MIRA INFORM REPORT

Report Date :

17.04.2007

IDENTIFICATION DETAILS

Name :	GOODYEAR INDIA LIMITED
Formerly Known As :	GOODYEA TIRE AND RUBBER COMPANY (INDIA) LIMITED
Registered Office :	Mathura Road, Ballabgarh, Faridabad - 121 004, Haryana
Country :	India
Financials (as on) :	31.12.2005
Date of Incorporation :	01.01.1901
Com. Reg. No.:	05-8578
CIN No. :	L25111HR1961PLC008578
TAN No.: (Tax Deduction & Collection Account No.)	DELG00070A / RTKG03767B
PAN No.: (Permanent Account No.)	AAACG3511H
Legal Form :	It is a Public Limited liability Company. The company’s shares are listed on the Stock Exchanges. Subject is a subsidiary of Goodyear Tire and Rubber Company Limited, a multinational giant with a universally recognised brand name.
Line of Business :	Manufacturing and selling of Automotive Tyres, Truck, Bus, Car, Tractor, Jeep and LCV tyres

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 3500000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Their trade relations are fair. General financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office /Factory :	Mathura Road, Ballabgarh, Faridabad - 121 004, Haryana, India
Tel. No.:	91-129-5069000/2305301-05
Fax No.:	91-129-2305309
E-Mail :	info@goodyear.com
Website :	http://www.goodyear.com
Head Office :	Godrej Bhavan, Mathura Road, New Delhi - 110 065
Tel. No.:	91-11-26836567 (8 Lines)
Fax No.:	91-11-26836170

DIRECTORS

Mr. Antonio M. Capellini	Chairman & Managing Director
Mr. Hugo O. Dedekind	Finance Director
Mr. R. V. Gupta	Independent Director
Mr. Alberto Aguirre Rivera	Finance Director
Mr. C. Dasgupta	Independent Director
Mr. Luis C Ceneviz	Director
Other Personnel
Mr. S. K. Jain	Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	17069215	74.00
Financial Institutions, Banks and Mutual Funds etc.	714407	03.10
Foreign Institutional Investors	150625	00.65
Private Corporate Bodies	648112	02.81
NRIs/OCBs	69208	00.30
Indian Public	4414940	19.44
Total	23066507	100.00

As on 30.06.2006

Names of Shareholders	No. of Shares	Percentage of Holding
Foreign Promoters	17069215	74.00
Non Promoters Holding	5997292	26.00
Mutual Funds	616	0.00
Bank, Foreign Institutional Insurance Companies [Cent/State Gov. Institutions, Non Government Institutions	619828	2.69
FIIs	200	0.00
Private Corporate Bodies	669838	2.69
Indian Public	4652305	20.17
NRIs/OCBs	51939	0.23
Any other trusts	2566	0.01
Total	29063799	125.79

BUSINESS DETAILS

Line of Business :	Manufacturing and selling of Automotive Tyres, Truck, Bus, Car, Tractor, Jeep and LCV tyres.
Products :	Automotive Tyres, Truck, Bus, Car, Tractor, Jeep and LCV tyres.
Exports to :	Bangladesh, Dubai, Ghana, Australia, Ethiopia, Tanzania, Myanmar, Sri Lanka, Vietnam, Maldives, Pakistan, Qatar, Mauritius and Greece.
Imports from :	Raw materials, components and spare parts and capital goods from Europe, USA and Far East.
Terms :
Purchasing :	against L/C, D/A, D/P or Credit terms.

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Automotive Tyres	Nos.	1264	1095

GENERAL INFORMATION

No. of Employees :	1053
Bankers :	· Citibank, Faridabad, Haryana · Bank of America, Faridabad, Haryana · Punjab National Bank, Faridabad, Haryana
Facilities :	--

Banking Relations :	Good
Auditors :	Price Waterhouse Chartered Accountants A. F. Ferguson & Company Chartered Accountants Cost auditor Dr. Ashok K. Agarwal Cost Auditor
Parent Company :	· Goodyear Tire and Rubber Company Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
30000000	Equity Shares	Rs. 10/- each	Rs. 300.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
23066507	Equity Shares	Rs. 10/- each	Rs. 230.665 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.12.2005	31.12.2004	31.12.2003
SHAREHOLDERS FUNDS
1] Share Capital	230.665	230.665	230.665
2] Reserves & Surplus	671.245	672.976	677.041
3] Profit and Loss Account	[5.575]	(93.564)	(145.354)
Total	896.335	810.081	762.352
LOAN FUNDS
1] Secured Loans	0.000	0.000	0.000
2] Unsecured Loans	950.040	913.290	958.506
3) Finance Lease Liabilities	0.000	2.030	3.142
GRAND TOTAL	1846.375	1725.401	1724.000
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	1013.896	1031.062	1107.795
Capital work-in-progress	58.243	22.285	48.260
INVESTMENTS	113.400	113.400	113.400
CURRENT ASSETS, LOANS & ADVANCES
Inventories	583.071	869.899	643.644
Sundry Debtors	966.859	710.591	698.644
Cash & Bank Balances	723.749	389.518	448.458
Loans & Advances	143.014	199.555	171.021
Total Current Assets	2416.693	2169.563	1961.767
Less :
Current Liabilities	1506.693	1538.362	1476.262
Provisions	259.398	112.296	100.224
Total Current Liabilities	1766.091	1650.658	1576.486
Net Current Assets	650.602	518.905	385.281
MISCELLANEOUS EXPENSES	10.234	39.749	69.264
GRAND TOTAL	1846.375	1725.401	1724.000

PROFIT & LOSS ACCOUNT

PARTICULARS	31.12.2005	31.12.2004	31.12.2003
Sales Turnover	6801.459	6306.167	6583.288
[including other income]
Profit/(Loss) Before Tax	104.423	54.690	0.502
Provision for Taxation	16.434	2.900	--
Profit/(Loss) After Tax	87.989	51.790	0.502
Export Value	765.341	739.365	496.530
Import Value	654.627	580.613	382.382
Total Expenditures	6437.958	6024.759	6293.406

SUMMARISED RESULTS

Particulars	31.12.2006 Full Year
Sales Turnover	8286.600
Other Income	140.000
Total Income	8426.600
Total Expenditure	7672.600
Operating Profit	754.000
Interest	91.400
Gross Profit	662.600
Depreciation	107.700
Tax	08.600
Reported PAT	451.200

KEY RATIOS

PARTICULARS	31.12.2005	31.12.2004	31.12.2003
Debt Equity Ratio	1.15	1.26	1.04
Long Term Debt Equity Ratio	0.00	0.00	0.05
Current Ratio	0.87	0.81	0.76
TURNOVER RATIOS
Fixed Assets	3.30	3.19	2.90
Inventory	10.39	9.46	9.51
Debtors	8.56	10.16	8.78
Interest Cover Ratio	2.16	2.09	1.01
Operating Profit Margin (%)	4.43	3.89	3.97
Profit Before Interest and Tax Margin (%)	2.58	2.19	2.03
Cash Profit Margin (%)	3.01	2.79	1.95
Adjusted Net Profit Margin (%)	1.17	1.08	0.01
Return on Capital Employed (%)	11.01	8.96	9.18
Return on Net Worth (%)	10.21	8.95	0.10

STOCK PRICES

Face Value	Rs. 10 /-
High	Rs. 144.90/-
Low	Rs. 140.10/-

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated on 10^th October, 1922 at Faridabad in Haryana as a private limited company under the name "The Goodyear Tire and Rubber Company (India) Limited" having Company Registration Number 8578.

In 1961, the company was converted into a public limited liability company and the name was changed to the present.

In 1993, a joint venture South Asia Tyres was effected with RPG-Ceat to manufacture steel radial passenger tyres, truck tyres and bias earthmover tyres, earlier imported. Goodyear’s product profile includes ultra large earthmover tyres, which are import substitutes, power tread passenger radial tyres, light and medium commercial truck tyres, farm tyres, automotive tyres, etc, which are marketed under the Goodyear brand.

The Company undertook modernisation and expansion of its units to increase productivity. It was accredited with ISO 9002 certification by National Quality Assurance, UK, in 1994. BEML, Coal India, etc, procure their requirement of earthmover tyres from Goodyear. While it previously catered only to Ambassador, Padmini and Premier.

In 1999, it launched India’s first 13 inch tubeless as well as tube type H-rated, the Eagle NCT3 which will cater to all the mid-size cars such as Ford Ikon, Honda City, Opel Corsa, Mitsubishi Lancer, Fiat Siena, Maruti Esteem and Baleno etc.

Subject has introduced three new products for truck and light truck segments. They are the Power 200, the Power Torq+ and the Power Max+ targeted at the medium, commercial and light truck segments, respectively. The new tyres were created with the state-of-the-art computer modelling techniques to reduce tread wear.

The company explored new markets beyond the borders and expanded the areas of its marketing influence in Asia.

It is also trading in Automotive Tyres, Flaps, Automotive Tubes, Rubber Dock Fenders, Transmission Belting, Industrial V Belts, Fan Belts and other rubber products.

The company's product range includes ultra large earthmover tyres, power tread passenger radial tyres, light and medium commercial truck tyres, farm tyres, automotive tyres, etc. which are marketed under the Goodyear brand.

A Tyre Tube Plant was erected in Haryana on approximately a 70-acre plot of land in Ballabgarh on Delhi-Agra Road.

The company has been accredited with ISO 9002 Certification by National Quality Assurance, UK in 1994.

During 2005, the company launched a new Rear Farm Tyre 'Sampurna' which was ver well accepted in the Market. During the year under report the companies production capacity of Automotive Tyre stood at 1264 Nos.

Generic Names of the Principle Products / Services of the Company is:-

Item Code No. (ITC Code)	Tyres	Flap	Tubes	Others
Passenger / Jeep	40111000	--	40131001	--
Bus / Lorries Off the Road	40112000 40119901	40129004	40131002 40139003	--
Tractor	40119902		40139004	--
Transmission Belting	--	--	--	40109904
V & Fan Belt	--	--	--	40101002

During the year, the net sales and other income increased from Rs. 6306.2 millions in the previous year to Rs. 6801.5 millions. The Export sales increased from Rs. 73.6 millions in the previous year to Rs. 76.2 millions. The Directors are pleased to inform that the company has been given a Special Export Award by CAPEXIL (Chemicals & Allied Products Export Promotion Council) for export performance during the year 2004-2005. 

Increase in the prices of the raw materials viz. Natural rubber, synthetic rubber, carbon black, nylon fabric and oil based raw materials as well as the increase in conversion cost had affected the performance of the Company for the year under review. The tax advantage on purchase of natural rubber, due implementation of Value Added Tax in the State of Kerala, was neutralised against the increase in its prices. 

The depreciation for the year is inclusive of the accelerated depreciation amounting to Rs. 25.7 millions, in respect of a category of equipment due for replacement, as well as the depreciation in respect of machinery spares capitalized during the year. 

No dividend is recommended as the profit for the year has been adjusted against the loss brought forwarded from earlier years. 

OPERATIONS

In view of the alarming increase in the prices of raw materials and the competition being faced from Indian manufacturers as well as importers, the company decided to focus its resources on more profitable areas of operations i.e. on production of farm tyres at its plant at Ballabgarh. During the year, the company launched a new Rear Farm Tyre 'Sampurna' which was very well accepted in the market. 

During the year under report, the company continued its endeavour to provide the best quality of products to its customers at the lowest cost and to achieve excellence in customer services. All round efforts were made to achieve possible savings/cost reduction in different areas of operations. 

During the year under report, the company continued its thrust on energy conservation and the Directors are pleased to report that for the year 2005, the company received National Energy Conservation Award from His Excellency President of India, Dr. Abdul Kalam, in appreciation of its efforts towards energy conservation in tyre sector. 

FINANCE AND ACCOUNTS

During the year, the interest expenses on External Commercial Borrowing (ECB) of US$ 21 million were higher, due higher applicable LIBOR. The company has been exploring various options for obtaining funded/non-funded limits as well as considering for disposing of the investment held in Goodyear South Asia Tyres Private Limited, to pre-pay a portion of the ECB loan in order to reduce exposure and have effective utilization of working capital. Loss on account of foreign exchange fluctuation has been provided in 2005 accounts. 

As at the end of December 2005, an amount of Rs. 0.410 million of matured deposits remained unclaimed. An amount of Rs. 0.006 millions has since been paid out of the unclaimed amount. 

During the year under report, the capital expenditure of Rs. 166.1 millions was incurred. 

FUTURE OUTLOOK

With continued emphasis being placed by the Central Government on development of infrastructure, particularly the roads, agricultural and manufacturing sector, the Indian economy and the automobile sector/tyre industry are poised for an impressive growth. The company's products are well accepted in the market and the Company is committed to provide the highest quality of products to its customers. In view of continuous upward trend in the prices of raw materials as well as fierce competition being faced in the market place, the company's endeavour is to channelise its resources on more profitable products. 

The Continuous Improvement Systems (CIS) as well as the activities under the Six Sigma umbrella have been an integral part of company's strategy to improve processes or operations to maximize gain/reduce cost. The study and implementation of projects undertaken under the Six-Sigma concept have made a significant contribution and assure gains on a continuous basis. 

The company’s fixed assets of important value include freehold land, buildings, plant and machinery, furniture and fittings, motor cars and trucks.

WEBSITE DETAILS

The Goodyear India Story

Goodyear is a multinational with a universally recognized brand name identified with quality tyres. Goodyear has annual sales of over US $15bn, has a presence in six continents and operates from 80 facilities in 28 countries.

All this is achieved with a team of 85,000 people dedicated to make Goodyear a company in the service of our esteemed customers and consumers.

Goodyear India Limited

Goodyear's presence in India is over 80 years old, with two plants, one each in Ballabgarh and Aurangabad.

A chronology of Goodyear's continued success in India is as follows:

1922: Goodyear tyre and Rubber company Akron, Ohio entered the Indian Market.

1961: Goodyear India's own manufacturing facility was inaugurated in Ballabgarh, 32 kms from India’s capital New Delhi .The plant had an investment of US $12million and was commissioned within 12 months.

1965: The Ballabgarh plant was expanded which increased the plant production by 35%

1969-70: The production increased by nearly 100%

1993: Goodyear formed a 50-50 joint venture with South- Asian Tyres Limited (SATL) at Aurangabad to manufacture state-of-art radial tyres for car and light truck and bias construction tyres for graders and earthmovers.

1996: The first tyre GPS2 radial Passenger was rolled out from Aurangabad plant

1998: SATL becomes a fully owned Goodyear Company

1999: A significant investment of 9.3 MM USD was made in the farm tyre manufacturing process.

2002: Goodyear becomes the first tyre manufacturer to roll out tubeless tyres on Indian roads.

In the passenger car segment, Goodyear supplies tyres to many of the leading Original Equipment Manufacturers in India. These include Maruti, Telco, Mahindra & Mahindra, Ford, Fiat and many more.

Goodyear India has been a pioneer in introducing tubeless radial tyres in the passenger car segment.

In the farm segment Goodyear tyres are supplied to all the major Tractor manufacturers like PTL, ITL, TAFE, Eicher and Escorts. Similarly, for buses and trucks, vehicles rolling out of the assembly line of the leading OEMs like TELCO, Ashok Leyland, and Swaraj Mazda are often seen with Goodyear tyres.

Goodyear commands a major market share in the Off The Road (OTR) segment by being a major supplier to Coal India Limited, Escorts, L&T, TISCO and major steel plants of the country.

Spreading its wings outside the geographical boundaries of the country Goodyear India exports tyres to other countries, both in the and beyond. These include Pakistan, Nepal, Bangladesh, Sri Lanka, Bhutan, Australia, Dubai, Hong Kong, and Philippines.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.41.89
UK Pound	1	Rs.84.17
Euro	1	Rs.56.93

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions