MIRA INFORM REPORT

Report Date :

15.02.2007

IDENTIFICATION DETAILS

Name :	J K TYRE INDUSTRIES LIMITED
Formerly Known As :	J K INDUSTRIES LIMITED
Registered Office :	7, Council House Street, Kolkata - 700 001, West Bengal
Country :	India
Financials (as on) :	30.09.2005
Date of Incorporation :	01.01.1951
Com. Reg. No.:	21-19430
CIN No.: [Company Identification No.]	U67120WB1951PLC019430
TAN No.: (Tax Deduction & Collection Account No.)	JDHJ01475F/CALJ01643F
PAN No.: (Permanent Account No.)	AAACJ6716P
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing of Automotive Tyres, Tubes and Flaps, Pharmaceuticals and Cane Sugar.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 31000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company having satisfactory track. Directors are reported as experienced, respectable and resourceful industrialists. Their trade relations are fair. General financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered good for any normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	7, Council House Street, Kolkata - 700 001, West Bengal, India
Tel. No.:	91-33-22484198 / 22486181
Fax No.:	91-33-22481641
E-Mail :	info@jktyre.com
Website :	http://www.jktyre.com
Administrative Office :	3, Bahadurshah Zafar Marg, New Delhi- 110 002, India
Plants Locations :	· J K Tyre, Kankroll, Rajasthan, India · Banmore, Madhya Pradesh, India · Mysore Plant I, Karnataka Mysore Plant II, Karnataka, India · J. K. Sugar, Meerganj, Uttar Pradesh, India
Branch :	3/Fl, Gulab Bhavan, 3 Bahadur Shah Jafar Marg, New Delhi – 110 002, India

DIRECTORS

Name :	Mr. Hari Shankar Singhania
Designation :	Chairman
Age :	68 years
Qualification :	B.Sc., F. Inst. D. (London)
Date of Joining :	25/03/1974
Other Directorships :	J. K. Corporation Limited-Chairman and Managing Director The Central Pulp Mills Limited- Chairman Atlas Copco (India) Limited- Chairman J. K. Udaipur Udyog Limited-Chairman
Name :	Mr. Raghupati Singhania
Designation :	Vice Chairman and Managing Director
Name :	Mr. Vikrampati Singhania
Designation :	Deputy Managing Director
Name :	Mr. Bharat Hari Singhania
Designation :	Managing Director
Name :	Swaroop Chand Sethi
Designation :	Whole Time Director
Name :	Mr. Arvind Narottam Lalbhai
Designation :	Director
Age:	83 Years
Qualification :	B. Sc.
Date of Joining :	07/04/1975
Other Directorships :	The Arvind Mills Limited- Chairman and Managing Director SRF Limited Atul Limited Birla VXL Limited Tata Chemicals Limited Arvind Products Limited Lokprakashan Limited Arvind Overseas (M) Limited
Name :	Mr. Arvind Singh Mewar
Designation :	Director
Age:	57 Years
Qualification :	B. A. (English Literature, Economics and Political Science), Hotel Management Course (U.K)
Date of Joining :	07/04/1975
Other Directorships :	The Lake Palace Hotels and Motels Limited -Chairman and Managing Director Historic Resort Hotels Limited -Chairman Shikarbadi Hotels Limited
Name :	Mr. Bakul Jain
Designation :	Director
Name :	Mr. B. C. Bose
Designation :	Director (LIC Nominee)
Name :	Mr. I M Vittala Murthy, IAS,
Designation :	Director
Name :	Mr. Om Prakash Khaitan
Designation :	Director
Name :	Dr. Vinayshi Gautam
Designation :	Director (IDBI Nominee)

KEY EXECUTIVES

Name :	Mr. P. K. Rustagi
Designation :	Company Secretary

MAJOR SHAREHOLDERS

As On 31.03.2006

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters' Holdings
Indian Promoters	16376700	43.72
Non Promoter's Holdings
Mutual Funds and UTI	3304248	8.82
Banks, Financial Institutions and Insurance Companies	3587706	9.57
FIIs	2629787	7.02
Others
Private Corporate Bodies	3748225	10.01
Indian Public	3751796	10.02
NRIs / OCBs	4060884	10.84

BUSINESS DETAILS

Line of Business :	Manufacturing of Automotive Tyres, Tubes and Flaps, Pharmaceuticals and Cane Sugar.
Products with ITC Code :	· Tyres, Tubes & Flaps - 4011,12 & 13 · Pharmaceuticals - 3004 · Cane Sugar - 1701

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Automobile Tyres	Million Nos.	6.055	5.562
Automobile Tubes	Million Nos.	2.425	4.360
Automobile Flaps	Million Nos.	--	1.985

GENERAL INFORMATION

No. of Employees :	Around 4000
Bankers :	> Bank of India > Canara Bank > Corporation Bank > Dena Bank > Indian Bank > Punjab National Bank > State Bank of Bikaner & Jaipur > State Bank of India > State Bank of Mysore > Syndicate Bank > The Bank of Rajasthan Limited > The Federal Bank Limited > UCO Bank > UTI Bank > Vijaya Bank
Facilities :	--

Banking Relations :	Satisfactory
Auditors :	Lodha & Company Chartered Accountants
Associates :	> J K Corp Limited > J K Paper Limited > Hari Shankar Singhania Elastomer and Tyre Research Institute > J K Pharmachem Limited > Valiant Pacific LLC > J K Pharmachem Limited
Subsidiaries :	> J K Drugs & Pharmaceutical Limited > Hansdeep Investment Limited > Hidrive Finance Limited > Panchanan Investment Limited > Radial Finance Limited > Shivdham Properties Limited > J.K. International Limited, UK > J K Asia Pacific Limited, Hong Kong > J K Asia Pacific (S) Pte Limited
Memberships :	Confederation of Indian Industry

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
13,50,00,000	Equity Shares	Rs 10/-	Rs 1350.000 millions
7,00,000	14% Cumulative Redeemable Preference Shares	Rs 100/-	Rs 70.000 millions
48,00,000	Preference Shares	Rs 100/-	Rs 480.000 millions
	Total		Rs.1900.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
3,74,59,346	Equity Shares	Rs 10/-	Rs 374.600 millions
	Total		Rs. 374.600 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		30.09.2005	30.09.2004	30.09.2003
SHAREHOLDERS FUNDS
1] Share Capital		374.600	374.600	374.600
2] Reserves & Surplus		7451.400	8187.600	8565.300
NETWORTH		7826.000	8562.200	8939.900
LOAN FUNDS
1] Secured Loans		6712.800	6565.100	7381.900
2] Unsecured Loans		1592.200	941.600	998.700
TOTAL BORROWING		8305.000	7506.700	8380.600
DEFERRED TAX LIABILITIES
TOTAL		16131.000	16068.900	17320.500
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		11739.800	12071.100	12648.300
Capital work-in-progress		616.300	164.300	70.200
INVESTMENT		2500.400	2522.600	2520.200
DEFERREX TAX ASSETS		--	--	--
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2440.300	1781.700	2113.100
	Sundry Debtors	4117.900	4495.200	4125.900
	Cash & Bank Balances	361.100	382.300	253.200
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	1349.200	1127.700	1431.500
Total Current Assets		8268.500	7786.900	7923.700
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	6864.400	6416.000	5776.400
	Provisions	259.000	214.200	209.600
Total Current Liabilities		7123.400	6630.200	5986.000
Net Current Assets		1145.100	1156.700	1937.700
MISCELLANEOUS EXPENSES		129.400	154.200	144.100
TOTAL		16131.000	16068.900	17320.500

PROFIT & LOSS ACCOUNT

PARTICULARS	30.09.2005	30.09.2004	30.09.2003
Sales Turnover [including other income]	24320.000	21932.700	21194.800
Profit/(Loss) Before Tax	34.400	164.800	390.500
Provision for Taxation	(133.200)	42.900	169.600
Profit/(Loss) After Tax	167.600	121.900	220.900
Export Value	3828.700	3711.900	3247.300
Import Value	NA	2957.900	2556.200
Total Expenditure	19639.800	21174.600	20036.830

QUARTERLY RESULTS

PARTICULARS	31.12.2005 (1^st Quarter)	31.03.2006 (2^nd Quarter)	30.06.2006 (3^rd Quarter)	30.09.2006 (4^TH Quarter)
Sales Turnover	5761.100	6250.400	6969.300	7113.000
Other Income	15.200	90.800	45.100	35.500
Total Income	5776.300	6341.200	7014.400	7148.500
Total Expenditure	5392.000	5935.200	6569.600	6694.200
Operating Profit	384.300	406.000	444.800	454.300
Interest	166.700	188.700	206.100	199.300
Gross Profit	217.600	217.300	238.700	255.000
Depreciation	169.400	172.300	182.900	185.800
Tax	9.200	09.900	03.600	9.200
Reported PAT	24.700	45.000	36.300	66.300

200512 Quarter 1^st

Notes Expenditure Includes (Increase) / Decrease in Stock in Trade Rs (428.30) million Consumption of Raw Materials Rs 4242.60 million Staff Cost Rs 372.30 million Other Expenditure Rs 1205.40 million Tax includes Provision for Fringe Benefit Tax Rs 9.20 million Deferred tax Rs 14.30 million Status of Investor Complaints for the quarter ended December 31, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 01 Complaints disposed off during the quarter 01 Complaints unresolved at the end of the quarter Nil 1. Sales during the quarter is higher by 29% over corresponding quarter of last year. 2. The Project for expansion of 30% passenger Radial and 50% Truck/Bus Radial Tyre capacity at the cost of Rs 1600 million has been completed, full benefit to which shall be realised in the coming months. 3. Pursuant to interim stay granted by Honorable High Court of Calcutta, Deferred Tax Liability for the period upto March 31, 2001 has not been provided for. 4. The Company has two business segments namely type and Investments. 5. Figures for the corresponding previous periods have been regrouped / rearranged, wherever necessary. 6. The above results were approved by the Board of Directors at their meeting held on January 20, 2006.

200603 Quarter 2^nd

1. Sales during the nine months is higher by 25% over corresponding period of last year. 2. Export during the nine months accounts for Rs.3130 millions. 3. Impact of sizeable increase in cost of natural rubber and other petro based raw materials could partially be recovered by selling price revisions. 4. The Board has approved issue of 36.1 millions equity shares to a group company on preferential basis at a price of Rs.105 per share aggregating to Rs.378.0 millions to augment long term resources, subject to requisite approvals. 5. The Company has two business segments namely Tyre and Investments. 6. The Board has approved a scheme involving demerger of substantial investments into a separate Company w.e.f.1.10.05. The scheme has been filed with Hon'ble High Court of Calcutta. Pending requisite approvals, no effect has been given in these results of the said scheme. 7. Pursuant to interim stay granted by Honourable High Court of Calcutta, Deferred Tax Liability for the period upto 31st March 2001 has not been provided for. 8. No investor complaints were received during the quarter ended 30th June, 2006 and no complaints were pending at the beginning and the end of the quarter. 9. Figures for the corresponding previous periods have been regrouped /rearranged, wherever necessary. 10. The above results were approved by the Board of Directors at their meeting held on 28th July, 2006.

200606 Quarter 3^rd

1. Sales during the nine months is higher by 25% over corresponding period of last year. 2. Export during the nine months accounts for Rs.3130 millions. 3. Impact of sizeable increase in cost of natural rubber and other petro based raw materials could partially be recovered by selling price revisions. 4. The Board has approved issue of 306 millions equity shares to a group company on preferential basis at a price of Rs.105 per share aggregating to Rs.378.0 millions. to augment long term resources, subject to requisite approvals. 5. The Company has two business segments namely Tyre and Investments. 6. The Board has approved a scheme involving de merger of substantial investments into a separate Company w.e.f.1.10.05. The scheme has been filed with Hon'ble High Court of Calcutta. Pending requisite approvals, no effect has been given in these results of the said scheme. 7. Pursuant to interim stay granted by Honourable High Court ofCalcutta, Deferred Tax Liability for the period upto 31st March 2001 has not been provided for. 8. No investor complaints were received during the quarter ended 30th June,2006 and no complaints were pending at the beginning and the end of the quarter. 9. Figures for the corresponding previous periods have been regrouped/ rearranged, wherever necessary. 10. The above results were approved by the Board of Directors at their meeting held on 28th July, 2006.

200609 Quarter 4^th

Notes Expenditure Includes (Increase) / Decrease in Stock in Trade Rs. (369.100) million Consumption of Raw Materials Rs. 5321.700 million Staff Cost Rs. 395.100 million Other Expenditure Rs. 1346.500 million Tax includes Provision for Fringe Benefit Tax Rs. 9.200 million Deferred tax/(Credit) Rs. (6.300) million Status of Investor Complaints for the quarter ended 30.09.2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. Sales during the year is higher by 24% over previous year. 2. Operating profit for the year is higher by 28% as a result of higher sales, improved product and market mix, all round cost cutting and operating efficiencies. 3. Pursuant to the allotment of 3.600 Millions equity shares on preferential basis to a Group Company aggregating to Rs. 378.000 million, net worth of the Company has increased by an equivalent amount. The proceeds are being used towards augmenting long term resources. Pending utilisatian, balance funds are retained in working capital. 4. The Company has two business segments namely Tyre and Investments. 5. The Company has filed a Scheme with Honourable High Court of Kolkala involving demerger of substantial investments into separate company w.e.f. 01.10.2005. Pending requisite approvals, no effect has been given in these results of said Scheme. 6. Pursuant to interim stay granted by Honourable High Court of Calcutta, Deferred Tax Liability for the period upto 31.03.2001 has not been provided for. 7. Figures for the corresponding previous periods have been regrouped / rearranged, wherever necessary. 8. The above results were approved by the Board of Directors at their meeting held on 26.10.2006.

KEY RATIOS

PARTICULARS	30.09.2005	30.09.2004	30.09.2003
Debt Equity Ratio	1.96	1.84	1.26
Long Term Debt Equity Ratio	1.41	1.33	0.84
Current Ratio	0.88	0.92	0.90
TURNOVER RATIOS
Fixed Assets	1.59	1.57	1.26
Inventory	11.29	11.49	10.13
Debtors	5.54	5.19	5.35
Interest Cover Ratio	0.93	1.19	1.39
Operating Profit Margin (%)	5.31	7.30	9.89
Profit Before Interest and Tax Margin (%)	2.64	4.56	6.96
Cash Profit Margin (%)	3.04	3.29	4.02
Adjusted Net Profit Margin (%)	0.37	0.54	1.09
Return on Capital Employed (%)	5.34	8.42	9.31
Return on Net Worth (%)	2.21	2.83	3.27

STOCK PRICES

Face Value	Rs. 10.00/-
High	Rs. 143.00/-
Low	Rs. 131.70/-

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject was incorporated on December 1970 at Kolkata in West Bengal having Company Registration Number 19430.

Subject was incorporated as a private limited liability company in February 1951 and was converted into a public limited company in 1974. In January 1993, it came out with a rights issue to part finance the radial tyre plant capacity expansion, the balancing / expansion scheme of the Banmore tyre plant, the 7-ADCA and semi-synthetic cephalosporins project, the pig iron project and the rehabilitation of the central pulp mills. Company is the leading manufacturer of tyres and tubes, and steel-belted radial tyres, under the brand name J K tyres. Apart from tyres, it has diversified into hybrid and high-yielding seeds by setting up J K agri-genetics to produce cereals, seeds, pulses, etc. It also diversified into pharmaceutical and international trading and also set up a project - J K Pharmaceuticals - to manufacture 7-ADCA and semi-synthetic cephalosporins at Gajraula, Utter Pradesh, which commenced commercial production in February 1995 and also set up a 3120-tcd sugar project at Meerganj, Uttar Pradesh. The company has become 16th largest tyre manufacturers of the world as per 'Rubber & Plastic News, U.S.A.'. The company is ISO 9001 certified from DNV, The Netherlands and become the world`s first tyre manufacturer to get an ISO 9001 for its entire operations.

The company has technical collaboration with General Tire International, USA, for the manufacture of tyres.

The Company introduced the dual contact high traction and high performance `Aquasonic` steel radial car tyre. It also developed India`s first and only H-rated 'Ultima-XS' specially for Mercedes - Benz. It acquired majority equity share holding in Vikrant Tyres Limited (VTL) and made a public offer for the same.

During the year 2000, in the truck and bus tyre segments - `Tanker Lug` and 'Jet Haul' have been introduced as specific application products. In LCV category 'WL 407' tyre has been developed and 'Ultima-XP' car radial tyre has been developed with Value-added features.

As part of its efforts towards enhancing export volumes of tyres, company through a wholly-owned foreign subsidiary tied up with a Chinese company for sourcing Light Commercial Vehicle (LCV) tyres for the export markets. It has opened a new office at Singapore through its subsidiary in exploring the possibility of opening up more office abroad as part of its added thrust towards enhancing the company`s export volumes and sales of truck and light commercial vehicle (LCV) tyres in the coming years.

In January 1993, it came out with a rights issue to part-finance the expansion of radial tyre plant, the balancing/expansion scheme of the Banmore tyre palnt. The money from the rights issue in January 1993 was utilised for the 7-ADCA and semi-synthetic cephalosporins project, the pig iron project and the rehabilitation of the Central Pulp Mills Limited (which was done in association with JK Corp)

The company has four subsidiary investment companies namely Hansdeep Investment, Hidrive Finance, Panchanan Investment and Radiant Finance. It also has two fully-owned subsidiary abroad- J K international, U.K. and JK Asia Pacific, Hong Kong. The Company, along with TIDCO, has promoted J K Pharma Chem for the manufacture of penicillin-G.

Note :- A joint-sector company of the Government of Karnataka, Vikrant Tyres entered into a technical collaboration with Techno-Export Foreign Trade Company, Czechoslovakia. This technical agreement, with Avon Technical Services, Melksham, U.K. , the tyre suppliers to Rolls Royce. It manufactures a wide range of cross-ply tyres for trucks, buses, LCVs, Jeeps, Cars. Two and three-wheelers, tractors, trailers, animal-drawn vehicles etc. It is the first company in the country to venture into radial truck tyres, setting up a pilot plant for that purpose.

The company turned around in the late eighties by making profits due to the improved overall situation. Again in 1992-93, the company started registering losses due to recessional pressures. The company with Avon, U.K. did not work out because the English company did not want to participate in the equity. The Karnataka Government has invited bids for technical and financial collaboration with the company. Michelin, France is one of the bidding companies.

The company now plans to increase the capacity utilisation of radial tyre plant and to use part of the capacity in that plant for producing cross-ply tyres for light commercial vehicles (LCV). Company has received QS 9000 Certificate which is one of the most sringent quality systems in the Automotive Industry and defines quality adherence of the Big Three Auto Giants of U.S.A. Company has also received ISO 14001 Certificate for protection of environment and conservation of natural resources. Vikrant Tyre is only Tyre Manufactures in India to have all three accreditations i.e. ISO 9001, QS 14001, ISO 14001.

The company received the Golden Export Award of Government of Karnataka and also received certificate of Merit from CAPEXIL.

In September 2003, Vikrant Tyres Limited amalgamated with the company for which nine equity shares of the company were alloted for every twenty fully paid up equity shares of Rs. 10/- each held.

During the year 2000, in the truck and bus tyre segments – ‘ Tanker Lug’ and ‘Jet Haul’ have been introduced as specific application products. In LCV category ‘WL 407’ tyre has been developed and ‘Ultima-XP” car radial tyre has been developed with value-added features.

Biodata

JK Industries (JKI), the flagship company of the Hari Shankar Singhania Group is one of the leading automotive tyre manufacturer in India. The company which had diversified presence with business interest in Pharma, Sugar, Agriseeds and Tyres has decided to exit from non-tyre businesses and has undertaken a restructuring programme in this regard. By this restructuring exercise the company has divested its Pharma business to J K Drugs & Pharmaceuticals Ltd(JKDPL) and is also in the process of spining off its Sugar and Agribusiness to JK Sugar Ltd and JK AgriGenetics Ltd. respectively. Later JKI has divested its stake in JKPDL to TEVA Pharma of Israel thus existing from pharma sector. 

Post demerger and also the completion of capital restructuring at J K Industries pushed the company to 16th largest tyre manufacturer in the world. The merger of JK Tyre and Vikrant Tyres made JKI to cross turnover of over Rs.20000.000 Millions in the year 2003. 

Further the company which made an 51% strategic acquisition of Vikrant tyres in 1997 from Karnataka Government has completed the modernisation and expansion of Vikrant tyres. Late in 2003 Vikrant Tyres was amalgamted with JKI. 

JKI manufacturers tyres and tubes, and steel-belted radial tyres, under the brand name JK Tyres. For the manufacture of tyres JKI has technical collaboration with General Tire International, US. Apart from General tyres the company has technical collaboration with International, US and Continental AG, Germany.

JKI will become the second largest player in the four-wheeler tyres segment on combined capacity basis(JK tyres + vikrant tyres). The 'Rubber and Plastic New, USA' lists JK Industries as the 16th largest tyre manufacturer in the world. The company has also have the distinction of being the first tyre manufaturer to get an ISO 9001 in the world, when it got certified ISO 2001 from DNV of Netherlands. 

JK Tyres introduced the dual contact high traction and high performance 'Aquasonic' Steel Radial Car Tyre. It also developed India's first and only H-rated 'Ultima-XS' specially for Mercedes - Benz.

During the year 2000, in the truck and bus tyre segments - 'Tanker Lug' and 'Jet Haul' have been introduced as specific application products. In LCV category 'WL 407' tyre has been developed and 'Ultima-XP' car radial tyre has been developed with valu-added features. 

AS part of its efforts towards enhancing export volumes of tyres, JKI through a wholly-owned foreign subsidiary tied up with a Chinese company for sourcing light commercial vehicle (LCV) bias tyres for the export markets. It has opened a new office at Singapore through its subsidiary in exploring the possibility of opening up more offices abroad as part of its added thrust towards enhancing the company's export volumes and sales of truck and light commercial vehicle (LCV) tyres in the coming years. 

The company has diversified into hybrid and high-yielding seeds by setting up J K Agri-genetics to produce cereals, seeds, pulses, etc. The company's sugar operation(JK Sugars) is located in UP and it has set up a 3120 TCD sugar project at Meerganj, UP.

JKI which has also diviversified into pharma business and set up facility to produce of 7-ADCA and semi-synthetic cephalosporins at Gajraula, UP. The plant which started commercial production of Feb 1995. Later the company has hived off its pharma business to JK Drugs & Pharmaceuticals(JKDPL). Subsequently JKI has divested its stake in JKPDL to TEVA Pharma of Israel thus existing from pharma sector. 

In Jan.'93, it came out with a rights issue to part-finance the expansion of radial tyre plant, the balancing / expansion scheme of the Banmore tyre plant. The money so raised from the rights issue in Jan 1993 is also will be utilied for the 7-ADCA and semi-synthetic cephalosporins project, the pig iron project and the rehabilitation of the Central Pulp Mills Ltd.(which was done in association with JK Corp)

The company has four subsidiary investment companies namely Hansdeep Investment, Hidrive Finance, Panchanan Investment, and Radial Finance. It also has 3 fully-owned subsidiaries abroad -- J K International, UK, J K Asia Pacific, Hong Kong and JK Asia Pacific(S) Pte Limited. The company, along with TIDCO, has promoted J K Pharma Chem for the manufacture of penicillin-G.

OVERVIEW 

During the year under report, the Company continued to surge ahead and maintain its leadership in the Indian Tyre Industry. Turnover at Rs. 24000 millions for the period was the highest so far. Exports recorded another high of Rs. 3830 millions and the company maintained its premier position of India's leading Tyre exporter. 

The year witnessed a sharp increase in input costs arising from a steep increase in the prices of petro-based products, which constitute as much as 60% of the cost of raw materials. Since tyre prices did not move in consonance with cost increases, this phenomena impacted margins. The company met this challenge through a series of measures including aggressive cost cutting, business process reengineering, product re-designing as also enrichment of product and market mix. The expansion projects undertaken are complete and in the coming year, the Company will have the full benefit of enhanced capacity. 

Indian economy as well as the road transport sector has performed well in the year, The momentum of high economic growth continues in the current year as well. With increased capacities available due to expansions, the Company is fully geared to capitalize on this advantage. Various aforesaid measures coupled with higher volumes is expected to improve performance of the Company in the years ahead. 

TYRE INDUSTRY SCENARIO 

Robust growth in the economic activity in various sectors of the economy as well as in the Surface Transport sector and renewed thrust in the infrastructural spends continued to be growth drivers for the Tyre Industry. The reduction in excise duty from 24% to 16% was a welcome move. The completion of Golden Quadrilateral and North South and East-West corridor projects will further boost the Automobile sector. This augurs well for the Indian tyre industry. 

While the demand continues to be buoyant, rising input costs in general and petro-based raw materials in particular is a matter of concern. During the year, the Tyre Industry faced pressure on margins on account of imbalances in the cost increases and tyre prices. 

Indian Tyre Industry can be globally competitive on a level playing field. There are significant deficiencies in the infrastructure and its cost thereof vis-a-vis the global one thus putting the Indian Industry in a disadvantageous position. While the reduction in the import tariffs is a step in right direction, it needs to be calibrated with the development of infrastructure in the country. 

JK TYRE - MARKET LEADER 

Production during the year touched a high of 5.774 millions tyres against 5.562 millions tyres last year. 

All the 4 Tyre Plants of the Company worked at the optimum capacities at high operational efficiency levels, producing world-class quality tyres. 

During the year, the Company achieved yet another land mark of being ranked No. 1 in the Tyre Customer Satisfaction Index Study conducted by J D Power Asia Pacific 2005 India - a distinct customer satisfaction endorsement of the Company's products. This has reinforced our market leadership. It is indeed a matter of great pride and satisfaction that 

JK Tyre has received the most coveted recognition of 'Superbrand' and now No. 1 ranking in the Customer Satisfaction. This, more than amply demonstrates the Company's commitment to its customers and its leadership in the Indian Tyre market. 

COMMERCIAL TYRE SEGMENT 

Commercial tyre segment contributes 80% of the revenue for the tyre industry and thus to a great extent, this segment drives the industry. The segment constitutes Bus, Truck and LCV tyres. Our efforts have been to not only meet customer expectations but also to give the very best in quality and performance driven products. 

During the year, Company made new offerings and introduced various tyres, the principal ones being Jet Xtra, Jet Rock and Jet Star for segment specific Bias Truck applications. Nine new tyres were introduced for LCVs for different usage and road conditions. 

The Company continued to establish great focus on customers through customer contact programmes in LCV tyres and also by partnering the fleet program of Indian Oil Corporation. Training camps were organised to create awareness amongst tyre fitters by organising 'Master Tyre Fitter' Programmes - a first in the industry. AIDS awareness programme was launched amongst Truck Drivers to educate them for prevention and care of this deadly disease. 

TRUCK RADIALS 

Company's initiative of introducing all Steel Truck Radial tyres in India have started yielding results and the roll out of the millionth tyre at the most modern plant at Mysore in July '05 is a testimony to the far sighted vision of the company. The company is not only the No. 1 truck radial manufacturer, but is a dominant leader in the market with more than 80% market share. 

New products and sizes of tyres were introduced in the market which received excellent consumer acceptance, JK Tyre Truck/Bus Radial Tyres are gaining increased fitment by Original Equipment Manufacturers. 

Customer education and participative involvement with end users has taken shape under the Unique Fleet Management Programme. Dedicated personnel have been attached to the fleets to enable them to fully realize the benefits of usage of radials. The 'Tyre Care Center Network along prominent highways continues to provide round the clock service to truck/bus operators. Company is able to see the rapidly growing pace of radialisation moving from current levels of approximately 2% to 5% in the immediate future to 10% in next 5 years. Expansion of capacity by 50% will help maintain company's leadership in domestic market as also service its export to sophisticated markets across the globe. 

CAR TYRES 

During the year under report, the Company continued its thrust on partnering growth with OEM Customers. Various consumer oriented activities such as 'Zip and Sip' offer, participation in 'Indian Oil Extra' Rewards programme and 'Monsoon Protection' offer were undertaken to strengthen bondage with customers. Product aesthetics, introduction of newer range, addressing product requirement across different types of cars continued to be important focus areas for radial car tyre segment. Various new sizes and patterns such as Vectra and Zephyr for car radials were introduced for the new models launched by the auto manufacturers, Through relentless efforts, the Company achieved Unique Distinction of being ranked No,1 in Customer Satisfaction by JD Power Asicz Pacific, a world leader in assessing customer satisfaction in the automotive segment, Expansion in capacity by 30% shall enable the company to increase its participation in replacement as well as OE segments. 

STEEL WHEELS 

At the forefront of all car consumer-reach programs has been the 'Steel Wheels' retail network as an important Customer Interface touch point. This year, Steel Wheels played a significant role creating awareness on tubeless tyres usage. Over hundred outlets across the country cater thousands of customers with value added services including wheel alignment, wheel balancing and automated tyre changer apart from providing ready guide on tyre care in a pleasant ambience. 

ORIGINAL EQUIPMENT MANUFACTURERS (OEMs) 

India is fast emerging as a global automotive hub. The Automotive industry is maturing and New Models being introduced at a rapid pace is a challenge for the tyre industry. It is our privilege to be a major business partner to highly prestigious OEM manufacturers with increased share of Business both in Commercial as well as Passenger categories. 

It may be recalled that JK Tyre product development group was entrusted with the task of developing tyres for Maruti Udyog's New Generation Global Car. It is heartening that during the year, JK Tyre was listed as a single source vendor for Maruti 'Swift' Car. Mahindra and Mahindra Limited selected the Company for supplying specially developed ELANZO tyres for their luxury Scorpio vehicle. 

OFF THE ROAD TYRE (OTR) 

Company has put renewed thrust on development of OTR Tyre business. Both production and sales increased by various folds in the last four years with JK Tyre OTRs attaining improved market share. 

Continued thrust on development of new sizes of products has helped the company to emerge as the best in class in the domestic replacement market. 

UDYOG RATAN AWARD :

PHDCCI CENTENARY CELEBRATIONS IN MADHYA PRADESH; DISTINGUISHED PERSONALITIES HONORED FOR THEIR CONTRIBUTION TOWARDS THE DEVELOPMENT OF THE STATE.

Mr. Raghupati Singhania, Vice Chairman and Managing Director, JK Tyre receives the Udyog Ratna Award and announces a Rs. 2000.000 Millions expansion plan for the JK Tyre plant in Banmore, M.P.

New Delhi: The Chief Minister of Madhya Pradesh, Mr. Babulal Gaur and Mr. Kailash Chawla, Minister for Commerce and Industry, Employment and Commercial Taxes, M.P, felicitated distinguished personalities for their contribution to the development of the state, at a function held at the Nur-us-Sabha Palace in the state capital on Monday, April 25, 2005. Upon receiving the Udyog Ratna Award, Mr. Raghupati Singhania, who is also the Chairman of the Centenary Celebrations of PHDCCI, announced a Rs. 2000 millions-expansion plan for the JK Tyre plant in Banmore, Madhya Pradesh spread over the next three years. JK Tyre's Madhya Pradesh Plant located at Banmore, District Morena started production in 1991 with a capacity of 0.570 Millions tyres per annum, producing a range of tyres and Passenger Radials in particular.

Commenting on the role of PHDCCI, Mr. Raghupati Singhania, Chairman, Centenary Celebrations, said, "I am happy to be associated with the Chamber's Centenary Celebrations. Traversing from the colonial to the post-independence era of planning and controls to the liberalization of the economy in the nineties, the Chamber has achieved the distinguished stature of an apex Chamber with a wide regional focus. The chambers spectrum of services to the community has also expanded, giving it an ideal blend of regional development and grass-root operations. With its international linkages, particularly the MoU's with Chambers of Commerce in various countries have added to the chamber's capabilities in promotion of international trade."

Other distinguished personalities awarded for their contribution towards the development of the state include: C. K. Birla - Chairman, Hindustan Motors, S P Oswal - Chairman, Abhay Firodia - CMD, Bajaj Tempo Limited, Adi Godrej - Chairman, Godrej, Shashi Ruia - Chairman, Essar, Arun Bharatram - CMD, SRF, OP Lohia - MD, Indo Rama Synthetics, Sunil Bharti Mittal - CMD, Bharti Group, Malvinder Mohan Singh - President, Ranbaxy laboratories, Jaiprakash Gaur - CMD, Jaypee Group, State Bank of Indore - MD C. Narsimhan, Ramesh Agarwal, Bhaskar Group, S. Matsunga, MD, Bridgestone India Private Limited, Ashok Sinha - BPCL, Ashok Puri - BHEL, S.Shandilya - Eicher, among other distinguished personalities.

Press Releases

J K INDUSTRIES COMPLETES RESTRUCTURING :

Demerger of Sugar and Agri-Genetics and Merger of Vikrant Tyres creates a Tyre giant

The Board of Directors of J K Industries Limited (JKI), a flagship company of H S Singhania Group, today announced the completion of the restructuring of its Businesses. As a result JKI, upon demerger of its non-tyre businesses and merger of Vikrant Tyres has emerged as a Tyre giant with Automobile Tyres as its sole business.

Non tyre business viz. Sugar and Agri seeds have been demerged into two separate entities namely J K Sugar Limited (JKSL) and J K Agri-genetics Limited (JKAGL) respectively.

Commenting on the restructuring initiatives, Mr Hari Shankar Singhania, Chairman, JKI said "This is a forward looking strategic step for the Company by creating strong business focussed entities, which will be able to leverage their core competencies in the competitive business environment both in the domestic as well as global markets. This reorganization and creation of three business focused entities opens up tremendous possibilities of strategic alliances and enhancement of technological prowess which would result in further strengthening market leadership in these important sectors of Indian Economy".

JKI's main business is Tyres sold under the well known brand "J K Tyre". Some time back the Company had made foray into Agri businesses by setting up facility for manufacture of Sugar and established research farms and facilities for production of Hybrid and High Yielding Seeds. These businesses will now have better focus on a stand alone basis.

JKI had acquired majority stake in Vikrant Tyres Limited (VTL) in 1997 and turned it around in a short period of one year. Merger of VTL with JKI is a logical step forward to achieve the benefits of scale, synergy, logistics and marketing, besides greater financial strength. The consolidated tyre entity will increase its global competitive strength thereby significantly contributing to better profitability and future growth, thus maximizing shareholder value.

J.K. Tyre is the foremost manufacturer of four wheeler tyres and is the largest bus and truck tyre manufacturer. Mr Singhania added that JK Tyre pioneered radial technology in India way back in 1977 and is the leader in radials. It is the only Indian manufacturer producing the entire range of truck/bus, LCV, MUV, Jeep, Car and Tractor radials. It has taken upon the challenge of leading the radial revolution in commercial vehicle segments as well. JK Tyre is first and the only manufacturer of truck radials in India. It has a state-of-the-art Truck Radial plant in Mysore which is poised for further expansion of the capacity.

JK Tyre's expansion of bias truck tyres and passenger radials is nearing completion, which will raise its radial passenger capacity by 50%. This shall further strengthen its market share. JKI's turnover in a years time would be Rs.25000 millions, which is expected to increase to Rs.50000 Millions by the year 2006. JK Tyre is the largest exporter of tyres from India accounting for 30% of total tyre exports. It exports to over 60 countries in all the 6 continents including USA, Latin America, Africas, Middle East, South East Asia, Australia, etc. It has launched its products in China and is also out-sourcing tyres from China for international markets.

JK Sugar's current capacity of 4,300 TCD is poised for expansion to 5,000 TCD. Its co-generation capacity of 19 MW and export of power to UP Power Corporation adds great value to the business.

JK Agri-Genetics Limited is a leading producer of Hi-yielding Hybrid seeds under its brand name "JK Seeds". It produces seeds for a large variety of crops such as Bajra, Jowar, Cotton, Maize, Rice, Sun Flower, Tomato, etc. It is the largest in Bajra and leader in Jowar and Cotton. JK Seeds are sown by 0.800 Millions farmers in 15 states covering an area of 2 million acres under cultivation. It has a state-of-the-art Biotechnology Lab in Hyderabad and research farms to carry out its research activities.

Both these Agri businesses of Sugar and Hybrid Seeds have tremendous scope for growth, looking at India's fundamental strength in Agriculture.

The shareholders of JKI will reap benefits by creation of these 3 focused entities. They will be receiving the share of J K Sugar and J K Agri-genetics as well in the same proportion as their existing holding in JKI.

The shareholders of VTL shall also be rewarded. For every holder of 100 shares of VTL, the shareholder will be receiving 45 shares of JKI i.e. in the proportion of 9 shares of JKI for every 20 shares held in VTL. This is a win win situation for the shareholders in every respect.

JK board clears recast, Vikrant merger ratio

NEW DELHI, Oct. 7

THE board of JK Industries Ltd (JKI) today gave its nod for a proposal to de-merge the existing sugar and agri-genetics businesses into two separate companies. The board also gave its approval for a 2:5 equity share-swap ratio for merging its subsidiary, Vikrant Tyres Ltd (VTL) with JKI.

"This restructuring exercise will help JKI emerge as a focused business entity, which would be manufacturing only tyres. The shareholders of Vikrant Tyres will get two shares of JKI for every five shares of Vikrant currently held by them," a senior JKI official told Business Line here.

The official also said that the shareholders of JKI are to get 15 shares of the new sugar company for every 100 shares held by them in JKI. Similarly, the shareholders of JKI would get 10 shares of the agri-genetics company for every 100 shares of JKI held by them. The merger of Vikrant Tyres with JKI is yet to receive the nod of the financial institutions and the shareholders of the two companies. The board of VTL, which met today, gave its nod for the 2:5 share swap ratio.

A senior JKI official said that the entire restructuring exercise (demerger of the two businesses and merger of VTL with itself) would result in a 25 per cent reduction in the paid-up capital of the JKI. "From a current paid-up capital of about Rs 349.6 millions, the paid-up capital of JKI would decline by 25 per cent to about Rs 259.1 millions," the official said.

The new sugar entity will have the capacity of 4,300 TCD, which is slated to expand to 5,000 TCD after the demerger.

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. 44.09
UK Pound	1	Rs. 86.59
Euro	1	Rs. 57.92

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	5
--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		52

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		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

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