MIRA INFORM REPORT

Report Date :

20.08.2008

IDENTIFICATION DETAILS

Name :	APOLLO TYRES LIMITED

Registered Office :	6^th Floor, Cherupushpam Building, Shanmugham Road, Kochi – 682031, Kerala

Country :	India

Financials (as on) :	31.03.2008

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 :

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 62000000

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 – 682031, Kerala, India
Tel. No.:	91-484-22381902/ 03/ 22381895/ 22381808/ 22381895/22372767/ 22370780
Fax No.:	91-484-22370351
E-Mail :	info@apollotyres.com pn.wahal@apollotyres.com
Website :	http://www.apollotyres.com http://www.surfindia.com/automobile/apollo-tyre-ltd.html

Head/ Corporate Office :	Apollo House, 7, Institutional Area, Sector 32, Gurgaon - 122001, Haryana, India
Tel. No.:	91-124-6383002 to 18
Fax No.:	91-124-6383017 / 3021
E-Mail :	pn.wahal@apollotyres.com

Factory 1:	Perambra Plant P.O Perambra Thrissur, District Kerala - 680689, India
Tel. No.:	91-480-2725901 to 09

Factory 2:	Limda Plant Premier Tyres Limited, Kalamassery Always, Ernakulam (Kerala) – 683104, India
Tel. No.:	91-484-2540261 to 66

Factory 3:	Pune Plant Plot A-1, Ganpati Nagar Road, Ranjan Gaon, (P.O) Taluka Shirur, District Pune-419209
Tel. No.:	91-2138-232287 to 90

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
Age:	56 years
Qualification:	B.Sc., Bachelor of Administration (California)
Experience:	37 years
Date of Joining:	1st February, 1988
Previous Employment:	BST Manufacturing Limited

Name :	Mr. Jean Marc Francois
Designation :	Director (Michelin Nominee Director)

Name :	Mr. A. K. Purwar
Designation :	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 :	Vice Chairman and Joint Managing Director

Name :	Mr. Nimesh N. Kampani
Designation :	Director

Name :	Mrs. Suman Sarkar
Designation :	Chief (Strategy and 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. T. Balakrishna
Designation:	Director (Kerala Government Nominee)

KEY EXECUTIVES

Name :	Mr. P. N. Wahal
Designation :	Head – Secretarial and Company Secretary

Name :	Mr. Ashok S. Lyer
Designation :	Chief – Group Advisory Services

Name :	Mr. Tapan Mitra
Designation :	Chief - Human Resources

Name :	Mr. Satish Sharma
Designation :	Chief – Indian Operations

Name :	Mr. K. Prabhakar
Designation :	Chief - Projects

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 30.06.2008)

Names of Shareholders		Percentage of Holding

Fls/ Banks/ Mutual Funds		20.84
Government of Kerala and Others		1.98
Promotors		37.79
Public		22.37
Fls/ NRIs/ Foreign Bodies Corporate		17.02

Total		100.00

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

Truck
Light Truck
Passenger Car
Farm

Exports:

Countries :

Middle East
Pakistan
Africa and South East Asia

Imports:

Countries :

Germany
Singapore
U.K

PRODUCTION STATUS (As on 31.03.2008)

Particulars	Unit	Installed Capacity	Actual Production
Automobile Tyres	Nos.	9659232	8867443
Automobile Tubes	Nos.	-	76677965
Automobile Flaps	Nos.	-	3867532
Alloy Wheels	Nos.	-	15
Camel Black/Retreading Materials	MT	248040	149176

GENERAL INFORMATION

No. of Employees :

5257

Bankers :

State Bank of India, Kochi, Kerala
Bank of India, Kochi, Kerala
Punjab National Bank, Kochi, Kerala
State Bank of Mysore, Kochi, Kerala
State Bank of Patiala, Kochi, Kerala
State Bank of Travancore, Kochi, Kerala
ICICI Bank Limited, Kochi, Kerala
Union Bank of India, Kochi, Kerala
The Federal Bank Limited, Kochi, Kerala
Canara Bank, Kochi, Kerala
IDBI Bank, Kochi, Kerala
Standard Chartered Grindlays Bank
Citi Bank

Facilities :

Secured Loan	31.03.2008 Rs. In Millions)
Debentures:
1,000,000-11.25% non Convertible Debentures of Rs.100/- each	100.000
Less: Redeemed to date	100.000
	0.000

Terms Loan:
From International Finance Corporation
-Foreign Currency	345.330
- Rupee Loan	321.520
	666.850

From Banks:
ICICI - Foreign Currency	-
State Bank of India	500.000

From Institutions :
G E Capital Services India	105.000

Other Loans :
Banks – Cash Credit	500.720
Deferred Payment Credit	383.330
Sales Tax Loan	75.550

Total	2231.450

Unsecured Loan:
Commercial Paper	-
Short Term Loans:
- From Banks	2375.060

Total:	2375.060

NOTES: SECURED LOANS

1. Loan from International Finance Corporation is secured by :

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

- A first and fixed charge on the Company's land and premises situated at Gurgaon, Haryana State together with all existing and 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.

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

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

3. Loan from GE Capital Services India is secured by :

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

4. 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.

5. Deferred payment credit is secured by specific assets purchased under the scheme and include Rs.20.940 Million (Rs.16.670 Millions) repayable within one year.

6. The Company had availed interest free Sales Tax Loan from Gujarat State Government amounting to Rs.112.610 Millions. 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. Accordingly, a sum of Rs18.53 Millions (Rs.18.530 Millions) was paid during the year and a similar amount is repayable within one year.

7. Loans include Rs.602.650 Millions (Rs.839.600 Millions) repayable within one year.

8. Maximum amount outstanding on Commercial papers at any time during the year was Rs.24.50 Millions (Rs.30.50 Millions).

Banking Relations :	Satisfactory

Auditors :
Name :	Fraser and Ross Chartered Accountants

Name :	Deloitte Haskins and Sells Chartered Accountant

Cost Auditors :	N. P. Gopalakrishnan and Company Cost Accountant

Associates :	Dusk Valley Technologies Limited Travel Tracks Private Limited Apollo International Limited Dusk Valley Global Services (Private) Limited Raunaq Finance Limited Apollo Tubes Limited Bharat Gears Limited Gujarat Perstorp Electronics Limited Encrop E Services Limited Gujarat Perstorp Electronics Limited (under liquidation) Landmark Farms & Housing (Private) Limited Sunlife Tradelinks (Private) Limited

Subsidiaries:	Apollo (Mauritius) Holding Private Limited, (AMHPL) Apollo (South Africa) Holding Pty. Limited, (ASHPL) Dunlop Tyres International Pty. Limited. (DTIPL) Dunlop Africa Marketing (UK) Limited, (DAMUK) Dunlop Zimbabwe Limited(DZL) Radun Investment Private Limited AFS Mining Private Limited Ceased to be subsidiary Apollo Automotive Tyres Limited Ceased to be subsidiary Apollo Radial Tyres Limited Apollo Tyres AG, Switzerland (AT AG) Apollo Tyres GmbH , Germany (AT GmbH) Apollo Tyres Kft., Hungary (AT Kft) Apollo Tyres Pte Limited, Singapore ( AT PL)

Membership :	Confederation of Indian Industry

Joint Venture Company:	Michelin Apollo Tyres Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount

730000000	Equity Shares	Rs1/- Each	Rs.730.000 millions
200000	Preference Shares	Rs.100/- Each	Rs.20.000 Millions

	Total		Rs.750.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

488444770	Equity Shares	Rs1/- Each	Rs.488.445 Millions
	Add Forfeited Shares		Rs.0.070 Million

	Total		Rs.488.515 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		488.510	464.090	383.400
2] Equity Share Warrant		45.650	117.200	0.000
3] Reserves & Surplus		11799.990	9207.130	5956.800
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		12334.150	9788.420	6340.200
LOAN FUNDS
1] Secured Loans		2231.450	4737.630	3810.000
2] Unsecured Loans		2375.060	1449.400	3690.000
TOTAL BORROWING		4606.510	6187.030	7500.000
DEFERRED TAX LIABILITIES		1412.000	1290.570	1052.100

TOTAL		18352.660	17266.020	14892.300

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		9709.960	9508.550	8406.700
Capital work-in-progress		944.080	804.550	779.300

INVESTMENT		3027.130	2581.140	5.300
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	5132.910	4519.490	4194.100
	Sundry Debtors	1551.330	2030.550	1751.400
	Cash & Bank Balances	2658.530	1720.020	2313.600
	Other Current Assets	128.390	139.140	2.100
	Loans & Advances	1786.840	1937.100	1843.900
Total Current Assets		11258.000	10346.300	10105.100
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	5658.250	5422.010	4157.200
	Provisions	930.850	553.750	249.500
Total Current Liabilities		6589.100	5975.760	4406.700
Net Current Assets		4668.900	4370.540	5698.400

MISCELLANEOUS EXPENSES		2.590	1.240	2.600

TOTAL		18352.660	17266.020	14892.300

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		36939.270	32923.280	26255.200
Other Income		92.230	29.710	11.820
Total Income		37031.500	32952.990	26267.020

Profit/(Loss) Before Tax		3334.470	1854.190	1005.700
Provision for Taxation		1141.440	719.970	282.000
Profit/(Loss) After Tax		2193.030	1134.220	723.700

Export Value		940.240	416.950	8.830

Imports :
	Raw Materials	7274.010	8007.610	4530.800
	Stores & Spares	40.180	37.070	24.750
	Capital Goods	204.440	1067.530	422.320
	Finished Good	0.000	25.090	5.550
Total Imports		7518.630	9137.300	4983.420

Expenditures :
	Manufacturing Expenses	32851.260	30143.670	24795.810
	Increase/(Decrease) in Finished Goods	(552.740)	(313.610)	(768.010)
	Interest	520.410	526.480	505.620
	Depreciation & Amortization	878.100	742.260	727.900
Total Expenditure		33697.030	30356.540	24533.420

QUARTERLY RESULTS

PARTICULARS			30.06.2008 1^st Quarterly
Type
Sales Turnover			10758.600
Other Income			9.700
Total Income			10768.300
Total Expenditure			9661.100
Operating Profit			1107.200
Interest			138.100
Gross Profit			969.100
Depreciation			231.800
Tax			205.800
Reported PAT			486.300

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Debt Equity Ratio	0.49	0.86	1.07
Long Term Debt Equity Ratio	0.20	0.36	0.47
Current Ratio	0.99	0.99	0.98
TURNOVER RATIOS
Fixed Asset Ratio	2.78	2.70	2.45
Inventory	8.80	8.66	8.01
Debtors	23.71	19.96	18.10
Interest Cover Ratio	6.53	3.48	2.84
Operating Profit Margin (%)	11.34	8.86	7.89
Profit Before Interest and Tax Margin (%)	9.27	6.89	5.47
Cash Profit Margin (%)	7.23	4.97	5.03
Adjusted Net Profit Margin (%)	5.16	3.01	2.60
Return on Capital Employed (%)	24.09	17.56	13.14
Return on Net Worth (%)	20.03	14.22	12.99

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The flagship of the Raunaq Singh group, Apollo Tyres (ATL) is engaged in the manufacture of automobile tyres and tubes at Perambra, Kerala; Vadodara, Gujarat and Pune, Maharashtra. Mahindra and Mahindra and TAFC are its major OEM clients. Subject has a 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.

The company was incorporated in 1972 and commenced its production in 1977. 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 Apr.'95 in which its sick Stallion Tyres came under the Apollo brand name.

In 1999-2000, the projects of radial passanger capacity of 2000 tyres per day at Vadodara plant and 50000 two/three wheeler tyres at conversion unit have been successfully implemented; this has resulted in improving market shares in the respective segment. During 2004-05, the company plans for a expansion project to increase the passenger car radials to 3 lac units per month and light truck radials to 0.5 lac units per month at the radial facility at Vadodara and expansion projects are proposed at both Vadodara and Kochi plants to achieve the production capacity of 360 MT & 270 MT per day respectively.

During 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 36.90 lac shares @ Rs.90 per share. The expansion programme for its Subsidiary Company which is under lease with Apollo tyres viz PTL Enterprises Limited (formerly Premier Tyres Limited) is implemented to enhance the capacity from 60 tons per day to 85 tons per day.

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 is set to roll out by April, 2004.

In 2003-2004, the company has entered into a joint venture with Michelin, France to set up 'Michelin Apollo Tyres Private Limited for producing dual branded truck & Bus radial tyres in India. The Plant will be set up at Ranjangaon, Maharashtra with an investment of $75 Million in the ratio of 51:49. The Commercial Production will commence by September 2005 and produce 3.5 Lakh truck and bus radial tyres by 2007.

During 2004-05, the company launched premium 4x4 SUV range of sturdy tyres called 'Hawkz' and 'Apollo Acelere' H-Rated, Premium Tubeless Tyre Range.

The Company completed the Company's first International acquisition of `Dunlop Tyres International (Pty.) Limited' (DTIPL), South Africa on 21st April 2006. DTIPL, South Africa has two plants with a total capacity of 50,000 MT p.a. With the acquisition of DTIPL, the company 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 3 lac PCR tyre capacity per month, the Company achieved 2.1 lac/month. Against 0.5 lac per month of LTR, a capacity of 0.4 lac 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 is 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.

During 2005-06, the Company incorporated a wholly owned subsidiary i.e. `Apollo (Mauritius) Holdings Private Limited in Mauritius which further created another wholly owned subsidiary in South Africa i.e. `Apollo (South Africa) Holdings (Pty) Limited' for acquiring 100% controlling interest of Dunlop, South Africa.

The Company has also formed `Apollo Automotive Tyres Limited' and `Apollo Radial Tyres Limited ', as wholly owned subsidiaries of the Company. ' PTL Enterprises Limited.' (formerly known as `Premier Tyres Limited') ceased to be a subsidiary Company pursuant to dis-investment of entire shareholding in the Company.

The companies Automobile Tyres capacity expanded from 6888640 Nos to 7934272 Nos. and the Automobile Tubes capacity expanded from 5143200 Nos to 6522560 Nos. during the year.

OPERATIONS

During the financial year ended March 31, 2008, sales from operations amounted to Rs.42469.83 million as against Rs.37743.43 million during the previous year, recording a growth of 12.52%.

Operating profit, before interest and depreciation, amounted to Rs.4732.98 million, as against Rs.3122.93 million during the previous year. Net profit, after providing for interest, depreciation and tax amounted to Rs.2193.03 million as against Rs.1134.22 million during the previous year, registering an increase of 93.35%.

The Company has achieved all time high profit and robust growth in its operations supported by a motivated management team, aggressive marketing initiatives, better working capital management and overall cost reduction measures adopted by the Company. The cost management and production efficiencies helped in maintaining a good profitable track record despite increase in input costs.

PRODUCTION

The Company has achieved 7.81 % growth in production tonnage by registering production of 290000 MT as against 269000 MT in the previous year. All expansion programmes were implemented successfully as envisaged, by increasing total capacity across all plants to 744 MT/day from 736 MT/day.

RAW MATERIALS

The year witnessed softening of major raw material prices initially, followed by a sharp increase towards the end of the year. Natural rubber prices were stable during the first half of the year but witnessed continuous increase thereafter due to shortage of supply. Production of natural rubber was badly hit globally due to bad weather in Malaysia and Thailand and in particular in India where production was substantially down due to major spread of viral fever in Kerala.

Crude oil prices increased approx. 25% during the year and the impact of the same was felt in prices of other petro based raw materials like nylon tyre cord fabric,' synthetic rubber and carbon black but the depreciation of US dollar partially offset the increase.

Later part of the year also witnessed shortage in the supply of major raw materials like rubber chemicals, synthetic rubber, carbon black & bead wire. These shortages are due to closure of major plants, tight availability of intermediates like butadiene, carbon black feed stock, high carbon wire rod etc. and continuing strong demand from Asia.

While anti dumping duties continued on raw materials like nylon tyre cord fabric, rubber chemicals and EPDM, fresh investigation started on some other major rubber chemicals which were not having anti dumping duty so far.

The company, in order to remain competitive in sourcing raw materials, had to resort to effective leverage of strategic procurement tools like long term relationship with vendors, forecasting and planning based on real time information in a dynamic environment.

The raw material environment continues to challenge their industry in terms of cost pressure. The inverted duty structure where customs duty on imported natural rubber is 20% against 10% customs duty on import of finished tyres further aggravates the pressure. The Company continued to focus on strategic partnership with key suppliers of raw materials and expanding the sourcing network across the world to leverage competitive prices.

DOMESTIC MARKETING

Having achieved leadership in the Indian market by leveraging the spirit of enterprise of our people, strengths in quality manufacturing processes and product development, your company is today seeking new challenges and markets, identifying customer needs, innovating to design new products and develop new delivery systems and growing with certainty and responsibility.

The is a Company that has always measured its success and well being in that of its stakeholders; be it customer, dealer, employee or member of the wider community. Consistent performance has translated into customer delight, profits, and return on investment.

This year saw the Company exceeding the overall industry growth and meeting its targets in all the product categories. During the year, the Company recorded a healthy growth of 7.3% in truck, 20.4% in passenger car radial, 39.7% in light commercial vehicles and 8.9% in tractor rear.

Significant strides were made in the realm of the marketing strategy tripod covering Product Leadership, Customer Intimacy and Operations Excellence.

The efforts at building greater brand equity in global markets have received a fillip with the launch of Winter Tyres and Concept Tyres at the New Delhi Auto Expo in January this year. Acelere Ice and Hawkz Ice (meant for passenger vehicles and 4x4s), are the first ever India Made winter tyres and will be sold across Europe and North America. On a similar note, showcasing of indigenously developed Aspire TT and Dolphin Concept Tyres marked another first in the Indian tyre industry.

In the realm of commercial vehicles, Endurance, a premium radial is currently undergoing extensive road tests and will be launched in the forthcoming fiscal. This new product compliments the company's existing radial range in the category of Duramile for light commercial vehicles and the Regal Transport for medium to heavy commercial vehicles.

This year also saw the introduction of the 360 Degree Offer - Complete Tyre Solutions for commercial vehicle customers. The 'Apollo Exchange Offer' and 'Own Today Pay Later' are two initiatives which are an industry first in the Indian market and complete product offerings covering new bias tyres (Apollo, Kaizen), new radial tyres (Regal), retreading material (Duratread), and retread tyres as a product (Duratyre).

The 2008 J.D. Power India original equipment tyre total customer satisfaction index report for the year 2007-08 ranks the Company in the second place. The rating is for all the passenger vehicle tyre brands that are fitted as OE and is significant progress for the Company given that its OEM journey in passenger vehicle tyres is young.

By consistently outpacing the market growth, the Company has been the fastest growing tyre brand in the country. More and more OEMs have added Apollo as approved supplier-General Motors, Hyundai, Skoda, ICML, Tata Motors -have been recent additions to the list.

To facilitate the development of organization wide culture of data and knowledge driven analysis and decision making, the Company embarked upon the Six Sigma journey. The first batch of Black Belts has successfully completed their projects and their achievements. This indicates that the efforts are on the right track in company's quality journey.

EXPORTS

The passenger car tyres exports lead the exports growth story with sales, in numbers, registering over 30% growth during the year under review. In doing so, Apollo also retains the distinction of being the largest exporter of passenger car tyres from India.

Apollo also pushed ahead with new marketing initiatives, the most distinct being the high decibel participation at the Singapore Tyre Expo in September, 2007, the largest tyre expo in South East Asia. Though this was Company's first participation, it was awarded the 'Gold Award' for being the most innovative tyre stand.

'Winning Edge', the incentive oriented marketing programme, continued to shore up the Apollo brand equity at the grassroot levels, with increased participation from the network in creating new and innovative visibility at retail level. As part of the fraternization initiatives with the local network, a team of key retailers from Kenya visited the company's factory in India to know first hand about the Company and its product.

A centralized supply chain concept is also gaining ground, to supply to customers from different plant locations across India & South Africa and planned facilities at other places including Europe, keeping the logistics costs to the minimum and thus passing the benefit to the customers.

While 2007-08 has been a year of growth in volumes, the new financial year 2008-09, would embark-Apollo truly on a global platform with supplies from transnational locations, with increased brand portfolio, and continued efforts on brand building & other marketing initiatives.

EXPANSION PROGRAMME/FUTURE OUTLOOK

The Company has announced setting up of a greenfield plant for manufacture of radial tyres in Hungary. The project will have an estimated investment of Rs.12000 million. (200 million) over next 5 years and the plant would achieve a capacity of 7 million passenger car radial tyres per annum. One of the key strategies of the Company is to establish a foothold in the mature and large market of Europe and the proposed plant in Hungary would help in achieving that objective. This plant would take us closer to the customer and make them a local player along with global majors in the European markets.

In line with the objective of profitable growth in all segments, your Company embarked upon setting up a manufacturing facility for production of bias OTR (Off The Road) tyres at Limda plant. The plant would have a capacity of 10 MT/day and is scheduled to go on stream by end of 2008-09.

In order to keep pace with the high growth area of passenger car market, the Company commenced project activities to setup a State of the art manufacturing base for production of 3.5 Million passenger car tyres per year in Oragadam, Chennai. The facility would cater to original equipment manufacturers and to replacement market requirements.

The Company earmarked an investment of Rs.3.2 billion for OTR and Chennai plants put together.

To cater to growing demand, existing capacity of radial passenger car, radial light truck and truck bus radial tyres in Llmda is proposed to be expanded from approx. 12,200 nos. per day to approx, 17,800 nos. per day. The expanded capacity is scheduled to go on stream by end of 2008-09.

Existing bias capacity in Perambra plant is proposed to be increased by approx. 11%. The expanded capacity is scheduled to goon stream by 3rd quarter of 2008-09.

SUBSIDIARY COMPANIES

During the year, in order to achieve its vision of Global player, the Company incorporated Apollo Tyres AG (Switzerland) w.e.f. 4th July, 2007 as wholly owned subsidiary of company. which has further incorporated two subsidiaries viz. Apollo Tyres Kft (Hungary) w.e.f. 11th February, 2008 and Apollo Tyres GmbH (Germany) w.e.f. 27th February, 2008 respectively. Apollo (Mauritius) Holdings Private Limited, (Mauritius), the Company's subsidiary has also incorporated its subsidiary Apollo Tyres Pte Limited, (Singapore) w.e.f. 28th February, 2008.

During the year, two subsidiary companies, Apollo Automotive Tyres Limited and Apollo Radial Tyres Limited. have been desubsidiarized w.e.f. 21st December, 2007.

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

The Central Government vide its letter No.47/194/2008-CL-III dated 9th April, 2008 has accorded its approval under Section 212(8) of the Companies Act, 1956, exempting the company from attaching the accounts of the subsidiary companies. However, the consolidated accounts are attached to the accounts of the Company.

The copy of the annual report of the subsidiary companies will be made available to shareholders on request and will also be kept for inspection by any shareholder at the registered office and corporate office of the company, and its subsidiary companies.

MARKET OVERVIEW:

Today, India is in the midst of rapid economic growth. The government's continued emphasis on building infrastructure has given a tremendous fillip to the development of road infrastructure and transport. Obviously, the no. of vehicles on road has shown a marked increase. As direct fallout of this scenario, the tyre industry has had the good fortune of receiving increasing orders from OEM's and replacement market alike.

Indian tyre manufacturing companies are re-engineering their businesses and looking at strategic tie-ups worldwide. The future is expected to see many strategic alliances among the domestic and global players. Meanwhile, alliances have also included the OEM segment with vehicle manufacturers looking for fresh tie-ups or strengthening of existing partnerships. The world tyre market is essentially a replacement market in terms of volume and value. Even though vehicle manufacturers account for only one-quarter of road tyres sold, this segment of the market is of primary significance because it drives technical development and greatly influences the market.

The tyre industry has evolved from the more basic cross ply products to the more sophisticated radial tyres. Radial tyre usage has shown significant increase in usage every year. In India, almost all the automobile segments have shifted to radial tyres and the usage of cross ply is restricted to trucks and buses only.

In the domestic market radial tyres are largely used in the passenger car segment, while the commercial vehicle segment still prefers to stay with the cross ply variety, because of the lowerprice of cross ply and the ease of retreading. However, following the global trend, India too is witnessing a sure change in favour of radial tyres.

The increasing segmentation of the car market in India has created new opportunities for the tyre manufacturers. The aspirational urban SUV market is a case in point. These off road vehicles, where 99% of the time the vehicles are being driven on metalled surfaces, require a tyre that occasionally may have to deal with some sand or mud or rough terrain. Subjected to high torque these vehicles require special tyres that not only meet the stringent off road terrain tests but also are able to withstand the overload and high speed index characteristics prevalent in India.

India is being increasingly looked at as a competitive outsourcing destination for automobile components given the progress and growth of the Indian automobile industry. Tyre companies in India will therefore continue to expand their reach to foreign shores to build up scale either through marketing or manufacturing tie ups aided in no small measure by increasing access and acceptance of products through the automobile export route.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Indian tyre industry is mainly dominated by the organized sector and consists of four major players who together account for approximately 85% of the industry's turnover – Subject, MRF Limited JK Tyre & Industries Limited, and Ceat Limited, These companies have a presence in all the major segments of the tyre industry – the replacement market, original equipment manufacturers (OEMs) as well as exports and consequently, offer the consumer a well diversified product mix. There are many other companies, some in the unorganised sector and mostly smaller in size, with a focus only on one or two categories of tyres, tubes and flaps primarily for the replacement market.

Unlike the international tyre industry where passenger car radials dominate the market, in the Indian industry commercial vehicle tyres take the lead and account for approximately 70% of the industry's turnover. As a result, the growth of the entire tyre industry depends on primary factors like agricultural growth, overall GDP growth, industrial production, growth in vehicle demand and secondary factors like infrastructure development, prevailing interest rates and financing options. For the last 10 years, Apollo Tyres has maintained its leadership position in the commercial vehicle tyres segment.

Although the automotive sector in India saw negative growth in the medium and heavy commercial vehicle segments, this downward trend was in contrast to the strong demand witnessed by the tyre industry. Led by replacement market growth of over 10%, the tyre industry registered a high single digit growth.

The tyre industry is highly raw material intensive and a major consumer of rubber. With raw material costs accounting for 70% of the cost of production, any change in the price of rubber or the crude basket has a direct impact on the cost of production. The comparatively stable raw material prices in the first half of FY 2007-08, coupled with price increases undertaken by the Industry in FY 2006-07, resulted in all the major players reporting improved operating profit margins. This was after four consecutive years of raw material cost-push, both for natural rubber and crude oil-linked raw material basket.

The second half of FY 2007-08 again saw an upward trend for all major raw material prices and the same is anticipated for the year ahead. As a result, margins are once again under pressure, even while the demand-supply situation continues to be in favour of the Industry.

OPPORTUNITIES AND THREATS SWOT ANALYSIS

STRENGTHS

While taking fresh strides, Company has continued to maintain its lead in the market within the dominant segment of truck and bus tyres within the Indian tyre industry. The Company has established a state-of-the-art plant in Baroda. Quick response to changes in market conditions and product profiles has resulted in superior product innovation and technical expertise. The Company's marketing initiatives have resulted in a strong brand recall, even in the price sensitive tyre market. Aiding these efforts is an extensive distribution network. A progressive leadership has given direction to all the different aspects of the establishment, from the sourcing of raw materials to a global presence through the acquisition of Dunlop Tyres International (Pty) Limited in South Africa. Economies of transportation cost are a constant benefit to the company on account of proximity to the natural rubber growing belt. With a move into the international arena, Company not only has access to global sources of raw materials, but can also follow and maintain global quality standards and international process and system certifications. Within its physical boundaries, the Company propagates extensive use of information technology systems, so as to hasten the flow of information and leverage opportunities across its multiple locations in India and South Africa.

WEAKNESS

Company has no presence in the two and three wheeler segments. The capital intensive nature of the business in this segment also has its drawbacks.

OPPORTUNITIES

The national thrust in road infrastructure and construction of expressways and national highways presents a range of opportunities for the tyre industry and Apollo Tyres aims to make the most of these. Creation of road infrastructure has given, and will increasingly give, a tremendous fillip to surface transportation in the coming years. The tyre industry will continue to play an important role in this dynamic and evolving situation. Apollo's leadership position in the commercial vehicle segment will enable the company to leverage new and related business opportunities. They have already started leveraging these opportunities to their benefit with their new product segments like Truck/Bus Radial (TBR), Off-The-Road (OTR) tyres, retreading and allied automotive services. Growth within India also supports the Company's aim to be a leader in the global industry and partake in overseas markets like Europe.

THREATS

There is a need to prepare for imports from neighboring countries at competitive prices, which have been rising in the recent past. As well the ever present challenge of raw material price volatility.

SEGMENT WISE PERFORMANCE

The commercial vehicle tyre segment plays a dominant role in the Indian tyre industry. While maintaining its leadership position in the truck, bus and light truck categories, the Company gained market share in the Passenger Car Radial segment by registering growths that were in excess of the industry's growth rate.

This year saw Apollo Tyres exceeding the overall industry growth and meeting the Company's targets in all the product categories. As compared to the last year (2006-07), this year (2007-08) recorded a healthy growth of 7.3% in Truck, 20.4% in PCR, 39.7% in LCV, and 8.9% in Tractor Rear tyres. Significant strides were made in the realm of the marketing strategy, covering the three key areas of:

1. Product Leadership (a 360 Degree Offer product and service offering for the Indian market)

2. Customer Intimacy (Consumer Promotions in the Truck Tyres Category helped establish the Company's proposition in the mileage and radial segments, while in the PCR Category the aim was to boost sales of tubeless tyres)

3.Operations Excellence (Tiered Network with an addition of 47 business partners in the elite Diamond Boys Club Upwards Club significantly enriched the Value Edge Club)

In the realm of commercial vehicles, EnduRace, a premium truck-bus radial is currently undergoing extensive road tests and will be launched in the forthcoming year. This new product compliments the company's existing radial range in the category of Duramile for Light Commercial Vehicles and the Regal Transport for Medium to Heavy Commercial Vehicles.

This year also saw the introduction of the 360 Degree Offer, comprising complete tyre solutions for all commercial vehicle customers.

More and more OEMs have added Apollo as an approved supplier. These include General Motors, Hyundai, Skoda, ICML and Tata Motors over the course of the year.

The company's foray into branded retail was started this year with the launch of two retail stores -- National Tyres in Patiala, Punjab and Lal Tyre Centre, Chennai, Tamil Nadu. These outlets are designed to ensure a comfortable and informed purchase decision, and are particularly tuned to make women buyers comfortable. Backed by quality service levels, in look, feel and service these stores are attempting to take away the 'commodity' tag from

tyre purchase, while bringing in global and best-in-class tyre buying experience into India.

The Apollo spirit remains unstoppable as ever.

OUTLOOK

The Company continues its passionate journey towards customer delight and loyalty. Focusing on expanding its delivery of the country's most technologically advanced and cost competitive tyres, Apollo Tyres plans to extend its leadership beyond commercial vehicle tyres to other segments.

It also continues its thrust towards becoming a global player and after the acquisition of Dunlop Tyres, the Company has now set a foot in the European markets and plans to penetrate deeper. Towards this, it has announced a Passenger Car Radial Greenfield in Hungary, one of East European's low cost countries.

Moving beyond commercial vehicles to passenger cars, company has announced a passenger car radial greenfield project in Chennai to cater to the small car tyre segment, which will further enhance the Company's participation in this sector. With this move, the Baroda capacity will now be able to concentrate on the higher end, premium products catering to the passenger car radial market. The segregation of production in this manner will bring about economies of scale and efficiency in production.

The Company has also forayed into the production of Off-The- Road (OTR) tyres. With the current national impetus on infrastructural growth and road building, Apollo Tyres has maintained a futuristic vision and in this regard, finalised an agreement with BEML for producing and supplying OTR tyres to them. The Company has successfully launched the world-class regal truck and bus radial tyres (TBR) last year. It would now rapidly move towards expanding its TBR capacity and be prepared to meet the increasing radialisation levels in this segment.

Subject continues with its ethos of promoting technological innovations and giving its personnel the necessary confidence, infrastructural backup and professional freedom to enable them to extend their limits and reach. The Gold Series in truck-bus cross-ply tyres, the expanded Acelere range and the newly launched V- and W-speed rated high-performance tyres for passenger cars last year and the dual-bead tyres for light trucks, stand testimony to the Company's commitment to offer the customer technology most appropriate to Indian operating conditions. Apollo's pioneering position in the field of radials for farm tyres was further enhanced by broadening the range during the course of the year.

RISKS AND CONCERNS

Being the wheels that keep the nation in motion, the tyre industry and economic development of the country are interdependent. The growth of the tyre industry is not only dependent on economic growth and infrastructural development, but also on the growth in the automobile industry, which is cyclical in nature. Also, most of the raw materials for the tyre industry are petroleum based and their prices are linked to the movement in crude oil prices, which have been continuously increasing. Natural rubber which is one of the major components of the total raw material cost is an agricultural product and is subject to price and production volatility resulting from speculating activities and natural causes. The inverted duty structure between tyres and natural rubber puts further pressure on the industry's revenue and profitability.

INFORMATION TECHNOLOGY/INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACIES

Ensuring progress is made in a strategically planned and phased way requires a network of processes to be in place, which will enable people at Apollo to make correct and informed decisions. The Internal Audit through a planned approach ensures that the authority is exercised within a framework of appropriate systems and controls. A team of experienced and qualified professionals carry out the Audit reviews across all locations of the Company.

The Company has established a robust Internal Audit Process both at the corporate and unit levels to continuously monitor the adequacy and effectiveness of the Internal Controls across the Company and compliance with the operating systems, internal policies and regulatory requirements.

The Internal Audit function also reviews the execution of all ongoing projects involving significant expenditure to ensure adherence to fiscal controls.

Apollo Tyres has upgraded the BS7799 standard for information security practices in the current year to ISO 27001. The Company has a robust risk management process which involves identification and quantification of various risks and setting out mitigation plans. Information Technology is used across the company to enable data-based decision making.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial statements have been prepared in accordance with the requirements of the Companies Act, 1956, and applicable accounting standards issued by the Institute of Chartered Accountants of India. The management of Company accepts the integrity and objectivity of these financial statements as well as the various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements are reflected in a true and fair manner and reasonably present the Company's state of affairs and profit for the year.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS

The primary stakeholders in any organisation, as well as its most important contributors are its people. Those who have maintained and continually evolved a vision for the company; those who have ensured that the vision is executed and transformed into a reality; and those that have the onus of finally putting into execution the plants and process that together bring to life this vision.

Year 2007-08 was an eventful and landmark year for the people at Apollo. With their vision of 2010 fuelling the growth momentum, they have begun an exciting journey of expansions and acquisitions towards the aim of becoming a leader in the global tyre industry. Human Resource at Apollo is positioned as an importantb contributor to this growth and aims to contribute effectively in the overall Apollo journey.

Apollo Talent Trek (ATT) was conceived and implemented to enhance the growth journey of the organisation. A cross functional team – ATT, identifies the manpower requirement and key HR policies for each project undertaken – in India and outside. The ATT team as a part of its manpower strategy, last year inducted 50 Graduate Engineer Trainees who underwent extensive training for three months at Apollo's plants understanding processes and systems. Post this, according to their specialisation, the trainees is allocated to various ongoing projects, according to the mapped manpower requirements.

Apollo Talent Trek is also committed to creating a career path for all project-related manpower and the creation of policies to support this.

The Apollo Laureate Academy saw completion of its middle and senior management leadership programmes, ALDP and ELDP respectively this year. ALDP partnering with IIM-Bangalore completed all four modules and four key projects in areas of Finance, Operations, Sales & Marketing and Human Resources, while ELDP has undergone extensive modules with Grow Talent on leadership and related areas. With our expansion projects and initiatives, these leadership programmes identify and groomtalent to take up strategic roles within the organisation. The junior management team, as part of a competency development workshop, underwent a two-day programme on presentation skills, which taught the nuances and techniques of creating appropriate presentations.

PACE (Performance and Career Enhancement) was in its second year running successfully, with process improvements being done to ensure more ease of operations. With the timely KRA setting to the Quarterly evaluation culminating into the final annual appraisal, PACE has been widely accepted and appreciated due to the high level of transparency and ease of evaluation it brings to the entire assessment process.

Last year we integrated the HR policies and systems of Dunlop South Africa with company. Beginning with the compensation policy and its realignment with the philosophy at Apollo, we are now re-aligning the key area of training and development – both Leadership and Technical with the overall HR philosophy prevalent at Apollo.

Over the years Apollo has built healthy relations in the manufacturing facilities. A number of training programmes and various reward and recognition schemes were rolled out for shop floor workers. Initiatives like the Attendance Champion, Suggestion Award are some of the reward schemes which have received a great response from the workmen.

A wide array of employee engagement initiatives were launched alongside the ones that have been traditionally followed. Svago (Fun@work) saw a number of activities, ranging from quiz competitions to gaming championship to keep employees motivated and engaged through informal and fun activities. The plants along with their families celebrated the various festivals and their factory days in each location. As a part of the Company's reward and recognition scheme, an “Employee of the Year” is identified every year. This is an individual who has shown exceptional contribution to the growth of the organisation, keeping in mind the corporate objectives and strategy and demonstrated exemplarily ability to not just meet targets, but also motivate and guide others in the team to accomplish the set objectives. Their “Roll of Honour” groups, consisting of 23 individuals, who have been consistent performers, were rewarded with a three nights / four day tour to Singapore.

Overall, the Human Resource function saw a strengthening and a process improvement of its core areas. With new initiatives and the improvement of existing ones, HR has positioned itself towards building a global organisation.

QUALITY AT APOLLO TYRES

For a capital intensive industry like tyre manufacturing, technological developments are of paramount importance. Not only do the quality control teams at Apollo ensure that required standards are adhered to, but with the drive and the passion that forges across boundaries, the technical expertise of Apollo's personnel is constantly setting new benchmarks for the industry.

Multiple quality driven initiatives are under progress, some of which are being continued from previous years. At this time, Process Maturity, Small Improvement Projects/QC and ISO/TS 16949 certification have started taking shape and giving results. Improved quality on the shop floors is evident form the fact that 27 shop floor teams were recognised in various external competitions (including CII and QCFI) in 2007, as against, 11 in 2006 and 3 in 2005. Meanwhile, over 250 Small Improvements Projects have been completed, and another 200 are in various stages of completion. Extensive employee involvement and contribution to operational efficiency has already been witnessed. Multiple OE audits were accomplished successfully with appreciation received from auditors for good practices.

The Six Sigma initiative made significant headway this year, bring in financial savings of Rs.134.07 million from both Black Belt and Green Belt projects. 20 Black Belts and 17 Green Belts were trained in this year completing one project each. Next year, 11 more Black Belts and 40 more Green Belts are planned to be trained.

Quality control and enhancement initiatives also resulted in significant improvements in manufacturing processes. All manufacturing units have improved significantly towards manufacturing excellence as indicated by improvement in scores (PQA) by 60% compared to last year. Efforts are on to take Apollo Tyres to a high level of manufacturing excellence, benchmarking the company to enhance Apollo's core brand value.

INTEGRATION BENEFIT BETWEEN APOLLO & DUNLOP TYRES

Apollo and Dunlop, both continue to benefit with the acquisition of the latter. Manufacturing-led benefits include lower raw material input costs for the South African operations and strategic benefits to Company from centralised purchasing. Skill transfer through on-the-job training has also enhanced engineering and factory technical staff. Further, a Technical Competency Centre was established to service existing and new product requirements in South Africa and India. The acquisition has also enabled Apollo to outsource products and capitalise on lower manufacturing costs, as well as secure off-shore funding at more competitive rates.

Future benefits of this move in Apollo's journey towards becoming a global player include product range rationalisationb along with increased factory output and efficiencies. Synergy benefits of product development will accrue to Apollo and equally important, will be the possibility for global brand positioning and centralised international marketing.

NOTES ON ACCOUNTS:

CONTINGENT LIABILITIES

PARTICULARS	31.03.2008 (Rs. In Millions)
Sales Tax	68.590
Income Tax-Disputed Demands under Appeal	145.600
Claims not acknowledged as debts – Employee Related	17.810
- Property Disputes	13.190
- Others	0.700
Provision of Security	156.750
Guarantees given by bankers on behalf of the Company	370.880
Custom Duty	23.500
Excise Duty*	297.300

*Excludes demands of Rs.533.310 Millions (Rs.533.310 Millions) raised on one of the company's units relating to the issues which have been decided by the Appellate Authority in company's favour in appeals pertaining to another unit of the company.

In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the grounds that there are reasonable chances of successful outcome of appeals.

RADIALISATION:
Radialisation was an important innovation made in tyre technology in the 1950s. It has several advantages like additional mileage, fuel saving and improved driving especially at higher speeds. If we look at the Indian context, radialisation has not penetrated in the Indian tyre industry except in the passenger car tyres segment. Poor road conditions, practice of overloading and unwillingness on the part of consumers to upfront pay higher prices for radial tyres can be attributed as reasons for extremely low penetration in the commercial vehicle tyre segment.

A further introspection might lead to the fact that radial tyres cost - 40% more than cross-ply tyres and the world average for truck & bus tyre radialisation is 65% while in India it was only 2% till FY 06. Also, OEMs have not pushed for radialisation of commercial vehicle tyres as radial tyres would mean driving the initial cost of ownership up. However, with the thrust on infrastructural development, the radialisation levels in the commercial vehicle segment in India is expected to go upto 10% in FY 2010 - the estimated radialisation levels in FY 07 is 4%.

CULTURAL INTEGRATION:

Respect for people who contribute to the success of 'Brand Apollo' is a cornerstone of their existence. Be it their own employees, customers who buy their products, their shareholders or their technical collaborators, we as a philosophy make sure that every voice has a platform.

To maximise the potential of the diverse work-force and to maintain focus, the Employment Equity Programme at Dunlop has been deployed to integrate the performance objectives of supervisors and managers for 2007.

Diversity workshops for all staff has had a positive impact on culture. The seamless integration of professional management staff from Apollo's Indian operations clearly suggests that there is growing cultural tolerance and an increased understanding and insight into the value of diversity.

SOUTH AFRICA MARKET HIGHLIGHTS:

* Decline of Company owned distribution.

* Emergence of Independent distribution channels.

* 212 DAD's (Dunlop Accredited Dealer).

* Growth estimated in current financial year - +22stores

* Growth of Independents - +80 Nos Strategic plan for IInd tier distribution channel.

* Direct accounts - Commercial segment (Truck and Mining segment) 200 Dealers for the Rugby World Cup in France and Mauritius (Reward for the annual scheme).

* Market research survey highlighting Dunlop as the best in terms of providing timely deliveries to the dealers among all present competitors in SA market.
* Only local company to manufacture 17' and 18' tyres in SA.

* Only local company to manufacture 'Super Singles' for Trucks.
* 23% Market share in PCR - Aftermarket.
* 22% Market share in Truck - Aftermarket.
* 22% Market share in OTR - Aftermarket

ATL Locations:

Pakistan, Philippines, Bangladesh, Cambodia, Singapore, Taiwan, Sri Lanka, Myanmar, Hong Kong, Kenya, Iran, Zambia, Oman, Qatar, Mozambique, Somalia, Iraq, Jordan, Ghana, Rwanda, Lebanon, Burundi, Nigeria, Syria, Lithuania, Greece, Turkey, Ireland, Netherlands, Bulgaria, Portugal, Turkmenistan, UK, Brazil, Peru, Honduras, Eucador, Guatemala, Nicaragua, Uruguay, Chile, Columbia, Haiti, El Salvador, Cuba, Panama, Venezuela.

DTL Locations:

Holland, UK (Bristol, Telford), Singapore, Australia, New Zealand, Sri Lanka, Pakistan, China, Turkey, UAE, Lebanon, Iran, Oman, Kuwait, Qatar, Kenya, Uganda, Tanzania, Ethiopia, Eritrea, Malawi, Zambia, Mozambique, Seychelles, Mauritius, Madagascar, Burundi, Ivory Coast, Ghana, Guinea, Nigeria, Senegal, Gambia, Sierra Leone, Liberia, Mali, Angola, Libya, Egypt, Sudan, Morocco, Puerto Rico, Chile.

BUSINESS PARTNERSHIPS:

Their relationships with the key automakers have both expanded as well as improved over the year. We have added General Motors India to their list of customers. All the major automakers in India now actively look at Apollo Tyres Ltd. as a partner in their jtheirneys. The last financial year has been a watershed year in ATL's march towards being a significant global player.

The year 2006 witnessed many a milestones being created starting with Apollo Tyres strategic acquisition of Dunlop South Africa and becoming the first Indian tyre company to have a transnational footprint. A very important milestone was the initiation of direct exports by Apollo tyres to its International customers across Africa, Middle East, South America, Asia Pacific and Europe. With over a hundred thousand passenger car tyres exported in 06-07, Apollo Tyres retains its position as the country's highest exporter of passenger car tyres. A major fillip to ATL exports has been achieved last year, by breaking into the most sophisticated market of the world - Europe, with ATL's quality brands.

European market will be the strategic focus for the high quality premium brands of Apollo passenger car radials. Passenger car tyres sales would be the driver in Exports sales growth and would be supported suitably by Truck Bus Radials being planned for launch in this year. Last year, ATL also launched a slew of new patterns in high performance and ultra high performance passenger car radial segment with Acelere Sportz and Aspire.

Critical emphasis has also been placed on enhancing the brand 'Apollo' in the overseas markets through marketing initiatives like the Winning Edge and Apollo Vista, to result in committed business growth from the network partners.

DISTRIBUTION NETWORK:

Aiming to make the most of ongoing growth in the promising world tyre market, Apollo Tyres is expanding its operations by fortifying local production capacity, product line ups and depth into the market. With over 120 sales & service stock points, 5 zonal offices, 18 state offices and 11 redistribution centres, Apollo Tyres is poised to penetrate its presence to the farthest corners of the country. A 4,032 strong dealership network along with 2138 Apollo Tyre Worlds, 194 Apollo Radial Worlds and 61 Apollo Pragati Kendras, ensures that Apollo Tyres is never very far from its consumers.

The over 3000 exclusive Apollo Tyre World and Apollo Tyre Radial outlets have initiated a quick response mechanism by enabling prompt product delivery and after sales service to customers throughout the country.

Carrying forward a similar spirit are the Apollo Pragati Kendras. This initiative not only provides the latest farm technologies to their customers through their tie-up with domain specialists in this area but also helps their customers to choose the best suited products for their applications.

On the global forefront, Apollo Tyres has firmly grounded its feet in South Africa by integrating Dunlop's operations.
The manufacturing facilities at Durban, Ladysmith and Zimbabwe have helped Apollo Tyres in consolidating its position in the highly competitive tyre market. With 5 sales, service & branch offices, 9 regional offices and 3 distribution centres at Ladysmith, Durban and Jetpark (Johannesburg) the company is all set to meet the demands of a plethora of its international clients. In the current scenario, its total dealer count stands at 936 out of which 193 are Dunlop accredited dealers - making it perhaps the only company to have a chain of independent Dealers (DADs), retaining the flavour of entrepreneurship.

OPERATIONS:
During the financial year ended March 31, 2007, sales from operations recorded Rs 37743.43 million as against Rs 30021.19 million during the previous year, registering a growth of 25.72%.

Operating profit, before interest and depreciation, amounted to Rs.3122.93 million as against Rs.2239.22 million during the previous year. Net profit, after providing for interest, depreciation and tax amounted to Rs.1134.22 million as against Rs.781.69 million during the previous year, recording a growth of 45.10%.

The Company has achieved remarkable growth in its operations supported by a motivated management team, aggressive marketing initiatives, better operating and financial efficiencies. A sharp focus on profitability and fiscal discipline in payment terms has resulted in significant financial gains. Cost management and better production efficiencies have helped in maintaining a profitable track record, despite a sharp increase in input costs, which we were able to pass to some extent to the customer.

PRODUCTION:
During the year 2006-07, Company has achieved 6.9% growth in production tonnage by registering production of 269,000 MT as against 252,000 MT in the previous year. All expansion programmes were implemented successfully as envisaged, by increasing total capacity across all plants to 736 MT/day from 704 MT/day.

RAW MATERIALS:

The year under review witnessed steep raw material price increases which included natural rubber, synthetic rubber and carbon black. Natural rubber prices touched an all-time peak in the international markets in 2006-07 due to weather disruptions in Thailand and Malaysia and insurgent activities in the rubber producing regions in Southern Thailand. Increased investor interest in commodities has also contributed to higher natural rubber prices during the year under review. Driven by international prices, in India too, natural rubber prices touched a high during this period. The inverted duty structure in their industry continues, where custom duty on imported natural rubber is 20% against 10% custom duty on the import of finished tyres. Prices of synthetic rubber have also increased in the year under review due to an adverse demand and supply situation and sharp increase in crude oil prices. Carbon black prices have escalated sharply due to a similar rise in feedstock prices combined with a tight supply position. The continuing antidumping duty on nylon tyre cord fabric and rubber chemicals have further added to raw material costs. TheCompany continued to focus on strategic partnership with key suppliers of the above raw materials and in expanding the sourcing network across the world to leverage competitive prices.

DOMESTIC MARKETING:

In India, the Apollo Tyres brand has continued on the growth path that it has set for itself, benefiting from the spread and depth of its dealer network, the Company's customer-focussed marketing initiatives and the launch of products relevant to the Indian consumer. Adding further impetus to this growth have been a carefully planned and executed series of activities in the realm of product development, customer education, building relationships with key automobile manufacturers and promotion of profiled marketing properties. On the product front, The Company has progressed further in bringing to the Indian customer tyres in every category, suited to the needs of Indian consumers, the country's rapidly expanding road infrastructure and the advent of new generation vehicles in all segments. In keeping with TheCompany's philosophy of continuously servicing the customer, a number of product launches took place over the course of the year. These include an expansion in the Gold series of commercial tyres, launch of the Champion FS - a class-leading fuel saver for the truck & bus segment, and the Regal Transport brand of truck & bus radial tyres. All light commercial vehicle tyres were further strengthened with the incorporation of a dual-bead technology, which allows for optimum benefits under varying load conditions. For the passenger segment, the ultra high performance tyres Acelere Sportz and Aspire were introduced, along with an expanded range of the 4x4 Hawkz tyres.

The Company continues to add some of the world's best-known automobile manufacturers to its list of OE partners. This includes General Motors, their new vehicle Spark was launched riding exclusively on Apollo Acelere tyres. Two other new products included the entry of The Company into the retreading material arena with DuraTread and the retreaded tyres category with DuraTyres. The Company continued on its existing platform of care for customer, under the Safe Drive banner, establishing temporary clinics on National Highways, where passenger car tyres were checked for condition and usage, and a report given to the driver for future reference, irrespective of the brand used. This was extended to the commercial vehicle segment under the 'Tyre Pressure Check Day' banner. Both these activities have brought The Company tremendous goodwill and empathy with vehicle owner.

The continuation of double digit growth while reinforcing the Apollo Tyres brand and maintaining Apollo Tyres' premium quality position is what makes The Company's leadership in the Indian market unique as well as enviable.

EXPORTS:

The last financial year has been a watershed year in The Company's march towards becoming a significant global player, having undertaken extensive measures to strengthen the Company's exports to key countries across the world. As a result, The Company's share of total exports from India has gone up from 12% in 2003-04 to 18.6% in 2006-07. A major filip to the Company's exports has been achieved by breaking into the most sophisticated tyre market in the world - Europe - high quality brands. Europe continues to remain the strategic focus for the Company's premium brands of Apollo passenger car radial tyres. With over 500,000 units, The Company has emerged as the highest exporter of passenger car tyres from India in 2006-07.

Going forward, the focus would remain on export of passenger car radials, supported by truck and bus radials.

EXPANSION PROGRAMME/FUTURE OUTLOOK:

The Company's future outlook continues to remain strong and positive with a focus on exploring new growth opportunities both within India and overseas. The Company's passenger car radial tyre manufacturing capacity was expanded to achieve 300,000 tyres per month from an earlier capacity of 210,000 at the beginning of the year. Light truck radial capacity has been augmented to 50,000 per month. In the coming year, expansion programmers will continue in both expanding existing capacity and range of products, identifying newer opportunities and continuing to bring to the customer base a better and higher range of existing and allied products.

Manufacturing capacity of Dunlop Tyres, South Africa, which is now owned by The Company, was augmented by about 10% through debottlenecking and improved operational efficiencies. The Company would continue its efforts on improving plant efficiency, thereby, releasing hidden capacity and bringing down conversion costs.

ACQUISITION OF DUNLOP TYRES INTERNATIONAL, SOUTH AFRICA:

The Company had completed its first international acquisition of Dunlop Tyres International (Pty) Limited on April 21, 2006. Given the local domestic price and global raw material cost pressures in South Africa, the acquisition by The Company has benefited Dunlop Tyres International significantly. Certain key integration benefits have already been realised and further positive results are expected in the forthcoming year. There has been specific emphasis on improvement of efficiencies and output in truck radial and earthmover products in Durban and ultra high performance products in Ladysmith. These initiatives will positively impact Dunlop's competitive capability and favorably position the group for growth and improved profitability in the forthcoming financial year.

FIXED ASSETS

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

Website Details:

Milestones of Apollo Tyres

1972: The Company’s license was obtained by Mr Mathew T Marattukalam, Jacob Thomas and his associates.

1974: The Company was taken over by Dr. Raunaq Singh and his associates.

1975: April 13, Perambra Plant Foundation stone was laid down.

1976: Apollo Tyres Limited was registered.

1977: Plant commissioned in Kerala with 49 TPD capacity.

1982: Manufacturing of Passenger Car Radial Tyres in Kerala.

1991: The second plant commissioned in Baroda.

1995: Acquired Premier Tyres Limited in Kerala.

2000: Exclusive Radial capacity established at Baroda.

2003: Radial Capacity expanded to 6600 tyres per day.November 17, JointVenture with Michelin.

2004: Launch of Apollo Acelere- 'H' Speed Rated Car Radials.

2005: April 13, Perambra Plant completes 30 Years.

2006: January 30, Dunlop South Africa is acquired.

Company Flashback

Named after the Greek Sun God, Apollo, the company subject has created a niche for itself in the Indian tyre market. After three decades of consistent growth, today it is the premier tyre manufacturing company of India.

The history of the company dates back to the early 70s. In 1972, license was obtained by Mr. Mathew T Marattukalam, Jacob Thomas and his associates. The company was taken over by Dr. Raunaq Singh and his associates in 1974. The implementation of the tyre project took place in 1976 in Perambra (Kerala). In 1977 commercial production began with an installed capacity of 420,000 each of tyres and tubes.

The Research and Development of Apollo Tyres took place at Perambra in Cochin and later it had grown to a substantial height and stature at its present location at Limda, Baroda. All the activities in the R&D center are extensively supported by a series of highly sophisticated equipment that help the research scientists develop products as per customers' specific requirements. The centers have the facilities and expertise for the following:

Development of compounds for improved performance
Raw material development
Analytical research
Reverse engineering
Advanced design using CAD
FEA modeling of tyres
Simulation testing of the designed product
Product validity & reliability studies

MEDIA RELEASE

Apollo Tyres Appoints Chief Financial Officer and Chief of Research & Technology

Appointments in keeping with the company’s expansion plans

Gurgaon, Haryana, India, August 4, 2008: Salil Gupta has been appointed Chief Financial Officer at Apollo Tyres Ltd. Mr Gupta will be overseeing the Finance, Taxation and Accounts functions at the organisation, with the primary objective of contributing to the organisation’s financial health and stability, ensuring full compliance with statutory guidelines and the company’s corporate governance policies. His responsibilities also include an advisory role to the Legal and Secretarial functions of the company. Salil Gupta’s last assignment was with Dentsu India, where he served as the Group Chief Financial Officer for over a year. Prior to this, he had spent a significant part of his career as a member of the Indian Revenue Services, which included a stint with the Securities & Exchange Board of India. He has worked with KPMG as Director, Tax and Regulatory Services. An Economics Major from Punjab University, Mr Gupta is a qualified Chartered Accountant.

The appointment of a CFO comes at a time when Apollo Tyres is in an expansion mode with Greenfield facilities planned for Gyongyos, Hungary and Chennai, India. Also on the cards are brownfield expansions at the Gujarat Plant in India and the two South African Plants in Durban and Ladysmith respectively. Considering the current scenario of an all round capacity increase, and the challenges of rising raw material costs, Mr Gupta’s role becomes pivotal in providing the balancing act for the organisation. Summed up Salil Gupta, Chief Financial Officer, “I have joined the organisation when it is at an inflection point, poised for expansion on a global platform, in an environment which is challenging to say the least. The key job is to continuously improve internal efficiencies and create greater value for our customers.”

A month back, Apollo Tyres also brought on board Peter Becker as Chief of Research & Technology. He will be leading Apollo Tyres’ initiatives in tyre technology, research and new product development, especially keeping in mind the mobility needs of European customers. Mr Becker will be based out of Germany, where he will be responsible for establishing an R&D facility for Apollo Tyres. He will be working with Apollo’s research, technology and design teams across geographical locations in India, South Africa and Europe.

Peter Becker’s appointment forms part of Apollo Tyres Ltd’s plans for the European market. The company has already announced the establishment of a passenger car radial tyre manufacturing facility in Hungary, with an initial investment of Euro 200 million. Said Peter Becker, Chief, Research & Technology, “I am excited by this opportunity and impressed by the possibilities the future holds with Apollo Tyres. I am positive that we will be able to bring out competitive products which address our European and global customer needs.”

Peter Becker joins Apollo Tyres from Goodyear Dunlop Germany, where he was the Senior Manager Tyre Development (passenger, light truck and 4x4 tyres) for the past seven years. Prior to this, he spent 15 years in various positions of leadership at the Sumitomo Group’s testing facility SP Reifenwerke GmbH at Hanau, apart from three years developing special vehicles at Opel AG. Mr Becker studied Mechanical Engineering in Germany; and as part of his education spent time as an apprentice at Deutsche Lufthansa AG studying aircraft mechanics.

Commenting on the crucial appointments of Salil Gupta and Peter Becker, Neeraj Kanwar, Vice Chairman & Joint MD, Apollo Tyres Ltd, said: “The appointments reflect Apollo’s commitment to long term goals and our tradition of leveraging talent across markets. While Peter brings with him rich product technology experience, Salil’s strength lies in his knowledge of managing diverse businesses. Their appointment further strengthens Apollo’s Leadership Team and gives the company’s growth agenda an added impetus.”

About Apollo Tyres Limited

Apollo Tyres Ltd. is a high-performance company and the leading Indian tyre manufacturer with revenues of over US$ 1.2 billion. It is built around the core principles of creating stakeholder value through reliability in its products and dependability in its relationships. The company has four manufacturing units in India and four in southern Africa. Two greenfield facilities are currently underway in Chennai, India, and Gyongyos, Hungary. The company has a network of over 4,000 dealerships in India, of which over 2,500 are exclusive outlets. In South Africa, it has over 900 dealerships, of which 190 are Dunlop Zones. Website: www.apollotyres.com

First quarter revenues up 15%; shareholders approve 50% dividend payout Chairman says: “Spiralling input costs continue to remain a key cause of concern”

Kochi, Kerala, and July 18, 2008: The Board of Directors of Apollo Tyres Limited, today took on record the company’s unaudited results for the first quarter of the financial year 2008-09. Earlier in the day, at the 35th Annual General Meeting of the company, the shareholders approved the annual dividend payout of 50% per share for the year ended March 31, 2008.

Highlights: Q1 FY2008-09 (April-June) versus Q1 FY2007-08

• Consolidated revenue reported at Rs.13.2 billion up 15% from Rs.11.5 billion

• Consolidated net profit after tax at Rs.586.6 million up 7.3% from Rs 546.4 million

• Standalone India Operations revenue at Rs 10.7 billion up 23% from Rs 8.7 billion

• Standalone India Operations net profit after tax at Rs 486.3 million up 4% from Rs 467.6 mn

• Sharp rise in prices of raw materials precipitated price corrections across products

Commenting on the results, Mr Onkar S Kanwar, Chairman & Managing Director, Apollo Tyres Ltd, said: “These are probably one of the most challenging times we have faced as a company. The unnatural rise in crude and natural rubber prices, have had a cascading impact across all raw materials. Combined with prices, which are two or three times higher than what they were last year, we are facing the added problem of certain essential crude-based raw materials being unavailable even at higher prices. Merely by increasing product prices we will not be able to bridge this yawning gap. The only solution is to look internally, undertaking rigorous efficiency and economy drives across the organisation. That’s the silver lining. I believe this frugality will only strengthen the company in the long run.”

In the 12 months between June 2007 and July 2008, natural rubber prices have gone up by 61%, while crude prices are up 111%. Crude-based derivatives like rubber chemicals are costlier by 60%, while an item like poly butadiene rubber is currently facing a production crisis, despite a price increase of 115%.

About Apollo Tyres Ltd

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 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.43.23
UK Pound	1	Rs.80.89
Euro	1	Rs.63.80

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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		72

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.	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

MIRA INFORM REPORT

1786.840

1937.100

11258.000

10346.300

5658.250

5422.010

930.850

553.750

6589.100

5975.760

4668.900

4370.540

Unit