ANNUAL REPORT 09-10

67

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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

CORPORATE GOVERNANCE REPORT

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

Ministry of Corporate Affairs has proposed Corporate Governance Voluntary Guidelines 2009 and Corporate Social Responsibility Voluntary Guidelines 2009 during December, 2009 for voluntary adoption by all listed companies. Your Company is committed to the highest standards of compliance and in all feasible cases, action is being instituted to ensure we remain benchmarked in these areas.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, the auditors of your Company, will retire at the ensuing Annual General Meeting and are eligible for reappointment.

PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in Annexure-C of this report.

DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 217 (2AA) of the Companies Act, 1956, your Directors state that:

i) In preparation of the annual accounts for the year ended March 31, 2010, the applicable accounting standards have been followed and there has been no material departure;

ii) The selected accounting policies were applied consistently and the Directors made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of March 31, 2010, and of the profit of the company for the year ended as on date;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation to the State Governments of Kerala, Gujarat, Haryana, Tamil Nadu, and the national Governments of India, the Netherlands and South Africa as also all the bankers, financial institutions, consumers, vendors, members and other stakeholders for their valuable support and patronage during the year under review. The Board further wishes to place on record their deep sense of appreciation for the committed services and contribution made by employees towards the growth of the Company.

For and on behalf of the Board of Directors

Place: Gurgaon. (Onkar S Kanwar) Date : May 28, 2010. Chairman & Managing Director

For operational purposes, the Board has made certain restructuring changes in respect of the following subsidiaries:

- The shares of Apollo Tyres AG (Switzerland) held by Apollo Tyres Ltd. have been transferred in favour of Apollo Tyres (Cyprus) Pvt. Ltd. as on 31.3.2010.

- Apollo Tyres Zrt (Hungary), a wholly owned subsidiary of Apollo Tyres AG (Switzerland) has applied for reduction of capital and voluntary dissolution during the year. The reduction of capital was approved vide order of the Court dated January 4, 2010.

- Apollo Tyres GmbH (Germany), a wholly owned subsidiary of Apollo Tyres AG (Switzerland) has been merged with Vredestein GmbH (Germany). The merger has been registered on April 7, 2010 effective from October 1, 2009.

The members may refer to the statement under Section 212(3) of the Companies Act, 1956, forming part of accounts, for further information on the Companys subsidiaries.

The Company has applied to the Central Government for its approval under Section 212 (8) of the Companies Act, 1956, exempting the Company from attaching the accounts of the subsidiary companies. The information regarding subsidiaries in terms of the order of Central Government u/s 212(8) shall be made part of the Annual Report. The consolidated accounts are attached along with accounts of your Company.

In view of the ongoing economic uncertainty in Zimbabwe and the long term restriction on financial repatriation, the accounts of Zimbabwe based entities have not been consolidated under accounting standard (AS 21) Consolidated Financial Statements. Please refer to note 2 (c) of schedule 12 of consolidated accounts.

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 your Company, and its subsidiary companies.

You may refer to the Management Discussion and Analysis report and other sections for a more detailed analysis of Europe and South Africa operations.

FIXED DEPOSITS

Your Company is not accepting fixed deposits from the public/shareholders. In respect of fixed deposit issued earlier, cheques had been issued for the deposit amount and interest thereon amounting to Rs 1.31 millions, which remained unencashed as on March 31, 2010. Out of this amount, no amount has remained unclaimed for more than 7 years, and no amount has been transferred to Investor Education and Protection Fund on March 31, 2010.

AUDITORS REPORT

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

COST AUDIT

M/s N P Gopalakrishnan & Co., cost accountants, has been appointed to conduct cost audit for the year ended March 31, 2010. They will submit their report to the Board of Directors before forwarding it to the Ministry of Corporate Affairs, Government of India.

BOARD OF DIRECTORS

The Government of Kerala nominated Mr P Prabakaran in place of Mr L C Goyal on the Board of the Company w.e.f. January 29, 2010. The Board places on record its appreciation for the contribution made by Mr L C Goyal during his tenure of Directorship.

Mr Shardul S Shroff resigned from the Directorship of the Company w.e.f. March 25, 2010. The Board places on record its appreciation for the contribution made by Mr Shardul S Shroff during his tenure of Directorship.

Mr Raaja Kanwar resigned from the Directorship of the Company w.e.f. May 17, 2010. The Board places on record its appreciation for the contribution made by Mr Raaja Kanwar during his tenure of Directorship.

Mr M J Hankinson, Dr S Narayan and Mr Nimesh N Kampani retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

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

66

segment has also been consistent and we have now started supplying tyres to the Chevrolet Beat, Hyundai i20, Volkswagen Polo, Ford Figo, Tata Sumo Grande and Indigo Manza, in addition to the vast number of existing models where Apollo is a force to reckon with.

Truly 2009-10 has concluded on a resounding note for the Company and the spirit remains unstoppable as ever.

EXPORTS

The demand outlook in international markets saw a revival at the start of year 2009-10, from the lows of the previous years closing. The severe dip in all-around demand had put considerable strain in despatches out of India, however the Companys exports ended on a satisfactory note.

Exports of passenger car radial tyres continued to be the highest amongst the Indian tyre producers. The exports of truck and bus tyres were better than the previous year, though enhanced focus on exploiting surging demand in the domestic market led to controlled despatches for exports.

On the marketing front, efforts were made for enhancing brand Apollo, across geographies, by conducting successful programmes like Apollo Vista, Safe Drive and technical training sessions for tyre specialists and dealers.

The year also witnessed the coming together of high-performing business partners for two conclaves - one in China for the passenger car radial partners and the other in India for the truck and bus tyre partners, where they were felicitated and their bonds with Apollo strengthened further.

EXPANSION PROGRAMME/FUTURE OUTLOOK

State of the art radial facility at Chennai went on stream as per schedule. After the initial trial production, in September 2009, regular marketable production of passenger car radials (PCR) commenced on March 11, 2010. Whereas on successful completion of trial production of truck-bus radials (TBR) in March 2010, their regular marketable production commenced on May 11, 2010. Further expansion of TBR and PCR capacity is in progress to meet projected market requirements.

Cross ply and radial farm tyre capacity augmentation was done in Perambra thereby increasing the plant capacity by approximately 48,000 units/year in rear tractor and 34,000 units/year in front tractor on an annualised basis.

ACQUISITION OF VREDESTEIN BANDEN BV, NETHERLANDS

On May 15 2009, your Company completed its second international acquisition of Vredestein Banden BV, an European tyre manufacturing Company, headquartered in the Netherlands, with a production capacity of 5.5 million tyres per annum, thus taking another step towards realising its goal of becoming a global player. The acquisition was done through a Special Purpose Vehicle and was funded through internal accruals and external debt.

The acquisition has benefited your Company by providing access to the high-end passenger car radial technology and a well-established distribution network for entry into Europe. The acquisition would also benefit our combined operations through reduced raw material costs as a result of consolidated purchase and access to cost competitive manufacturing base in the future. The integration efforts have started and your Company has finalised its plan of launching the brand Apollo tyres in Europe.

These integration initiatives will favourably position the Company for growth and improved profitability in the coming years.

SUBSIDIARY COMPANIES

During the year under review, Apollo (Mauritius) Holdings Pvt. Ltd., your Companys subsidiary has incorporated Apollo Tyres Co-operatief U.A. w.e.f. May 1, 2009 and Apollo Tyres (Cyprus) Pvt. Ltd. w.e.f August 14, 2009 as its wholly owned subsidiaries.

Apollo Tyres Co-operatief U.A acquired Vredestein Banden BV, a company based in the Netherlands w.e.f. May 15, 2009 along with its various subsidiaries, which are primarily marketing and sales offices, in Europe. The name of Vredestein Banden BV was subsequently changed to Apollo Vredestein BV in order to synergise the corporate name with Apollo Group.

Apollo Tyres South Africa (Pty.) Ltd., your Companys subsidiary, has acquired Pollock & Aitken (Pty) Ltd, a Company owning property in Durban, on February 8, 2010 from the old Dunlop Staff Provident Fund, which went into voluntary liquidation.

65

ANNUAL REPORT 09-10

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 July 16, 2010 to July 29, 2010 (both days inclusive).

BUY BACK OF SHARES

The Board of Directors at the meeting held on March 19, 2009 had approved buy back of equity shares at a price not exceeding Rs 25 per share upto an amount not exceeding Rs 1220 millions, representing approximately 10% of the Company's paid up equity share capital and free reserves as per last audited accounts.

The Company could not buyback any shares because of the run-up in the market price of your Companys shares immediately after the commencement of buyback beyond Rs 25 per share i.e. maximum price fixed for buyback. Therefore, the Company closed its buy-back offer on the due date for the closure i.e. March 18, 2010.

RAW MATERIALS

Natural Rubber continued its upward trend during the year as the prices moved from a level of Rs 100/kg in June, 2009 to Rs 140/kg in December, 2009. It recorded a new peak of around Rs 150/kg in March, 2010. The demand and supply gap in the India industry widened to 1,00,000 MT due to production shortfall and increased demand on the back of economic recovery. Natural Rubber imports continue to attract customs duty of 20% as against 10% duty on tyres. The production in Malaysia and Indonesia has been lower due to erratic weather conditions and the has also been impacted by the unrest in Thailand. International prices reached their all time high of US$ 3.5/kg.

Crude oil remained steady in the band of US$ 7080/barrel but crude-based raw materials, like synthetic rubber, carbon black, and nylon tyre cord fabric, remained firm due to adverse demand-supply gap caused by plant shutdowns in high- cost countries and revival of demand from emerging economies.

The anti-dumping duty continued on nylon tyre cord fabric and rubber chemicals while during the year, anti-dumping duty was imposed on carbon black imported from Australia, China, Russia and Thailand. Your Company continued its approach of developing cost effective sources, renewed focus on global sourcing and vendor relationship management, while working capital management remained an area of focus throughout the year.

DOMESTIC MARKETING

The year under review has been a record year for the Company with the demand increasing in both the commercial vehicle and passenger vehicle tyre categories. India Operations achieved a new benchmark in sales turnover at Rs 50 billion. During the year, the company recorded a very healthy growth of 23.7% in overall sales value over the previous year. Seen category wise this translates to a number growth of 16% in heavy commercial vehicles, 26% in passenger car radials, 18% in light commercial vehicles, and maintaining sales volumes in tractor rear.

The triumvirate of our marketing strategy, namely, Product Leadership, Customer Intimacy, and Operations Excellence, were pursued even more vigorously to create better differentiators in the market and gain consumer preference and market share.

In the realm of passenger vehicle tyres, the year was witness to the launch of a new range of tubeless radials in the economy segment with the introduction of Amazer 3G and Amazer 3G Maxx. A new advertising and communication campaign was released on television with the central creative thought on Apollo tubeless radials The Road is a Friend.

Branded tyre outlets Apollo Zones are also extending their footprint across major cities in the country and being very well received by our business partners who are coming forward to participate under this programme. The Zones, which display Apollos high-performance, technology-driven tyres and alloy wheels in a friendly and interactive fashion, are aimed at capturing the customers share of mind and heart. Their unique appeal lies in the visual dispaly, an in-store experience which promises comfort, convenience and best-in-class service.

In the area of commercial vehicles tyres, your Company was able to gain market share and further consolidate its leadership position in truck-bus tyres. Our priority is to maintain the dominant leadership position in cross ply tyres, whilst leading radialisation in India. Apollo Tyres, in association with CV magazine, also announced the first set of dedicated awards for the commercial vehicle segment in India Apollo CV Awards 2010. These awards recognise the best fleets in India and are aimed at creating engagement value with commercial customers.

India has emerged as a major OEM hub for passenger car tyres in view of a strong domestic market and also as a competitive export base with heavy order booking by Maruti Suzuki, Hyundai and Tata Motors. Our growth in the OE

64

63

ANNUAL REPORT 09-10

Year Ended Year Ended 31.03.2010 31.03.2009 31.03.2010 31.03.2009 Standalone Consolidated*

Net Sales 50,366 40,704 81,207 49,841 Other Income & Exceptional Items 112 113 1,088 230

Operating Profit (EBIDTA) 7,950 3,360 12,836 4,392Less: Depreciation 1,228 980 2,542 1,285 Interest 740 668 1,154 973 Provision for Tax 1,832 631 2,606 742

Net Profit 4,150 1,081 6,534 1,392

D I R E C T O R S R E P O R T

Dear Member,

Your Directors have pleasure in presenting the Annual Report along with the audited statement of accounts of your Company for the financial year ended March 31, 2010.

FINANCIAL PERFORMANCE

*The consolidated figures for the year ended March 31, 2009 do not include Apollo Vredestein BV, a tyre company in the Netherlands, Europe, acquired on May 15, 2009.

OPERATIONS

During the financial year ended March 31, 2010, your Company has scaled new heights and set benchmarks in terms of sales and profitability. The Net Sales of India Operations increased from Rs 40,704 millions during the previous year toRs 50,366 millions in the year under review, registering a growth of 23.7%.

Operating Profit, before interest and depreciation, amounted to Rs 7,950 millions as against Rs 3,360 millions during the previous year. Net Profit, after providing for interest, depreciation and tax amounted to Rs 4,150 millions as againstRs 1,081 millions during the previous year, registering an increase of 284%.

The amount available for appropriations, including surplus from previous year amounted to Rs 7,395 millions. Surplus of Rs 5,892 millions has been carried forward to the Balance Sheet after providing for Dividend of Rs 378 millions, Dividend Tax of Rs 63 millions, Debenture Redemption Reserve worth Rs 62 millions and General Reserve of Rs 1,000 millions.

The consolidated figures of sales from operations in India, South Africa and Europe (post the recent acquisition of Apollo Vredestein BV based out of the Netherlands), amounted to Rs 81,207 millions and Net Profit, after providing for interest, depreciation and tax amounted to Rs 6,534 millions recording a growth of 63% in sales and 369% in Net Profit respectively.

On a consolidated level, the break up of revenues across the three geographies is as follows: India 62%, Europe 24% and South Africa 14%.

Your Company has recorded commendable growth during the year under review. Consistency across operations has strengthened Apollo's position as a leading global tyre manufacturing organisation headquartered in India.

PRODUCTION

During the year, your Company has achieved 19.4 % growth in production tonnage by registering production of 326,739 MT as against 273,575 MT in the previous year.

DIVIDEND

Your Directors recommend a dividend of Re 0.75 per equity share for FY2009-10 for your approval. There will be no tax deduction at source on Dividend Payments, but your Company will have to bear tax on dividend @ 16.6%, inclusive of surcharge.

Rs/Million

61

STATEMENT RELATING TOSUBSIDIARY COMPANIES 116

CONSOLIDATED ACCOUNTS

AUDITORS REPORT

BALANCE SHEET

PROFIT & LOSS ACCOUNT

CASH FLOW STATEMENT

SCHEDULES

SIGNIFICANT ACCOUNTINGPOLICIES & NOTES ON ACCOUNTS

117

DIRECTORS REPORT 63

CORPORATE GOVERNANCEREPORT 70

STANDALONE ACCOUNTS

AUDITORS REPORT

BALANCE SHEET

PROFIT & LOSS ACCOUNT

CASH FLOW STATEMENT

SCHEDULES

SIGNIFICANT ACCOUNTINGPOLICIES & NOTES ON ACCOUNTS

117

118

119

120

121

133

83

86

87

88

89

100

83

BALANCE SHEET ABSTRACT &COMPANYS GENERAL BUSINESS PROFILE 115

INFORMATION PERTAININGTO SUBSIDIARY COMPANIES U/S 212(8) 150

F I N A N C I A L S

ANNUAL REPORT 09-10

67

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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

CORPORATE GOVERNANCE REPORT

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

Ministry of Corporate Affairs has proposed Corporate Governance Voluntary Guidelines 2009 and Corporate Social Responsibility Voluntary Guidelines 2009 during December, 2009 for voluntary adoption by all listed companies. Your Company is committed to the highest standards of compliance and in all feasible cases, action is being instituted to ensure we remain benchmarked in these areas.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, the auditors of your Company, will retire at the ensuing Annual General Meeting and are eligible for reappointment.

PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in Annexure-C of this report.

DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 217 (2AA) of the Companies Act, 1956, your Directors state that:

i) In preparation of the annual accounts for the year ended March 31, 2010, the applicable accounting standards have been followed and there has been no material departure;

ii) The selected accounting policies were applied consistently and the Directors made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of March 31, 2010, and of the profit of the company for the year ended as on date;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation to the State Governments of Kerala, Gujarat, Haryana, Tamil Nadu, and the national Governments of India, the Netherlands and South Africa as also all the bankers, financial institutions, consumers, vendors, members and other stakeholders for their valuable support and patronage during the year under review. The Board further wishes to place on record their deep sense of appreciation for the committed services and contribution made by employees towards the growth of the Company.

For and on behalf of the Board of Directors

Place: Gurgaon. (Onkar S Kanwar) Date : May 28, 2010. Chairman & Managing Director

For operational purposes, the Board has made certain restructuring changes in respect of the following subsidiaries:

- The shares of Apollo Tyres AG (Switzerland) held by Apollo Tyres Ltd. have been transferred in favour of Apollo Tyres (Cyprus) Pvt. Ltd. as on 31.3.2010.

- Apollo Tyres Zrt (Hungary), a wholly owned subsidiary of Apollo Tyres AG (Switzerland) has applied for reduction of capital and voluntary dissolution during the year. The reduction of capital was approved vide order of the Court dated January 4, 2010.

- Apollo Tyres GmbH (Germany), a wholly owned subsidiary of Apollo Tyres AG (Switzerland) has been merged with Vredestein GmbH (Germany). The merger has been registered on April 7, 2010 effective from October 1, 2009.

The members may refer to the statement under Section 212(3) of the Companies Act, 1956, forming part of accounts, for further information on the Companys subsidiaries.

The Company has applied to the Central Government for its approval under Section 212 (8) of the Companies Act, 1956, exempting the Company from attaching the accounts of the subsidiary companies. The information regarding subsidiaries in terms of the order of Central Government u/s 212(8) shall be made part of the Annual Report. The consolidated accounts are attached along with accounts of your Company.

In view of the ongoing economic uncertainty in Zimbabwe and the long term restriction on financial repatriation, the accounts of Zimbabwe based entities have not been consolidated under accounting standard (AS 21) Consolidated Financial Statements. Please refer to note 2 (c) of schedule 12 of consolidated accounts.

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 your Company, and its subsidiary companies.

You may refer to the Management Discussion and Analysis report and other sections for a more detailed analysis of Europe and South Africa operations.

FIXED DEPOSITS

Your Company is not accepting fixed deposits from the public/shareholders. In respect of fixed deposit issued earlier, cheques had been issued for the deposit amount and interest thereon amounting to Rs 1.31 millions, which remained unencashed as on March 31, 2010. Out of this amount, no amount has remained unclaimed for more than 7 years, and no amount has been transferred to Investor Education and Protection Fund on March 31, 2010.

AUDITORS REPORT

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

COST AUDIT

M/s N P Gopalakrishnan & Co., cost accountants, has been appointed to conduct cost audit for the year ended March 31, 2010. They will submit their report to the Board of Directors before forwarding it to the Ministry of Corporate Affairs, Government of India.

BOARD OF DIRECTORS

The Government of Kerala nominated Mr P Prabakaran in place of Mr L C Goyal on the Board of the Company w.e.f. January 29, 2010. The Board places on record its appreciation for the contribution made by Mr L C Goyal during his tenure of Directorship.

Mr Shardul S Shroff resigned from the Directorship of the Company w.e.f. March 25, 2010. The Board places on record its appreciation for the contribution made by Mr Shardul S Shroff during his tenure of Directorship.

Mr Raaja Kanwar resigned from the Directorship of the Company w.e.f. May 17, 2010. The Board places on record its appreciation for the contribution made by Mr Raaja Kanwar during his tenure of Directorship.

Mr M J Hankinson, Dr S Narayan and Mr Nimesh N Kampani retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

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

66

segment has also been consistent and we have now started supplying tyres to the Chevrolet Beat, Hyundai i20, Volkswagen Polo, Ford Figo, Tata Sumo Grande and Indigo Manza, in addition to the vast number of existing models where Apollo is a force to reckon with.

Truly 2009-10 has concluded on a resounding note for the Company and the spirit remains unstoppable as ever.

EXPORTS

The demand outlook in international markets saw a revival at the start of year 2009-10, from the lows of the previous years closing. The severe dip in all-around demand had put considerable strain in despatches out of India, however the Companys exports ended on a satisfactory note.

Exports of passenger car radial tyres continued to be the highest amongst the Indian tyre producers. The exports of truck and bus tyres were better than the previous year, though enhanced focus on exploiting surging demand in the domestic market led to controlled despatches for exports.

On the marketing front, efforts were made for enhancing brand Apollo, across geographies, by conducting successful programmes like Apollo Vista, Safe Drive and technical training sessions for tyre specialists and dealers.

The year also witnessed the coming together of high-performing business partners for two conclaves - one in China for the passenger car radial partners and the other in India for the truck and bus tyre partners, where they were felicitated and their bonds with Apollo strengthened further.

EXPANSION PROGRAMME/FUTURE OUTLOOK

State of the art radial facility at Chennai went on stream as per schedule. After the initial trial production, in September 2009, regular marketable production of passenger car radials (PCR) commenced on March 11, 2010. Whereas on successful completion of trial production of truck-bus radials (TBR) in March 2010, their regular marketable production commenced on May 11, 2010. Further expansion of TBR and PCR capacity is in progress to meet projected market requirements.

Cross ply and radial farm tyre capacity augmentation was done in Perambra thereby increasing the plant capacity by approximately 48,000 units/year in rear tractor and 34,000 units/year in front tractor on an annualised basis.

ACQUISITION OF VREDESTEIN BANDEN BV, NETHERLANDS

On May 15 2009, your Company completed its second international acquisition of Vredestein Banden BV, an European tyre manufacturing Company, headquartered in the Netherlands, with a production capacity of 5.5 million tyres per annum, thus taking another step towards realising its goal of becoming a global player. The acquisition was done through a Special Purpose Vehicle and was funded through internal accruals and external debt.

The acquisition has benefited your Company by providing access to the high-end passenger car radial technology and a well-established distribution network for entry into Europe. The acquisition would also benefit our combined operations through reduced raw material costs as a result of consolidated purchase and access to cost competitive manufacturing base in the future. The integration efforts have started and your Company has finalised its plan of launching the brand Apollo tyres in Europe.

These integration initiatives will favourably position the Company for growth and improved profitability in the coming years.

SUBSIDIARY COMPANIES

During the year under review, Apollo (Mauritius) Holdings Pvt. Ltd., your Companys subsidiary has incorporated Apollo Tyres Co-operatief U.A. w.e.f. May 1, 2009 and Apollo Tyres (Cyprus) Pvt. Ltd. w.e.f August 14, 2009 as its wholly owned subsidiaries.

Apollo Tyres Co-operatief U.A acquired Vredestein Banden BV, a company based in the Netherlands w.e.f. May 15, 2009 along with its various subsidiaries, which are primarily marketing and sales offices, in Europe. The name of Vredestein Banden BV was subsequently changed to Apollo Vredestein BV in order to synergise the corporate name with Apollo Group.

Apollo Tyres South Africa (Pty.) Ltd., your Companys subsidiary, has acquired Pollock & Aitken (Pty) Ltd, a Company owning property in Durban, on February 8, 2010 from the old Dunlop Staff Provident Fund, which went into voluntary liquidation.

65

ANNUAL REPORT 09-10

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 July 16, 2010 to July 29, 2010 (both days inclusive).

BUY BACK OF SHARES

The Board of Directors at the meeting held on March 19, 2009 had approved buy back of equity shares at a price not exceeding Rs 25 per share upto an amount not exceeding Rs 1220 millions, representing approximately 10% of the Company's paid up equity share capital and free reserves as per last audited accounts.

The Company could not buyback any shares because of the run-up in the market price of your Companys shares immediately after the commencement of buyback beyond Rs 25 per share i.e. maximum price fixed for buyback. Therefore, the Company closed its buy-back offer on the due date for the closure i.e. March 18, 2010.

RAW MATERIALS

Natural Rubber continued its upward trend during the year as the prices moved from a level of Rs 100/kg in June, 2009 to Rs 140/kg in December, 2009. It recorded a new peak of around Rs 150/kg in March, 2010. The demand and supply gap in the India industry widened to 1,00,000 MT due to production shortfall and increased demand on the back of economic recovery. Natural Rubber imports continue to attract customs duty of 20% as against 10% duty on tyres. The production in Malaysia and Indonesia has been lower due to erratic weather conditions and the has also been impacted by the unrest in Thailand. International prices reached their all time high of US$ 3.5/kg.

Crude oil remained steady in the band of US$ 7080/barrel but crude-based raw materials, like synthetic rubber, carbon black, and nylon tyre cord fabric, remained firm due to adverse demand-supply gap caused by plant shutdowns in high- cost countries and revival of demand from emerging economies.

The anti-dumping duty continued on nylon tyre cord fabric and rubber chemicals while during the year, anti-dumping duty was imposed on carbon black imported from Australia, China, Russia and Thailand. Your Company continued its approach of developing cost effective sources, renewed focus on global sourcing and vendor relationship management, while working capital management remained an area of focus throughout the year.

DOMESTIC MARKETING

The year under review has been a record year for the Company with the demand increasing in both the commercial vehicle and passenger vehicle tyre categories. India Operations achieved a new benchmark in sales turnover at Rs 50 billion. During the year, the company recorded a very healthy growth of 23.7% in overall sales value over the previous year. Seen category wise this translates to a number growth of 16% in heavy commercial vehicles, 26% in passenger car radials, 18% in light commercial vehicles, and maintaining sales volumes in tractor rear.

The triumvirate of our marketing strategy, namely, Product Leadership, Customer Intimacy, and Operations Excellence, were pursued even more vigorously to create better differentiators in the market and gain consumer preference and market share.

In the realm of passenger vehicle tyres, the year was witness to the launch of a new range of tubeless radials in the economy segment with the introduction of Amazer 3G and Amazer 3G Maxx. A new advertising and communication campaign was released on television with the central creative thought on Apollo tubeless radials The Road is a Friend.

Branded tyre outlets Apollo Zones are also extending their footprint across major cities in the country and being very well received by our business partners who are coming forward to participate under this programme. The Zones, which display Apollos high-performance, technology-driven tyres and alloy wheels in a friendly and interactive fashion, are aimed at capturing the customers share of mind and heart. Their unique appeal lies in the visual dispaly, an in-store experience which promises comfort, convenience and best-in-class service.

In the area of commercial vehicles tyres, your Company was able to gain market share and further consolidate its leadership position in truck-bus tyres. Our priority is to maintain the dominant leadership position in cross ply tyres, whilst leading radialisation in India. Apollo Tyres, in association with CV magazine, also announced the first set of dedicated awards for the commercial vehicle segment in India Apollo CV Awards 2010. These awards recognise the best fleets in India and are aimed at creating engagement value with commercial customers.

India has emerged as a major OEM hub for passenger car tyres in view of a strong domestic market and also as a competitive export base with heavy order booking by Maruti Suzuki, Hyundai and Tata Motors. Our growth in the OE

64

63

ANNUAL REPORT 09-10

Year Ended Year Ended 31.03.2010 31.03.2009 31.03.2010 31.03.2009 Standalone Consolidated*

Net Sales 50,366 40,704 81,207 49,841 Other Income & Exceptional Items 112 113 1,088 230

Operating Profit (EBIDTA) 7,950 3,360 12,836 4,392Less: Depreciation 1,228 980 2,542 1,285 Interest 740 668 1,154 973 Provision for Tax 1,832 631 2,606 742

Net Profit 4,150 1,081 6,534 1,392

D I R E C T O R S R E P O R T

Dear Member,

Your Directors have pleasure in presenting the Annual Report along with the audited statement of accounts of your Company for the financial year ended March 31, 2010.

FINANCIAL PERFORMANCE

*The consolidated figures for the year ended March 31, 2009 do not include Apollo Vredestein BV, a tyre company in the Netherlands, Europe, acquired on May 15, 2009.

OPERATIONS

During the financial year ended March 31, 2010, your Company has scaled new heights and set benchmarks in terms of sales and profitability. The Net Sales of India Operations increased from Rs 40,704 millions during the previous year toRs 50,366 millions in the year under review, registering a growth of 23.7%.

Operating Profit, before interest and depreciation, amounted to Rs 7,950 millions as against Rs 3,360 millions during the previous year. Net Profit, after providing for interest, depreciation and tax amounted to Rs 4,150 millions as againstRs 1,081 millions during the previous year, registering an increase of 284%.

The amount available for appropriations, including surplus from previous year amounted to Rs 7,395 millions. Surplus of Rs 5,892 millions has been carried forward to the Balance Sheet after providing for Dividend of Rs 378 millions, Dividend Tax of Rs 63 millions, Debenture Redemption Reserve worth Rs 62 millions and General Reserve of Rs 1,000 millions.

The consolidated figures of sales from operations in India, South Africa and Europe (post the recent acquisition of Apollo Vredestein BV based out of the Netherlands), amounted to Rs 81,207 millions and Net Profit, after providing for interest, depreciation and tax amounted to Rs 6,534 millions recording a growth of 63% in sales and 369% in Net Profit respectively.

On a consolidated level, the break up of revenues across the three geographies is as follows: India 62%, Europe 24% and South Africa 14%.

Your Company has recorded commendable growth during the year under review. Consistency across operations has strengthened Apollo's position as a leading global tyre manufacturing organisation headquartered in India.

PRODUCTION

During the year, your Company has achieved 19.4 % growth in production tonnage by registering production of 326,739 MT as against 273,575 MT in the previous year.

DIVIDEND

Your Directors recommend a dividend of Re 0.75 per equity share for FY2009-10 for your approval. There will be no tax deduction at source on Dividend Payments, but your Company will have to bear tax on dividend @ 16.6%, inclusive of surcharge.

Rs/Million

61

STATEMENT RELATING TOSUBSIDIARY COMPANIES 116

CONSOLIDATED ACCOUNTS

AUDITORS REPORT

BALANCE SHEET

PROFIT & LOSS ACCOUNT

CASH FLOW STATEMENT

SCHEDULES

SIGNIFICANT ACCOUNTINGPOLICIES & NOTES ON ACCOUNTS

117

DIRECTORS REPORT 63

CORPORATE GOVERNANCEREPORT 70

STANDALONE ACCOUNTS

AUDITORS REPORT

BALANCE SHEET

PROFIT & LOSS ACCOUNT

CASH FLOW STATEMENT

SCHEDULES

SIGNIFICANT ACCOUNTINGPOLICIES & NOTES ON ACCOUNTS

117

118

119

120

121

133

83

86

87

88

89

100

83

BALANCE SHEET ABSTRACT &COMPANYS GENERAL BUSINESS PROFILE 115

INFORMATION PERTAININGTO SUBSIDIARY COMPANIES U/S 212(8) 150

F I N A N C I A L S

ANNUAL REPORT 09-10

67

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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

CORPORATE GOVERNANCE REPORT

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

Ministry of Corporate Affairs has proposed Corporate Governance Voluntary Guidelines 2009 and Corporate Social Responsibility Voluntary Guidelines 2009 during December, 2009 for voluntary adoption by all listed companies. Your Company is committed to the highest standards of compliance and in all feasible cases, action is being instituted to ensure we remain benchmarked in these areas.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, the auditors of your Company, will retire at the ensuing Annual General Meeting and are eligible for reappointment.

PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in Annexure-C of this report.

DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 217 (2AA) of the Companies Act, 1956, your Directors state that:

i) In preparation of the annual accounts for the year ended March 31, 2010, the applicable accounting standards have been followed and there has been no material departure;

ii) The selected accounting policies were applied consistently and the Directors made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of March 31, 2010, and of the profit of the company for the year ended as on date;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation to the State Governments of Kerala, Gujarat, Haryana, Tamil Nadu, and the national Governments of India, the Netherlands and South Africa as also all the bankers, financial institutions, consumers, vendors, members and other stakeholders for their valuable support and patronage during the year under review. The Board further wishes to place on record their deep sense of appreciation for the committed services and contribution made by employees towards the growth of the Company.

For and on behalf of the Board of Directors

Place: Gurgaon. (Onkar S Kanwar) Date : May 28, 2010. Chairman & Managing Director

For operational purposes, the Board has made certain restructuring changes in respect of the following subsidiaries:

- The shares of Apollo Tyres AG (Switzerland) held by Apollo Tyres Ltd. have been transferred in favour of Apollo Tyres (Cyprus) Pvt. Ltd. as on 31.3.2010.

- Apollo Tyres Zrt (Hungary), a wholly owned subsidiary of Apollo Tyres AG (Switzerland) has applied for reduction of capital and voluntary dissolution during the year. The reduction of capital was approved vide order of the Court dated January 4, 2010.

- Apollo Tyres GmbH (Germany), a wholly owned subsidiary of Apollo Tyres AG (Switzerland) has been merged with Vredestein GmbH (Germany). The merger has been registered on April 7, 2010 effective from October 1, 2009.

The members may refer to the statement under Section 212(3) of the Companies Act, 1956, forming part of accounts, for further information on the Companys subsidiaries.

The Company has applied to the Central Government for its approval under Section 212 (8) of the Companies Act, 1956, exempting the Company from attaching the accounts of the subsidiary companies. The information regarding subsidiaries in terms of the order of Central Government u/s 212(8) shall be made part of the Annual Report. The consolidated accounts are attached along with accounts of your Company.

In view of the ongoing economic uncertainty in Zimbabwe and the long term restriction on financial repatriation, the accounts of Zimbabwe based entities have not been consolidated under accounting standard (AS 21) Consolidated Financial Statements. Please refer to note 2 (c) of schedule 12 of consolidated accounts.

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 your Company, and its subsidiary companies.

You may refer to the Management Discussion and Analysis report and other sections for a more detailed analysis of Europe and South Africa operations.

FIXED DEPOSITS

Your Company is not accepting fixed deposits from the public/shareholders. In respect of fixed deposit issued earlier, cheques had been issued for the deposit amount and interest thereon amounting to Rs 1.31 millions, which remained unencashed as on March 31, 2010. Out of this amount, no amount has remained unclaimed for more than 7 years, and no amount has been transferred to Investor Education and Protection Fund on March 31, 2010.

AUDITORS REPORT

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

COST AUDIT

M/s N P Gopalakrishnan & Co., cost accountants, has been appointed to conduct cost audit for the year ended March 31, 2010. They will submit their report to the Board of Directors before forwarding it to the Ministry of Corporate Affairs, Government of India.

BOARD OF DIRECTORS

The Government of Kerala nominated Mr P Prabakaran in place of Mr L C Goyal on the Board of the Company w.e.f. January 29, 2010. The Board places on record its appreciation for the contribution made by Mr L C Goyal during his tenure of Directorship.

Mr Shardul S Shroff resigned from the Directorship of the Company w.e.f. March 25, 2010. The Board places on record its appreciation for the contribution made by Mr Shardul S Shroff during his tenure of Directorship.

Mr Raaja Kanwar resigned from the Directorship of the Company w.e.f. May 17, 2010. The Board places on record its appreciation for the contribution made by Mr Raaja Kanwar during his tenure of Directorship.

Mr M J Hankinson, Dr S Narayan and Mr Nimesh N Kampani retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

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

66

segment has also been consistent and we have now started supplying tyres to the Chevrolet Beat, Hyundai i20, Volkswagen Polo, Ford Figo, Tata Sumo Grande and Indigo Manza, in addition to the vast number of existing models where Apollo is a force to reckon with.

Truly 2009-10 has concluded on a resounding note for the Company and the spirit remains unstoppable as ever.

EXPORTS

The demand outlook in international markets saw a revival at the start of year 2009-10, from the lows of the previous years closing. The severe dip in all-around demand had put considerable strain in despatches out of India, however the Companys exports ended on a satisfactory note.

Exports of passenger car radial tyres continued to be the highest amongst the Indian tyre producers. The exports of truck and bus tyres were better than the previous year, though enhanced focus on exploiting surging demand in the domestic market led to controlled despatches for exports.

On the marketing front, efforts were made for enhancing brand Apollo, across geographies, by conducting successful programmes like Apollo Vista, Safe Drive and technical training sessions for tyre specialists and dealers.

The year also witnessed the coming together of high-performing business partners for two conclaves - one in China for the passenger car radial partners and the other in India for the truck and bus tyre partners, where they were felicitated and their bonds with Apollo strengthened further.

EXPANSION PROGRAMME/FUTURE OUTLOOK

State of the art radial facility at Chennai went on stream as per schedule. After the initial trial production, in September 2009, regular marketable production of passenger car radials (PCR) commenced on March 11, 2010. Whereas on successful completion of trial production of truck-bus radials (TBR) in March 2010, their regular marketable production commenced on May 11, 2010. Further expansion of TBR and PCR capacity is in progress to meet projected market requirements.

Cross ply and radial farm tyre capacity augmentation was done in Perambra thereby increasing the plant capacity by approximately 48,000 units/year in rear tractor and 34,000 units/year in front tractor on an annualised basis.

ACQUISITION OF VREDESTEIN BANDEN BV, NETHERLANDS

On May 15 2009, your Company completed its second international acquisition of Vredestein Banden BV, an European tyre manufacturing Company, headquartered in the Netherlands, with a production capacity of 5.5 million tyres per annum, thus taking another step towards realising its goal of becoming a global player. The acquisition was done through a Special Purpose Vehicle and was funded through internal accruals and external debt.

The acquisition has benefited your Company by providing access to the high-end passenger car radial technology and a well-established distribution network for entry into Europe. The acquisition would also benefit our combined operations through reduced raw material costs as a result of consolidated purchase and access to cost competitive manufacturing base in the future. The integration efforts have started and your Company has finalised its plan of launching the brand Apollo tyres in Europe.

These integration initiatives will favourably position the Company for growth and improved profitability in the coming years.

SUBSIDIARY COMPANIES

During the year under review, Apollo (Mauritius) Holdings Pvt. Ltd., your Companys subsidiary has incorporated Apollo Tyres Co-operatief U.A. w.e.f. May 1, 2009 and Apollo Tyres (Cyprus) Pvt. Ltd. w.e.f August 14, 2009 as its wholly owned subsidiaries.

Apollo Tyres Co-operatief U.A acquired Vredestein Banden BV, a company based in the Netherlands w.e.f. May 15, 2009 along with its various subsidiaries, which are primarily marketing and sales offices, in Europe. The name of Vredestein Banden BV was subsequently changed to Apollo Vredestein BV in order to synergise the corporate name with Apollo Group.

Apollo Tyres South Africa (Pty.) Ltd., your Companys subsidiary, has acquired Pollock & Aitken (Pty) Ltd, a Company owning property in Durban, on February 8, 2010 from the old Dunlop Staff Provident Fund, which went into voluntary liquidation.

65

ANNUAL REPORT 09-10

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 July 16, 2010 to July 29, 2010 (both days inclusive).

BUY BACK OF SHARES

The Board of Directors at the meeting held on March 19, 2009 had approved buy back of equity shares at a price not exceeding Rs 25 per share upto an amount not exceeding Rs 1220 millions, representing approximately 10% of the Company's paid up equity share capital and free reserves as per last audited accounts.

The Company could not buyback any shares because of the run-up in the market price of your Companys shares immediately after the commencement of buyback beyond Rs 25 per share i.e. maximum price fixed for buyback. Therefore, the Company closed its buy-back offer on the due date for the closure i.e. March 18, 2010.

RAW MATERIALS

Natural Rubber continued its upward trend during the year as the prices moved from a level of Rs 100/kg in June, 2009 to Rs 140/kg in December, 2009. It recorded a new peak of around Rs 150/kg in March, 2010. The demand and supply gap in the India industry widened to 1,00,000 MT due to production shortfall and increased demand on the back of economic recovery. Natural Rubber imports continue to attract customs duty of 20% as against 10% duty on tyres. The production in Malaysia and Indonesia has been lower due to erratic weather conditions and the has also been impacted by the unrest in Thailand. International prices reached their all time high of US$ 3.5/kg.

Crude oil remained steady in the band of US$ 7080/barrel but crude-based raw materials, like synthetic rubber, carbon black, and nylon tyre cord fabric, remained firm due to adverse demand-supply gap caused by plant shutdowns in high- cost countries and revival of demand from emerging economies.

The anti-dumping duty continued on nylon tyre cord fabric and rubber chemicals while during the year, anti-dumping duty was imposed on carbon black imported from Australia, China, Russia and Thailand. Your Company continued its approach of developing cost effective sources, renewed focus on global sourcing and vendor relationship management, while working capital management remained an area of focus throughout the year.

DOMESTIC MARKETING

The year under review has been a record year for the Company with the demand increasing in both the commercial vehicle and passenger vehicle tyre categories. India Operations achieved a new benchmark in sales turnover at Rs 50 billion. During the year, the company recorded a very healthy growth of 23.7% in overall sales value over the previous year. Seen category wise this translates to a number growth of 16% in heavy commercial vehicles, 26% in passenger car radials, 18% in light commercial vehicles, and maintaining sales volumes in tractor rear.

The triumvirate of our marketing strategy, namely, Product Leadership, Customer Intimacy, and Operations Excellence, were pursued even more vigorously to create better differentiators in the market and gain consumer preference and market share.

In the realm of passenger vehicle tyres, the year was witness to the launch of a new range of tubeless radials in the economy segment with the introduction of Amazer 3G and Amazer 3G Maxx. A new advertising and communication campaign was released on television with the central creative thought on Apollo tubeless radials The Road is a Friend.

Branded tyre outlets Apollo Zones are also extending their footprint across major cities in the country and being very well received by our business partners who are coming forward to participate under this programme. The Zones, which display Apollos high-performance, technology-driven tyres and alloy wheels in a friendly and interactive fashion, are aimed at capturing the customers share of mind and heart. Their unique appeal lies in the visual dispaly, an in-store experience which promises comfort, convenience and best-in-class service.

In the area of commercial vehicles tyres, your Company was able to gain market share and further consolidate its leadership position in truck-bus tyres. Our priority is to maintain the dominant leadership position in cross ply tyres, whilst leading radialisation in India. Apollo Tyres, in association with CV magazine, also announced the first set of dedicated awards for the commercial vehicle segment in India Apollo CV Awards 2010. These awards recognise the best fleets in India and are aimed at creating engagement value with commercial customers.

India has emerged as a major OEM hub for passenger car tyres in view of a strong domestic market and also as a competitive export base with heavy order booking by Maruti Suzuki, Hyundai and Tata Motors. Our growth in the OE

64

63

ANNUAL REPORT 09-10

Year Ended Year Ended 31.03.2010 31.03.2009 31.03.2010 31.03.2009 Standalone Consolidated*

Net Sales 50,366 40,704 81,207 49,841 Other Income & Exceptional Items 112 113 1,088 230

Operating Profit (EBIDTA) 7,950 3,360 12,836 4,392Less: Depreciation 1,228 980 2,542 1,285 Interest 740 668 1,154 973 Provision for Tax 1,832 631 2,606 742

Net Profit 4,150 1,081 6,534 1,392

D I R E C T O R S R E P O R T

Dear Member,

Your Directors have pleasure in presenting the Annual Report along with the audited statement of accounts of your Company for the financial year ended March 31, 2010.

FINANCIAL PERFORMANCE

*The consolidated figures for the year ended March 31, 2009 do not include Apollo Vredestein BV, a tyre company in the Netherlands, Europe, acquired on May 15, 2009.

OPERATIONS

During the financial year ended March 31, 2010, your Company has scaled new heights and set benchmarks in terms of sales and profitability. The Net Sales of India Operations increased from Rs 40,704 millions during the previous year toRs 50,366 millions in the year under review, registering a growth of 23.7%.

Operating Profit, before interest and depreciation, amounted to Rs 7,950 millions as against Rs 3,360 millions during the previous year. Net Profit, after providing for interest, depreciation and tax amounted to Rs 4,150 millions as againstRs 1,081 millions during the previous year, registering an increase of 284%.

The amount available for appropriations, including surplus from previous year amounted to Rs 7,395 millions. Surplus of Rs 5,892 millions has been carried forward to the Balance Sheet after providing for Dividend of Rs 378 millions, Dividend Tax of Rs 63 millions, Debenture Redemption Reserve worth Rs 62 millions and General Reserve of Rs 1,000 millions.

The consolidated figures of sales from operations in India, South Africa and Europe (post the recent acquisition of Apollo Vredestein BV based out of the Netherlands), amounted to Rs 81,207 millions and Net Profit, after providing for interest, depreciation and tax amounted to Rs 6,534 millions recording a growth of 63% in sales and 369% in Net Profit respectively.

On a consolidated level, the break up of revenues across the three geographies is as follows: India 62%, Europe 24% and South Africa 14%.

Your Company has recorded commendable growth during the year under review. Consistency across operations has strengthened Apollo's position as a leading global tyre manufacturing organisation headquartered in India.

PRODUCTION

During the year, your Company has achieved 19.4 % growth in production tonnage by registering production of 326,739 MT as against 273,575 MT in the previous year.

DIVIDEND

Your Directors recommend a dividend of Re 0.75 per equity share for FY2009-10 for your approval. There will be no tax deduction at source on Dividend Payments, but your Company will have to bear tax on dividend @ 16.6%, inclusive of surcharge.

Rs/Million

61

STATEMENT RELATING TOSUBSIDIARY COMPANIES 116

CONSOLIDATED ACCOUNTS

AUDITORS REPORT

BALANCE SHEET

PROFIT & LOSS ACCOUNT

CASH FLOW STATEMENT

SCHEDULES

SIGNIFICANT ACCOUNTINGPOLICIES & NOTES ON ACCOUNTS

117

DIRECTORS REPORT 63

CORPORATE GOVERNANCEREPORT 70

STANDALONE ACCOUNTS

AUDITORS REPORT

BALANCE SHEET

PROFIT & LOSS ACCOUNT

CASH FLOW STATEMENT

SCHEDULES

SIGNIFICANT ACCOUNTINGPOLICIES & NOTES ON ACCOUNTS

117

118

119

120

121

133

83

86

87

88

89

100

83

BALANCE SHEET ABSTRACT &COMPANYS GENERAL BUSINESS PROFILE 115

INFORMATION PERTAININGTO SUBSIDIARY COMPANIES U/S 212(8) 150

F I N A N C I A L S

ANNUAL REPORT 09-10

67

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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

CORPORATE GOVERNANCE REPORT

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

Ministry of Corporate Affairs has proposed Corporate Governance Voluntary Guidelines 2009 and Corporate Social Responsibility Voluntary Guidelines 2009 during December, 2009 for voluntary adoption by all listed companies. Your Company is committed to the highest standards of compliance and in all feasible cases, action is being instituted to ensure we remain benchmarked in these areas.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, the auditors of your Company, will retire at the ensuing Annual General Meeting and are eligible for reappointment.

PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in Annexure-C of this report.

DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 217 (2AA) of the Companies Act, 1956, your Directors state that:

i) In preparation of the annual accounts for the year ended March 31, 2010, the applicable accounting standards have been followed and there has been no material departure;

ii) The selected accounting policies were applied consistently and the Directors made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of March 31, 2010, and of the profit of the company for the year ended as on date;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation to the State Governments of Kerala, Gujarat, Haryana, Tamil Nadu, and the national Governments of India, the Netherlands and South Africa as also all the bankers, financial institutions, consumers, vendors, members and other stakeholders for their valuable support and patronage during the year under review. The Board further wishes to place on record their deep sense of appreciation for the committed services and contribution made by employees towards the growth of the Company.

For and on behalf of the Board of Directors

Place: Gurgaon. (Onkar S Kanwar) Date : May 28, 2010. Chairman & Managing Director

For operational purposes, the Board has made certain restructuring changes in respect of the following subsidiaries:

- The shares of Apollo Tyres AG (Switzerland) held by Apollo Tyres Ltd. have been transferred in favour of Apollo Tyres (Cyprus) Pvt. Ltd. as on 31.3.2010.

- Apollo Tyres Zrt (Hungary), a wholly owned subsidiary of Apollo Tyres AG (Switzerland) has applied for reduction of capital and voluntary dissolution during the year. The reduction of capital was approved vide order of the Court dated January 4, 2010.

- Apollo Tyres GmbH (Germany), a wholly owned subsidiary of Apollo Tyres AG (Switzerland) has been merged with Vredestein GmbH (Germany). The merger has been registered on April 7, 2010 effective from October 1, 2009.

The members may refer to the statement under Section 212(3) of the Companies Act, 1956, forming part of accounts, for further information on the Companys subsidiaries.

The Company has applied to the Central Government for its approval under Section 212 (8) of the Companies Act, 1956, exempting the Company from attaching the accounts of the subsidiary companies. The information regarding subsidiaries in terms of the order of Central Government u/s 212(8) shall be made part of the Annual Report. The consolidated accounts are attached along with accounts of your Company.

In view of the ongoing economic uncertainty in Zimbabwe and the long term restriction on financial repatriation, the accounts of Zimbabwe based entities have not been consolidated under accounting standard (AS 21) Consolidated Financial Statements. Please refer to note 2 (c) of schedule 12 of consolidated accounts.

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 your Company, and its subsidiary companies.

You may refer to the Management Discussion and Analysis report and other sections for a more detailed analysis of Europe and South Africa operations.

FIXED DEPOSITS

Your Company is not accepting fixed deposits from the public/shareholders. In respect of fixed deposit issued earlier, cheques had been issued for the deposit amount and interest thereon amounting to Rs 1.31 millions, which remained unencashed as on March 31, 2010. Out of this amount, no amount has remained unclaimed for more than 7 years, and no amount has been transferred to Investor Education and Protection Fund on March 31, 2010.

AUDITORS REPORT

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

COST AUDIT

M/s N P Gopalakrishnan & Co., cost accountants, has been appointed to conduct cost audit for the year ended March 31, 2010. They will submit their report to the Board of Directors before forwarding it to the Ministry of Corporate Affairs, Government of India.

BOARD OF DIRECTORS

The Government of Kerala nominated Mr P Prabakaran in place of Mr L C Goyal on the Board of the Company w.e.f. January 29, 2010. The Board places on record its appreciation for the contribution made by Mr L C Goyal during his tenure of Directorship.

Mr Shardul S Shroff resigned from the Directorship of the Company w.e.f. March 25, 2010. The Board places on record its appreciation for the contribution made by Mr Shardul S Shroff during his tenure of Directorship.

Mr Raaja Kanwar resigned from the Directorship of the Company w.e.f. May 17, 2010. The Board places on record its appreciation for the contribution made by Mr Raaja Kanwar during his tenure of Directorship.

Mr M J Hankinson, Dr S Narayan and Mr Nimesh N Kampani retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

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

66

segment has also been consistent and we have now started supplying tyres to the Chevrolet Beat, Hyundai i20, Volkswagen Polo, Ford Figo, Tata Sumo Grande and Indigo Manza, in addition to the vast number of existing models where Apollo is a force to reckon with.

Truly 2009-10 has concluded on a resounding note for the Company and the spirit remains unstoppable as ever.

EXPORTS

The demand outlook in international markets saw a revival at the start of year 2009-10, from the lows of the previous years closing. The severe dip in all-around demand had put considerable strain in despatches out of India, however the Companys exports ended on a satisfactory note.

Exports of passenger car radial tyres continued to be the highest amongst the Indian tyre producers. The exports of truck and bus tyres were better than the previous year, though enhanced focus on exploiting surging demand in the domestic market led to controlled despatches for exports.

On the marketing front, efforts were made for enhancing brand Apollo, across geographies, by conducting successful programmes like Apollo Vista, Safe Drive and technical training sessions for tyre specialists and dealers.

The year also witnessed the coming together of high-performing business partners for two conclaves - one in China for the passenger car radial partners and the other in India for the truck and bus tyre partners, where they were felicitated and their bonds with Apollo strengthened further.

EXPANSION PROGRAMME/FUTURE OUTLOOK

State of the art radial facility at Chennai went on stream as per schedule. After the initial trial production, in September 2009, regular marketable production of passenger car radials (PCR) commenced on March 11, 2010. Whereas on successful completion of trial production of truck-bus radials (TBR) in March 2010, their regular marketable production commenced on May 11, 2010. Further expansion of TBR and PCR capacity is in progress to meet projected market requirements.

Cross ply and radial farm tyre capacity augmentation was done in Perambra thereby increasing the plant capacity by approximately 48,000 units/year in rear tractor and 34,000 units/year in front tractor on an annualised basis.

ACQUISITION OF VREDESTEIN BANDEN BV, NETHERLANDS

On May 15 2009, your Company completed its second international acquisition of Vredestein Banden BV, an European tyre manufacturing Company, headquartered in the Netherlands, with a production capacity of 5.5 million tyres per annum, thus taking another step towards realising its goal of becoming a global player. The acquisition was done through a Special Purpose Vehicle and was funded through internal accruals and external debt.

The acquisition has benefited your Company by providing access to the high-end passenger car radial technology and a well-established distribution network for entry into Europe. The acquisition would also benefit our combined operations through reduced raw material costs as a result of consolidated purchase and access to cost competitive manufacturing base in the future. The integration efforts have started and your Company has finalised its plan of launching the brand Apollo tyres in Europe.

These integration initiatives will favourably position the Company for growth and improved profitability in the coming years.

SUBSIDIARY COMPANIES

During the year under review, Apollo (Mauritius) Holdings Pvt. Ltd., your Companys subsidiary has incorporated Apollo Tyres Co-operatief U.A. w.e.f. May 1, 2009 and Apollo Tyres (Cyprus) Pvt. Ltd. w.e.f August 14, 2009 as its wholly owned subsidiaries.

Apollo Tyres Co-operatief U.A acquired Vredestein Banden BV, a company based in the Netherlands w.e.f. May 15, 2009 along with its various subsidiaries, which are primarily marketing and sales offices, in Europe. The name of Vredestein Banden BV was subsequently changed to Apollo Vredestein BV in order to synergise the corporate name with Apollo Group.

Apollo Tyres South Africa (Pty.) Ltd., your Companys subsidiary, has acquired Pollock & Aitken (Pty) Ltd, a Company owning property in Durban, on February 8, 2010 from the old Dunlop Staff Provident Fund, which went into voluntary liquidation.

65

ANNUAL REPORT 09-10

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 July 16, 2010 to July 29, 2010 (both days inclusive).

BUY BACK OF SHARES

The Board of Directors at the meeting held on March 19, 2009 had approved buy back of equity shares at a price not exceeding Rs 25 per share upto an amount not exceeding Rs 1220 millions, representing approximately 10% of the Company's paid up equity share capital and free reserves as per last audited accounts.

The Company could not buyback any shares because of the run-up in the market price of your Companys shares immediately after the commencement of buyback beyond Rs 25 per share i.e. maximum price fixed for buyback. Therefore, the Company closed its buy-back offer on the due date for the closure i.e. March 18, 2010.

RAW MATERIALS

Natural Rubber continued its upward trend during the year as the prices moved from a level of Rs 100/kg in June, 2009 to Rs 140/kg in December, 2009. It recorded a new peak of around Rs 150/kg in March, 2010. The demand and supply gap in the India industry widened to 1,00,000 MT due to production shortfall and increased demand on the back of economic recovery. Natural Rubber imports continue to attract customs duty of 20% as against 10% duty on tyres. The production in Malaysia and Indonesia has been lower due to erratic weather conditions and the has also been impacted by the unrest in Thailand. International prices reached their all time high of US$ 3.5/kg.

Crude oil remained steady in the band of US$ 7080/barrel but crude-based raw materials, like synthetic rubber, carbon black, and nylon tyre cord fabric, remained firm due to adverse demand-supply gap caused by plant shutdowns in high- cost countries and revival of demand from emerging economies.

The anti-dumping duty continued on nylon tyre cord fabric and rubber chemicals while during the year, anti-dumping duty was imposed on carbon black imported from Australia, China, Russia and Thailand. Your Company continued its approach of developing cost effective sources, renewed focus on global sourcing and vendor relationship management, while working capital management remained an area of focus throughout the year.

DOMESTIC MARKETING

The year under review has been a record year for the Company with the demand increasing in both the commercial vehicle and passenger vehicle tyre categories. India Operations achieved a new benchmark in sales turnover at Rs 50 billion. During the year, the company recorded a very healthy growth of 23.7% in overall sales value over the previous year. Seen category wise this translates to a number growth of 16% in heavy commercial vehicles, 26% in passenger car radials, 18% in light commercial vehicles, and maintaining sales volumes in tractor rear.

The triumvirate of our marketing strategy, namely, Product Leadership, Customer Intimacy, and Operations Excellence, were pursued even more vigorously to create better differentiators in the market and gain consumer preference and market share.

In the realm of passenger vehicle tyres, the year was witness to the launch of a new range of tubeless radials in the economy segment with the introduction of Amazer 3G and Amazer 3G Maxx. A new advertising and communication campaign was released on television with the central creative thought on Apollo tubeless radials The Road is a Friend.

Branded tyre outlets Apollo Zones are also extending their footprint across major cities in the country and being very well received by our business partners who are coming forward to participate under this programme. The Zones, which display Apollos high-performance, technology-driven tyres and alloy wheels in a friendly and interactive fashion, are aimed at capturing the customers share of mind and heart. Their unique appeal lies in the visual dispaly, an in-store experience which promises comfort, convenience and best-in-class service.

In the area of commercial vehicles tyres, your Company was able to gain market share and further consolidate its leadership position in truck-bus tyres. Our priority is to maintain the dominant leadership position in cross ply tyres, whilst leading radialisation in India. Apollo Tyres, in association with CV magazine, also announced the first set of dedicated awards for the commercial vehicle segment in India Apollo CV Awards 2010. These awards recognise the best fleets in India and are aimed at creating engagement value with commercial customers.

India has emerged as a major OEM hub for passenger car tyres in view of a strong domestic market and also as a competitive export base with heavy order booking by Maruti Suzuki, Hyundai and Tata Motors. Our growth in the OE

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63

ANNUAL REPORT 09-10

Year Ended Year Ended 31.03.2010 31.03.2009 31.03.2010 31.03.2009 Standalone Consolidated*

Net Sales 50,366 40,704 81,207 49,841 Other Income & Exceptional Items 112 113 1,088 230

Operating Profit (EBIDTA) 7,950 3,360 12,836 4,392Less: Depreciation 1,228 980 2,542 1,285 Interest 740 668 1,154 973 Provision for Tax 1,832 631 2,606 742

Net Profit 4,150 1,081 6,534 1,392

D I R E C T O R S R E P O R T

Dear Member,

Your Directors have pleasure in presenting the Annual Report along with the audited statement of accounts of your Company for the financial year ended March 31, 2010.

FINANCIAL PERFORMANCE

*The consolidated figures for the year ended March 31, 2009 do not include Apollo Vredestein BV, a tyre company in the Netherlands, Europe, acquired on May 15, 2009.

OPERATIONS

During the financial year ended March 31, 2010, your Company has scaled new heights and set benchmarks in terms of sales and profitability. The Net Sales of India Operations increased from Rs 40,704 millions during the previous year toRs 50,366 millions in the year under review, registering a growth of 23.7%.

Operating Profit, before interest and depreciation, amounted to Rs 7,950 millions as against Rs 3,360 millions during the previous year. Net Profit, after providing for interest, depreciation and tax amounted to Rs 4,150 millions as againstRs 1,081 millions during the previous year, registering an increase of 284%.

The amount available for appropriations, including surplus from previous year amounted to Rs 7,395 millions. Surplus of Rs 5,892 millions has been carried forward to the Balance Sheet after providing for Dividend of Rs 378 millions, Dividend Tax of Rs 63 millions, Debenture Redemption Reserve worth Rs 62 millions and General Reserve of Rs 1,000 millions.

The consolidated figures of sales from operations in India, South Africa and Europe (post the recent acquisition of Apollo Vredestein BV based out of the Netherlands), amounted to Rs 81,207 millions and Net Profit, after providing for interest, depreciation and tax amounted to Rs 6,534 millions recording a growth of 63% in sales and 369% in Net Profit respectively.

On a consolidated level, the break up of revenues across the three geographies is as follows: India 62%, Europe 24% and South Africa 14%.

Your Company has recorded commendable growth during the year under review. Consistency across operations has strengthened Apollo's position as a leading global tyre manufacturing organisation headquartered in India.

PRODUCTION

During the year, your Company has achieved 19.4 % growth in production tonnage by registering production of 326,739 MT as against 273,575 MT in the previous year.

DIVIDEND

Your Directors recommend a dividend of Re 0.75 per equity share for FY2009-10 for your approval. There will be no tax deduction at source on Dividend Payments, but your Company will have to bear tax on dividend @ 16.6%, inclusive of surcharge.

Rs/Million

61

STATEMENT RELATING TOSUBSIDIARY COMPANIES 116

CONSOLIDATED ACCOUNTS

AUDITORS REPORT

BALANCE SHEET

PROFIT & LOSS ACCOUNT

CASH FLOW STATEMENT

SCHEDULES

SIGNIFICANT ACCOUNTINGPOLICIES & NOTES ON ACCOUNTS

117

DIRECTORS REPORT 63

CORPORATE GOVERNANCEREPORT 70

STANDALONE ACCOUNTS

AUDITORS REPORT

BALANCE SHEET

PROFIT & LOSS ACCOUNT

CASH FLOW STATEMENT

SCHEDULES

SIGNIFICANT ACCOUNTINGPOLICIES & NOTES ON ACCOUNTS

117

118

119

120

121

133

83

86

87

88

89

100

83

BALANCE SHEET ABSTRACT &COMPANYS GENERAL BUSINESS PROFILE 115

INFORMATION PERTAININGTO SUBSIDIARY COMPANIES U/S 212(8) 150

F I N A N C I A L S

ANNUAL REPORT 09-10

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CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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

CORPORATE GOVERNANCE REPORT

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

Ministry of Corporate Affairs has proposed Corporate Governance Voluntary Guidelines 2009 and Corporate Social Responsibility Voluntary Guidelines 2009 during December, 2009 for voluntary adoption by all listed companies. Your Company is committed to the highest standards of compliance and in all feasible cases, action is being instituted to ensure we remain benchmarked in these areas.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, the auditors of your Company, will retire at the ensuing Annual General Meeting and are eligible for reappointment.

PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in Annexure-C of this report.

DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 217 (2AA) of the Companies Act, 1956, your Directors state that:

i) In preparation of the annual accounts for the year ended March 31, 2010, the applicable accounting standards have been followed and there has been no material departure;

ii) The selected accounting policies were applied consistently and the Directors made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of March 31, 2010, and of the profit of the company for the year ended as on date;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation to the State Governments of Kerala, Gujarat, Haryana, Tamil Nadu, and the national Governments of India, the Netherlands and South Africa as also all the bankers, financial institutions, consumers, vendors, members and other stakeholders for their valuable support and patronage during the year under review. The Board further wishes to place on record their deep sense of appreciation for the committed services and contribution made by employees towards the growth of the Company.

For and on behalf of the Board of Directors

Place: Gurgaon. (Onkar S Kanwar) Date : May 28, 2010. Chairman & Managing Director

For operational purposes, the Board has made certain restructuring changes in respect of the following subsidiaries:

- The shares of Apollo Tyres AG (Switzerland) held by Apollo Tyres Ltd. have been transferred in favour of Apollo Tyres (Cyprus) Pvt. Ltd. as on 31.3.2010.

- Apollo Tyres Zrt (Hungary), a wholly owned subsidiary of Apollo Tyres AG (Switzerland) has applied for reduction of capital and voluntary dissolution during the year. The reduction of capital was approved vide order of the Court dated January 4, 2010.

- Apollo Tyres GmbH (Germany), a wholly owned subsidiary of Apollo Tyres AG (Switzerland) has been merged with Vredestein GmbH (Germany). The merger has been registered on April 7, 2010 effective from October 1, 2009.

The members may refer to the statement under Section 212(3) of the Companies Act, 1956, forming part of accounts, for further information on the Companys subsidiaries.

The Company has applied to the Central Government for its approval under Section 212 (8) of the Companies Act, 1956, exempting the Company from attaching the accounts of the subsidiary companies. The information regarding subsidiaries in terms of the order of Central Government u/s 212(8) shall be made part of the Annual Report. The consolidated accounts are attached along with accounts of your Company.

In view of the ongoing economic uncertainty in Zimbabwe and the long term restriction on financial repatriation, the accounts of Zimbabwe based entities have not been consolidated under accounting standard (AS 21) Consolidated Financial Statements. Please refer to note 2 (c) of schedule 12 of consolidated accounts.

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 your Company, and its subsidiary companies.

You may refer to the Management Discussion and Analysis report and other sections for a more detailed analysis of Europe and South Africa operations.

FIXED DEPOSITS

Your Company is not accepting fixed deposits from the public/shareholders. In respect of fixed deposit issued earlier, cheques had been issued for the deposit amount and interest thereon amounting to Rs 1.31 millions, which remained unencashed as on March 31, 2010. Out of this amount, no amount has remained unclaimed for more than 7 years, and no amount has been transferred to Investor Education and Protection Fund on March 31, 2010.

AUDITORS REPORT

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

COST AUDIT

M/s N P Gopalakrishnan & Co., cost accountants, has been appointed to conduct cost audit for the year ended March 31, 2010. They will submit their report to the Board of Directors before forwarding it to the Ministry of Corporate Affairs, Government of India.

BOARD OF DIRECTORS

The Government of Kerala nominated Mr P Prabakaran in place of Mr L C Goyal on the Board of the Company w.e.f. January 29, 2010. The Board places on record its appreciation for the contribution made by Mr L C Goyal during his tenure of Directorship.

Mr Shardul S Shroff resigned from the Directorship of the Company w.e.f. March 25, 2010. The Board places on record its appreciation for the contribution made by Mr Shardul S Shroff during his tenure of Directorship.

Mr Raaja Kanwar resigned from the Directorship of the Company w.e.f. May 17, 2010. The Board places on record its appreciation for the contribution made by Mr Raaja Kanwar during his tenure of Directorship.

Mr M J Hankinson, Dr S Narayan and Mr Nimesh N Kampani retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

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

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segment has also been consistent and we have now started supplying tyres to the Chevrolet Beat, Hyundai i20, Volkswagen Polo, Ford Figo, Tata Sumo Grande and Indigo Manza, in addition to the vast number of existing models where Apollo is a force to reckon with.

Truly 2009-10 has concluded on a resounding note for the Company and the spirit remains unstoppable as ever.

EXPORTS

The demand outlook in international markets saw a revival at the start of year 2009-10, from the lows of the previous years closing. The severe dip in all-around demand had put considerable strain in despatches out of India, however the Companys exports ended on a satisfactory note.

Exports of passenger car radial tyres continued to be the highest amongst the Indian tyre producers. The exports of truck and bus tyres were better than the previous year, though enhanced focus on exploiting surging demand in the domestic market led to controlled despatches for exports.

On the marketing front, efforts were made for enhancing brand Apollo, across geographies, by conducting successful programmes like Apollo Vista, Safe Drive and technical training sessions for tyre specialists and dealers.

The year also witnessed the coming together of high-performing business partners for two conclaves - one in China for the passenger car radial partners and the other in India for the truck and bus tyre partners, where they were felicitated and their bonds with Apollo strengthened further.

EXPANSION PROGRAMME/FUTURE OUTLOOK

State of the art radial facility at Chennai went on stream as per schedule. After the initial trial production, in September 2009, regular marketable production of passenger car radi