MIRA INFORM REPORT

Report Date :

21.02.2007

IDENTIFICATION DETAILS

Name :	APOLLO TYRES LIMITED
Registered Office :	6^th Floor, Cherupushpam Building, Shanmugham Road, Kochi – 682 031, Kerala
Country:	India
Financials (as on):	31.03.2006
Date of Incorporation :	28.09.1972
Com. Reg. No.:	09-2449
CIN No.: [Company Identification No.]	L25111KL1972PLC002449
TAN No.: [Tax Deduction & Collection Account No.]	CHNA01479C
PAN No.: [Permanent Account No.]	AAACA6990Q
Legal Form :	A Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing of Automobile Tyres, Automobile Tubes, Automobile Flaps and Camel Black/Rethreading Materials.

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 25000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. Available information indicates high financial responsibility of the company. Their trade relations are fair. Financial position is good. Payments are usually correct and as per commitments. The company can be considered good for normal for business dealings. It can be regarded as a promising business partner in a medium to long-run.

LOCATIONS

Registered Office :	6^th Floor, Cherupushpam Building, Shanmugham Road, Kochi – 682 031, Kerala, India
Tel. No.:	91-484-22381902 / 22381903 / 22381895 / 22381808 / 22381895 /22372767 / 22370780
Fax No.:	91-484-22370351
E-Mail :	info@apollotyres.com
Website :	http://www.apollotyres.com
Corporate Office :	Apollo House, 7, Institutional Area, Sector 32, Gurgaon - 122 001, Haryana
Tel. No.:	91-124-6383002 (17 Lines)
Fax No.:	91-124-6383017 / 3021
E-Mail :	pnwahal@apollotyres.com
Factory :	v Perambra, P.O. Chalakudy, Trichur – 680 689, Kerala v Limda, Taluka Waghodia, Dist. Vadodara – 391 760, Gujarat v Ranjangaon, Nagar Road, Taluka Shirur, District Pune – 419 209, Maharashtra
Branches :	4^th Floor, 60 Skylark Building, Nehru Place, New Delhi – 110 019
Tel. No.:	91-11-2643 1005
Fax No.:	91-11-2647 1283

DIRECTORS

Name :	Mr. Onkar S. Kanwar
Designation :	Chairman & Managing Director
Name :	Mr. Jean Marc Francois
Designation :	Director (Michelin Nominee Director)
Name :	Mr. K. Jacob Thomas
Designation :	Director
Name :	Mr. John Mathai
Designation :	Director (Kerala Government Nominee)
Name :	Mr. M. R. B. Punja
Designation :	Director
Name :	Mr. Neeraj Kanwar
Designation :	Joint Managing Director
Name :	Mr. Nimesh N. Kampani
Designation :	Director
Name :	Suman Sarkar
Designation :	Chief (Strategy & Business Operations & Whole Time Director)
Name :	Mr. Raaja Kanwar
Designation :	Director
Name :	Mr. Robert Steinmetz
Designation :	Director
Name :	Mr. Shardul S. Shroff
Designation :	Director
Name :	Mr. K Jose Cyriac
Designation :	Director (Kerala Government Nominee)
Name :	Mr. U. S. Oberoi
Designation :	Chief (Project & Corp. Affairs) & Whole Time Director
Name :	Mr. Dr. S. Narayan
Designation :	Director
Name :	Mr. P. N. Wahal
Designation :	Company Secretary
Name:		Mr. Onkar S. Kanwar
Designation:		Chairman & Managing Director
Age:		56 years
Qualification:		B.Sc., Bachelor of Administration (California)
Experience:		37 years
Date of Joining:		1^st February, 1988
Previous Employment:		BST Manufacturing Limited
Name:		Mr. T. Balakrishna
Designation:		Kerala Government Nominee

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters ' holdings
Indian Promoters	14315400	37.34
Non Promoter's holdings
Mutual Funds and UTI	3326600	8.68
Banks, Financial Institutions and Insurance Companies	3134486	8.18
FIIs	1679472	4.38
Others
Private Corporate Bodies	4497119	11.73
NRIs / OCBs / Foreign Others	316470	0.83
Government	500000	1.30
Others	5712500	14.90
General Public	4855930	12.67
TOTAL	38337977	100.00

As on 31.12.2006

No	Category of Shareholders	Number of Share holders	Total number of shares	Number of shares held in demat form	Total shareholding as a percentage of total number of shares
					As a percentage of (A+B)	As a percentage of (A+B+C)
(A)	Shareholding of Promoter & Promoter Group
1	Indian
a	Individual / HUF	6	221032	221032	0.48	0.48
b	Cent. Govt / State Govt	0	0	0	0.00	0.00
c	Bodies Corporate	12	14827133	14826238	31.95	31.95
d	Financial Inst. / Banks	0	0	0	0.00	0.00
e	Any Other (Specify)	0	0	0	0.00	0.00
	Sub Total (A) (1)	18	15048165	15047270	32.43	32.43
2	Foreign
a	Individuals (NRI / Foreigners)	0	0	0	0.00	0.00
b	Bodies Corporate	0	0	0	0.00	0.00
c	Institutions	0	0	0	0.00	0.00
d	Any Other (Specify)	0	0	0	0.00	0.00
	Sub Total (A) (2)	0	0	0	0.00	0.00
	Total shareholding of Promoter & Promoter Group (A) = (A) (1) + (A) (2)	18	15048165	15047270	32.43	32.43
B	Public Shareholding
1	Institutions
a	Mutual Funds / UTI	42	11719864	11588394	25.26	24.97
b	Financial Inst. / Banks	16	32900	18675	0.07	0.04
c	Cent. Govt / State Govt	3	1000150	1000000	2.16	2.16
d	Venture Capital Funds	0	0	0	0.00	0.00
e	Insurance Companies	5	1079198	1070098	2.33	2.31
f	Foreign Institutional Investors	26	5829265	5778802	12.56	12.45
g	Foreign Venture Capital Investors	0	0	0	0.00	0.00
h	Any Other (Specify)
	Sub Tota (B) (1)	92	19661377	19455969	42.37	41.93
2	Non-Institutions
a	Bodies Corporate
	Indian Bodies Corporate	765	1683757	1646806	3.63	3.55
b	Individulas -
	(i) Individual shareholders holding nominal share capital upto Rs. 1 lac	45316	3802007	2014335	8.19	4.34
	(ii) Individual shareholders holding nominal share capital in excess of Rs. 1 lac	7	233205	209905	0.50	0.45
c	Any Other (Specify)
	Foreign Bodies Corporate	3	5713750	1250	12.31	0.00
	NRIs	1149	260216	113349	0.56	0.24
	Sub Total (B) (2)	47240	11692935	3985645	25.20	8.59
	Total Public shareholding (B) = (B) (1) + (B) (2)	47332	31354312	23441614	67.57	50.52
	Total (A) + (B)	47350	46402477	38488884	100.00	82.95
C	Shares held by Custodians & against which Depository Receipts have been issued	0	0	0	0.00	0.00
	GRAND TOTAL (A)+(B)+(C)	47350	46402477	38488884	100.00	82.95

BUSINESS DETAILS

Line of Business :

Manufacturing of Automobile Tyres, Automobile Tubes, Automobile Flaps and Camel Black/Rethreading Materials.

Products :

ITC CODE NO.:	Tyres	Flaps	Tubes
Passenger/Jeep	40111000		40131001
Bus/Lorries	40112000	40129004	40131002
Off the Road	40119901		40131003
Tractor Tyres	40119902		40131004

Exports to :

Middle East, Pakistan, Africa & South East Asia

Imports from :

Germany, Singapore and U.K.

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Automobile Tyres	Nos.	7934272	7029973
Automobile Tubes	Nos.	6522560	6177585
Automobile Flaps	Nos.	--	3188527
Alloy Wheels	Nos.	--	3528
Camel Black/Retreading Materials	MT	3000	--

GENERAL INFORMATION

No. of Employees :

5257

Bankers :

v State Bank of India, Kochi, Kerala

v Bank of India, Kochi, Kerala

v Punjab National Bank, Kochi, Kerala

v State Bank of Mysore, Kochi, Kerala

v State Bank of Patiala, Kochi, Kerala

v State Bank of Travancore, Kochi, Kerala

v ICICI Bank Limited, Kochi, Kerala

v Union Bank of India, Kochi, Kerala

v The Federal Bank Limited, Kochi, Kerala

v Canara Bank, Kochi, Kerala

v IDBI Bank, Kochi, Kerala

v Standard Chartered Grindlays Bank

v Citi Bank

Facilities :

Secured Loan	Amount (In Millions)	Amount (In Millions)
Debentures:
30,10,000 -14.5% Partly Convertible Debentures of Rs. 222/- each	668.200
Less: Converted into Equity Shares to date	276.900
	391.300
Less : Redeemed to date	391.300
		0.000
10,00,000 -11.25% Non Convertible Debentures of Rs. 100/- each	100.000
Less: Redeemed to date	33.300
		66.700
Terms Loan:
From International Finance Corporation
-Foreign Currency	678.700
- Rupee Loan	535.800
		1214.500
From Banks:
ICICI - Foreign Currency		473.500
State Bank of India		1000.000
From Institutions :
G E Capital Services India		225.000
Other Loans :
Banks - Cash Credit		171.700
Sales Tax Loan		112.600
Unsecured Loan:
Commercial Paper
Short Term Loans:
- From Banks		2240.000
- From others		750.000
Total:		6645.300

NOTES: SECURED LOANS

1. 10,00,000 -11.25% Non Convertible Debentures of Rs. 100 each issued at par and allotted on 26th June, 2002 are redeemable in three equal annual instalments at the end of 3rd, 4th and 5th year from the date of allotment of debentures. The first instalment of Rs. 33.3 Millions was paid during the current year. The above debentures and interest payable thereon are secured by a par! passu first charge on the Company's land and premises at Chalakudy, Kerala State and at village Limda, Gujarat State together with the Factory Buildings, Plant & Machinery and Equipments, both present and future.

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

- Afirst and fixed charge on the Company's land and premises situated at Gurgaon, Haryana State together with all existing and future buildings, erections and structures.

- A pari passu first charge on all the moveable assets except current assets of the Company.

- A second charge on all the current assets of the Company.

3. External Commercial Borrowing from ICICI Bank Limited, Singapore 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 State together with the Factory Buildings, Plant & Machinery and Equipments both present and future.

- A pari passu first charge on all the moveble assets except current assets at Chalakudy, Kerala State and at village Limda, Gujarat State.

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

- A second charge on all the current assets of the Company.

5. 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 State 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, Gujarat State.

6. Cash Credits and Guarantees from Banks are secured by Hypothecation of Raw materials, Work-in-Process, Stocks, Stores and

Book Debts ranking in priority to the charge created in respect of the IFC Loan and also by second charge on the Company's land at Chalakudy, Kerala State, at village Limda, Gujarat State and on part of the Land at Ranjangaon in the State of Maharashtra together with the Factory Buildings, Plant & Machinery and Equipments, both present and future.

7. The Company had availed interest free Sales Tax Loan from Gujarat State Government amounting to Rs. 112.6 Millions as on 31^st March, 2006. These loans are secured by a pari passu charge on the entire fixed assets of the Company, both present and future situated at village Limda in Gujarat State. The said loan is repayable in six equal annual installments on the expiry of 14 years from the commencement of commercial production i.e. 31st May, 2006.

8. Loans, other than debentures, include Rs. 846.0 Millions (Rs.333.9 Millions) repayable within one year.

Banking Relations :	Satisfactory
Auditors :	Fraser & Ross Chartered Accountants
Associates :	v Dusk Valley Technologies Limited v Travel Tracks Private Limited v Apollo International Limited v Dusk Valley Global Services (Private) Limited v Raunaq Finance Limited v Apollo Tubes Limited v Bharat Gears Limited v Gujarat Perstorp Electronics Limited v Encrop E Services Limited v Gujarat Perstorp Electronics Limited (under liquidation) v Landmark Farms & Housing (P) Limited v Sunlife Tradelinks (P) Limited
Subsidiaries:	v Premier Tyres Limited v Apollo Automotive Tyres Limited v Apollo Radial Tyres Limited v Apollo (Mauritius) Holding Private Limited v Apollo (South Africa) Holding Private Limited
Membership :	Confederation of Indian Industry
Joint Venture Company:	Michelin Apollo Tyres Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
48,000,000	Equity Shares	Rs.10/- each	Rs.480.000 Millions
200,000	Preference Shares	Rs.100/- each	Rs. 20.000 Millions
	GRAND TOTAL		Rs.500.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
38337977	Equity Shares	Rs.10/- each	Rs. 383.379 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital	383.400	383.400	383.400
2] Reserves & Surplus	5956.800	5384.000	5335.900
NETWORTH	6340.200	5767.400	5719.300
LOAN FUNDS
1] Secured Loans	3810.000	3487.500	3764.100
2] Unsecured Loans	3690.000	1950.600	450.000
TOTAL BORROWING	7500.000	5438.100	4214.100
DEFERRED TAX LIABILITIES	1052.100	1033.500	0.000
TOTAL	14892.300	12239.000	9933.400
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	8406.700	7501.300	6480.800
Capital work-in-progress	779.300	843.300	658.400
INVESTMENTS	5.300	544.800	642.100
CURRENT ASSETS, LOANS & ADVANCES
Inventories	4194.100	3301.200	2626.600
Sundry Debtors	1751.400	1565.200	877.800
Cash & Bank Balances	2313.600	1104.300	1063.500
Other Current Assets	2.100	00.200	0.000
Loans & Advances	1843.900	1464.600	3286.900
Total Current Assets	10105.100	7435.500	7854.800
Less : CURRENT LIABILITIES & PROVISIONS
Current Liabilities	4157.200	3801.400	5719.200
Provisions	249.500	288.300	0.000
Total Current Liabilities	4406.700	4089.700	5719.200
Net Current Assets	5698.400	3345.800	2135.600
MISCELLANEOUS EXPENSES	2.600	3.800	16.500
TOTAL	14892.300	12239.000	9933.400

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	30.03.2005	31.03.2004
Sales Turnover [including other income]	26267.000	22453.000	23686.800
Profit/(Loss) Before Tax	1005.700	849.100	1052.300
Provision for Taxation	282.000	172.800	348.100
Profit/(Loss) After Tax	723.700	676.300	704.200
Export Value	8.800	22.000	NA
Import Value	4983.400	4647.500	NA
Total Expenditure	24533.400	21036.000	22634.500

SUMMARISED RESULTS

PARTICULARS	30.06.2006 (1^st Quarter)	30.09.2006 (2^nd Quarter)	31.12.2006 (3^rd Quarter)
Sales Turnover	7572.700	7673.300	8575.200
Other Income	1.000	1.700	1.100
Total Income	7573.700	7675.000	8576.300
Total Expenditure	7005.300	7075.900	7650.800
Operating Profit	568.400	599.100	925.500
Interest	135.400	127.800	129.900
Gross Profit	433.000	471.300	795.600
Depreciation	190.000	180.000	182.500
Tax	50.000	73.200	155.600
Reported PAT	162.600	193.700	350.700

Notes

200606 Quarter 1

Expenditure Includes (Increase) / Decrease in Work in Process & Finished Goods Rs (154.60) million Consumption of Raw Materials Rs 5360.40 million Staff Cost Rs 485.10 million Other Expenses Rs 1314.40 million Tax Includes Provision for Current Tax Rs 42.00 million Deferred Tax Rs 30.40 million Fringe Benefit Tax Rs 8.00 million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 05 Complaints disposed off during the quarter 05 Complaints unresolved at the end of the quarter Nil 1. The Company's operation comprises of One segment - Tyres, Tubes & Flaps and therefore, the figures shown above relate to that segment. 2. The Results for the current quarter have been affected due to unprecedented increase in the raw material prices. 3. During the quarter, the company acquired 100% shareholding control of Dunlop Tyres International (Pty) Limited (DTIPL), South Africa along with some of its subsidiary/associate companies in Zimbabwe and United Kingdom. 4. The revised Accounting Standard AS - 15 on Employee Benefits issued by the ICAI which became effective from April 01, 2006 has been complied with and there is no significant impact for the current quarter. The adjustments on account of transitional provisions will be dealt with in the revenue reserves at the year end. 5. The above results were taken on record by the Board Of Directors at its meeting held on July 19, 2006. 6. Previous Periods' figures have been regrouped/rearranged wherever considered necessary.

2006-09 Quarter 2

Expenditure Includes (Increase) / Decrease in Work in Process & Finished Goods Rs (702.10) million Consumption of Raw Materials Rs 5934.20 million Staff Cost Rs 487.30 million Other Expenses Rs 1356.50 million Tax Includes Provision for Current Tax Rs 64.20 million Fringe Benefit Tax Rs 9.00 million Deferred Tax Rs 24.40 million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 07 Complaints disposed off during the quarter 07 Complaints unresolved at the end of the quarter Nil 1. The Company's operation comprises of one segment - Tyres, Tubes & Flaps and therefore, the figures shown above relate to that segment. 2. The Board / Members of the Company have approved a proposal to raise funds through Qualified Institutional Placement (QIP) upto Rs 2500 million and through preferential allotment of 4 millions warrants to Promoter Group in accordance with SEBI (DIP) guidelines, 2000 for the purpose of financing of the acquisition of Dunlop Tyres International (Pty) Limited, South Africa and also to meet normal capital expenditure requirements as well as other general business needs of the Company. 3. The revised Accounting Standard AS - 15 on Employee Benefits issued by the ICAI which became effective from April 01, 2006 has been complied with and there is no significant impact for the current quarter. The adjustments on account of transitional provisions will be dealt with in the revenue reserves at the year end. 4. The above results were taken on record by committee of Directors on behalf of the Board at its meeting held on October 12, 2006. 5. Previous periods & figures have been regrouped/rearranged wherever considered necessary.

200612 Quarter 3

Note Expenditure Includes (Increase) / Decrease in Work in Process & Finished Goods Rs 203.00 million Consumption of Raw Materials Rs 5517.40 million Staff Cost Rs 516.60 million Other Expenses Rs 1413.80 million Tax Includes Provision for Current Tax Rs 147.10 million Fringe Benefit Tax Rs 8.50 million Deferred Tax Rs 106.80 million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 06 Complaints disposed off during the quarter 06 Complaints unresolved at the end of the quarter Nil 1. The Company's operation comprises of one segment - Tyres, Tubes & Flaps and therefore, the figures shown above relate to that segment. 2. The Company issued 8,064,500 Equity Share at Rs 310 per share (including securities premium of Rs 300 per share) to Qualified Institutional Buyers (QIB) on October 27, 2006. The Company also issued 40 Lacs share warrants to the Promoter Group in accordance with SEBI(DIP) guidelines 2000 on October 18, 2006. 3. The revised Accounting Standard AS - 15 on Employee Benefits issued by the ICAI which became effective from April 01, 2006 has been complied with and there is no significant impact for the current quarter. The adjustments on account of transitional provisions will be dealt with in the revenue reserves at the year end. 4. The above results were taken on record by the Board at its meeting held on January 25, 2007. 5. Previous periods figures have been regrouped/rearranged wherever considered necessary.

KEY RATION

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	1.07	0.84	0.72
Long Term Debt Equity Ratio	0.47	0.42	0.39
Current Ratio	0.98	0.98	1.05
TURNOVER RATIOS
Fixed Asset Ratio	2.45	2.51	2.74
Inventory	8.01	8.96	9.66
Debtors	18.10	21.75	28.55
Interest Cover Ratio	2.84	2.37	4.30
Operating Profit Margin (%)	7.89	6.44	7.82
Profit Before Interest and Tax Margin (%)	5.47	4.30	5.93
Cash Profit Margin (%)	5.03	4.12	4.93
Adjusted Net Profit Margin (%)	2.60	1.98	3.04
Return on Capital Employed (%)	13.14	10.85	16.30
Return on Net Worth (%)	12.99	9.20	14.30

STOCK PRICES

Face Value	Rs.10/- each
High	Rs.336.00/-
Low	Rs.326.10/-

LOCAL AGENCY FURTHER INFORMATION

The company has been accredited with ISO 9001 Certification.

History

The company commenced its commercial production in 1977.

Subject is the flagship company of the Raunaq Singh Group. Mahindra and Mahindra and TAFC are its major OEM clients. The Company has an MoU with United Tyres, a Canada based giant, for a 50% buy-back agreement and a joint venture agreement with Continental, Germany, for passenger car radial tyre factory at Pune.

It was the first to receive the ISO 9001 accreditation in the Indian Tyre Industry for its entire range of brands. ATL took over Premier Tyres in April, 1995 in which its sick Stallions Tyres came under the Apollo Brand name.

In 1999-2000, the projects of radial passenger capacity of 2000 tyres per day at Vadodara plant and 50000 two/three wheeler tyres at conversion unit had been successfully implemented. This has resulted in improving market shares in the respective segment.

It was the first to receive the ISO 9001 accreditation in the Indian Tyre Industry had been successfully implemented, this has resulted in improving market shares in the respective segment.

It has invested Rs. 2300.000 millions in Kerala at its’ Perambra plant and the expansion programme is being implemented in a progressive manner. The company would invest Rs. 1500.000 millions for the manufacture of radial tyres at Vadodara and the project activities is in full swing. The first of the Truck radial Tyres was set to roll out by April, 2004.

During the year 2002-03 the capacity of the Perambra plant was increased from 147 tons to 200 tons per day. The expansion programme was completed in March, 2003. As of May 2003 the Share Capital of the company stands reduced to 326.300 millions due to buy back of 3.690 millions shares @ Rs. 90/- per share. The expansion programme for its subsidiary company which is under lease with company viz Premier Tyres Limited is being implemented in progressive manner. After the expansion programme the capacity would be enhanced from 58 tons per day to 78 tons per day.

OPERATIONS

Sales from operations during the financial year ended March 31, 2006 amounted to an all time high of Rs. 3,0021.200 Millions as against Rs. 2,6568.100 Millions during the previous year, recording a growth of approx.13%. Operating profit, before interest and depreciation, amounted to Rs. 2239.200 Millions as against Rs. 1846.400 Millions during the previous year, registering an increase of approx. 21.27%. Net profit, after providing for interest, depreciation, tax and exceptional items amounted to Rs. 781.700 Millions, as against Rs. 676.300 Millions during the previous year.

The strong performance of Apollo is a combination of high growth in sales alongwith enhanced operations management, better working capital management, aggressive marketing and overall cost reduction measures adopted by the Company.

During the year, the Company realigned its relationship with Michelin and exited from the Joint Venture Company "Michelin Apollo Tyres (Private) Limited", as radialization in commercial vehicle tyres segment in Indian markets had not reached anticipated levels. The Company recovered almost its entire investment in the JV through sale of its 49% stake back to Michelin. This re-alignment would enable the Company to utilise the available resources better towards other growth opportunities in short to medium term.

PRODUCTION:

During the year 2005-06, the Company has achieved 12.2% growth in production tonnage by recording production of 0.252 Millions MT as against 0.224 Millions MT in the previous year. As a result of successful implementation of expansion programme, the total capacity across the plants has increased to 704 MT/day from 628 MT/day.

DIVIDEND:

The directors recommend for the approval a dividend of Rs. 4.50 per equity share for the financial year 2005-06. There will be no tax deduction at source on dividend payments, but the Company will have to pay tax on dividend @ 14.025%, 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 details furnished by the depositories, determined with reference to the book closure from 23-8-2006 to 25-8-2006 (both days inclusive).

RAW MATERIALS:

In the year under report, the raw material prices continued their upward march with record highs being recorded for their major raw materials viz. Natural rubber, Nylon tyre cord fabric, Carbon Black, Synthetic Rubber and Rubber Chemicals. The unabated increase in prices continued throughout the year with assured supplies being an important factor for the coming year.

The year under report saw Natural Rubber prices scaling new peaks in the international markets with weather playing a major role in disrupting supplies. There were drought conditions in early part of the year in Thailand, China lost rubber plantations in the Hainan province due to typhoon in September, 2005 followed by floods in Thailand and Malaysia in December, 2005.

With international natural rubber prices ruling high and India being a part of the global market, exports of rubber from India adversely affected the demand and supply position. The inverted customs duty structure on natural rubber continues wherein the customs duty on imported natural rubber is 20% as against 12.5% customs duty on import of tyres.

Petro based raw materials namely Nylon Tyre Cord Fabric, Carbon Black, Synthetic Rubber and Rubber Chemicals went up due to crude prices breaching the barrier of USD 70/barrel and settling at higher levels over the previous year. The adverse demand and supply position for Synthetic Rubber and Rubber Chemicals led to phenomenal increase in prices for these raw materials. The antidumping duty on import of Nylon Tyre Cord Fabric and Rubber Chemicals further contributed to the increased costs.

The Company continued its thrust on strategic partnership with vendors and expanding the sourcing network across the world to get competitive prices.

EXPORTS:

The increasing raw material costs on one hand and increasing radialization on the other continued to pose challenges in the export markets. Through a better product mix, development of new markets and brand building, we have been able to register increase in sales volumes.

EXPANSION PROGRAMME / FUTURE OUTLOOK:

On 21st April, 2006, the Company completed the Company's first International acquisition of 'Dunlop Tyres International (Pty.) Limited' (DTIPL), South Africa. DTIPL, South Africa has two plants with a total capacity of 50,000 MT p.a. With the acquisition of DTIPL, ATL shall also get control over certain subsidiaries of DTIPL, having plants at Bulawayo and Harare, Zimbabwe.

The acquisition will add enormous value to the Company. It has a complementary set of products and technology and will allow Apollo access to the African, European and Australian markets. This acquisition has helped the Company to become number one tyre Company in India and establish footprints in global arena.

The current expansion plan to set up a high performance PCR & LTR facility is almost complete. Out of the proposed 0.3 millions PCR tyre capacity per month, the Company achieved 0.21 million/month. Against 0.05 million per month of LTR, a capacity of 0.04 million per month has been achieved. The balance capacity augmentation will be completed during the next year. The Company's plans for production of high performance tyres is progressing satisfactorily. Optimisation of bias plant capacities in Limda & Perambra plants are successfully completed. The Company is planning to set up a state of the art tyre manufacturing facility in high growth segments like OTR during the current year. The efforts for continuous improvement in plant efficiencies are being put in, thus, reducing conversion costs and improving operational efficiencies.

FIXED ASSETS

Land, Leasehold Land, Buildings, Water Supply Installation, Plant & Machinery, Electrical Installation, Furniture & Fixture, Office Equipments and Vehicles.

Press Releases

07/08/2006

Apollo Tyres Limited signs MoU with Tamil Nadu government To set up a state-of-the-art radial tyre manufacturing facility

Gurgaon, Haryana, August 7, 2006: Mr Onkar S Kanwar, Chairman and Managing Director of Apollo Tyres Limited, today signed a Memorandum of Understanding with the Tamil Nadu government to acquire 135 acres of land, in the Oragadam Industrial Park, 11 km from Sriperumbudur, Tamil Nadu, for the construction of a radial facility.

“They intend to build one of the finest and most progressive radial tyre manufacturing units here in Oragadam. They will be investing Rs 3000 millions in the first stage, with the final investment reaching between Rs 4500 to 5200 millions by the end of five years. The radial technology which will be used, is currently being developed by us in Apollo, using their internal R&D expertise. This fresh capacity will allow us to produce technology products across categories for both the OE and replacement markets,” said Mr Onkar S Kanwar, Chairman and Managing Director, Apollo Tyres Limited.

Apollo Tyres crossed a turnover of Rs 30000 millions in 2005-06. The company currently has three tyre and one tube plant in India. The Tamil Nadu unit will be used exclusively for the manufacture of high quality truck, bus and light truck radial tyres, along with high and ultra-high performance passenger car radial tyres for the domestic and the export markets. The company expects to complete the Tamil Nadu project within a time span of 24 to 36 months.

Tamil Nadu was chosen as a location due to its proximity to the rubber growing region, the presence of automobile manufacturers in the state, good connectivity to the domestic market and proximity to a port for ease of import of raw materials and export of finished products. The proactive approach of the Tamil Nadu government towards new investments and the availability of a ready local market with skilled manpower played a role in choosing the appropriate location.

04.09.2006

Apollo Tyres’ Board of Directors decide to go the QIP way

Raise around Rs 3650 millions through Qualified Institutional Placement and Preferential Allotment

Gurgaon, Haryana, September 4, 2006: The Board of Directors of Apollo Tyres Limited met today to approve the company’s fund raising proposal through preferential allotments. The Board took a decision to raise funds to the tune of Rs 365 millions through placements to Qualified Institutional Buyers (QIB) and preferential allotment of securities to the promoters, as opposed to proceeding with the earlier planned rights-cum-public issue offering.

The Board, on recommendation from the company’s lead managers, decided in favour of Qualified Institutional Placement (QIP) in accordance with the Securities and Exchange Board of India’s (SEBI) guidelines introduced in May 2006. This option allows the company to access the capital markets through a simpler and quicker process.

An amount not exceeding Rs 2500 millions would be raised through private placement of securities through Qualified Institutional Buyers. A further 4.0 millions warrants would be issued to the promoters through a preferential allotment, in accordance with SEBI guidelines.

The Board also approved the formation of a Committee of Directors/ Company Officials, which would implement the sale of the company’s tube manufacturing unit in Ranjangaon, Pune. Apollo’s shareholders had granted their approval on this sale in November 2005, after the Apollo Board of Directors took a decision to sell this unit in keeping with the company’s stated business plan of consolidating around its core strength of producing high-technology tyres.

14/06/2005

Apollo Tyres Limited. Limda plant returns to normalcy
In three shifts work resumes in full swing

Limda, Baroda, 14 June 2005: Normalcy has returned to the Apollo Tyres Limited’s state-of-the-art facility in Limda, outside Baroda city. Since the beginning of the week, production has been underway at the plant in the normal practice of three shifts. Speaking on the same, Mr Satish Agarwal, Head, Limda Plant said, “They are glad that almost all their employees have reported back to work. Their strength lies in the positive spirit that their employees have shown during these past two weeks. Regrettably, some employees had been taken in by vested interests, however their maturity and commitment to the organisation is clearly evident. I am glad to have the Apollo Limda Family together again.”

Apart from impacting production at the plant, the strike would also mean a substantial loss of revenue to the Gujarat government in terms of excise tax paid by the company to the state. Other states will stand to lose revenue in sales tax, at the point of sales.

09/06/2005

Apollo Tyres’ Limda facility returning to normalcy

Limda, Baroda, 9 June, 2005: Apollo Tyres Limited. (ATL) is a leader of the Indian tyre industry and one of the fastest-growing global tyre companies. The Baroda plant of Apollo Tyres is the biggest tyre manufacturing facility not only in India, but also across neighbouring countries in South East Asia. The plants contribution to the group’s annual turnover is in excess of Rs 1,2000.000 Millions. The company closed FY 2004-05 with a gross turnover of Rs 2,6560.000 Millions, a 15% growth over last year.

The Limda facility was set up in 1991 and currently produces 13 to 14,000 tyres a day, both radial and bias tyres for India and the export market. In the past two years Rs 3000.000 Millions have been invested here making it a state-of-the-art facility.

The factory had been running on full capacity when on the midnight of 30 May 2005, the leadership of one of the three trade unions forced work to come to a standstill. Such stoppages without prior notice are deemed illegal by existing labour laws and was prohibited by an order issued by the Government of Gujarat on 7 June 2005. Post which the factory resumed operations.

Certain members of the union issued death threats to workers reporting for duty and even threatened the management of the factory with dire consequences.

Given that only a few individuals are involved in furthering their vested interests, Apollo wishes to stand by all its employees and their welfare. These vested interests have managed to create a temporary distraction. However, the company is of the firm belief that all employees will see through the current situation and return to the Apollo fold. The company has immense faith in its employees who have contributed to its growth over the years and wishes to create a harmonious environment for their growth.

Currently, it has focused all its efforts in ensuring workers can perform in a safe environment.

Said Mr Satish Agarwal, Head, Limda Plant: "At Apollo Tyres their employees are part of their larger family. They have always been out biggest asset and will continue to be so. They will take all safeguards to ensure their well-being. To ensure their growth in future, they plan to continue to upgrade and increase capacity at the Limda plant over the next few years to make it one of the best in the world and a point of pride for Gujarati, and all Indians."

Said Mr Neeraj Kanwar, Chief Operating Officer, Apollo Tyres Limited: "Apollo believes in adhering to the laws of the land while running its operations. It is currently one of biggest employers and revenue generators for the state of Gurajat with the highest industrial wage and perquisites in Baroda. They will continue to work towards the benefit of their employees and other stakeholders."

Apollo Tyres also believes in contributing to the society from which it receives so much support. In keeping with this philosophy, it runs HIV/AIDS awareness Clinics across the country for long-distance truck drivers. In Limda and Ishwarpura villages of Wagodia Taluka, Vadodara, it provides support to the local school, provides healthcare facilities to the villagers and runs women’s adult literacy programmes.

These projects will be scaled up substantially over the coming year. Apollo is also one a sponsors to the Emergency Medical Service being set up for Baroda residents to ensure fast and efficient medical attention in case of an emergency.

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. 44.25
UK Pound	1	Rs. 86.41
Euro	1	Rs. 58.10

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--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		65

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

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