.

142

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

vi) Actuarial Assumptions

a. Financial Assumptions

The principal financial assumptions used in the valuation are shown in the table below:

Particulars

As at

31.03.2023

As at

31.03.2022

Discount rate (per annum) 7.50% 7.30%

Salary growth rate (per annum) 5.50% 5.50%

b. Demographic Assumptions

Particulars

As at

31.03.2023

As at

31.03.2022

Mortality Rate % of IALM 2012-14 (% of IALM 2006-08) 100% 100%

Withdrawal rates, based on age: (per annum)

Up to 30 years 3.00% 3.00%

31 - 44 years 2.00% 2.00%

Above 44 years 1.00% 1.00%

vii) Amount, Timing and Uncertainty of Future Cash Flows

a. Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and

mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at

the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below:

(` Crores)

Particulars As at

31.03.2023

As at

31.03.2022

Defined Benefit Obligation (Base) 484.47 450.87

Particulars

31.03.2023 31.03.2022

Decrease Increase Decrease Increase

Discount Rate (- / + 1%) 530.74 444.60 495.50 412.48

(% change compared to base due to sensitivity) 9.60% -8.20% 9.90% -8.50%

Salary Growth Rate (- / + 1%) 443.48 531.27 411.48 495.92

(% change compared to base due to sensitivity) -8.50% 9.70% -8.70% 10.00%

Attrition Rate (- / + 50%) 481.65 487.04 448.63 452.90

(% change compared to base due to sensitivity) -0.60% 0.50% -0.50% 0.50%

Mortality Rate (- / + 10%) 483.67 485.27 450.12 451.61

(% change compared to base due to sensitivity) -0.20% 0.20% -0.20% 0.20%

Please note that the sensitivity analysis presented above may not be representative of the actual change in the defined benefit

obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may

be correlated.

143

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

There is no change in the method of valuation for the prior period. For change in assumptions please refer to Section 6 above,

where assumptions for prior period, if applicable, are given.

b. Asset Liability Matching Strategies

The scheme is managed on funded basis.

c. Effect of Plan on Entity’s Future Cash Flows

- Funding arrangements and Funding Policy

The scheme is managed on funded basis.

(` Crores)

- Expected Contribution during the next annual reporting period

31.03.2023 31.03.2022

The Company's best estimate of Contribution during the next year

33.41 32.28

- Maturity Profile of Defined Benefit Obligation

Weighted average duration (based on discounted cash flows)

9 years 10 years

(` Crores)

- Expected cash flows over the next (valued on undiscounted basis):

31.03.2023 31.03.2022

1 year

58.34 46.12

2 to 5 years

163.81 148.35

6 to 10 years

220.41 203.02

More than 10 years

682.50 645.96

v) Other Long Term Employee Benefits:

(` Crores)

Particulars As at

31.03.2023

As at

31.03.2022

Present value of obligation as at:

Leave Encashment 53.42 49.98

Post Retirement Medical Benefits 6.78 6.56

144

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

h. (i) Revenue expenditure on Research and Development activities during the year ended 31st March, 2023:

(` Crores)

Particulars Year Ended 31.03.2023 Year Ended 31.03.2022

1) Salaries Wages and Other Benefits 47.87 43.19

2) Repairs, and Maintenance 15.43 15.63

3) Power 10.13 7.81

4) Travelling and Vehicle Running 4.03 2.48

5) Cost of Materials/Tyres used for Rallies / Test Purpose 16.23 11.36

6) Other Research and Development Expenses 16.23 15.15

109.92 95.62

(ii) Capital Expenditure on Research and Development during the year, as certified by the management is ` 25.15 Crores (Previous year - ` 6.71 Crores).

This information complies with the terms of the Research and Development recognition granted upto 31st March, 2024 for the Company’s in-house

Research and Development activities by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of

India, vide their Letter No.TU/IV-RD/118/2021 dated 20th October, 2021.

i. 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 4.00% to 7.90% (Previous year 3.8% to 6.85%).

Quarterly returns or statements of current assets filed by the Company with the banks in connection with the working capital limit sanctioned

are in agreement with the books of accounts.

b) Non Current Borrowings

i) Indian Rupee Term Loan (Unsecured) from the HSBC Bank

a) Indian Rupee Term Loan of ` 150 Crores availed in February, 2019 is for capital expenditure. Interest is payable at a rate equal to

the three months T-Bill rate plus a margin of 1.49% (Previous year- 1.49%) payable monthly. The said Loan is repayable in one full

installment in Febuary, 2024.

b) 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 months 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.

145

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

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 quarterly 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.

j. Inventories

Provision for obsolescence and Non-moving stocks for the year amounts to `0.01 Crores (Previous year - `16.70 Crores) net of reversal.The amount of

write down of inventories to net realizable value recognised as an expenses was `4.31 crores( Previous year - `15.44 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 `15637.04 Crores (Previous year - `12812.74 Crores).

k. Managerial Remuneration

During the current financial year ended 31st March 2023, the company has complied with the provisions of Sections 197 & 198 of the Companies Act,

2013 in respect of payment of remuneration to managerial personnel. Further, necessary approval is being sought from the shareholders of the Company

in compliance with the provision of Regulation 17(6)(e)(ii) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of

remuneration of Promoter Executive Directors of the Company.

l. The amount due and paid during the year to “Investor Education and Protection Fund” is ` 0.05 Crores (Previous year - ` 0.38 Crores).

m. 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 2023

amounts to `29.13 crores (Previous year `33.92 crores). A CSR Committee has been formed by the Company as per the Act. During the financial year

ended 31st March 2023, the Company has incurred an amount of `17.49 Crores.

Amount spent during the year on:

(` Crores)

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

1) Amount required to be spent by the company during the year 29.13 33.92

2) Amount of expenditure incurred on:

(i) Construction/acquisition of any asset 7.60 8.57

(ii) On Purposes other than (i) above 9.89 9.05

3) Shortfall at the end of the year 11.64 16.30

4) Total of previous years shortfall - -

5) Reason for shortfall - * -

6) Nature of CSR activities - ** - **

7) Details of related party transactions in relation to CSR expenditure as per relevant Accounting Standard

- Contribution to MRF Foundation in relation to CSR expenditure 15.66 16.42

*The shortfall in CSR expenditure was on account of delay in implementation of projects and project duration extending beyond one financial year as per

their original schedule of implementation. The shortfall is transfered to unspent CSR Bank account on 25th April, 2023 (Previous year 27th April, 2022).

The amount spent, during the year, out of the shortfall at the end of the previous year is ` 9.09 Crores.

**Disaster Management including Relief, Promotion of Education, Environmental Sustainability, Livelihood enhancement, Vocational Skill development,

Promoting Health care, Safe drinking water, Training for Sports, Sanitation and Hygiene, Rural Development projects.

146

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

n. Earnings Per Share (Basic and Diluted)

Particulars Year Ended

31.03.2023

Year Ended

31.03.2022

Profit after taxation after Exceptional Item ` Crores 816.23 647.34

Profit after taxation before Exceptional Item ` Crores 735.90 647.34

Number of equity shares (Face Value `10/-) Nos. 4241,143 4241,143

Earnings per share after Exceptional Item ` 1924.56 1526.34

Earnings per share before Exceptional Item ` 1735.15 1526.34

o. Events Occuring after the Balance Sheet date

The proposed final dividend for Financial Year 2022-23 amounting to `71.68 Crores will be recognised as distribution to owners during the financial

year 2023-24 on its approval by Shareholders. The proposed final dividend amounts to `169/- per share.

p. Capital and Other Commitments

(i) Estimated amount of contracts remaining to be executed on Capital Account, net of advances and not provided for - ` 2185.02 Crores (Previous

Year `3031.32 Crores)

(ii) Guarantees given by the Banks - ` 130.78 Crores (Previous Year - ` 43.84 Crores)

(iii) Letters of Credit issued by the Banks - ` 265.58 Crores (Previous Year - ` 182.45 Crores)

(iv) Commitments relating to Lease arrangements - Refer Note 28 (b)

(v) Derivative contract related commitments - Refer Note 25B(i)(b)

q. (i) Key Financial Ratios

SI.

No.

Description Numerator Denominator 2022-23 2021-22 Change in

Percentage (%)

Reasons for Change if

variation is more than 25%

1. Current Ratio Current Assets Current Liabilities 1.22 1.45 (16)

2. Debt Equity Ratio Long Term Debt Shareholder's Equity 0.07 0.08 -

3. Debt Service Coverage

Ratio

EBITDA Interest Expense + Principal

Repayments

4.71 4.83 (2)

4. Return on Equity (%) PAT (After

Exceptional item)

Average Shareholder's

Equity

5.77% 4.80% 20

5. Inventory Turnover Ratio Cost of Sales Average Inventory 5.47 5.45 -

6. Trade Receivables

Turnover Ratio

Net Credit Sales Average Trade Receivables 9.55 8.56 12

7. Trade Payables Turnover

Ratio

Net Credit

Purchases

Average Trade Payables 4.55 3.88 17

8. Net Capital Turnover Ratio Net Sales Working Capital 14.02 6.13 129 Increase in ratio is due to

reduction in working capital

for current year

9. Net Profit Margin (%) PAT (After

Exceptional item)

Total Income 3.58% 3.35% 7

147

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

SI.

No.

Description Numerator Denominator 2022-23 2021-22 Change in

Percentage (%)

Reasons for Change if

variation is more than 25%

10. Return on Capital

Employed (%)

EBIT (Excl Other

income and

Exceptional item)

Capital Employed 6.54% 5.13% 28 Increase in percentage is

due to increase in EBIT for

current year

11. Return on Investment Income

generated from

Invested funds

Time weighted average

of investments (includes

Quoted Equity shares,Debt

instruments-Bonds and

Unquoted mutual funds)

5.99% 7.62% (21)

(ii) The company did not have any material transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of

the Companies Act, 1956 during the financial year.

r. (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 - `198.44 Crores (Previous Year- ` 196.00 Crores)

(c) Disputed Excise/Customs Duty demands pending before the Appellate Authorities/High Court - `377.84 Crores (Previous Year - `378.66

Crores)

(d) Disputed Income Tax Demands - `275.64 Crores (Previous Year - `159.87 Crores). Against the said demand the company has deposited an

amount of `131.61 Crores (Previous Year `97.52 Crores)

(e) Disputed Goods and Service Tax demands pending before the Appellate Authorities - `0.56 Crores (Previous Year- `1.70 Crores)

(f) Contested EPF Demands pending before Appellate Tribunal- `1.10 Crores (Previous year `1.10 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 has been disposed off by National Company Law Appellate Tribunal (NCLAT) in December 2022 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 of the same, the Company is of the view that no provision is considered necessary

in respect of this matter in the Standalone Financial Statements.

148

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

s. Other Notes:

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

1) Value of imported/indigenous raw material/ stores and spares consumed :

% of total

Consumption

Value

` Crores

% of total

Consumption

Value

` Crores

Raw Materials

Imported at landed cost 30.40 4720.46 29.92 3965.34

Indigenous 69.60 10806.44 70.08 9289.11

100.00 15526.90 100.00 13254.45

Stores and Spares

Imported at landed cost 7.07 29.32 8.86 34.21

Indigenous 92.93 385.22 91.14 351.99

100.00 414.54 100.00 386.20

(` Crores)

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

2) Details of Purchase of Traded Goods under broad heads:

T and S Equipments 21.10 3.47

Sports Goods 11.18 10.61

Others 2.95 2.93

35.23 17.01

3) CIF Value of Imports:

a. Raw Materials 3836.70 4048.35

b. Components and Spare Parts 72.28 54.10

c. Capital Goods 1136.83 413.38

4) Earnings in Foreign Exchange:

FOB Value of Exports 1646.96 1521.29

Freight and Insurance 33.94 43.75

Others 82.43 -

Note: FOB Value of Exports excludes export sales in Indian Rupee

149

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

(` Crores)

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

5) Expenditure in Foreign Currency paid or payable by the Company:

a. Interest and Finance Charges 2.98 2.70

b. Professional and Consultation Fees 15.32 12.30

c. Travelling 2.79 1.20

d. Advertisements 71.19 100.65

e. Traded goods 2.79 0.86

f. Insurance 5.50 4.39

g. Product warranty claims 0.77 1.20

h. Others 21.16 18.51

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N. KASHINATH C R KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Partner Partner MADHU P NAINAN S DHANVANTH KUMAR Director Director Chairman &

Mem. No. 036490 Mem. No. 026143

Chennai Chennai

Executive Vice

President Finance

Company Secretary

Chennai

DIN: 00860095

DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

CONSOLIDATED

FINANCIAL STATEMENTS

151

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MRF

LIMITED

1. Opinion

We have audited the accompanying Consolidated Financial

Statements of MRF Limited (hereinafter referred to as the

“Holding Company”) and its subsidiaries (Holding Company

and its subsidiaries together referred to as “the Group”) which

comprise the Consolidated Balance Sheet as at March 31, 2023,

and the Consolidated Statement of Profit and Loss (including

Other Comprehensive Income), the Consolidated Statement of

Changes in Equity and the Consolidated Cash Flows Statement for

the year ended on that date and notes to financial statements, a

summary of significant accounting policies and other explanatory

information (hereinafter referred to as “the Consolidated Financial

Statements”).

In our opinion and to the best of our information and according to

the explanations given to us, the aforesaid Consolidated Financial

Statements give the information required by the Companies Act,

2013 (“the Act”) in the manner so required and give a true and

fair view in conformity with the Indian Accounting Standards (Ind

AS) prescribed under Section 133 of the Act read with Companies

(Indian Accounting Standards) Rules, 2015, as amended and

other accounting principles generally accepted in India, of the

Consolidated state of affairs (financial position) of the Group

as at 31st March, 2023, and its Consolidated profit (financial

performance including Other Comprehensive Income), the

Consolidated Changes in Equity and its Consolidated Cash Flows

for the year ended on that date.

2. Basis for Opinion

We conducted our audit of the Consolidated Financial Statements

in accordance with the Standards on Auditing (SAs) specified

under Section 143(10) of the Act. Our responsibilities under those

Standards are further described in the Auditor’s Responsibilities for

the Audit of the Consolidated financial Statements section of our

report. We are independent of the Group in accordance with the

Code of Ethics issued by the Institute of Chartered Accountants of

India (ICAI) together with the independence requirements that are

relevant to our audit of the Consolidated Financial Statements under

the provisions of the Act and the Rules thereunder, and we have

fulfilled our other ethical responsibilities in accordance with these

requirements and the ICAI’s Code of Ethics. We believe that the

audit evidence we have obtained is sufficient and appropriate to

provide a basis for our audit opinion on the Consolidated Financial

Statements.

3. Emphasis of Matter

We draw attention to Note 25 (j) (a) to the Consolidated Financial

Statement which describe the following matter :

In terms of the Order dated 31st August 2018 the Competition

Commission of India (CCI) has on 2nd February 2022 released

its Order imposing penalty on the Holding Company concerning

the breach of provisions of the Competition Act, 2002 during the

year 2011-2012 and imposed a penalty of `622.09 Crores on the

Holding Company. The appeal filed by the Holding Company

has been disposed of by the National Company Law Appellate

Tribunal (NCLAT) in December 2022, 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 of the same, the Company is of

the view that no provision is considered necessary in respect of this

matter in the Consolidated Financial Statements.

Our opinion is not modified in respect of this matter.

4. Key Audit Matters

Key audit matters are those matters that, in our professional judgment,

were of most significance in our audit of the Consolidated Financial

Statements of the current year. These matters were addressed in the

context of our audit of the Consolidated Financial Statements as a

whole, and in forming our opinion thereon, and we do not provide

a separate opinion on these matters.

152

S. No. Key Audit Matter Our Response

1. Defined Benefit Obligation

The valuation of the retirement benefit schemes in

the Group is determined with reference to various

actuarial assumptions including discount rate, future

salary increases, rate of inflation, mortality rates and

attrition rates. Due to the size of these schemes, small

changes in these assumptions can have a material

impact on the estimated defined benefit obligation.

We have examined the key controls over the process involving member data, formulation

of assumptions and the financial reporting process in arriving at the provision for retirement

benefits. We tested the controls for determining the actuarial assumptions and the approval

of those assumptions by senior management. We found these key controls were designed,

implemented and operated effectively, and therefore determined that we could place reliance

on these key controls for the purposes of our audit.

We tested the employee data used in calculating the obligation and where material, we also

considered the treatment of curtailments, settlements, past service costs, remeasurements,

benefits paid, and any other amendments made to obligations during the year. From the

evidence obtained, we found the data and assumptions used by management in the actuarial

valuations for retirement benefit obligations to be appropriate.

Warranty Provision

The Holding Company makes an estimated provision

for assurance type warranties at the point of sale. This

estimate is based on historical claims data.

We understood and tested the controls over the assumptions applied in arriving at the warranty

provision, particularly vouching of relevant data elements with provision calculations;

validation of formula used in the warranty spread sheet; management review control of the

relevant internal and external factors impacting the provision.

Litigation, Claims and Contingent Liabilities

(Refer Note 25 (j), to be read along with Emphasis of

matter in Independent Auditor’s Report.)

●•The Group is exposed to variety of different

laws, regulations and interpretations thereof.

Consequently, in the normal course of business,

Provisions and Contingent Liabilities may arise

from legal proceedings, constructive obligations

and commercial claims.

●•Management applies significant judgement when

considering whether and how much to provide for

the potential exposure of each matter.

●•These estimates could change substantially over

time as new facts emerge as each legal case or

matters progresses.

●•Given the different views possible, basis the

interpretations, complexity and the magnitude of

potential exposures and the judgement necessary

to estimate the amount of provision required or

determine required disclosures.

●•We understood the processes, evaluated the design and implementation of controls and

tested the operating effectiveness of the Group’s controls over the recording and re-

assessment of uncertain legal positions, claims and contingent liabilities.

●•We held discussions with senior management including the person responsible for legal

and compliance to obtain an understanding of the factors considered by management in

classification of the matter as ‘probable’, ‘possible’ and ‘remote’.

●•Examined the Holding Company’s legal expenses on sample basis and read the minutes of

the board meetings in order to ensure completeness.

●•With respect to tax matters, involving our tax specialists, and discussing with the Holding

Company’s tax officers, their views and strategies on significant cases, as well as the related

technical grounds relating to their conclusions based on applicable tax laws.

●•Assessing the decisions and rationale for provisions held or for decisions not to record

provisions or make disclosures.

●•For those matters where management concluded that no provisions should be recorded,

considering the adequacy and completeness of the disclosures.

153

S. No. Key Audit Matter Our Response

Property, Plant & Equipment (Including Capex)

●•Tracking and monitoring capex requires more

attention to ensure reasonable accurateness and

completeness of financial reporting in respect of

Property, plant and equipment.

●•Further, technical complexities require

management to assess and make estimates/

judgements about capitalization, estimated useful

life, impairment etc. which has material impact

on Balance sheet and operating results.

●•Refer note 1 to consolidated financial statements.

Principal Audit Procedures

Our audit approach consisted testing of the design and operating effectiveness of the internal

controls and substantive testing as follows :

● We assessed company’s process regarding maintenance of records and accounting of

transactions pertaining to property, plant and equipment including capital work in progress

with reference to Indian Accounting Standard 16.

● We have carried out substantive audit procedures at financial and assertion level to verify

the capitalization of assets as Property, Plant & Equipment.

● We have reviewed management judgement pertaining to estimation of useful life and

depreciation of the Property, Plant and Equipment in accordance with Schedule II of the

Companies Act, 2013.

● We have relied on physical verification conducted by management and management

representations.

5. Information Other than the Consolidated Financial Statements and

Auditor’s Report thereon

The Holding Company’s Management and Board of Directors are

responsible for the preparation of the other information. The other

information comprises the information included in the Holding

Company’s Board’s Report including Annexures to Board’s Report,

Management Discussion and Analysis, Report on Corporate

Governance, Business Responsibility and Sustainability Report, but

does not include the Consolidated Financial Statements and our

auditor’s report thereon.

Our opinion on the Consolidated Financial Statements does not

cover the other information and we do not express any form of

assurance conclusion thereon.

In connection with our audit of the Consolidated Financial

Statements, our responsibility is to read the other information and,

in doing so, consider whether the other information is materially

inconsistent with the Consolidated Financial Statements or our

knowledge obtained during the course of our audit or otherwise

appears to be materially misstated.

If, based on the work we have performed, we conclude that there is

a material misstatement of this other information, we are required to

report that fact. We have nothing to report in this regard.

6. Management’s Responsibility and Those Charged with Governance

for the Consolidated Financial Statements

The Holding Company’s Board of Directors is responsible for the

preparation and presentation of these Consolidated Financial

Statements in term of the requirements of the Act that give a true

and fair view of the Consolidated financial position, Consolidated

financial performance including other comprehensive income,

Consolidated Changes in Equity and Consolidated Cash Flows of

the Group in accordance with the accounting principles generally

accepted in India, including the Indian Accounting Standards

(Ind AS) specified under section 133 of the Act. The respective

Board of Directors of the companies included in the Group are

responsible for maintenance of adequate accounting records in

accordance with the provisions of the Act for safeguarding the assets

of the Group and for preventing and detecting frauds and other

irregularities; selection and application of appropriate accounting

policies; making judgments and estimates that are reasonable and

154

prudent; and the design, implementation and maintenance of

adequate internal financial controls, that were operating effectively

for ensuring accuracy and completeness of the accounting records,

relevant to the preparation and presentation of the Consolidated

Financial Statements that give a true and fair view and are free from

material misstatement, whether due to fraud or error.

In preparing the Consolidated Financial Statements, the respective

Board of Directors of the companies included in the Group are

responsible for assessing the ability of the Group to continue as a

going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless

management either intends to liquidate the Group or to cease

operations, or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the

Group are responsible for overseeing the financial reporting process

of the Group.

7. Auditor’s Responsibilities for the audit of the Consolidated

Financial Statements

Our objectives are to obtain reasonable assurance about whether

the Consolidated Financial Statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue

an auditor’s report that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with SAs will always detect a material

misstatement when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic

decisions of users taken on the basis of these Consolidated Financial

Statements.

As part of an audit in accordance with SAs, we exercise professional

judgement and maintain professional scepticism throughout the

audit. We also:

•● Identify and assess the risks of material misstatement of the

Consolidated Financial Statements, whether due to fraud or

error, design and perform audit procedures responsive to those

risks, and obtain audit evidence that is sufficient and appropriate

to provide a basis for our opinion. The risk of not detecting a

material misstatement resulting from fraud is higher than for one

resulting from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of

internal control.

•● Obtain an understanding of internal financial controls relevant to

the audit in order to design audit procedures that are appropriate in

the circumstances. Under Section 143(3)(i) of the Act, we are also

responsible for expressing our opinion on whether the Company

and its subsidiary companies which are companies incorporated in

India, has adequate internal financial controls system in place and

the operating effectiveness of such controls.

• ● Evaluate the appropriateness of accounting policies used

and the reasonableness of accounting estimates and related

disclosures in the consolidated financial statements made by

the management.

• ● Conclude on the appropriateness of management’s use of the going

concern basis of accounting and, based on the audit evidence

obtained, whether a material uncertainty exists related to events or

conditions that may cast significant doubt on the Group’s ability

to continue as a going concern. If we conclude that a material

uncertainty exists, we are required to draw attention in our auditor’s

report to the related disclosures in the Consolidated Financial

Statements or, if such disclosures are inadequate, to modify our

opinion. Our conclusions are based on the audit evidence obtained

up to the date of our auditor’s report. However, future events or

conditions may cause the Group to cease to continue as a going

concern.

•● Evaluate the overall presentation, structure and content of the

Consolidated Financial Statements, including the disclosures,

and whether the Consolidated Financial Statements represent the

underlying transactions and events in a manner that achieves fair

presentation.

• ● Obtain sufficient appropriate audit evidence regarding the financial

information of the entities or business activities within the Group to

express an opinion on the Consolidated Financial Statements. We

are responsible for the direction, supervision and performance of

the audit of the financial statements of such entities included in the

155

Consolidated Financial Statements of which we are the independent

auditors. For the other entities included in the Consolidated

Financial Statements, which have been audited by other auditors,

such other auditors remain responsible for the direction, supervision

and performance of the audits carried out by them. We remain

solely responsible for our audit opinion.

We believe that the audit evidence obtained by us is sufficient

and appropriate to provide a basis for our audit opinion on the

Consolidated Financial Statements.

We communicate with those charged with governance regarding,

among other matters, the planned scope and timing of the audit and

significant audit findings, including any significant deficiencies in

internal control that we identify during our audit.

We also provide those charged with governance with a statement

that we have complied with relevant ethical requirements regarding

independence, and to communicate with them all relationships

and other matters that may reasonably be thought to bear on our

independence, and where applicable, related safeguards.

From the matters communicated with those charged with

governance, we determine those matters that were of most

significance in the audit of the Consolidated Financial Statements

of the current year and are therefore the key audit matters. We

describe these matters in our auditor’s report unless law or

regulation precludes public disclosure about the matter or when, in

extremely rare circumstances, we determine that a matter should not

be communicated in our report because the adverse consequences

of doing so would reasonably be expected to outweigh the public

interest benefits of such communication.

8. Other Matters

We did not audit the financial statements / financial information

of certain subsidiaries whose financial statements / financial

information reflect total assets of `345.66 Crores as at 31st March,

2023, total revenues of `434.73 Crores, total net profit/(Loss) after

tax of `(47.27) Crores and net cash inflows of `24.52 Crores for the

year ended on that date, as considered in the Consolidated Financial

Statements. These financial statements / financial information have

been audited by other auditors whose reports have been furnished

to us by the Management and our opinion on the Consolidated

Financial Statements, in so far as it relates to the amounts and

disclosures included in respect of these subsidiaries and our report

in terms of sub-section (3) and (11) of Section 143 of the Act, in so

far as it relates to the aforesaid subsidiaries is based solely on the

reports of the other auditors.

Our opinion on the Consolidated Financial Statements, and our

report on Other Legal and Regulatory Requirements below, is not

modified in respect of the above matters with respect to our reliance

on the work done and the reports of the other auditors.

9. Report on Other Legal and Regulatory Requirements

9.1 As required by Section 143(3) of the Act, based on our audit, we

report that:

a) We have sought and obtained all the information and

explanations which to the best of our knowledge and belief

were necessary for the purposes of our audit of the aforesaid

Consolidated Financial Statements.

b) In our opinion, proper books of account as required by

law relating to preparation of the aforesaid Consolidated

Financial Statements have been kept so far as it appears from

our examination of those books and the reports of the other

auditors.

c) The Consolidated Balance Sheet, the Consolidated Statement

of Profit and Loss, the Consolidated Statement of Changes in

Equity and the Consolidated Cash Flow Statement dealt with

by this Report are in agreement with the relevant books of

account maintained for the purpose of preparation of the

Consolidated Financial Statements.

d) In our opinion, the aforesaid Consolidated Financial

Statements comply with the Indian Accounting Standards

prescribed under section 133 of the Act read with Rule 7 of

the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from

the directors of the Holding Company as on 31st March,

2023 taken on record by the Board of Directors of the

Holding Company and the reports of the statutory auditors

156

of its subsidiary companies incorporated in India, none of

the directors of the Group companies is disqualified as on

31st March, 2023 from being appointed as a director in terms

of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls

with reference to Financial Statements of the Group and the

operating effectiveness of such controls, refer to our separate

Report in “Annexure A”.

g) As required by section 197(16) of the Act, based on our

audit, we report that the Holding Company and its subsidiary

companies incorporated in India, has paid and provided for

remuneration to its directors during the year in accordance

with the provisions of and limits laid down under section 197

read with Schedule V to the Act.

h) With respect to the other matters to be included in the Auditor’s

Report in accordance with Rule 11 of the Companies (Audit

and Auditors) Rules, 2014, in our opinion and to the best of

our information and according to the explanations given to us:

i. The Consolidated Financial Statements disclose the

impact of pending litigations on the Consolidated

financial position of the Group – Refer Note 25 (j) to the

Consolidated Financial Statements;

ii. The Group has long-term contracts including derivative

contracts for which there were no material foreseeable

losses;

iii. There has been no delay in transferring amounts,

required to be transferred to the Investor Education

and Protection Fund by the Holding company and its

subsidiary companies incorporated in India.

iv. (a) The respective Managements of the Company and

its subsidiaries which are companies incorporated

in India, whose financial statements have been

audited under the Act, have represented to us that

to the best of their knowledge and belief, no funds

have been advanced or loaned or invested (either

from borrowed funds or share premium or any

other sources or kind of funds) by the Company

and its subsidiary companies incorporated in

India to or in any other person(s) or entity(ies),

including foreign entities (“Intermediaries”), with

the understanding whether recorded in writing

or otherwise that the Intermediary shall, whether,

directly or indirectly lend or invest in other persons

or entities identified in any manner whatsoever

by or on behalf of the Company or any of its

subsidiaries, (“Ultimate Beneficiaries”) or provide

any guarantee, security or the like on behalf of the

Ultimate Beneficiaries;

(b) The respective Managements of the Company and

its subsidiaries which are companies incorporated

in India, whose financial statements have been

audited under the Act, have represented to us

that to the best of their knowledge and belief, no

funds have been received by the Company and

its subsidiary companies incorporated in India,

from any person(s) or entity(ies), including foreign

entities (“Funding Parties”), with the understanding,

whether recorded in writing or otherwise, that the

Company or any of its subsidiaries shall, 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 provide any guarantee, security

or the like on behalf of the Ultimate Beneficiaries;

and

considered reasonable and appropriate in the

circumstances performed by us on the Company

and its subsidiaries, which are companies

incorporated in India whose financial statements

have been audited under the Act, nothing has

come to our notice that causes us to believe that

the above representations under sub-clause (i)

and (ii) of Rule 11(e) as provided under (a) and (b)

above, contain any material misstatement.

157

v. The Company and its subsidiary companies incorporated

in India have complied with the provisions with respect

to Section 123 of the Companies Act, 2013 in respect

of final dividend proposed in the previous year, interim

dividends declared and paid by the company during the

year and the proposed final dividend for the year which

is subject to the approval of members at the ensuing

Annual General Meeting, as applicable.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules,

2014 for maintaining books of account using accounting

software which has a feature of recording audit trail (edit

log) facility is applicable to the Group with effect from

April 1, 2023, and accordingly, reporting under Rule

11(g) of Companies (Audit and Auditors) Rules, 2014 is

not applicable for the financial year ended March 31,

2023; and

vii. With respect to the matters specified in paragraphs 3(xxi)

and 4 of the companies (Auditor’s Report) order, 2020

(the order/CARO) issued by the central government in

terms of section 143 (11) of the act, to be included in

the Auditor’s Report, according to the information and

explanation given to us, and based on CARO reports

issued by us and the component auditor for the Holding

company and its subsidiaries incorporated in India

included in the consolidated financial statements of

the company, to which the reporting under CARO is

applicable. We report that there are no qualifications or

adverse remarks in these CARO reports.

For M M NISSIM & CO. LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N KASHINATH C R KUMAR

Partner Partner

Mem. No. 036490 Mem. No. 026143

UDIN: 23036490BGXRXP9499 UDIN: 23026143BGZEEG3060

Place: Chennai Place: Chennai

Date: 3rd May, 2023 Date: 3rd May, 2023

158

“ANNEXURE A” TO THE INDEPENDENT AUDITOR’S REPORT OF

EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF

MRF LIMITED

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE

(I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT,

2013 (“THE ACT”)

OPINION

In conjunction with our audit of the Consolidated Financial Statements of

the Company as of and for the year ended 31 March 2023, we have audited

the internal financial controls with reference to Financial Statements of

MRF LIMITED (“the Holding Company”) and its subsidiary companies

which are companies incorporated in India, as of that date. In our

opinion, the Holding Company and its subsidiary companies, which are

companies incorporated in India, have, in all material respects, an adequate

internal financial controls with reference to Consolidated Financial

Statements and internal financial controls were operating effectively as at

31 March 2023, based on the internal financial control with reference to

Consolidated Financial Statement criteria established by the respective

Companies considering the essential components of internal control stated

in the Guidance Note on Audit of Internal Financial Controls Over Financial

Reporting issued by the Institute of Chartered Accountants of India (ICAI).

1. MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL

CONTROLS

The Respective Board of Directors of the Holding Company and

its subsidiary companies incorporated in India, are responsible

for establishing and maintaining internal financial controls with

reference to Consolidated Financial Statements based on the

internal financial control reporting criteria established by the

respective Companies considering the essential components of

internal control stated in the Guidance Note issued by the Institute

of Chartered Accountants of India ("ICAI"). These responsibilities

include the design, implementation and maintenance of adequate

internal financial controls that were operating effectively for

ensuring the orderly and efficient conduct of its business, including

adherence to respective company’s policies, the safeguarding of

its assets, the prevention and detection of frauds and errors, the

accuracy and completeness of the accounting records, and the

timely preparation of reliable financial information, as required

under the Act.

2. AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on the internal financial

controls with reference to Financial Statements of the Holding

Company and its subsidiary companies which are incorporated in

India, based on our audit. We conducted our audit in accordance

with the Guidance Note issued by ICAI and the Standards on

Auditing, issued by ICAI and prescribed under section 143(10) of

the Act, to the extent applicable to an audit of internal financial

controls, both issued by ICAI. Those Standards and the Guidance

Note require that we comply with ethical requirements and plan

and perform the audit to obtain reasonable assurance about whether

adequate internal financial controls with reference to Consolidated

Financial Statements were established and maintained and if such

controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit

evidence about the adequacy of the internal financial controls

with reference to Consolidated Financial Statements and their

operating effectiveness. Our audit of internal financial controls with

reference to Consolidated Financial Statements includes obtaining

an understanding of internal financial controls with reference to

Consolidated Financial Statements, assessing the risk that a material

weakness exists, and testing and evaluating the design and operating

effectiveness of internal control based on the assessed risk. The

procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the consolidated

financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained and the

audit evidence obtained by other auditors of a subsidiary company

incorporated in India, in terms of their report referred to in other

matters paragraph below, is sufficient and appropriate to provide

159

a basis for our audit opinion on the Company and its subsidiary

companies which are incorporated in India.

3. MEANING OF INTERNAL FINANCIAL CONTROLS WITH

REFERENCE TO FINANCIAL STATEMENTS

A company's internal financial control with reference to

Consolidated Financial Statements is a process designed to provide

reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements for external purposes

in accordance with generally accepted accounting principles. A

company's internal financial control with reference to Consolidated

Financial Statements includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable

detail, accurately and fairly reflect the transactions and dispositions

of the assets of the company; (2) provide reasonable assurance

that transactions are recorded as necessary to permit preparation

of financial statements in accordance with generally accepted

accounting principles, and that receipts and expenditures of the

company are being made only in accordance with authorisations

of management and directors of the company; and (3) provide

reasonable assurance regarding prevention or timely detection of

unauthorised acquisition, use, or disposition of the company's assets

that could have a material effect on the financial statements.

4. INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS

WITH REFERENCE TO CONSOLIDATED FINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls over

financial reporting, including the possibility of collusion or improper

management override of controls, material misstatements due to

error or fraud may occur and not be detected. Also, projections of

any evaluation of the internal financial controls with reference to

Consolidated Financial Statements to future periods are subject to the

risk that the internal financial control with reference to Consolidated

Financial Statements may become inadequate because of changes

in conditions, or that the degree of compliance with the policies or

procedures may deteriorate.

5. OTHER MATTERS

Our aforesaid report under Section 143(3)(i) of the Act on the

adequacy and operating effectiveness of the internal financial

controls with reference to Financial Statements in so far as it relates

to subsidiary companies, incorporated in India, is based on the

report of the auditors.

For M M NISSIM & CO. LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N KASHINATH C R KUMAR

Partner Partner

Mem. No. 036490 Mem. No. 026143

UDIN: 23036490BGXRXP9499 UDIN: 23026143BGZEEG3060

Place: Chennai Place: Chennai

Date: 3rd May, 2023 Date: 3rd May, 2023

160

MRF LIMITED, CHENNAI

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2023

(` Crores)

Note As at 31.03.2023 As at 31.03.2022

ASSETS

Non-Current Assets

Property, Plant and Equipment 2 (a (1, 2)) 10092.03 9500.59

Capital Work-in-Progress 2 (b) 3045.86 1233.07

Other Intangible Assets 2 (c) 25.94 21.23

Financial Assets:

- Investments 3 1110.27 1135.02

- Loans 4 1.28 0.95

- Other financial assets 5 26.90 75.74

Non Current Tax Asset (Net) 263.24 241.77

Other non-current assets 6 560.21 587.72

Current Assets

Inventories 7 4141.05 4129.67

Financial Assets:

- Investments 3 1974.84 2521.44

- Trade Receivables 8 2503.27 2332.68

- Cash and Cash Equivalents 9 248.51 254.39

- Bank Balances other than Cash and Cash Equivalents 10 9.98 1.74

- Loans 4 2.97 3.18

- Other financial assets 5 104.86 757.91

Other Current Assets 6 258.20 262.64

TOTAL ASSETS 24369.41 23059.74

EQUITY AND LIABILITIES

Equity

Equity Share Capital SOCE 4.24 4.24

Other Equity SOCE 14703.42 14027.51

Non Controlling Interest 0.16 0.15

Total Equity 14707.82 14031.90

LIABILITIES

Non-Current Liabilities

Financial Liabilities:

- Borrowings 11 823.58 817.21

- Lease Liability 508.62 350.87

- Other Financial Liabilities 16 - 106.83

Provisions 12 215.25 218.91

Deferred Tax Liabilities (Net) 13 384.63 395.49

Other non-current liabilities 14 234.19 181.80

Current Liabilities

Financial Liabilities:

- Borrowings 11 1605.92 2000.79

- Lease Liability 75.49 60.08

- Trade Payables

(A) total outstanding dues of micro enterprises and small enterprises; 15 72.72 58.26

(B) total outstanding dues of creditors other than micro enterprises and small enterprises 15 2363.05 1998.52

- Other Financial Liabilities 16 809.87 403.05

Other Current Liabilities 14 2331.07 2251.43

Provisions 12 233.53 180.78

Current Tax Liabilities (Net) 3.67 3.82

Total Liabilities 9661.59 9027.84

TOTAL EQUITY AND LIABILITIES 24369.41 23059.74

Significant Accounting Policies and key accounting estimates and Judgement 1

Accompanying Notes are an integral part of these Financial Statements.

This is the Consolidated Balance Sheet referred to in our report of even date.

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N. KASHINATH C R KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Partner Partner MADHU P NAINAN S DHANVANTH KUMAR Director Director Chairman &

Mem. No. 036490 Mem. No. 026143

Chennai Chennai

Executive Vice

President Finance

Company Secretary

Chennai

DIN: 00860095 DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

161

MRF LIMITED, CHENNAI

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2023

(` Crores)

Note Year ended

31.03.2023

Year ended

31.03.2022

INCOME

Revenue from Operations 17 23008.50 19316.72

Other Income 18 252.67 316.99

TOTAL INCOME 23261.17 19633.71

EXPENSES

Cost of materials consumed 19 15751.09 13419.57

Purchases of Stock-in-Trade 35.40 17.32

Changes in inventories of Finished Goods, Stock-in-Trade and Work-in-Progress 20 (346.91) (856.15)

Employee Benefits expense 21 1595.38 1501.95

Finance Costs 22 319.00 253.80

Depreciation and Amortisation expense

2 (a (1, 2)) and (c)

1253.05 1205.05

Other Expenses 23 3584.42 3184.24

TOTAL EXPENSES 22191.43 18725.78

PROFIT BEFORE TAX 1069.74 907.93

TAX EXPENSE

Current Tax 306.15 228.38

Deferred Tax (5.37) 10.31

TOTAL TAX EXPENSE 300.78 238.69

PROFIT FOR THE YEAR 768.96 669.24

NON-CONTROLLING INTEREST - ` 53,105 (Previous year - ` 53,631) (0.01) (0.01)

OTHER COMPREHENSIVE INCOME (OCI)

Items that will not be reclassified to Profit or Loss

Remeasurements of Defined benefit plans net of tax (1.70) 10.46

Items that may be reclassified to Profit or Loss

Exchange differences in translating the financial statements of foreign operations (8.52) (2.16)

Fair value of cash flow hedges through other comprehensive income net of tax 0.25 1.69

Fair value of debt instruments through other comprehensive income net of tax (19.46) 2.45

TOTAL OTHER COMPREHENSIVE (LOSS) / INCOME FOR THE YEAR, NET OF TAX (29.43) 12.44

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 739.52 681.67

EARNINGS PER EQUITY SHARE 25 (b)

Basic 1813.10 1577.97

Diluted 1813.10 1577.97

Significant Accounting Policies and key accounting estimates and Judgement 1

Accompanying Notes are an integral part of these Financial Statements.

This is the Consolidated Statement of Profit and Loss referred to in our report of even date.

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N. KASHINATH C R KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Partner Partner MADHU P NAINAN S DHANVANTH KUMAR Director Director Chairman &

Mem. No. 036490 Mem. No. 026143

Chennai Chennai

Executive Vice

President Finance

Company Secretary

Chennai

DIN: 00860095 DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

162

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (SOCE) FOR THE YEAR ENDED 31ST MARCH, 2023 (` Crores)

EQUITY SHARE CAPITAL

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Number Number Amount Amount

Authorised Share Capital

9000000

9000000 9.00 9.00

Issued Share Capital

(Excludes 71 bonus shares not issued and not allotted on non-payment of call monies)

4241143

4241143 4.24 4.24

Subscribed Share Capital

4241143

4241143 4.24 4.24

Fully Paid-up Share Capital

4241143

4241143 4.24 4.24

Balance at the beginning of the reporting year

4241143

4241143 4.24 4.24

Changes in equity share capital due to prior period errors

- - -

Restated balance at the beginning of the reporting year

4241143 4241143 4.24

4.24

Changes in Equity Share Capital during the reporting year:

- -

Balance at the end of the reporting year

4241143

4241143 4.24 4.24

Rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital

The Holding Company has one class of equity shares having a par value of ` 10 per share. Each shareholder is eligible for one vote per share held. The

dividends proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim

dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Holding Company after distribution of all

preferential amounts, in proportion to their shareholding.

The Holding Company has declared two interim dividends aggregating to ` 2.54 Crores (Previous year ` 2.54 Crores) which has already been distributed

during the Financial Year 2022-23.

Shares in the Company held by each shareholder holding more than

five percent shares

As at 31.03.2023 As at 31.03.2022

No. % No. %

Comprehensive Investment and Finance Company Private Limited 441834 10.42% 441834 10.42%

MOWI Foundation 507984 11.98% 507984 11.98%

SBI Mutual Fund (Through its various Funds) 212453 5.01% 158010 3.73%

163

MRF LIMITED, CHENNAI

(` Crores)

OTHER EQUITY

Reserves and Surplus Other Comprehensive Income

TOTAL

Securities

Premium

Capital

Reserve

General

Reserve

Capital

Redemp

tion

Reserve

Remeasure-

ments

of Defined

Benefit Plans

Retained

Earnings

Cash Flow

Hedges

through

OCI

Debt

Instruments

through OCI

Foreign

Currency

Translation

Reserve

Balance at the beginning of the comparative

reporting year - 1st April 2021

9.42 0.05 13466.89 0.44 (72.14) - 1.59 (6.74) 9.92 13409.43

Changes in Accounting Policy or Correction of Prior

Period Errors

- - - - - - - - - -

Restated balance as at 1st April 2021

9.42 0.05 13466.89 0.44 (72.14) - 1.59 (6.74) 9.92 13409.43

Profit for the Comparative Year ending 31st March 2022

- - - - - 669.23 - - 669.23

Other Comprehensive Income for the Comparative

Year ending 31st March 2022

- - - - 10.46 - 1.69 2.45 (2.16) 12.44

Total Comprehensive Income for the Comparative Year

- - - - 10.46 669.23 1.69 2.45 (2.16) 681.67

Transactions with owners in their capacity as owners:

- Interim Dividends (` 6 per share)

- - - - - (2.54) - - - (2.54)

- Final Dividend and Special Dividend (`144 per share)

- - - - - (61.05) - - - (61.05)

Add/(Less) Adjustments during the year

- - - - - - - - - -

Transfer to General Reserve - - 605.64 - - (605.64) -

- -

Balance at the beginning of the reporting year 9.42 0.05 14072.53 0.44 (61.68) - 3.28 (4.29) 7.76 14027.51

Balance at the end of the comparative reporting

period B/F

9.42 0.05 14072.53 0.44 (61.68) - 3.28 (4.29) 7.76 14027.51

Changes in Accounting Policy or Correction of Prior

Period Errors

- - - - - - - - - -

Restated balance as at 1st April 2022

9.42 0.05 14072.53 0.44 (61.68) - 3.28 (4.29) 7.76 14027.51

Profit for the Current Reporting Year ending

31st March 2023

- - - - - 768.95 - - - 768.95

Other Comprehensive (Loss) / Income

- - - - (1.70) - 0.25 (19.46) (8.52) (29.43)

Total Comprehensive Income attributable to the

Owners of the Company for the Reporting Year

- - - - (1.70) 768.95 0.25 (19.46) (8.52) 739.52

164

(` Crores)

OTHER EQUITY (Contd.)

Reserves and Surplus Other Comprehensive Income

TOTAL

Securities

Premium

Capital

Reserve

General

Reserve

Capital

Redemp

tion

Reserve

Remeasure-

ments

of Defined

Benefit Plans

Retained

Earnings

Cash Flow

Hedges

through

OCI

Debt

Instruments

through OCI

Foreign

Currency

Translation

Reserve

Transactions with owners in their capacity as owners: - - - - - - - - - -

Dividends & Dividend Distribution Tax;

- Interim Dividends (` 6 per share)

- - - - - (2.53) - - (2.53)

- Final Dividend (`144 per share)

- - - - - (61.08) - - (61.08)

Add/(Less) Adjustments during the year

- - - - - -

Transfer to General Reserve

- - 705.34 - - (705.34) - - -

Balance at the end of the reporting year ending

31st March 2023

9.42 0.05 14777.87 0.44 (63.38) - 3.53 (23.75) (0.76) 14703.42

Nature and Purpose of each

component of equity

Nature and Purpose

Securities Premium Amounts received in excess of par value on issue of shares is classified as Securities Premium

Capital Reserve Capital reserve was created on purchase of shares by the parent company.

General Reserve General Reserve represents accumulated profits and is created by transfer of profits from Retained Earnings and it is not an item of

Other Comprehensive Income and the same shall not be subsequently reclassified to Statement of Profit and Loss.

Capital Redemption Reserve Capital Redemption Reserve represents statutory reserve created upon buyback of equity shares in the earlier years.

Retained Earnings Retained earnings are the Profits that the group has earned till date, less any transfer to General reserve and Dividend.

Cash Flow Hedges Gains / Losses on Effective portion of cashflow hedges are initially recognized in Other Comprehensive Income as per IND AS 109.

These gains or losses are reclassified to the Statement of Profit or Loss when the forecasted transaction affects earnings,except for

hedge transactions resulting in recognition of non financial assets which are included in the carrying amount of the asset ("Basis

Adjustments")

Debt Instruments

The fair value change of the debt instruments measured at fair value through Other Comprehensive Income is recognised in Debt

instruments through Other Comprehensive Income. Upon derecognition, the cumulative fair value changes on the said instruments are

reclassified to the Statement of Profit and Loss.

Remeasurements of Defined

Benefit Plans

Gains / Losses arising on Remeasurements of Defined Benefit Plans are recognised in the Other Comprehensive Income as per IND

AS-19 and shall not be reclassified to the Statement of Profit or Loss in the subsequent years.

Foreign Currency Translation

Reserve

Exchange differences relating to the transalation of the results and net assets of the groups foreign operations from their functional

currencies to the Group's presentation currency, i.e, Indian Rupees.

This is the Consolidated Statement of Equity(SOCE) referred to in our report of even date.

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N. KASHINATH C R KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Partner Partner MADHU P NAINAN S DHANVANTH KUMAR Director Director Chairman &

Mem. No. 036490 Mem. No. 026143

Chennai Chennai

Executive Vice

President Finance

Company Secretary

Chennai

DIN: 00860095 DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

165

Disclosure of Shareholding of Promoters and Promoter Group

No.

Name As at 31st March, 2023 % Change during

the year as

compared to

31st March, 2022

As at 31st March, 2022 % Change during

the year as

compared to

31st March, 2021

No. of

% of total

No. of

% of total

1 ACCAMMA KURUVILLA 2,328 0.05 (0.01) 2,338 0.06 (0.00)

2 ADARSH MAMMEN VERGHESE 2,000 0.05 - 2,000 0.05 -

3 ADITH POULOSE MAMMEN 1,185 0.03 (0.01) 1,635 0.04 -

4 ADITI MAMMEN GUPTA 4,744 0.11 - 4,744 0.11 -

5 AMBIKA MAMMEN 2,489 0.06 - 2,489 0.06 -

6 AMIT MATHEW 3,570 0.08 (0.03) 4,520 0.11 -

7 AMMU MATHEW 2,650 0.06 - 2,650 0.06 -

8 ANITA MANI 1,304 0.03 (0.00) 1,334 0.03 (0.00)

9 ANNA PHILIP 350 0.01 - 350 0.01 -

10 ANNA RAPHAEL 258 0.01 - 258 0.01 -

11 ANNA THOMAS CHACKO 1,291 0.03 - 1,291 0.03 -

12 ANNAMMA MAMMEN 3,755 0.09 (0.18) 11,265 0.27 -

13 ANNAMMA PHILIP 8,900 0.21 (0.01) 9,500 0.22 0.11

14 ANNU KURIEN 15,695 0.37 0.08 12,490 0.29 (0.01)

ARJUN JOSEPH

1,850

0.04 - 1,850 0.04 -

16 ARUN MAMMEN

27,560

0.65 -

27,560

0.65 -

17 ASHOK KURIYAN

1,878

0.04 -

1,878

0.04 -

18 ASHWATHI JACOB

151

0.00 -

151

0.00 -

19 ASWATHY VARGHESE

9,450

0.22 -

9,450

0.22 -

20 BADRA ESTATES AND INDUSTRIES LIMITED

6,530

0.15 -

6,530

0.15 -

21 BEEBI MAMMEN

20,237

0.48 -

20,237

0.48 -

22 BINA MATHEW

1,568

0.04 -

1,568

0.04 -

23 BRAGA INDUSTRIES LLP

29,457

0.69 -

29,457

0.69 0.11

24 CHALAKUZHY POULOSE MAMMEN

530

0.01 -

530

0.01 -

25 CIBI MAMMEN

500

0.01 -

500

0.01 -

26 COMPREHENSIVE INVESTMENT AND FINANCE COMPANY

PVT. LTD.

441,834

10.42 -

441,834

10.42 0.03

27 DEVON MACHINES PVT LTD

1,000

0.02 -

1,000

0.02 -

28 ELIZABETH JACOB MATTHAI

4,000

0.09 -

4,000

0.09 -

29 GEETHA ZACHARIAH

6,113

0.14 -

6,113

0.14 -

30 GEETHA MAMMEN MAPPILLAI

250

0.01 -

250

0.01 -

31 GEORGE MAMMEN

808

0.02 -

808

0.02 -

32 HANNAH KURIAN

600

0.01 -

600

0.01 -

33 HARSHA MATHEW

2,000

0.05 0.02

1,250

0.03 -

34 JACOB MAMMEN

35,120

0.83 -

35,120

0.83 -

35 JACOB MATHEW

20,027

0.47 (0.02)

20,977

0.49 -

36 JAYANT MAMMEN MATHEW

2,190

0.05 -

2,190

0.05 -

166

No.

Name As at 31st March, 2023 % Change during

the year as

compared to

31st March, 2022

As at 31st March, 2022 % Change during

the year as

compared to

31st March, 2021

No. of

% of total

No. of

% of total

37 JCEE MANUFACTURING AND SERVICES PVT LTD

13,415

0.32 0.03

12,415

0.29 0.03

38 JOSEPH KANIANTHRA PHILIPS

1,000

0.02 -

1,000

0.02 -

39 K C MAMMEN

9,043

0.21 -

9,043

0.21 -

40 K K MAMMEN MAPPILLAI

7,399

0.17 -

7,399

0.17 -

41 K M MAMMEN

16,048

0.38 -

16,048

0.38 -

42 K S JOSEPH

483

0.01 -

483

0.01 -

43 K Z KURIYAN

650

0.02 -

650

0.02 -

44 KARUN PHILIP

4,000

0.09 -

4,000

0.09 -

45 KAVITA PHILIP

- -

- (0.12)

46 KAVYA VERGHESE

2,000

0.05 -

2,000

0.05 -

47 KIRAN JOSEPH

1,850

0.04 -

1,850

0.04 -

48 KIRAN KURIYAN

403

0.01 -

403

0.01 -

49 KMMMF PVT. TRUST

37,387

0.88 0.01

36,987

0.87 -

50 LATHA MATTHEW 5,723

0.13 -

5,723

0.13 -

51 M A MATHEW 6,595

0.16 -

6,595

0.16 -

52 M M HOUSING PRIVATE LIMITED 179

0.00 -

179

0.00 -

53 M.M.PUBLICATIONS LIMITED 300

0.01 -

300

0.01 -

54 MALINI MATHEW 2,000

0.04 0.00

1,800

0.04 -

55 MAMMEN EAPEN 4,128

0.10 -

4,128

0.10 -

56 MAMMEN MAPPILLAI INVESTMENTS LTD 1,209

0.03 -

1,209

0.03 -

57 MAMMEN MATHEW 11,015

0.26 -

11,015

0.26 -

58 MAMMEN PHILIP 8,480

0.20 0.01

7,880

0.19 (0.02)

59 MAMY PHILIP 6,922

0.16 (0.01)

7,350

0.17 -

60 MARIA MAMMEN 84

0.00 -

61 MARIAM MAMMEN MATHEW 100

0.00 -

100

0.00 -

62 MARIEN MATHEW 160

0.00 -

160

0.00 -

63 MARIKA MAMMEN APPIAH 100

0.00 -

100

0.00 -

64 MARY KURIEN 14,594

0.34 0.08

10,839

0.26 -

65 MEERA NINAN 6,167

0.15 -

6,167

0.15 -

66 MEERA PHILIP 23,441

0.55 (0.24)

33,627

0.79 -

67 MEERA MAMMEN 15,840

0.37 -

15,840

0.37 -

68 MICAH MAMMEN PARAMBI 100

0.00 -

100

0.00 -

69 NISHA SARAH MATTHEW 164

0.00 -

164

0.00 -

70 NITHYA SUSAN MATTHEW 169

0.00 -

169

0.00 -

71 OMANA MAMMEN 4,703

0.11 -

4,703

0.11 -

72 PENINSULAR INVESTMENTS PRIVATE LIMITED 124,367

2.93 -

124,367

2.93 -

73 PETER K PHILIPS 240

0.01 (0.05)

2,341

0.06 -

74 PETER PHILIP 12,538

0.30 0.24

2,352

0.06 -

167

No.

Name As at 31st March, 2023 % Change during

the year as

compared to

31st March, 2022

As at 31st March, 2022 % Change during

the year as

compared to

31st March, 2021

No. of

% of total

No. of

% of total

75 PHILIP MATHEW 11,762

0.28 -

11,762

0.28 -

76 PREMA MAMMEN MATHEW 10,881

0.26 -

10,881

0.26 -

77 PREMINDA JACOB 98

0.00 -

78 RACHEL KATTUKARAN 16,647

0.39 (0.02)

17,247

0.41 -

79 RADHIKA MARIA MAMMEN 600

0.01 -

600

0.01 -

80 RAHUL MAMMEN MAPPILLAI 4,538

0.11 -

4,538

0.11 -

81 RAMANI JOSEPH 2,509

0.06 -

2,509

0.06 -

82 RANJEET JACOB 28

0.00 -

0.00 0.00

83 REENU ZACHARIAH 517

0.01 -

517

0.01 -

84 RIYAD MATHEW 4,520

0.11 -

4,520

0.11 -

85 ROHAN MATHEW MAMMEN 1,635

0.04 -

1,635

0.04 -

86 ROSHIN VARGHESE 6,679

0.16 -

6,679

0.16 -

87 ROY MAMMEN 12,439

0.29 (0.01)

12,894

0.30 -

88 SAMIR THARIYAN MAPPILLAI 4,470

0.11 -

4,470

0.11 -

89 SARA KURIYAN 1,880

0.04 -

1,880

0.04 -

90 SARAH CHERIAN TRUST 4,950

0.12 -

4,950

0.12 -

91 SARAH THOMAS 12,433

0.29 (0.01)

12,608

0.30 (0.00)

92 SARASU JACOB 13,984

0.33 (0.00)

14,114

0.33 (0.00)

93 SHANTA MAMMEN 4,938

0.12 -

4,938

0.12 -

94 SHILPA MAMMEN 4,412

0.10 -

4,412

0.10 -

95 SHIRIN MAMMEN 1,450

0.03 -

1,450

0.03 -

96 SHONA BHOJNAGARWALA 50

0.00 -

97 SHREYA JOSEPH 5,120

0.12 -

5,120

0.12 -

98 SOMA PHILIPS -

- -

- (0.05)

99 STABLE INVESTMENTS AND FINANCE COMPANY LTD. 3,964

0.09 -

3,964

0.09 -

100 SUSAN ABRAHAM 68

0.00 -

101 SUSAN KURIAN 9,137

0.22 -

9,137

0.22 -

102 SUSY THOMAS 5,278

0.12 -

5,278

0.12 -

103 TARA JOSEPH 3,150

0.07 -

3,150

0.07 -

104 THANGAM MAMMEN 5,981

0.14 -

5,981

0.14 -

105 THE MALAYALA MANORAMA COMPANY LIMITED 6,109

0.14 -

6,109

0.14 -

106 USHA EAPEN GEORGE 1,210

0.03 (0.00)

1,220

0.03 -

107 VARUN MAMMEN 8,706

0.21 -

8,706

0.21 -

108 VIKRAM KURUVILLA 109

0.00 -

109

0.00 -

109 ZACHARIAH KURIYAN 3,411

0.08 -

3,411

0.08 -

Total 1,180,831 1,185,320

Note : Figures in brackets represents reduction in percentage change as compared to previous period.

168

MRF LIMITED, CHENNAI

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2023

(` Crores)

Year ended 31.03.2023 Year ended 31.03.2022

A. CASH FLOW FROM OPERATING ACTIVITIES

NET PROFIT BEFORE TAX 1069.74 907.93

Adjustment for :

Depreciation 1253.05 1205.05

Unrealised Exchange (Gain) / Loss (1.75) (0.32)

Provision for Impairment of Assets (other than Financial Assets) - 7.10

Impairment of Financial Assets 0.36 0.42

Finance Cost 319.00 253.80

Government Grant Accrued (1.35) (0.99)

Interest Income (105.83) (100.49)

Dividend Income (0.03) (0.06)

Loss / (Gain) on Sale / Disposal of Property, Plant and Equipment 7.51 2.20

Fair Value changes in Investments (105.31) (155.49)

Fair Value changes in Financial Instruments 13.34 32.23

Loss / (Gain) on Sale of Investments (1.19) (7.38)

Bad debts written off - 1377.80 0.21 1236.28

OPERATING PROFIT/(LOSS) BEFORE WORKING CAPITAL CHANGES 2447.54 2144.21

Trade receivables (171.56) (187.60)

Other receivables 49.82 (102.97)

Inventories - Finished Goods (365.72) (785.57)

Inventories - Raw materials and Others 354.34 (405.29)

Trade Payable

- Supplier Finance - (983.40)

- Import acceptance and Others 379.72 (266.45)

Provisions 39.83 2.38

Other liabilities 349.27 635.70 220.14 (2,508.76)

CASH GENERATED FROM OPERATIONS 3083.24 (364.55)

Direct Taxes paid (327.77) (213.46)

NET CASH FROM OPERATING ACTIVITIES 2755.47 (578.01)

169

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2023 (Contd.) (` Crores)

Year ended 31.03.2023 Year ended 31.03.2022

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Property, Plant and Equipment (3291.24) (1707.01)

Proceeds from sale of Property, Plant and Equipment 1.18 2.37

Purchase of Investments (135.99) (649.97)

Proceeds from sale of Investments 787.19 3033.02

Fixed Deposits Others - Proceeds / (Placed) 600.00 (600.00)

Fixed Deposits with Banks - Proceeds / (Placed) - (0.41)

Loans (Financial assets) repaid / (given) (0.72) 1.19

Interest Income 116.08 88.38

Dividend income 0.03 0.06

NET CASH USED IN INVESTING ACTIVITIES (1923.47) 167.63

C. CASH FLOW FROM FINANCING ACTIVITIES

(Repayments) / Proceeds from Working Capital Facilities (Net) (254.53) 785.94

Proceeds from Term Loans - 299.99

Proceeds from SIPCOT Loan 7.76 -

Repayments of Term Loans (288.59) (86.00)

(Repayments) / Proceeds of Debentures 150.00 (180.00)

Government Grant Accrued 1.35 0.99

Deferred payment Credit (0.78) (0.68)

Payment of Lease Liability (121.30) (96.78)

Interest paid (269.83) (236.10)

Dividend (63.62) (63.62)

NET CASH FROM FINANCING ACTIVITIES (839.54) 423.74

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (7.54) 13.36

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR Refer Note 9 254.39 239.93

Unrealised Gain / (Loss) on Foreign currency Cash & Cash equivalents 1.66 1.10

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR Refer Note 9 248.51 254.39

Notes to Consolidated Cash Flow Statement:

1. The above Consolidated Cash Flow Statement has been prepared under the Indirect Method.

2. Reconciliation of Financing Liabilities (Refer Note. 11)

This is the Consolidated Cash Flow statement referred to in our report of even date.

MRF LIMITED, CHENNAI

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N. KASHINATH C R KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Partner Partner MADHU P NAINAN S DHANVANTH KUMAR Director Director Chairman &

Mem. No. 036490 Mem. No. 026143

Chennai Chennai

Executive Vice

President Finance

Company Secretary

Chennai

DIN: 00860095 DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

170

NOTE 1 – BASIS OF CONSOLIDATION AND SIGNIFICANT

ACCOUNTING POLICIES UNDER IND AS

A) General Information:

The Consolidated Financial Statements comprise Financial

Statements of MRF Limited (the Holding Company) and its

Subsidiaries (collectively, the Group) for the year ended 31st March

2023.

The Group, except for MRF Corp Ltd., a subsidiary company, is

engaged interalia in the manufacture of Rubber Products such as

Tyres, Tubes, Flaps, Tread Rubber and dealing in rubber. MRF Corp

Ltd., is engaged in the manufacture of specialty coatings.

B) Principles of Consolidation:

The Consolidated Financial Statements comprise of the Financial

Statements of the Holding Company and the following Subsidiaries

as on 31st March 2023:

Name Country of

incorporation

Proportion

of ownership

interest

Financial

Statement

as on

Accounting

Period covered

for consolidation

MRF Corp

Ltd.

India 100% March 31,

2023

1st April 2022 –

31st March 2023

MRF

International

Ltd.

India 94.66% March 31,

2023

1st April 2022 –

31st March 2023

MRF Lanka

Pvt. Ltd.

Sri Lanka 100% March 31,

2023

1st April 2022 –

31st March 2023

MRF SG PTE

LTD.

Singapore 100% March 31,

2023

1st April 2022 –

31st March 2023

The Consolidated Financial Statements comprise the Financial

Statements of the Holding Company and its Subsidiaries as at

31st March 2023. Control is achieved when the Holding Company

is exposed, or has rights, to variable returns from its involvement

with the investee and has the ability to affect those returns through

its power over the investee. Specifically, the Holding Company

controls an investee if and only if the Holding Company has:

 Power over the investee (i.e. existing rights that give it the

current ability to direct the relevant activities of the investee),

 Exposure, or rights, to variable returns from its involvement

with the investee, and

 The ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights

result in control. To support this presumption and when the Holding

Company has less than a majority of the voting or similar rights of

an investee, the Holding Company considers all relevant facts and

circumstances in assessing whether it has power over an investee,

including:

 The contractual arrangement with the other vote holders of

the investee

 Rights arising from other contractual arrangements

 The Holding Company’s voting rights and potential voting

rights

 The size of the Holding Company’s holding of voting rights

relative to the size and dispersion of the holdings of the other

voting rights holders

The Holding Company re-assesses whether or not it controls an

investee if facts and circumstances indicate that there are changes

to one or more of the three elements of control. Consolidation of

a Subsidiary begins when the Holding Company obtains control

over the Subsidiary and ceases when the Holding Company loses

control of the Subsidiary. Assets, liabilities, income and expenses of

a Subsidiary acquired or disposed of during the year are included

in the Consolidated Financial Statements from the date the Holding

Company gains control until the date the Holding Company ceases

to control the Subsidiary.

Consolidated Financial Statements are prepared using uniform

accounting policies for like transactions and other events in similar

circumstances. If a member of the group uses accounting policies

other than those adopted in the Consolidated Financial Statements

for like transactions and events in similar circumstances, appropriate

adjustments, if material, are made to that group’s Financial

Statements in preparing the Consolidated Financial Statements to

ensure conformity with the group’s accounting policies.

171

The Financial Statements of all entities used for the purpose of

consolidation are drawn up to same reporting date as that of the

parent Holding Company, i.e., year ended on 31 March.

Consolidation procedure:

a) Combine like items of assets, liabilities, equity, income,

expenses and cash flows of the Holding Company with those

of its Subsidiaries.

b) Offset (eliminate) the carrying amount of the Holding

Company’s investment in each Subsidiary and the Holding

Company’s portion of equity of each Subsidiary.

c) Eliminate in full intragroup assets and liabilities, equity,

income, expenses and cash flows relating to transactions

between entities of the group (profits or losses resulting from

intragroup transactions that are recognised in assets, such as

inventory and Property, Plant and Equipment, are eliminated

in full). Intragroup losses may indicate an impairment that

requires recognition in the Consolidated Financial Statements.

Ind AS 12 Income Taxes applies to temporary differences that

arise from the elimination of profits and losses resulting from

intragroup transactions.

Profit or loss and each component of other comprehensive income

(OCI) are attributed to the equity holders of the Holding Company

of the Group and to the non-controlling interests, even if this

results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the Financial Statements

of Subsidiaries to bring their accounting policies in line with the

Holding Company’s accounting policies.

A change in the ownership interest of a subsidiary, without a loss

of control, is accounted for as an equity transaction. If the Holding

Company loses control over a Subsidiary, it:

 Derecognises the assets (including goodwill) and liabilities of

the Subsidiary

 Derecognises the carrying amount of any non-controlling

interests

 Derecognises the cumulative translation differences recorded

in equity

 Recognises the fair value of the consideration received

 Recognises the fair value of any investment retained

 Recognises any surplus or deficit in profit or loss

 Reclassifies the Holding Company’s share of components

previously recognised in OCI to profit or loss or retained

earnings, as appropriate, as would be required if the Holding

Company had directly disposed of the related assets or

liabilities

C) Basis of preparation of Financial Statements

The principal accounting policies applied in the preparation of these

Consolidated Financial Statements are set out below. These policies

have been consistently applied to all the years presented.

i. Statement of Compliance

The Consolidated Financial Statements have been prepared in

accordance with IND AS as prescribed under Section 133 of

the Companies Act, 2013 read with Rule 3 of the Companies

(Indian Accounting Standards) Rules, 2015 and subsequent

amendments thereto.

ii. Basis of preparation and presentation

The Consolidated Financial Statements have been prepared

on historical cost basis considering the applicable provisions

of Companies Act, 2013, except for the following items that

have been measured at fair value as required by relevant IND

AS. Historical cost is generally based on the fair value of the

consideration given in exchange for goods and services.

a) Certain financial assets/liabilities measured at fair value

(Refer Note 1 (D 20)) and

b) Any other item as specifically stated in the accounting

policy.

The Consolidated Financial Statement are presented in

INR and all values are rounded off to Rupees Crores

unless otherwise stated.

The group reclassifies comparative amounts, unless

impracticable and whenever the group changes the

presentation or classification of items in its Financial

Statements materially. No such material reclassification

has been made during the year.

172

The Consolidated Financial Statements of the Group for

the year ended 31st March, 2023 were authorised for

issue in accordance with a resolution of the directors on

3rd May, 2023.

iii. Major Sources of Estimation Uncertainty

In the application of accounting policy which are described in

para (D) below, the management is required to make judgment,

estimates and assumptions about the carrying amount of assets

and liabilities, income and expenses, contingent liabilities and

the accompanying disclosures that are not readily apparent

from other sources. The estimates and associated assumptions

are based on historical experience and other factors that are

considered to be relevant and are prudent and reasonable.

Actual results may differ from those estimates. The estimates

and underlying assumptions are reviewed on ongoing basis.

Revisions to accounting estimates are recognised in the period

in which the estimates are revised if the revision affects only

that period or in the period of revision and future periods if the

revision affects both current and future period.

The few critical estimations and judgments made in applying

accounting policies are:

Property, Plant and Equipment:

Useful life of Property, Plant and Equipment and Intangible

Assets are as specified in Schedule II to the Companies Act,

2013 and on certain assets based on technical advice which

considered the nature of the asset, the usage of the asset,

expected physical wear and tear, the operating conditions of

the asset, anticipated technological changes, manufacturers

warranties and maintenance support. The Group reviews the

useful life of Property, Plant and Equipment at the end of each

reporting period. This reassessment may result in change in

depreciation charge in future periods. (Refer Note 1 (D 1))

Impairment of Non-financial Assets:

For calculating the recoverable amount of non-financial

assets, the Group is required to estimate the value-in-use of the

asset or the Cash Generating Unit and the fair value less costs

to disposal. For calculating value in use the Group is required

to estimate the cash flows to be generated from using the

asset. The fair value of an asset is estimated using a valuation

technique where observable prices are not available. Further,

the discount rate used in value in use calculations includes an

estimate of risk assessment specific to the asset. (Refer Note 1

(D 4))

Impairment of Financial Assets:

The Group impairs financial assets other than those measured

at fair value through profit or loss or designated at fair value

through other comprehensive income on expected credit

losses. The estimation of expected credit loss includes the

estimation of probability of default (PD), loss given default

(LGD) and the exposure at default (EAD). Estimation of

probability of default apart from involving trend analysis of

past delinquency rates include an estimation on forward-

looking information relating to not only the counterparty but

also relating to the industry and the economy as a whole.

The probability of default is estimated for the entire life of

the contract by estimating the cash flows that are likely to

be received in default scenario. The lifetime PD is reduced

to 12 months PD based on an assessment of past history of

default cases in 12 months. Further, the loss given default is

calculated based on an estimate of the value of the security

recoverable as on the reporting date. The exposure at default is

the amount outstanding at the balance sheet date. (Refer Note

1 (D 21(a)))

Defined Benefit Plans:

The cost of the defined benefit plan and other post-

employment benefits and the present value of such obligations

are determined using actuarial valuations. An actuarial

valuation involves making various assumptions that may

differ from actual developments in the future. These include

the determination of the discount rate, future salary increases,

mortality rates and attrition rate. Due to the complexities

involved in the valuation and its long-term nature, a defined

benefit obligation is highly sensitive to changes in these

173

assumptions. All assumptions are reviewed at each reporting

date.

Fair Value Measurement of Financial Instruments:

When the fair values of financial assets and financial liabilities

recorded in the balance sheet cannot be measured based on

quoted prices in active markets, their fair value is measured

using valuation techniques including the Discounted Cash

Flow (DCF) model. The inputs to these models are taken from

observable markets where possible, but where this is not

feasible, a degree of judgement is required in establishing fair

values. Judgments include considerations of inputs such as

liquidity risk, credit risk and volatility. Changes in assumptions

about these factors could affect the reported fair value of

financial instruments. (Refer Note 1 (D 20))

Income Taxes

Significant judgments are involved in determining the

provision for income taxes, including amount expected to

be paid/recovered for uncertain tax positions. (Refer Note 1

(D 17))

In assessing the realizability of deferred income tax assets,

management considers whether some portion or all of the

deferred income tax assets will not be realized. The ultimate

realization of deferred income tax assets is dependent upon

the generation of future taxable income during the periods

in which the temporary differences become deductible.

Management considers the scheduled reversals of deferred

income tax liabilities, projected future taxable income and tax

planning strategies in making this assessment. Based on the

level of historical taxable income and projections for future

taxable income over the periods in which the deferred income

tax assets are deductible, management believes that the

group will realize the benefits of those deductible differences.

The amount of the deferred income tax assets considered

realizable, however, could be reduced in the near term if

estimates of future taxable income during the carry forward

period are reduced.

Leases

Ind AS 116 requires lessees to determine the lease term as the

non-cancellable period of a lease adjusted with any option

to extend or terminate the lease, if the use of such option is

reasonably certain. The Group makes an assessment on the

expected lease term on a lease-by-lease basis and thereby

assesses whether it is reasonably certain that any options

to extend or terminate the contract will be exercised. In

evaluating the lease term, the Group considers factors such as

any significant leasehold improvements undertaken over the

lease term, costs relating to the termination of the lease and

the importance of the underlying asset to Group’s operations

taking into account the location of the underlying asset and

the availability of suitable alternatives. The lease term in future

periods is reassessed to ensure that the lease term reflects the

current economic circumstances. (Refer Note 1 (D 6))

Allowance for credit losses on receivables:

The Group determines the allowance for credit losses based

on historical loss experience adjusted to reflect current and

estimated future economic conditions. The Group considered

current and anticipated future economic conditions relating

to industries the Group deals with and the countries where

it operates. In calculating expected credit loss, the Group

has also considered credit reports and other related credit

information for its customers to estimate the probability of

default in future.

D) Summary of Significant Accounting Policies:

1) Property, Plant and Equipment (PPE)

The Group has elected to continue with the carrying value

of Property, Plant and Equipment (‘PPE’) recognised as of the

transition date, measured as per the Previous GAAP and use

that carrying value as its deemed cost of the PPE.

Property, Plant and Equipment are stated at cost less

accumulated depreciation and accumulated impairment

losses except for freehold land which is not amortised. Cost

includes purchase price after deducting trade discount /

174

rebate, import duties, non-refundable taxes, cost of replacing

the component parts, borrowing costs (Refer Note D15) and

other costs that are directly attributable and necessary to bring

the asset to its working condition in the manner intended

by the management, and the initial estimates of the cost of

dismantling /removing the item and restoring the site on which

it is located.

Spare parts procured along with the Plant and Equipment

or subsequently which has a useful life of more than 1

year and considering the concept of materiality evaluated

by management are capitalised and added to the carrying

amount of such items. The carrying amounts of items of PPE

and spare parts that are replaced is derecognised when no

future economic benefits are expected from their use or upon

disposal. Other machinery spares are treated as ‘stores and

spares’ forming part of the inventory. If the cost of the replaced

part is not available, the estimated cost of similar new parts is

used as an indication of what the cost of the existing part was

when the item was acquired.

An item of PPE is derecognised on disposal or when no future

economic benefits are expected from use or disposal. Any gain

or loss arising on derecognition of an item of property, plant

and equipment is determined as the difference between the

net disposal proceeds and the carrying amount of the asset

and is recognised in Statement of Profit and Loss when asset is

derecognised

The depreciable amount of an asset is determined after

deducting its residual value. Where the residual value of an

asset increases to an amount equal to or greater than the

asset’s carrying amount, no depreciation charge is recognised

till the asset’s residual value decreases below the asset’s

carrying amount. Depreciation of an asset begins when it is

available for use, i.e., when it is in the location and condition

necessary for it to be capable of operating in the intended

manner. Depreciation of an asset ceases at the earlier of the

date that the asset is classified as held for sale and the date

when the asset is derecognised.

Description of the Asset Estimated Useful life

(On Single shift working)

Tangible (Owned Assets) :

Building – Factory

– Other than factory buildings

30 Years

60 Years

Plant and Equipment 5-21 Years

Moulds 6 Years

Furniture and Fixtures 5 Years

Computer Servers 5 Years

Computers 3 Years

Office Equipment 5 Years

Other Assets, viz., Electrical Fittings, Fire

Fighting/Other Equipments and Canteen

Utensils

10 Years

Renewable Energy Saving Device – Windmills 22 Years

Vehicles 5 Years

Aircraft 10 and 20 Years

Right of Use Assets (Leased Assets) :

- Buildings-Other than factory buildings 1-21 Years

- Vehicles 2 Years

- Land – Leasehold Primary period of lease

Intangible (Owned Assets):

Software 5 Years

Depreciation on the Property, Plant and Equipment, is

provided over the useful life of assets based on management

estimates which is generally in line with the useful life

indicated in Schedule II to the Companies Act, 2013.

Depreciation on all assets except Renewable Energy

Saving Devices is provided on straight line basis whereas

depreciation on renewable energy saving devices is

provided on reducing balance basis. Plant and Machinery,

Moulds, Vehicles, Furniture and Fixtures and Computer

Servers are depreciated based on management estimate

of the useful life of the assets, and is after considering

the nature of the asset, the usage of the asset, expected

175

physical wear and tear, the operating conditions of the

asset, anticipated technological changes, manufacturers

warranties and maintenance support.

Depreciation on property, plant and equipment added/

disposed off during the year is provided on pro rata basis with

reference to the date of addition/disposal.

The assets’ residual values, useful lives and methods of

depreciation are reviewed at each financial year end and

adjusted prospectively, if appropriate.

Further, the Group has identified and determined separate

useful life for each major component of Property, Plant and

Equipment, if they are materially different from that of the

remaining assets, for providing depreciation in compliance

with Schedule II of the Companies Act, 2013.

In respect of Property, Plant & Equipment of MRF Lanka Pvt.

Ltd. and MRF SG PTE Ltd. depreciation is provided on straight

line method based on management estimate of useful life

of assets based on internal technical evaluation, except for

certain Property, Plant and Equipment namely Building, Plant

and Machinery, Moulds and Equipments of MRF Lanka Pvt

Ltd, which are depreciated on Written Down Value method.

The proportion of depreciation of the Subsidiaries to the total

depreciation of the group is not material.

2) Intangible Assets:

Intangible assets acquired separately are measured on initial

recognition at cost. After initial recognition, intangible assets

are carried at cost less any accumulated amortisation and

accumulated impairment losses.

Software (not being an integral part of the related hardware)

acquired for internal use are treated as intangible assets.

An item of Intangible asset is derecognised on disposal or

when no future economic benefits are expected from its use

or disposal. Any profit or loss arising from derecognition of an

intangible asset are measured as the difference between the

net disposal proceeds and the carrying amount of the asset and

are recognised in the Consolidated statement of profit and loss

when the asset is derecognised.

Intangible Assets are amortised over 5 years on straight-line

method over the estimated useful economic life of the assets.

The group undertakes Research and Development activities for

development of new and improved products. All expenditure

incurred during Research and Development are analysed into

research phase and development phase. The group recognises

all expenditure incurred during the research phase in the profit

or loss whereas the expenditure incurred in development

phase are presented as Intangible Assets under Development

till the time they are available for use in the manner intended

at which moment they are treated as Intangible Assets and

amortised over their estimated useful life.

3) Assets held for Sale:

Non-current assets are classified as held for sale if their

carrying amount is intended to be recovered principally

through sale rather than through continuing use. The condition

for classification of held for sale is met when the non-current

asset is available for immediate sale and the same is highly

probable of being completed within one year from the date

of classification as held for sale. Non-current assets held for

sale are measured at the lower of carrying amount and fair

value less cost to sell. Non-current assets that ceases to be

classified as held for sale shall be measured at the lower of

carrying amount before the non-current asset was classified as

held for sale adjusted for any depreciation/amortization and

its recoverable amount at the date when it no longer meets the

“Held for Sale” criteria.

4) Impairment of tangible (PPE) and intangible assets:

At the end of each reporting period, the Group reviews the

carrying amounts of its PPE and other intangible assets to

determine whether there is any indication that these assets

have suffered an impairment loss. If any such indication exists,

the recoverable amount of the asset is estimated in order to

determine the extent of the impairment loss. Where it is not

possible to estimate the recoverable amount of an individual

176

asset, the Group estimates the recoverable amount of the cash-

generating unit (CGU) to which the asset belongs. When the

carrying amount of an asset or CGU exceeds its recoverable

amount, the asset is considered impaired and is written down

to its recoverable amount. The resulting impairment loss is

recognised in the Consolidated statement of profit and loss.

Recoverable amount is the higher of fair value less costs

of disposal and value in use. In assessing value in use, the

estimated future cash flows are discounted to their present

value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific

to the asset. In determining fair value less costs of disposal,

recent market transactions are taken into account. If no such

transactions can be identified, an appropriate valuation model

is used.

Where an impairment loss subsequently reverses, the carrying

amount of the asset or CGU is increased to the revised estimate

of its recoverable amount, but so that the increased carrying

amount does not exceed the carrying amount that would have

been determined had no impairment loss been recognised for

the asset or CGU in prior years. A reversal of an impairment

loss is recognised in the Consolidated statement of profit and

loss.

5) Inventories:

Inventories consisting of stores and spares, raw materials,

work in progress, stock in trade and finished goods are valued

at lower of cost and net realisable value. However, materials

held for use in production of inventories are not written down

below cost, if the finished products are expected to be sold

at or above cost. The cost is computed on FIFO basis except

for stores and spares which are on daily moving Weighted

Average Cost basis and is net of input tax credits under various

tax laws.

Goods and materials in transit include materials, duties and

taxes (other than those subsequently recoverable from tax

authorities) labour cost and other related overheads incurred in

bringing the inventories to their present location and condition.

Traded goods includes cost of purchase and other costs

incurred in bringing the inventories to their present location

and condition.

Net realisable value is the estimated selling price in the

ordinary course of business, less estimated cost of completion

and estimated cost necessary to make the sale.

Inventory obsolescence is based on assessment of the future

uses. Obsolete and slow-moving items are subjected to

continuous technical monitoring and are valued at lower of

cost and estimated net realisable value. When Inventories

are sold, the carrying amount of those items are recognized

as expenses in the period in which the related revenue is

recognized.

6) Leases:

The Group has applied Ind AS 116 using the modified

retrospective approach.

The Group as a lessee

The Group’s lease asset classes primarily consist of leases for

land, buildings and vehicles. The Group assesses whether a

contract contains a lease, at inception of a contract. A contract

is, or contains, a lease if the contract conveys the right to

control the use of an identified asset for a period of time in

exchange for consideration. To assess whether a contract

conveys the right to control the use of an identified asset, the

Group assesses whether: (i) the contract involves the use of

an identified asset (ii) the Group has substantially all of the

economic benefits from use of the asset through the period of

the lease and (iii) the Group has the right to direct the use of

the asset.

At the date of commencement of the lease, the Group recognizes

a right-of-use asset (“ROU”) and a corresponding lease liability

for all lease arrangements in which it is a lessee, except for leases

with a term of twelve months or less (short-term leases) and

low value leases. For these short-term and low value leases, the

Group recognizes the lease payments as an operating expense

on a straight-line basis over the term of the lease.

177

Certain lease arrangements include the options to extend or

terminate the lease before the end of the lease term. ROU

assets and lease liabilities includes these options when it is

reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which

comprises the initial amount of the lease liability adjusted for

any lease payments made at or prior to the commencement

date of the lease plus any initial direct costs less any lease

incentives. They are subsequently measured at cost less

accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement

date on a straight-line basis over the shorter of the lease term

and useful life of the underlying asset. Right of use assets are

evaluated for recoverability whenever events or changes in

circumstances indicate that their carrying amounts may not

be recoverable. For the purpose of impairment testing, the

recoverable amount (i.e. the higher of the fair value less cost to

sell and the value-in-use) is determined on an individual asset

basis unless the asset does not generate cash flows that are

largely independent of those from other assets. In such cases,

the recoverable amount is determined for the Cash Generating

Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the

present value of the future lease payments. The lease payments

are discounted using the interest rate implicit in the lease or,

if not readily determinable, using the incremental borrowing

rates in the country of domicile of these leases. Lease liabilities

are remeasured with a corresponding adjustment to the related

right of use asset if the Group changes its assessment if whether

it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented

in the Balance Sheet and lease payments have been classified

as financing cash flows.

The Group as a lessor

Leases for which the Group is a lessor is classified as a finance

or operating lease. Whenever the terms of the lease transfer

substantially all the risks and rewards of ownership to the

lessee, the contract is classified as a finance lease. All other

leases are classified as operating leases.

When the Group is an intermediate lessor, it accounts for

its interests in the head lease and the sublease separately.

The sublease is classified as a finance or operating lease by

reference to the right-of-use asset arising from the head lease.

For operating leases, rental income is recognized on a straight-

line basis over the term of the relevant lease.

7) Government Grants:

Grants and subsidies from the government are recognised

when there is reasonable assurance that (i) the group will

comply with the conditions attached to them, and (ii) the

grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognised

as income on a systematic basis in the Consolidated Statement

of Profit and Loss over the periods necessary to match them

with the related costs, which they are intended to compensate.

Where the grant relates to an asset, it is recognised as income in

equal amounts over the expected useful life of the related asset

or by deducting the grant in arriving at the carrying amount of

the assets. Where the assets have been fully depreciated with

no future related cost, the grant is recognised in profit or loss.

When loans or similar assistance are provided by governments

or related institutions, with an interest rate below the current

applicable market rate, the effect of this favourable interest

is regarded as a government grant. The loan or assistance

is initially recognised and measured at fair value and the

government grant is measured as the difference between the

initial carrying value of the loan and the proceeds received.

The loan is subsequently measured as per the accounting

policy applicable to financial liabilities in respect of loans/

assistance received subsequent to the date of transition.

8) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when there is a present legal

or constructive obligation as a result of a past event and it

is probable (i.e. more likely than not) that an outflow of

178

resources embodying economic benefits will be required to

settle the obligation and a reliable estimate can be made of

the amount of the obligation. Such provisions are determined

based on management estimate of the amount required to

settle the obligation at the balance sheet date. When the

Group expects some or all of a provision to be reimbursed, the

reimbursement is recognised as a standalone asset only when

the reimbursement is virtually certain.

If the effect of the time value of money is material, provisions

are discounted using a current pre-tax rate that reflects,

the risks specific to the liability. When discounting is used,

the increase in the provision due to the passage of time is

recognised as a finance cost.

Present obligations arising under onerous contracts are

recognised and measured as provisions. An onerous

contract is considered to exist when a contract under

which the unavoidable costs of meeting the obligations

exceed the economic benefits expected to be received

from it. Unavoidable cost are determined based on cost

that are directly attributable to having and executing the

contracts.

Contingent liabilities are disclosed on the basis of judgment

of management / independent experts. These are reviewed at

each balance sheet date and are adjusted to reflect the current

management estimate.

Provisions for warranty-related costs are recognized when the

product is sold to the customer. Initial recognition is based on

scientific basis as per past trends of such claims. The initial

estimate of warranty-related costs is revised annually.

Contingent Assets are not recognized, however, disclosed

in financial statement when inflow of economic benefits is

probable.

9) Foreign Currency Transactions:

The Financial Statements of Group are presented in INR, which

is also the functional currency. In preparing the Financial

Statements, transactions in currencies other than the entity’s

functional currency are recognised at the rates of exchange

prevailing at the dates of the transactions. At the end of each

reporting period, monetary items denominated in foreign

currencies are translated at the rates prevailing at that date.

Non-monetary items denominated in foreign currency are

reported at the exchange rate ruling on the date of transaction.

On consolidation, the assets and liabilities of foreign

operations are translated into INR at the exchange rate

prevailing at the reporting date and their statement of profit

and loss are translated at the exchange rate prevailing on the

date of transactions. For practical reasons, the group uses an

average rate to translate income and expense items, if they

average rate approximates the exchange rates at the dates

of the transactions. The exchange differences arising on the

translation for consolidation are recognised in consolidated

statement of OCI. On disposal of foreign operation, the

relevant component of OCI is reclassified to consolidated

statement of profit and loss.

10) Share Capital and Securities Premium:

Ordinary shares are classified as equity, incremental costs

directly attributable to the issue of new shares are shown in

equity as a deduction net of tax from the proceeds. Par value

of the equity share is recorded as share capital and the amount

received in excess of the par value is classified as securities

premium.

11) Dividend Distribution to Equity Shareholders:

The Group recognizes a liability to make cash distributions

to equity holders when the distribution is authorized and

the distribution is no longer at the discretion of the group.

A distribution is authorized when it is approved by the

shareholders. A corresponding amount is recognized directly

in other equity along with any tax thereon.

12) Cash Flows and Cash and Cash Equivalents:

Statement of cash flows is prepared in accordance with

the indirect method prescribed in the relevant IND AS. For

the purpose of presentation in the statement of cash flows,

179

cash and cash equivalents includes cash on hand, cheques

and drafts on hand, deposits held with Banks, other short-

term, highly liquid investments with original maturities of

three months or less that are readily convertible to known

amounts of cash and which are subject to an insignificant

risk of changes in value, and book overdrafts. However,

Book overdrafts are to be shown within borrowings in

current liabilities in the balance sheet for the purpose of

presentation.

13) Revenue Recognition:

The Group derives revenues primarily from sale of goods

comprising of Automobile Tyres, Tubes, Flaps, Tread Rubber,

Speciality Coatings and dealing in rubber.

The following is a summary of significant accounting policies

related to revenue recognition:

Revenue is recognised upon transfer of control of promised

products or services to customers in an amount that reflects

the consideration the Group expects to receive in exchange

for those products or services.

Revenue from the sale of goods is recognised at the point in

time when control is transferred to the customer.

Revenue towards satisfaction of a performance obligation is

measured at the amount of transaction price (net of variable

consideration) allocated to that performance obligation. The

transaction price of goods sold and services rendered is net of

variable consideration on account of turnover/product/prompt

payment discounts and schemes offered by the Group as part

of the contract with the customers. When the level of discount

varies with increase in levels of revenue transactions, the Group

recognises the liability based on its estimate of the customer’s

future purchases. If it is probable that the criteria for the discount

will not be met, or if the amount thereof cannot be estimated

reliably, then discount is not recognised until the payment is

probable and the amount can be estimated reliably. The Group

recognises changes in the estimated amounts of obligations for

discounts in the period in which the change occurs. Revenue

also excludes taxes collected from customers.

Revenue in excess of invoicing are classified as contract assets

while invoicing in excess of revenues are classified as contract

liabilities.

The Holding Company provides warranties for general

repairs and does not provide extended warranties or

maintenance services in its contracts with customers and

are assurance type warranties. Claims preferred during the

year against such obligations are netted off from revenue,

consistent with its current practice. Provision for warranties

is made for probable future claims on sales effected and

are estimated based on previous claim experience and

are accounted for under Ind AS 37 Provisions, Contingent

Liabilities and Contingent Assets, consistent with its current

practice.

Use of significant judgments in revenue recognition:

 Judgment is also required to determine the transaction

price for the contract. The transaction price could

be either a fixed amount of consideration or variable

consideration with elements such as turnover/product/

prompt payment discounts. Any consideration payable

to the customer is adjusted to the transaction price,

unless it is a payment for a distinct product or service

from the customer. The estimated amount of variable

consideration is adjusted in the transaction price only

to the extent that it is highly probable that a significant

reversal in the amount of cumulative revenue recognised

will not occur and is reassessed at the end of each

reporting period.

 The Group exercises judgement in determining whether

the performance obligation is satisfied at a point in

time or over a period of time. The Group considers

indicators such as how customer consumes benefits

as services are rendered or who controls the asset as

it is being created or existence of enforceable right to

payment for performance to date and alternate use of

such product or service, transfer of significant risks and

rewards to the customer, acceptance of delivery by the

customer.

180

14) Other Income:

Dividend Income

Dividend Income is accounted for when the right to receive

the same is established, which is generally when shareholders

approve the dividend.

Interest Income

Interest Income on financial assets measured at amortised cost

is recognised on a time-proportion basis using the effective

interest method.

15) Borrowing Costs

Borrowing cost includes interest, commitment charges,

brokerage, underwriting costs, discounts / premiums, financing

charges, exchange difference to the extent they are regarded

as interest costs and all ancillary / incidental costs incurred in

connection with the arrangement of borrowing.

Borrowing costs which are directly attributable to acquisition

/ construction of qualifying assets that necessarily takes a

substantial period of time to get ready for its intended use are

capitalized as a part of cost pertaining to those assets. All other

borrowing costs are recognised as expense in the period in

which they are incurred.

The capitalisation of borrowing costs commences when the

group incurs expenditure for the asset, incurs borrowing

cost and undertakes activities that are necessary to prepare

the asset for its intended use or sale. The capitalisation

of borrowing costs is suspended during extended periods

in which active development of a qualifying asset is

suspended. The capitalisation of borrowing costs ceases

when substantially all the activities necessary to prepare

the qualifying asset for its intended use or sale are

complete.

16) Employee Benefits:

a) Short term Employee Benefits:

All employee benefits payable wholly within twelve

months of rendering services are classified as short

term employee benefits. Benefits such as salaries,

wages, short-term compensated absences, performance

incentives etc., are recognized during the period in

which the employee renders related services and are

measured at undiscounted amount expected to be paid

when the liabilities are settled.

b) Long Term Employee Benefits:

The cost of providing long term employee benefit

such as earned leave is measured as the present value

of expected future payments to be made in respect of

services provided by employees upto the end of the

reporting period. The expected costs of the benefit

is accrued over the period of employment using the

same methodology as used for defined benefits post

employment plans. Actuarial gains and losses arising

from the experience adjustments and changes in

actuarial assumptions are charged or credited to the

Consolidated statement of profit and loss in which they

arise except those included in cost of assets as permitted.

The benefit is valued annually by independent actuary.

c) Post Employment Benefits:

The Group provides the following post employment

benefits:

i) Defined benefit plans such as gratuity, trust

managed Provident Fund and post-retirement

medical benefit (PRMB); and

ii) Defined contributions plans such as provident

fund, pension fund and superannuation fund.

d) Defined Benefits Plans:

The cost of providing benefits on account of gratuity

and post retirement medical benefits / obligations are

determined using the projected unit credit method on

the basis of actuarial valuation made at the end of each

balance sheet date, which recognises each period of

service as given rise to additional unit of employees benefit

entitlement and measuring each unit separately to build

up the final obligation. The yearly expenses on account of

these benefits are provided in the books of accounts.

181

The net interest cost is calculated by applying the discount

rate to the net balance of the defined benefit obligation

and the fair value of plan assets. This cost is included in

employee benefit expense in the Consolidated statement

of profit and loss except those included in cost of assets as

permitted.

Re-measurements comprising of actuarial gains and

losses arising from experience adjustments and change

in actuarial assumptions, the effect of change in assets

ceiling (if applicable) and the return on plan asset

(excluding net interest as defined above) are recognized

in other comprehensive income (OCI) except those

included in cost of assets as permitted in the period in

which they occur. Re-measurements are not reclassified

to the Consolidated statement of profit and loss in

subsequent periods.

Service cost (including current service cost, past service

cost, as well as gains and losses on curtailments and

settlements) is recognized in the Consolidated statement

of profit and loss except those included in cost of assets

as permitted in the period in which they occur.

Eligible employees of the Group receive benefits

from a provident fund trust which is a defined benefit

plan. Both the eligible employee and the Group make

monthly contributions to the provident fund plan equal

to a specified percentage of the covered employees

salary. The Group contributes a part of the contribution

to the provident fund trusts. The trusts invests in specific

designated instruments as permitted by Indian Law. The

remaining portion is contributed to the Government

Administered Pension Fund. The rate at which the

annual interest is payable to the beneficiaries by the

trusts is administered by the Government. The Group has

obligation to make good the shortfall, if any, between

the return from investments of the Trusts and the notified

interest rate. However, as at the year end no shortfall

remains unprovided for.

e) Defined Contribution Plans

Payments to defined contribution retirement benefit

plans, viz., Provident Fund for certain eligible

employees, Pension Fund and Superannuation

benefits are recognized as an expense when

employees have rendered the service entitling them

to the contribution.

17) Taxes on Income:

Income tax expense represents the sum of tax currently payable

and deferred tax. Tax is recognized in the Consolidated

statement of profit and loss, except to the extent that it relates to

items recognized directly in equity or in other comprehensive

income.

a) Current Tax:

Current tax includes provision for Income Tax computed

under normal provision of Income Tax Act. Tax on Income

for the current period is determined on the basis of estimated

taxable income and tax credits computed in accordance

with the provisions of the relevant tax laws and based on the

expected outcome of assessments/appeals.

b) Deferred Tax:

Deferred tax is recognised on temporary differences between

the carrying amounts of assets and liabilities in the balance

sheet and the corresponding tax bases used in the computation

of taxable profit. Deferred tax liabilities are generally recognised

for all taxable temporary differences. Deferred tax assets are

generally recognised for all deductible temporary differences,

unabsorbed losses and unabsorbed depreciation to the extent

that it is probable that future taxable profits will be available

against which those deductible temporary differences,

unabsorbed losses and unabsorbed depreciation can be utilised.

The carrying amount of deferred tax assets is reviewed at

each balance sheet date and reduced to the extent that it is no

longer probable that sufficient taxable profits will be available

to allow all or part of the asset to be recovered.

182

Deferred tax assets and liabilities are measured at the tax rates

that are expected to apply in the period in which the liability

is settled or the asset realised, based on tax rates (and tax laws)

that have been enacted or substantively enacted by the balance

sheet date. The measurement of deferred tax liabilities and

assets reflects the tax consequences that would follow from the

manner in which the Group expects, at the reporting date, to

recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a

legally enforceable right to set off current tax assets against

current tax liabilities and when they relate to income taxes

levied by the same taxation authority and the Group intends

to settle its current tax assets and liabilities on a net basis.

The deferred tax assets (Net) and deferred tax liabilities (Net)

are determined separately for the parent and each subsidiary

Group, as per their applicable laws and then aggregated.

18) Earnings per Share:

Basic earnings per share is calculated by dividing the profit from

continuing operations and total profit, both attributable to equity

shareholders of the Holding Company by the weighted average

number of equity shares outstanding during the period.

19) Current versus non-current classification:

The Group presents assets and liabilities in the Balance Sheet

based on current/non-current classification.

a) An asset is current when it is:

 Expected to be realized or intended to be sold or

consumed in the normal operating cycle,

 Held primarily for the purpose of trading,

 Expected to be realised within twelve months after

the reporting period, or

 Cash or cash equivalent unless restricted from

being exchanged or used to settle a liability for at

least twelve months after the reporting period.

All other assets are classified as non-current.

b) A liability is current when:

 It is expected to be settled in the normal operating

cycle,

 It is held primarily for the purpose of trading,

 It is due to be settled within twelve months after

the reporting period, or

 There is no unconditional right to defer the

settlement of the liability for at least twelve months

after the reporting period.

All other liabilities are classified as non-current.

c) Deferred tax assets and liabilities are classified as

non-current assets and liabilities.

20) Fair value measurement:

Fair value is the price that would be received to sell an

asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date,

regardless of whether that price is directly observable or

estimated using another valuation technique. In estimating

the fair value of an asset or a liability, the Group takes into

account the characteristics of asset and liability if market

participants would take those into consideration. Fair value for

measurement and / or disclosure purposes in these Financial

Statements is determined on such basis except for Inventories,

Leases and value in use of non-financial assets. Normally at

initial recognition, the transaction price is the best evidence of

fair value.

The fair value of an asset or a liability is measured using the

assumptions that market participants would use when pricing

the asset or liability, assuming that market participants act in

their economic best interest. A fair value measurement of a

non-financial asset takes into account a market participant’s

ability to generate economic benefits by using the asset in

its highest and best use or by selling it to another market

participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in

the circumstances and for which sufficient data are available to

183

measure fair value, maximizing the use of relevant observable

inputs and minimizing the use of unobservable inputs.

All financial assets and financial liabilities for which fair

value is measured or disclosed in the Financial Statements

are categorized within the fair value hierarchy, described as

follows, based on the lowest level input that is significant to

the fair value measurement as a whole:

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.

Financial assets and financial liabilities that are recognized at

fair value on a recurring basis, the Group determines whether

transfers have occurred between levels in the hierarchy by re-

assessing categorization at the end of each reporting period.

21) Financial Instruments:

A financial instrument is any contract that gives rise to a financial

asset of one entity and a financial liability or equity instrument

of another entity. The Group recognizes a financial asset or

financial liability in its balance sheet only when the entity

becomes party to the contractual provisions of the instrument.

a) Financial Assets

A financial asset inter-alia includes any asset that is cash,

equity instrument of another entity or contractual rights

to receive cash or another financial asset or to exchange

financial asset or financial liability under condition that

are potentially favourable to the Group.

Financial assets other than investment in Subsidiaries

Financial assets of the Group comprise trade receivable,

cash and cash equivalents, Bank balances, Investments

in equity shares of companies other than in Subsidiaries,

investment in units of Mutual Funds, loans/advances

to employee / related parties / others, security deposit,

claims recoverable etc.

Initial recognition and measurement

All financial assets are recognized initially at fair

value plus, in the case of financial assets not recorded

at fair value through profit or loss, transaction costs

that are attributable to the acquisition of the financial

asset. However, Trade receivables that do not contain

a significant financing component are measured at

Transaction Price. Transaction costs of financial assets

carried at fair value through profit or loss are expensed

in Consolidated statement of profit and loss. Where

transaction price is not the measure of fair value and

fair value is determined using a valuation method

that uses data from observable market, the difference

between transaction price and fair value is recognized in

Consolidated statement of profit and loss on the date of

recognition if the fair value pertains to Level 1 or Level

2 of the fair value hierarchy and in other cases spread

over life of the financial instrument using effective interest

method.

Subsequent measurement

For purposes of subsequent measurement financial

assets are classified in three categories:

 Financial assets measured at amortized cost

 Financial assets at fair value through OCI – Debt

Instruments

 Financial assets at fair value through profit or loss

Financial assets measured at amortized cost

Financial assets are measured at amortized cost if the

financial asset is held within a business model whose

objective is to hold financial assets in order to collect

contractual cash flows and the contractual terms of the

financial asset give rise on specified dates to cash flows

that are solely payments of principal and interest on the

184

principal amount outstanding. These financial assets are

amortized using the effective interest rate (EIR) method,

less impairment. Amortized cost is calculated by taking

into account any discount or premium on acquisition

and fees or costs that are an integral part of the EIR.

The EIR amortization is included in finance income

in the consolidated statement of profit and loss. The

losses arising from impairment are recognized in the

consolidated statement of profit and loss in finance costs.

Financial assets at fair value through OCI (FVTOCI)

Financial assets are mandatorily measured at fair value

through other comprehensive income if the financial

asset is held within a business model whose objective is

achieved by both collecting contractual cash flows and

selling financial assets and the contractual terms of the

financial asset give rise on specified dates to cash flows

that are solely payments of principal and interest on the

principal amount outstanding.

At initial recognition, an irrevocable election is made

(on an instrument-by-instrument basis) to designate

investments in equity instruments other than held for

trading purpose at FVTOCI. Fair value changes relating

to financial assets measured at FVTOCI are recognized

in the other comprehensive income (OCI). However, the

Group recognizes interest income, impairment losses and

reversals and foreign exchange gain or loss in the income

statement. On derecognition of the financial asset other

than equity instruments, cumulative gain or loss previously

recognised in OCI is reclassified to Profit or Loss.

Financial assets at fair value through profit or loss

(FVTPL)

Any financial asset that does not meet the criteria for

classification as at amortized cost or as financial assets

at fair value through other comprehensive income, is

classified as financial assets at fair value through profit or

loss. Further, financial assets at fair value through profit

or loss also include financial assets held for trading and

financial assets designated upon initial recognition at fair

value through profit or loss. Financial assets are classified

as held for trading if they are acquired for the purpose of

selling or repurchasing in the near term. Financial assets

at fair value through profit or loss are fair valued at each

reporting date with all the changes recognized in the

Consolidated statement of profit and loss.

Derecognition

The Group derecognises a financial asset only when the

contractual rights to the cash flows from the asset expire,

or when it transfers the financial asset and substantially

all the risks and rewards of ownership of the asset to

another entity. If the Group neither transfers nor retains

substantially all the risks and rewards of ownership and

continues to control the transferred asset, the Group

recognizes its retained interest in the asset and an

associated liability for amounts it may have to pay.

Impairment of financial assets

The Group assesses impairment based on expected

credit loss (ECL) model on the following:

 Financial assets that are measured at amortised

cost.

 Financial assets (excluding equity instruments)

measured at fair value through other comprehensive

income (FVTOCI).

ECL is measured through a loss allowance on

a following basis after considering the value of

recoverable security:-

 The 12 month expected credit losses (expected

credit losses that result from those default events

on the financial instruments that are possible

within 12 months after the reporting date)

 Full life time expected credit losses (expected

credit losses that result from all possible default

events over the life of financial instruments)

185

The Group follows ‘simplified approach’ for recognition

of impairment on trade receivables or contract assets

resulting from normal business transactions. The

application of simplified approach does not require

the Group to track changes in credit risk. However, it

recognises impairment loss allowance based on lifetime

ECLs at each reporting date, from the date of initial

recognition.

For recognition of impairment loss on other financial

assets, the Group determines whether there has been

a significant increase in the credit risk since initial

recognition. If credit risk has increased significantly,

lifetime ECL is provided. For assessing increase in credit

risk and impairment loss, the Group assesses the credit

risk characteristics on instrument-by-instrument basis.

ECL is the difference between all contractual cash flows

that are due to the Group in accordance with the contract

and all the cash flows that the entity expects to receive

(i.e., all cash shortfalls), discounted at the original EIR.

Impairment loss allowance (or reversal) recognized

during the period is recognized as expense/income in

the consolidated statement of profit and loss.

b) Financial Liabilities

The Group’s financial liabilities includes borrowings,

trade payable, accrued expenses and other payables.

Initial recognition and measurement

All financial liabilities at initial recognition are

classified as financial liabilities at amortized cost or

financial liabilities at fair value through profit or loss,

as appropriate. All financial liabilities are recognized

initially at fair value and, in the case of loans and

borrowings and payables, net of directly attributable

transaction costs. Any difference between the proceeds

(net of transaction costs) and the fair value at initial

recognition is recognised in the consolidated statement

of profit and loss depending upon the level of fair value.

Subsequent measurement

The subsequent measurement of financial liabilities

depends upon the classification as described below:-

Financial Liabilities classified as Amortised Cost:

Financial Liabilities that are not held for trading and are

not designated as at FVTPL are measured at amortised

cost at the end of subsequent accounting periods.

Amortised cost is calculated by taking into account any

discount or premium on acquisition and fees or costs

that are an integral part of the Effective Interest Rate.

Interest expense that is not capitalised as part of costs of

assets is included as Finance costs in the consolidated

statement of profit and loss.

Financial Liabilities at Fair value through profit and loss

(FVTPL)

FVTPL includes financial liabilities held for trading and

financial liabilities designated upon initial recognition

as FVTPL. Financial liabilities are classified as held

for trading if they are incurred for the purpose of

repurchasing in the near term. Financial liabilities have

not been designated upon initial recognition at FVTPL.

Derecognition

A financial liability is derecognised when the obligation

under the liability is discharged / cancelled / expired.

When an existing financial liability is replaced by

another from the same lender on substantially different

terms, or the terms of an existing liability are substantially

modified, such an exchange or modification is treated

as the derecognition of the original liability and the

recognition of a new liability. The difference in the

respective carrying amounts is recognized in the

consolidated statement of profit and loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and

the net amount is reported in the balance sheet if

there is a currently enforceable legal right to offset the

186

recognised amounts and there is an intention to settle on

a net basis, to realise the assets and settle the liabilities

simultaneously.

c) Derivatives

Derivative instruments are initially recognized at fair

value on the date a derivative contract is entered into

and are subsequently re-measured to their fair value at

the end of each reporting period. The accounting for

subsequent changes in fair value depends on whether

the derivative is designated as a hedging instrument,

and if so, the nature of the item being hedged and the

type of hedge relationship designated. The resulting

gain or loss is recognized in the consolidated statement

of profit and loss immediately unless the derivative is

designated and effective as a hedging instrument and

is recognized in Other Comprehensive Income (OCI).

Cash flow hedges shall be reclassified to profit or loss

as a reclassification adjustment in the same period

or periods during which the hedged expected future

cash flows affect profit or loss. If hedge of a forecast

transaction results in the recognition of a non-financial

asset or a non-financial liability, then the gain or loss

that are accumulated in the cash flow hedge reserve is

recognised in the initial cost or other carrying amount

of the asset or liability (this is also referred to as “Basis

Adjustment”).

E) The Ministry of Corporate Affairs (MCA) vide notification

dated 24th March 2021, has amended Schedule III to the

Companies Act, 2013 to enhance the disclosure requirements

in financial statements. The financial statements have been

prepared after incorporating the amendments to the extent

they are applicable.

F) Recent accounting pronouncements

The Ministry of Corporate Affairs (MCA) on 31st March 2023

through Companies (Indian Accounting Standards) Amendment

Rules, 2023 has notified the following amendments to IND AS

which are applicable for the annual periods beginning on or

after 1st April, 2023.

a) IND AS 1 – Presentation of Financial Statements –

This amendment requires the Company to disclose its

material accounting policies rather than their significant

accounting policies.

The Company will carry out a detailed review of

accounting policies to determine material accounting

policy information to be disclosed going forward.

The Company does not expect this amendment to have

any material impact in its financial statements.

b) IND AS 8 – Accounting Policies, Changes in Accounting

Estimates and Errors - This amendment has changed the

definition of a “change in accounting estimates” to a

definition of “accounting estimates”. The amendment

clarifies how companies should distinguish changes

in accounting policies from changes in accounting

estimates.

The Company does not expect this amendment to have

any material impact in its financial statements.

c) IND AS 12 – Income Taxes - This amendment has

done away with the recognition exemption on initial

recognition of assets and liabilities that give rise to equal

and offsetting temporary differences.

The Company does not expect this amendment to have

any material impact in its financial statements.

187

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 2 (a) : PROPERTY, PLANT AND EQUIPMENT (` Crores)

Property, plant and equipment As at 31.03.2023 As at 31.03.2022

Owned Assets 9482.05 9054.62

Leased Assets 609.98 445.97

Total 10092.03 9500.59

NOTE 2 (b) : CAPITAL WORK-IN-PROGRESS (CWIP) 3045.86 1233.07

CWIP Ageing Schedule (` Crores)

CWIP

Amount in CWIP for a period of Total

Less than

1 year

1-2 years 2-3 years More than

3 years

Projects in progress 2493.37 306.07 116.46 127.14 3043.04

(839.63) (200.45) (164.84) (25.18) (1230.10)

Projects temporarily suspended 0.11 - 0.07 2.64 2.82

- - (0.75) (2.22) (2.97)

Figures in brackets are in respect of previous year

188

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

(` Crores)

NOTE 2 (a 1) : Owned Assets

NOTE 2 (c)

INTANGIBLES

Particulars Land

Freehold

Buildings Plant and

equipment

Furniture

and

fixtures

Vehicles Air

Craft

Office

equipment

Computers Moulds Other

Assets

Total Computer

Software

GROSS BLOCK

Carrying Value as at 31 March 2021 579.49 3053.99 8421.08 33.55 53.93 83.98 40.52 53.97 706.24 446.06 13472.81 61.32

Additions 0.87 145.66 832.17 3.97 10.04 - 3.85 6.93 124.44 45.93 1173.86 6.73

Disposals - (2.57) (39.62) (0.72) (2.20) - (1.15) (4.17) (4.77) (2.62) (57.82) (9.25)

Carrying Value as at 31 March 2022 580.36 3197.08 9213.63 36.80 61.77 83.98 43.22 56.73 825.91 489.37 14588.85 58.80

Additions 2.70 385.39 964.13 3.89 11.58 - 5.57 15.38 158.81 41.69 1589.14 13.46

Disposals - (0.02) (73.06) (1.60) (3.28) - (3.24) (5.29) (56.95) (4.25) (147.69) (0.60)

Carrying Value as at 31 March 2023 583.06 3582.45 10104.70 39.09 70.07 83.98 45.55 66.82 927.77 526.81 16030.30 71.66

DEPRECIATION BLOCK

Accumulated depreciation/

Amortisation as at 31 March 2021

- 359.94 3394.18 18.47 25.90 16.23 25.75 35.19 365.92 224.19 4465.77 36.99

Depreciation / Amortisation for the year - 101.10 830.41 5.11 6.99 5.92 6.11 9.68 105.86 50.52 1121.71 9.83

Disposals - (0.70) (37.62) (0.65) (1.84) - (1.12) (4.16) (4.77) (2.38) (53.24) (9.25)

Accumulated depreciation /

Amortisation as at 31 March 2022

460.34 4186.97 22.93 31.05 22.15 30.74 40.71 467.01 272.33 5534.23 37.57

Depreciation / Amortisation for the year - 108.08 847.73 5.23 7.71 5.91 5.80 9.80 113.29 49.47 1153.02 8.73

Disposals - (0.01) (70.83) (1.52) (3.04) - (3.24) (5.29) (51.09) (3.98) (139.00) (0.58)

Accumulated depreciation /

Amortisation as at 31 March 2023

568.41 4963.87 26.64 35.72 28.06 33.30 45.22 529.21 317.82 6548.25 45.72

NET BLOCK

As at 31 March 2022 580.36 2736.74 5026.66 13.87 30.72 61.83 12.48 16.02 358.90 217.04 9054.62 21.23

As at 31 March 2023 583.06 3014.04 5140.83 12.45 34.35 55.92 12.25 21.60 398.56 208.99 9482.05 25.94

Note:

1. Freehold land includes agricultural land - `0.12 Crores (31st March, 2022 - `0.12 Crores).

2. Other assets represents Electrical Fittings, Fire Fighting/Other Equipments and Canteen Utensils.

3. The amount of Borrowing Cost capitalised during the year ended 31st March, 2023 - ` 6.38 Crores (31st March, 2022 - `1.85 Crores.)

4. Capital expenditure on Research and Development during the year - `25.15 Crores (31st March, 2022 `6.71 Crores)

5. Title deeds of Freehold Land are held in the name of the Company. Title deeds in respect of Buildings which are constructed on company’s Freehold Land

is based on documents constituting evidence of legal ownership of the Buildings.

189

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 2 (a 2): Leased Assets (` Crores)

Particulars Land Buildings Vehicles Total

GROSS BLOCK

Carrying Value as at 31 March 2021 97.84 421.66 24.93 544.43

Additions - 123.03 9.14 132.17

Disposals - (36.84) - (36.84)

Carrying Value as at 31 March 2022 97.84 507.85 34.07 639.76

Additions 3.11 250.69 26.12 279.92

Disposals - (48.73) - (48.73)

Carrying Value as at 31 March 2023 100.95 709.81 60.19 870.95

DEPRECIATION BLOCK

Accumulated depreciation/Amortisation as at 31 March 2021 4.46 110.93 19.66 135.05

Depreciation / Amortisation for the year 1.06 63.03 9.43 73.52

Disposals - (14.78) - (14.78)

Accumulated depreciation / Amortisation as at 31 March 2022 5.52 159.18 29.09 193.79

Depreciation / Amortisation for the year 1.06 81.39 8.85 91.30

Disposals - (24.12) - (24.12)

Accumulated depreciation / Amortisation as at 31 March 2023 6.58 216.45 37.94 260.97

NET BLOCK

As at 31 March 2022 92.32 348.67 4.98 445.97

As at 31 March 2023 94.37 493.36 22.25 609.98

Note:

1. The Group has incurred `33.18 Crores (Previous year `25.53 Crores) for the year ended 31st March, 2023 towards expenses relating to short-term leases

and leases of low-value assets (Refer Note 23). The total cash outflow for leases is `154.48 Crores (Previous year `122.31 Crores) for the year ended

31st March, 2023, including cash outflow of short-term leases and leases of low-value assets. Interest on lease liabilities is `48.70 Crores (Previous year

`36.29 Crores) for the year ended 31st March, 2023 (Refer Note 22).

2. The Group’s leases mainly comprise of land, buildings and Vehicles. The Group mainly leases land and buildings for its manufacturing, warehouse

facilities and sales offices. The Company also has leased vehicles for its Goods Transporation.

190

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 3: INVESTMENTS

Particulars

(` Crores)

As at 31.03.2023 As at 31.03.2022

Non-Current Investments

Fully Paid-up

Quoted

Equity Shares (at fair value through Profit or Loss) 14.04 12.14

In Debt Instruments - Bonds (at fair value through OCI) 1096.16 1122.81

Others: (at fair value through Profit or Loss)* 0.07 0.07

* Note: The Holding 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 Holding Company has carried

these investments at its transaction value considering it to be its fair value.

Total 1110.27 1135.02

Aggregate Market Value of Quoted Investments 1110.20 1134.95

Aggregate Amount of Unquoted Investments 0.07 0.07

Grand Total 1110.27 1135.02

Current Investments

Fully paid up - Unquoted

In Mutual Fund Units: (at fair value through Profit or Loss)

Income Plan: Growth Option 1974.84 2521.44

Aggregate Amount of Unquoted Investments 1974.84 2521.44

Grand Total 1974.84 2521.44

NOTE 4 : LOANS (Unsecured, considered good) (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Loans to employees 1.28 0.95 2.97 3.18

Total 1.28 0.95 2.97 3.18

191

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 5 : OTHER FINANCIAL ASSETS (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Carried at Amortised cost :

Bank deposits with more than 12 months maturity 2.72 2.72 - -

Export Benefits receivables - - 1.72 0.85

Interest Accrued on Loans, Deposits etc. - - 40.29 51.69

Fixed Deposits - Others - - - 600.00

Others - 52.69 62.85 105.37

Carried at Fair value through Profit & Loss :

Security Deposits 2.06 2.72 - -

Deposits 22.12 17.61 - -

Total 26.90 75.74 104.86 757.91

NOTE 6 : OTHER ASSETS (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Capital Advances 456.39 529.50 - -

Advances other than capital advances;

Security Deposits

87.48 55.08 - -

Advances to Employees - - 26.24 19.82

Sub Total 543.87 584.58 26.24 19.82

Others

Balance with statutory authorities 10.04 - 1.74 1.77

Advances recoverable in cash or kind 6.30 3.14 136.64 146.21

Salary and wage advance - - 4.32 9.25

Prepaid Expenses - - 46.02 42.50

Others - - 43.24 43.09

Sub Total 16.34 3.14 231.96 242.82

Total 560.21 587.72 258.20 262.64

192

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 7 : INVENTORIES (VALUED AT LOWER OF COST AND NET REALISABLE VALUE) (` Crores)

As at

31.03.2023

As at

31.03.2022

Raw Materials 1246.85 1633.30

Raw Materials in transit 112.60 98.30

Work-in-progress 366.28 395.29

Finished goods 1969.88 1604.16

Stock-in-trade 52.61 42.41

Stores and spares 392.83 356.21

Total 4141.05 4129.67

NOTE 8 : TRADE RECEIVABLES (` Crores)

As at

31.03.2023

As at

31.03.2022

Trade receivables

Secured, considered good 1684.56 1580.95

Unsecured, considered good 818.71 751.73

Trade Receivables - credit impaired 3.16 2.99

Less: Expected Credit Loss provision (Refer Note 24 (B) ii) (3.16) (2.99)

Total 2503.27 2332.68

Note: The Group has used a practical expedient for computing expected credit loss allowance for trade receivables, taking into account historical credit loss

experience and accordingly, provisions are made for expected credit loss for amounts due from customers where necessary.

Trade Receivables Ageing Schedules (` Crores)

Particulars Outstanding for following periods from due date of payment

Total

Less than

6 months

6 months -

1 year

1-2 years 2-3 years More than

3 years

(i) Undisputed Trade Receivables — considered good 268.33 5.47 - - - 273.80

(316.64) (10.22) - - - (326.86)

(ii) Undisputed Trade Receivables — credit impaired - 0.43 0.32 0.28 2.13 3.16

- (0.33) (0.34) (2.11) (0.21) (2.99)

(iii) Amount Not Due 2229.47

(2005.82)

Total Gross 2506.43

(2335.67)

Allowance for Expected Credit Loss 3.16

(2.99)

Total 2503.27

(2332.68)

Figures in brackets are in respect of Previous year

193

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 9 : CASH AND CASH EQUIVALENTS (as per Cash Flow Statement) (` Crores)

As at

31.03.2023

As at

31.03.2022

Balances with Banks

- In Current accounts 161.14 133.27

- In Term deposits with original maturity of less than 3 months 48.97 89.79

Cheques, drafts on hand; and 37.62 30.55

Cash on hand 0.78 0.78

Total 248.51 254.39

NOTE 10 : BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS (` Crores)

As at

31.03.2023

As at

31.03.2022

Others:

Unclaimed Dividend Account 2.76 1.74

Unspent CSR Account 7.22 -

Total 9.98 1.74

194

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 11 : BORROWINGS (` Crores)

As at

31.03.2023

As at

31.03.2022

NON CURRENT

Secured

Softloan from SIPCOT (At amortised cost) 71.37 64.12

Unsecured

Debentures;

Floating Rate linked to 6 months T Bill - 15000 Nos. Unsecured Redeemable

Non-convertible Debentures of `1,00,000/- each

150.00 -

Term loans from Banks;

- Rupee Term Loan 599.99 749.99

Others

Deferred payment liabilities 2.22 3.10

Sub Total 823.58 817.21

CURRENT

Secured

Loans repayable on demand

- from banks 997.34 885.00

Interest accrued on above 1.11 1.31

Unsecured

- from banks 445.92 812.79

Interest accrued on above 6.50 1.49

(The interest rate on the above said loans range from 1.27% to 5.28% p.a (Previous Year 0.665% to 2.98% p.a)).

Current maturities of long-term debt 150.88 291.69

Interest accrued on above 4.17 8.51

Sub Total 1605.92 2000.79

Total 2429.50 2818.00

Note: Security and terms of repayment in respect of above borrowings are detailed in Note 25 f and 25 g.

195

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

Reconciliation of Financing Liabilities: (` Crores)

As at

31.03.2023

As at

31.03.2022

Opening balance

- Long Term Borrowings 817.21 811.76

- Current borrowings 1697.79 911.85

- Current maturities of long term debt 291.69 267.11

- Interest accrued on debt 11.31 29.90

Total - A 2818.00 2020.62

a) Cash flow movements

- Proceeds from borrowings 157.76 1,085.93

- Repayment of borrowings (543.90) (266.68)

b) Non-cash movements

- Effect of amortization of loan origination costs (0.51) 0.99

- Foreign exchange translation (2.32) (4.27)

- Interest accrued on debt 0.47 (18.59)

Total - B (388.50) 797.38

Closing Balance (A+B) 2429.50 2818.00

Closing Balance Break Up

- Long Term Borrowings 823.58 817.21

- Current borrowings 1443.26 1697.79

- Current maturities of Long term borrowings 150.88 291.69

- Interest accrued on debt 11.78 11.31

NOTE 12 : PROVISIONS (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Provision for employee benefits 53.85 51.33 46.52 18.39

Others:

- Warranty and others 161.40 167.58 187.01 162.39

Total 215.25 218.91 233.53 180.78

196

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 13 : DEFERRED TAX LIABILITIES (NET) (` Crores)

As at

31.03.2023

As at

31.03.2022

Deferred Tax Liabilities:

- Arising on account of difference in carrying amount and tax base of PPE and Intangibles 427.55 430.10

- Unrealised (gain)/loss on FVTPL debt Mutual Funds 45.29 30.20

- Other adjustments 14.04 12.65

Total 486.88 472.95

Deferred Tax Asset:

- Accrued Expenses allowable on Actual Payments 42.35 28.69

- Unrealised gain/(loss) on FVTOCI Debt Instruments 7.98 1.44

- On remeasurements of defined benefit plans 28.48 26.74

- On revaluation of designated cash flow hedges 6.38 6.29

- On Right of Use Asset 17.06 14.30

Total 102.25 77.46

Total 384.63 395.49

NOTE 14 : OTHER LIABILITIES (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Contract Liabilities - - 35.09 44.86

Others:

Dealers' Security Deposit - - 1773.44 1682.57

Retention Money 13.18 16.90 139.02 76.23

Statutory Dues - - 341.94 410.95

Liabilities for expenses - - 0.61 0.34

Deferred Income 220.62 164.27 21.84 23.54

Others 0.39 0.63 19.13 12.94

Total 234.19 181.80 2331.07 2251.43

Movement of contract liabilities is as under:

(` Crores)

As at

31.03.2023

As at

31.03.2022

As at beginning of the year 44.86 33.04

Recognised as revenue from contracts with customers (43.27) (31.41)

Advance from customers received during the year 33.50 43.23

Balance at the close of the year 35.09 44.86

197

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31ST MARCH, 2023

NOTE 15 : TRADE PAYABLES (` Crores)

As at

31.03.2023

As at

31.03.2022

Outstanding dues of Micro and Small Enterprises 72.72 58.26

Outstanding dues of Creditors other than Micro and Small Enterprises 2363.05 1998.52

Total 2435.77 2056.78

Of the above;

- Acceptances 413.00 427.14

Trade Payables ageing schedule (` Crores)

Particulars

Outstanding for following periods from

due date of payment

Total

Less than

1 year

1-2 years 2-3 years More than

3 years

(i) MSME 2.15 0.03 0.14 0.01 2.33

(1.58) - - - (1.58)

(ii) Others 266.75 8.20 7.17 32.33 314.45

(441.55) (3.85) (14.06) (20.70) (480.16)

(iii) Amounts not due 2118.99

(1575.04)

Figures in brackets are in respect of Previous year

NOTE 16 : OTHER FINANCIAL LIABILITIES (` Crores)

Non-Current Current

As at

31.03.2023

As at

31.03.2022

As at

31.03.2023

As at

31.03.2022

Carried at Amortised Cost :

Unclaimed dividends - - 2.76 1.74

Employee benefits - - 122.27 101.33

Liabilities for expenses - 106.83 187.55 112.76

Others - - 496.20 182.99

Carried at Fair Value :

Derivative Financial Liabilities (FVTOCI) - - (0.53) 3.59

Derivative Financial Liabilities (FVTPL) - - 1.62 0.64

Total - 106.83 809.87 403.05

198

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 17 : REVENUE FROM OPERATIONS (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Revenue from Contracts with Customers :

Sale of Goods (Refer Note 25 e) 22824.12 19006.28

Sale of Services 26.44 20.87

Other Operating Revenues:

Scrap Sales 140.24 122.17

Subsidy from State Government 17.70 167.40

Total

23008.50 19316.72

The management determines that the segment information reported is sufficient to meet the disclosure objective with respect to disaggregation of revenue

under IND AS 115 "Revenue from contracts with customers". Hence no separate disclosure of disaggregate revenues are reported.(refer note 25 e).

Reconciliation of revenue recognised with the contracted price is as follows:

(` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Gross Sales (Contracted Price) 23792.77 19976.42

Reductions towards variable consideration (Product, Turnover and Prompt payment discount) (463.73) (413.73)

Claims preferred against obligation (Note 1(D-13)) (320.54) (245.97)

Revenue recognised 23008.50 19316.72

NOTE 18 : OTHER INCOME (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Interest Income 105.83 100.49

Dividend Income from Non Current Investment 0.03 0.06

Government Grant :

- Export Incentives 6.52 15.09

- Others 20.15 17.40

Net gain on sale of Investments classified as FVTPL 1.19 7.38

Net gains on fair value changes on financial assets classified as FVTPL 105.31 155.49

Profit on sale of Investments 0.14 -

Doubtful Debt provision written back 0.05 0.13

Miscellaneous Income 13.45 20.95

Total 252.67 316.99

199

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 19 : COST OF MATERIALS CONSUMED (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Opening Stock of Raw Materials 1731.61 1421.26

Purchases during the year 15378.93 13729.92

Closing Stock of Raw Materials (1359.45) (1731.61)

Total 15751.09 13419.57

NOTE 20 : CHANGES IN INVENTORIES OF FINISHED GOODS STOCK-IN-TRADE AND WORK-IN-PROGRESS (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Closing Stock:

Finished Goods 1969.88 1604.16

Stock-in-Trade 52.61 42.41

Work-in-Progress 366.28 395.29

2388.77 2041.86

Less: Opening Stock:

Finished Goods 1604.16 818.59

Stock-in-Trade 42.41 40.76

Work-in-Progress 395.29 326.36

2041.86 1185.71

Total (346.91) (856.15)

Net gains (losses) on fair value changes

(` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Equity Investments designated at FVTPL 2.04 2.63

Debt Mutual Fund Investments designated at FVTPL 103.27 152.86

Total Net gains (Losses) on fair value changes 105.31 155.49

200

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 21 : EMPLOYEE BENEFITS EXPENSE (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Salaries and Wages 1306.32 1215.89

Contribution to provident and other funds 121.12 113.86

Staff welfare expenses 167.94 172.20

Total 1595.38 1501.95

NOTE 22 : FINANCE COSTS (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Interest on Loans and Deposits 265.21 209.79

Interest on Debentures* - 2.78

Interest on Deferred Payment Credit 0.41 0.50

Interest on Lease liabilities (Refer Note 2 (a 2)) 48.70 36.29

Other Borrowing Costs

Unwinding of discount relating to Long Term Liabilities 4.36 3.98

Other Charges 0.32 0.46

Total 319.00 253.80

*Interest on Debenture capitalised during the year ` 0.90 Crores (Previous year ` Nil.)

201

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 23 : OTHER EXPENSES (` Crores)

Year Ended

31.03.2023

Year Ended

31.03.2022

Stores and Spares Consumed 417.70 387.63

Power and Fuel 1136.03 931.94

Processing Expenses 262.82 271.40

Rent (Refer Note 2 (a 2)) 33.18 25.53

Rates and Taxes 15.89 15.02

Insurance 59.41 62.56

Printing and Stationery 10.40 9.66

Repairs and Renewals:

Buildings 25.77 20.45

Plant and Machinery 159.46 152.78

Other Assets 92.33 83.03

Travelling and Conveyance 46.29 27.11

Communication Expenses 8.07 7.17

Vehicle Expenses 12.79 11.34

Auditors' Remuneration:

As Auditors:

Audit fee 1.09 0.93

Tax Audit fee 0.26 0.18

Other Services 0.12 0.06

Reimbursement of Expenses 0.14 0.07

1.61 1.24

Cost Auditors Remuneration:

Audit fee 0.08 0.08

Directors' Fees 0.25 0.24

Directors' Travelling Expenses 9.04 2.81

Advertisement 258.31 205.58

Warranty 18.99 14.06

Sales tax absorbed by the company 0.17 0.07

Bad debts written off - 0.21

Commission 27.45 18.64

Freight and Forwarding (Net) 739.47 712.43

Loss on Sale of Fixed Asset (Net) 7.65 2.20

Net Loss on Foreign Currency Transactions 24.70 61.89

Bank Charges 7.44 9.00

Provision for Impairment of Assets (other than Financial Assets) - 7.10

Provision for Impairment of Financial Assets 0.36 0.42

Corporate Social Responsibility Expenditure 29.62 34.33

Miscellaneous Expenses 179.14 108.32

Total 3584.42 3184.24

202

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 24 :

A. Capital Management

For the purpose of Group’s Capital Management, capital includes Issued Equity Capital, Securities Premium, and all other Equity Reserves attributable to

the Equity Holders of the Group. The primary objective of the Group’s Capital Management is to maximise the Share Holder Value.

The Group 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 Group monitors using a gearing ratio which is net debts divided by total capital plus net debt. The

group includes within net debt, interest bearing loans and borrowings, less cash and short term deposit. Consequent to such capital structure, there are

no externally imposed capital requirements. In order to maintain an optimal capital structure, the group allocates its capital for distribution as dividend

or reinvestment into business based on its long term financial plans.

B. Financial Risk Management

The Group’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance

the operations of the Group. The principal financial assets include trade and other receivables, investments in mutual funds, cash and short term deposits.

The Group 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 Group borrows funds in Indian Rupees and Foreign currency, to meet both the long term and short term funding requirements.The

Interest rate risk in terms of Foreign currency is managed through financial instruments available to convert floating rate liability into fixed

rate liability. The Group 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 Group. 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 Group 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 0.50% to 1% higher / lower and all other variables held constant, the Group's profit for the year ended 31st

March, 2023 would have been decreased/increased by `16.56 Crores (Previous year `13.17 Crores).

203

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

b) Currency Risk:

Foreign currency risks from financial instruments at the end of the reporting period expressed in INR :

Unhedged Short Term Exposures: (` Crores)

31.03.2023 31.03.2022

Financial Assets 199.27 253.61

Financial Liabilities 178.79 212.40

The company is mainly exposed to changes in US Dollar. The sensitivity to a 4% (Previous year 2%) increase or decrease in US Dollar against

INR with all other variables held constant will be +/( - ) `1.37 Crores (Previous year ` 0.87 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 External Commercial borrowings and certain highly probable forecast transactions, are measured at

fair value through OCI on being designated as Cash Flow Hedges.

The Group 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.

The outstanding position and exposures are as under :

i) Foreign Currency forward contracts designated as Hedge Instruments :

Currency Amount

` Crores

Nature Cross Currency

Currency/Interest Rate Swap USD - Million - ECB Loan

INR

(45.00) Million (288.59)

Forward Contract USD 101.68 Million 844.11 Import purchase

(135.18) Million (1042.38)

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.

ii) Other Forward Contract Outstanding :

Currency Amount

` Crores

Nature Cross Currency

Forward Contract USD 30.49 Million 252.84 Import purchase

INR

(24.96) Million (190.91)

Forward Contract USD - Million - Sales USD

(19.03) Million (144.04)

Figures in brackets are in respect of Previous year.

204

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

c) Price Risk :

The Group is affected by the price stability of certain commodities. Due to the significantly increased volatility of certain commodities like

Natural Rubber, Synthetic Rubber and other Chemicals, the Group 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 Group’s investments in Quoted and Unquoted Securities are susceptible to market price risk arising from uncertainties about future

values of investment securities. The group manages the securities price risk through investments in debt 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 2023 the investments in debt mutual funds and Bonds amounts to `3071.00 Crores (Previous year `3644.25 Crores). A 1%

point increase or decrease in the NAV with all other variables held constant would have lead to approximately an additional `31 Crores

(Previous Year `36 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., Investments in Equity Shares, Bonds, Debt Funds, Fixed Deposits-others and Balances with Banks.

The Group’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 Group 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, 2023 is 0.02 % (31st March, 2022 - 0.25%) of the total trade receivables.

The group 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 2023 was `3.16 Crores and for the year ended 31st March 2022 was `2.99 Crores.

(` Crores)

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

Balance at the beginning 2.99 3.24

Impairment loss recognised 0.17 0.42

Impairment loss reversed - 0.67

Balance at the end 3.16 2.99

The Group 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 funds, which have high safety ratings and are monitored on a monthly basis and the Group is of the

opinion that its mutual fund investments have low credit risk.

205

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

iii) Liquidity Risk

The Group manages liquidity risk by maintaining adequate surplus, banking facilities and reserve borrowings facilities by continuously monitoring

forecasts and actual cash flows.

The Group 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 Group 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 details of the contractual maturities of significant financial liabilities as at 31st March, 2023 are as under:

(` Crores)

Particulars Refer Note Less than 1 year 1-3 years 3-5 years More than 5 years

Borrowings Note 11 and 14 1605.92 452.22 299.99 88.67

(2000.79) (251.87) (401.21) (180.92)

Trade Payable Note 15 2435.77 - - -

(2056.78) (-) (-) (-)

Other Financial Liabilities Note 16 684.84 - - -

(299.98) (106.83) (-) (-)

Employee Benefit liabilities Note 16 122.27 - - -

(101.33) (-) (-) (-)

Unclaimed dividends Note 16 2.76 - - -

(1.74) (-) (-) (-)

Lease Liabilities 75.49 155.79 151.01 201.82

(60.08) (108.02) (106.63) (136.22)

Figures in brackets are in respect of Previous year.

206

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

NOTE 25 : ADDITIONAL / EXPLANATORY INFORMATION

a. Disclosures

(i) The Notes to these consolidated Ind AS financial statements are disclosed to the extent relevant and necessary for presenting a true and fair view

of the consolidated Ind AS financial statements based on section 129(4) of The Companies Act, 2013 and as clarified vide Circular No. 39/2014

dated 14th October, 2014.

(ii) Movement in Provisions as required by IND AS - 37 - "Provisions, Contingent Liabilities and Contingent Assets" are the same as disclosed in the

Standalone Ind AS Financial Statements.

(iii) Consolidated Employee benefit disclosures are not materially different from the employee benefit disclosures of the standalone Ind AS financial

statements of the Company.

b. Earnings Per Share

Particulars

Year ended

31.03.2023

Year ended

31.03.2022

Profit after taxation ` Crores 768.96 669.24

Number of equity shares (Face Value `10/-) Nos. 4241143 4241143

Earnings per share (Basic & Diluted)

1813.10 1577.97

c. Related party disclosures:

(a) Names of related parties and nature of relationship with whom transactions have taken place:

Key Management Personnel (KMP): i) Mr. K.M. Mammen, Chairman and Managing Director

ii) Mr. Arun Mammen, Vice Chairman and Managing Director

iii) Mr. Rahul Mammen Mappillai, Managing Director

iv) Mr. Samir Thariyan Mappillai, Whole time Director

v) Mr. Varun Mammen, Whole time Director

vi) Mr. S. Dhanvanth Kumar, Company Secretary

vii) Mr. Madhu P Nainan, Executive Vice President Finance

Close Members of the family of KMP: i) Mrs. Ambika Mammen, Director (Wife of Chairman and Managing Director)

ii) Dr. (Mrs) Cibi Mammen, Director (Wife of Vice Chairman and Managing Director)

iii) Mrs. Meera Mammen (Mother of Mr. Varun Mammen)

Companies in which Directors are interested: Badra Estate & Industries Limited, Devon Machines Pvt. Ltd., Coastal Rubber Equipments Pvt. Ltd.

Braga Industries LLP, Jcee Manufacturing & Services Pvt. Ltd., Balanoor Plantations and Industries

Limited. Funskool (India) Ltd, VPC Freight Forwarders Pvt. Ltd, The Malayala Manorama Co. Private

Limited, Tarapore and Company, Tarapore Constructions Private Limited, The J. H Tarapore Foundation

Other Related Parties: Mr. Jacob Kurian-Director, MRF Ltd. Executives Provident Fund Trust, MRF Management Staff

Gratuity Scheme, MRF Employees Gratuity Scheme, MRF Managers' Superannuation Scheme, MRF

Foundation. Mr. Philip Eapen, Mr. Mammen Eapen, Mr. Zachariah Kurian, Mr. George Mammen,

Mr. Mammen A Mathew.

207

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

(b) Transactions with related parties (excluding reimbursements)

(` Crores)

Nature of Transaction

KMP

Close member of

the KMP

Companies in which

Directors are interested

Other Related

Parties

Year Ended

31.03.2023

Year Ended

31.03.2023

Year Ended 31.03.2023 Year Ended

31.03.2023

i. Sale of Materials - - 0.90 0.15

- - (5.00) (0.55)

ii. Purchase of Materials/Machinery - - 249.78 -

- - (180.84) -

iii. Payment towards Service - - 16.68 -

- - (17.82) -

iv. Selling and Distribution Expenses - - 1.48 -

- - (1.72) -

v. Other Receipts - - 2.02 -

- - (1.84) -

vi. Professional charges - - - 0.49

- - - (0.17)

vii. Contribution to Retirement Benefit fund /Others - - - 60.91

- - - (94.87)

Compensation*

viii. Short term Employee benefit (including Commission

payable to KMP)

93.86 2.63 - 1.52

(82.96) (2.40) - -

ix. Sitting fees - 0.02 - -

- (0.02) - -

* Remuneration does not include provisions made for Gratuity and Leave benefits as they are determined on an actuarial basis for the Company

as a whole.

208

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

(` Crores)

Nature of Transaction

KMP

Close member of

the KMP

Companies in which

Directors are interested

Other Related

Parties

Year Ended

31.03.2023

Year Ended

31.03.2023

Year Ended 31.03.2023 Year Ended

31.03.2023

Outstanding as at Year End

x. Other Receivables - - 1.78 0.04

- - (26.55) (0.04)

xi. Trade Payables - - 29.34 -

- - (16.44) -

xii. Commission Payable 38.28 - - -

(30.57) - - -

xiii. Contribution payable to Retirement Benefit fund/Others - - - 40.61

- - - (13.43)

(Figures in brackets are in respect of Previous year)

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 2023, the Group 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.

209

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

d. (i) Additional information on Net Assets and Share of Profit as at 31st March, 2023

Name of the entity

Net Assets, i.e., total assets

minus total liabilities

Share in profit or loss

Share in Other Comprehensive

Income (OCI)

As % of

consolidated

net assets

Amount

(` Crores)

As % of net

Profit

Amount

(` Crores)

As a % of

OCI

Amount

(` Crores)

Parent

- MRF Ltd. 2022-23 98.64 14507.39 104.70 1120.03 100.48% (21.01)

2021-22 98.17 13774.61 96.82 879.07 100.48% 14.67

Subsidiaries

Indian

- MRF Corp. Ltd. 2022-23 0.97 143.08 2.12 22.71 (0.48%) 0.10

2021-22 0.90 126.75 2.28 20.70 (0.48%) (0.07)

- MRF International Ltd. 2022-23 0.01 2.08 0.01 0.13 - -

2021-22 0.01 1.99 0.01 0.13 - -

Foreign

- MRF Lanka (P) Ltd. 2022-23 0.04 5.22 0.24 2.58 - -

2021-22 0.03 3.74 0.01 0.05 - -

- MRF SG PTE. LTD. 2022-23 0.34 49.89 (7.07) (75.71) - -

2021-22 0.89 124.66 0.88 7.98 - -

Minority Interest

Indian Subsidiary 2022-23 - 0.16 - - - -

2021-22 - 0.15 - - - -

(ii) The Group does not have any material transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the

Companies Act,1956 during the financial year.

e. Disclosures under Ind AS 108 - "Operating Segment" :

The group except for MRF Corp Ltd., is engaged in the manufacture of rubber products such as Tyre, Tubes, Flaps, Tread Rubber and / or Trading in

Rubber and Rubber Chemicals. In the context of IND AS 108 operating segment are considered to constitute one single primary segment. MRF Corp

Ltd. is engaged in the manufacture of Speciality Coatings and its revenues, results and assets do not meet the criteria specified for reportable segment

prescribed in the IND AS. The group's operations outside India do not exceed the quantitative threshold for disclosure envisaged in the IND-AS. Non-

reportable segments have not been disclosed as unallocated reconciling item in view of their materiality. In view of the above, primary and secondary

reporting disclosures for business/geographical segment are not applicable.

Entity wide disclosure as per paragraph 31 of IND AS 108:

210

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

(` Crores)

Particulars

Year Ended

31.03.2023

Year Ended

31.03.2022

(i) Products:

Automobile Tyres 20665.22 17048.83

Automobile Tubes 1336.42 1233.43

Speciality Coating 421.03 318.16

Others 401.45 405.86

22824.12 19006.28

(ii) Revenue from Customers:

India 20947.24 17215.06

Outside India 1876.88 1791.22

22824.12 19006.28

(iii) Non Current Assets :

India 15113.14 12869.26

Outside India 12.59 2.52

(iv) There are no transactions with single customer which amounts to 10% or more of the Group's revenue.

f. Terms of Repayment and Security Description of 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 4.00% to 7.90% (Previous year 3.8% to 6.85%).

g. Terms of Repayment and Security Description of Non Current Borrowings:

i) Indian Rupee Term Loan (Unsecured) from the HSBC Bank

a) Indian Rupee Term Loan of `150 Crores availed in February, 2019 is for capital expenditure. Interest is payable at a rate equal to the three months T-Bill rate plus

a margin of 1.49% (Previous year-1.49%) payable monthly. The said Loan is repayable in one full installment in February, 2024.

b) 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.

211

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023

iii) 15,000 [Floating Interest rate linked to 6 months 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.

h. Events Occurring after the Balance Sheet date

The proposed final dividend for Financial Year 2022-23 amounting to `71.68 Crores will be recognised as distribution to owners during the financial year 2023-24 on its

approval by Shareholders. The proposed final dividend amounts to `169/- per share.

i. Commitment:

(i) Estimated amount of contracts remaining to be executed on Capital Account, net of advances and not provided for - `2185.02 Crores (Previous year `3031.32 Crores)

(ii) Guarantees given by the Banks - `130.78 Crores (Previous year-` 43.84 Crores)

(iii) Letters of Credit issued by the Banks - `265.58 Crores (Previous year - `182.45 Crores)

j. 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 - `198.44 Crores (Previous year - `196.00 Crores)

(c) Disputed Excise/Customs Duty demands pending before the Appellate Authorities/High Court - `377.84 Crores (Previous year - `378.66 Crores)

(d) Disputed Income Tax Demands - `275.64 Crores (Previous year - `159.87 Crores). Against the said demand the company has deposited an amount of `131.61 Crores

(Previous year `97.52 Crores)

(e) Disputed Goods and Service Tax demands pending before the Appellate Authorities - ` 0.56 Crores (Previous year- `1.70 Crores)

(f) Contested EPF Demands pending before Appellate Tribunal- `1.10 Crores (Previous year `1.10 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 Holding 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 Holding Company. The appeal filed by the Holding Company has been disposed off by

National Company Law Appellate Tribunal (NCLAT) in December 2022 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 of the same, the Holding Company is of the view that no provision is

considered necessary in respect of this matter in the Consolidated Financial Statements.

For M M NISSIM & CO LLP For SASTRI & SHAH

Chartered Accountants Chartered Accountants

Firm Reg. No. 107122W / W100672 Firm Reg. No. 003643S

N. KASHINATH C R KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Partner Partner MADHU P NAINAN S DHANVANTH KUMAR Director Director Chairman &

Mem. No. 036490

Mem. No. 026143

Chennai

Executive Vice

President Finance

Company Secretary

Chennai

DIN: 00860095

DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

212

FORM AOC-1

(Pursuant to first proviso to sub-section(3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures

SUBSIDIARIES

` Crores

No.

Name of the

Subsidiary

The Date

since when

subsidiary was

acquired

Reporting Period of

the Subsidiary

Reporting

Currency

Exchange

Rate as on

31.03.2023

Capital

Reserve &

Surplus

Total

Assets

Total

Liabilities

Investments Turnover Profit

before

Taxation

Provision

for

Taxation

Profit

after

Taxation

Proposed

Dividend

Extent of

Shareholding

(in %)

1 MRF Corp

Ltd.

26.08.1985 1st April, 2022 to

31st March, 2023

INR 1 0.05 143.07 238.43 95.31 1.00 421.03 22.71 6.38 16.33 0.10* 100.00%

2 MRF

International

Ltd.

23.10.1992 1st April, 2022 to

31st March, 2023

INR 1 0.56 2.21 2.77 - - 0.14 0.13 0.03 0.10 94.66%

3 MRF Lanka

(P) Ltd.

15.06.2005 1st April, 2022 to

31st March, 2023

LKR 0.25 15.01 5.22 23.76 3.53 - 16.81 2.57 0.55 2.02 100.00%

4 MRF SG PTE

LTD

23.07.2014 1st April, 2022 to

31st March, 2023

USD 82.17 6.11 49.89 544.85 488.85 - 1887.60 (75.70) (8.91) (66.79) 100.00%

* The Proposed Dividend is not recognised in books as per Ind AS.

MADHU P NAINAN S DHANVANTH KUMAR JACOB KURIAN V SRIDHAR K M MAMMEN

Executive Vice Company Secretary Director Director Chairman &

President Finance Chennai

DIN: 00860095 DIN: 00020276

Managing Director

DIN: 00020202

Dated 03rd May, 2023

MRF Limited

No.114, Greams Road, Chennai - 600 006.

Tel: +91 44 28292777 Fax: +91 44 28295087

CIN: L25111TN1960PLC004306

E-mail: [email protected] | Website: www.mrftyres.com

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