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Directors Report of Goodyear India Ltd.

Dec 31, 2014

Dear Members,

The Directors are delighted to present the report on the business and operations of the Company for the year ended December 31,2014:

1. THE COMPANIES ACT, 2013

The Ministry of Corporate Affairs ("MCA") has notified 282 sections of the Companies Act, 2013 in tranches in September 2013 and March 2014 with majority of the sections as well as rules being notified in March 2014. The Companies Act, 1956 continues to be in force to the extent of the corresponding provisions of the Companies Act, 2013, which are yet to be notified. MCA vide its Circular dated April 4, 2014 has clarified that the financial statements (and documents attached thereto), auditors'' report and Board''s report in respect of financial years that commenced earlier than 1st April, 2014 shall be governed by the relevant provisions/ Schedules/ rules of the Companies Act, 1956. Accordingly the Company has prepared this Board''s Report in accordance with the provisions of the Companies Act, 1956, however, the Company has made such disclosures under the Companies Act 2013, as considered appropriate.

2. FINANCIAL SUMMARY

A brief summary of the audited financials of the Company for the year ended December 31, 2014 is as follows: (Rs. In Lakhs) Particulars 2014 2013

Total Sales & Other Income 174,061 173,611

Less: Excise Duty 12,962 13,717

Net Sales & Other Income 161,099 159,894

Less: Total Expenditure Excluding 142,556 142,968 Interest & Depreciation

Profit before Interest, 18,543 16,926

Depreciation & Tax

Less: i) Finance Cost 341 216

ii) Depreciation 2,851 2,518

Profit before Tax 15,351 14,192

Less: Provision for Taxation:

Current Tax 5,164 4,604

Deferred Tax 63 181

Profit after Tax 10,124 9,407

Except, as disclosed elsewhere in the Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of the financial year and the date of this Report.

3. DIVIDEND

Your Board recommends a dividend @ Rs 10 per equity share for the year 2014. The recommended dividend will absorb a sum of Rs. 2307 lakhs and tax on dividend will be Rs. 472 lakhs. Out of the surplus, an amount of Rs. 1020 lakhs is transferred to General Reserve and balance carried to the Balance Sheet as at December 31, 2014 is Rs. 6325 lakhs.

4. OPERATIONS

The Company manufactures automotive bias tyres viz. farm tyres and commercial truck tyres at its Ballabgarh plant and also trades in "Goodyear" branded tyres [including radial passenger and Off The Road (OTR) bias tyres] manufactured by Goodyear South Asia Tyres Private Limited (GSATPL), Aurangabad. The other products in which the Company markets and sells include tubes, flaps and Radial OTR imported tyres.

The sales performance during the year is as follows: (Rs. in Lakhs)

Tyres 161,200

Flaps 51

Tubes 9,626

The Company feels proud to have been awarded "Business Partner of the Year Award" from Mahindra & Mahindra (M&M). This is the highest level award for any supplier bestowed by M&M.

The Company has been conferred second consecutive global recognition as a Partner-level supplier by John Deere. This is also the highest level global award in their achieving excellence program. The honor is in recognition of your Company''s dedication to providing products and service of outstanding quality as well as commitment to continuous improvement.

The Company has been re-certified as being a Class A S&OP (Sales and Operations Planning) entity by Goodyear''s internal global audit team. This certification reinforces the commitment of the business towards process orientation and a drive towards continuous improvement.

This year also saw the introduction of Assurance Triple Max tyres catering to the need of consumers who are looking for safety (braking ability being a key driver) as a key requirement from their tyres. We have also strengthened our presence and portfolio in SUV segment with launch of Wrangler ATSA tyres. In our Consumer business we have been able to increase contribution from higher rim sizes, thereby improving overall profitability and adding market share.

5. FINANCE AND ACCOUNTS

During the year, additions to fixed assets amounted to Rs. 5,855 lakhs as against Rs. 3,807 lakhs in the previous year. The Capital expenditure incurred amounted to Rs.4,120 lakhs. The interest and other finance cost during the year was Rs. 341 lakhs.

As of the end of December 2014, an amount of NIL matured deposits remained unclaimed.

The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as on the balance sheet date.

6. FINANCIAL STATEMENTS (Full & Abridged)

In terms of Clause 32 of the Listing Agreement, your Company shall supply:

(i) Soft copies of full Annual Reports containing its Balance Sheet, Profit & Loss account and Directors'' Report to all those shareholder(s) who have registered their email address(es) for the purpose.

(ii) Hard copy of Abridged Annual Report containing the salient features of all the documents, as prescribed in Section 219 of the Companies Act, 1956 to those shareholder(s) who have not so registered their email address(es); and

(iii) Hard copies of full Annual Reports to those shareholders, who request the same.

The Board of Directors has decided to circulate the abridged Annual Report containing salient features of the Balance Sheet and Profit And Loss account to the shareholders for the financial year 2014. A Full version of the Annual Report will be available on Company''s website www.goodyear.co.in and will also be made available to investors upon request.

7. DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 134 (3) (c) OF COMPANIES ACT, 20131 CORRESPONDING TO SECTION 217 (2AA) OF COMPANIES ACT, 1956 READ WITH CLAUSE 49 (III) (D) (4) (A) OF LISTING AGREEMENT

Dear Directors state that the annual accounts of the Company have been prepared in conformity, in all material respects, with the generally accepted accounting standards in India and supported by reasonable and prudent judgments and statements so as to give a true and fair view of the state of affairs of the Company and of the results of the operations of the Company. Significant accounting policies followed and other disclosures are appearing in Note 2 to the Notes of the financial statements.

These financial statements of the Company have been audited by Price Waterhouse & Co., Bangalore LLP (FRN: 007567S/ S-200012). A reference may be made to their report dated February 27, 2015 to the members together with Annexure thereto containing information per requirement under the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment), Order, 2004 attached with these annual accounts.

Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the applicable laws for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

The internal control system including internal financial controls of the Company is monitored by an independent internal audit team, which encompasses examination/ periodic reviews to ascertain adequacy of internal controls and compliance to Company''s policies. Weaknesses noted along with agreed upon action plans are shared with audit committee, which ensures orderly and efficient conduct of the business and effectiveness of the system of internal control. Internal auditors, Audit Committee members and Statutory Auditors have full and free access to all the information and records considered necessary to carry out the assigned responsibilities. The issues raised from time to time are suitably acted upon and followed up at different levels of management.

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

Directors have laid down internal financial controls to be followed by the Company; through periodic internal audits they monitor compliance to the internal financial controls to ascertain whether they are adequate and operating effectively. The Directors have devised appropriate systems to ensure compliance with the provisions of all applicable laws and they monitor adequacy and operating effectiveness of the same on periodically.

8. FUTURE OUTLOOK

Indian tractor penetration still lags behind the global average (19 vs. 21 per 1000 hectares) (Source: CRISIL Research 2013). Tractor growth in India is likely to remain robust in future. With the current shortage of labor, there is an increasing trend towards mechanization, which will boost the tractor demand in the future. Mid term outlook seems positive with better winter crop expected leading to better disposable income. Long term outlook remains robust based on industry and macro trends (Source: CRISIL Research 2015).

The passenger tyre industry is likely to register a modest recovery in the year 2015. Your Company will continue to work closely with OEMs for the introduction of new products from their dealerships. We shall also be focusing on increasing distribution reach and presence in branded retail segment in the market.

9. DIRECTORS

Mr Daniel Lawrence Smytka, Chairman is retiring by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers himself for reappointment. The information relating to his reappointment is also appearing under the head ''Directors'' in the Corporate Governance Report.

The Board of Directors, at its meeting held on June 6, 2014, had appointed Ms Sudha Ravi as an Additional Director in the capacity of an Independent Director of the Company with effect from June 7 2014. The Board at its Meeting held on November 5, 2014 also proposed the re - appointment of its existing Independent Directors Mr Ravi Vira Gupta and Mr. C Dasgupta in terms of the Companies Act, 2013. The said appointment of Ms Sudha Ravi and reappointment of existing Independent Directors is being proposed for approval of Members via postal ballot notice dated January 16, 2015, the results of which will be announced on March 12, 2015. The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under subsection (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

During the year ended on December 31, 2014, Five (5) Board Meetings were held on February 27, 2014, May 15, 2014, June 6, 2014, July 30, 2014 and November 5, 2014.The details regarding Company''s remuneration policy, evaluation of Board and the Directors is mentioned in the Corporate Governance Report forming part of this Director''s Report.

10. CHANGE IN FINANCIAL YEAR

In compliance of applicable provisions of the Companies Act 2013, read with rules made thereunder, as amended, the Board of Directors of your Company at its meeting held on February 27, 2015 approved the change of the Financial Year from (January 1 to December 31) to (April 1 to March 31). In view of the above, for the first year of implementation, the Financial Year would be from January 1, 2015 to March 31, 2016 (i.e.15 months) and thereafter, would be effective April 1 of that year to March 31 of next year.

11. STATUTORY AUDITORS

M/s. Price Waterhouse & Co., Bangalore LLP (FRN: 007567S/ S-200012) [(formerly Price Waterhouse & Co., Bangalore, Firm Registration Number: 007567S)], the Statutory Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment as Statutory Auditors for Financial Year 201516 (15 Months) and to hold office till the conclusion of next Annual General Meeting to be held in the year 2016. In view of the above, a "written consent" and a "Certificate" to act as an auditor of the Company for a period beginning the date of ensuing Annual General Meeting till the conclusion of Annual General Meeting for the year ending on March 31, 2016 subject to the compliance of Section 139 of Companies Act, 2013 and other applicable provisions of the Act and Rules, as amended, has been received from M/s. Price Waterhouse & Co., Bangalore LLP (FRN: 007567S/ S-200012).

12. COST AUDITORS

M/s Vijender Sharma & Co., Cost Accountants, 11,3rd Floor, Hargovind Enclave, Vikas Marg, New Delhi - 110092 was appointed as cost auditor for conducting the cost audit for the year ending December 31, 2014. The due date for filing of the cost audit report with the Ministry of Corporate Affairs (MCA) for the year ended December 31, 2013 was June 29,2014. The said report was filed on June 25, 2014.

Based on the recommendation of audit committee, M/s Vijender Sharma & Co., Cost Accountants, being eligible, have also been appointed by the Board as the Cost Auditors of the Company for the Financial Year 2015-16 subject to ratification of remuneration by the Members. The Company has received a letter from them to the effect that their reappointment would be within the limits prescribed under section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for such re-appointment within the meaning of section 141 of the Companies Act, 2013.

13. CORPORATE GOVERNANCE

As per the applicable provisions of Clause 49 of the Listing Agreement, a detailed Corporate Governance Report together with the auditors'' certificate on the compliance of conditions of Corporate Governance and a Management Discussion & Analysis Report form part of the Annual Report.

In terms of Clause 49 (II)(F)(3) of Listing Agreement, the Company has formulated its whistle blower policy, the detail of which is mentioned in the Corporate Governance Report under the head Disclosures. The Corporate Governance also includes details of the various Committees of the Board.

14. HUMAN RESOURCES

Industrial harmony was maintained during the year through cordial and productive employee relations. The Collective Bargaining Agreement (CBA) effective May 1, 2014 and valid till April 30, 2017 was under discussions with the Union and a Memorandum of Understanding (MoU) was reached with the Union on January 03, 2015. A formal tripartite settlement was signed before the Deputy Labour Commissioner, Faridabad, Haryana on February 05, 2015. This new settlement will help the Ballabgarh factory to improve productivity and operational efficiencies, which will offset the cost of the CBA. High priority was given by the management to training and development related to ethics and compliance, discipline, safety of the employees and environmental awareness. The total number of salaried and hourly paid associates, as of December 31, 2014, stood at 905.

The statement of particulars of the employees of the Company, pursuant to section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, forming part of this Report as Annexure ''A''.

In terms of the applicable provisions of the Companies Act, 2013, the abridged Annual Report has been sent to the shareholders excluding this annexure.

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

The particulars related to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988,are given in a separate Annexure ''B'' and forming part of this report.

16. DETAILS OF NUMBER OF CASES FILED, IF ANY, AND THEIR DISPOSAL IN TERMS OF SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

None

17. ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to the Company''s esteemed shareholders, customers, suppliers, associates, bankers, the State Government and the Central Government etc. for their valuable contribution and continued support. Your Directors also wish to place on record their deep appreciation to The Goodyear Tire & Rubber Company, Akron, Ohio, USA and its subsidiaries for its continued support and contribution in all the spheres of operations.

On behalf of the Board of Directors

Rajeev Anand R V Gupta Vice Chairman & Director New Delhi Managing Director (DIN: 00017410) February 27, 2015 (DIN: 02519876)


Dec 31, 2012

Dear Member,

The Directors present the audited results of your company for the year ended December 31, 2012 as under:

(Rs. In Lakhs)

2012 2011

Total Sales & other Income 163,513 163,432

Less: Excise Duty 13,205 10,684

Net Sales & other income 150,308 152,748

Less: Total Expenditure excluding Interest & Depreciation 139,054 140,634

Profit before Interest, 11,254 12,114 Depreciation, & Tax

Less: i) Finance cost 382 521

ii) Depreciation 2,409 1,969

Profit before Tax 8,463 9,624

Less: Provision for Taxation:

Current Tax 2,821 3,079

Deferred Tax 10 86

Profit after Tax 5,632 6,459

1. DIVIDEND

Your Board recommends a dividend @ Rs 7/- per equity share for the year 2012. The recommended dividend will absorb a sum of Rs.1,615 Lakhs and tax on dividend will be Rs.262 Lakhs. Out of the surplus, an amount of Rs. 600 Lakhs is transferred to General Reserve and balance carried to the Balance Sheet as at December 31, 2012 is Rs. 3,155 Lakhs.

2. OPERATIONS

The Company manufactures automotive bias tyres viz. farm tyres and medium commercial truck tyres at its Ballabgarh plant and also trades in "Goodyear" branded tyres (including radial passenger and Off The Road (OTR) bias tyres) manufactured by Goodyear South Asia Tyres Private Limited (GSATPL) Aurangabad, pursuant to the offtake agreement dated September 1, 2001 and thereby revised offtake agreement effective April 1, 2012 (executed on July 11, 2012 post receipt of Government approval(s) no. 4/202/T- 1/2012/D/2157, 4/203/T-1/2012/D/2158 and 4/204/T- 1/2012/D/2159 dated July 2, 2012. The other products in which the Company markets and sells include tubes and flaps.

The process for sale of piece of land was terminated pursuant to a Circular Resolution passed by the Board of Directors on June 21, 2012.

Your Company feels proud to have been recognized as ''Self Certified Supplier'' by one of the leading tractor manufacturers in India - TAFE (Tractors & Farm Equipment Limited). This award is based on the quality of products delivered and control measures being practiced in Ballabgarh plant.

In the OTR category, your Company has been awarded a ''Gold Level'' in SQEP (Supplier Quality Excellence Programme) by India''s leading earthmover brand, Caterpillar, as a recognition based on achieving specified levels of process capability for key, special characteristics, PPM (Parts Per Million), PPAP (Product Part Approval Process), on-time completion, delivery performance and Six Sigma deployment in your company.

Your Company feels proud to have been recognized by the Hyundai Motors Company for being the best supplier for the year in the tyre commodity. Your company''s farm business has been certified Class A S&OP. Your Company''s ''Assurance Fuel Max'' was voted the product of the year.

3. FINANCE AND ACCOUNTS

During the year, additions to fixed assets amounted to Rs. 3,254 Lakhs as against Rs.7,228 Lakhs in the previous year. The Capital expenditure incurred amounted to Rs. 2,936 Lakhs. The interest and other finance cost during the year was Rs. 382 Lakhs.

As of the end of December 2012, an amount of NIL matured deposits remained unclaimed.

The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as on the balance sheet date.

4. FINANCIAL STATEMENTS (Full & Abridged)

In terms of Clause 32 of the Listing Agreement, your Company shall supply:

(i) Soft copies of full annual reports containing its Balance Sheet, Profit & Loss account and Directors'' Report to all those shareholder(s) who have registered their email address(es) for the purpose

(ii) Abridged Annual Report - Hard copy of statement containing the salient features of all the documents, as prescribed in sub-clause (iv) of clause (b) of proviso to section 219 of the Companies Act, 1956 to those shareholder(s) who have not so registered their email address(es); and

(iii) Hard copies of full annual reports to those shareholders, who request the same.

The Board of Directors has decided to circulate the abridged annual report containing salient features of the balance sheet and profit and loss account to the shareholders for the financial year 2012. Full version of the annual report will be available on Company''s website www.goodyear.co.in and will also be made available to investors upon request.

5. DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Your Directors state that the annual accounts of the Company have been prepared in conformity, in all material respects, with the generally accepted accounting standards in India and supported by reasonable and prudent judgments and statements so as to give a true and fair view of the state of affairs of the Company and of the results of the operations of the Company. Significant accounting policies followed and other disclosures are appearing in Note 2 to the Notes of the financial statements.

These financial statements of the Company have been audited by M/s Price Waterhouse & Co., Bangalore (FRN 007567S). A reference may be made to their report dated February 27, 2013 to the members together with Annexure thereto containing information per requirement under the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment), Order, 2004 attached with these annual accounts.

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.

The internal control system of the Company is monitored by an independent internal audit team, which encompasses the examination and evaluation of the adequacy and effectiveness of the system of internal control. Internal Auditors, Audit Committee Members and Statutory Auditors have full and free access to all the information and records considered necessary to carry out the assigned responsibilities. The issues raised from time to time are suitably acted upon and followed up at different levels of management.

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

6. FUTURE OUTLOOK

As per the Central Bank''s (RBI) estimates, the growth in the Indian economy is expected to continue to be moderate.

In this context, your Company will continue to focus on the review of activities in different areas of operations under the umbrella of Continuous Improvement Systems (CIS). CIS is an integral part of your Company''s philosophy to maximize gains and reduce costs in order to address market realities.

As far as the industry is concerned, a moderate growth rates is expected in the consumer tyre segment; however, we expect some momentum in growth during later part of the year. Your Company will continue to seek new Original Equipment Manufacturers'' (OEM) fitments and introduce award winning new products to its existing consumer tyre portfolio.

The overall outlook of Indian agricultural is positive with the projected annual growth rate during the 12th plan (2012-17) at 4% as against actual annual growth of 3.3% during the 11th plan (2007-12).

Passenger vehicle sales grew at 8.5% (Source: Society of Indian Automobile Manufacturers), which translated to moderate consumer tyre demand from the OEM customers, however, the OE business has registered a healthy growth and we continue to gain market share. Consumer replacement tyres also felt softening of demand due to rising pressure on consumers'' purchasing ability as a result of higher interest rates, fuel prices and food inflation.

7. DIRECTORS

Mr. C Dasgupta and Mr. Yashwant Singh Yadav are retiring by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for reappointment.

The information relating to the above appointments is also appearing under the head ''Directors'' in the Corporate Governance Report.

8. STATUTORY AUDITORS

M/s Price Waterhouse & Co., Bangalore (FRN 007567S), retires at the conclusion of this Annual General Meeting and are eligible for reappointment.

9. COST AUDITORS

Dr. Ashok K Agarwal was appointed as cost auditor for conducting the cost audit for the year ending December 31, 2011. The due date for filing of the cost audit report with the Ministry of Corporate Affairs (MCA) for the year ended December 31, 2011 was June 28, 2012. The said report was filed on March 30, 2012.

M/s Vijender Sharma & Co., Cost Accountant, Delhi was appointed as Cost Auditor for conducting the cost audit for the year ending December 31, 2012.

10. CORPORATE GOVERNANCE

Your Company follows a corporate philosophy, enshrined in a manual titled ''Business Conduct Manual'' for The Goodyear Tire & Rubber Company''s global operations. The core values, inter-alia, include conducting business in accordance with the highest applicable legal and ethical standards, deliver the highest quality products and services and operate as a global socially responsible corporate citizen with a view to create value that can be sustained continuously for the benefit of customers, shareholders and associates. As per the applicable provisions of Clause 49 of the Listing Agreement, a Management Discussion & Analysis, a Report on Corporate Governance together with the Auditors'' certificate on the compliance of conditions of Corporate Governance form part of the Annual Report.

11. HUMAN RESOURCE

The employer-employee relations throughout the year remained cordial. Measures for training, development, safety of the employees and environmental awareness received the top priority of the management.

The statement of particulars of the employees of the Company, pursuant to section 217 (2A) of the Companies Act, 1956 forming part of this report, is also attached. In terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the abridged annual report has been sent to the shareholders excluding this annexure.

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

The particulars related to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956, are given in a separate Annexure ''B'' attached hereto and forms part of this report.

13. ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to the Company''s esteemed shareholders, customers, suppliers, associates, bankers, the State Government and the Central Government etc. for their valuable contribution and continued support. Your Directors also wish to place on record their deep appreciation to The Goodyear Tire & Rubber Company, Akron, Ohio, USA and its subsidiaries for its continued support and contribution in all the spheres of operations.

On behalf of the Board of Directors

Rajeev Anand R V Gupta

New Delhi Vice Chairman & Director

February 27, 2013 Managing Director


Dec 31, 2010

The Directors present the audited results for the year ended December 31, 2010 as under:

(Rs. in Million)

2010 2009

Total Sales & other Income 13,944 10,735

Less: Excise Duty 801 535

Net Sales & other income 13,143 10,200

Less:Total Expenditure excluding 11.845 8.926 Interest & Depreciation

Profit Before Interest, Depreciation, & Tax 1.298 1.274

Less: i) Interest Expenses 36 34

ii) Depreciation 153 126

Profit Before Tax 1,109 1,114

Less: Provision for Taxation:

Current Tax 367 383

Deferred Tax (6) (2)

Fringe Benefit Tax - 2

Profit After Tax 748 731

During the year, the net sales and other income increased from Rs. 10,200 Million in the previous year to Rs. 13,143 Million. The export sales stood at Rs 594 Million. Other Income rose by 250 % mainly due to reversal of Provision of Rs. 47 Million related to Price Differential pends settlement matter and Increase in interest Income on Deposits by Rs.37 Million.

The depreciation for the year is inclusive of the accelerated depreciation amounting to Rs 5 Million, in respect of a category of equipment due for replacement.

DIVIDEND

Your Board recommends a dividend @ Rs 7 per equity share for the year 2010. The recommended dividend will absorb a sum of Rs. 161 Million and tax on dividend will be Rs. 27 Million. Out of the surplus, an amount of Rs 80 Million is transferred to General Reserve and balance of Rs. 1,513 Million is carried to the Balance Sheet.

OPERATIONS

At macroeconomic level, the Indian economy has been experiencing strong growth, with the Central Economic Advisory (CEA) expecting GDP up 8.5% for 2010-2011. The strong economy, coupled with improving consumer confidence and a good monsoon, helped spark strong demand for tractors and passenger vehicles, the primary focus segments foryour Company.

The tractor industry in India has witnessed an exponential growth of 27% in 2010 (Source: Tractor

Manufacturers Association). This resulted in an increased demand for tyres which your Company capitalized on, with strong sales growth of tractor tyres to OEM customers and in the replacement market.

Similarly, new passenger vehicles sales grew an unprecedented 29% (Source: Society of Indian Automobile Manufacturers), translating into strong consumer tyres demand from OEM customers. The replacement market increased as well, following the brief slowdown experienced late 2008 and early 2009. This fueled strong growth in your Companys consumer tyres sales.

FINANCE AND ACCOUNTS

During the year, additions to fixed assets amounted to Rs. 342 Million as against Rs. 180 Million in the previous year. The Capital expenditure incurred amounted to Rs. 573 Million. The interest cost during the year has increased from Rs. 34 Million in the previous year to Rs. 36 Million.

As at the end of December 2010, an amount of NIL matured deposits remained unclaimed.

DIRECTORS RESPONSIBILITY STATEMENT UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Your Directors state that the annual accounts of the Company have been prepared in conformity, in all material respects, with the generally accepted accounting standards in India and supported by reasonable and prudent judgements and statements so as to give a true and fair view of the state of affairs of the Company and of the results of the operations of the Company. Significant accounting policies followed and other disclosures are appearing in Schedule 15(a) to the Notes to the Accounts and forming part of theannual accounts.

These financial statements of the Company have been audited by M/s Price Waterhouse, Chartered Accountants, Gurgaon, (Registration Number: FRN301112E). A reference may be made to their report dated February 21, 2011 to the members together with Annexure thereto containing information per requirement under the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment), Order, 2004 attached with these annual accounts.

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.

The internal control system of the Company is monitored by an independent internal audit team, which encompasses the examination and evaluation of the adequacy and effectiveness of the system of internal control. Internal Auditors, Audit Committee Members and Statutory Auditors have full and free access to all the information and records considered necessary to carry out the assigned responsibilities. The issues raised from time to time are suitably acted upon and followed up at different levels of Management.

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

FUTURE OUTLOOK

As per the Central Economic Advisory (CEA), the Indian economy is expected to continue to grow at a fast pace, with GDP growth forecasted at 9% for 2011-2012. However, cost and competitive pressures are expected to stay.

In this context, your Company will continue to focus on the review of activities in different areas of operations under the umbrella of the Continuous Improvement System (CIS). The CIS is an integral part of your Companys philosophy to maximize gains and reduce costs in order to address the market realities.

In the tyre industry, strong growth is expected to continue in both the farm tyres and the consumer tyres segments. Your Company intends to maintain its focus on the production of farm tyres to retain its leadership in the said segment, and to further consolidate its strong position in the consumer tyres segment.

UPDATE ON DELISTING OF SHARES

During the year, based on the decision taken and communicated by its Promoter, The Goodyear Tire & Rubber Company, for delisting of its equity shares from the Bombay Stock Exchange Limited ("BSE"), in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 ("Delisting Regulations") either directly or through one or more of its subsidiaries. After passing of the Resolution by Board of your Company, shareholders of the company approved the proposal for delisting of its equity shares on April 7,2010 by postal ballot and BSE granted its in principle approval on April 27,2010.

Pursuant to the Delisting Regulations, Goodyear Orient Company Private Limited, a wholly owned subsidiary of the promoter, The Goodyear Tire & Rubber Company, invited bids by way of public announcement dated May 13, 2010, to acquire, in accordance with the Delisting Regulations and terms and conditions set out in the Public Announcement, up to 5,997,292 equity shares of the company, representing 26% of the equity capital (the "Offer Shares") for which the approval was obtained from shareholders byway of postal ballot.

The number of Offer Shares tendered by the public shareholders at or below the discovered price was less than the minimum number of Offer Shares required to be accepted for the delisting offer to be successful in terms of Delisting Regulations. Accordingly, the delisting offer is deemed to have failed in terms of the Delisting Regulations.

The Company thus continues to remain listed on BSE.

DIRECTORS

In the Board Meeting held on February 23, 2010, resignation of Mr Hugo O Dedekind, effective the close of business hours on March 31, 2010, was accepted as Director & wholetime Finance Director.

In the Board Meeting held on April 27, 2010, Mr Quek Khai Whatt was appointed as non-wholetime Additional Director with immediate effect i.e. April 27,2010.

In the Board Meeting held on June 8, 2010, Mr Jean Philippe Lecerf was appointed as Additional Director as well as wholetime Finance Director for a period of 3 years effective July 1, 2010. In the same Board Meeting, resignation of Mr Quek Khai Whatt was accepted as Director, effective the close of business hours onJune30,2010.

In the Board Meeting held on October 25, 2010, Mr Yashwant Singh Yadav was appointed as Additional Director as well as wholetime Director designated as Director-HR & Corporate Affairs, effective November 1, 2010. In the same Board Meeting, resignation of Mr Jean Philippe Lecerf was accepted as Director and wholetime Finance Director, effective the close of business hours on October 31, 2010. However, effective November 1, 2010, Mr Jean Philippe Lecerf is continuing as Chief Financial Officer (CFO) of the Company.

The Board records its appreciation for the valuable contribution made by Mr Hugo O Dedekind, Mr Quek Khai Whatt and Mr Jean Philippe Lecerf as Directors.

Mr Rajiv Lochan Jain is retiring by rotation at this Annual General Meeting and, being eligible, offers himselfforre-appointment.

The information relating to the above appointments is also appearing under the head Directors in the Corporate Governance Report.

AUDITORS

M/s Price Waterhouse, Chartered Accountants, Gurgaon, (Registration Number: FRN301112E), retires at the conclusion of this Annual General Meeting and are eligible for reappointment.

Dr. Ashok K Agarwal, has been re-appointed as Cost Auditor for conducting the cost audit for the year ending December31,2011.

CORPORATE GOVERNANCE

Your Company follows the corporate philosophy, enshrined in a manual titled "Business Conduct

Manual1 for Global Operations. The core values, mter-alia, include conducting business in accordance with the highest applicable legal and ethical standards, the highest standards of product quality and services to the consumers with a view to create value that can be sustained continuously for the benefits of its customers, shareholders and the associates. As per the applicable provisions of Clause 49 of the Listing Agreement with the Stock Exchange, a Management Discussion & Analysis, a Report on Corporate Governance together with the Auditors certificate on the compliance of conditions of Corporate Governance form part of the Annual Report.

HUMAN RESOURCE

The employer-employee relations throughout the year remained cordial. Measures for training, development, safety of the employees and environmental awareness received the top priority of the Management.

The Statement of Particulars of the employees of the Company, pursuant to Section 217 (2A) of the Companies Act, 1956 forming part of this report, is also attached.

ANNEXURE

The Annexure to Directors Report under The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 forming part of this report, is attached.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to the Companys esteemed Shareholders, Customers, Suppliers, Associates, Bankers and the State and

Central Governments etc. for their valuable contribution and continued support. Your Directors also wish to place on record their deep appreciation to The Goodyear Tire & Rubber Company, Akron, Ohio, USA for their continued support and contribution in all the spheres of operations.

On behalf of the Board of Directors

Aurangabad Pierre Eric Cohade

February 21,2011 Chairman


Dec 31, 2009

The Directors present the audited results for the year ended December 31, 2009 as under:

(Rs. in Million) 2009 2008

Total Sales & other Income 10,735 10,154

Less: Excise Duty 535 827

Net Sales & other income 10,200 9,327

Less: Total Expenditure excluding

Interest & Depreciation 8,926 8,667

Profit Before Interest, Depreciation, 1,274 660 &Tax

Less: i) Interest Expenses 34 25

ii) Depreciation 126 112

Profit Before Tax 1,114 523

Less: Provision for Taxation:

Current Tax 383 166

Deferred Tax (2) 20

Fringe Benefit Tax 2 15

Profit After Tax 731 322

During the year, the net sales and other income increased from Rs. 9327 Million in the previous year to Rs. 10200 Million. The export sales stood at Rs. 572 Million.

The depreciation for the year is inclusive of the accelerated depreciation amounting to Rs. 6 Million, in respect of a category of equipment due for replacement.

DIVIDEND

Your Board recommends a dividend @ Rs. 7 per equity share for the year 2009. The recommended dividend will absorb a sum of Rs. 161 Million and tax on dividend will be Rs. 27 Million. Out of the surplus, an amount of Rs. 80 Million is transferred to General Reserve and balance of Rs. 1033 Million is carried to the Balance Sheet.

OPERATIONS

The year under review was started with a global slow down, however, India, with its strong economic fundamentals was able to overcome the impact faster. Your Companys philosophy to have continued efforts for improvement in productivity, cost and effective utilisation of working capital helped to present the above results.

Supply of farm tyres to replacement and original equipment segments, wherein your company holds a key position, continued to be the area of focus of your Company. All-round efforts were made for improved production and timely supply of farm tyres.

FINANCE AND ACCOUNTS

During the year, additions to fixed assets amounted to Rs. 180 Million as against Rs. 216 Million in the previous year. The Capital expenditure incurred amounted to Rs. 418 Million. The interest cost during the year has increased from Rs. 25 Million in the previous year to Rs. 34 Million.

As at the end of December 2009, an amount of Rs. NILof matured deposits remained unclaimed.

DIRECTORS RESPONSIBILITY STATEMENT UNDER SECTION 217(2AA) OF THE COMPANIES ACT 1956.

Your Directors state that the annual accounts of the Company have been prepared in conformity, in all material respects, with the generally accepted accounting standards in India and supported by reasonable and prudent judgements and statements so as to give a true and fair view of the state of affairs of the Company and of the results of the operations of the Company. Significant accounting policies followed and other disclosures are appearing in Schedule 15 (a) to the Notes to the Accounts and forming partof theannual accounts.

These financial statements of the Company have been audited by M/s Price Waterhouse, Chartered Accountants. A reference may be made to their report dated February 23, 2010 to the members together with Annexure thereto containing information per requirement under the Companies (Auditors Report) Order, 2003 attached with these annual accounts.

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.

The internal control system of the Company is monitored by an independent internal audit team, which encompasses the examination and evaluation of the adequacy and effectiveness of the system of internal control. Internal Auditors, Audit Committee Members and Statutory Auditors have full and free access to all the information and records considered necessary to carry out the assigned responsibilities. The issues raised from time to time are suitably acted upon and followed up at different levels of Management.

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

FUTURE OUTLOOK

India, with its strong economic fundamentals had put behind last years downturn impact. As per Central Economic Advisory (CEA), GDP growth could touch 9% in next fiscal year. However, high volatility in the prices of key raw materials, particularly the natural rubber prices being witnessed would pose a challenge to be met.

Your Company continues its focus on production of farm tyres to maintain its leadership in the said segment and is also undergoing the plans to introduce radial farm tyres.

Continuous review of activities in different areas of operations under the umbrella of the Continuous Improvement System (CIS) has been an integral part of your Companys philosophy to maximise gains and reduce costs in order to meet the market realities.

PROPOSAL FOR DELISTING OF SHARES

Pursuant to a communication received from The Goodyear Tire & Rubber Company, Akron, Ohio, USA, holding 74% of the total Paid-up Capital of the Company, proposing a voluntary de-listing of the equity shares of the Company from the Bombay Stock Exchange Limited to acquire all outstanding shares of the Company, your Companys Board of Directors in its meeting held on February 9, 2010 considered and initiated steps for de-listing of the Companys shares. A Notice would be received by the shareholders of the Company for their approval for a Special Resolution to be passed through postal ballot in accordance with the provisions of Securities and Exchange Board of India (De-listing of Equity Shares) Regulations, 2009. The Bombay Stock Exchange would be kept informed from time to time with regard to the developments in the said de-listing proposal.

GROUP

For the purpose of the SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997, the names of certain entities forming part of group in the context of the Company, as defined under the Monopolies and Restrictive Trade Practices Act, 1969, are as follows:

1. The Good year TireS Rubber Company

2. Goodyear Tire Management Co. (Shanghai) Ltd.

3. Goodyear Wingfoot Kabushiki Kaisha

4. Goodyear Korea Company

5. Goodyear Dalian Tire Company Limited

6. Goodyear & Dunlop Tyres (Aust) Pty Ltd.

7. Goodyear Earthmover Pty Limited

8. Goodyear S. A.

9. Goodyear International Corporation

10. Goodyear Orient Company (Private) Limited

DIRECTORS

In the Board Meeting held on February 23, 2010, resignation of Mr Hugo 0 Dedekind was accepted as Director and wholetime Finance Director, effective the close of business hours on March 31,2010. The Board records its appreciation for the valuable contribution made by Mr. Hugo O Dedekind as wholetime Finance Director.

Mr C Dasgupta is retiring by rotation at this Annual General Meeting and, being eligible, offers himself for re-appointment. The information relating to the appointment of Mr C Dasgupta is also appearing under the head Directors in the Corporate Governance Report, appearing separately.

AUDITORS

M/s Price Waterhouse, Chartered Accountants, retires at the conclusion of this Annual General Meeting and are eligible for reappointment.

Dr. Ashok K Agarwal, has been re-appointed as Cost Auditor for conducting the cost audit for the year ending December 31,2010.

CORPORATE GOVERNANCE

Your Company follows the corporate philosophy, enshrined in a manual titled Business Conduct Manual for Global Operations. The core values, inter-alia, include conducting business in accordance with the highest applicable legal and ethical standards, the highest standards of product quality and services to the consumers with a view to create value that can be sustained continuously for the benefits of its customers, shareholders and the associates. As per the applicable provisions of Clause 49 of the Listing Agreement with the Stock Exchange, a Management Discussion & Analysis, a Report on Corporate Governance together with the

Auditors certificate on the compliance of conditions of Corporate Governance form part of the Annual Report.

HUMAN RESOURCE

The employer-employee relations throughout the year remained cordial. Measures for training, development, safety of the employees and environmental awareness received the top priority of the Management.

The Statement of Particulars of the employees of the Company, pursuant to Section 217 (2A) of the Companies Act, 1956 forming part of this report, is also attached.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to the Companys esteemed Shareholders, Customers, Suppliers, Associates, Bankers and the State and Central Governments etc. for their valuable contribution and continued support. Your Directors also wish to place on record their deep appreciation to The Goodyear Tire & Rubber Company, Akron, Ohio, USA for their continued support and contribution in all the spheres of operations.

On behalf of the Board of Directors

Pierre Eric Cohade New Delhi Chairman

February 23,2010

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