Annual Report 2008 2009 Apollo Tyres

8/7/2019 Annual Report 2008 2009 Apollo Tyres

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CONTENTS

PRODUCT, QUALITY& TECHNOLOGY

OPERATIONS &MANUFACTURING

HUMAN CAPITAL

MARKETING, SERVICE& DISTRIBUTION

SUSTAINABILITY

FINANCIALS

VISION - VALUES

CHAIRMAN'S MESSAGE

BOARD OF DIRECTORS

OPERATING &FINANCIAL HIGHLIGHTS

MANAGEMENT DISCUSSION& ANALYSIS (MDA)

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32

36

40

46

48

04

06

10

14

16



Key HighlightsUnveiling the new corporate identity that reflects ourglobal vision and showcases Apollo as a young, ambitious,dynamic company, proud to be Indian.Featured in the top 20 "Best Companies To Work For" inIndia, in a survey conducted by Business Today inpartnership with Mercer Consulting and TNS.In the JD Power India original equipment Total CustomerSatisfaction Index Report 2008, Apollo Tyres stood secondat 816 points out of 1000.The company's world-class, green field facility in Chennai,India will be operational soon. The plant will produce 'top

of the line' Truck/Bus Radial Tyres & Ultra HighPerformance Passenger Car Radial Tyres.Apollo rides to Europe with the establishment of theEuropean Technology Center at Russelsheim, Germany.

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Apollo was the only Indian company to be invited byVolkswagen AG to participate in the IZB exhibition inWolfsburg, Germany. Volkswagen Polo, the best selling carmodel from Volkswagen, will now roll out on Apollo Tyresfor its India launch.Integrating the global product portfolio by rebranding the"Dunlop" brand and rolling out new “Dunlop Zones” acrossSouth Africa.Awarded the Gold certificate for its manufacturing units inDecember, 2008, at the India Manufacturing ExcellenceAwards.Production of the first ever ultra large size OTR (Off-the-

Road) tyre from our flagship plant at Limda which will caterto the present and future needs of the mining industry.Apollo Tyres Mission 2018 discovers hidden tennis talentacross the country for the second batch in 2008.

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EXCELLENCE THROUGH TEAMWORK

CARE FOR CUSTOMERS

RESPECT FOR ASSOCIATES

ALWAYS LEARNING

TRUST MUTUALLY

ETHICAL VALUES

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R

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A

T

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C R E A T E

Our Values

Our Vi si on“A significant player in the global tyre industry and a brand of choice, providing customer delight and continuouslyenhancing stakeholder value”

VISION–VALUES



04/05LIMDA PLANT MAIN BUILDING



Dear Member,

These are challenging times. The global economic downturn

has impacted businesses worldwide. Our operations andprofitability also have been affected but I strongly believeyour company has the management depth and resource toride out this storm. This year's annual review focuses on theongoing challenges and how your company plans to turnadversity into an opportunity.The high price of crude and natural rubber in the first quarterof fiscal year 2008-09 was a precursor to the slowdown thatwas seeded by the sub-prime crisis in the USA. The steep fallin demand by both OEMs and the replacement marketresulted in higher inventories. This coupled with the steepprice of raw materials, eroded what could have been a veryprofitable year. Despite the fall in raw material prices over thethird quarter, the average procurement cost remained high

but we were still able to register a profit due to judiciousplanning and sales.

Your company has been quick toreact to the changingenvironment and we haveaggressively liquidated ourinventories, as a result of whichwe are uniquely poised to takeadvantage of the softer rawmaterial prices in the comingyear.

The 6% excise cut announced by the government, which was

passed onto the consumers, helped rally sales and coupledwith other government initiatives, market sentiment picked upin the latter half of the year.This year our challenge is to react to the slowdown in theindustry and prepare ourselves for increased competitivenessin the market place.

As part of our efforts to be more efficient, the managementteam had identified 40 Profit Improvement Projects with asavings target of Rs 520 million. These savings are over andabove our ongoing efficiency improvement initiatives. A newR&D facility at Frankfurt will add a technological edge to allour products ensuring that we remain globally competitivenot only in price but also in emerging technologies.

Apollo has made significant inroads into the passengervehicle tyres segment. The passenger vehicle tyre productioncapacity is slated to increase from 10,500 tyres to 16,500tyres per day in our Limda plant from January 2010 in view of

We have increased ouroperational efficiencies and fine-tuned our manufacturingprocesses. The awarding of the

Gold Certificate to Apollo at theIndia Manufacturing ExcellenceAwards is a reflection of ourendeavours.

CHAIRMAN'S MESSAGE



06/07



the estimated increase in market demand. We have alsoprogressed on our partnerships with leading automakers inIndia, including a few global players who have recentlyentered the Indian market. This showcases our ability tomanufacture tyres and supply the right blend of technology,quality and price.I am happy to inform you that your company has alsocommenced development of new technologies in thepassenger vehicle tyre segment like “run-on-flat” and“winter”. We will also be launching the third generation of thepopular Amazer tyre, called “Amazer 3G” in the coming year.In the commercial vehicle radial tyre segment variousdevelopmental activities have been initiated. New application-led patterns, designs and the use of environmentally friendlymaterials are but some of the new activities in focus.

Manufacturing processes have been further tweaked to refinequality levels even further.

Your company featured in the top20 "Best Companies To Work For"in India this year in a surveyconducted by Business Today inpartnership with MercerConsulting and TNS. This is atribute to the importance of“human capital” in Apollo.

CHAIRMAN'S MESSAGE



Through continuous training, job enhancement, cross-functional working and multi-tasking we have reached astature where each Apolloite stands tall and proud in theIndian tyre industry.Added to this, the “Apollo One Family” culture makes workingat Apollo Tyres truly unique and mutually enriching for theorganisation and the team member.

While product acceptability is the ultimate test, the rightvisual look and feel and visual differentiation is the coat thatshowcases the brand attributes that we stand for -competent, credible and confident. During the course of theyear your company unveiled a new corporate identity.This has been a major step taken by us after depictingourselves in a certain way for 33 years. The new “Apollo”reflects to the outside world what we actually are - a modernyouthful company that blends Indian values with a globalperspective. I am confident you will find the change appealingand in tune with the brand objectives.

At the end I would like to conclude by reaffirming mycommitment to ensure that your company achieves its visionof being a global player of significance and a brand of choice.On behalf of the Board of Directors of Apollo Tyres Ltd.,I thank all our customers, partners, investors and otherstakeholders for your suppor t and conf idence in themanagement of your company.

Best Regards

Onkar S. Kanwar

Chairman & Managing Director

Today your company stands onthe threshold of a new world. Aworld where the “Apollo” brand is

determined to stand out and becounted. Reaching out to worldmarkets by systematically settingup global scale operations;marketing, distribution andmanufacturing. This is part of ourstrategy and will enable us to beseen for who we really are –

young, ambitious, Indian andproud of it !

08/09



Dr. S. Narayan

M. R. B. Punja

Neeraj KanwarVice Chairman & Managing Director

T. BalakrishnanKerala Govt. Nominee

A. K. Purwar

Sunam SarkarChief Financial Officer& Whole Time Director

U. S. OberoiChief, Corporate Affairs and Wholetime Director

K. Jacob Thomas

Nimesh N. Kampani Raaja Kanwar

Shardul S. Shroff

BOARD OF DIRECTORS



Robert Steinmetz

Onkar S. KanwarChairman & Managing Director

M. J. HankinsonL.C. GoyalKerala Govt. Nominee

10/11



Asoka S. IyerChief - Group Advisory Services

Satish SharmaChief - Indian Opeartions

Sunam Sarkar

& Wholetime DirectorChief - Financial Officer

Satish AggarwalChief - Corporate Manufacturing

Dr. Luis CenevizChief - South Africa Operations

Peter BeckerChief - Research & Technology

P.K. MohmmadAdvisor - Research & Technology

U.S. OberoiChief - Corporate Affairs & Wholetime Director

K. PrabhakarChief - Projects

Tapan MitraChief - Human Resources

CORPORATE CHIEFS



Neeraj KanwarVice Chairman

& Managing Director

12/13



Return on Capital Employed

17.13%

14.00%

FY 2007 FY 2008 FY 2009

24.61%

35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%

Earning per share

2.80 2.76

FY 2007 FY 2008 FY 2009

5.737.00

6.00

5.00

4.00

3.00

2.00

1.00

0.00

Net Profit Margin

2.72% 2.79%

FY 2007 FY 2008 FY 2009

5.75%7.00%

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%

EBIDTA Margin

9.53% 8.81%

FY 2007 FY 2008 FY 2009

13.08%14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

% M a r g i n

% M a r g i n

% R e t u r n

E a r n i n g p e r

s h a r e ( R s

. )

OPERATING & FINANCIAL HIGHLIGHTS*



14/15

* Based on Consolidated AccountsIncludes production under lease arrangement and conversion of finished goods by conversion agents.**

Net Sales

36,000

24,000

12,000

48,000

0.0

( R s .

M n )

42,99246,912 49,841

FY 2007 FY 2008 FY 2009

Debt / Equity

1.00

0.61

FY 2007 FY 2008 FY 2009

0.69

1.2

0.8

0.0

0.4

FY 2007 FY 2008 FY 2009

**Actual Production

889963 958

M T p e r d a y

1200

900

600

300

0.0







Industry Structure and Developments

The Indian tyre industry is an approximately Rs. 225 billionindustry with 4 major players : Apollo Tyres Ltd., MRF Ltd., JKTyres & Industries Ltd. and Ceat Ltd. These companiesaccount for around 75% of the industry's turnover with a well-diversified product mix and presence in all three majorsegments - the replacement market, original equipmentmanufacturers (OEMs) and exports. Some of the globalmajors like Bridgestone and Goodyear also have theiroperations in India. However, these are relatively smallersized operations today. There are also many other small capcompanies, with a focus only on one or two categories of tyres,plus tubes and flaps primarily for the replacement market.The demand and growth for the industry depends on primaryfactors like the overall GDP growth, agricultural & industrialproduction, growth in vehicle demand and secondary factorslike infrastructure development, prevailing interest rates andfinancing options.Unlike the global industry, where passenger car radialsdominate the market, the Indian industry is primarily

dominated by commercial vehicle tyres which accounts forapproximately 70% of the industry turnover. In the commercialvehicle tyres industry Apollo Tyres has maintained itsleadership position amongst the industry players. However, theindustry has seen a significant growth in passenger car radialsover the years with a 5 year compounded annual growth rate(CAGR) of approximately 14%.Another significant difference between the Indian and theglobal tyre industry is the extent of radialisation in thecommercial vehicle tyres. Globally, commercial vehicle tyresare radialised to the extent of 65% as compared to Indiawhere the radialisation levels in this segment until last yearwas only 4%. However, this trend is gradually changing and itis expected that radialisation levels will go up to the extent of20% in the next 2 years. The major domestic players haveannounced significant expansion plans to meet the growingdemand for commercial vehicle radial tyres.The current financial year has been extremely challenging forthe economy as a whole and particularly for the automotivesector. There was a collapse of the credit markets post theLehman debacle in the second half of the year, resulting in aliquidity crunch in the market and interest rates going up. Thiscoupled with the overall economy slowdown impacted thedemand in the automotive sector resulting in a negativegrowth in the medium and heavy commercial vehiclesegment. Most of the industry, including Apollo, was forced totake production cuts as a consequence of this lower demand.The tyre industry is highly raw material sensitive and a majorconsumer of natural rubber. The industry was affected by

soaring raw material prices in the second and third quarter ofthe year, with natural rubber touching an all time high atRs. 137/kg in September and crude touching $145/ barrel inJuly. Reduced demand, increasing raw material prices and

Market Overvi ew

In the midst of a global recession, India's growth, despite itsintrinsic strengths has not remained untouched. Economicwoes across the world, prompted by the sub-prime crisis inthe USA, have contributed to a slowdown which has had a far-reaching impact. More than an actual ground level impact,public sentiment has been hit and there is a general warinessin capital spending both at the personal level as well as theinstitutional level.A fall out of this has been a dramatic fall in production and saleof automotive products across categories and across nationalboundaries – Trucks, Buses, LCV's, Tractors and PassengerVehicles. There has been a significant reduction in offtakefrom the OEM segment with Truck and Bus sales down bymore than 40% in India. The passenger car market was alsoimpacted, albeit to a smaller extent. Exports from India havebeen affected due to the low demand.Tyre sales in India which accounts for more than 70% ofApollo's revenues, have been slow. The year witnessed asteep rise in input raw material costs in the beginning but the

ongoing recession ensured that the tide turned and rawmaterial costs actually dropped enabling a reduction in tyreprices across the board. The Indian government has added tothis positive note by reducing excise duty by 6%, leading to afurther decrease in the cost of ownership of tyres. However,the real impact of the lowering of commodity prices will be feltmore in the coming year since the average procurement priceof raw material over the last year has been relatively high.Indian tyres have been fighting an uphill battle with cheapimports from China. Representation to the government by thetyre manufacturers highlighting the unfair trade practices hasresulted in the imposition of anti-dumping duties on import oftruck/bus bias tyres. The import of radials in these categorieshave also been now placed in the restricted list.Another silver lining in the cloud has been the exchange rateparity between the dollar and rupee. The ongoing financialcrisis has depreciated the rupee even further which hasresulted in imports becoming even more unviable therebyimpacting the influx of these tyres in India.However despite the worldwide turmoil,

Low raw material prices, economic fillips by the government,

large infrastructure spending and a cautiously positivesentiment are all contributing to what we believe are sunnydays ahead, though belt tightening and high efficiency willremain the norm for a business to be successful.

India seems set to shake off thelethargy. There are signs of arevival with an increasing offtakein both car and truck production.

MANAGEMENT DISCUSSION & ANALYSIS



strengthening of the dollar against the rupee further

increased the raw material cost thus impacting the overallprofitability. As a consequence, most of the tyre companiesreported a net loss in the September and December quarter.However, there were signs of relief in the fourth quarter withthe Government announcing excise duty cut by 6%. BetweenDecember to February, raw material prices significantlyeasing off and the demand picked up. The industry as a resulthas shown better results in the March quarter.

StrengthsContinued market leadership in the dominant industrysegment of truck and bus tyres

Global presence with the acquisition of Apollo TyresSouth Africa (Pty) Ltd. (Formerly known as Dunlop TyresInternational (Pty) Ltd.)Extensive distribution network in India and South AfricaStrong brand recall in a price sensitive Indian marketResponsive to changes in market conditions and productprofilesGlobal quality standards, international process and systemcertificationsHigh usage of information technology systems to hastenthe flow of information and leverage opportunities across140 locations in IndiaDynamic and progressive leadership, willing to implementchange

Opportunities and Threats

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SWOT Analysis

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Passenger Car Tyres

Economies of transportation cost, on account of closeness

to natural rubber growing beltGlobal sourcing of raw materials

No presence in two and three-wheeler segmentsCapital intensive business

Leadership position in the commercial vehicle segmentwill enable the Company to leverage new and relatedbusiness opportunitiesNew product segments like Truck/Bus Radial (TBR), OffThe Road tyres (OTR), retreading and allied automotiveservices

Growth in overseas markets like Europe

Imports from neighbouring countries at competitivepricesRaw material price volatility

The annual domestic car production has shown a growth of3%, where as, domestic sales has remained on the same levelwith 1.5 million vehicles in 2008-09.Passenger vehicle exports have grown by 53%. This growth has

been mainly driven by Maruti Udyog Ltd. & Hyundai, who haveplans to make India a small car hub. Passenger cars and utilityvehicles are expected to grow at a CAGR of 13.2 % till 2012 – 13.

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Weakness

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Opportunities

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Segment wise performance

18/19



Our farm tyre business has grown by 16% over a period of last3 three years, while the industries has grown by 6.7%. Anotherfirst from apollo is the specialist farm tyre network "ApolloPragati Kender" has helped company to consolidate itsposition in the market.

Your Company has continued its passionate journey towardscustomer delight & loyalty by focussing on expanding itsglobal reach, delivering technologically superior products andservices, and by focussing on the 3i (Invent, Innovate &Implement).For 33 years, we have represented ourselves within and to theworld in a certain way. We received constructive feedbackfrom within the organisation, and outside, that the presentidentity may not be most appropriate to serve us for the next33 years. Therefore, as a global brand of choice, we needed toreinvent our brand, while preserving all our core values.

and is consciously different from others in the globalmarketplace. The new identity has been designed by WallyOlins, one of the world's leading practitioners in corporateidentity and branding who has advised leading globalorganisations like Prudential, Renault, Volkswagen, Tata etc.Initial pilot implementation of the new corporate identity hasbeen initiated and will be rolled out at all the retail chains inthe coming year.Apollo continues its thrust towards becoming a global player.In South Africa, the 'Dunlop' brand was rejuvenated with avibrant looking logo, revitalising the Dunlop AccreditedDealers (DAD) by the new look 'Dunlop Zones'. A newcommunication campaign 'Driven by Precision' was launchedto spread the new look. The European technology centre atRusselsheim near Frankfurt, Germany was established.The passenger car radial greenfield plant at Chennai cateringto the growing small car segment is going full steam ahead.The production of tyres from this facility would commencefrom November '09.The Baroda Plant capacity will concentrate on higher end,premium products catering to the passenger car radialmarket. The OTR Plant was also commissioned in March '09.The initial production capacity of the plant would be 7400 tonsper day. The TBR segment capacity is being prepared to meetthe increasing radialisation levels expected in the industry.In commercial vehicles, the 'Endurace' premium radial trucktyre has gone through extensive tests and the initial resultsare showing superior performance over the best bench-

marked world-class product. Few more field tests are underway and the product is slated to be launched by next year. Thiswill add one more superior global product in your Company'sportfolio and exceed customer expectation yet again.

Outlook

Our new identity reflects

confidence, future thinking,

The Passenger car tyre market in India has witnessed asimilar trend to the passenger vehicle industry, remaining atthe same level as last year. In such a market, Apollo hasshown a 18 % growth.In fact, with the introduction of the new product rangeAmazer 3G (tubeless car radial range in A1~A3 segment) yourCompany will further consolidate the product range. Apollo'sfocus this year has been on the organised retail networkexpansion & extraction.

The slowdown in the economy has affected the industry in2008-09. In an environment of rising costs and weak tyredemand, the industry has tightened its belt with productioncuts and other monetary measures.For Financial Year 2008-09, tyre production in volume termshas witnessed a decline of around 0.4% across the maincategories (truck and bus, light commercial vehicles, cars and jeep).While the production in tonnage terms has declined by around1.7%, in the domestic segment, the dominant truck and bus(T&B) tyre segments registered a de-growth of around 2.7%.Growth slowed down largely due to the decelerated OEMproduction of medium and heavy commercial vehicle (MHCV)which has seen a huge 35% drop. Added to this, was the lowerdemand in the replacement segment. OEM Light CommercialVehicles production fell 12% while tyre output showed a bare0.1% increase in production.In the exports segment, between April 2008 and March 2009,the tyre industry witnessed a decline of 10.0% in terms ofvolume and around 14.9% in tonnage. The LCV segmentwitnessed a growth of around 3.3 % during the year. As againstthe industry, Apollo's truck and bus production contracted 8%while LCV production declined 2%. This was due to productioncuts being undertaken to contain inventory costs. This decision

has turned out in your Company's favour as

As a leader, Apollo has enabled itself and its businesspartners to forge ahead of the competition by launching thefirst 'TRUST' outlet in Salem, Tamil Nadu. The first of its kindin India, the Apollo TRUST is a fully automated service outletproviding wheel alignment, wheel balancing and radial repairservices to the discerning truck/bus radial customer. In the

year 2009-10, we are looking at setting up 10 more suchoutlets.The retread Business 'Duratreads' has grown by 14%. Moresizes & patterns, especially radial will be launched in 2009-10.

Commercial Vehicle Tyres

Apollo Tyres Ltd. remained theonly profitable company acrossall quarters of 2008-09 in thetyre industry.




20/21



Risks and Concerns

The growth of the tyre industry is dependent on economicgrowth, infrastructure development and also growth in the

automobile industry which is cyclical in nature. Most of theraw materials are petroleum based and their prices are linkedto the movement in crude oil prices. Natural rubber which isone of the major components of the total raw material cost isan agricultural product and is subject to price and production

volatility resulting from speculative activities and naturalcauses. The inverted duty structure between tyres andnatural rubber puts further pressure on the industry'srevenue and profitability. The industry may also come underpressure if the radialisation level in the commercial vehiclesegment increases faster than expected, necessitating largerinvestments.

Information Technology/Internal Control Systems andtheir adequacies

Your Company has internal controls which provide a high

degree of assurance with regard to effectiveness andefficiency of the following:Business operationsSafeguarding of Company Assets andCompliance with various laws & regulations.

It is empowered to examine the adherence to policies & plans,as well as statutory obligations.

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Your Company has an internalaudit function which conductsregular audits in a structuredmanner across the Company.

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(Rs./Millions)

Sl.No Particulars Year ended

1 Gross Sales/ Income from operations 45,496.32 42,469.83

2 Other Income 112.47 92.23

Total 45,608.79 42,562.06

3 Total E xpenditurea) Decrease /(Increase) in Work in

Process & Finished Goods 265.86 (552.74)

b) Consumption of Raw Materials 27,946.64 23,849.60

c) Staff Cost 2,075.46 2,270.55

d) Excise Duty 4,791.91 5,530.56

e) Other Expenses 7,168.77 6,731.11

Total 42,248.64 37,829.08

4 Operating Profit 3,360.15 4,732.98

5 Interest 668.43 520.41

6 Depreciation 980.07 878.10

7 Profit before Tax 1,711.65 3,334.47

8 Provision for Tax

- Current 439.30 975.01

- Deferred 148.67 121.43

- Fringe Benefit Tax 42.50 45.00

9 Net Profit 1,081.18 2,193.03

31.03.2009 Year ended 31.03.2008

It also reviews the adequacy of controls in ongoing projectsinvolving significant expenditures in addition to regularoperations. A quarterly review of the audit findings isconducted by the management, as also the audit committeeof the Board.Your Company has a robust risk management frameworkwhich is reviewed every quarter for its relevance andassessment of risk ratings.Your Company has established a robust audit processcomprising both internal and external audits to ensureadequacy and effectiveness of the controls across IT systemsand compliance with the operating systems, internal policiesand regulatory requirements.The information systems of Apollo Tyres is ISO 27001certified. The yearly audit of information security was donewith BSI product services and has been found to be in

compliance with the standards. During the year, yourCompany has also established a disaster recovery system forcritical IT infrastructure.

The financial statements have been prepared in accordancewith the requirements of the Companies Act, 1956, andapplicable accounting standards issued by the Institute ofChartered Accountants of India. The management of ApolloTyres Ltd accepts the integrity and objectivity of thesefinancial statements as well as the various estimates and judgements used therein. The estimates and judgementsrelating to the financial statements have been made on aprudent and reasonable basis, in order that the financialstatements are reflected in a true and fair manner, reasonablypresent the Company's state of affairs and profit for the year.

Discussion on Financial Performance with Respect toOperational Performance

22/23



Material Development in Human Resources/IndustrialRelations

The year under review was challenging for the industry withthe slowdown in the economy, increase in prices and anoverall bleak outlook for the future. Human Resource, nowmore so than ever had to put its best foot forward and

integrate the business with the people, create a sense ofbuoyancy and bring in a whole new positive behaviour, attitudeand approach to the present and the future.

While this year our focus did lie on cost efficiency and right-sizing, we also introduced initiatives to approach both

Apollo Human resources activelysought to make a difference andto revive the unstoppable spirit ofApollo through variousinterventions.

parameters with a sense of stability. Job rotation, re-deployment and multi-skilling was introduced, and within HR afocus of cost efficiency was built in. Newer methods ofrecruitments were brought in with usage of job portals andreferences of employees for various positions within theorganisation. We also introduced 'Thomas Profiling' whileselecting prospective employees to ensure the right job fitment.

For the middle management, the learning and developmentfocused on leadership programmes. In our approach ofimparting multiple skills, our non-HR field commercialmanagers underwent a comprehensive programme on HRwith XLRI, as a result they will now also be taking on the roleof human resource facilitators for their field offices. The salesteam underwent a programme with MDI Gurgaon, onmarketing competencies. A case study on Apollo's growth journey was compiled by IIM-Ahmedabad charting out theorganisation's growth from inception till date. The same waslaunched at The Indian Institute of ManagementAhmedabad, campus amongst 300 students and faculty.Apollo Talent Trek (ATT) was conceived and implemented toaugment the growth journey of the organisation. A cross-




functional team – ATT, identifies the manpower requirementsand key HR policies for each project undertaken – India andInternational. The ATT team, as a part of its manpower

strategy, inducted about 80 Graduate Engineer Trainees.These trainees underwent a structured, rigorous induction forthe last one year and are now placed in various functionsacross the organisation.

This has re-instated the strong people practices that areprevalent at Apollo Tyres. We have featured amongst notablenames such as Microsoft, HSBC, Infosys, Whirlpool andothers.Over the years we have built healthy relations in our plants. Anumber of training programmes and various recognitionschemes were rolled out for the workmen. Initiatives like the

Attendance Champion and the Suggestion Award are some ofthe reward schemes which have received a great responsefrom the workmen. A new initiative “HR Trophy” was launchedthis year to reward the best HR team amongst the plants forinnovative HR practices.Apollo believes in the One Family concept and a number ofemployee engagement activities were undertaken this year toengage the workforce positively. Various health sessions &camps were held to promote healthy living and lifestyle forthe employees. Festivals and other celebrations were held atthe plants and the head office bringing employees and theirfamily together.Overall, the human resources function had a challenging year,maintaining the balance between the external and internal

environments. People practices ranging from engagement topolicies and systems remained the core focus areas. Withnew initiatives and improvements of the existing ones, HumanResources at Apollo, is steadily positioning itself towardsbuilding a truly global organisation.

At your Company, all quality initiatives are undertaken underthe 'Passion in Motion' journey. The journey revolves aroundthe three key pillars of People, Quality and Technology, usingthe rigour of Six Sigma methodology across all functions.Under this, multiple initiatives based on achievement are inprogress:Process Maturity and Small Improvement Projects (QualityCircle Tools) have become a part of the overall competency of

Apollo featured in the top 20companies to work for in Indiathis year in a survey conducted byBusiness Today in partnershipwith Mercer Consulting and TNS.The “Best Companies to work forin India” study evaluated the HRpractices, policies, initiatives andtakes employee feedback onvarious dimensions.

Quality at Apollo Tyres

shop floor employees and are slowly getting aligned to criticalprocesses.Six Sigma Initiatives have resulted in cost savings. In

addition, Six Sigma competency developments resulted int ra in ing Black Belt s for improving effect iveness ofimplementation, the initiative has resulted in cost savings.Manufacturing Excellencea. Our plants namely Limda and Perambra bagged the

“Gold Certificate of Merit” in Frost & Sullivan's “IndiaManufacturing Excellence Awards”.

b. Internally designed Plant Quality Assessment scale hasbeen made more stringent for meeting increasedchallenges like: entry into critical export markets andservicing big multinational customers.

Integrated Management Systema. The 3 Management Systems that are being integrated

are as follows:- Quality Management System- Environment Management System- Occupational Health and Safety Systems

b. This approach will ensure common planning, executionand review for all three systems ensuring synergy,effectiveness as well as huge reduction in effort andcosts. This will mean common documentation, commonwork instructions and common training modules.

c. This system will ensure achievement and continuation ofthree certifications namely:- ISO/ TS 16949- ISO 14001

- OHSAS 18001

This report contains forward-looking statements thatdescribe our objectives, plans or goals. All statements thataddress expectations or projections about the future,including, but not limited to, statements about the Company'sstrategy for growth, product development, market position,expenditure and financial results, are forward lookingstatements. These are subject to, cer tain risks anduncertainties, including, but not limited to, government action,local, political or economic development, technological risks,risks inherent in the Company's growth strategy, dependenceon certain customers, technical personnel and other factors

that could cause actual results to differ materially from thosecontemplated by the relevant forward looking statements.Investors should bear this in mind as they consider forward-looking statements.

NOTE:

24/25



The Japanese have always loved fresh fish. But the ocean surrounding Japanhas not held many fish for decades. So to feed the population, fishing boatswent further out at sea. The further they went, the longer it took to bring backthe fish, which meant, the fish were not fresh. To solve this problem, fishcompanies installed freezers so that they could freeze their catch at sea.This allowed the boats to go further and stay longer.

EVEN WHEN IT COMES TOEATING FISH.

However, the Japanese did not like the taste of frozen fish. So, fishingcompanies installed fish tanks. They would catch the fish and stuff them in thetanks, fin-to-fin. After a little thrashing around, they were tired, dull, and losttheir fresh fish taste. Sales plummeted.

But today the Japanese eat fresh fish everyday!How did they manage this?

To keep the fish tasting fresh, the Japanese fishing companies still put the fishin large tanks but with a small shark for company. The shark challenges the fish

and keep the fishes on the move. This challenge kept the fish alive and fresh!

THE RIGHT QUALITYIS IMPORTANT.



PRODUCT, QUALITY & TECHNOLOGY

At Apollo the aim forperfection is important.The challenge of globalpeers and evolving needsof our customers ensureswe innovate and stayahead in the game.

26/27



Today, the challenge is to always stay ahead of competition. Tothink on one's feet and deliver nothing less than perfection. AtApollo, we are changing the rules of the game, and leading byexample. Whether it is the development of our own internalbenchmarks for manufacturing excellence called PlantQuality Assessment (PQA) or the introduction of tubelesstyres in 22.5” size for the global Truck/Bus Radial market.The further development of bias tyres and the first of its kindultra large size Off The Road tyre manufactured at ourflagship plant at Limda herald the dawn of a new tomorrow.While significant steps have been taken to become globallycompetitive, with the launch of Amazer 3G & Amazer 3G Max,the journey of constant innovation and implementation in thepassenger car radial market is gaining momentum.

A testimony to the quality and manufacturing excellenceinitiative was the gold certificate to Apollo at the IndiaManufacturing Excellence Awards in December, 2008.Alongside technological enhancements, process relateddevelopments are also of equal importance. At Apollo, thedrive to achieve Six Sigma competency has shown significantpositive impact on financial savings. These advancedproduction processes are of strategic importance and alsohelp in enhancing customer satisfaction, and contributetowards the achievement of our long-term goals.To be at the forefront of the ever evolving radial technology,testing & evaluation has been carried out on global tracks inplaces l ike South Africa, Spain, Italy, Germany andScandinavia, to factor specific demands and climateconditions. For the Chennai project, technical standards areready and product development plan have been finalised. Wetcommissioning of equipment has also been undertaken.Several projects with Universities in India and abroad are indevelopment, for e.g. predictive testing and evaluation ofnoise, simulation and design.In the Passenger Car Radial segment, Apollo hascommenced the development of the Run on Flat Technology,and the unique development of the Winter Tyre.

Today, Apollo stands at thethreshold of a significantinflection point one which canposition us firmly as a significantplayer in the global tyre industry.

In the Truck/Bus Radial segment, there has been initialisationof developmental activities to cater to various customer andglobal regulatory requirements (for e.g. all wheel pattern, offthe road pattern, economic designs, premium mileage andusage of environment friendly materials). There has also beena maturing of manufacturing process to high precision levelsto create products with a competitive edge in quality (for e.g.reduced levels of tyre uniformity, constant indoor testresults).

This approach will ensure common planning, execution andreview for all three systems ensuring synergy, effectivenessas well as huge reduction in effort and costs. This approachwill also help us to achieve and maintain 3 differentcertifications through 1 comprehensive system. Thesecertifications are ISO/ TS16949, ISO 14001 and OHSAS18001.The Plant Quality Assessment (PQA) Scale has also beendeveloped by taking inputs from best companies and modelsacross the world. Most experts, including certifying bodieshave acknowledged that the Apollo PQA scale is morestringent than any other available scale in the world.

To better integrate all processes,Apollo has decided to merge

three management systems suchas Quality Management;Environment Management; andOccupational Health and SafetySystem.

At Apollo, all challenges are amotivation to stay ahead, wherethe constant endeavour is toevolve, be globally competitive,and achieve perfection in product& processes.

PRODUCT, QUALITY & TECHNOLOGY



28/29



A farmer owned a mule. One day, the mule fell into the farmer's well. Uponassessing the situation, the farmer ruled out any possibility of a rescue as it

was simply too much trouble to lift the mule out of the well. Out of sympathyfor the animal, he decided to bury the mule and put it out of its misery.

The old mule was hysterical upon learning that his life would end. However,as the farmer shoveled dirt into the well, a thought struck the old mule. Herealised that if he could shake off the dirt that landed on his back, the dirtwould hit the floor and he could step on the dirt.

BEING BURIED ALIVEWAS NOT AN OPTION?

He fought the sense of panic and distress and just went on shaking off the dirtthat landed on his back climbed higher up the well. Eventually the mulestepped out the well, battered and exhausted, but otherwise triumphant thathe had survived the ordeal.



A “never say die” spirit issomething that permeatesthrough Apollo. Adversesituations are but anopportunity to discover newpaths and become moreefficient.

OPERATIONS & MANUFACTURING

30/31



The heart of any organisation is its manufacturing process.More so at Apollo, where the cycle of production is an inherentand core component of our existence. As a global player in thetyre industry, business operations at Apollo predict consumerdemand, anticipate industry changes, constantly upgradeskill sets and create efficient processes.With the global economic situation and the cost of rawmaterials shooting up to an all time high, the Company had toabsorb much of the operational cost increases, since it couldnot be passed on to the consumer. This year, the challengewas to increase operational efficiencies, maintain margins,f ine tune manufacturing processes and create profit

improvement projects.

The Company's green field project in Chennai has beenconceptualised keeping both Passenger Car Radial & TruckBus Radial capacities under one umbrella. This has beenmade possible with the use of common mother equipment forboth capacities. There are future possibilities of expanding thecapacities in a modular fashion.The production capacity expansion in Passenger Car Radial inLimda will be increased from 10,500 per day to 16,500 per dayby Jan 2010. The world class green field plant in Chennai hasa capacity to produce 8000 tyres per day and will beoperational in November 2009. From here, Apollo will berolling out 'top of the line' Truck/Bus Radials & Ultra HighPerformance Passenger Car Radial Tyres.To gear up for the growing pace of radialisation in theTruck/Bus Radial segment, future plans are already in place.Strategically, we are aiming to be a globally competitiveplayer by growing both organically and inorganically.

Apollo has been successful ingrowing despite the slowdown.The expansion programmes areon track and progressing asenvisaged.

Initial work has already startedin the development of radial OTRmanufacturing unit. Capacity has

been ramped up to 7400 Tons perday and we have initiated asuccessful partnership withBEML for OE fitment.In the bias technology segment break through projects likere-engineering, technology innovation, and asset utilisationhave been established. This will add 40 MT per day in allplants with an absolute minimal cost. Capacities have alsobeen increased at Limda, Perambra and Kalamassery plants.

The major projects were on raw material substitution andefficiency improvements. The Company has looked ataggressively reducing the cure cycles of all sizes ofPassenger, LCV, SUV and Van tyres by 11% and handling timeby 28%. The implementation of these will save investment on12 presses.The steam consumption reduction project has also beenundertaken which will be achieved through the properinsulation of presses, pipelines and leak corrections. Thisproject will help us save Rs. 57 million per annum.At Apollo, key processes like operations & manufacturing canlead the way in combating a slowdown. Today, there is apositive bias towards the stabilisation of the environment andall processes are once again going full steam ahead in thehope of a revival.

The Company in response to theslowdown has created manyinitiatives to counter thechallenging economicenvironment. The managementteam has identified 40 ProfitImprovement Projects with asavings target of about Rs. 520

million.

OPERATIONS & MANUFACTURING





Did you know that there are lessons to be learnt from flyinggeese?

As each goose flaps its wings it creates an "uplift" for thebirds that follow. By flying in a "V" formation, the whole flockadds 71% greater flying range than if each bird flew alone.

When a goose falls out of formation, it suddenly feels the dragand resistance of flying alone. It quickly moves back intoformation to take advantage of the lifting power of the birdimmediately in front of it.

Geese flying in formation honk to encourage those up front tokeep up their speed.

TEAMWORK COUNTS.EVEN WHEN YOU ARE FLYING



At Apollo Teamwork is ofparamount importance andthe learning from flyinggeese is a corporatephilosophy. Our assets areour people who work toinnovate beyond andchallenge established

boundaries.

HUMAN CAPITAL

34/35



Today, the real asset of a competitive global organisation isHuman Capital. The workforce is the real strength and is theone that drives the organisation to innovation, ideas,teamwork, as well as executing the plan. At Apollo Tyres, the

power of human capital is nurtured, enhanced and motivatedto achieve higher goals.

At Apollo, Human Resources choose to make a significantdifference to the key stakeholders of the company – ourpeople. Many initiatives like job rotation, re-deployment andmulti-skil ling were introduced. To also empower theworkforce and rea li se the future vis ion, LeadershipDevelopment Programmes were rolled out for the middlemanagement.

The year 2008-09 was indeed achallenging year for the industry.At Apollo Tyres, adversesituations have led us to seeopportunity, where we have notonly raised the bar but alsogreatly enhanced the quality oftalent and learning, and set evenhigher benchmarks for ourselves.

This year, marked a significantachievement for our HR practices.In the 'Best Companies to Workfor in India' survey, conducted by

Business Today in partnershipwith Mercer Consulting and TNS,

Apollo has been featured in thetop 20.This has re-instated the sound HR practices, innovativepolicies & initiatives.At Human Resources, we are creating stronger trainingnorms, inculcating the value system for all employees andeven initiating innovative, employee friendly policies. This willensure the beginning of a new “Apollo way of life” mirroringour vibrant Apollo identity. Also, many unique humanresource initiatives across plants have been rolled out likeAttendance Champion, Suggestion Award & the “HR Trophy”.

At Apollo, we firmly believe that adversity can be overcome ifwe instill the values of teamwork, common goals and improvethe lives of our prime asset – our people.With new initiatives and improvements of the existing ones,Human Resources at Apollo, has steadily positioned itselftowards building a true globally competitive organisation.

Apollo, believes in the one familyconcept and various employeeengagement activities wereundertaken this year - fromsetting up of health camps tocelebrating all festivals together,both at the plants as well as thecorporate office.

HUMAN CAPITAL



36/37ADVANCED LEADERSHIPDEVELOPMENT PROGRAMME, SOUTH AFRICA



A salesman complained to his manager that sales were decliningbecause of the recession and he was tired of fighting and strugglingto maintain sales.

The manager took the salesman to the kitchen and filled three potswith boiling water and in each either placed potatoes, eggs orground coffee beans. After about 5 minutes he took out the potato,the egg and the coffe and placed it in front of the salesman.

He then explained that the potatoes, the eggs and coffee beans hadeach faced the same adversity, the boiling water. However, eachone reacted differently.

The potato went in strong, hard and unrelenting, but in boilingwater it became soft and weak.

The egg was fragile with the thin outer shell protecting its liquidinterior until it was put in the boiling water. Then the inside of theegg became hard.

However, the ground coffee beans were unique. After they wereexposed to the boiling water, they changed the water and createdsomething new and fresh.

He than told the salesman. We have to be like the coffee bean.Respond to the adversity and change so that people can see the

value and are drawn towards us.

A POTATO, AN EGGOR COFFEE BEANS?

WHAT DO YOU WANT TO B



Marketing in Apollo is aboutbeing the coffee bean. Alwaysadding value and creating anew experience for ourconsumers.

MARKETING, SERVICE & DISTRIBUTION

38/39



At Apollo, our network of marketing, service and distributioncreates value and brings about an entirely new experience forour consumers. In today's challenging environment, all ourmarketing efforts are concentrated on engineering out-of-the-box solutions to engage the consumer and turn everyadversity into an opportunity.Today, we are evolving and as a first step towards becoming aforce to reckon with on the global map, we needed to re-inventourselves and our brand. A brand which has been makinggreat tyres for many years and is immensely popular in Indiaand other parts of the world. Now, the time has come for us tomove to the next level and become a truly international player.As a long-term strategy tobuild a globally competitivebrand, a new brandidentitywas unveiled for Apollo. There-branding introduces a bitof colour, wit and fun into therepresentation of Apollo. It is meant to showcase a Companythat is young, ambitious and proud of its Indian heritage,making it stand out from other tyre brands.As a strategy to re-enforce the Apollo brandacross segments, this year saw the launchof XTRAX, Alloy Wheels and LoadstarSuper XP.

XTRAXCross ply tyre in sizes 10.00-20-XT-100K, & 24.00-49 – XTRAX

“S” lug design which provides forsup er io r t ra ct ion and excel lentmileage

Loadstar Super XPCross ply tyre in size 10.00-20Perfect tyre for heavy load applicationsSpecial casing design with dual beadsOptimised shoulder mass ensurescooler running andimproved performance

Acelere WheelzRange of designeralloy wheels

¢

¢

¢

¢

¢

¢

¢

Ultra Large Size OTR segmentSize: 24.00-49Designed for haulage applicationCatering to the present and future needs of the miningindustry

At Apollo, we work towards constantly surpassing consumerexpectations. The year ahead will be an exciting time, asApollo will create benchmarks across all tyre segments. TheCompany will bring to the consumers, tyre technology that isat the helm of the globally competitive marketplace. Thelaunches to look forward to this year are:

Amazer 3 G & Amazer 3G MaxHAWKZ new rangeMilestar Gold3 Wheeler Cargo - Amar DlxXT-7 GOLD XMNew Kaizen RangeTo further strengthen our internationaloperations, a re-branding of the "Dunlop"brand was undertaken through the "Driven

by Precision" communication exercise. This activity sawvarious “Dunlop Zones” being

rolled out across South Africa.As a marketing strategy, theCompany saw this as ana dd it io na l s te p t ow ar dsintegrating our offerings with the global product portfolio.Apollo was the only Indian tyre company to be invited byVolkswagen AG to participate in the IZB exhibition inWolfsburg, Germany. This marks an important achievement,as Volkswagen Polo – the best selling car model fromVolkswagen, will now roll out on Apollo Tyres for its Indianlaunch.The journey of Apollo into the European market is nowtreading new paths with the establishment of the EuropeanTechnology Center at Russelsheim, Germany. All back-endoperations like marketing & sales are in the process of beingset up as the launch of the European Operations will takeplace by the end of 2009-10.

¢

¢

¢

MARKETING, SERVICE & DISTRIBUTION



40/41APOLLO AT IZB EXHIBITIONIN WOLFSBURG, GERMANY



This year, the marketing approach towards many productsand segments were differentiated and geared towardsmaking a significant impact in the minds of the targetconsumer. The idea was to look at the brand from an involvedinteraction medium, as well create many consumer focusedevents, promotions and branded programmes.The Apollo Tyres PCR segment launched a Tubeless Tyrespromotion. The offer was that on the purchase of 4 ApolloTubeless Tyres, the consumer got a Van Heusen gift voucherworth Rs 1000. A countrywide advertising exposure was

created for the customers of Aspire, Acelere Sportz, Acelere& Hawkz Tyres. The tubeless tyres promotion witnessed anenthusiastic response from the target audience and helpedgarner more market share.In December 2008, Apollo kicked off 'The Mall Drive'a uniqueoutreach programme to change the perception of tyres from acommodity to a high-end consumer durable. The venue wasvarious malls of NCR where an eye catching Apollo Stall

showcased the complete range of Apollo passenger vehicletubeless tyres. The idea behind this below-the-line initiativewas to provide consumers with a real life interactiveexperience in a high footfall environment like a shopping mall.

To reach out to the consumer in an interactive manner, variouson ground activation events like the Auto Car PerformanceShow and the Apollo 4X4 Hawkz event were held. At the AutoCar Performance Show which is the single biggest definitiveevent in India's automotive calendar Apollo got the perfectopportunity to showcase its new identity. Apollo also hostedthe 'Design Your Tyre' contest which continues to be very well-received over the years.Apollo participated in the 2009 Mumbai International MotorShow which also saw participation from all the other leading

Indian and multinational automotive brands like Volkswagen,Honda, Toyota, Fiat, Mitsubishi, Fiat and Mahindra andMahindra. At the event, Apollo in association with Mahindraand Mahindra created the 4X4 challenge track whichattracted the attention of auto enthusiasts. The Apollo Hawkz4x4 Challenge was a 200 metre dirt track with sections ofmud, rocks, rumblers, sand, and water all surrounding the

track, right in the heart of the show.

In fact, over the years Apollocontinues to create many brandproperties which have captured themind space of the Indian consumer

APOLLO HAWKZ CHALLENGE

MARKETING



and have helped us create significant brand equity. Brandinginitiatives like 'Unstoppable Indians' with NDTV Profit and'Highway On My Plate' with NDTV Goodtimeshave bothprovided an excellent platform for the Apollo brand. In fact,the India Brand Equity Foundation names Apol lo 's'Unstoppable Indians' as one of the best brand equityprogrammes on TV. While with 'Highway On My Plate', Apollohas managed to create relevance with the young Indianvehicle owner and create a differentiation in the way tyre

brands are marketed.One of the most importantinitiatives that Apollo Tyreshas taken is the Mission2018 - established in May

2007 with Mahesh Bhupathiacting as a consultant. Thiseffort is among the biggests p o r t s i n i t i a t i v e su nd e r t a k e n b y a n y

corporate in India with a mission to create India's Grand SlamTennis Champion by the year 2018. The mission entered itsthird year with 14 children qualifying for the second batch. Intotal, 34 children have been inducted into the programme, outof which 17 children are placed in the top 10 ranking in theirrespective age groups. These children have been training atthe FIST Academy in Bangalore by some of the best national& international trainers.This year, gave us the perfect opportunity to take the conceptof Apollo Branded Stores to a new level. A dynamic new look in

sync with our new corporate identity was unveiled with GlobalTyres, Cochin. The idea was to create a striking, highperformance image that generates maximum visibility andenhances in-store customer experience at every level.Becoming a part of the Apollo Passenger Car Radial retail

journey represents more than an extreme makeover - it's anopportunity to transform the very nature of a dealer'sbusiness. In fact, Global Tyres, Cochin, is the latest entrant toexperience the positive impact of a powerful 'main street'image. At Apollo, we will continue to bring world classfacilities in tyre retail to Indian customers.The year 2008 presented unique challenges for ourdistribution network. The global financial crisis coupled withtightening liquidity tested the mettle of the best in the trade.Given the perpetual volatility in the marketplace, we invested

in short-term marketing programmes to weather the same.All levels of the tiered network witnessed an increase in thenumber of business partners. The 'Platinum Boys Club' whichforms the pinnacle of our network, doubled in number. The

'Apollo TRUST @ Salem',Tamil Nadu, reflected aglimpse of the timesahead for the ApolloTruck business partnerswhile the Passenger CarRadial '7 Wonders of theWo rl d' m ar ke d t he

advent of an exciting voyage for car dealers.We even enjoyed an increased presence in OE with the SkodaFabia, Optra Magnum and Hyundai i20 rolling out on Apollotyres. This growth in business from the OE segment was asignificant achievement as compared to the situation beingfaced by other automobile tyre manufacturers.At Apollo, the online product development process systemhas also been implemented this year. This process hasescalations at each level by which it helps in faster time tomarket, tracking, and also provides support in variousanalyses.

As an innovative manufacturerand marketeer, Apollo hascontinued to set industry

benchmarks. We are driven toseek opportunity in adversity andthe same was reflected by aplethora of achievements andpersonal firsts, especially in thelast quarter of the year.

42/43

APOLLO’S DISPLAY ATGLOBAL TYRES, COCHIN

World-class Tyres. World-class Service.



THAT COVERS THEDISTANCE.IT IS THE SMALL STEP

A small boy was walking along a beach at low tide, where countlessstarfish, had been washed up on the beach and were stranded anddoomed to perish. A man watched as the boy picked up eachindividual starfish and put them back into the water.

"I can see you're being very kind," said the watching man, "But

there must be thousands of them; it can't possibly make anydifference.”

Returning from the water's edge, the boy said, "It will for that one.”



Making a difference topeople around us in

whatever small way we canis our way of saying “wecare” to the world we live in.

SUSTAINABILITY

44/45



Today, Corporate Social Responsibility functions as a built-in,self-regulating mechanism whereby businesses embraceresponsibil ity for the impact of their activities on theenvironment, consumers, employees, communities and allother stakeholders. It is the deliberate inclusion of publicinterest into corporate decision-making, and the honouring ofthe triple bottom line system: People, Planet & Profit.The field of sustainable development encompasses both:environmental & economic sustainability. Corporate SocialResponsibility as a business risk mitigation approach, should

provide in the long run, better value for shareholders as wellas for other stakeholders. At Apollo, we strive to operate in asustainable manner across all our businesses by reducing ouroperational inefficiencies and by acting in a social lyresponsible manner. The CSR philosophy at Apollo, forms apart of our vision statement of continuously enhancingstakeholder value. Our belief is to create true sustainability,all CSR activities should be linked to business goals and

objectives. The CSR initiatives form a part ofour strategy to strengthen relationshipswith our stakeholders, reach out to themand work towards making it a people-centric business. At Apollo, the CSRinitiatives are built on the foundation of the

3i or Influence, Involve, Impact.As a strategic decision, all CSR activities areundertaken by the Apollo Tyres Foundation orATF. This foundation activates all key

initiatives including theHIV–AIDS programme atApollo Tyres, which is acomprehensive activitytargeting key stakeholdersi.e. employees, customersand supply chain. Thescope of the Foundationhas expanded from thelong distance commercialvehicle community to alsoinclude women, children,a nd l es s p ri vi le ge dsections, of the society, in collaboration with NGO's and otherexternal agencies. The activities are undertaken across differentspheres like: health, education, infrastructure & the environment.As a part of the Foundation and with the objective of involvingkey stakeholders, the Apollo Tyres Health Care Centres is animportant initiative which has been established for the longdistance commercial vehicle community. The past year, sawconsolidation of existing partnerships and the initiation of newones. Currently, we have 9 Centres operating in TransportNagars in North, West, South and East of India, catering totruckers and the allied population.For the Employees, the foundation runs a workplaceprogramme which covers information, education, prevention,implementation and the administration aspects of HIV. Theprogramme has been conducted at a steady pace in Limda,Perambra and Kalamassery. Among new initiatives is aRefresher Programme – conducted by ILO for the capacitybuilding of the master trainers. Over 7500 employees havebeen reached through a network of 500 peer educators and 25master trainers.As a move towards the private-private partnership model, theApollo Tyres Foundation has formed a partnership with theAmbuja Cement Foundation for optimal resource utilisationand impact on lives of stakeholders. Both Ambuja and Apolloare equal par tners, though the programme is beingimplemented by the Ambuja Cement Foundation.The Apollo Tyres Foundation has initiated a partnership withGujarat State AIDS Control Society (GSACS). Under thispubl ic-pr ivate par tnersh ip model , a c linic in Narol ,

SUSTAINABILITY



Ahmedabad, was inaugurated in February. GSACS will beproviding medicines and the testing kits for the interventionwhere as Apollo Tyres will be responsible for alladministrative and programme supervision.Apollo has also partnered with the AIDS Health CareFoundation (AHF). This foundation and its activities werepiloted in the year 2008-09. This partnership added testingfacilities to the existing services of Apollo interventions.As a part of the HIV-AIDS initiative, various community

outreach programmes as well as training and leveragingsupply chain in spreading the message have been undertaken.Emergency Medical Services (EMS) has also been set uparound our manufacturing locations in India. As a part of EMS,we have established a highway rescue project in Gujarat and acity EMS in Vadodara.At Apollo Tyres, our efforts in CSR have always extendedbeyond health to other areas such as: education,infrastructure, customer promotion and the environment.These activities include women, children and other lessprivileged sections of society.Skill Development Classes have been started for women invillages with an objective of making them self-sufficient.While for the economically less privileged families, crèches

have been provided to take care of their children. This year,adult literacy classes have expanded to include more villages.In keeping with the Millennium Development Goals in thevillages, primary education support has been provided byproviding scholarships to support bright students fromeconomically backward families.

The basic need for proper infrastructure has also been kept infocus. In many of the villages, Apollo Tyres has been veryclosely involved in the maintenance of school buildings andalso in providing of computers to the village schools. In fact,for the 500 students of the Government Girls High School,Perambra, a provision has been made to bring the supply ofwater through a water pipeline and a new water tank has alsobeen constructed in the village.The scope of CSR activities has even extended to customerpromotion on safe drive. Safe drive campaigns have beenconduct ed on the nati ona lexpressways which includedthe checking of tyres fordamage or patterns wear and toensure all parameters were metfor a safe journey.At Apollo, care is also taken to make ourselves environmentsustainable. The wind energy project which was initiated lastyear has enabled us to tap approximately 8 Megawattcapacity of wind power, with an expected generation of 1.70million units of power every year.Also, an agreement with GAIL is in force which will use steamenergy to replace the use of RNLG. The project is based on thewaste heat recovery system and is conceived as a CleanDevelopment Mechanism (CDM) project under the KyotoProtocol. This landmark initiative will help the Company savearound 935 million kilo calories of energy in producingprocess steam. This will also reduce the formation of 55000tonnes of CO2 per annum.

At Apollo, we hope to be thewheels of change for thecommunity we inhabit and tosustain it both economically andenvironmentally. We believe thatour actions and thoughts shouldbenefit the lives of all ourstakeholders and thecommunities that we work in.

46/47





48/49

FINANCIALS

51 79

72

76

77

78

90

104

105

134

SCHEDULES

SIGNIFICANT ACCOUNTINGPOLICIES & NOTES ON ACCOUNTS

STATEMENT RELATING TOSUBSIDIARY COMPANIES

CONSOLIDATED ACCOUNTS

INFORMATION PERTAININGTO SUBSIDIARY COMPANIESU/S 212(8)

DIRECTORS’ REPORT

AUDITORS' REPORT

BALANCE SHEET

PROFIT & LOSS ACCOUNT

CASH FLOW STATEMENT

CORPORATE GOVERNANCEREPORT

BALANCE SHEET ABSTRACT &COMPANY'S GENERAL BUSINESS PROFILE

59

103





DIRECTORS REPORT

Dear Member,

Your Directors have pleasure in presenting the Annual Report along with the audited statement of accounts of your Company for the financialyear ended March 31, 2009.

FINANCIAL PE RFORMANCE

Year Ended31.03.2009 31.03.2008

(Rs./Million)Sales & other Income 40,816.88 36,939.27Profit before Depreciation &Tax 2,691.72 4,212.57Less: Depreciation 980.07 878.10

Provision for Tax - Current 439.30 975.01- Deferred 148.67 121.43- Fringe Benefit Tax 42.50 45.00

Net Profit 1,081.18 2,193.03Add: Transfer from Debenture Redemption Reserve - 21.70

Surplus Brought Forward From Previous Year 2,992.01 1,672.12Profit available for Appropriations 4,073.19 3,886.85Appropriations:

Debenture Redemption Reserve 62.50 -Dividend to Equity Shareholders 226.81 252.01Dividend Tax 38.55 42.83General Reserve 500.00 600.00

Balance Carried Forward 3245.33 2,992.01

OPRA TI ONS

During the financial year ended March 31, 2009, sales from operations amounted to Rs.40,704.41 million as against Rs.36,939.27 million duringthe previous year, registering a growth of 10.19%. The growth in revenue was impacted by the slowdown in industry, particularly in the OEMdemand.

Operating profit, before interest and depreciation, amounted to Rs.3,360.15 million, as against Rs.4,732.98 million during the previous year. Netprofit, after providing for interest, depreciation and tax amounted to Rs.1,081.18 million as against Rs.2,193.03 million during the previous year,recording a decline of 50.70%.The decline in profitability is due to overall slow down in economy which impacted the demand in the automotivesector, coupled with soaring raw material prices for major part of the financial year.

PR DUCI ON

During the year, your Company recorded a drop in production tonnage at 2,73,575 MT as against 2,90,000 MT in the previous year. However,subsequently there was improvement across all the plants.

50/ 51



SHARE CAPITAL

During the year, your Company has allotted 15.58 million equity shares of Re.1/- each at a premium of Rs.28.30 to Promoters on conversi1.558 million warrants issued during 2006-07. Your Company's share capital as on 31st March, 2009 has increased from Rs.488.44 million tRs.504.02 million after the said allotment.

DIVI DEN D

Your directors recommend a dividend of 45% per equity share for the financial year 2008-09 for your approval. There will be no tax dedusource on dividend payments, but your company will have to bear tax on dividend @ 16.995%, inclusive of surcharge.

The dividend, if approved, shall be payable to the shareholders registered in the books of the company and the beneficial owners as per dfurnished by the depositories, determined with reference to the book closure from 1st July, 2009 to 23rd July, 2009 (both days inclusive).

BUY BACK OF SHARES

Keeping in view the unfolding economic environment, Company's operating results and the available surplus, the Board of Directors at it

meeting held on 19th March, 2009 approved buy back of equity shares at a price not exceeding Rs.25 per share upto an amount not excRs.1220 million, representing approx. 10% of Company's paid up equity share capital and free reserves as per last audited accounts. The bback will optimize returns to shareholders, enhance overall shareholder's value as well as earning per share.

RAW MATER IALS

During the year under review, there was steep increase in all the raw material prices, specially the price of natural rubber and crude oilhitting their new peak. Natural rubber touched a peak of Rs.142/kg in August 2008 in tandem with international rubber prices and remainedthe range of Rs.120 - Rs.140 /kg in the first five months of the year because of scarce supply position. There was moderation in prOctober 2008 with the commencement of the tapping season in Thailand and Malaysia.

Crude oil also touched an all time high of US $ 145 per barrel in early July 2008. This resulted in sharp rise in prices of petro based racarbon black, synthetic rubber, nylon tyre cord fabric and rubber chemicals. In the first half of the year, there were shortages in the suppsome raw materials like carbon black, synthetic rubber, steel tyre cord, beadwire, butyl rubber and rubber chemicals due to strong globa

demand and lower availability of their intermediates.The global economic slowdown adversely affected automobile industry in the second half of the year resulting in curtailment of production atour plants. As a result of this, high cost inventory of raw materials had to be carried in the third quarter. The benefit of falling commodcould not be fully reflected in our working due to the weakening of the rupee against the dollar and lower production levels at the placompany met these challenges through global sourcing of raw materials, leveraging its relationship with the supply chain partners,realignment of the vendor mix and renewed focus on current asset management. These initiatives together with lower natural rubber and crudeoil prices led to lower raw material costs in the last quarter of the year.

Prices of raw material continued to have escalations due to antidumping duty resorted by local manufacturers of nylon tyre cord from all masources and periodical increases in duty. Antidumping proceedings have also been initiated in case of import of carbon black from majproducing countries.

Natural rubber remained firm due to inverted duty structure where its import duty is 20% against 10% on Tyres.

DOMES TIC MARKET ING

The year has been a challenging one which witnessed peak raw material prices and an environment of uncertainty in the financial markets andemand slowdown in both the commercial and passenger segments during July to December, 2008. The fiscal closed with some signs ofrecovery in last month within a tough operating environment for the full year. For the period under review, the company recorded a hgrowth of 7.1% in overall sales value with 3.3% growth in truck, 19.8% in passenger car radials (PCR), 6.9% in light commercial vehiclewith similar numbers in Tractor Rear.

The journey undertaken in the area of marketing strategy covering product leadership, customer intimacy, and operations excellence werecontinued in order to create better differentiators in the marketplace.



This year also saw a change in Apollo - a change in the way your company is perceived by all stakeholders in terms of its visual identity. Not

do we offer the greatest reach - but, we are also redefining the way consumers shop for tyres through the introduction of the Apollo BrandedOutlets for PCR and the Apollo Trust for Truck Tyres. From the look and feel of our new showrooms adorning the new corporate identity to thdepth and range of the products on offer - it is a whole new experience on the way tyres are perceived and purchased in India.

In the realm of commercial vehicles, Regal truck bus radials got firmly established during the year as a quality product with a proven salesrecord. The new XT-100K bias truck tyre is a benchmark product engineered to deliver a mileage of more than one lac kms. XT-100K boasts ofthe next generation in cross-ply technology featuring advanced multi-layered tread construction, optimized cavity, improve bead profiling and ahost of other features that delivers unmatched mileage.

This year also saw the delivery of a new product line - a 49 inch OTR tyre called Xtrax, weighing as much as 1100 Kg. The tyre is as highand uses an 8-hour curing cycle. As it can be seen, that this is truly in big league.

Whilst the year saw turbulence on the OE front, with a few manufacturers cutting back vehicle production by as much as 70%, your Company hasbeen able to weather the storm. There was cheer with Apollo having been selected as the sole supplier on the Hyundai I-20 and also chosen to

partner with Volkswagen for their Polo debut slated for 2010.

EX PO RTS

The international markets have been severely affected due to acute fall in demand, extreme liquidity crunch and devaluation of some keycurrencies of important markets. All sectors were adversely affected on export front due to combination of economic conditions that developedaround the third quarter of the financial year.

Exports of Apollo Tyres were also not left unscathed through robust internal processes and a strong distribution network developed over thelast 2-3 years which helped to blunt the impact of demand slowdown.

The year under review was creditable for exports for the fact that the overall volumes exported in passenger car radials (PCR), was not onlymaintained, on the face of demand slump, over the previous years volumes but also improved on it. Apollo Tyres continues to be the highestexporter of PCR tyres from India.

The exports of truck and bus tyres by Indian manufacturers dropped by about 20%. However, exports of Apollo truck and bus tyres weremarginally affected. This decrease is largely attributed to Apollo's decision not to cut prices in the wake of severe price undercutting bycompetition.

Marketing activities continued to be focused at both wholesale and retail levels though plans are afoot to bring out more retail led initiatives,riding on the launch of the new Corporate Identity. The very popular Apollo Vista marketing programs were conducted in a number of countries,and various technical workshops were held to reach out to the end users in various markets.

EX ANSON PROGRAMME FUTRE OUTL OOK

All expansion programmes under progress are on schedule. During the year, the company completed a state-of-the-art OTR (Off The Road) Tyreproject, set up through a unique partnership with Bharat Earth Movers Ltd. (BEML). After the trial production, regular, marketable productionhas commenced from April, 2009.

The Passenger car radial tyre expansion project in Baroda has been completed in March 09, and after completion of ramp up, the plant capacity

would be 16,500 tyres per day, up from 10,500 tyres per day.The company's, world class, green field facility to produce 'top of the line' truck bus radial tyres and ultra high performance passenger car radialtyres, is progressing at a rapid pace. The plant is coming up near Chennai. The production of tyres from this facility would commence fromNovember, 2009. In light of pursuing these projects and keeping in view the economic slowdown, implementation of project at Hungary hasbeen deferred.

Plans are on the way to further increase the truck bus radial tyres output, keeping in view the growing pace of radialisation in this segment. ThCompany has strategic plans to look out for further global growth through acquisitions, mergers, strategic alliances and joint ventures forimproving business synergies.

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SU BSI DIARY COMPANIES

During the year under review, Apollo (Mauritius) Holdings Pvt. Ltd. (Mauritius), your company's subsidiary has incorporated Apollo Tyre(Nigeria) Ltd. w.e.f. 23rd December, 2008 as its wholly owned subsidiary for having greater focus on sales in Nigeria and its surrounding mar

During the year, name of "Dunlop Tyres International (Pty.) Ltd." was changed to "Apollo Tyres South Africa (Pty.) Ltd." w.e.f. 6th February,in order to synergize the corporate name with Apollo Group.

The members may refer to the statement under Section 212 of the Companies Act, 1956, forming part of accounts, for further informationcompany's subsidiaries.

The Central Government vide its letter No.47/93/2009-CL-III dated 13th March, 2009 has accorded its approval under Section 212 (8) of thCompanies Act, 1956, exempting the company from attaching the accounts of the subsidiary companies. However, the consolidated accountsare attached along with the accounts of your company.

The copy of the annual report of the subsidiary companies will be made available to shareholders on request and will also be kept for insp

by any shareholder at the registered office and corporate office of your company, and its subsidiary companies.FIX ED DEPOSITS

Your company is not accepting fixed deposits from the public/shareholders. In respect of fixed deposit issued earlier, cheques had been issuedfor the deposit amount and interest thereon amounting to Rs. 1.31 million, which remained unencashed as on March 31, 2009.

AUDITORS' REPORT

The comments on the statement of accounts referred to in the report of the auditors are self explanatory.

COST AUDIT

M/s.N.P.Gopalakrishnan & Co., cost accountants, have been appointed to conduct cost audit for the year ended March 31, 2009. They will subtheir report to the Board of Directors before forwarding it to the Ministry of Corporate Affairs, Government of India.

BOARD OF DIRECTORS

The Govt. of Kerala nominated Mr.L.C.Goyal in place of Mr.K.Jose Cyriac on the Board of the Company w.e.f. 23rd October, 2008.

The present tenure of Mr.U.S.Oberoi as Whole-time Director is upto 25th November, 2009. The Remuneration Committee and the Board oDirectors at their meeting held on 29th April, 2009 considered and approved the re-appointment of Mr.U.S.Oberoi as Whole-time Director forfurther period of five years w.e.f. 26th November, 2009 subject to approval of the members at the ensuing annual general meeting.

Mr.L.C.Goyal, Mr.K.Jacob Thomas, Mr.M.R.B.Punja and Mr.Shardul S.Shroff retire by rotation at the forthcoming annual general meeting andbeing eligible offer themselves for re-appointment.

None of the Directors are disqualified under Section 274 (1) (g) of the Companies Act, 1956.

CONSERVATION OF ENERGY, TECHNOLO GY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information as required u/s 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Bof Directors) Rules, 1988, regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-

A to this report.CORPORATE GOVE RNANCE REPORT

A detailed report on corporate governance duly certified by the auditors is given in Annexure-B to this report.

AUDI TORS

M/s.Deloitte Haskins & Sells, Chartered Accountants, the auditors of your company, will retire at the ensuing annual general meeting and areeligible for reappointment.





ANNEXURE TO DIRECTORS' REPORTThe Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

Information under Section 217 (1) (e) of the Companies Act,1956 read with Companies (Disclosure of Particulars in the report of BoardDirectors) Rules, 1988 and forming part of the Directors Report for the year ended March 31, 2009.

A) CONSERVATION OF ENERGY:

(a) Measures taken for conservation of energy:Your company continues to invest in the latest energy efficient technologies and deploying it effectively to maintain the competitiveedge. The latest initiatives include simplification of existing processes and reduction of cycle times, superior insulation systems andimprovement in steam recovery systems.

(b) Additional investment and proposal for reduction of energy usage:Your company proposes to increase the usage of renewable sources of energy, process reengineering and continual investment intoenergy efficient systems.

(c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of productiongoods:The above measures have enabled the company to achieve reduction in power and fuel consumption per unit of production.

(d) Total energy consumption and energy consumption per unit of production

FORM A

PARTI Unit TotalMeasure 2008- 09 2007- 08

A POWER/FUEL CONSUMPTION

1. Electricitya. Purchased Units (in Mill) 81.74 106.91

Total Amount (Rs./Mill) 386.05 438.58Rate per Unit (Rs.) 4.72 4.10

b. Own Generationi) Total Captive Generation

- Units (in Mill) 32.64 33.13- Units/Ltr. of Diesel/Furnace oil 4.09 4.39- Cost/Unit (Rs.) 7.27 5.96

ii) through steam turbine/generator- Units (in Mill) 29.93 35.98- Units/Ltr. of Diesel/Furnace oil 5.61 5.94- Cost / Unit (Rs.) 5.08 2.22

2. Coal - -

3. Furnace oil/LSHSQuantity (K.Ltrs) 38,622.88 43,574.86Total Amount (Rs./Mill) 721.63 639.59Average rate (Rs.) 18.68 14.68

4. Other/internal generation - -

BC ONSUMPTIO N PER UNIT OF PRODUCTIO NElectricity (KWH/MT) 587.95 673.67

Furnace Oil/LSHS (Ltrs/MT) 157.37 166.77Coal & Others - -



B) TECHNOLOGY ABSORPTION

Efforts made in technology absorption as per form BI) Research & Development

(1) Specific areas in which R&D is carried out by the company:

A group of highly qualified young scientists and technologist are engaged in the R&D activities of the company to maintain thetechnological leadership both in India and abroad. R&D has made remarkable contribution and introduced new products, improvedthe performance of the existing products and reduced the input cost. It has made vital contributions in manufacturing, improved theproductivity and efficiency of the company. Major contributions are the introduction of higher sizes of OTR tyres, one lakh kilometerbias tyre for normal load application, concussion resistant tyres for super load application, truck radial tyres tailor made for overload Indian markets, reduced dependence on natural rubber by developing suitable compounds, and enhanced productivity byoptimizing cure cycles based on in-house developed new technology. Several new designed and products in passenger category oftyres were developed specially winter tyre & run flat tyre, ultra high performance tyre which can give comparable performance inmost demanding European markets.

(2) Benefits derived as a result of R&D:

R&D efforts had helped to improve the reputation of the company, reduce material cost, minimize the dependence on naturalrubber, improve the performance of the existing products, enter into the most demanding European markets. It also helped us toenhance the ranges of our products such as OTR and TBR for high load application for Indian markets. Method developed forunderstanding the vehicle tyre interaction as a single entity. Usage of this advanced multi-body dynamics tools is helpful to predictthe behavior of tyre in combination of vehicles.

(3) Future Plan of Action:We have plans to develop OTR radial tyres, additional sizes in OTR bias tyres, low cost TBR tyres, improvement in ageing resistanceof TBR & PCR tyres, wear and failure prediction of tyres through simulation techniques.

(4) Expenditure on R&D: (Rs./million)(a) Capital 80.88(b) Deferred revenue expenditure -(c) Revenue 195.75(d) Total 276.63

(e) Total R&D expenditure as a % of turn over 0.68%II) Technology absorption, adaptation and innovation

(1) Efforts towards technology absorption, adaptation and innovation:Several projects have been initiated to absorb and adopt modern technology. These steps include the speeding up of all operationsto reduce the cycle time, minimization of components in the tyres, compilation of process to reduce handling time and man power,standardisation of material & processes, new technological approach in mixing, extrusion, tyre building and curing of tyres toimprove productivity and quality. We have also initiated an innovative project of replacing imported synthetic rubber by modifiednatural rubber.

(2) Benefits derived as a result of the above efforts:We have made significant improvement in productivity in several areas of operation, improved performance of products, gainedcustomer confidence, reduced wastage and saved energy.

(3) Technology imported:(a) No technology was imported during this financial year

(b) Year of import - Not applicable(c) Has the technology been fully absorbed-we are focusing on the development of our own technology through in house R&D efforts.(d) The present technology is based on our own R&D efforts.

C) FOREIGN EXCHANGE EARNINGS AND OUTGO

The company exports directly and also through Apollo International Ltd., an associate company.i) Foreign Exchange Earnings: (Rs./million)

- On account of direct - export sales from Apollo Tyres Ltd.(FOB value) 2,483.84- On account of export sales of Fixed Assets 19.43

ii) Foreign Exchange outgo (other than CIF value of imports) 222.02

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Annexure-B

CORPORATE GOVERNANCE REPORT

Your Company has complied in all material respects, with the requirements of the Corporate Governance Code as per clause 49 of the listingagreement with the stock exchanges.

A report on the implementation of the Corporate Governance Code of the listing agreement by your Company is furnished below:1. Compas phi l osophy on Corporat e Governance

At Apollo Tyres Ltd. (the Company), corporate governance brings direction and control to the affairs of the Company in a fashion that ensuresoptimum return for stakeholders. Corporate governance is a broad framework, which defines the way Company functions and interacts withits environment. It is a combination of voluntary practices and compliance with laws and regulations in each of the markets the Companyoperates in, leading to effective management of the organisation.The Company is guided by a key set of values for all its internal and external interactions. These are enshrined in the acronym CREATE whichstands for Care for customer, Respect for associates, Excellence through teamwork, Always learning, Trust mutually and Ethical practices.Simultaneously, in keeping with best practices, your Company seeks to execute the practices of corporate governance by maintaining strongbusiness fundamentals and by delivering high performance through relentless focus on the following:(a) Transparency by classifying and explaining the Company's policies and actions to those towards whom it has responsibilities, including

its employees. This implies the maximum possible disclosures without hampering the interests of the Company and those of itsshareholders.

(b) Accountability is a key pillar, where there cannot be a compromise in any aspect of accountability and full responsibility, even as themanagement pursues profitable growth for the Company.

(c) Professionalisation ensures that management teams at all levels are qualified for their positions, have a clear understanding of theirroles and are capable of exercising their own judgement, keeping in view the Company's interests, without being subject to undueinfluence from any external or internal pressures.

(d) Trusteeship brings into focus the fiduciary role of the management to align and direct the actions of the organisation towards creatingwealth and shareholder value in the Company's quest to establish a global network, while abiding with global norms and cultures.

(e) Corporate Social Responsibility ensures the promotion of ethical values and setting up exemplary standards of ethical behaviour in ourconduct towards our business partners, colleagues, shareholders and general public. Through this, the Company also ensures that itcontributes to society's overall welfare by undertaking not-for-profit activities which would benefit all or any of its stakeholders insociety.

(f) Safeguarding integrity ensures independent verification and truthful presentation of the Company's financial position. For thispurpose, the Company has also constituted an Audit Committee which pays particular attention to the financial management process.

(g) Continuous focus on training & development of employees and workers to achieve the overall corporate objectives, while ensuringemployee integration across national boundaries.

Your Company is open, accessible and consistent with its communication. Apollo Tyres Ltd shares a long term perspective and firmlybelieves that good Corporate Governance practices underscore its drive towards competitive strength and sustained performance. Thus,overall Corporate Governance norms have been institutionalised as an enabling and facilitating business process at the Board, Managementand at all operational levels.

2. Board of Directors

(a) Composition of Board: The Company has a broad-based Board and meets the 'Composition' criteria. As on March 31, 2009 theCompany's Board of Directors consist of 15 Executive and Non-Executive Directors, including leading professionals in their respectivefields. The following is the percentage of executive and non-executive directors of the Company:

Category of Directors No. of % of Total no.Directors of Directors

Executive 4 27

Non Executive:

- Independent Directors 10 67

- Others 1 6

Total 15 100



(b) The constitution of the board and attendance record of directors is given below:

Name/Designation Executive/ Non-Executive/ No. of positions held No. of Board Attendance atof Director Independent in other companies Meetings attended last AGM

Board# Committee##Mr. Onkar S.Kanwar Promoter – Executive 3 1 5 YesChairman & ManagingDirectorMr. Neeraj Kanwar Executive 3 2 5 YesVice Chairman &Jt. Managing DirectorMr. A.K. Purwar Non-Executive 7 4 4 Yes

IndependentMr. K.Jacob Thomas Non-Executive 5 1 4 Yes

IndependentMr. L.C.Goyal ** Non-Executive 2 - 2 N.A.Nominee Director – IndependentGovt. of Kerala (Equity Investor)Mr.M.R.B.Punja Non-Executive Independent 6 3 5 YesMr. M.J. Hankinson Non-Executive Independent - - 1 NoMr.Nimesh N. Kampani Non-Executive Independent 5 3 Nil NoMr.Raaja Kanwar Non-Executive 4 - 3 YesMr.Robert Steinmetz Non-Executive Independent - - 4 YesMr.Sunam Sarkar Executive - - 5 YesChief Financial Officer &Whole Time DirectorMr.Shardul S.Shroff @ Non-Executive Independent 6 3 Nil No

Dr. S. Narayan Non-Executive Independent 3 1 3 NoMr. T. Balakrishnan Non-Executive Independent 14 - 4 YesNominee Director– Govt. of Kerala(Equity Investor)Mr.U.S.Oberoi Executive 1 - 5 YesChief (Corporate Affairs)& Whole Time Director

ceased to be directorMr. K. Jose Cyriac* Non- Executive N.A. N.A. Nil N.A.Nominee Director-Govt. of Kerala (Equity Investor)

#This includes directorships held in Public Ltd. companies and subsidiaries of Public Ltd. companies and excludes directorships held in privatelimited companies and overseas companies.##For the purpose of committees of board of directors, only Audit and Shareholders' Grievance committees in other Public Ltd. companies ansubsidiaries of public Ltd. companies are considered.

th* Mr. K. Jose Cyriac , Nominee Director of Govt. of Kerala has resigned from the directorship of the Company w.e.f. 9 May, 2008.**Govt. of Kerala has nominated Mr.L.C. Goyal as director of the Company in place of Mr. K. Jose Cyriac w.e.f. 23rd October, 2008@ Mr.Shardul S.Shroff is a partner of M/s.Amarchand & Mangaldas & Suresh A.Shroff & Co., carrying out the practice of solicitors and advon record, to whom the Company has paid fee of Rs.7.50 million for the year 2008-2009 for professional advice rendered by the firm in whinterested. The board has determined that such payment in the context of overall expenditure by the Company, is not significant and doesaffect his independence.



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None of the directors of your Company is a member of more than 10 committees or is the chairman of more than five committees across

all the companies in which they are directors.(c) Relationship amongst Directors

Mr.Neeraj Kanwar, Vice – Chairman & Jt.Managing Director and Mr.Raaja Kanwar, Director are sons of Mr.Onkar S.Kanwar, Chairman &Managing Director.

(d) Profile of the ChairmanMr.Onkar S.Kanwar is the Chairman & Managing Director of Apollo Tyres Ltd. Mr.Kanwar has graduated in science and administrationfrom University of California. Innovation, quality and exclusivity are Mr.Kanwar's guiding principles, which have helped the Company toachieve a great turnaround. He is the past President of Federation of Indian Chamber of Commerce and Industry (FICCI). Mr.Kanwarhas also held the office of Chairman of Automotive Tyres Manufacturing Association (ATMA), the apex body of the Indian tyre industryand is a past President of the Indian arm of the International Chamber of Commerce.

(e) During the year, five board meetings were held on the following dates: -9th May, 200818th July, 2008

23rd October, 200819th January, 200919th March, 2009

The gap between any two meetings never exceeded four months as per the requirements of clause 49 of the listing agreement. Therequired information was suitably placed before the Board to the extent possible at the Board Meetings.

3. Audit Committeea) Constitution and Composition of Committee:

The Board of Directors constituted an audit committee in the year 1992. The present audit committee comprises of following three non-executive and independent directors who have financial/accounting acumen to specifically look into the internal controls and auditprocedures:

Name of Director Designation Category of Director No. of meetings attended

Mr. M.R.B. Punja Chairman Non- Executive Independent 5

Mr.K. Jacob Thomas Member Non- Executive Independent 4Dr. S. Narayan Member Non- Executive Independent 4

In addition to the members of the audit committee, these meetings are attended by the Heads of Accounts & Finance and otherrespective functional heads, Internal Auditors, Cost Auditors and Statutory Auditors of the Company, wherever necessary, and thoseexecutives of the Company who are considered necessary for providing inputs to the committee. Members have discussions with theStatutory Auditors during the meetings of the committee and the quarterly/half-yearly and annual audited financials of the Companyare reviewed by the audit committee before consideration and approval by the board of directors. The committee also reviews theInternal Control Systems, IT systems and conduct of the Internal Audit.

b) Meetings:

During the financial year, the audit committee met five times on the following dates: -

9th May, 2008

17th July, 2008

23rd October, 2008

19th January, 2009

27th March, 2009

c) Mr.P.N. Wahal, Company Secretary, acts as secretary of the committee.

d) Role of Internal Auditors

The organisation considers the Internal Audit Department as a powerful tool with clear focus on risk control and governance. InternalAuditing assesses and promotes strong ethics and values within the organisation and serves as an educational resource regardingchanges and trends in the business and regulatory environment.



At Apollo, the Internal Audit Team aims at audit of the organisation which is reflected by quality review of all major functional

Production, Marketing, Sales, Technical, Commercial and Finance. Besides legal and compliance issues, Internal Audit functionsupports in evaluation of Internal Control Systems and locating all other important issues, which contribute to organisationalobjectives of customer delight, employee satisfaction, operating profit margin increase and revenue growth.

Internal Audit also provides objective assurance to the Board on all the major findings during their audit.

e) Terms of reference:

The audit committee has been entrusted with the following responsibilities: -

£ Overview of the Company's financial reporting process and disclosure of its financial information to ensure that the financialstatements are correct, sufficient and credible

£ Recommend the appointment/removal of External Auditors, nature and scope of audit, fixation of audit fee and payment for anyother services to external auditors.

£ Review with the management, the quarterly/half yearly and annual financial statements before submission to the board focusingprimarily on:-

- Any changes in accounting policies and practices.- Major accounting entries based on exercise of judgement by management.

- Qualifications in draft audit report.

- Significant adjustments arising out of audit.

- The Going Concern Assumption.

- Compliance with Accounting Standards.

- Compliance with Stock Exchange and legal requirements concerning Financial statements.

£ Any related party transactions i.e. transactions of the Company of material nature, with promoters or the management, theirsubsidiaries or relatives etc. that may have potential conflict with the interests of Company at large.

£ Discussion and review of the Internal Audit Reports and the reports of the external auditors with the management.

£ Review of the adequacy and effectiveness of internal audit function, the internal control system of the Company, compliance withthe Company's policies and applicable laws and regulations.

£ Discussions with External Auditors about the scope of audit including the observations of the auditors.

£ Discussion with Internal Auditors about significant findings and follow up thereon.

£ Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud orirregularity or a failure of internal control system of a material nature and reporting the matter to the Board.

£ Reviewing the Company's financial and risk management policies.

£ Looking into the reasons for substantial defaults, if any, in payments to the depositors, debenture holders, shareholders

£ Reviewing on going relationship of business partners.

The audit committee may also review such matters as are considered appropriate by it or referred to it by the board.

4. Remuneration Committee

a) Constitution and Composition of the Committee:

The Board of Directors had constituted a Remuneration Committee in the year 2003. The present composition of the RemunerationCommittee is as follows:

Name of Director Designation Category of Director No. of meetings attended

Mr. M.R.B. Punja Chairman Non- Executive Independent 1

Dr.S.Narayan Member Non- Executive Independent 1

Mr. K. Jacob Thomas Member Non- Executive Independent Nil



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b) Meetings of the Committee:

During the financial year, the Remuneration Committee met on 9th May, 2008.

c) Mr. P.N. Wahal, Company Secretary, acts as the secretary of the Committee.

d) Terms of Reference

The Remuneration Committee has been entrusted with the following responsibilities:

¢ To review and grant annual increments to Managing/Joint Managing Director.

¢ To vary and/or modify the terms and conditions of appointment/re-appointment including remuneration and perquisites,commission etc. payable to Managing Directors within the overall ceiling of remuneration as approved by the members.

¢ To suitably suggest changes based on changes in Schedule XIII of the Companies Act, 1956 and/or any amendments and/ormodifications that may be made by the Central Govt. from time to time.

¢ To do all such acts, deeds, things and execute all such documents, instruments and writings as may be considered necessary,expedient or desirable on this subject.

e) Payment of remuneration/sitting fee to the directors

Remuneration paid/payable to directors during the financial year 2008-2009 is given below:

i) Executives:

(Rs./Million)

Name of Director Salary Contribution to Commission/ Perquisites TotalPF/Superannuation Performance Bonus Remuneration

Mr.Onkar S.Kanwar 18.00 5.72 50.00 18.42 92.14

Mr.Neeraj Kanwar 6.00 2.27 6.00 8.73 23.00

Mr.U.S.Oberoi 2.50 1.11 1.41 2.79 7.81

Mr.Sunam Sarkar 2.64 1.04 1.76 6.55 11.99

Total 29.14 10.15 59.17 36.48 134.94

The remuneration policy of the Company is to remain competitive in the industry to attract and retain talent and appropriatelyreward them on their contribution. The criteria for payment of remuneration to the executive directors takes into account thebusiness plans and market conditions.

ii) Non-Executives: Sitting fee and commission paid/to be paid to the non-executive directors is in pursuance of the resolutionpassed by the Board.

During the year, the following fee/ commission was paid to the non-executive directors

Name of Director Sitting fee (Rs./mil lion) Commission provided for the No. of Shares held as on Stock Option, if anyyear 2008-09 (Rs./Million) 31st March, 2009

Mr.A.K. Purwar 0.08 0.64 - [email protected] Cyriac*Mr. T Balakrishnan* 0.12 1.27 - N.A.Mr. L.C. Goyal*Mr.K.Jacob Thomas 0.20 0.64 442050 N.A.Mr.M.R.B.Punja 0.22 0.64 - N.A.Mr.M.J. Hankinson 0.02 0.64 - N.A.Mr.Nimesh Kampani 0.00 0.64 - N.A.Mr.Raaja Kanwar 0.06 0.64 180880 N.A.Mr.Robert Steinmetz 0.08 0.64 - N.A.Mr.Shardul S.Shroff 0.04 0.64 - N.A.Dr.S.Narayan 0.16 0.64 - N.A.

@Resigned from the directorship w.e.f. 9th May, 2008.*Commission payable to Govt. of Kerala.



5. Shareholders'/Investors' Transfer/Grievance Committee

(a) Constitution and Composition of the CommitteeThe Company has constituted a Shareholders'/Investors' Transfer/Grievance Committee comprising of the followingmembers:-

Name of Director Designation No.of meetings attended

Mr.K.Jacob Thomas Chairman 2Mr.Neeraj Kanwar Member 4Mr.Shardul S.Shroff Member 2Mr.Sunam Sarkar Member 4Mr.U.S.Oberoi Member 4

Mr. P.N.Wahal, Company Secretary, acts as Secretary of the Committee.

(b) Terms of referenceThis Committee has been formed with a view to undertake the following: -• Approval of transfer/transmission of shares/debentures issued by the Company, issue of duplicate certificates and

certificates after split/consolidation/ replacement.• Looking into the redressal of shareholders' and investors' complaints like transfer of shares/debentures, demat of shares,

non-receipt of balance sheet, dividend and interest etc(c) Meetings

During the year, four meetings of the Shareholders' /Investors' Transfer/ Grievance Committee were held.(d) Compliance Officer

Mr.P.N.Wahal, Company Secretary, has been designated as the compliance officer.(e) No. of shareholders' complaints received

During the year 2008-2009, the Company received 34 complaints. As on date, no complaints are pending other than those,which are under litigation, disputes or court orders. All other complaints were attended and resolved to the satisfaction of theshareholders.

6. General Body Meetings and Dividend declared

a) The last three AGMs were held as under: -Year Venue Date Time

2007-2008 Kerala Fine Arts Theatre, 18.07.2008 10.00 A.M.Fine Arts Avenue,Foreshore Road, Ernakulam,Kochi (Kerala)

2006-2007 - do - 26.07.2007 10.00 A.M2005-2006 - do - 25.08.2006 10.00 A.M

b) Special Resolutions passed during the previous three AGMs : -Year Special Resolution passed

2007-2008 - E mployees Stock O ption S cheme2006-2007 - Increase the limit of FIIs holding upto 30%2005-2006 - Commission to Directors other than the Managing/Whole Time Directors

c) Resolutions passed last year through postal ballotDuring the year 2008-2009, no resolutions were passed through postal ballot.





(c) Financial Calendar for Financial Year 2009-2010Financial Reporting for the quarter ending June 30, 2009 : Month of July 2009Financial Reporting for the quarter ending September 30, 2009 : Month of October 2009Financial Reporting for the quarter ending December 31, 2009 : Month of January 2010Financial Reporting for the quarter ending March 31, 2010 : April - June 2010

(d) Date of Book-Closurest rdThe dates of the book closure shall be from 1 July, 2009 to 23 July, 2009 (both days inclusive).

(e) Dividend PaymentThe dividend of 45% per equity shares for the financial year 2008-09, subject to approval from shareholders, has been

rdrecommended by the Board of Directors. The same shall be paid on or after 23 July, 2009 but within the statutory time lim

(f) Listing at Stock Exchanges1. Cochin Stock Exchange Ltd., 2. Bombay Stock Exchange Ltd.

MES, Dr. P.K. Abdul Gafoor Memorial Phiroze Jeejeebhoy Towers,th stCultural Complex, 36/1565, 4 Floor, 1 Floor, Dalal Street,

Judges Avenue, Kaloor, Mumbai – 400001.Kochi – 682017. Ph.: 022-22721233/34Ph.0484-2400044,2401898 Fax: 022-22721919/3027Fax:0484-2400330 E-mail: [email protected]: [email protected]

3. National Stock Exchange of India Ltd

Exchange Plaza, Bandra Kurla ComplexBandra (E), Mumbai – 400 051Ph.: 022-26598100-14Fax: 022-26598237-38E-mail: [email protected]

The annual listing fee for the year 2008-2009 has been paid to all the aforesaid stock exchanges.

(g) Stock CodeBombay Stock Exchange Ltd. 500877National Stock Exchange of India Ltd. APOLLOTYRE



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(h) Stock Market Price Data for the year 2008-2009

ATL share price on NSE & Nifty Index

Month NSE Nifty IndexHigh (Rs.) Low (Rs.) Volume High Low

(in million)

April, 08 47.30 39.10 12.82 5230.75 4628.75May, 08 48.40 40.50 17.53 5298.85 4801.90June, 08 42.80 31.15 6.92 4908.80 4021.70July, 08 34.00 27.80 9.03 4539.45 3790.20August, 08 41.05 29.10 29.31 4649.85 4201.85September,08 41.90 28.75 36.40 4558.00 3715.05October, 08 39.00 20.95 13.09 4000.50 2252.75November, 08 27.35 18.30 20.54 3240.55 2502.90December, 08 21.50 18.20 16.02 3110.45 2570.70January, 09 21.20 16.80 11.05 3147.20 2661.65February, 09 18.10 13.60 7.04 2969.75 2677.55March, 09 21.00 14.65 31.25 3123.35 2539.45

ATL share price on BSE & SensexMonth BSE Sensex

High (Rs.) Low (Rs.) Volume (in million) High Low

April, 08 46.95 39.00 6.62 17480.74 15297.96

May, 08 48.40 40.50 8.95 17735.7 16196.02

June, 08 43.00 32.10 3.46 16632.72 13405.54July, 08 33.45 27.75 3.89 15130.09 12514.02

August, 08 40.85 29.15 17.20 15579.78 14002.43

September,08 41.00 32.25 27.69 15107.01 12153.55

October, 08 38.45 21.10 16.83 13203.86 7697.39

November, 08 27.30 18.30 17.71 10945.41 8316.39

December, 08 21.70 18.15 16.67 10188.54 8467.43

January, 09 21.50 16.50 6.02 10469.72 8631.60

February, 09 18.05 14.80 6.37 9724.87 8619.22

March, 09 20.40 14.75 18.85 10127.09 8047.17





(k) Share Transfer System

To expedite the share transfer in physical segment, “Shareholders'/Investors' Transfer/ Grievances Committee” has authorised whole-time director and Company secretary to approve transfer of securities upto 10,000 received from individuals and transfers pertaining toshares of notified parties lodged by the Office of Custodian on weekly basis. In case of approval of transfer of securities over 10,000, the“Shareholders'/Investors' Transfer/Grievances Committee” meets at periodical intervals. In any case, all share transfers arecompleted within the prescribed time limit from the date of receipt, if document meets the stipulated requirement of statutoryprovisions in all respects. In reference to SEBI directives, the Company is providing the facility for transfer and dematerialization ofsecurities simultaneously. The total no. of shares transferred during the year were 468530. All the transfers were completed withinstipulated time.

(l) Dematerialisation of Shares and LiquidityThe equity shares of the Company are being traded under compulsorily demat form as per SEBI notification. The Company's shares aretradable compulsorily in electronic form and are available for trading in the depository systems of both National Securities DepositoryLtd. (NSDL) and Central Depository Services (India) Ltd. (CDSL). The International Securities Identification Number (ISIN) of theCompany, as allotted by NSDL and CDSL, is INE438A01022. As on 31st March, 2009, 96.39 % of the share capital standsdematerialized.

(m) Share Transfer/Demat Registry workAll share transfers/demat are being processed in house. The Company has established direct connectivity with NSDL/CDSL forcarrying out demat completely in house.

(n) Share Transfer DepartmentAll Communications regarding change of address for shares held in physical form, dividend etc, should be sent at the Company'scorporate office at:-Apollo Tyres Ltd.Apollo House, 7, Institutional Area,Sector-32, Gurgaon – 122 001 (Haryana)Tel Nos: (0124) 238 3002-10Fax : (0124) 238 3351E-Mail : [email protected]

(o) ECS MandateAll shareholders are requested to update their bank account details with their respective depositories urgently. This would enable theCompany to service its investors better.

(p) Plant Location1. Perambra, P.O.Chalakudy,

Trichur – 680 689(Kerala)2. Limda, Taluka Waghodia,

Dist.Vadodara – 391 760 (Gujarat)(q) Address for correspondence : Secretarial Department

for share transfer/demat Apollo Tyres Ltd.of shares, payment of dividend Apollo House,and any other query relating 7, Institutional Area,

to shares Sector-32, Gurgaon.Tel Nos. 0124-238 3002-10

(r) The non-mandatory requirements of clauses 49 of the listing agreement, wherever necessary have been complied with.

68/ 69



11. ADDITIONAL INFORMATION

a) Investor Relations SectionThe Investors Relations Section is located at the Corporate Office of the Company.Contact person : Mr.P.N.Wahal, Compliance OfficerTime : 10.00 A.M. to 6.00 P.M. on all working days of the Company.

(Saturdays & Sundays closed)Phone No. : (0124) 2383002 – 10 (Extn.602)Fax No. : (0124) 2383351E-mail : [email protected]

b) BankersState Bank of India State Bank of MysoreState Bank of Patiala The Federal Bank Ltd.Union Bank of India BNP Paribas

Bank of India Canara BankPunjab National Bank Citi BankICICI Bank Ltd. IDBI Bank Ltd.Standard Chartered Bank State Bank of Travancore

(c) AuditorsDeloitte Haskins & Sells, Chartered Accountants

(d) Cost AuditorsN.P. Gopalakrishnan & Co., Cost Accountants

( e) Secretarial AuditAs stipulated by SEBI, a qualified Company Secretary in practice conducts the Secretarial Audit of the Company for the purposereconciliation of total admitted capital with the Depositories, i.e. NSDL and CDSL, and the total issued and listed capital ofCompany.The Company Secretary in practice conducts such Secretarial Audit in every quarter and issues a Secretarial Audit Certificate to thiseffect to the Company.

(f) Code of Conduct of Insider TradingApollo Tyres Ltd. has a Code of Conduct for 'Prevention of Insider Trading' in the securities of the Company. The Code of Cprohibits the purchase/ sale of shares of the Company by employees in possession of unpublished price sensitive informationpertaining to the Company. Mr. P.N. Wahal, Company Secretary, has been appointed as Compliance Officer.This Code of Conduct is applicable to all the Directors, Departmental Chiefs and Heads and such other employees of the Company ware expected to have access to unpublished price sensitive information.

(g) Code of Conduct for Directors and Senior ManagementApollo Tyres has a code of business conduct called “The Code of Conduct for Directors and Senior Management”. The Code envithat Board of Directors and Senior Management must act within the bounds of the authority conferred upon them and with a dutmake and keep themselves informed about the development in the industry in which the Company is involved and the lerequirements to be fulfilled.The Code is applicable to all the Directors and Senior Management of the Company. The Company Secretary is the compliance offiThe declaration of the Chairman & Managing Director, dated 29th April, 2009, affirming compliance of provisions of the codeconduct for Directors and Senior Management is given below:

Declaration Affirming Compliance of provisions of the Code of Conduct

To the best of my knowledge and belief and on the basis of declarations given to me, I hereby affirm that all the Board memberssenior management personnel have fully complied with the provisions of the Code of Conduct for Directors and Senior ManagementPersonnel during the financial year ended March 31, 2009.

For Apollo Tyres Ltd.

Date : 29th April, 2009 (Onkar S.Kanwar)Place : Gurgaon Chairman & Managing Director



70/ 71

COMPLIANCE:thThe certificate dated 29 April, 2009 obtained from statutory auditors, M/s. Deloitte Haskins & Sells, forms part of this annual report and the

same is given herein:

AUDITORS' CERTIFICATE

AS PER CLAUSE 49 OF THE LISTING AGREEMENT

CERTIFICATE

To the Members of Apollo Tyres Ltd.

We have examined the compliance of conditions of corporate governance by Apollo Tyres Ltd. (the company) for the year ended on 31st March,2009, as stipulated in Clause 49 of the Listing Agreement of the company with stock exchanges.

The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to the proceduresand implementation thereof, adopted by the company for ensuring the compliance of the conditions of the Corporate Governance. It is neitheran audit nor an expression of opinion on financial statements of the company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the company has complied withthe conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness withwhich the management has conducted the affairs of the company.

For DELOITTE HASKINS & SELLS

CHARTERED ACCOUNTANTS

-sd-

Geetha Suryanarayanan

Place : Gurgaon PartnerthDate : 29 April, 2009 Membership No.29519



AUDITORS' REPORT

TO THE MEMBERS OF APOLLO TYRES LTD.

1. We have audited the attached Balance Sheet of Apollo Tyres Ltd.(the Company) as at 31st March 2009, the Profit and Loss Account andthe Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of ssection (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragrapand 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes

our audit;

ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examinthose books;

iii. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the bof account;

iv. In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply withaccounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

v. On the basis of the written representations received from the directors and taken on record by the Board of Directors, we reportnone of the directors is disqualified as on 31st March 2009 from being appointed as a director in terms of clause (g) of sub-sectioSection 274 of the Companies Act, 1956 as on the said date.

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the inforrequired by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting prgenerally accepted in India;

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2009;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

For Deloitte Haskins & Sells

Chartered Accountants


Place : Gurgaon PartnerDate : 29th April, 2009 Membership No : 29519



Annexure referred to in paragraph 3 of our report of even date(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) Physical verification of fixed assets is carried out in a phased manner as determined by the management, whereby assets held at theCompany's factories have been verified during the year. The program of verification is considered reasonable having regard to the size ofthe Company and the nature of its assets and no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company andsuch disposal has, in our opinion, not affected the going concern status of the Company.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification isreasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size ofthe Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and thebook records were not material.

(iii) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintainedunder section 301 of the Companies Act, 1956.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintainedunder section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensuratewith the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goodsDuring the course of our audit, we have not observed any significant continuing failure to correct major weaknesses in such internalcontrols.

(v) According to the information and explanations provided by the management, we are of the opinion that the particulars of contractsarrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained underthat section; and

In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or

arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees fivelakhs in respect of any party during the year have been made at prices which are, prima facie, reasonable having regard to prevailingmarket prices at the relevant time.

(vi) The Company has not accepted any deposits from the public during the year.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company relating to the manufacture of automobile tyres and tubes,pursuant to the order made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the CompaniesAct, 1956 and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. We have,however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, InvestorEducation and Protection Fund, Employees' State Insurance, Income-Tax, Sales-Tax, VAT, Wealth-Tax, Service Tax, Customs Duty,Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts in respect of Provident Fund, Investor Education andProtection Fund, Employees' State Insurance, Income-Tax, Sales Tax, VAT, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cessand other material statutory dues applicable to the Company were in arrears as at 31st March 2009, for a period of more than sixmonths from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax,Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute, except the following:

72/ 73



* Net of deposits Rs.16.74 Million** Net of deposits Rs. 10.00 Million

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the currentimmediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of duebanks, financial institutions and debenture holders during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Companynot granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the C(Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions ofclause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for ltaken by others from bank or financial institutions during the year except for the bank deposits pledged by the Company as referto in Schedule 6 to the financial statements.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed bCompany were, prima facie, applied during the year for the purpose for which these loans were obtained, other than temporadeployment pending application.

(xvii) According to the information and explanations given to us, and on overall examination of the Balance Sheet of the Company, no fraised on short-term basis have been used for long term investment.

(xviii) According to the information and explanations given to us, the Company has made preferential allotment of shares to parties andcompanies covered in the register maintained under Section 301 of the Act. In our opinion, the price at which such shares haveissued is not prejudicial to the interests of the Company.

(xix) The Company had created security in respect of debentures issued during the year.

(xx) The Company has not raised any money by public issues during the year as defined under SEBI (Disclosure and Investor ProtectioGuidelines, 2000 which excludes conversion of warrants referred to in Note 3.b to Schedule 12 to the financial statements.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, we report that no fraudthe Company has been noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants


Place : Gurgaon PartnerDate : 29th April, 2009 Membership No : 29519

Name of the Nature of dues Amount Period to which Forum where

statute (Rs. in Million) the amount relates dispute is pending

Custom Custom Duty 23.50 Assessment Years Assistant/Deputy

Act, 1982 1989-90 & 1994-95 commissioner of

Customs/Supreme Court

Sales Tax Act Sales Tax 48.91* Assessment Years Various Appellate

applicable to 1990-91 to 2003-04 Authorities/Revenue

various States Board/High Court

Central Excise Act, Excise Duty and 658.99 1995-96 to 2002-03 Various Appellate

1944 Additional Excise Duty Authorities/High Court

Income Tax Act, Income Tax 237.10** Assessment years Various Appellate

1961 1993-94 to Authorities/High

2006-07 Court



74/ 75



As per our Report attached MR. ONKAR S.KANWAR MR. NEERAJ KANWAR MR. M.R.B.PUNJAFor DELOITTE HASKINS & SELLS Chairman & Managing Director Vice Chairman & MR. U.S.OBEROIChartered Accountants Joint Managing Director MR. A.K.PURWAR

MR. ROBERT STEINMETZGEETHA SURYANARAYANAN MR. SUNAM SARKAR MR. P. N. WAHAL MR. RAAJA KANWARPartner Chief Financial Officer & Head (Sectt. & Legal) & MR. K. JACOB THOMASGurgaon Whole Time Director Company Secretary MR. SHARDUL SHROFF29th April, 2009

Directors

BALANCE SHEETstAS AT 31 MARCH 2009

st stSchedule As at 31 As at 31March, 2009 March,2008

Rs./Millions Rs./MillionsSOURCES OF FUNDS :

Shareholders' Funds :Share Capital 1 504.09 488.51Equity Share Warrants ( Note - B 3(b) ) - 45.65Reserves and Surplus 2 13,053.04 11,799.99

13,557.13 12,334.15Loan Funds : 3

Secured 4,623.88 2,231.45Unsecured 2,331.27 2,375.06

6,955.15 4,606.51Deferred Tax Liability (Net) ( Note - B 15 ) 1,560.67 1,412.00TOTAL 22,072.95 18,352.66

APPLICATION OF FUNDS :Fixed Assets 4

G r o s s B l o c k 18,379.96 15,697.79Less : Depreciation 6,946.60 5,987.83Net Block 11,433.36 9,709.96Capital Work in Progress 2,814.09 944.08

14,247.45 10,654.04

Investments 5 2,974.48 3,027.13Current Assets, Loans and Advances : 6

Inventories 4,170.47 5,132.91Sundry Debtors 872.84 1,551.33Cash and Bank Balances 3,405.98 2,658.53Other Current Assets 5.03 128.39Loans and Advances 1,952.69 1,786.84

10,407.01 11,258.00Less: Current Liabilities and Provisions: 7Current Liabilities 4,601.22 5,658.25Provisions 956.28 930.85

5,557.50 6,589.10Net Current Assets 4,849.51 4,668.90

Deferred Revenue Expenditure ( Note - B 8 ) 1.51 2.59

TOTAL 22,072.95 18,352.66SIGNIFICANT ACCOUNTING POLICIES 12AND NOTES ON ACCOUNTS



76/ 77

PROFIT & LOSS ACCOUNTstFOR THE YEAR ENDED 31 MARCH 2009

Schedule Year Ended Year Endedst st31 March, 2009 31 March,2008

Rs./Millions Rs./MillionsINCOME

Gross Sales 45,496.32 42,469.83Less : Excise Duty 4,791.91 40,704.41 5,530.56 36,939.27Other Income 8 112.47 92.23

40,816.88 37,031.50EXPENDITURE

Manufacturing and Other Expenses 9 37,190.87 32,851.26Decrease / (Increase) in Work in Process and Finished Goods 10 265.86 (552.74)

Interest 11 668.43 520.4138,125.16 32,818.93

PROFIT BEFORE DEPRECIATION & TAX 2,691.72 4,212.57Depreciation 980.07 878.10

PROFIT BEFORE TAX 1,711.65 3,334.47Provision for Tax - Current 439.30 975.01

- Deferred 148.67 121.43- Fringe Benefit Tax 42.50 630.47 45.00 1,141.44

NET PROFIT 1,081.18 2,193.03

ADD: PROFIT BROUGHT FORWARD FROM PREVIOUS YEAR 2,992.01 1,672.12Transfer from Debenture Redemption Reserve - 21.70

4,073.19 3,886.85DEDUCT- APPROPRIATIONS:

General Reserve 500.00 600.00Debenture Redemption Reserve 62.50 -Proposed Dividend 226.81 252.01Dividend Tax 38.55 42.83

827.86 894.84Surplus Carried To Schedule 2 3,245.33 2,992.01

Basic Earnings per share (Face value of Re. 1/- each) (Rs.) 2.15 4.66Diluted Earnings per share (Face value of Re. 1/- each) (Rs.) 2.15 4.64

SIGNIFICANT ACCOUNTING POLICIES 12AND NOTES ON ACCOUNTS



Directors





SCEDULESANNEXE TO THE ACCOUNTSSCH - SHARE CAPITAL

Asat Asatst st31 Marc h, 2009 31 Marc h, 2008

Rs. /Mi l l i ons Rs. /Mi l l i onsAUTHORSD

730, 00( 73So Re. 1/- each 730. 00 730. 00

200, 00 No ( 200, 000 Nos. ) Cumul at i ve RedeemPe Sof Rs. 100/ - each 20. 00 20. 00

750. 00 750. 00

IS SUED SUBSCR CALLED AND PAI UP

5040R 1/- each 504. 02 488. 44

A 0. 07 0. 07

504. 09 488. 51

* Numo Sha- Post spl i t

78/ 79



SCHEDULE 2 - RESERVES & SURPLUSAsat Asat

st st31 Marc h, 2009 31 Marc h, 2008Rs. /Mi lli ons Rs. /Mi lli ons

Cap 3.00 3. 00Fi xed Asset s Reval uat i on

As per l ast Bal ance Sheet 31. 57 31.57Less: Tra nsfer to Pro fi t &Loss A/c 0. 35 -

31. 22 31. 57ShareF - -

Cap 44.40 44. 40

Debent ur e Redempt i on

As per l ast Bal ance Sheet - 21.70Add: Tra 62. 50 -Less: Tra nsfer to Pro fi t &Loss Account - 21.70

62. 50 -Securi t i es Premi um

As per l ast Bal ance Sheet 5, 218. 80 4,527.71Add: Recei ved duri ng the year 440. 91 691.09

5, 659. 71 5,218.80Forei gn Currency Transl at i on Reserve

As per l ast Bal ance Sheet 3. 58 -

Add: Addi ti on duri ng the year - 3.58Less: Transferred duri ng the year 3. 33 -

0. 25 3.58General Reserve

As per l ast Bal ance Sheet 3, 506. 63 2,906.63Add: Transf er f romProf i t &Loss Account 500. 00 600.00

4, 006. 63 3,506.63

Surplus as sho 3, 245. 33 2,992.01

13, 053. 04 11,799.99



SCHEDULE 3 - LOANSAs at As at

st st31 March, 2009 31 March, 2008Rs./Millions Rs./Millions

SECUREDDebentures

1,000,000 - 11.25% Non Convertible Debentures of Rs. 100/- each - 100.00Less: Redeemed to Date - 100.00

- -1,250 - 11.50 % Non Convertible Debentures of Rs 1,000,000/- each 1,250.00 -Less: Redeemed to date - -

1,250.00 -

Term LoansFromInt ernat i onal Fi nance Corporat i on:

- Foreign Currency 178.62 345.33- Rupee Loan 214.34 392.96 321.52 666.85

From Banks:

- ECB from BNP Paribas, Singapore 732.75 -- ECB from Standard Chartered Bank, Singapore 1,001.00 -- State Bank of India 250.00 500.00

From Institutions:

- Bharat Earthmovers Ltd. (BEML) 500.00 -- G E Capital Services India 45.00 105.00

2,921.71 1,271.85

Other Loans:- Banks - Cash Credit 32.76 500.72- Deferred Payment Credit 362.39 383.33- Sales Tax Loan 57.02 75.55

452.17 959.60

4,623.88 2, 231. 45

UNSECRD- Commercial Paper 1,000.00 -- Short term Loans - From Banks 1,331.27 2,375.06

2,331.27 2,375.06

80/ 81



NOTES: SECURED LOANS

1. Loan from International Finance Corporation is secured by :

¢ A pari passu first charge along with other lenders on the company's land at Chalakudy, Kerala State and at village Limda, Gujarat Stogether with the Factory Buildings, Plant & Machinery and Equipments, both present and future.

¢ A first and fixed charge on the Company's Land and premises situated at Gurgaon, Haryana State together with all existing and futbuildings, erections and structures.

¢ A pari passu first charge on all the movable assets except current assets of the company.

¢ A second charge on all the current assets of the company.

2. Loan from State Bank of India is secured by :

¢ A pari passu first charge along with other lenders on the company's land at Chalakudy, Kerala State and at village Limda, Gujarat Stogether with the Factory Buildings, Plant & Machinery and Equipments, both present and future.

¢ A second charge on all the current assets of the company.

3. Loan from GE Capital Services India is secured by :¢ A pari passu first charge along with other lenders on the company's land at Chalakudy, Kerala State and at village Limda, Gujarat S

together with the Factory Buildings, Plant & Machinery and Equipments, both present and future.

¢ A pari passu first charge on all the moveable assets except current assets at Chalakudy, Kerala State and at village Limda, GujaState.

4. Loan from BNP Paribas is secured by:

¢ A pari passu first charge along with other lenders by way of mortgage (created on 21st April, 2009 ) on the company's land atLimda, Gujrat State together with the factory Building, Plant and Machinery and equipments, both present and future . Further, this hato be secured by way of mortgage on all the immovable assets of the company, both present and future.

¢ A pari passu first charge along with other lenders by way of hypothecation over all movables assets of the company, both presentfuture ( except stocks & book debts)

5. Loan from Standard Chartered Bank is secured by;

¢ A pari passu first charge along with other lenders by way of mortgage (created on 21st April, 2009) on the company's land at vLimda, Gujrat State together with the factory Building, Plant and Machinery and equipments, both present and future . Further, this hato be secured by way of mortgage on all the immovable assets of the company, both present and future.

¢ A pari passu first charge along with other lenders by way of hypothecation over all movable fixed assets of the company, both presefuture(except current assets); and

¢ A second charge by way of hypothecation over all current assets of the company.

6. Loan from BEML is secured by :

¢ Hypothecation on the assets to be created out of the proceeds of the loan taken from BEML.

7. 1,250 (Nil) 11.50% Secured Redeemable Non-Convertible Debentures of Rs.1 Million each aggregating to Rs 1,250 Millions (Nil) subscribeby Life Insurance Corporation of India is secured by a pari passu first charge (created on 21st April, 2009) along with other lenders bof mortgage on the Company's Land & Premises at Chalakudy, Kerala State & at Village Limda, Gujrat State together with the factbuildings, Plant & machinery & Equipments, both present & future.

8. Cash Credits and Guarantees from Banks are secured by Hypothecation of Raw materials, Work-in-Process, Stocks, Stores and Book Debtsranking in priority to the charge created in respect of the IFC Loan and also by second charge on the Company's land at Chalakudy,State and at Village Limda, Gujarat State together with the Factory Buildings, Plant & Machinery and Equipments, both present and future.

9. Deferred payment credit is secured by specific assets purchased under the scheme and includes Rs. 24.11 Million (Rs.20.94 Millions)repayable within one year.

10. The company had availed interest free Sales Tax Loan from Gujarat State Government amounting to Rs. 112.61 Millions. This loan is secuby a pari-passu charge on the entire fixed assets of the company, both present and future situated at Village Limda in Gujarat State. Theloan is repayable in six equal annual installments on the expiry of 14 years from the commencement of commercial production i.e. 31st M2006. Accordingly, a sum of Rs 18.53 Millions (Rs. 18.53 Millions) was paid during the year and a similar amount is repayable within

11. Secured Loans include Rs. 576.74 Millions (Rs. 602.65 Millions) repayable within one year.

12. Maximum amount outstanding on Commercial papers at any time during the year is Rs. 2,250 Millions ( Rs. 2,450 Millions).



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SCHEDULE 4 - FIXED ASSETSRs./Millions

GROSS BLOCK DEPRECIATION / AMORTIZATION NET BLOCKDescription of Assets As at Additions Deductions As at As at Additions Deductions To date As at As at

31st March, 31st March, 31st March, 31st March, 31st March,2008 2009 2008 2009 2008

Land 74.27 - 0.40 73.87 73.87 74.27(b) (b)

Leasehold Land 153.65 153.65 1.20 1.74 - 2.94150.71 152.45(a)

Buildings 1,731.13 960.78 41.81 2,650.10 388.10 50.86 0.06 438.902,211.20 1,343.03(b) (b)

Plant & Machinery 12,142.63 1,539.58 21.90 13,660.31 4,729.64 797.40 3.49 5,523.558,136.76 7,412.99(b) (c) (b)

Electrical Installation 344.03 121.62 - 465.65 176.21 17.72 - 193.93271.72 167.82

Furniture, F ixtures & O ffice 6 09.82 70.62 1.29 679.15 306.64 44.77 0.54 350.87328.28 303.18Equipments

Vehicles 500. 01 91.33 45.37 545.97 290.88 43.05 17.21 316.72229.25 209.13

Intangible Assets 142.25 9.01 - 151.26 95.16 24.53 - 119.69 31.57 47.09

15,697.79 2,792.94 110.77 18,379.96 5,987.83 980.07 21.30 6,946.60 11,433.36 9,709.96(d)

Previous Year 14,926.11 1,426.23 654.55 15,697.79 5,417.56 878.10 307.83 5,987.83 9,709.96 9,508.55

( a) Reprsp07 Ml i ons wr tten off.( b) Incl udes amn 1985a1R2Mon ( Rs. 227. 76 Mi l l i ons) .( c) Incl udes Rs 80. 88 Mi l l i ons (Rs. 15. 89 Mi l l i ons) for capi tal expendi ture on Researc h &Devel opmen (Note B -7) .(d) Incl udprR 519Ml i ons (Ni l ) as per Note B-13 &Borro wi ng cost capi tal i zed to the

extent of Rs. 120. 75 Mi ll i ons (Ni l).



SCHEDULE 5 - INVESTMENTSAs at As at


LONG TERM (AT COST):TRADE (FULLY PAID)QUOTEDEquity Shares of Rs.10/- each in Companies:

999,515 (999,515) Shares in Raunaq Finance Ltd. 10. 00 10.00167,150 (167,150) Shares in Apollo Tubes Ltd. 0. 17 0.1716,394 (16,394) Shares in Bharat Gears Ltd. 0. 36 0.36

10. 53 10.53UNQUOTED24,500 (24,500) Equity Shares of Rs. 10/- each in Apollo Radial Tyres Ltd. 0. 25 0.2524,500 (24,500) Equity Shares of Rs. 10/- each in Apollo Automotive Tyres Ltd. 0. 25 0.255,568,188 ( 5,568,188) Equity s hares o f US$ 1 e ach in Apollo ( Mauritius) 249. 01 249.01Holdings Pvt Ltd. - wholly owned subsidiary48,666,679 (51,941,679) 9% Non-cumulative redeemable preference shares 2, 597. 06 2,771.92

of US$ 1 each in Apollo (Mauritius) Holdings Pvt Ltd. - wholly owned subsidiary(25,000 Shares Acquired during the year - Cost Rs. 1.24 Millions)(3,300,000 Shares Redeemed during the year - Cost Rs. 176.10 Millions)3,248,652 (100,000) Equity Shares of CHF 1 each in Apollo Tyres A.G., Switzerland 12 5. 55 3.34-wholly owned subsidiary(3,148,652 Shares Acquired during the year - Cost Rs. 122.21 Millions)5,000 (5,000) Equity Shares of Rs. 100/- each in Apollo Tyres Employees' 0. 50 0.50Multipurpose Co-operative Society Limited

2, 972. 62 3,025.27

NON TRADE (FULLY PAID)QUOTEDCURRENT:

132,191 (132,191) Units of "UTI Balanced Fund - Dividend Plan - Reinvestment" 1. 50 1.50of Unit Trust of India (Face Value of Rs. 10/- each) #

2, 984. 65 3,037.30Less : Provision for diminution / reduction in the value of Investments 10. 17 10.17

2, 974. 48 3,027.13Cost / Book value of quoted Investments (Net of provision for diminution /reduction in the value of Investments ) 0. 36 0.36

Market price of quoted Investments 0. 27 0.72# Repurchase price of units 1. 89 2.61



SCHEDULE 6 - CURRENT ASSETS, LOANS AND ADVANCESAs at As at

st st31 M arch, 2009 31 March, 2 008Rs./Millions Rs./Millions

CURRENT ASSETSInventories : @

Raw Materials 1, 340. 74 1,973.56Stores and Spares 295. 76 251.29Work-in-Process 289. 25 240.91Finished Goods 2, 244. 72 2,667.15

4, 170. 47 5,132.91Sundry Debtors - Unsecured

Outstanding for a period exceeding six months:

Considered Good 17. 94 11.29Considered Doubtful 46. 78 46.78Others - Considered Good* 854. 90 1,540.04

919 . 62 1,598.11Less: Provision for Doubtful Debts 46. 78 46.78

872. 84 1,551.33Cash and Bank Balances

Cash on hand 4. 86 2.94Cheques on hand 666. 74 420.65Remittances in Transit 321. 42 326.99

With Scheduled Banks :

Current Accounts 737. 65 792.93Dividend Accounts 22. 94 17.75Deposit Accounts** 1, 652. 37 1,097.27

3, 405. 98 2,658.53Other Current Assets

Interest Accrued on Loans/ Deposits*** 5. 03 128.395. 03 128.39

* Includes due from Subsidiary Company - 1.57

** Includes Rs. 168.13 Millions (Rs.156.75 Millions) pledged with a bank againstwhich working capital loan has been availed by Apollo Finance Ltd.

*** Includes due from Subsidiary Company - 128.00

@ Includes stock in transit of Finished Goods 729. 98 619.81

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SCHEDULE 6 - CURRENT ASSETS, LOANS AND ADVANCES (Continued)

As at As atst st31 March, 2009 31 March, 2008

Rs./Millions Rs./MillionsLOANS AND ADVANCES - UNSECURED

(Considered good unless otherwise stated)Advances recoverable in cash or in kindor for value to be received

Considered Good* 1,881.68 1,642.53Considered Doubtful 41.12 2.25

1,922.80 1,644.78Less: Provision for Doubtful Advances 41.12 2.25

1,881.68 1,642.53Advance Tax 3,910.09 3,501.60Less: Provision for Taxation (3,839.26) 70.83 (3,357.46) 144. 14Balance with Customs, Port Trust etc. 0.18 0.17

1,952.69 1,786.84

10,407.01 11,258.00

* Includes dues from Subsidiary Companies 22.28 48.73



SCHEDULE 7 - CURRENT LIABILITIES AND PROVISIONSAs at As at


CURRENT LIABILITIESAcceptances 245.02 749.16Sundry Creditors:

Dues to micro & small enterprises (Note B-4) 43.88 109.46Others* 4,198.95 4,753.34

**Investor Education and Protection Fund shall be creditedby the following amounts whenever due:-Unpaid Debenture Redemption Amount 0.85 1.74Unpaid Interest on Debentures 0.17 0.47

Unpaid Matured Deposits 1.21 1.21Interest on Unpaid Matured Deposits 0.10 0.10Unpaid Dividend 22.94 17.75

Interest accrued but not due on Loans 88.10 25.024,601.22 5,658.25

PROVISIONSDividend Tax 38.55 42.83Proposed Dividend on Equity Shares 226.81 252.01Provision for Sales related obligations 484.91 431.10Gratuity, Leave Encashment & Superannuation 206.01 204.91

956.28 930.85

5,557.50 6,589.10

* Includes due to Subsidiary Company 8.22 -** 1. There are no amounts due and outstanding as at Balance Sheet Date to be credited to the Investor Education & Protection Fund.

2. Other unpaid amounts represent warrants / cheques issued to the Debentureholders / Depositors / Shareholders, as the case may be,which remain unpresented to the bankers as on 31st March, 2009.

SCHEDULE 8 - OTHER INCOMEYear Ended Year Ended


Income from Investments

Income from trade Investments 0.02 -Income from Non-trade Investments

- From Mutual Funds - 0.450.02 0.45

Profit on Sale of Assets (Net) * 12.16 -Provisions no longer required written back 69.80 -Bad Debts Recovered 5.00 -Miscellaneous Receipts ** 25.49 91.78

112.47 92.23

* Includes Transfer from Revaluation Reserve to the extent of Rs. 0.35 Millions (Nil).** Tax Deducted at Source Rs. 0.56 Millions ( Rs. 0.41 Millions).

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SCHEDULE 9 - MANUFACTURING & OTHER EXPENSESYear Ended Year Ended


MATERIALSRaw Materials Consumed* 28, 042. 63 23,930.19Less: Scrap Recoveries 95. 99 80.59

27, 946. 64 23,849.60Purchase of Finished Goods 1, 162. 04 1,035.08

EMPLOYEESSalaries, Wages and Bonus** 1, 654. 32 1,855.75Contribution to Provident and Other Funds 12 9. 31 115.38Workmen and staff welfare expenses 291. 83 299.42

MANUFACTURING, ADMINISTRATIVE AND SELLINGConsumption of stores and spare parts 271. 69 270.81Power and Fuel 1, 492. 94 1,348.15Conversion Charges 539. 05 448.91Repairs and Maintenance

- Machinery 59. 48 66.26- Buildings 27. 63 21.03- Others 12 6. 89 122.56

Rent*** 10 3. 01 93.80Insurance 60. 26 65.58Rates and Taxes 74. 11 74.88Directors' Sitting Fees 0. 98 0.92

Loss on Sale of Assets (Net) - 4.00Travelling, Conveyance and Vehicle Expenses 434. 04 394.04Postage, Telex, Telephone and Stationery 64. 63 63.86Freight & Forwarding 879. 37 851.15Commission to Selling Agents 50. 04 43.57Sales Promotion Expenses 645. 77 714.30Advertisement & Publicity 267. 92 245.18Research and Development 19 5. 75 107.42Bank Charges 61. 14 48.61Provision for Doubtful Advances 38. 87 2.25Bad Debts Written off - 6.12Less: Transferred from Provision - - 5.68 0.44

Lease Rent to PTL Enterprises Ltd. 250. 00 200.00Legal & Professional Expenses 140. 10 101.15Miscellaneous Expenses**** 223. 06 407.16

37, 190. 87 32,851.26

* Includes Foreign Exchange Fluctuation Loss of Rs. 204.76 Millions (Net of Gain of Rs. 60.28 Millions).** Includes VRS payments amortised during the year of Rs. 1.71 Millions (Rs. 2.24 Millions).*** Net of Rent Receipts of Rs. 13.42 Millions, TDS Rs. 3.04 Millions (Rs.13.73 Millions, TDS - Rs. 3.15 Millions).**** Net of Foreign Exchange Fluctuation Gain of Rs. 62.75 Millions (Including loss of Rs.20.39 Millions).



SCHEDULE 10 - (INCREASE) / DECREASE IN WORK IN PROCESS AND FINISHED GOODS

Year Ended Year Endedst st31 March, 2009 31 March, 2008

Rs./Millions Rs./MillionsOPENING STOCK

Work in Process 240.91 270.46Finished Goods 2,667.15 2,124.36

2,908.06 2,394.82Less:CLOSING STOCK

Work in Process 289.25 240.91Finished Goods 2,244.72 2,667.15

2,533.97 2,908.06

374.09 (513.24)Excise Duty on Increase/Decreaseof Finished Goods (Note B - 5) (108.23) (39.50)

265.86 (552.74)

SCHEDULE 11 - INTEREST

Year Ended Year Endedst st31 March, 2009 31 March,2008Rs./Millions Rs./Millions

Fixed Loans* 146.10 122.28Debentures 22.84 0.88Others # * 499.49 397.25

668.43 520.41

# Net of Interest Earned Rs. 58.73 Millions (Rs. 30.90 Millions) including:Interest Earned on Deposits Rs. 47.96 Millions (Rs. 15.59 Millions).Interest Earned on Trade Balances Rs. 7.02 Millions (Rs. 5.65 Millions).Interest Earned - Others Rs. 3.75 Millions (Rs. 9.66 Millions).Tax Deducted at source on Interest Earned Rs. 8.67 Millions (Rs.4.38 Millions).

* Net of Foreign Exchange Fluctuation gain of Rs. 36.50 Millions (Rs. 2.64 Millions).

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SCHEDULE 12 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES:

1. A. BASIS OF ACCOUNTING

The financial statements are prepared on historical cost convention with the exception of certain fixed assets (which were revalued) basedon accrual method of accounting and in accordance with the accounting principles generally accepted in India and comply with themandatory accounting standards notified by the Central Government of India and with the relevant provisions of the Companies Act, 1956.

B. USE OF ESTIMATES

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amountsof assets and liabilities including the disclosure of contingent liabilities as of the date of the financial statements and the reported incomand expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements areprudent and reasonable. Actual results could vary from these estimates. Any revision to accounting estimates is recognised in the periodwhich the results are known/materialized.

2. FIXED ASSETS

(a) Fixed assets are stated at cost ,as adjusted by revaluation of certain land, buildings, plant and machineries based on the thereplacement cost as determined by approved independent valuer in 1986 and 1987 , less depreciation.

(b) All costs relating to the acquisition and installation of fixed assets (net of Cenvat /VAT credits wherever applicable) are capitalised aninclude finance cost on borrowed funds attributable to acquisition of qualifying fixed assets for the period upto the date when the asseready for its intended use and adjustments arising from exchange differences arising from foreign currency borrowings to the extentthey are regarded as an adjustment to interest costs.(Also refer accounting policy No. 4 on Borrowing Costs.) Other incidentalexpenditure attributable to bringing the fixed asset to its working condition for its intended use is capitalized.

(c) Fixed assets taken on finance lease are capitalised and depreciation is provided on such assets, while the interest is charged to the proand loss account.

3. DEPRECIATION

Depreciation on fixed assets is provided using straight line method at the rates specified in Schedule XIV of the Companies Act 1956, ex

for certain vehicles and other equipments for which the depreciation is provided at 30% and 16.67% respectively. Certain plant anmachinery are classified as continuous process plant based on technical evaluation by the management.

Additional depreciation consequent to the enhancement in the value of fixed assets on the revaluation is adjusted in the fixed assetrevaluation reserve account.

Leasehold land/improvements thereon is amortised over the period of lease.

In respect of fixed assets whose useful life has been revised, the unamortized depreciable amount is charged over the revised remaininguseful life.

4. BORROWING COSTS

Borrowing costs are capitalised as part of the cost of qualifying asset when it is possible that they will result in future economic benefitthe cost can be measured reliably. Other borrowing costs are recognised as an expense in the period in which they are incurred.

5. IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/externa

factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverableamount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flowdiscounted to their present value at the pre tax weighted average cost of capital.

6. INTANGIBLE ASSETS

The expenditure incurred by the company on acquisition and implementation of software system / development cost upto the stage whenthe new product reaches technical feasibility, has been recognised as an intangible asset and is amortized over a period of five years baon their estimated useful life.

7. INVESTMENTS

Long term investments are stated at cost and provision for diminution is made if the decline in value is other than temporary in nCurrent investments are stated at lower of cost and fair value determined on the basis of each category of investments.



8. INVENTORIES

Inventories are valued at the lower of cost and net realisable value. The cost comprises of cost of purchase, cost of conversion and othercosts including appropriate production overheads in the case of finished goods and work in process, incurred in bringing such inventories totheir present location.

In case of raw materials and stores & spares, cost (net of Cenvat/VAT credits wherever applicable) is determined on a moving weightedaverage basis and in case of work in process and finished goods, cost is determined on first in first out basis

9. FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are recorded at rates of exchange prevailing on the date of transaction. Monetary assets and liabilitiesdenominated in foreign currencies as at the balance sheet date are translated at the rate of exchange prevailing at the year-end. Exchangedifferences arising on actual payments/realisations and year-end restatements are dealt with in the profit & loss account.

The premium or discount arising at the inception of the foreign exchange contract is amortised as expense or income over the life of thecontract. Exchange difference on such contracts is recognised in the profit and loss account in the year in which the exchange rates change.

Exchange difference arising on a monetary item that, in substance, forms part of the company's net investment in a non-integral foreign

operation has been accumulated in a foreign currency translation reserve in the company's financial statement until the disposal of netinvestment, at which time they would be recognised as income or as expense.

10. REVENUE RECOGNITION

Revenue is recognised when the significant risks and rewards of ownership of goods have been passed to the buyer. Gross sales are inclusiveof excise duty and are net of trade discounts/sales returns/VAT.

11. EXPORT INCENTIVE

Export Incentive in the form of advance licences / credit earned under duty entitlement pass book scheme are treated as income in the yearof export at the estimated realisable value / actual credit earned on exports made during the year and are credited to the raw materialconsumption account.

12. EMPLOYEE BENEFITS

¢ Liability for gratuity to employees determined on the basis of actuarial valuation as on balance sheet date is funded with the LifeInsurance Corporation of India and are recognised as an expense in the year incurred.

¢ Liability for short term compensated absences is recognised as expense based on the estimated cost of eligible leave to the credit of theemployees as at the balance sheet date on undiscounted basis. Liability for long term compensated absences is determined on the basisof actuarial valuation as on the balance sheet date.

¢ Contributions to defined contribution schemes such as provident fund, employees pension fund and superannuation fund and cost ofother benefits are recognised as an expense in the year incurred.

¢ Actuarial gains and losses arising from experience adjustments and effects of changes in actuarial assumptions are immediatelyrecognised in the profit & loss account as income or expense.

13. DEFFERED REVENUE EXPENDITURE

Payments under voluntary retirement scheme are being charged to profit and loss account over a period of three years or over the periodending 31st March, 2010 which ever is earlier.

14. TAXES ON INCOME

Current tax is determined on the income for the year chargeable to tax in accordance with the Income Tax Act, 1961.

Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year, and quantified usingthe tax rates and laws enacted or substantially enacted as on the balance sheet date. Deferred tax assets are recognised only to the extentthere is a reasonable certainty that assets can be realised in future, however where there is unabsorbed depreciation or carry forward oflosses ,deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets.

15. PROVISIONS

A provision is recognised when the company has a present obligation as a result of past event; it is probable that an outflow of resources willbe required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present valueand are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balancesheet date and adjusted to reflect the current best estimates.

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B NOTES ON ACCOUNTS:1. CONTINGENT LIABILITIES

PARTICULARS 2008-09 2007-08Rs./Millions Rs./Millions

Sales Tax 65.64 68.59Income Tax-Disputed Demands under Appeal 247.10 145.60Claims not acknowledged as debts - Employee Related 28.22 17.81

- Property Disputes2.60 2.60- Others16.53 11.29

Provision of Security 168.13 156.75Guarantees given by bankers on behalf of the Company 588.18 370.88Custom Duty 23.50 23.50Excise Duty* 125.68 297.30Irrevocable l etters o f c redit 1,562.98 1,141.22

* Excludes demands ofRs. 533. 31 Mi l l i ons (Rs. 533.31 Millions) raised on one of the company's units relating to the issues which have bedecided by the Appellate Authority in company's favour in appeals pertaining to another unit of the company.In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the grounds that there arreasonable chances of successful outcome of appeals.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for as on 31st March, 2009 isRs. 6, 314. 31Mi l l i ons (Rs. 3,882.86 Millions).

3. a) Split of equity sharesPursuant to the resolution passed by the shareholders at the annual general meeting held on 26th July, 2007, the equity shares of Rs.1each of the company were sub divided into 10 equity shares of Re.1 per share with effect from record date i.e., 27th August, 2007.b) Preferential allotment of equity share to the promoter group through conversion of Equity share warrantsDuring 2006-07, the company had received Rs. 117.20 Millions towards 10% security deposit against preferential allotment of 4 Millionequity share warrants to the promoter group (in accordance with SEBI (DIP) guidelines, 2000) at Rs.293.00 each to be converted intoMillion equity shares of Rs.1.00 each at a premium of Rs.28.30 per equity share (4 Million equity shares of Rs. 10.00 each at a premiu283.00 each prior to share split) on exercise of option by warrant holders before the expiry of 18 months from 19th October, 2006.During the year, the company has issued 15,580,000 (24,420,000) equity shares consequent upon conversion of the remaining 1,558,000(2,442,000) warrants into equity shares on exercise of option by promoter group. Accordingly, Rs. 410.84 Millions (Rs. 643.96 Millionsequivalent to 90% of the conversion price in respect of 15,580,000 (24,420,000) equity shares has been received during the year and utilistowards meeting the normal capital expenditure and other general business needs of the company.c) Buy Back of the Shares :During the year, the Board of Directors at its meeting held on 19th March 2009 has approved a proposal to buy back equity sharescompany from open market through stock exchange route up to an amount not exceeding Rs 1,220 Million at a maximum buy back prRs 25 per equity share.

4. Based on information available with the company and relied upon by the auditors, the information as required to be disclosed under "M

Small and Medium Enterprises Development Act, 2006" (MSMDA) as on 31st March , 2009 is given below:


Principal amount unpaid as at year-end 38.85 104.79Amount paid after appointed date during the year 104.54 346.85Amount of interest accrued and unpaid as at year-end 5.03 4.67

5. Excise duty relating to sales has been disclosed as a reduction from turnover. Excise duty related to difference between the closing stocand opening stock has been disclosed in Schedule 10 "(Increase)/Decrease in Work in Process and Finished Goods”.

6. Borrowing costs capitalized / transferred to capital work in progress during the year isRs. 215.48 Millions (Re.0.31 Millions).





ii) Remuneration to Whole-time Directors


Salary 5.14 4.18Commission/Performance Bonus 3.17 5.59Contribution to Provident / Superannuation Funds / Gratuity/Compensated absences* 2.15 1.13Money Value of Perquisites 9. 34TOTAL 19.80 15.88TOTAL (i + ii) 134.94 186.81

*The figures for previous year do not include provisions for compensated absences and gratuity as separate actuarial valuations are notavailable.

10. Statutory Auditors' Remuneration included under Miscellaneous Expenses


For Audit 3.50 2.00For Certification & Other Service 2.78 2.13Reimbursement of expenses 0.52 0.59TOTAL 6.80 4.72

11. ( A) Capaci t i es and Pro duct i on

PARTICULARS UNIT INSTALLED CAPACITY* PRODUCTION @PER ANNUM

2008-09 2007-08 2008-09 2007-08

Automobile Tyres No. 9,896,725 9,659,232 8,592,050 8,867,443Automobile Tubes No. 7,486,464 7,677,965Automobile Flaps No. 3,649,053 3,867,532Alloy Wheels No. 3,948 15Camel Back/Pre-cured Tread Rubber No. 248,040 248,040 133,435 149,176

* As certified by Management (Includes capacity under Lease agreement)@ Includes Production under Lease Arrangement and purchases/conversion of Finished Goods by Conversion Agents: -

PARTICULARS 2008-09 2007-08Nos. Nos.

Tyres 756,021 975, 357Tubes 7,486,464 7, 677, 965Flaps 3,649,053 3, 867, 532PCTR 133,435 149, 176Alloy Wheels 3,948 15



(B) Turnover and stock

PARTICULARS Opening Stock Turnover* Closing Stock

Unit 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08

Automobile Tyres No. 740,385 568,968 8,699,334 8,696,026 633,101 740,385

Rs./Millions 2,203.63 1,839.78 40,606.34 37,911.94 1,857.84 2,203.63

Automobile Tubes No. 780,961 652,423 7,298,044 7,549,427 969,381 780,961Rs./Millions 345.07 220.95 3,816.19 3,581.50 287.33 345.07

Automobile Flaps No. 378,051 243,063 3,713,146 3,732,544 313,958 378,051Rs./Millions 66.48 43.03 840.51 806.27 57.45 66.48

Pre-cured Tread Rubber No. 37,222 14,375 148,861 126,329 21,796 37,222Rs./Millions 49.08 17.67 224.38 167.95 29.60 49.08

Alloy Wheels No. 3,597 4,199 2,216 617 5,329 3,597

Rs./Millions 2.89 2.93 8.90 2.17 12.50 2.89TOTAL Rs./Millions 2,667.15 2,124.36 45,496.32 42,469.83 2,244.72 2,667.15

* Includes quantities relating to claims and own consumption.

(C) Raw Materials Consumed

PARTICULARS 2008-09 2007-08Tonnes Rs./Millions Tonnes Rs./Millions

Fabric 23,131.64 4,450.73 24,929.93 4,193.56Rubber 131,090.09 16,225.10 139,664.30 13,490.96Chemicals 20,795.05 2,041.15 21,460.37 1,953.54Carbon Black 64,344.10 3,447.97 69,256.16 2,817.91Others 1,877.68 1,474.22

TOTAL 28,042.63 23, 930. 19

(D) Break-up of Consumption

PARTICULARS 2008-09 2007-08% Rs./Millions % Rs./Millions

Raw Material – Imported 38.59 10,820.79 31.23 7,473.04- Indigenous 61.41 17,221.84 68.77 16,457.15

100.00 28,042.63 100.00 23,930.19Stores & Spares- Imported 7.99 21.737.44 20.15

-Indigenous 92.01 249.96 92.56 250.66100.00 271.69 100.00 270.81

(E) C.I.F. Value of Imports


Raw Material 10,328.93 7,274.01Stores & Spares 107.50 40.18Capital Goods 1,086.11 204.44

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(F) Expenditure in Foreign Currency (Remitted) :

(Excluding value of imports)PARTICULARS 2008-09 2007-08

Rs./Millions Rs./Millions

Interest 42. 92 50.94Dividend for the year 2007-08 (2006-07)* 29. 61 26.55Others 14 9. 49 214.63

*Number of non-resident Shareholders – 33 (37), Number of Shares held by Non resident Shareholders – 59,219,500 (59,229,500).

12. Earnings in Foreign Exchange:


FOB Value of Exports 2, 483. 84 940.24FOB Value of Sale of Fixed Assets 19. 43 -

13. Pre-operative expenses capitalized / included in capital work-in-progress during the year:


Salaries, Wages and Bonus 56.13 3.46Contribution to Provident and Other Funds 11.83 0.14Welfare Expenses 0.14 0.13Rent 0.02 1.91Travelling, Conveyance and Vehicle expenses 3.44 4.84Postage, Telex Telephone and Stationery 0.41 0.11Power Expenses 4.15 -

Insurance Expenses 4.41 -Miscellaneous Expenses 115.18 0.28TOTAL* 195.71 10.87*Including Rs. 143. 74 Mi l l i ons (Rs 10.87 Millions) lying in capital work in progress as on 31st March, 2009.

14. Employee BenefitsThe company has a defined benefit gratuity plan. Every employee who has completed five years or more of service receives gratuityleaving the company at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life InsuCorporation of India.The following table summarise the components of net benefit expense recognised in the profit and loss account and the funded status anamounts recognised in the balance sheet for the respective plan:

Profit and Loss Account:

PARTICULARS 2008-09 2007-08Rs. Millions Rs. Millions

Net employee benefit expenses (recognised in employee cost):

Current service cost 24. 71 19. 77

Interest cost on benefit obligation 23. 78 23.87Expected return on plan assets ( 23. 32) (19.93)Net actuarial loss recognised in the year 23. 28 17.81Net benefit expense 48. 45 41. 52





15. The compono Def er Ta Li abl i t y ( Net ) are as f ol l ows

PARTICULARS 2008-09 2007-08Rs. /Mi l l i ons Rs. /Mi l l i ons

Def erre d Tax Li abi l i t y on t i mi ng di f f ere nces ari si ng on:

Depreci at i on 1, 670. 23 1, 524. 87Sub Total (A) 1, 670. 23 1, 524. 87

Def err ed Tax Asset s on t i mi ng di f f ere nces ari si ng on:

Payment under Vol unt ary Ret i rement Scheme 0. 55 0. 65Ot her s 10 9. 01 112. 22

Sub Total (B) 109. 56 112. 87Net Deferre 1,560.67 1, 412. 00

16. Pro vi si on for sal es re l ated obl i gati ons re pre sents esti mates for paymeto be mad i n future . Maj or port i on of these costs i s esti mated tobe pai d i n the next fi nanci al year and wi l l be pai d wi thi n a maxi mumof 3 years fro mthe bal ance sheet date:

Rs. / Mi l l i onsOpeni ng Bal ance Addi ti onal pro vi si on Incurr ed agai nst pro vi si on Cl osi ng Bal anceas at 01. 04. 2008 made duri ng the year duri ng the year as at 31. 03. 2009

431.10 468.44 414.63 484.91

st17. The fol l owi ng forward exchange contracts entered i nto by the company are outstandi ng as on 31 March, 2009:Currency Amount Buy/Sell Cross Currency

USDolla r 2, 811, 100(750, 000 Buy (Sell) Rupees

The above forward contra ct has been val ued mar to mare as at the year- end and the re sul ti ng l oss has been charg ed to the pro fi t &l ossacco unt .

18. The company' s operat i ons compri se of onl y one busi ness segment –Automobi l e Tyres, Automobi l e Tubes &Autome Fl aps i n the contextof report i ng busi ness/ geographi cal segment as requi red under mandatory account i ng standard AS -17 “Segment Report i ng “

The geogra phi cal segmIn anr of the wor d. Al l the manufacturi ng faci l i ti es are l ocated i n Indi a:

PARTICULARS 2008-09 2007-08Rs. /Mi l l i ons Rs. /Mi l l i ons

1. Revenue by Geographi cal market

Indi a 38, 347. 71 36, 141. 32Rest of the worl d 2, 469. 17 890. 18Total 40,816.88 37, 031. 50

2. Carryi ng amount of Segment Asset s

Indi a 21, 965. 23 18, 299. 54

Rest of the worl d- Export Debtors 10 7. 72 53. 12Total 22,072.95 18, 352. 66

3. Addi t i ons t o Fi xed Asset s and Int angi bl e Asset s

Indi a 2, 792. 94 14 26. 23Rest of the worl d - -Total 2,792.94 14 26. 23

19. Di scl osure of Rel ated Party Transacti on i n accordance wi th mandatory accounti ng standard AS-18 “Rel ated Party Di scl osures”



a) Name of t he Rel at ed Part i es:

PARTIC 200 2007-08

Subsi di ari es Apol l o ( Mauri ti us) Hol di ngs Pvt. Ltd. ( AMHPL) Apol l o ( Mauri ti us) Hol di ngs Pvt. Ltd. ( AMHPL)

Apol l o (South Afri ca) Hol di ngs (Pty. ) Ltd. (ASHPL) Apol l o (South Afri ca) Hol di ngs (Pty. ) Ltd. (ASHPL)

( Subsi di ary through AMHPL) ( Subsi di ary through AMHPL)

Apol l o Tyre s South Afri ca (Pty. ) Ltd. (ATSA) Dunl op Tyre s Intern ati onal (Pty. ) Ltd. (DTIPL)

( Previ ousl y Dunl op Tyres Internati onal Pty. Ltd. ( Subsi di ary through ASHPL)

( DTIPL) ( Subsi di ary t hrough ASHPL)

Dunl op Af ri ca Market i ng ( UK) Lt d. ( DAMUK) Dunl op Af ri ca Market i ng ( UK) Lt d. ( DAMUK)

(Subsi di ary thro ugh ATSA) (Subsi di ary thro ugh DTIPL)

Dunl op Zi mbabwe Pvt. Ltd. (DZL) Dunl op Zi mbabwe Pvt. Ltd. (DZL)

( Subsi di ary through DAMUK) ( Subsi di ary through DAMUK)

Radun Investment (Pvt. ) Ltd. Radun Investment (Pvt. ) Ltd.

( Subsi di ary through DAMUK) ( Subsi di ary through DAMUK)

AFSMi ni ng (Pvt. ) Ltd. AFSMi ni ng (Pvt. ) Ltd.

(Subsi di ary thro ugh DZL) (Subsi di ary thro ugh DZL)

Apol l o Tyre s AG, Swi tzerl and ( AT AG) Apol l o Tyres AG, Swi tzerl and ( AT AG)

Apol l o Tyres GmbH , Germany ( AT GmbH) Apol l o Tyres GmbH , Germany ( AT GmbH)

(Subsi di ary thro ugh AT AG) (Subsi di ary thro ugh AT AG)

Apol l o Tyre s ZRT. , Hungary (AT ZRT) Apol l o Tyre s Kft. , Hungary (AT Kft)

(Subsi di ary thro ugh AT AG) (Subsi di ary thro ugh AT AG)

Apol l o Tyre s Pte Ltd, Si ngapore ( AT PL) Apol l o Tyre s Pte Ltd, Si ngapore ( AT PL)

( Subsi di ary through AMHPL) ( Subsi di ary through AMHPL)

Apol l o Tyres ( Ni geri a) Li mi ted

( Subsi di ary t hrough AMHPL)Associ at es Apol l o Intern ati onal Ltd. (AIL) Apol l o Intern ati onal Ltd. (AIL)

Encorp EServi ces Ltd. Encorp EServi ces Ltd.

Landmark Farms &Housi ng ( P) Ltd. Landmark Farms &Housi ng ( P) Ltd.

Sunli fe Tradeli nks (P) Ltd. Sunli fe Tradeli nks (P) Ltd.

Travel Tracks (P) Ltd. Travel Tracks (P) Ltd.

PTL Enterp ri ses Ltd. (PTL) PTL Enterp ri ses Ltd. (PTL)

Nati onal Tyre Servi ces, Zi mbabwe Nati onal Tyre Servi ces, Zi mbabwe

Pressuri te (Pty ) Ltd , South Afri ca Pressuri te (Pty ) Ltd , South Afri ca

Apollo Fi nance Ltd. Apollo Fi nance Ltd.

Art emi s Medi care Serv i ces Pvt. Ltd. Art emi s Medi care Serv i ces Pvt. Ltd.

Art emi s Heal th Sci ences Pvt. Ltd. Art emi s Heal th Sci ences Pvt. Ltd.

Apol l o Automoti ve Tyre s Ltd. Apol l o Automoti ve Tyre s Ltd.Apollo Radi al Tyres Ltd. Apollo Radi al Tyres Ltd.

Key Management Per so nnel Mr. O. S. Kanwar Mr. O. S. Kanwar

Mr. Neeraj Kanwar Mr. Neeraj Kanwar

Mr. U. S. Oberoi Mr. U. S. Oberoi

Mr. SunamSarkar Mr. SunamSarkar

Rel at i ve of Key Manageri al Personnel Mr. Raaj a Kanwar Mr. Raaj a Kanwar

98/ 99





10 0/ 10 1

2007- 08

Part i cul ars Subsi di ari es Associ ates Key Management TotalPer son nel

Rs. /Mi l l i ons Rs. /Mi l l i ons Rs. /Mi l l i ons Rs. /Mi l l i ons

Vol ume of Transact i ons:

Sa 2,216.41 2216.41Sa 95.46Inve 3.34Adva 36. 30Invest ment s made i n Pref erenceSha 442.70

Loa 2.43Rei mbur se men of Exp ense sRec (28.56)Rei mbur se men of Exp ense sRec (1.70)Reim 1.91Rei m 355. 85Reim 0.01Lea 200 200.00Servc (3.60)Man 186.81 186.81Pur 1.63

Trave 139. 25Re (0.87 (0.87)Conf 40. 01Inte (2.72)Renp 21.30Rent padto L 13. 20Sec 10 100.00Cla 3.15Tota 553.51 3,081.99 186.81 3,822.31Am- 805.31

Fr om AMHPL 13 0. 43

Fromot hers 47. 87

Fr omPTL 280. 21

FromLandmFarm&Houng ( P) Lt d. 111. 50

Fr omAIL 18 3. 59

Fromot hers 51. 71



Di scl osure re qui re d by Cl ause 32 of t he l i st i ng agre ement re gard i ng t he re l at ed part i es:

FY2 s)PARTICULAR Out st andi ng as on Maxi mumamount Invest ment s

Marc h 31, 2009 Out st andi ng duri ng i n share s oft he year t he company

SU BSI DIARIES

Apollo (Mauri ti us) Holdi ng Pvt. Ltd. (AM 2. 80 131. 67 1. 24Apoll o Tyres AG, Swi tze - 125. 93 122. 21

ASSO CI ATES

PTLEnterprs 39.67 57.16 -

FY2 s)PARTICULAR Out st andi ng as on Maxi mumamount Invest ment s

Marc h 31, 2008 Out st andi ng duri ng i n share s oft he year t he company

SU BSI DIARIES

Apollo (Mauri ti us) Holdi ng Pvt. Ltd . (AMHPL) 130. 42 130. 42 442. 69Apollo Tyres AG, Swi tzerla 36. 30 36. 30 3. 34

ASSO CI ATES

PTLEnterprs 30.21 46.41 -

20. Operat i ng Lease

The company has acqui re d assets unde the operti ng l ease agremrnp bas at the opti on of both thel essor and l essee. Rental expenses under those l eases were Rs. 250 Mi l l i ons (Rs. 200 Mi lli ons).The schedul e of future mi ni muml ease payments i n respect of non-cancel l abl e operati ng l eases i s set out bel ow:

st stPARTICULARS 31 Marc h 2009 ( Rs. /Mi l l i ons) 31 Marc h 2008 ( Rs. /Mi l l i ons)

Wi thi n one year of the bal ance sheet date 250. 00 250. 00Due i n a peri od between one year and fi ve years 1, 000. 00 1, 000. 00Due after fi ve years - 250. 00

21. Earni ng Per Share ( EPS) – The numerat or and denomi nat or used t o cal cul at e Basi c and Di l ut ed Earni ng Per Share:

PARTICULARS 2008-09 2007-08a) Basi c

Pro fi t attri butabl e to the equi ty share hol ders used as numera tor (Rs. Mi l l i ons) - (A) 1, 081. 18 2, 193. 03The wei ghted average number of equi ty shares outstandi ng duri ng the year usedas denomi nat or -( B) 503, 299, 12 6 470, 905, 262Basi c earni ng per share (Rs. ) – (A) / (B) (Face Value of Re. 1 each) 2. 15 4. 66b) Di l ut ed

Pro fi t attri butabl e to the equi ty share hol ders used as numera tor (Rs. Mi l l i ons) - (A) 1, 081. 18 2, 193. 03The wei ghted average number of equi ty shares outstandi ng duri ng the year used

as denomi nator -( B) 503, 338, 920 472, 721, 493Di lute d earni ng per share (Rs. ) – (A) / (B) (Face Value of Re. 1 each) 2. 15 4. 64

22. Previ ous Year' s fi gures have been regrouped or rearranged wherever consi dee ne con the cl assi fi cati ons for the currentyear. Fi gure s i n bra ckets re l ate to the pre vi ous year.



Directors



BALNC SHEET ABSTRACT AND COMPANY' S GENERAL BUSINESS PROFILE

( AS PER SCHEDUV PART ( i v) OF THE COMPANIES ACT, 1956)I REGIS TRATIO N DETAILS

Regi st rat i on No.St at e CodeBala

II CAPITAL RAISED DURINTH YEA ( Ami n Rs. Thousands)

Publ i c IssueRightPri vate Pl acement ( Conversi on of Equi ty share warrants) i ncl . Share Premi um

III POSITION OF MOBILISATIO AN DEPn Rs Thousa nds)

Total Li abi l i ti es*Tot al Asset s

Pai d-up Capi t alReserves &Surpl usSecur ed LoansUnse cu r ed Loans*Incl udi ng Deferred Tax Li abi l i ty ( Net)

APPLI CATION OF FU NDSNet Fi xed AssetsIn ves t men t sNet Current Asset sMi sc. Expendi t ureAccu mul at ed Losses

IV PERFORMANO THE COMn Rs. Thousa nds)Turnover i ncl udi ng Ot her IncomesTot al Expendi t urePro fi t Before TaxPro fi t After TaxEarn i ngs Per Share – Basi c (Rs. )Earn i ngs Per Share – Di l uted (Rs. )Di vi dend Rate ( %)

V GENERIC NAMES OF THREE PRIN CIP AL PRODUCTS/ SERVIC ES OF THE COMPANYITEMCODE NO ( ITC COD TYRES FLAPS TUBES

Passen ger / Jee pBus/ Lorri esOff the RoadTr act or

Si gnaturs to Schedul es 1 to 12 whi ch form i ntegra l part of Accounts.

10 2/ 10 3

2 449

9

31 03 2 009

NIL

NIL

4564 90

2 20 7 2 950

5 04 0 90

13 053 04 0

46 2 3 8 8 0

2 33 1 270

1560 670

1 42 4 7450

29 7 4 4 80

484 951 0

1 5 10

NIL

4 5 60 8 790

43 89 7 1 40

1711 650

10 81180

2 . 15

2 . 15

2 207 2 950

40111000

40112000 40129004

40119901 40139003

401199 0 2 40 13900 4

401 31 001

401 31002

00 .54

MR. ONKAR S.KANWAR MR. NEERAJ KANWAR MR. M.R.B.PUNJAChairman & Managing Director Vice Chairman & MR. U.S.OBEROI

Joint Managing Director MR. A.K.PURWARMR. ROBERT STEINMETZ

MR. SUNAM SARKAR MR. P. N. WAHAL MR. RAAJA KANWARChief Financial Officer & Head (Sectt. & Legal) & MR. K. JACOB THOMAS

Gurgaon Whole Time Director Company Secretary MR. SHARDUL SHROFF29th April, 2009

Directors



STATEMENT PURSUANT TO SECTIO N 212( 3) OF THE COMPANIE S

ACT, 1956 RELATIN G TO SUBSID IA RY COMPANIE SRs. / Mi l l i ons

NAME OF THE SUBSIDIARY APOLLO APOLLO APOLLO TYRES DUNLOP AFRICA APOLLO TYRES APOLLO TYRES APOLLO TYRES APOLLO TYRESAPOLLO TYRES

( MAURIT IU S) ( SOUTH AFRIC A) SOUTH AFRIC A MARKETIN G ( UNIT ED PTE LTD, AG, SWIT ZERLANDG mbH, GERMANYZRT, HUNGARY( NIG ERIA ) LTD.HOLDINGS PVT LTDHOLDINGS ( PTY) LTD ( PTY) LTD KINGDOM) LTD. SINGAPORE NIGERIA

(AMHPL) (ASHPL) (ATSAPL) (DAMUK) (AT PL) (AT AG) (AT GmbH) (AT ZRT) (AT NGR)

1 NUMBER OF S HARES HELD 5,568,188 ORDINARY 314 ORDINARY 2,487,818 ORDINARY 103 ORDINARY 45,000 EQUITY 3,248,652 9 EQUITY SHARE SHARE CAPITAL 10 MILLIONIN THE SUBSIDIARY SHARE OF US$ 1/- SHARES OF ZAR SHARES OF ZAR SHARES OF GBP SHARE OF US$ 1 EQUITY OF EURO 25, 000 OF 256,976 tHUFCOMPANY FULLY PAID & 1 EACH FULLY 0,0001 EACH 1 EACH FULLY PAID EACH FULLY PAID SHARES OF CHF-1 EACH FULL PAID FULLY PAID S

48,666,679 9% PAID (SUBSIDIARY FULLY PAID (SUBSIDIARY (SUBSIDIARY EACH FULLY PAID (SUBSIDIARY (SUBSIDIARY NGN 1 EACHNON-CUMULATIVE THROUGH AMHPL) (SUBSIDIARY THROUGH ATSAPL) THROUGH THROUGH THROUGH (SUBSIDIARY

REDEEMABLE THROUGH ASHPL) AMHPL) AT AG) AT AG) THROUGHPREFERENCE AMHPL)SHARES OF

US$ 1/- FULLY PAID

2 PERCENTAGE OF HOLDING IN 100. 00% 100. 00% 100. 00% 100. 00% 100. 00% 100. 00% 100. 00% 100. 00% 100. 00%

THE SUBSIDIARY COMPANY

3 FINANCIAL YEAR ENDED 31st Marc h, 31st Marc h, 31st Marc h, 31st Marc h, 31st Marc h, 31st Marc h, 31st Marc h, 31st Marc h, 31st Marc h,2009 2009 2009 2009 2009 2009 2009 2009 2009

4 PROFITS/(LOSSES) OF THESUBSIDIARY COMPANY FORITS FINANCIAL YEAR SOFAR AS IT CONCERNS THEMEMBERS OF APOLLOTYRES LTD. WHICH HAVENOT BEEN DEALT WITH INTHE ACCOUNTS OF APOLLOTYRES LTD. FOR THE YEARENDED 31ST MARCH, 2009 *

FOR THE YEAR (153.20) 152.12 192.56 (17.57) (0.77) (4.42) (10.38) (0.97) -

FOR THE PREVIOUSFINANCIAL YEAR (104.56) (286.01) 765.51 86.89** (0.23) (1.42) (0.27) - -

TOTAL ACCUMULATEDUPTO THE YEAR (257.76) (133.89) 958.07 69.32** (1.00) (5.84) (10.65) (0.97) -

5 THE NET AGGREGATE OFPROFITS / (LOSSES) OF THESUBSIDIARY CO. WHICHHAVE BEEN DEALT WITHINTHE ACCOUNTS OFAPOLLO TYRES LTD.FOR THE YEAR ENDED31st MARCH, 2009

FOR THE YEAR - - - - - - - - -

FOR THE PREVIOUSFINANCIAL YEAR - - - - - - - - -

TOTAL ACCUMULATEDUPTO THE YEAR - - - - - - - - -

Note - Exchange rates conversi on on average rates duri ng the year* The i nformati on i n re spect of subsi di ari es i n Zi mbabwe thro ugh DAMUK, whi ch opera te under severe pol i ti cal and economi c uncert ai nty that si gni fi cantl y di mi ni shes contro l , or whi ch opera te

under severe l ong term re stri cti ons that si gni fi cantl y i mpai r thei r abi l i ty to tra nsfer funds to the Pare nt company has not been di scl osed.** Incl udes GBP 261, 000 Speci al Reserve Account

MR. ONKAR S.KANWAR MR. NEERAJ KANWAR MR. M.R.B.PUNJAChairman & Managing Director Vice Chairman & MR. U.S.OBEROI

Joint Managing Director MR. A.K.PURWARMR. ROBERT STEINMETZ

MR. SUNAM SARKAR MR. P. N. WAHAL MR. RAAJA KANWARChief Financial Officer & Head (Sectt. & Legal) & MR. K. JACOB THOMAS

Gurgaon Whole Time Director Company Secretary MR. SHARDUL SHROFF29th April, 2009

Directors



AUDIORS REPORT TO THE BOARD OF DIR ECTORS OF APOLLO TYRES LTD. ON THE CONSOLID ATED FIN ANCIA L STATEMENTS OF

THE COMPANY AND IT S SUBSID IA RIES

1. We have audi ted the attached Consol i dated Bal anc Shof Apol o Tyres Ltd. ( the Compan i ts subsi di ari es and associ ates ( col l ecti vel yreferred as the Apol l o Tyres group) as at 31st March 2009, the Consol i dated Profi t and Loss Account and the Consol i dated Cash Fl owStatement for the year ended on that date annexed thereto. These consol i dated fi nanci al statements are the responsi bi l i ty of Company' smanagemaha bee prepby the manab of separate f i nanci al statements and other f i nanci al i nf ormati onre gardi ng compon Orspy i s to expre ss an opi ni on on these fi nanci al statements based on our audi t.

2. We conducted our audi t i n accord ance wi th audi ti ng standard s generl l y accepte i n Indi a. Those standards requi re that we pl an andperformthe audi t to obtai n re asonabl e assura nce about whether the fi nanci al statements are fre e of materi al mi sstatement. An audi ti ncl udes exami ni ng, on a test basi s, evi dence support i ng the amounts and di scl osurs i n the fi nanci al statements. An audi t al so i ncl udesassessi ng the accounti ng pri nci pl es used and si gni fi cant esti mates made by managema we as eval uati ng the overal l fi nanci alstatement pre senaon We bel i eve that our audi t pro vi des a re asonabl e basi s for our opi ni on.

3. We di d not audi t the fi nanci al statements of cert ai n subsi di ari es and associ ates whose fi nanci al statemen rfl ec total assets of

Rs. 10, 474. 89 mi l l i on as at 31st Marc h 2009, total re venues of Rs. 9, 175. 93 mi l l i on and net cash i nfl ows amounti ng to Rs. 26. 36 mi l l i on for theyear then ended. These fi nanci al statements have been audi ted by other audi tors whose reports have been furn i shed to us and our opi ni on i sbased sol el y on the re port of the other audi tors . The fi nanci al statements of Apol l o Tyre s (Ni geri a) Li mi ted and Apol l o Tyre s Kft, Hungaryhave not been audi ted and i n so far as i t re lates to the amounts i ncluded i n re spect of the Apol lo Tyre s gro up, i s based solely on the fi nanci alstatements prepared and submi tted by the managemThe resul ts of the subsi di ari es/associ ate based i n Zi mbabwe have not beenconsol i dated i n accordance wi th paragraph 11 of the accounti ng standard ( AS) 21- “Consol i dated Fi nanci al Statements” noti fi ed by theCent ral Government of Indi a.

4. We report that the consol i dated f i nanci al statements have been prepared by the Company' s managemen i n accordance wi th therequi rements of accounti ng standard ( AS) 21 – “ Consol i dated Fi nanci al Statements” and accounti ng standard ( AS) 23- “ Accounti ng forInvestments i n Associ ates i n Consol i dated Fi nanci al Statements” noti f i ed by the Central Government of Indi a.

5. Based on our audi t and on consi dera ti on of re port s of other audi tors on separa te fi nanci al statements and on the other fi nanci al i nformati onof the components, and to the best of our i nformati on and accord i ng to the expl anati ons gi ven to us, we are of the opi ni on that the attachedconsol i dated fi nanci al statemens gi ve a tru e and fai r vi ewi n conformi ty wi th the accounti ng pri nci pl es genera l l y accepted i n Indi a

a. i n the case of Consol i dated Bal ance Sheet, of the state of affai rs as at 31st Marc h 2009;b. i n the case of Consol i dated Pro fi t and Loss Account, of the pro fi t for the year ended on that date; andc. i n the case of Consol i dated Cash Fl owStatement, of the cash fl ows for the year ended on that date.

For DELOITTE HASKINS & SELLSChart ered Account ant s

GEET HA SU RYA NARAYA NANPla Partner

thDate: 29A Membership No: 29519

10 4/ 10 5



CONSOLIDATED BALANCE SHEETstAS AT 31 MARCH 2009

st stSchedule As at 31 As at 31March, 2009 March, 2008Rs./Millions Rs./Millions

SOURCES OF FUNDS :Shareholders' Funds :

Share Capital 1 504.09 488.51Equity Share Warrants ( Note - B 3(b) ) - 45.65Reserves and Surplus 2 12,992.26 11,290.67

13,496.35 11,824.83Loans : 3

Secured 6,368.42 3,940.31Unsecured 2,538.83 2,520.89

8,907.25 6,461.20Deferred Tax Liability (Net) (Note - B 12) 1,941.54 1,755.68

TOTAL 24,345.14 20, 041. 71APPLICAT

Fixed Assets 4Gross Block 22,840.48 19,555.44Less : Depreciation 8,821.75 7,504.08Net Block 14,018.73 12,051.36Capital Work in Progress 2,814.09 949.48

16,832.82 13,000.84

Goodwill on Consolidation 235.08 214.99Investments 5 47.53 51.87Current Assets, Loans and Advances : 6

Inventories 6,302.15 7,151.48Sundry Debtors 2,247.35 3,128.98Cash and Bank Balances 3,620.91 2,847.09Other Current Assets 5.33 0.42Loans and Advances 2,051.90 1,678.76

14,227.64 14,806.73Less: Current Liabilities and Provisions 7Current Liabilities 5,860.44 6,923.79Provisions 1,139.00 1,111.52

6,999.44 8,035.31Net Current Assets 7,228.20 6,771.42

Deferred Revenue Expenditure (Note - B 8) 1.51 2.59TOTAL 24,345.14 20, 041. 71



MR. ROBERT STEINMETZGEETHA SURYANARAYANAN MR. SUNAM SARKAR MR. P. N. WAHAL MR. RAAJA KANWARPartner Chief Financial Officer & Head ( Sectt. & Legal) & MR. K. JACOB THOMASGurgaon Whole Time Director Company Secretary MR. SHARDUL SHROFF29th April, 2009

Directors



CONSOLIDATED PROFIT & LOSS ACCOUNTstFOR THE YEAR ENDED 31 MARCH 2009

Schedule Year Ended Year Endedst st31 March, 2009 31 March, 2008

Rs./Millions Rs./MillionsINCOME

Gross Sales 54,632.60 52,442.92Less: Excise Duty 4,791.91 49,840.69 5,530.56 46,912.36Other Income 8 230.05 211.86

50,070.74 47,124.22EXPENDITURE

Manufacturing and Other Expenses 9 45,792.92 41,694.65Increase in Work in Process and Finished Goods 10 (113.71) (706.29)Interest 11 972.53 784.50

46,651.74 41,772.86PROFIT BEFORE DEPRECIATION & TAX 3,419.00 5, 351. 36

Depreciation 1,285.13 1,298.64PROFIT BEFORE TAX (Note B-19) 2,133.87 4,052.72

Provision for Tax - Current 546.22 1,183.54- Deferred 153.62 127.33- Fringe Benefit Tax 42.50 742.34 45.00 1,355.87

PROFIT AFTER TAX (Note B-19) 1,391.53 2,696.85

Less: Share of Loss in Associates 0.06 -Net Profit 1,391.47 2,696.85

Add: PROFIT BROUGHT FORWARD FROM PREVIOUS YEAR 3,516.40 1,713.40

Transfer from Debenture Redemption Reserve - 21.704,907.87 4,431.95Deduct : APP RO PRI ATI ONS:

General Reserve 500.00 600.00Debenture Redemption Reserve 62.50 -Proposed Dividend 226.81 252.01Dividend Tax 38.55 42.83

827.86 894.84Surplus Carried to Schedule 2 4,080.01 3,537.11

Basic Earnings Per Share (Face Value of Re.1/- each) ( Rs.) 2.76 5.73Diluted Earnings Per Share (Face Value of Re.1/- each) ( Rs.) 2.76 5.70


10 6/ 10 7



Directors



CONSOLIDATED CASH - FLOW STATEMENTstFOR THE YEAR ENDED 31 MARCH 2009


Rs./Millions Rs./MillionsA CASH FLOW FROM OPERATING ACTIVITIES

(i) PROFIT AFTER TAX 1,391.53 2, 696. 85ADD: - PROVISION FOR TAX 742.34 1, 355. 87NET PROFIT BEFORE TAX 2,133.87 4, 052. 72ADD: - DEPRECIATION 1,285.06 1, 299. 42

- (PROFIT) / LOSS ON SALE OF ASSETS (NET) 8.75 3. 77- INCOME FROM INVESTMENTS (0.02) (0. 45)

- IMPAIRMENT OF FIXED ASSETS 0.08 -- (REVERSAL) / PROVISION FOR DOUBTFUL DEBTS/ADVANCES 38.87 30. 19- DEFERRED R EVENUE EXPENDITURE PAYMENT NET OF A MORTISED 1.08 ( 1. 35)- INTEREST 1,097.78 784. 50

- PROVISIONS WRITTEN BACK (70.33) -- UNREALISED FOREX FLUCTUATION LOSS / (GAIN) (32.61) 32. 84- BAD DEBTS WRITTEN OFF - 2,328.66 7. 69 2, 156. 61

(ii) OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 4,462.53 6, 209. 33ADJUSTMENT FOR

- TRADE & OTHER RECEIVABLE 696.06 327. 66- INVENTORIES 927.42 ( 1, 165. 29)- TRADE PAYABLES (1,156.10) 467.38 (78. 70) (916. 33)

( i i i ) CASH GENERATED FROM OPERATIO NS 4,929.91 5, 293. 00- DIRECT TAXES PAID (680.08) ( 927. 58)

(iv) NET CASH FLOW FROM OPERATING ACTIVITIES 4,249.83 4, 365. 42B. CASH FLOW FROM INVESTING ACTIVITIES

- PURCHASE OF FIXED ASSETS (INCLUDING INTEREST CAPITALISED) (5,018.80) ( 1, 693. 19)- SALE OF FIXED ASSETS 106.75 341. 94- PURCHASE OF INVESTMENTS (179.42) ( 48. 50)- SHORT TERM DEPOSITS WITH BANKS (522.99) ( 10. 37)

- SALE OF INVESTMENTS 202.56 -- ACQUISITION OF SUBSIDIARY - 0. 23- INTEREST RECEIVED 191.09 32. 60

NET CASH USED IN INVESTING ACTIVITIES (5,220.81) ( 1, 377. 29)C. CASH FLOW FROM FINANCING ACTIVITIES

- LOAN FROM HOLDING COMPANY (608.46) -- PROCEEDS F ROM ISSUE O F SHARE CAPITAL I NCL. S HARE PREM. 410.84 643. 96- LONG TERM BORROWING RECEIVED 3,483.75 397. 78- DEFERRED CREDIT ON ACQUISITION - ( 340. 95)- REPAYMENTS OF LONG TERM BORROWING (697.86) (1, 101. 24)- PAYMENTS OF UNPAID DEBENTURES REDEMPTION (0.89) (1. 44)- BANK OVERDRAFT/SHORT TERM FUNDS (511.75) ( 685. 38)- DIVIDENDS PAID (289.65) ( 142. 17)- INTEREST PAID (1,114.70) ( 841. 18)

NET CASH FLOW FROM/(USED) IN FINANCING ACTIVITIES 671.28 ( 2, 070. 62)ADJUSTMENT ARISING ON DISINVESTMENT OF SUBSIDIARY - (0. 40)FOREX FLUCTUATION DIFFERENCE ARISING OUT OF CONSOLIDATION 550.53 (15. 48)NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS 250.83 901.63CASH & CASH EQUIVALENTS AS AT BEGINNING OF THE YEAR 2,847.09 1, 935. 09BANK DEPOSITS WITH TENURE EXCEEDING THREE MONTHS 156.75 14 6. 38ADJUSTED CASH & CASH EQUIVALENTS AS AT BEGINNING OF THE YEAR 2,690.34 1, 788. 71CASH & CASH EQUIVALENTS AS AT END OF THE YEAR 3,620.91 2, 847. 09BANK DEPOSITS WITH TENURE EXCEEDING THREE MONTHS 679.74 15 6. 75ADJUSTED CASH & CASH EQUIVALENTS AS AT END OF THE YEAR 2, 941. 17 2, 690. 34



Directors



SCHEDULESANNEXED TO THE ACCOUNTSSCHEDULE 1 - SHARE CAPITAL

As at As atst st31 March, 2009 31 March, 2008Rs./Millions Rs./Millions

AUTHORISED

730,000,000 Nos. (730,000,000 Nos.*) Equity Shares of Re.1/- each 730.00 730.00

200,000 Nos. (200,000 Nos.) Cumulative Redeemable Preference Shares of Rs.100/- each 20.00 20.00750.00 750.00

ISSUED, SUBSCRIBED, CALLED AND PAID UP

504,024,770 Nos. (488,444,770 Nos.*) Equity Shares of Re. 1/- each 504.02 488.44

Add: Forfeited Shares 0.07 0.07

504.09 488.51

* Number of Shares - Post split

10 8/ 10 9



SCHEDULE 2 - RESERVES & SURPLUSAs at As at


Capital Subsidy 3.00 3.00

Fixed Assets Revaluation ReserveAs per last Balance Sheet 31.57 31.57Less: Transfer to Profit & Loss Account 0.35 -

31.22 31.57Share Forfeiture (Rs. 1375/-) - -

Capital Redemption 44.40 44.40

Debenture RedemptionAs per last Balance Sheet - 21.70Add: Transfer from Profit & Loss Account 62.50 -Less: Transfer to Profit & Loss Account - 21.70

62.50 -Securities PremiumAs per last Balance Sheet 5,218.80 4,527.71Add: Received during the year 440.91 691.09

5,659.71 5,218.80Foreign Currency Translation ReserveAs per last Balance Sheet (1,045.64) (476.47)Addition during the year 155.63 (569.17)

(890.01) (1,045.64)General ReserveAs per last Balance Sheet 3,501.43 2,901.43Add: Transfer from Profit & Loss Account 500.00 600.00

4,001.43 3,501.43

Surplus as shown in the Profit & Loss Account 4,080.01 3,537.11

12,992.26 11, 290. 67



SCHEDULE 3 - LOANSAs at As at


SECUREDDebentures

1,000,000 - 11.25% Non Convertible Debentures of Rs. 100/- each - 100.00Less: Redeemed to date - 100.00

- -1,250 - 11.50 % Non Convertible Debentures of Rs 1,000,000/- each 1,250.00 -Less: Redeemed to date - -

1,250.00 -Term Loans

FromInt ernat i onal Fi nance Corporat i on- Foreign Currency 178.62 345. 33- Rupee Loan 214.34 392.96 321. 52 666.85

From Banks:- ECB from BNP Paribas, Singapore 732.75 -- ECB from Standard Chartered Bank, Singapore 1,001.00 -- State Bank of India 250.00 500.00- ICICI Bank, South Africa 784.67 978.56- State Bank of India, South Africa 306.81 345.46

From Institutions:- Bharat Earthmovers Ltd. (BEML) 500.00 -- G E Capital Services India 45.00 105.00

Other Loans :- Banks - Cash Credit 32.76 500.72- Banks - Overdraft, South Africa 653.06 384.84- Deferred Payment Credit 362.39 383.33- Sales Tax Loan 57.02 75.55

5,118.42 3,940.31

6,368.42 3,940.31

UNSECRDCommercial Paper 1,000.00 -Short term Loans - from banks 1,331.27 2,375.06

- f r o m o t h e r s 207.56 145.83

2,538.83 2,520.89

110 / 111



NOTES: SECURED LOANS1. Loan from International Finance Corporation is secured by :

¢ A pari passu first charge along with other lenders on the Parent company's land at Chalakudy, Kerala State and at village Limda, GujState together with the Factory Buildings, Plant & Machinery and Equipments, both present and future.

¢ A first and fixed charge on the Parent company's Land and premises situated at Gurgaon, Haryana State together with all existing afuture buildings, erections and structures.

¢ A pari passu first charge on all the movable assets except current assets of the Parent company.

¢ A second charge on all the current assets of the Parent company.

2. Loan from State Bank of India is secured by :

¢ A pari passu first charge along with other lenders on the Parent company's land at Chalakudy, Kerala State and at village Limda, GState together with the Factory Buildings, Plant & Machinery and Equipments, both present and future.

¢ A second charge on all the current assets of the Parent company.

3. Loan from GE Capital Services India is secured by :

¢ A pari passu first charge along with other lenders on the Parent company's land at Chalakudy, Kerala State and at village Limda, GState together with the Factory Buildings, Plant & Machinery and Equipments, both present and future.

¢ A pari passu first charge on all the moveable assets, except current assets, at Chalakudy, Kerala State and at village Limda, GujaState.

4. Loan from BNP Paribas is secured by:

¢ A pari passu first charge along with other lenders by way of mortgage (created on 21st April, 2009 ) on the Parent company's lvillage Limda, Gujrat State together with the factory Building , Plant and Machinery and equipments both present and future . Furththis has to be secured by way of mortgage on all the immovable assets of the Parent company, both present and future.

¢ A pari passu first charge along with other lenders by way of hypothecation over all movables assets of the parent company, both presand future ( except stocks & book debts)

5. Loan from Standard Chartered Bank is secured by;

¢ A pari passu first charge along with other lenders by way of mortgage (created on 21st April , 2009) on the Parent company's lvillage Limda, Gujrat State together with the factory Building , Plant and Machinery and equipments both present and future . Furththis has to be secured by way of mortgage on all the immovable assets of the Parent company, both present and future.

¢ A pari passu first charge along with other lenders by way of hypothecation over all movable fixed assets of the parent company ,present & future(except current assets); and

¢ A second charge by way of hypothecation over all current assets of the Parent company.

6. Loan from BEML is secured by :

¢ Hypothecation on the assets to be created out of the proceeds of the loan taken from BEML.

7. 1,250 (Nil) 11.50% Secured Redeemable Non-Convertible Debentures of Rs.1 Million each aggregating to Rs 1,250 Millions (Nil) subscribedby Life Insurance Corporation of India is secured by a pari passu first charge (created on 21st April 2009) along with other lenders bymortgage on the Parent company's Land & Premises at Chalakudy, Kerala State & at Village Limda, Gujrat State together with the factobuildings, Plant & machinery & Equipments, both present & future.

8. Cash Credits and Guarantees from Banks are secured by Hypothecation of Raw materials, Work-in-Process, Stocks, Stores and Book Debtsranking in priority to the charge created in respect of the IFC Loan and also by second charge on the Parent company's land at ChalKerala State and at Village Limda, Gujarat State together with the Factory Buildings, Plant & Machinery and Equipments, both present anfuture.

9. Deferred payment credit is secured by specific assets purchased under the scheme and includes Rs. 24.11 Million (Rs.20.94 Millions)repayable within one year.

10. The Parent company had availed interest free Sales Tax Loan from Gujarat State Government amounting to Rs. 112.61 Millions. This loansecured by a pari-passu charge on the entire fixed assets of the company, both present and future situated at Village Limda in Gujarat SThe said loan is repayable in six equal annual installments on the expiry of 14 years from the commencement of commercial production

st31 May, 2006. Accordingly, a sum of Rs. 18.53 Millions (Rs. 18.53 Millions) was paid during the year and a similar amount is repayabone year.







SCHEDULE 6 - CURRENT ASSETS, LOANS AND ADVANCESAs at As at


CURRENT ASSETSInventories : @

Raw Materials 1, 834. 17 2,756.69Stores and Spares 383. 42 316.97Work-in-Process 525. 04 417.82Finished Goods 3, 559. 52 3,660.00

6, 302. 15 7,151.48

Sundry Debtors - Unsecured

Considered Good 2, 247. 35 3,128.98Considered Doubtful 64. 50 108.28

2, 311. 85 3,237.26Less: Provision for Doubtful Debts 64. 50 108.28

2, 247. 35 3,128.98

Cash and Bank Balances

Cash on hand 6. 87 4.78Cheques on hand 666. 74 420.65Remittances in Transit 321. 42 326.99

With Banks :Current Accounts 869. 38 949.21Dividend Accounts 22. 94 17.75Deposit Accounts* 1, 733. 56 1,127.71

3, 620. 91 2,847.09

Other Current AssetsInterest Accrued on Loans/ Deposits 5. 33 0.42

5. 33 0.42

*Includes Rs. 168.13 Millions (Rs.156.75 Millions) pledged with a bank

against which working capital loan has been availed by Apollo Finance Ltd.

@ Includes stock in transit of Finished Goods 729. 98 619.81

11 4/ 11 5



SCHEDULE 6 - CURRENT ASSETS, LOANS AND ADVANCES(Continued)

As at As atst st31 March, 2009 31 March, 2008Rs./Millions Rs./Millions

LOANS AND ADVANCES - UNSECURED

(Considered good unless otherwise stated)

Advances recoverable in cash or in kindor for value to be receivedConsidered Good 1,981.76 1,711.74

Considered Doubtful 41.12 2.252,022.88 1,713.99

Less: Provision for Doubtful Advances 41.12 2.251,981.76 1,711.74

Advance Tax 3,910.10 3,501.61Less: Provision for Taxation 3,843.22 66.88 3,534.85 (33.24)Balance with Customs, Port Trust etc. 3.26 0.26

2,051.90 1,678.76

14,227.64 14,806.73



SCHEDULE 7 - CURRENT LIABILITIES AND PROVISIONSAs at As at


CURRENT LIABILITIES

Acceptances 245.02 749.16Sundry Creditors :Dues to micro & small enterprises (Note - B 4) 43.88 109.46Others 5,425.85 5,996.16Investor Education and Protection Fund shall becredited by the following amounts whenever due:-*

Unpaid Debenture Redemption Amount 0.85 1.74Unpaid Interest on Debentures 0.17 0.47Unpaid Matured Deposits 1.21 1.21Interest on Unpaid Matured Deposits 0.10 0.10Unpaid Dividend** 25.38 21.15Financial Liabilities 10.09 -Interest accrued but not due 107.89 44.34

5,860.44 6,923.79PROVISIONS

Dividend Tax 38.55 42.83Proposed Dividend on Equity Shares 226.81 252.01Post Retirement Medical Benefits 126.48 116.16Provision for Sales related obligations 484.91 431.10Gratuity, Leave Encashment & Superannuation 262.25 269.42

1,139.00 1,111.526,999.44 8,035.31

* 1. There are no amounts due and outstanding as at Balance Sheet Date to be credited to the Investor Education & Protection Fund.2. Other unpaid amounts represent warrants / cheques issued to the Debentureholders / Depositors / Shareholders, as the case may be, which

remain unpresented to the bankers as on 31st March, 2009.** Includes Rs. 2. 44 Mi llli ons (Rs. 3. 40 Mi lli ons) payable by one of th e subsi di ari es.

SCHEDULE 8 - OTHER INCOMEYear Ended Year Ended


Income from InvestmentsIncome from trade Investments 0. 02 -Income from Non-trade Investments

- From Mutual Funds - 0.450. 02 0.45

Provisions no longer required written back 10 0. 22 -

Bad Debts Recovered 5. 00 -

Miscellaneous Receipts* 12 4. 81 211.41230. 05 211.86

* Tax Deducted at Source Rs. 0.56 Millions ( Rs. 0.41 Millions)

116/ 117



SCHEDULE 9 - MANUFACTURING & OTHER EXPENSESYear Ended Year Ended


MATERIALS

Raw Materials Consumed* 32,392.06 28,284.35Less: Scrap Recoveries 106.67 91.78

32,285.39 28,192.57Purchase of Finished Goods 1,831.34 1,764.99

EMPLOYEESSalaries, Wages and Bonus** 3,593.77 3,917.75

Contribution to Provident and Other Funds 222.29 161.04

Workmen and staff welfare expenses 334.22 326.79

MANUFACTURING, ADMINISTRATIVE AND SELLING

Consumption of stores and spare parts 340.62 335.18Power and Fuel 1,717.22 1,546.44Conversion Charges 539.05 448.91Repairs and Maintenance- Machinery 285.36 282.86- Buildings 33.39 24.06- Others 162.90 152.21Rent*** 103.90 101.78Insurance 101.89 110.95

Rates and Taxes 91.79 106.29Directors' Sitting Fees 1.40 1.19Loss on Sale of Assets (Net)**** 8.75 3.77Travelling, Conveyance and Vehicle Expenses 545.40 505.44Postage, Telex, Telephone and Stationery 92.89 97.32Freight & Forwarding 1,236.80 1,237.74Commission to Selling Agents 51.29 44.79Sales Promotion Expenses 645.77 714.30Advertisement & Publicity 486.91 439.70Research and Development 214.40 121.11Bank Charges 74.64 63.00Provision for Doubtful Debts / Advances 38.87 46.56Bad Debts/Advances Written off 18.18 7.69Less: Transferred from Provision 18.18 - 5.68 2.01Lease/ Service Charges 313.30 257.94Legal & Professional Expenses 200.85 148.30Miscellaneous Expenses***** 238.52 539.66

45,792.92 41, 694. 65

* Includes Foreign Exchange Fluctuation Loss of Rs. 204.76 Millions (Net of Gain of Rs. 60.28 Millions).** Includes VRS payments amortised during the year of Rs. 1.71 Millions (Rs. 2.24 Millions).*** Net of Rent Receipts of Rs. 13.42 Millions, TDS Rs. 3.04 Millions (Rs. 13.73 Millions, TDS - Rs. 3.15 Millions).**** Net of Transfer from Revaluation Reserve to the extent of Rs. 0.35 Millions (Nil).*****Includes Foreign Exchange Fluctuation loss of Rs. 127.49 Millions (Rs. 62.46 Millions).



SCHE - ( INCREASE) / DECREASE IN WORK IN PROCESS AND FINISHED GOODS



(Increase) / Decrease in Work in Process / Finished Goods (5.48) (666.79)

Excise Duty on Increase / Decreaseof Finished Goods (Note - B 5) (108.23) (39.50)

(113.71) (706.29)

SCHEDULE 11 - INTEREST

Year Ended Year Endedst st31 March, 2009 31 March,2008


Fixed Loans 302. 35 300.80Debentures 22. 84 0.88Bank Overdraft 161. 79 -Others # * 485. 55 482.82

972. 53 784.50

# Net of Interest Earned Rs. 70.67 Millions (Rs. 35.98 Millions) including:Interest Earned on Deposits Rs. 59.90 Millions (Rs. 20.67 Millions).Interest Earned on Trade Balances Rs. 7.02 Millions (Rs. 5.65 Millions).Interest Earned - Others Rs. 3.75 Millions (Rs. 9.66 Millions).

Tax Deducted at source on interest earned Rs. 8.67 Millions (Rs.4.38 Millions).* Net of Foreign Exchange Fluctuation gain of Rs. 36.50 Millions (Rs. 2.64 Millions).

118/ 119



SCHEDULE 12 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

A. SIGNIFI CANT ACCOUNTING POLI CIES:

1. A. BASIS OF ACCOUNTING

The financial statements are prepared on historical cost convention with the exception of certain fixed assets (which were revalued) basedon accrual method of accounting and applicable accounting standards.B. USE OF ESTIMATESThe preparation of financial statements requires the management to make estimates and assumptions considered in the reported amountsof assets and liabilities including the disclosure of contingent liabilities as of the date of the financial statements and the reported incomand expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements areprudent and reasonable. Actual results could vary from these estimates. Any revision to accounting estimates is recognised in the periodwhich the results are known/materialized.

2. BASIS OF CONSOLIDATIONThe consolidated financial statements comprise the financial statements of Apollo Tyres Ltd. (the company) and the following companies ofApollo Tyres Group.a) Subsidiaries:Name of the Company Relationship Country of Proportion of Proportion of

Incorporation Ownership Ownership31st Mar-09 31st Mar-08

Apollo (Mauritius) Holdings Pvt. Ltd. (AMHPL) Subsidiary Mauritius 100% 100%Apollo Tyres AG ( AT AG) Subsidiary Switzerland 100% 100%Apollo (South Africa) Holding Pty. Ltd. (ASHPL) Subsidiary through AMHPL South Africa 100% 100%Apollo Tyres Pte Ltd. (AT PL) Subsidiary through AMHPL Singapore 100% 100%Apollo Tyres (Nigeria) Limited Subsidiary through AMHPL Nigeria 100% -Apollo Tyres South Africa Pty. Ltd.(ATSA)-Previously Dunlop Tyres International (Pty) Ltd.(DTIPL) Subsidiary through ASHPL South Africa 100% 100%Dunlop Africa Marketing(United Kingdom) Ltd. (DAMUK) Subsidiary through ATSA United Kingdom 100% 100%Apollo Tyres GmbH ( AT GmbH) Subsidiary through AT AG Germany 100% 100%Apollo Tyres Zrt ( AT ZRT) * Subsidiary through AT AG Hungary 100% 100%

* Apollo Tyres Kft, Hungary was incorporated on 11th February 2008 as a wholly owned subsidiary of Apollo Tyres AG, Switzerland,share capital of 387,140 tHUF, Rs. 95.12 MillionsThe members of Apollo Tyres Kft, Hungary resolved on 14th July 2008 for transformation of the form of business from Limited LiabCompany to Private Limited Company. The Court of Registry incorporated the transformation on 28th August 2008, and Apollo Tyres ZRcame into existence with a share capital of 256,976 tHUF, Rs. 57.31 Millions and reserves of 92,679 tHUF, Rs. 20.67 Millions after adthe accumulated losses of 37,485 tHUF, Rs. 9.30 Millions against the net worth of the erstwhile Company.

b) Associates:

Name of the Company Relationship Country o f Incorporation Proportion o f Ownership Proportion of Ownership31st Mar 09 31st Mar 08

National Tyre Service, Zimbabwe Associate of DAMUK Zimbabwe 46.90% 46.90%Apollo Automotive Tyres Ltd. Associate India 49.00% 49.00%Apollo Radial Tyres Ltd. Associate India 49.00% 49.00%

The consolidated financial statements have been prepared in accordance with the principles and procedures for the preparation andpresentation of the consolidated financial statements as laid down in accounting standard (AS 21) “ Consolidated Financial Statements”.Investment in associates is accounted for in the consolidated financial statements under the “Equity Method” as laid down in accountingstandard (AS 23). Consolidated financial statements are prepared using uniform accounting policies.



The excess of cost to the parent company of its investments in subsidiaries over its share of equity in the subsidiary at the date on which

investment was made is recognized in the financial statements as goodwill. The parent company's portion of equity in the subsidiary isdetermined on the basis of the book value of assets and liabilities as per the financial statements of the subsidiary on the date of investment.In respect of the foreign operations, the audited financial statements for the year ended 31st March 2009 were converted into Indiancurrency as per accounting standard (AS 11) “The effect of changes in Foreign Exchange Rates”.c) Foreign subsidiaries, which operate under severe political and economic uncertainty that significantly diminishes control or which

operate under severe long term restrictions that significantly impair their ability to transfer funds to the parent company are notconsolidated.In view of the Current political situation in Zimbabwe and the long term restriction on financial repatriation, the accounts of Zimbabwebased entities have not been consolidated under accounting standard (AS 21) “Consolidated Financial Statements” and has beenconsidered as detailed below:

Subsidiaries Treatment in consolidated financialsRadun Investment (Private) Ltd. (RADUN), Zimbabwe Not consolidated. Cost of investment included under investment.Dunlop Zimbabwe (Private) Ltd. The cost of investment has been impaired.

ASF Minning (Pvt) Ltd. Zimbabwe The cost of investment has been impaired.Associates

National Tyre Service Zimbabwe (NTS) Investment is accounted for on equity basis to the extent of actual receipt ofshare of profit, if any, in the form of dividend.

d) The cost of investment of Pressurite (pty) Ltd South Africa has been fully impaired and hence not consolidated.3. FIXED ASSETS

(a) Fixed assets are stated at cost, as adjusted by revaluation of certain land, buildings, plant and machineries based on the thenreplacement cost as determined by approved independent valuer in 1986 and 1987 , less depreciation.

(b) All costs relating to the acquisition and installation of fixed assets (net of Cenvat /VAT credits wherever applicable) are capitalised andinclude finance cost on borrowed funds attributable to acquisition of qualifying fixed assets for the period upto the date ofcommencement of production, and adjustments arising from exchange differences arising from foreign currency borrowings to theextent they are regarded as an adjustment to interest costs.(Also refer accounting policy No. 5 on Borrowing Costs.) Other incidentalexpenditure attributable to bringing the asset to its working condition for its intended use is capitalized.

(c) Fixed assets taken on financial lease are capitalised and depreciation is provided on such assets, while the interest is charged to theprofit and loss account.

4. DEPRECIATION

Depreciation on fixed assets is provided using straight line method at the rates specified in Schedule XIV of the Companies Act 1956, exceptfor certain vehicles and other equipments for which the depreciation is provided at 30% and 16.67%, respectively Certain plant andmachinery are classified as continuous process plant based on technical evaluation by the management.Additional depreciation consequent to the enhancement in the value of fixed assets on the revaluation is adjusted in the fixed assetsrevaluation reserve account.Leasehold land/improvements thereon is amortised over the period of lease.In respect of assets whose useful life has been revised, the unamortized depreciable amount is charged over the revised remaining usefullife.In case of a subsidiary company incorporated outside India, depreciation is provided for on a straight line basis at such rates as will write offthe cost of the various assets over the period of their expected useful lives. The rates of depreciation considered for the major assets are asunder:

Asset Class Rate of DepreciationBuilding 4%Plant & Equipments (Average) 9%Moulds 20%Material Handling Equipments 15%Computer Hardware 20%Computer Software 33.33%Motor Vehicles 20%Furniture & Fixtures and Office Equipment 20%

12 0/ 12 1



Since it is practically impossible to use uniform accounting policy, the fixed assets of such subsidiaries have been depreciated in accordanc

with their respective accounting policy. The proportion of such fixed assets is 18 % (19%) of the consolidated value of fixed assets.Leasehold land/improvements thereon is amortised over the period of lease.

5. BORROWING COSTS

Borrowing costs are capitalised as part of the cost of qualifying asset when it is possible that they will result in future economic benefitthe cost can be measured reliably. Other borrowing costs are recognised as an expense in the period in which they are incurred.

6. IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/externafactors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverableamount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flowdiscounted to their present value at the pre tax weighted average cost of capital.

7. INTANGIBLE ASSETS

The expenditure incurred by the company on acquisition and implementation of software system / development cost upto the stage whenthe new product reaches technical feasibility has been recognised as an Intangible asset and is amortized over a period of five years bas

on their estimated useful life.Trademarks are measured at cost and amortised over a period of ten years.

8. INVESTMENTS

Long term investments are stated at cost and provision for diminution is made if the decline in value is other than temporary in nCurrent investments are stated at lower of cost and fair value determined on the basis of each category of investments.

9. INVENTORIES

Inventories are valued at the lower of cost and net realisable value. The cost comprises of cost of purchase, cost of conversion and ocosts including appropriate production overheads in the case of finished goods and work in process, incurred in bringing such inventoriestheir present location.For Indian companies, in case of raw materials and stores & spares, cost (net of Cenvat/VAT credits wherever applicable) is determined onmoving weighted average basis and in case of finished goods, cost is determined on first in first out basis, whereas in case of subcompanies incorporated outside India, the cost is determined on the basis of “first-in first-out” and consumable stores are stated at actualcost by reference to latest purchases.

Since it is not practically possible to use uniform accounting policy, the valuation of the inventory of such subsidiaries has been considefor the purpose of consolidation. The proportion of such inventory is 34 % (29%) of the consolidated value of inventory.10. FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are recorded at rates of exchange prevailing on the date of transaction. Monetary assets and liabilitiesdenominated in foreign currencies as at the balance sheet date are translated at the rate of exchange prevailing at the year-end. Exchangedifferences arising on actual payments/realisations and year-end restatements are dealt with in the profit & loss account.The premium or discount arising at the inception of the foreign exchange contract are amortised as expense or income over the life ocontract. Exchange difference on such contracts is recognised in the profit and loss account in the year in which the exchange rates changThe financial statements of consolidated foreign subsidiaries are translated into Indian Rupees, which is the functional currency of thecompany, as follows:• Assets and liabilities at rates of exchange ruling at year end• Income Statement items at the average rate for the year.Exchange rate differences arising on the translation of consolidated foreign subsidiaries are classified as equity and transferred to theforeign currency translation reserve.

11. REVENUE RECOGNITION

Revenue is recognised when the significant risks and rewards of ownership of goods have been passed to the buyer. Gross sales are inclusof excise duty and are net of trade discounts/sales returns/VAT.Sales of the consolidated entity include sales to external customers and non-consolidated subsidiaries.Dividend income from investments is accounted for when the right to receive the payment is established.

12. EXPORT INCENTIVE

Export Incentive in the form of advance licences / credit earned under duty entitlement pass book scheme are treated as income in the yof export at the estimated realisable value / actual credit earned on exports made during the year and are credited to the raw matconsumption account.



13. EMPLOYEE BENEFITS¢ Liability for gratuity to employees of the Parent company determined on the basis of actuarial valuation as on balance sheet date is

funded with the Life Insurance Corporation of India and is recognised as an expense in the year incurred.¢ Liability for short term compensated absences is recognised as expense based on the estimated cost of eligible leave to the credit of the

employees as at the balance sheet date on undiscounted basis. Liability for long term compensated absences is determined on the basisof actuarial valuation as on the balance sheet date.

¢ Contributions to defined contribution schemes such as provident fund, employees pension fund and superannuation fund and cost ofother benefits are recognised as an expense in the year incurred.

¢ Actuarial gains and losses arising from experience adjustments and effects of changes in actuarial assumptions are immediatelyrecognised in the profit & loss account as income or expense.

¢ In case of subsidiary companies incorporated outside India, the employer's liability for post employment medical benefits, in respect ofpast service, is provided for and adjusted in response to actuarial assessments when necessary.

14. DEFFERED REVENUE EXPENDITURE

Payments under voluntary retirement scheme are being charged to profit and loss account over a period of three years or over the period

ending 31st March, 2010, which ever is earlier.15. TAXES ON INCOME

Current tax is determined in accordance with the applicable income tax laws of the country in which the respective entities in the group areincorporated. Deferred tax is recognised for all timing differences, subject to the consideration of prudence, in respect of deferred taxassets.

16. PROVISIONS

A provision is recognised when the company has a present obligation as a result of past event; it is probable that an outflow of resources willbe required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present valueand are determined based on best estimates required to settle the obligation at the balance sheet date. These are reviewed at each balancesheet date and adjusted to reflect the current best estimates.

B NOTES ON ACCOUNTS:1. CONTINGENT LIABILITIES

PARTICULARS 2008-09 (Rs./Millions) 2007-08 (Rs./Millions)

Sales Tax 65.64 68.59Income Tax-Disputed Demands under Appeal 247.10 145.60Claims not acknowledged as debts – Employee Related 28.22 17.81

– Property Disputes 2.60 2.60– Others 16.53 11.29

Provision of Security 168.13 156.75Guarantees given by bankers on behalf of the Company 590.88 370.88Custom Duty 23.50 23.50Excise Duty* 125.68 297.30Irrevocable letters of credit 1,586.06 1,159.93

* Excludes demands ofRs. 533.31 Millions (Rs. 533.31 Millions) raised on one of the Parent company's units relating to the issues whichhave been decided by the Appellate Authority in Parent company's favour in appeals pertaining to another unit of the company.In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the grounds that there arereasonable chances of successful outcome of appeals.

st2. Estimated amount of contracts remaining to be executed on capital account and not provided for as on 31 March, 2009 isRs. 6, 774. 31Mi l l i ons (Rs. 4,036.48 Millions)

3a) Spli t of equi ty shares :Pursuant to the resolution passed by the shareholders at the annual general meeting held on July 26, 2007, the equity shares of Rs.10each of the company were sub divided into 10 equity shares of Re.1 per share with effect from record date i.e., 27th August , 2007.

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b) Pre f ere nt i al al l ot ment of equi t y share t o t he pro mot er gro up t hro ugh convers i on of Equi t y share warra nt s :

During 2006-07, the company had received Rs. 117.20 Millions towards 10% security deposit against preferential allotment of 4 Millionsequity share warrants to the promoter group (in accordance with SEBI (DIP) guidelines, 2000) at Rs.293.00 each to be converted int40 Millions equity shares of Rs.1.00 each at a premium of Rs.28.30 per equity share (4 Millions equity shares of Rs. 10.00 eac

thpremium of Rs. 283.00 each prior to share split) on exercise of option by warrant holders before the expiry of 18 months froOctober , 2006.During the year, the company has issued 15,580,000 (24,420,000) equity shares consequent upon conversion of remaining 1,558,000(2,442,000) warrants into equity shares on exercise of option by promoter group. Balance amount of Rs. 410.84 Millions (Rs. 643.9Millions) equivalent to 90% portion in respect of 15,580,000 (24,420,000) equity shares has been received during the year and utilisedtowards meeting the normal capital expenditure and other general business needs of the company.

c) Buy Back of the Shares :

During the year, the Board of Directors at its meeting held on 19th March 2009 has approved a proposal to buy back equity sharescompany from open market through stock exchange route up to an amount not exceeding Rs. 1,220 Millions at a maximum buyprice of Rs 25 per equity share.

4. Based on information available with the company and relied upon by the auditors, the information as required to be disclosed under “MSmall and Medium Enterprises Development Act, 2006” (MSMDA) as on 31st March , 2009 is given below:


Principal amount unpaid as at year-end 38.85 104.79Amount paid after appointed date during the year 104.54 346.85Amount of interest accrued and unpaid as at year-end 5.03 4.67

5. Excise duty relating to sales of the company has been disclosed as a reduction from turnover. Excise duty related to difference betweethe closing stock and opening stock has been disclosed in Schedule 10 "(Increase)/Decrease in Work in Process and Finished Goods”.

6. Borrowing costs capitalised / transferred to capital work in progress during the year isRs. 215. 48 Mi l l i ons (Rs.0.31 Millions).7. Research and development expenses comprise of the following:


(A) Salary, Wages & Other Benefits 61.30 30.90Travelling & Conveyance 8.90 4.89Others 144.20 85.32SUB-TOTAL 214.40 121.11

(B) Capital Expenditure 80.88 15.89TOTAL (A+B) 295.28 137.00

8. Def erred revenue expendi t ure:

PARTICULARS 2008-09 2007-08

Rs./Millions Rs./MillionsPayment Under Voluntary Retirement Scheme:

Opening Balance 2.59 1.24Add : Payment during the year 0.63 3.59Less : Amortised during the year 1.71 2.24

Closing Balance 1.51 2.59



9. Pre-operative expenses capitalized / included in capital work in progress during the year

PARTICULARS 2008-09 2007-08Rs./Million Rs./Million

Salaries, Wages and Bonus 56.13 3.46Contribution to Provident and Other Funds 11.83 0.14Welfare Expenses 0.14 0.13Rent 0.02 1.91Travelling, Conveyance and Vehicle expenses 3.44 4.84Postage, Telex, Telephone and Stationery 0.41 0.11Power Expenses 4.15 -Insurance Expenses 4.41 -Miscellaneous Expenses 115.18 0.28TOTAL* 195.71 10.87

*Including,Rs.143.74 Millions (Rs.10.87 Millions) lying in capital work in progress as on 31st March, 2009.

10. Statutory Auditors' Remuneration included under Miscellaneous Expenses

PARTICULARS 2008-09 2007-08Rs./Million Rs./Million

11. Employee BenefitsA. Indian OperationsThe company has a defined benefit gratuity plan. Every employee who has completed five years or more of service receives gratuity onleaving the company at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life InsuranceCorporation of India.The following table summarise the components of net benefit expense recognised in the profit and loss account and the funded status andamounts recognised in the balance sheet for the respective plan:Profit and Loss Account:


Net employee benefit expenses (recognised in employee cost):

Current service cost 24. 71 19.77Interest cost on benefit obligation 23. 78 23.87Expected return on plan assets ( 23. 32) (19.93)Net actuarial loss recognised in the year 23. 28 17.81Net benefit expense 48. 45 41.52

For Audit 17.07 10.75For Certification & Other Service 4.78 3.16Reimbursement of expenses 0.52 0.59TOTAL 22.37 14.50

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Balance Sheet


Reconciliation of present value of the obligation and the fair value of plan assets:

Fair value of plan assets at the end of the year 311.03 248.14Present value of funded obligation at the end of the year 393.04 339.69Asset/(Liability) recognised in the balance sheet (82.01) (91.55)

Changes in the present value of the defined benefit obligation are as follows:PARTICULARS 2008-09 2007-08


Present value of obligations as at the beginning of the year 339. 69 298.35Interest cost 23. 78 23.87

Current service cost 24. 71 19.77Benefits paid ( 20. 22) (20.62)Actuarial loss on obligation 25. 08 18.32Present value of obligations as at the end of the year 393. 04 339.69

Changes in the fair value of plan assets are as follows:


Fair value of plan assets at beginning of the year 248. 14 213.12Expected return on plan assets 23. 32 19.93Contributions 57. 99 28.83Benefits paid ( 20. 22) (14.25)

Actuarial gain on plan assets 1. 80 0.51Fair value of plan assets as at the end of the year 311. 03 248.14

The company's gratuity funds are managed by the Life Insurance Corporation of India and therefore, the composition of the fundassets is not presently ascertained.

Principal actuarial assumptions

PARTICULARS 2008-09 2007-08Rate (%) Rate (%)

a) Discount rate 7. 00 8.00b) Future salary increase* 4. 50 5.50c) Expected rate of return on plan assets 9. 40 9.35

* The estimates of future salary increase take into account inflation, seniority, promotion and other relevant factors.

B. South African OperationsApol l o Tyre s Sout h Af ri ca ( Pt y) Lt d.Employees are members of an umbrella fund of one of three active retirement benefit funds which are defined contribution provident fundThese are governed by the Pensions Funds Act, 1956. The assets of these funds are independent of the company.The Retirement On-Line Provident Fund is an umbrella fund which is managed and controlled by an external board of trustees. Membe

stthe Dunlop Staff Provident Fund were transferred to this fund with effect from 1 September 2007.The Dunlop Tyres Operatives Provident Fund is valued in three year intervals. The fund's last formal actuarial valuation was independentlyperformed as at December 2006. The fund is judged to be in a sound financial position.The New Tyre Manufacturing Industry Provident Fund was established in 2005 and the majority of weekly paid employees are members othis fund. Interim valuations are performed by an actuary, the most recent being June 2006. The fund is judged to be in a sound fposition.



stThe Dunlop Staff Provident Fund is currently under Liquidation. It has no active members and last statutory valuation was as at 31

December 2006.The contribution holiday in the current period amounted to Rs. 101.31 Millions (Rs. 113.65 Millions). This is derived from the surplus status ofthe Dunlop Staff Provident Fund.Certain management are members of an umbrella fund which is managed and controlled by an external board of trustees.There is a single defined benefit fund, the Dunlop Africa Pension Fund. It has no active members and the last statutory valuation was as at

st31 March 2005.The surplus apportionment schemes for the Dunlop Africa Pension Fund and the Dunlop Staff Provident Fund, in terms of section 15B of theAct, have been approved by the Financial Services Board (FSB). After all of the surplus claims in these funds have been paid there will bebalance in the employer surplus account in the Dunlop Staff Provident Fund. Realisation of the surplus amount is still conditional uponseveral activities/ approvals, accordingly the surplus has not been recognised on the balance sheet.Foreign consolidated subsidiaries of Apollo Tyres South Africa (Pty) Ltd.

Employees are members of two defined contribution pension funds which are governed by the UK Pensions Act of 1995. The funds aremanaged by appointed Investment managers and are reviewed as statutorily required. Both funds are in a sound financial position.

Post-employment medical obligationApol l o Tyre s Sout h Af ri ca ( Pt y) Lt d.

Prior to 1998, it was the company's policy to provide post-employment medical benefits for its employees, by the way of subsidies. Thesesubsidies have been funded by means of pensions purchased from insurers. Each year additional amounts are paid in line with the increasesin medical aid subscriptions.The company's liability in respect of the post-employment medical obligation has been actuarially valued at Rs. 126.27 Millions (Rs. 115.98Millions) at 31st March 2009 by Fifth Quadrant Actuaries and Consultants. The actuarial valuation performed has been based on thefollowing assumptions:a) a health care cost inflation rate of 6.25% p.a. (7.80% p.a)b) a discount rate of 8.50% p.a. (10.20% p.a)


Opening Balance 116.16 134.73

Interest cost recognised in income statement in current period 6.36 10.23Health care cost inflation 11.65 3.41Actuarial loss recognised in income statement in current period (0.53) 4.55Miscellaneous (including basis and data changes) (7.17) (36.74)Closing balance 126.47 116.18

Sensitivity of healthcare costFor every 1% strengthening/weakness of investment returns, relative to medical aid inflation, the liability is calculated to increase/reduce byRs. 10.25 Millions (Rs. 11.84 Millions) from the reported level of Rs. 126.27 Millions (Rs. 115.98 Millions). Similarly for every 1%increase/decrease in medical aid inflation, relative to investment returns, the liability is calculated to increase/decrease by Rs.15.36Millions (Rs. 15.79 Millions)Foreign consolidated subsidiaries of Apollo Tyres South Africa (Pty) Ltd.

Foreign consolidated operations do not provide post-retirement medical benefits for employees, hence no employer obligation exists.

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12. The compone o Defered Ta Li abl i ty ( Net) are as fol l ows:


Deferred Tax Liability on timing differences arising on:Depreciation 2,149.43 1,975.64Others 8.75 3.72Sub Total (A) 2, 158. 18 1,979.36Deferred Tax Assets on timing differences arising on:

Payment under Voluntary Retirement Scheme 0.55 0.65Others 216.09 223.03Sub Total (B) 216 . 64 223.68Net Deferred Tax Liability (A-B) 1,941.54 1,755.68

13. Provision for sales related obligations of the Parent company represents estimates for payments to be made in future. Major portion of ththese costs is estimated to be paid in the next financial year and will be paid within a maximum of 3 years from the balance sheet dat

Rs. / Mi l l i onsOpening Balance Additional provision Incurred against Closing Balance

as at 01.04.2008 made during the year provision during the year as at 31.03.2009

431.10 468.44 414.63 484.91

14. The following Forward Exchange Contracts entered into by the company are outstanding as on 31st March, 2009:

Currency Amount Buy/Sell Cross Currency

US Dollar US $ 2,811,100.00 Buy RupeesUS Dollar US$ 4,683,000.00 Buy ZARU.K. Pound GBP 208,000.00 Sell ZAR

Euro Euro 604,000.00 Sell ZARJap. Yen JPY 1,727,000.00 Buy ZARAustralian Dollar Aus $ 827,000.00 Sell ZAR

The above forward contracts have been valued mark to market as at the year-end and the resulting loss has been charged to profit &loss account.

15. Segmental Reportinga) Geographical Segments

The company has considered geographic segments as the primary segments for disclosure. The Geographic Segments are India andSouth Africa on the basis of Organisation Structure and Operating Locations. Indian segment includes manufacturing and salesoperations through India and South African segment includes manufacturing and sales operations through South Africa along with itssubsidiaries.

b) Business Segments

The Company has considered business segment as the secondary segment for disclosure. The Company's operations comprise of onlyone segment - Tyres, Tubes & Flaps and therefore, there are no other business segments to be reported as required under accountinstandard (AS-17) - “Segment Reporting”.

c) Segmental assets includes all operating assets used by respective segment and consists principally of operating cash, debtors,inventories and fixed assets net of allowances and provisions. Segmental liabilities include all operating liabilities andconsist primarily of creditors and accrued liabilities. Segment assets and liabilities do not include income tax assets and liabilities



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d) Inform Rs. / Mi lli onsParticulars India South Africa Other Corp Total

2008-2009 2007-2008 2008-2009 2007-2008 2008-2009 2007-2008 2008-2009 2007-20081. REVENUE

Total Sales 40,704.41 36,939.27 9,175.93 10,068.55 - - 49,880.34 47,007.82Inter segment Sales 39.65 95.46 39.65 95.46External Sales 40,664.76 36,843.81 9,175.93 10,068.55 - - 49,840.69 46,912.362. RESULTSSegment result 2,382.06 3,853.63 736.39 990.07 (12.05) (6.48) 3,106.40 4,837.22Interest expense (727.16) (551.31) (318.04) (269.17) - - (1,045.20) (820.48)Interest and 58.73 30.90 6.70 4.82 7.24 0.26 72.67 35.98Dividend Income

Income Taxes (630.47) (1,141.44) (108.34) (210.31) (3.53) (4.12) (742.34) (1,355.87)Net profit 1,083.16 2,191.78 316.70 515.41 (8.34) (10.34) 1,391.53 2,696.853. OTHERINFORMATIONSegment assets 24,566.03 21,591.11 6,589.09 6,469.89 187.95 13.44 31,343.07 28,074.44Segment liabilities 12,503.83 11,195.61 3,373.75 3,292.28 1,970.65 1,764.31 17,848.23 16,252.20Capital Expenditure 4,662.95 1,569.32 346.54 122.29 9.86 5.40 5,019.35 1,697.01Depreciation 980.07 878.10 304.86 420.54 0.20 - 1,285.13 1,298.64

16. Disclosure of related party transactions in accordance with accounting standard (AS 18) “Related Party Disclosures”a) Name of the Related Parties:

PARTICULARS 2008-09 2007-08Associates Apol l o Int ernat i onal Lt d. ( AIL) Apollo International Ltd.

Encorp E Servi ces Lt d. Encorp E Services Ltd.Landmark Farms & Housi ng ( P) Lt d. Landmark Farms & Housing (P) Ltd.Sunl i f e Tra del i nks ( P) Lt d. Sunlife Tradelinks (P) Ltd.Tra vel Tra cks ( P) Lt d. Travel Tracks (P) Ltd.PTL Ent erpri ses Lt d. ( PTL) PTL Enterprises Ltd. (PTL)Nat i onal Tyre Servi ces, Zi mbabwe National Tyre Services, ZimbabwePre ssuri te (Pty) Ltd, South Afri ca Pressurite (Pty) Ltd, South AfricaApol l o Fi nance Lt d. Apollo Finance Ltd.Art emi s Medi care Servi ces Pvt . Lt d. Artemis Medicare Services Pvt. Ltd.Art emi s Heal t h Sci ences Pvt . Lt d. Artemis Health Sciences Pvt. Ltd.

Apol l o Aut omot i ve Tyres Lt d. Apollo Automotive Tyres Ltd.Apol l o Radi al Tyres Lt d. Apollo Radial Tyres Ltd.

Key Management Personnel Mr. O. S. Kanwar Mr. O. S. KanwarMr. Neeraj Kanwar Mr. Neeraj KanwarMr. U. S. Obero i Mr. U. S. OberoiMr. SunamSarkar Mr. Sunam Sarkar

Relative of Key Managerial Personnel Mr. Raaj a Kanwar Mr. Raaja Kanwar



b) Transactions with Related Parties

2008-09

Particulars Associates Key Management TotalRs./Millions Personnel Rs./Millions

Rs./Millions

Volume of Transactions:

Sale 1,409.49 1,409.49Reimb 295.30Reimb (0.01)Rei mbursement of Expenses t oArtemM 0.46Lease 250 250.00ServiceC (3.22)

Manag 134.94 134.94Travell 112.02Rent (0.95) (0.95)Confere 47.40Intere (3.8 (3.88)Rent Pa 21.30Rent Paid- L 13.20ClaimsA 2.38 2.3Total 2143.49 134.94 2278.43Amount Outstanding Dr./(Cr.) 545.38 545.38

PTL 289.67LandmAIL 191.78Othe 32.43



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17. Operat i ng LeaseA. Indi an Operat i ons

The compahacau opl ea aga the opti on of both thel essor and l essee. Rental expenses under those l eases were Rs. 250 Mi l l i ons (Rs. 200 Mi lli ons).The schedul e of future mi ni muml ease paymn respe of non-cance ab open l ease i s set out bel ow:

st stPARTICULAR 31 March, 2009 31 March, 2008Rs. /Mi l l i ons Rs. /Mi l l i ons

Wi thi n one year of the bal ance sheet date 250. 00 250. 00Due i n a peri od between one year and fi ve years 1, 000. 00 1, 000. 00Due after fi ve years - 250. 00

b) Transactions with Related Parties

2007-08

Particulars Associates Key Management TotalRs./Millions Personnel Rs./Millions

Rs./Millions

Volume of Transactions:

Sa 2,216.41 2,216.41Rei m 355. 85Reim 0.01Lea 200.0 200.00Servc (3.60)Man 186.81 186.81Trave 139. 25

Re (0.87) (0.87)Conf 40. 01Inte (2.72)Renp 21.30Rent pad to La 13. 20Sec 100 100.00Cla 3.15To 3,081.99 186.81 3,268.80Am62 627.01

Fro 280.21FromLa 111. 50Fro 183.59

Fro 51.71

B. Sout h Af ri can Operat i onsApol l o Tyre s Sout h Af ri ca ( Pt y) Ltd.

The l ease escal ati on l i abi l i ty re l ates to re ntal and l ease contra cts wi th fi xed escal ati on cl ause. Rental payabl es under the contra cts arecharg ed to pro fi t and l oss account on a stra i ght-l i ne basi s over the term of re l evant l ease.

LEASE 31st March 2009 31st March 2008Rs. /Mi lli ons Rs. /Mi lli ons

Long term 69. 48 60. 82Shor term (due wi thi n a year) ( 2. 98) ( 6. 06)Total l ease escal ati on 66. 50 54. 76



18. Earni ng Per Share ( EPS)

The numerator and denomi nator used to cal cul ate Basi c and Di l uted Earni ng Per Share:

PARTICULA 2008-09 2007-08

a) Basi c

Pro fi t attri butabl e to the equi ty share hol ders used as numera tor (Rs. Mi l l i ons) - (A) 1, 391. 47 2, 696. 85The wei ghted average number of equi ty shares outstandi ng duri ng the year usedas denomi nat or -( B) 503, 299, 12 6 470, 905, 262Basi c earni ng per share (Rs. ) – (A) / (B) (Face Value of Re. 1 each) 2. 76 5. 73

b) Di l ut ed

Pro fi t attri butabl e to the equi ty share hol ders used as numera tor (Rs. Mi l l i ons) - (A) 1, 391. 47 2, 696. 85The wei ghted average number of equi ty shares outstandi ng duri ng the year used

as denomi nator -( B) 503, 338, 920 472, 721, 493Di lute d earni ng per share (Rs. ) – (A) / (B) (Face Value of Re. 1 each) 2. 76 5. 70

19. DISCONTI NUED OPERATI ONSDuri ng the year ended 31 March 2009, the Group di sconti nued the tra di ng acti vi ti es of Dunl op Afri ca Marketi ng ( U. K. ) Li mi ted ( DAMUK) .DAMUKs pri nci pal busi ness acti vi ty wi l l nowbe an i nvestment company currentl y hol di ng i nvestments i n subsi di ari es and associ ates i nZi mbabwe.( LOSS) / PROFIT FROM DIS CONTIN UED OPERATIO NS

PARTICULA 2008-09 2007-08Rs. /Mi l l i ons Rs. /Mi l l i ons

Revenue 20. 58 576. 53Other gai ns 1. 58 ( 5. 86)Exp endi t ur e 42. 49 549. 16Pro fi t before taxati on ( 20. 33) 21. 51Taxat i on:

Current Tax 4. 78 ( 10. 02)Def erred Tax ( 0. 31) -Tot al Tax Charge 4. 47 ( 10. 02)(Loss) / Profi t for the year fromdi sconti nued op (15. 86) 11. 49

C. Germany Operat i ons

Apol l o Tyres GmbH, GermanyThe German Comp has taken offi ce at Rüssel shei munder the operati ng l ease agreemen that are renewabe on a peri odi c basi s atthe opti on of both the l essor and l essee. Rental expenses under thi s l ease was Euro 40, 484 (Ni l )The schedul e of future mi ni muml ease payments i n respect of non-cancel l abl e operati ng l eases i s set out bel ow:

PARTI CULARS 31st March2009 31st March2008Rs. /Mi l l i ons Rs. /Mi l l i ons

Wi thi n one year of the bal ance sheet date 7. 26 -Due i n a peri od between one year and fi ve years 33. 29 -Due after fi ve years 42. 39 -



CASH FL W FR OM DISCONTI NUED OPERATI ONS

PAR 2008-09 2007-08Rs. /Mi l l i ons Rs. /Mi l l i ons

Net cash fl owfro mopera ti ng acti vi ti es ( 50. 80) 61. 54Net cash fl owfro mi nvesti ng acti vi ti es 0. 37 1. 71Net cash fl owfro mfi nanci ng acti vi ti es ( 2. 85) ( 45. 89)Unre al i sed forx (loss) / gai n ( 6. 19) 12. 45Net cash flowfrom (59. 47) 29. 81

20. Previ ou Yes fi gure s have been re gruwth cue yea Fi gurs i nbra ckets re l ate to the pre vi ous year.

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Directors



Inf ormat i on pert ai ni ng t o Subsi di ary Compane u/s 212 ( 8) of t he Compani es Act , 1956Rs. / Mi l l i ons

Cont ent s APOLLO APOLLO APOLLO TYRES DUNLOP APOLLO TYRES APOLLO TYRES APOLLO APLO TYRESAPOLLO TYRES( MAURITIUS) ( SOUTH SOUTH AFRICA AFRICA PTE LTD. AG, TYRES GmbH, ZRT, HUNGARY ( NIGERIA)

HOLDIN GS AFRIC A) ( PTY) LTD. MARKETIN G SIN GAPORE SWIT ZERLANDGERMANY LTD. ,(PVT) LTD. HOLDINGS (UNITED NIGERIA

( PTY) LTD. KINGDOM) LTD.

( AMHPL) ( ASHPL) ( ATSAPL) ( DAMUK) ( AT PL) ( AT AG) ( AT GmbH) ( AT ZRT) ( AT NGR)

Share Capital 2,520.20 541.75 217.97 - 1.45 136.92 26.29 65.58Reserves / (Accumulated Loss) (257.76) (133.89) 2,424.22 69.32 (1.00) (5.84) (9.82) (22.68) -Total Assets 2,270.78 2,169.10 6,349.51 69.32 1.02 136.92 26.29 89.23 0.8Total Liabilities 2,270.78 2,169.10 6,349.51 69.32 1.02 136.92 26.29 89.23 0.8Detail of Investments(other than - - - 34.34 - - -investment in subsidiary companies)Turnov -Profit / (Loss) Befo (0 -

Incom -Profit / (Loss) afteta (13(4 (95 (0.9 -Prop - - - - - - -

* Exchange ra tes conversi on on avera ge ra tes duri ng the year.

The i nformati on i n respect of subsi di ari es i n Zi mbabwe through DAMUK, whi ch operate under severe pol i ti cal and economi c uncertai nty that si gni fi cantl y di mi ni shescontro l , or whi ch opera te under severe l ong term re stri cti ons that si gni fi cantl y i mpai r thei r abi l i ty to tra nsfer funds to the Pare nt company has not been di scl osed.





Documents

Annual Report 2008 2009 Apollo Tyres