Dear Member,

The Directors have pleasure in presenting the 24^th Annual Report along with the audited statements of accounts of your Company for the financial year ended 31^st March, 2017.

Financial Results

The following table shows the operational results of the Company for the year 2016-17 as compared to that of the previous year.

(Rs. in lakhs)

Financial Highlights

Considering the turmoil in the industry in general, your Company reported satisfactory performance during the financial year. The revenue has been improved by 7.4%, when compared to the previous year. Due to the uncertainties and turbulences in the market PBIDT has declined by 21%. The profit before tax and Net Profit after Tax have also dropped by 61%.

The Company was able to manage its growth in revenue, but the margin has shrunk due the rise in input costs. This fall in profit was on account of factors, like volatility in raw material prices, increased debt, higher finance cost, depreciation charges, demonetization and other economic restrictions etc.

Operational Highlights

During the year, key raw material prices were volatile in nature and this unpredictability impacted margins. Even though the Company has fought hard to mitigate the increase in input cost and passed some of this cost on to its customers, it could not increase the price in line with the extensive escalation of costs due to resistance in accepting the hike, as the retreaders were under high pressure to transmit the increase to end customers due to the pricing strategies of tyre manufacturers. Further as tyre retreading industry is cash driven in nature, the industry faced strong adverse impact of demonetization. However better operating efficiencies, saving in cost to the possible extent, launch of new products and franchise operations helped the Company to manage the profitability. The operations are exhaustively discussed in ‘Management Discussion and Analysis’ forming part of the annual report.

Dividend

The Board has recommended a dividend @ 5% (Re. 0.50 per equity share of Rs. 10/- each) for the financial year 2016-17. Subject to the approval of shareholders, the dividend will be paid on or after 15^th July, 2017 to the shareholders, whose name appears on the Register of Members / Beneficial Owners at the close of business hours on Friday, 30^th June, 2017.

Deposits

The Company has not accepted any fixed deposits during the year to which the provisions of Section 73 of the Companies Act, 2013 are applicable.

Board of Directors and Key Managerial Personnel

Mr. M.E. Mohamed, Managing Director, Mr. Rajesh S., Chief Financial Officer and CS. Baiju T., Company Secretary are the Whole-time Key Managerial Personnel of the Company. Mr. Naiju Joseph, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. The Board recommends his appointment.

Mr. M.E. Mohamed, Managing Director has vacated his office as the Managing Director and Whole-time KMP on 25^th August, 2016 and continued as a director. Considering his rich and varied experience in the industry and his involvement in the operations of the Company over a long period of time, as recommended by the Nomination and Remuneration Committee, the Board reappointed him as the Managing Director for a period of 5 years with effect from 9^th February, 2017. Being the Managing Director, he has also designated as Whole-time KMP. Mr. M.E. Mohamed seeks the approval of shareholders to hold the office of Managing Director for a period of 5 years with effect from 9^th February, 2017.

The Board has considered the declarations given by independent directors under Section 149 (6) and the Company’s policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes and independence of a director. The Board has further evaluated its own performance and that of its committees and individual directors. None of the Directors is disqualified under Section 164 of the Companies Act, 2013.

Directors' Responsibility Statement

Pursuant to the requirement of Section 134 (3) and (5) of the Companies Act, 2013, your Directors confirm that:-

(a) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that there are no material departures.

(b) Selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of the Company for that year.

(c) Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(d) Prepared the Annual Accounts on a going concern basis.

(e) Had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) Devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Auditors & Audit Observations

The period of appointment of M/s. JVR & Associates, Chartered Accountants as the auditors of the Company expires at this Annual General meeting. Pursuant to the provisions of Section 139(2) of the Companies Act, 2013 the existing auditors cannot be reappointed at the ensuing Annual General Meeting and the Board recommends the appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants, Kochi as Statutory Auditors, to hold office for a period of five consecutive financial years from the conclusion the 24^th Annual General Meeting, subject to ratification of the appointment at every Annual General Meeting. Necessary certificate has been obtained from the Auditors as per Section 139(1) of the Companies Act, 2013. The Auditor’s observations are suitably explained in notes to the Accounts and are self-explanatory.

Cost Audit Report

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 the Cost Audit Report is not mandatorily applicable to our Company for the financial year 2016-17; hence, no such audit has been carried out during the year.

Secretarial Audit Report

The secretarial audit report on the compliance of the applicable Acts, Laws, Rules, Regulations, Guidelines, Listing Agreement, Standards etc. as stipulated by the provisions of Section 204 of the Companies Act 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of this report as Annexure - A. The findings of the audit have been satisfactory.

Public Shareholding

About 34.50% of the paid up equity share capital of the Company are held by a large number of public shareholders. The category-wise shareholdings are reported in the “Extract of Annual Return” forming part of the annual report.

Listing and Dematerialization

The equity shares of the Company are listed on the Bombay Stock Exchange Ltd. Shareholders are requested to convert their holdings to dematerialized form to derive its benefits by availing the demat facility provided by NSDL and CDSL.

Extract of Annual Return

The details regarding extract of Annual Return in Form No: MGT-9 pursuant to Section 92 of Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, is annexed herewith as

Annexure - B.

Related Party Transactions

There were no materially significant related party transactions which could have had a potential conflict with the interests of the Company. Transactions with related parties are in the ordinary course of business on arm’s length and are periodically placed before the Audit Committee and Board for its approvals and the particulars of contracts entered during the year, in Form AOC-2 is enclosed as Annexure - C.

The Board of Directors, as recommended by the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the Listing Agreement. This Policy was has been uploaded on the website of the Company. There has been no change in the policy since the last fiscal year.

Conservation of Energy, Technology Absorption, Foreign Exchange Inflow & Outflow

Your Company continues its efforts to improve energy conservation and utilization most efficiently to nurture and preserve the environment and to exploit all its avenues to adopt latest technology in its operations. The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, regarding Conservation of Energy, Technology Absorption, Foreign Exchange Inflow and Outflow are given in Annexure - D to this report.

Corporate Governance

Your Company has been complying with the principles of good Corporate Governance over the years and is committed to the highest standards of compliance. Pursuant to the Listing Agreement read with Regulation 15(2) of the SEBI (LODR) Regulations 2015, the compliance with the corporate governance provisions as specified in regulations 17 to 27 and clauses (b) to (i) of Regulation 46(2) and para C , D and E of Schedule V shall not apply the Company. However, as a good Corporate Governance Practice the Company has generally complied with the Corporate Governance requirements and a report on Corporate Governance is annexed as Annexure - E and forms part of this Report. As required under SEBI (LODR) Regulations 2015 the Management Discussion and Analysis Report is annexed as Annexure - F and forms part of this Report.

Personnel

None of the employees is in receipt of remuneration in excess of the limit laid down under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company and Directors are annexed as Annexure - G and forms part of this Report.

Corporate Social Responsibility

Company has generally taken corporate social responsibility (CSR) initiatives. However, the present financial position of the Company does not mandate the implementation of CSR activities pursuant to the provisions of Section 135 and Schedule VII of the Companies Act, 2013. The Company will constitute CSR Committee, develop CSR policy and implement the CSR initiatives whenever it is applicable to the Company.

Vigil Mechanism

A Vigil Mechanism for directors and employees to report genuine concerns has been established as required under the provisions of Section 177 of the Companies Act, 2013. The Vigil Mechanism Policy has been uploaded on the website of the Company.

Particulars of Loans, Guarantees or Investments

Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement. Company has availed Line of Credit facility offered by IDBI Bank Ltd to the extent of Rs.750 Lakhs in the form of Bill discounting facility to the Company’s approved vendors supplying raw materials to the Company and has guaranteed for its repayment.

Development and Implementation of Risk Management Policy

Company has developed and implemented a risk management policy, and formed a Risk Management Committee to address and evaluate various risks impacting the Company and a report on risk management is provided in this Annual Report in Management Discussion and Analysis.

Adequacy of Internal Financial Controls with reference to the Financial Statements

The Company has implemented and evaluated the Internal Financial Controls which provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The Company Secretary has been appointed as the Internal Auditor with a dedicated internal audit team. The internal audit reports were reviewed periodically by Audit Committee as well as by the Board. Further, the Board annually reviews the effectiveness of the Company’s internal control system. The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3) (i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors report.

Material Changes and Commitments

No material changes and commitments, affecting the financial position of the Company has been occurred between the end of the financial year 2016-17 and till the date of this report.

Statutory Orders

No significant and material orders were passed by Courts, Tribunals and other Regulatory Authorities affecting the going concern status of the Company’s operations.

Employee Wellbeing and Safety

Your Company has implemented policies and procedures with the objective of ensuring employee safety, security and wellbeing at the workplace. As stated in our Code of Conduct we are committed to provide a gender friendly workplace, equal opportunities for men and women, prevent/redress sexual harassment and institute good employment practices. The Company has adopted policy on prevention of sexual harassment in line with the requirements of the Sexual Harassment of Women at the work place (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints. The Company has not received any complaint under this policy during the year 2016-17.

Acknowledgement

Your Directors wish to place on record their gratitude to Bankers, Share Transfer Agents, Auditor, Customers, Suppliers and Regulatory Authorities for their timely and valuable assistance and support. The Board values and appreciates the professionalism, commitment and dedication displayed by employees at all levels. Your Directors are thankful to the shareholders for their continued support and confidence.

For and on behalf of the Board

Kochi Navas M Meeran

04/05/2017 Chairman