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Notes to Accounts of Goodyear India Ltd.

Mar 31, 2017

Notes:

a The estimated useful lives of certain property plant and equipment items was revised with effect from January 1, 2015 to conform to the requirements of Ind AS and Schedule II to the Companies Act 2013. Pursuant to the above mentioned change, the depreciation expense for the fifteen months period ended March 31, 2016 was higher by Rs. 723. b Contractual obligations:

Refer to note 29 for disclosure of contractual commitments for the acquisition of property, plant and equipment. c Capital work-in-progress:

Capital work-in-progress mainly comprises of power supply enhancement project from 33KV to 66KV at the manufacturing facility at Ballabgarh.

(ii) Terms and rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed, if any by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(v) nature and purpose of other reserves

i. securities premium

Securities premium is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.

ii. General reserve

General reserve is kept aside out of company''s profits and are used to meet future obligations.

iii. other equity- revaluation

As the Company has opted for exemption under paragraph D7AA of Ind AS 101 and also elected the cost model under Ind AS 16 for subsequent measurement of Property, Plant and Equipment, the revaluation reserve recognized under previous GAAP has been transferred to ''Other equity- revaluation'' on the date of transition to Ind AS. This balance does not constitute free reserves available for distribution as dividend in accordance with the provisions of the Companies Act, 2013.

(a) Information about individual provisions and significant estimates

Provision for customs, excise and sales tax litigation: These represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes. It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

Provision for replacement loss: Replacement loss reserves are based on past claims experience, sales history and other considerations. Replacement loss is provided on the sale of our products and an accrual for estimated future claims is recorded at the time revenue is recognized. Tyres replacement offered by the Company is on a prorated basis.

(c) Employee Benefit Obligations

A. Leave obligations

The leave obligations cover the Company liability for sick and earned leave.

The amount of the provision of Rs. 515 (March 31, 2016 - Rs.418, January 1, 2015 - Rs. 359) is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is expected to be taken or paid within the next 12 months.

B. Defined Contribution Plans

a) Superannuation Fund

b) Employee''s Pension Scheme 1995 (State plan)

During the year/period, the Company has recognized the following amounts in the Statement of Profit and Loss:

C. Defined Benefit Plans

a) Gratuity

b) Provident Fund

(i) Balance Sheet amounts - Gratuity

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(v) Risk Exposures:

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below :

Salary Increases:

Actual salary increases will increase the Plan''s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

Investment Risk:

If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

Discount Rate:

Reduction in discount rate in subsequent valuations can increase the plan''s liability.

Mortality & disability:

Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities. Withdrawals:

Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan''s liability.

The Company through its Trusts ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans.

The Company through its Trusts actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets.

A large portion of assets in 2017 consists of government and corporate bonds, although the Company through its Trusts also invests in equities and mutual funds. The plan asset mix is in compliance with the requirements of the respective local regulations.

(vi) Defined benefit liability and employer contributions

Expected contributions to post-employment benefit plans for the year ending 31 March 2018 are Rs. 721.

The weighted average duration of the defined benefit obligation is 13.95 years (Mar 31,2016- 13.67 years, Jan 1, 2015- 13.84 years).

1 (b) Corporate social responsibility expenditure

Amount required to be spent as per section 135 of the Companies Act 2013.

Details of expenditure towards Corporate Social Responsibility (CSR) activities:

a) Gross amount required to be spent by the Company during the period was Rs. 324 (Previous Year Rs. 252).

Figures in brackets represent previous period numbers.

Amount unspent during the year was Rs. 68 ( Mar 31, 2016 - Rs.1).

The lower spend was due to procedural delay in obtaining clearance for the project from the concerned authorities. The Company stays committed to its corporate social responsibility and intends to make concerted efforts to spend the shortfall in the next financial year over the prescribed CSR amount for that year.

(b) Significant estimate

In calculating the tax expense for the current period, the Company has treated certain expenditures as being deductible for tax purposes. However, the tax legislation in relation to these expenditures is not clear and the Company/ tax authorities are litigating these matters. If the ruling should not be favourable, this would increase the Company’s current tax payable and current tax expense by Rs. 726, respectively. The impact in the prior year would have been an increase in current tax payable and current tax expense by Rs. 816.

*The surcharge on the Indian corporate tax rate was increased from 10% to 12% effective from 1 April 2015. As a result, the relevant deferred tax balances have been remeasured. The impact of the change in tax rate has been recognized in tax expense in profit or loss

(d) The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961. For this purpose, the Company has appointed independent consultants for conducting Transfer Pricing Study. Management is of the opinion that its international transactions with associated enterprises have been undertaken at arms'' length basis at duly negotiated prices on usual commercial terms. The Company has submitted the Accountants'' Report in form 3CEB up to the financial year ended on March 31, 2016 as required under section 92E of the Income Tax Act, 1961.

(i) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are:

(a) recognized and measured at fair value; and

(b) measured at amortized cost and for which fair value are disclosed in the financial statements

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instrument into three levels prescribed under the accounting standards.

-Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

-Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

-Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. There are no transfers between levels 1, 2 and 3 during the year/ period.

(ii) Valuation technique and process used to determine fair value

The fair values for security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

(iii) Fair value of financial assets and liabilities measured at amortized cost

The carrying amounts of trade receivables, trade payables, creditors for capital items, cash and cash equivalents, other bank balances and other financial assets/ liabilities are considered to be the same as their fair values, due to their short-term nature.

The fair values for security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

The Company does not have any financial instruments where significant estimation was involved in determination of its fair value.

2 Financial Risk Management

The Company ‘s activities expose it to the market risk, liquidity risk and the credit risk. The Company’s risk management is carried out by the treasury department for cash and cash equivalent, deposits with banks/ financial institutions, foreign currency risk exposure and liquidity risk under various approved policies. The risk management for trade receivables is carried out by controlling department of the Company.

(A) Credit Risk

Credit risk arises from cash and cash equivalents, trade receivables and other financial assets.

(i) Credit risk management

(a) Cash and cash equivalents:

The Company is in control of its exposure to these financial instruments by diversifying the deposit, by investing cash and equivalents based on counterparty credit strength as measured by long-term credit ratings of the three major rating agencies (Standard & Poors, Moody’s and Fitch) and by monitoring the financial strength of these banks/ financial institutions on regular basis.

By controlling and monitoring exposure to financial institutions in this manner, the Company believe that it effectively manage the risk of loss due to non performance by a banks/ financial Institutions.

(b) Trade Receivables:

The Company has Credit Policy and the independent credit control department to review the credit worthiness of the customers and assess the recoverability of the asset. Finance Director is the authority to approve any exception to the Policy.

Customer credit risk is managed basis established policies of the Company, procedures and controls relating to customer credit risk management which helps in assessing the risk at the initial recognition of the asset. Outstanding customer receivables are regularly and closely monitored. The Company has a monthly process of following past due analysis leading to very few cases of bad debts and delayed payments. The same is evident from the earlier years receivable write-off. The Company provides for any outstanding beyond 180 days. The trade receivables on the respective reporting dates are net off the allowance which is sufficient to cover the entire lifetime loss of sales recognized including those that are currently less than 180 days outstanding.

A default on a financial asset is when the counterparty fails to make contractual payment within 180 days of when they fall due. This definition of default is determined by considering the business environment in which entity operates.

The Company believe that there are efficient processes established to monitor and control the risk of loss associated with receivables.

(c) Other financial assets:

Other financial assets of the Company mainly comprises of security deposit with Dakshin Haryana Bijli Vitran Limited, security deposits for the rental premises, accrued interest on fixed deposits with banks and financial institutions, deposits held as lien with Banks and other receivables from related parties.

There is no credit risk exposure with respect to other financial assets as they are either supported by legal agreement or are with Nationalized banks and Government organizations:

- Security deposit with Dakshin Haryana Bijli Vitran Limited, a public sector organization, represents low credit risk.

- Security deposits for the rental premises are with counter parties with strong capacity to meet the obligation, hence the risk of default is considered to be negligible.

- Deposits held as lien with Banks are with Nationalized Bank, hence the risk of default is considered to be negligible.

- Accrued interest on fixed deposits are with banks and financial institutions having strong financial strength as explained above, hence the risk of default is considered to be negligible.

- Other receivables from related parties are as per approved policy and the established procedure to monitor the dues from related parties which also ensures timely payments and no default, hence there is no credit risk exposure involved.

(ii) Provision for expected credit losses

Customer credit risk is managed basis established policies of the Company, procedures and controls relating to customer credit risk management. Outstanding customer receivables are regularly monitored. The Company has a diverse customer base, as its customers are located and operate in largely independent markets and does not see any significant concentration of risk related to reliance on any single customer. The credit quality of the customers is evaluated based on the approved policies and established processes.

(iii) Reconciliation of loss allowance provision - Trade receivable

Significant estimates and judgments Impairment of Trade Receivables:

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(B) Liquidity Risk

The Company''s primary sources of liquidity are cash generated from operation. The cash flows from operating activities are driven primarily by operating results and changes in the working capital requirements.

The Company intend to operate the business in a way that allows us to address these needs with our existing cash and available financing arrangement if they cannot be funded by cash generated from operations.

The Company believe that its liquidity position is adequate to fund the operating and investing needs and to provide with flexibility to respond to further changes in the business environment

(i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

The bank overdraft facilities may be drawn at any time. No drawdown as at Mar 31, 2017, Mar 31, 2016 and Jan 1, 2015.

(ii) Maturities of financial liabilities

The table below analyses the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.

The amount disclosed in the table are the undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

(C) Market Risk

(ia) Foreign Currency risk: The Company operates internationally and is exposed to foreign exchange risk in relation to operating activities (when revenue or expense is denominated in a foreign currency) arising from foreign currency transactions, primarily with respect to the USD and EUR. The Company have approved policies to enter into foreign currency contracts in order to manage the impact of changes in foreign exchange rates on the results of operations and future foreign currency-denominated cash flows. The Company does not have material foreign currency exposure currently.

The Company believe that there are efficient processes established to monitor and control the risk of loss associated with foreign currency exposure.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company does not have any borrowings therefore it it not impacted by interest rate risk.

(iii) Price Risk: Price risk arises from exposure to equity securities prices from investments held by the Company. The Company does not have any investments in equity shares.

25 Capital Management (a) Risk Management

The Company’s objectives when managing capital is to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders.

There in no change in the Company capital structure since previous year.

3 segment Information

The Company is engaged in the business of sales of automotive tyres, tubes and flaps. The Company sells tyres of its own brand “Goodyear”. The Company is domiciled in India.

The Company has monthly review and forecasting procedure in place. The review involves the operating results of the Company as a whole except for sales and sales volume information which is available on disaggregated basis.

The Chief Operating Decision Maker (CODM), Managing Director, performs a detailed review of the operating results including cash flow, working capital, headcount of the company as a whole and sales and sales volume on disaggregated basis and thereby makes decisions about the allocation of resources among the various functions. Since the operating results of each of the functions are not considered individually by the CODM, the functions do not meet the requirements of Ind AS 108 for classification as an operating segment, hence there is only one operating segment namely, "Automotive tyres, tubes & flaps".

B) Information about geographical areas:

The following information''s discloses Revenues from external customers:

(i) attributed to the entity’s country of domicile and

(ii) attributed to all foreign countries in total from which the entity derives revenues:

All the non-current assets of the Company are located in India.

C) Revenue of Rs. 35,278 ( Mar 31, 2016 - Rs. 32,620) are derived from a single external customer.

4 Related Party Transactions

(a) Parent entities

(c) (i) List of related parties:

Fellow subsidiaries with whom the Company had transactions during the year/period:

i) Goodyear International Corporation

ii) Compania Goodyear Del Peru SA

iii) Goodyear & Dunlop Tyres (Australia) Pty Limited

iv) Goodyear & Dunlop Tyres (Nz) Limited

v) Goodyear (Thailand) Public Company Limited

vi) Goodyear Dalian Tire Company Limited

vii) Goodyear De Chile S.A.I.C

viii) Goodyear Do Brasil Produtos De Borracha Ltda.

ix) Goodyear Dunlop Tires France

x) Goodyear Dunlop Tires Operations SA

xi) Goodyear Earthmover Pty Limited

xii) Goodyear Malaysia Berhad

xiii) Goodyear Middle East, FZE

xiv) Goodyear Philippines Inc.

xv) Goodyear Regional Business Services Inc.

xvi) Goodyear SA (Luxembourg)

xvii) Goodyear Singapore Tyres

xviii) Goodyear South Africa (Pty) Limited

xix) Goodyear South Asia Tyres Private Limited

xx) Nippon Giant Tire Co. Ltd.

xxi) PT. Goodyear Indonesia TBK

xxii) TC Debica S.A.

Other related parties:

i) Provident Fund of Goodyear India Limited

ii) Trustee Goodyear India Limited Factory Provident Fund

(e) Terms and conditions

Transactions relating to dividends were on the same terms and conditions that applied to other shareholders. All other transactions were made on normal commercial terms and conditions and at arm''s length.

All outstanding balances are unsecured and are repayable in cash.

F. Haryana Local Area development Tax (HLADT)

The Haryana Government introduced the Haryana Local Area Development Tax Act, 2000 (“HLADT Act”). The liability of entry tax under the said HLADT Act was discharged by Goodyear till December 2006. In 2007, the Hon’ble Punjab and Haryana High Court held the HLADT Act was ‘unconstitutional’ for the reason that the legislation was not compensatory in nature as the State of Haryana did not utilize the tax for its intended use of local area development. The HLADT Act was later repealed by the State without creation of any further liability.

In 2008, the State of Haryana introduced the “Haryana Tax on Entry of Goods into Local Areas Act, 2008” (“HET Act”), which the Hon’ble Punjab and Haryana High Court declared as ‘unconstitutional’. The State did not frame and notify enabling “Entry Tax Rules” and no notice or demand was received by Goodyear under the HET Act. Accordingly, the amount of liability under the HET Act involved has not been quantified by the Company.

All the batch of entry tax petitions emerging from various High Courts were referred to the Hon’ble Nine Judge Bench of the Hon’ble Supreme Court. On November 11, 2016, the nine-judge bench of Hon’ble Supreme Court laid down certain principles on the basis of which the State entry tax legislations were to be tested. The question involving the interpretation of the term local area and the levy of entry tax on imports from outside India were referred to be heard by the division bench of the Supreme Court for each State on merits.

The division bench of Supreme Court on March 21, 2017 remanded the matter to the Punjab and Haryana High Court for the Haryana batch of petitions and directed that fresh petitions should be filed by the parties (including Goodyear) based on the principles laid down by the Hon’ble Supreme Court (nine Judge bench).

In view of above, Goodyear is in the process of filing a fresh petition in the High Court to protect its interest. Further, on the basis of the legal opinion in terms of the principles laid down by the Hon’ble Supreme Court (nine Judge bench), Goodyear has a strong case.

* The Company has given financial guarantee to Sarva Haryana Gramin Bank (Bank) in respect of loans taken by its employees. In case any employee on who''s behalf a guarantee has been provided by the Company, opts to leave his/ her employment, then the Company is required to pay the outstanding balance in his loan account to the Bank from the proceeds of the terminal benefits payable to him after adjusting the Company’s dues. The Company is covered and is not exposed to any loss. Therefore the fair value of financial guarantee is not material.

** These represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes. It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

(b) Non-cancellable operating leases

Cancellable: The Company''s cancellable operating lease arrangement mainly consists of residential premises, warehouses and offices taken on lease for periods between 1-10 years. Terms of lease include terms for renewal, increase in rents in future periods and terms of cancellation.

5 Events occurring after the reporting period

Refer to note 25 for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing annual general meeting.

6 Share-based payments

The Goodyear Tire & Rubber Company, Akron, Ohio, USA (Ultimate holding company) issues stock-based awards to employees under their approved Performance Plan. The issue of grants of restricted stock units and stock appreciation rights to the employees of the Company are covered under the same Performance Plan as declared by the ultimate holding company.

Stock appreciation rights (SAR)

Grants of Stock Appreciation Right generally have a graded vesting period of four years whereby one-fourth of the awards vest on each of the first four anniversaries of the grant date, an exercise price equal to the fair market value of one share of the ultimate holding company on the date of grant (calculated as the average of the high and low price or the closing market price on that date depending on the terms of the related Plan) and a contractual term of ten years. Stock Appreciation Rights are cancelled on, or 90 days following, termination of employment unless termination is due to retirement, death or disability under certain circumstances, in which case, all outstanding options vest fully and remain outstanding for a term set forth in the related grant agreement. As the obligation to settle the share based transaction rests with the Company, hence these are accounted for as cash-settled options.

Restricted stock units (RSU)

Restricted stock units have vesting period of three years beginning on the date of grant. Restricted stock units will be settled through the issuance of an equivalent number of shares of The Goodyear Tire & Rubber Company, Akron, Ohio, USA common stock. The Company is required to reimburse the ultimate holding company the cost of the share issuance as on the date of vesting. As the obligation to settle the share based transaction rests with the Company, hence these are accounted for as cash-settled options.

iii. Measurement of fair values

The fair value of SAR’s have been measured using the Black Scholes formula. Service and non-performance conditions attached to the arrangements were not taken into account in measuring fair value.

The fair value of grant of restricted stock unit is based on the closing market price of a share of Goodyear Tire and Rubber Company, Akron’s common stock on the date of grant, thereafter re-measuring the value on each reporting date at the closing market price of a share.

7 Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’ and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable to the Company from April 1, 2017.

Amendment to Ind AS 7:

Liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated. Amendment to Ind AS 102:

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market based performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

8 The Financial Year of the Company was changed during last reporting period from a ''January-December'' year to an ''April-March'' year, in accordance with the provisions of the Companies Act, 2013. Accordingly, the financial statements of the Company for the current year ended March 31, 2017 are for a period of twelve months, from April 1, 2016 to March 31, 2017 and are therefore not comparable with those of the previous period ended March 31, 2016 as those were for a period of fifteen months, from January 1, 2015 to March 31, 2016.

9 First time adoption of Ind As Transition to Ind As

These are the Company’s first financial statement prepared in accordance with Ind AS.

The accounting policies set out in Note 1, have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the 15 month ended March 31, 2016 and in the preparation of opening Ind AS balance sheet as at January 1, 2015. In preparing its opening balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes:

A.1 Exemptions and exceptions availed Ind AS optional exemptions

A.1.1 Deemed cost: Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for decommissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible assets. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying values as at January 1, 2015.

A.1.2 Leases: Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected not to be material.

The Company has elected to apply this exemption for such contracts/arrangements.

A.1.3 Decommissioning Liabilities included in the cost of property, plant and equipment: An entity need not to comply with the requirements of Appendix A of Ind AS 16 i.e. Changes in Existing Decommissioning, Restoration and Similar Liabilities for liabilities occurred before the date of transition to Ind AS. An entity can measure the liability as the date of transition.

The Company has elected to measure such liabilities as on the date of transition and on the basis of such evaluations no liabilities need to be recognized.

A.2 Ind AS mandatory exceptions

A.2.1 De-recognition of financial assets and liabilities: Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

A.2.2 Classification and measurement of financial assets: Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

A.2.3 Impairment of financial assets: An entity shall determine the approximate credit risk at the date that financial instruments were initially recognized and compare that to the credit risk at the date of transition to Ind AS. This should be based on reasonable and supportable information that is available without undue cost or effort. If an entity is unable to make this determination without undue cost or effort, it shall recognize a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognized.

The Company has availed this exception to analyze credit risk of the financial assets as on the date of transition instead of the date of initial recognition.

A.2.4 Embedded derivatives: Entity shall assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative either on the basis of conditions that existed on the date of contract or on the date of significant modification of the contract, whichever is later.

The Company has elected to analyze the requirements to separate the embedded derivative from host contract and account for as a derivative on the date of contract.

B reconciliation between previous GAAP and Ind As

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliation from previous GAAP to Ind AS reconciliation of equity as at the date of transition (January 1, 2015)

Notes to first time adoption

Note 10 Capitalization of spare parts

The previous GAAP required spares (other than spares used in connection with an item of fixed asset with irregular use) to be accounted for as an inventory and to be charged to the statement of profit and loss as and when consumed. Whereas under Ind AS, spares are recognized as property, plant and equipment (PPE) when they meet the recognition criteria under Ind AS 16. Due to this change in accounting standard, certain spare parts have been capitalized as PPE and accordingly depreciation has been charged on such assets. Spares capitalized as on January 1, 2015 and during the fifteen month period ending March 31,2016 amounted to Rs. 81 and Rs 45, respectively. Additional depreciation charged during the fifteen month period ending March 31,2016 amounted to Rs 33.

Note 11 security deposits

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term ) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognized at fair cost. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transactional value of the security deposit has been recognized as prepaid rent. Consequent to this change, the amount of security deposits decreased by Rs. 69 as at March 31,2016 ( Rs. 100 as at January 1, 2015). The prepaid rent increased by Rs. 56 as at March 31,2016 ( Rs. 85 as at January 1,2015). Total equity decreased by Rs.15 as on January 1,2015. The profit for the period and the total equity as at March 31,2016 decreased by Rs. 2 due to amortization of the prepaid rent of Rs. 29 which was partially off-set by the notional interest income of Rs. 31 recognized on security deposits.

Note 12 Share-based payments

Under Ind AS, Liabilities for the stock-based payments (Stock Appreciation Right and Restricted Stock Units) are recognized as employee benefit expenses over the relevant service period. The liabilities are remeasured to fair value at each reporting date and are presented as under Provisions in the balance sheet. Consequently, a provision of Rs.186 was recognized as on January 1, 2015 with corresponding impact in retained earnings. Rs. 58 was credited in the statement of profit and loss for the fifteen month period ended March 31, 2016.

Note 13 Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12, “Income taxes”, requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 has resulted in recognition of deferred tax on new temporary differences, which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to additional temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact was increase in deferred tax assets/(liabilities) is of (Rs.25), whereas as on March 31, 2016, the net impact was increase in deferred tax assets/ (liabilities) is of (Rs.2).

Note 14 Deferred revenue - Customer loyalty program

The Company operates a customer reward points program. The programme allows customers to accumulate points on purchase of tyres. The points can be redeemed by the customers for free products.

Under the previous GAAP, the Company created a provision towards its liability under the programme. Under Ind AS, the consideration allocated to the customer reward points has been deferred and will be recognized as revenue when the reward points are redeemed or lapsed.

On the date of transition i.e. January 1, 2015, deferred revenue of Rs. 189 was recognized with corresponding decrease in trade payables. For the year ended March 31, 2016, total revenue and total expense of Rs. 426 were recognized.

Note 15 Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of Rs. 3,347 as at March 31, 2016 (January 1, 2015 - Rs. 2,779) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity fluctuated by an equivalent amount.

Note 16 Excise duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the fifteen month ended March 31, 2016 by Rs. 12,898. There is no impact on the total equity and profit.

Note 17 Cash Discount

Under In AS, all cash discounts are netted off from revenue, whereas in earlier Indian GAAP, cash discount was shown as part of other expenses. This change has resulted in decrease in total revenue and total expenses by Rs. 2270. There is no impact on total equity and profit.

Note 18 Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2016 increased by Rs. 15. There is no impact on total equity.

Note 19 Lease Assets

Under previous GAAP, arrangements that did not take the legal form of lease were accounted for based on the legal form of such arrangements e.g. job work arrangements. Under Ind AS, any arrangements (even if not legally structured as lease) which conveys a right to use an assets in return for a payment or series of payments are identified as leases provided certain conditions are met. In case of such arrangements are determined to be in nature of leases, such arrangements are required to be classified into finance or operating leases as per requirements of Ind AS 17, Leases.

The Company had entered into an agreement in the year 1997 for purchase of nitrogen gas wherein a gas plant was built in within the premises of the Company. The said plant was assessed to be a finance lease on the date of transition to Ind AS. The life of the plant under consideration has expired on the transition date, therefore, gross block and accumulated depreciation of Rs. 615 was recognized in plant and machinery. There is no impact on the total equity.

Note 20 Change in Useful life

Under previous GAAP, the estimated useful lives of certain fixed assets was revised in accordance with Schedule II to the Companies Act 2013, with effect from January 1, 2015. Pursuant to the above mentioned changes in useful life of assets, for certain assets who’s revised useful life was over as on December 31, 2014, the net book value of Rs. 410 (net of deferred tax of Rs. 154) was deducted from the retained earnings and Rs. 110 relating to fixed assets revalued earlier, was released from revaluation reserve to general reserve.

Under Ind AS, as the Company has opted for exemption under paragraph D7AA of Ind AS 101 and also elected the cost model under Ind AS 16 for subsequent measurement of Property, Plant and Equipment, this change in accounting estimate has been accounted for prospectively and accordingly Rs. 564 has been charged to the statement of profit or loss for the fifteen months period ended March 31, 2016. The revaluation reserve recognized under previous GAAP has been transferred to ‘Other equity-revaluation’ on the date of transition to Ind AS.

Note 21 retained earnings

Retained earnings as at January 1, 2015 has been adjusted consequent to the above Ind AS transition adjustments.

Note 22 other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.


Mar 31, 2016

(b) Rights, preferences and restrictions attached to shares :

The Company has only one class of equity shares having par value of Rs. 10/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed, if any by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Deferred Tax Assets and Deferred Tax Liabilities have been offset as they relate to the same governing taxation laws.

* Includes adjustment on account of change in useful life of fixed assets (reversal of deferred tax liabilities) of Rs. 154 (Rs.Nil), adjusted with retained earnings. Also refer note ''11(c)'' of notes to the financial statements.

* No amount is due as at March 31, 2016 for credit to Investors'' Education and Protection Fund. Amount remaining due after adjustment to be claimed from the Company will be transferred on the respective due dates to the said Fund.

* Amount below the rounding off norm adopted by the company.

Notes:

a) Gross book value includes Rs.1,406 (Rs. 1,406) on account of revaluation of certain fixed assets in 1984. Amount added to fixed assets and revaluation was credited to revaluation reserve.

b) The depreciation charge for the current year represents gross Rs. 4,053 (Rs. 2,863) less transfer from revaluation reserve Rs. Nil (Rs. 12). Such transfer represents the amount equivalent to the additional charge necessitated on account of revaluation of certain fixed assets referred to in note (2)(ii) to the Financial Statements, being the difference between the depreciation charged and the depreciation calculated in accordance with the rates followed by the Company on such items if these were not revalued.

c) The estimated useful lives of certain fixed assets have been revised in accordance with Schedule II to the Companies Act 2013, with effect from January 1, 2015. Pursuant to the above mentioned changes in useful life of assets, the depreciation expense for the period is higher by Rs. 159 lacs and for the assets whose revised useful life was over as on December 31, 2014, the net book value of Rs. 410 lacs (net of deferred tax of Rs. 154 lacs) has been deducted from the retained earnings and Rs. 110 lakhs has been released from revaluation reserve relating to fixed assets revalued earlier.

E. Haryana Local Area Development Tax (HLADT)

In the year 2007, Hon''ble Punjab & Haryana High Court at Chandigarh, on a reference from the Hon''ble Supreme Court of India, had held the Haryana Local Area Development Tax (HLADT) as unconstitutional. Subsequently in the year 2008, the State of Haryana introduced "Haryana Tax on Entry of Goods Into Local Area Act, 2008 (Entry Tax)" by repealing the Haryana Local Area Development Tax Act, 2000 and the same was also held unconstitutional by the Hon''ble Punjab & Haryana High Court.

Earlier based on the legal opinion obtained by the Company and management’s assessment, provision towards liability for Haryana Local Area Development Tax (HLADT) for the periods prior to March 2008 aggregating to Rs. 540 lakhs was written back during the year 2008. The amount already paid for HLADT till December 2006 and expensed in earlier years is Rs.1,938 lakhs.

Pursuant to an interim order of Hon''ble Supreme Court in October 2009, there is a stay on recovery of tax with a direction to assesses for filing their returns of tax and giving undertaking that in the event of their losing the matter, they will deposit the tax along with the interest at a rate which will be determined by the Court. During the year 2010, on the matter being heard by a bench of five Hon''ble judges of the Hon''ble Supreme Court, it was requested to Hon''ble Chief Justice of India to refer the matter to a suitable larger bench for deciding the constitutional validity of the levy. The larger bench of Hon''ble Supreme Court is yet to be constituted. However, based on legal opinion obtained by the Company and management''s assessment, no provision for HLADT and Entry tax has been considered necessary.

** These represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes. It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

(1) The Company’s business activity falls within a single primary business segment viz. ‘Automotive tyres, tubes and flaps''. Secondary segment reporting is based on the geographical location of the customers. Details of secondary segments are not disclosed as more than 90% of the Company’s revenues, results and assets relate to the domestic market. Therefore, no further disclosure is considered as required under Accounting Standard (AS-17) “Segment Reporting”.

* Includes consumption of spare parts Rs. 685 (Rs. 406)

** Refer note ''33'' of notes to the financial statements.

*** A. Details of expenditure towards Corporate Social Responsibility (CSR) activities:

a) Gross amount required to be spent by the Company during the period was Rs. 252 (Previous Year Rs. Nil).

(2) DISCLOSURES UNDER ACCOUNTING STANDARD 18: i) List of related parties:

Ultimate holding company :

The Goodyear Tire & Rubber Company, Akron, Ohio, USA Holding company:

Goodyear Orient Company (Private) Limited, Singapore Fellow subsidiaries with whom the Company had transactions during the period/year:

i) Goodyear International Corporation

ii) Goodyear Dunlop Tires Operations SA

iii) Goodyear Middle East, FZE

iv) Goodyear Earthmover Pty Limited

v) Goodyear Dalian Tire Company Limited

vi) Goodyear & Dunlop Tyres (NZ) Limited

vii) Goodyear (Thailand) Public Company Limited

viii) Goodyear Do Brasil Produtos De Borracha Ltda.

ix) PT. Goodyear Indonesia TBK

x) Goodyear SA (Luxembourg)

xi) Compania Goodyear Del Peru SA

xii) Goodyear South Africa (Pty) Limited

xiii) Goodyear Singapore Tyres

xiv) Goodyear Marketing & Sales SDN BHD

xv) TC Debica SA

xvi) Goodyear & Dunlop Tyres (Australia) Pty Limited

xvii) Goodyear South Asia Tyres Private Limited

xviii) Goodyear Regional Business Services Inc.

xix) Goodyear De Chile S.A.I.C

xx) Nippon Giant Tire Co. Ltd.

xxi) Goodyear Philippines Inc.

xxii) Goodyear Wingfoot Kabushiki Kiasha

xxiii) Goodyear Dunlop Tires France

Key management personnel:

i) Mr. Rajeev Anand

ii) Mr. Yashwant Singh Yadav

iii) Mr. Leopoldo Estefano Maggiolo Gonzalez (with effect from August 13, 2015)

iv) Mr. Mark C Ravunni (upto August 12, 2015)

(3) Leases

Cancellable: The Company''s cancellable operating lease arrangement mainly consists of residential premises, warehouses and offices taken on lease for periods between 1-10 years. Terms of lease include terms for renewal, increase in rents in future periods and terms of cancellation.

** Gratuity is included under Employee Benefits Expenses (Refer note ‘27’).

Best estimate of contribution during next year for Gratuity is Rs. 268 lakhs (Rs. 292 lakhs).

(4) The Goodyear Tire & Rubber Company, Akron, Ohio, USA (Ultimate holding company) has various ‘non - qualified stock appreciation rights plan’ (SARs) whereby certain employees of its subsidiaries are granted cash-settled SARs. These SARs entitles the holder to receive cash payout equivalent to the fair market value of the underlying shares on the date of exercise as reduced by the designated exercise price of SARs. The eligible employees do not receive / own shares directly / as a beneficiary at any point of time under the SARs. The said SARs generally have a graded vesting period of four years. Once a SAR vests, an employee can exercise it at any time prior to its expiration. The cost related to these SARs exercised by the employees of Goodyear India Limited (‘Company’) is accounted for in the books of the Company. Accordingly, a sum of Rs. 158 lakhs (Rs. 28 lakhs) has been included under Employee Benefits Expense (Refer note ‘27’). These SARs are administered and governed by the Ultimate Holding Company. Accordingly, other detailed disclosures required by the Guidance Note on ‘Accounting for Employee Share based Payments’ issued by Institute of Chartered Accountants of India have not been made, as these do not pertain to information relating to the Company and such information is not available with the Company.

(5) Stock and book debts are subject to a maximum charge of Rs. 3,500 lakhs (Rs. 3,500 lakhs) for all credit facilities/guarantees sanctioned by BNP Paribas Bank.

(6) The Financial Year of the Company has been changed from January-December to April-March in line with the provisions of the Companies Act, 2013. Accordingly, current year’s financial statements of the Company are for a period of fifteen months, from January 1, 2015 to March 31, 2016 and are therefore not comparable with those of the previous year ended December 31, 2014.

(7) Previous year figures have been regrouped and recanted, wherever necessary, to conform to the current year''s classification.

Mr James Constantine Venizelos was appointed as an Alternate Director to Mr Daniel Lawrence Smytka effective August 13, 2015 and ceased to be director w.e.f. close of business hours on December 31, 2015 on resignation of Mr Smytka. Thereafter, Mr James Constantine Venizelos has been appointed as an Alternate Director to Mr Christopher Raymond Delaney w.e.f. February 05, 2016.


Dec 31, 2014

(1) GENERAL INFORMATION

Goodyear India Limited (the "Company"), an existing company under the Companies Act,1956, is a step-down subsidiary of The Goodyear Tire & Rubber Company, Akron, Ohio, USA ("GTRC"). The Company was originally registered and incorporated as a private company on October 10, 1922 and converted into a public company on March 24,1961. The Company is engaged in the business of manufacturing and trading of tyres, tubes and flaps with manufacturing facility at Ballabgarh, Haryana, India. The Company is presently listed with the Mumbai stock exchange (BSE Limited).

(2) Contingent Liabilities

i) Guarantee to Sarva Haryana Gramin Bank 102 133

ii) Other moneys for which Company is 474 474 contingently liable Price Differential pending settlement

iii) Claims against the Company disputed and not acknowledged as debts**

A. Excise duty and Service tax matters

a) Cases decided in the Company''s favour by Appellate authorities and for which 484 484 Department has filed further appeal.

b) Cases pending before Appellate authorities in respect of which the Company has filed 1,570 1,241 appeals.Amounts deposited under protest Rs. 386 (Rs. 386).

B. Income tax matters

Cases pending before Appellate authorities /Dispute Resolution Panel in respect 3,365 1,932 of which the Company has filed appeals. Amounts deposited under protest Rs. 271 (Rs. 133).

C. Sales tax matters

Cases pending before Appellate authorities in respect of which the Company has filed 383 663 appeals. Amounts deposited under protest Rs. 142 (Rs. 284).

D. Haryana Urban Development Authority - 662 (HUDA) demand matter *

Demand for proportionate external development charges by HUDA.

E. Other matters

These include claims against the Company for recovery lodged by various parties. 294 266



* During the year 2003, a demand of Rs. 662 lakhs besides interest, was raised by the Haryana Urban Development Authority (HUDA) towards external development charges (EDC) which was challenged by the Company. During June 2009, the Court of Hon''ble Additional Civil Judge (Senior Division) (First Court) passed an interim order whereby the Company was directed to pay interest @ 10% for delayed payment amounting to Rs. 5 lakhs and which was duly paid. In the year 2010, the entire demand had been set aside by the First Court. However, HUDA challenged the same before the Court of Hon''ble District & Session Judge, Faridabad. In December 2011, the said appeal was dismissed by Hon''ble District and Session Judge. HUDA has further gone into appeal before the Hon''ble High Court of Punjab and Haryana. The matter was heard by Hon''ble High Court and as per order dated May 27, 2014 the Appeal filed by HUDA has been dismissed. The Company has also not received any information of Huda filing any further appeal before the Supreme Court.

(3) Haryana Local Area Development Tax (HLADT)

In the year 2007, Hon''ble Punjab & Haryana High Court at Chandigarh, on a reference from the Hon''ble Supreme Court of India, had held the Haryana Local Area Development Tax (HLADT) as unconstitutional. Subsequently in the year 2008, the State of Haryana introduced "Haryana Tax on Entry of Goods Into Local Area Act, 2008 (Entry Tax)" by repealing the Haryana Local Area Development Tax Act, 2000 and the same was also held unconstitutional by the Hon''ble Punjab & Haryana High Court.

Earlier based on the legal opinion obtained by the Company and management''s assessment, provision towards liability for Haryana Local Area Development Tax (HLADT) for the periods prior to March 2008 aggregating to Rs. 540 lakhs was written back during the year 2008. The amount already paid for HLADT till December 2006 and expensed in earlier years is Rs.1,938 lakhs.

Pursuant to an interim order of Hon''ble Supreme Court in October 2009, there is a stay on recovery of tax with a direction to assessees for filing their returns of tax and giving undertaking that in the event of their losing the matter, they will deposit the tax along with the interest at a rate which will be determined by the Court. During the year 2010, on the matter being heard by a bench of five Hon''ble judges of the Hon''ble Supreme Court, it was requested to Hon''ble Chief Justice of India to refer the matter to a suitable larger bench for deciding the constitutional validity of the levy. The larger bench of Hon''ble Supreme Court is yet to be constituted. However, based on legal opinion obtained by the Company and management''s assessment, no provision for HLADT and Entry tax has been considered necessary.

** These represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

(4) The Company''s business activity falls within a single primary business segment viz. ''Automotive tyres, tubes and flaps''. Secondary segment reporting is based on the geographical location of the customers. Details of secondary segments are not disclosed as more than 90% of the Company''s revenues, results and assets relate to the domestic market. Therefore, no further disclosure is considered as required under Accounting Standard (AS-17) "Segment Reporting".

(5) Disclosures under Accounting Standard 18:

i) List of related parties with whom the Company had transactions during the year :

Ultimate holding company :

The Goodyear Tire & Rubber Company, Akron, Ohio, USA

* Holding company until November 28, 2011 Ultimate holding company since November 29, 2011

Holding company :

Goodyear Orient Company (Private) Limited, Singapore (Holding company since November 29, 2011)

Fellow subsidiaries:

i) Goodyear SA (Luxembourg)

ii) Goodyear Middle East, FZE

iii) Goodyear Dalian Tire Company Limited

iv) Goodyear Dunlop Tires France

v) Goodyear (Thailand) Public Company Limited

vi) Goodyear do Brasil Produtos de Borracha Ltda.

vii) PT. Goodyear Indonesia Tbk

viii) Goodyear South Africa (Pty.) Limited

ix) Goodyear Singapore Tyres

x) Goodyear & Dunlop Tyres (NZ) Limited

xi) Goodyear Marketing & Sales SDN Bhd

xii) TC Debica SA

xiii) Goodyear & Dunlop Tyres (Australia) Pty Limited

xiv) Goodyear South Asia Tyres Private Limited

xv) Goodyear Earthmover Pty Limited

xvi) Goodyear International Corporation

xvii) Goodyear Dunlop Tires Operations SA

xviii) Compania Goodyear Del Peru SA

xix) Goodyear SA R&D (Luxembourg)

xx) Goodyear Dunlop Tires Germany

xxi) GRBS Inc., Philippines

xxii) Nippon Giant Tire Co. Ltd.

xxiii) Goodyear Philippines Inc.

Key management personnel:

i) Mr. Rajeev Anand

ii) Mr. Yashwant Singh Yadav

iii) Mr. Mark C Ravunni

(6) Leases

Cancellable : The Company''s cancellable operating lease arrangement mainly consists of residential premises, warehouses and offices taken on lease for periods between 1-10 years. Terms of lease include terms for renewal, increase in rents in future periods and terms of cancellation.

(7) The management is of the opinion that its international transactions with associated enterprises have been undertaken at arm''s length basis at duly negotiated prices on usual commercial terms. The Company has submitted the Accountant''s Report in form 3CEB upto the financial year ended on March 31, 2014 as required under section 92E of the Income Tax Act, 1961. In respect of the proposed transfer pricing adjustments suggested by the Assessing Officers in the Assessments already completed, the matters are pending before the Appellate Authorities/Dispute Resolution Panel. Based on expert opinion, the management is of the view that in all likelihood there will be not material liability.

(8) Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006 (as amended in Schedule VI to the Companies Act, 1956 vide notification dated November 16, 2007) based on the information available with the Company :

i) Principal amount due to suppliers registered under the MSMED Act and remaining unpaid as at year end -Rs. NIL (Rs. NIL)

ii) Interest due to suppliers registered under the MSMED Act and remaining unpaid as at year end -Rs. NIL (Rs. NIL)

iii) Principal amounts paid to suppliers registered under the MSMED Act, beyond the appointed day during the year -Rs. NIL (Rs. NIL)

iv) Interest paid, other than under Section 16 of MSMED Act, to suppliers registered under the MSMED Act, beyond the appointed day during the year -Rs. NIL (Rs. NIL)

v) Interest paid, under Section 16 of MSMED Act, to suppliers registered under the MSMED Act, beyond the appointed day during the year -Rs. NIL (Rs. NIL)

vi) Interest due and payable towards suppliers registered under MSMED Act, for payments already made -Rs. NIL (Rs. NIL)

vii) Further interest remaining due and payable for earlier years -Rs. NIL (Rs. NIL)

(9) In accordance with AS-15 (revised) "Employee Benefits", the Company has calculated the various benefits provided to employees as under :

A. Defined Contribution Plans

a) Superannuation Fund

b) Employee''s State Insurance (State Plan)

c) Employee''s Pension Scheme 1995 (State plan)

(10) The Goodyear Tire & Rubber Company, Akron, Ohio, USA (Ultimate holding company) has various ''non - qualified stock appreciation rights plan'' (SARs) whereby certain employees of its subsidiaries are granted cash-settled SARs. These SARs entitles the holder to receive cash payout equivalent to the fair market value of the underlying shares on the date of exercise as reduced by the designated exercise price of SARs. The eligible employees do not receive / own shares directly / as a beneficiary at any point of time under the SARs. The said SARs generally have a graded vesting period of four years. Once a SAR vests, an employee can exercise it at any time prior to its expiration. The cost related to these SARs exercised by the employees of Goodyear India Limited (''Company'') is accounted for in the books of the Company. Accordingly, a sum of Rs. 28 lakhs (Rs. 72 lakhs) has been included under Employee Benefits Expense (Refer note ''27'').

(11) Stock and book debts are subject to a maximum charge of Rs. 3,500 lakhs (Rs. 3,500 lakhs) for all credit facilities/guarantees sanctioned by BNP Paribas Bank.

(12) Previous year figures have been regrouped and recasted, wherever necessary, to conform to the current year''s classification.


Dec 31, 2013

(1) GENERAL INFORMATION

Goodyear India Limited (the "Company"), an existing company under the Companies Act,1956, is a step-down subsidiary of The Goodyear Tire & Rubber Company, Akron, Ohio, USA ("GTRC"). The Company was originally registered and incorporated as a private company on October 10, 1922 and converted into a public company on March 24,1961. The Company is engaged in the business of manufacturing and trading of tyres, tubes and faps with manufacturing facility at Ballabgarh, Haryana, India. The Company is presently listed with the Mumbai stock exchange (BSE Limited).

Contingent Liabilities : Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

As at As at Dec 31, 2013 Dec 31, 2012 (Rs.'' lakhs) (Rs.'' lakhs)

(2) Contingent liabilities :

i) Guarantee to Gurgaon Gramin Bank 133 126

ii) Other moneys for which Company is contingently liable Price Differential pending settlement 474 474

iii) Claims against the Company disputed and not acknowledged as debts **

A. Excise duty and Service tax matters

a) Cases decided in the Company''s favor by Appellate authorities and for which 484 484 Department has fled further appeal.

b) Cases pending before Appellate authorities in respect of which the Company has fled 1,241 1,152 appeals. Amounts deposited under protest Rs. 386 (Rs. 376).

B. Income tax matters

Cases pending before Appellate authorities/Dispute Resolution Panel in respect of which 1,932 1,295 the Company has fled appeals. Amounts deposited under protest Rs. 133 (Rs. 63).

C. Sales tax matters

Cases pending before Appellate authorities in respect of which the Company has fled 663 676 appeals. Amounts deposited under protest Rs. 284 (Rs. 250).

D. Haryana Urban Development Authority (HUDA) demand matter * 662 662 Demand for proportionate external development charges by HUDA.

E. Other matters 266 909

These include claims against the Company for recovery lodged by various parties. Amounts deposited under protest Rs. Nil (Rs. 443).

* During the year 2003, a demand of Rs. 662 lakhs besides interest, was raised by the Haryana Urban Development Authority

(HUDA) towards external development charges (EDC) which was challenged by the Company. During June 2009, the Court of Hon''ble Additional Civil Judge (Senior Division) (First Court) passed an interim order whereby the Company was directed to pay interest @ 10% for delayed payment amounting to Rs. 5 lakhs and which was duly paid. In the year 2010, the entire demand had been set aside by the First Court. However, HUDA challenged the same before the Court of Hon''ble District & Session Judge, Faridabad. In December 2011, the said appeal was dismissed by Hon''ble District and Session Judge. HUDA has further gone into appeal before the Hon''ble High Court of Punjab and Haryana, to our knowledge the same has not yet been admitted.

F. Haryana Local Area Development Tax (HLADT)

In the year 2007, Hon''ble Punjab & Haryana High Court at Chandigarh, on a reference from the Hon''ble Supreme Court of India, had held the Haryana Local Area Development Tax (HLADT) as unconstitutional. Subsequently in the year 2008, the State of Haryana introduced "Haryana Tax on Entry of Goods Into Local Area Act, 2008 (Entry Tax)" by repealing the Haryana Local Area Development Tax Act, 2000 and the same was also held unconstitutional by the Hon''ble Punjab & Haryana High Court.

Earlier based on the legal opinion obtained by the Company and management''s assessment, provision towards liability for Haryana Local Area Development Tax (HLADT) for the periods prior to March 2008 aggregating to Rs. 540 lakhs was written back during the year 2008. The amount already paid for HLADT till December 2006 and expensed in earlier years is Rs.1,938 lakhs.

Pursuant to an interim order of Hon''ble Supreme Court in October 2009, there is a stay on recovery of tax with a direction to assessees for fling their returns of tax and giving undertaking that in the event of their losing the matter, they will deposit the tax along with the interest at a rate which will be determined by the Court. During the year 2010, on the matter being heard by a bench of fve Hon''ble judges of the Hon''ble Supreme Court, it was requested to Hon''ble Chief Justice of India to refer the matter to a suitable larger bench for deciding the constitutional validity of the levy. The larger bench of Hon''ble Supreme Court is yet to be constituted. However, based on legal opinion obtained by the Company and management''s assessment, no provision for HLADT and Entry tax has been considered necessary.

(3) The Company''s business activity falls within a single primary business segment viz. ''Automotive tyres, tubes and faps''. Secondary segment reporting is based on the geographical location of the customers. Details of secondary segments are not disclosed as more than 90% of the Company''s revenues, results and assets relate to the domestic market. Therefore, no further disclosure is considered as required under Accounting Standard (AS-17) "Segment Reporting".

(4) Disclosures under Accounting Standard 18 :

i) List of related parties with whom the Company had transactions during the year : Ultimate Holding Company :

The Goodyear Tire & Rubber Company, Akron, Ohio, USA

Holding Company :

Goodyear Orient Company (Private) Limited, Singapore (Holding company since November 29, 2011)

Fellow Subsidiaries :

i) Goodyear SA (Luxembourg)

ii) Goodyear Middle East, FZE

iii) Goodyear Dalian Tire Company Limited

iv) Goodyear Dunlop Tires France

v) Goodyear (Thailand) Public Company Limited

vi) Goodyear do Brasil Products de Borracha Ltda

vii) Goodyear De Colombia S.A

viii) PT. Goodyear Indonesia Tbk

ix) Goodyear South Africa (Pty.) Limited

x) Goodyear Singapore Tyres

xi) Goodyear & Dunlop Tyres (NZ) Limited

xii) Goodyear Marketing & Sales SDN Bhd

xiii) TC Debica SA

xiv) Goodyear & Dunlop Tyres (Australia) Pty Limited

xv) Goodyear South Asia Tyres Private Limited

xvi) Goodyear Earthmover Pty Limited

xvii) Goodyear International Corporation

xviii) Goodyear Dunlop Tires Operations SA

xix) Compania Goodyear Del Peru SA

xx) Goodyear SA R&D (Luxembourg)

xxi) Goodyear Dunlop Tires Germany

xxii) GRBS Inc., Philippines

Key management personnel :

i) Mr Rajeev Anand

ii) Mr Yashwant Singh Yadav

iii) Mr Mark C Ravunni

(5) Leases

Cancellable : The Company''s cancellable operating lease arrangement mainly consists of residential premises, warehouses and offices taken on lease for periods between 1-10 years. Terms of lease include terms for renewal, increase in rents in future periods and terms of cancellation.

(6) The management is of the opinion that its international transactions with associated enterprises have been undertaken at arm''s length basis at duly negotiated prices on usual commercial terms. The Company has submitted the Accountant''s Report in form 3CEB up to the financial year ended on March 31, 2013 as required under section 92E of the Income Tax Act, 1961. In respect of the proposed transfer pricing adjustments suggested by the Assessing Officers in the Assessments already completed, the matters are pending before the Appellate Authorities/Dispute Resolution Panel. Based on expert opinion, the management is of the view that in all likelihood there will be no material liability.

(7) Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006 (as amended in Schedule VI to the Companies Act, 1956 vide notification dated November 16, 2007) based on the information available with the Company :

i) Delayed payments due as at the end of accounting year on account of principal - Rs. Nil (Rs. Nil) and Interest due thereon - Rs. Nil (Rs. Nil)

ii) Total interest paid on all delayed payments during the year under the provisions of the Act - Rs. Nil (Rs. Nil)

iii) Interest due on principal amounts paid beyond the due date during the year but without the interest amounts under this Act - Rs. Nil (Rs. Nil)

iv) Interest accrued but not due - Rs. Nil (Rs. Nil)

v) Total interest due but not paid - Rs. Nil (Rs. Nil)

(8) In accordance with AS-15 (revised) "Employee Benefits", the Company has calculated the various benefits provided to employees as under :

A. Defend Contribution Plans

a) Superannuation Fund

b) Employee''s State Insurance (State Plan)

c) Employee''s Pension Scheme 1995 (State plan)

(9) The Goodyear Tire & Rubber Company, Akron, Ohio, USA (Ultimate holding company) has various ''non - qualified stock appreciation rights plan'' (SARs) whereby certain employees of its subsidiaries are granted cash-settled SARs. These SARs entitles the holder to receive cash payout equivalent to the fair market value of the underlying shares on the date of exercise as reduced by the designated exercise price of SARs. The eligible employees do not receive / own shares directly / as a beneficiary at any point of time under the SARs. The said SARs generally have a graded vesting period of four years. Once a SAR vests, an employee can exercise it at any time prior to its expiration. The cost related to these SARs exercised by the employees of Goodyear India Limited (''Company'') is accounted for in the books of the Company. Accordingly, a sum of Rs. 72 lakhs (Rs. Nil) has been included under Employee Benefits Expense (Refer note ''27'').

(10) Stock and book debts are subject to a maximum charge of Rs. 3,500 lakhs (Rs. 3,500 lakhs) for all credit facilities/guarantees sanctioned by BNP Paribas Bank.

(11) Previous year figures have been regrouped and recanted, wherever necessary, to conform to the current year''s classification.


Dec 31, 2012

(1) GENERAL INFORMATION

Goodyear India Limited (the "Company"), an existing company under the Companies Act - 1956, is a step down subsidiary of The Goodyear Tire & Rubber Company, Akron, Ohio, USA ("GTRC"). The Company was originally registered and incorporated as a private company on October 10, 1922 and converted into a Public Company on March 24, 1961. The Company is engaged in the business of manufacturing and sale of tyres, tubes, flaps with manufacturing facility at Ballabgarh, Haryana, India. The Company is presently listed with the Mumbai stock exchange (BSE Limited).

* During the year 2003, a demand of Rs. 662 lakhs besides interest, was raised by the Haryana Urban Development Authority (HUDA) towards external development charges (EDC) which was challenged by the Company. During June 2009, the court of Hon''ble Additional Civil Judge (Senior Division) (First Court) passed an interim order whereby the Company was directed to pay interest @ 10% for delayed payment amounting to Rs. 5 lakhs and which was duly paid. In the year 2010 the entire demand had been set aside by the First Court. However, HUDA challenged the same before the Court of Hon''ble District & Session Judge, Faridabad. In December 2011 the said appeal was dismissed by Hon''ble District and Session Judge. HUDA has further gone into appeal before the Hon''ble High Court of Punjab and Haryana, to our knowledge the same has not yet been admitted.

A. Haryana Local Area Development Tax (HLADT)

In the year 2007 Hon''ble Punjab & Haryana High Court at Chandigarh, on a reference from the Hon''ble Supreme Court of India, had held the Haryana Local Area Development Tax (HLADT) as unconstitutional. Subsequently in the year 2008 the state of Haryana introduced "Haryana Tax on Entry of Goods Into Local Area Act, 2008 (Entry Tax) by repealing the Haryana Local Area Development Tax Act, 2000 and the same was also held unconstitutional by the Hon''ble Punjab & Haryana High Court.

Earlier based on the legal opinion obtained by the Company and management''s assessment, provision towards liability for Haryana Local Area Development Tax (HLADT) for the periods prior to March 2008 aggregating to Rs. 540 lakhs was written back during the year 2008. The amount already paid for HLADT till December 2006 and expensed in earlier years is Rs.1,938 lakhs.

Pursuant to an interim order of Hon''ble Supreme Court in October 2009, there is a stay on recovery of tax with a direction to assessees for filing their returns of tax and giving undertaking that in the event of their losing the matter, they will deposit the tax along with the interest at a rate which will be determined by the court. During the year 2010 on the matter being heard by a bench of five Hon''ble judges of the Hon''ble Supreme Court, it was requested to Hon''ble Chief Justice of India to refer the matter to a suitable larger bench for deciding the constitutional validity of the levy The larger bench of Hon''ble Supreme Court is yet to be constituted. However, based on legal opinion obtained by the Company and management assessment, no provision for HLADT and Entry tax has been considered necessary

** These represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

(2) Disclosures under Accounting Standard 18:

i) List of related parties with whom the Company had transactions during the year. Ultimate holding company :

The Goodyear Tire & Rubber Co., Akron, Ohio, USA. (since November 29, 2011) Holding company:

The Goodyear Tire & Rubber Co., Akron, Ohio, USA. (until November 28, 2011) Goodyear Orient Company (Private) Ltd., Singapore (since November 29, 2011)

Fellow subsidiaries:

i) Goodyear SA (Luxembourg)

ii) Goodyear Middle East, FZE

iii) Goodyear Dalian Tire Company Limited

iv) Goodyear Dunlop Tires France

v) Goodyear (Thailand) Public Company Limited

vi) Goodyear do Brasil Produtos de Borracha Ltda.

vii) Goodyear De Colombia S.A

viii) PT. Goodyear Indonesia Tbk

ix) Goodyear South Africa (Pty.) Limited

x) Goodyear Philippines Inc.

xi) Goodyear Singapore Tyres

xii) Goodyear & Dunlop Tyres (NZ) Limited.

xiii) Goodyear Marketing & Sales SDN Bhd

xiv) TC Debica SA

xv) Goodyear & Dunlop Tyres (Australia) Pty Limited.

xvi) Goodyear South Asia Tyres Private Limited

xvii) Goodyear Earthmover Pty Limited.

xviii) Goodyear International Corporation

xix) Goodyear Dunlop Tires Operations SA

xx) Compania Goodyear Del Peru SA

xxi) Goodyear Nippon Giant (Japan NGT)

xxii) Goodyear SA R&D (Luxembourg)

xxiii) Goodyear Chile S.A.I.C

xxiv) Goodyear Dunlop Tires Germany

Key management personnel:

i) Mr. Rajeev Anand

ii) Mr. Yashwant Singh Yadav

iii) Mr. Mark C Ravunni (Effective July 16, 2012)

iv) Mr. Jean Philippe Lecerf (upto July 15, 2012)

(3)Leases

Cancellable : The Company''s cancellable operating lease arrangement mainly consists of residential premises, warehouses and offices taken on lease for periods between 1-10 years. Terms of lease include terms for renewal, increase in rents in future periods and terms of cancellation.

(4) The management is of the opinion that its international transactions with associated enterprises have been undertaken at arms'' length basis at duly negotiated prices on usual commercial terms. The Company has submitted the Accountant''s Report in form 3CEB upto the financial year ended on March 31, 2012 as required under section 92E of the Income Tax Act, 1961. In respect of the proposed transfer pricing adjustments suggested by the Assessing Officers in the Assessments already completed, the matters are pending before the Appelllate Authorities / Dispute Resolution Panel. Based on expert opinion the management is of the view that in all likelihood there will be no material liability.

(5) Disclosures under the Micro, Small & Medium Enterprise Development Act, 2006 (as amended in Schedule VI to the Companies Act, 1956 vide notification dated November 16, 2007) based on the information available with the company:

i) Delayed payments due as at the end of accounting year on account of Principal - Rs. Nil (Nil) and Interest due thereon - Rs. Nil (Nil)

ii) Total interest paid on all delayed payments during the year under the provisions of the Act - Rs. Nil (Nil)

iii) Interest due on principal amounts paid beyond the due date during the year but without the interest amounts under this Act - Rs. Nil (Nil)

iv) Interest accrued but not due- Rs. Nil (Nil)

v) Total Interest Due but not paid - Rs. Nil (Nil)

(6)In accordance with AS-15 (revised) "Employee Benefits", the Company has calculated the various benefits provided to employees as under:

A. Defined Contribution Plans

a) Superannuation Fund

b) Employer''s Contribution to Employee state insurance (State Plan)

c) Employer''s contribution to Employee''s Pension Scheme 1995. * (State plan)

(7) Stock and book debts are subject to a maximum charge of Rs.3,500 lakhs (Rs. 3,500 lakhs) for all credit facilities / guarantees sanctioned by BNP Paribas Bank.

(8) In the Board Meeting held on Feb. 21, 2011, the Board considered and approved the sale of a part of land located in Ballabgarh, subject to obtaining of necessary approvals for such sale. In the absence of said approvals, pursuant to a circular resolution passed by the Board of Directors on June 21, 2012, the Board considered and terminated the process of sale. During October, 2012 the Company has appropriately dealt with and replied to a notice received for a full refund of deposit along with interest and damages. There has not been any development thereafter.

(9) The financial statements for the year ended December 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended December 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been regrouped and reclassified to conform to this year''s classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements. Figures in brackets, wherever given are in respect of previous year unless stated otherwise.


Dec 31, 2011

(a) Contingent liabilities*

As at As at December 31, December 31, 2011 2010 (Rs.'000) (Rs.'000)

i) Bills discounted - 14,957

ii) Guarantee to 11,500 11,765 Gurgaon Gramin Bank

iii) Claims against the Company not acknowledged as debts Rent case** - 43,875

Sales Tax 45,166 30,176

Excise & Service Tax Matters 100,228 82,714

Income Tax Matters 107,328 48,447

Price Differential pending settlement 47,392 47,392

Others 27,956 28,146

* (excluding interest and penalty, if any)

** During the year, in compliance of order passed by the Hon'ble Delhi High Court in August 2011 in respect of Delhi branch rent case, the Company deposited with the court a sum of Rs.162 lakhs (including interest Rs. 81 lakhs) by way of demand drafts in the name of landlord(s), after deducting applicable TDS. However subsequent to such deposit, the Company received notice from Hon'ble Supreme Court of India revealing that the landlord(s) have preferred Special Leave Petition challenging the said order of High Court.

iv) During the year 2003, a demand of Rs. 66,222 thousand besides interest, was raised by the Haryana Urban Development Authority (HUDA) towards external development charges (EDC) which was challenged by the Company. During June 2009, the court of Hon'ble Additional Civil Judge (Senior Division) (First Court) passed an interim order whereby the Company was directed to pay interest @ 10% for delayed payment amounting to Rs. 476 thousand which was duly paid. In the year 2010 the entire demand had been set aside by the First Court. However, HUDA had challenged the same before the Court of Hon'ble District & Session Judge, Faridabad. During the year, the said appeal was dismissed by Hon'ble District & Session Judge.

v) In the year 2007 Hon'ble Punjab & Haryana High Court at Chandigarh, on a reference from the Hon'ble Supreme Court of India, had held the Haryana Local Area Development Tax (HLADT) as unconstitutional. Subsequently in the year 2008 the state of Haryana introduced Haryana Tax on Entry of Goods Into Local Area Act, 2008 (Entry Tax) by repealing the Haryana Local Area Development Tax Act, 2000 and the same was also held unconstitutional by the Hon'ble Punjab & Haryana High Court.

Based on the legal opinion obtained by the Company and management's assessment, provision towards liability for Haryana Local Area Development Tax (HLADT) for the periods prior to March 2008 aggregating to Rs. 540 lacs was written back during the year 2008. The amount already paid for HLADT till December 2006 and expensed in earlier years is Rs.1,938 lacs.

Pursuant to an interim order of Hon'ble Supreme Court in October 2009, there is a stay on recovery of tax with a direction to assessees for filing their returns of tax and giving undertaking that in the event of their losing the matter, they will deposit the tax along with the interest at a rate which will be determined by the court. During the year 2010 on the matter being heard by a bench of five Hon'ble judges of the Hon'ble Supreme Court, it was requested to Hon'ble Chief Justice of India to refer the matter to a suitable larger bench for deciding the constitutional validity of the levy. The larger bench of Hon'ble Supreme Court is yet to be constituted. However, based on legal opinion obtained by the Company and management assessment, no provision for HLADT and Entry tax has been considered necessary

vi) In respect of certain assessment years under Income Tax laws there are appeals / objections pending before the Hon'ble Supreme Court / Hon'ble High Court / Income tax Appellate Tribunal / Dispute Resolution Panel etc., against which based on the expert opinion the management does not consider any cash outflow at this stage.

(a) The depreciation charge for the current year represents gross Rs 198,105 (Rs. 154,625) less transfer from revaluation reserve Rs 1,212 (Rs 1,239). Such transfer represents the amount equivalent to the additional charge necessitated on account of revaluation of certain fixed assets referred to in (a) (ii) above, being the difference between the depreciation charged and the depreciation calculated in accordance with the rates followed by the Company on such items not revalued.

(b) Depreciation charge for the year includes an amount of Rs.3,196 (Rs. 5,323) provided for on an accelerated basis in respect of a category of equipment due for replacement as per technical assessment by the management.

* Net of utilisation / reversals during the year.

The above provision represents the estimated outflow in respect of the above items. However, considering the nature of items, the uncertainty and timing relating to these outflows cannot be estimated.

(c) Leases

Cancellable : The Company's cancellable operating lease arrangement mainly consists of residential premises, warehouses and offices taken on lease for periods between 1- 10 years. Terms of lease include terms for renewal, increase in rents in future periods and terms of cancellation.

(d) The management is of the opinion that its international transactions with associated enterprises have been undertaken at arms' length basis at duly negotiated prices on usual commercial terms. The Company has submitted the Accountant's Report in form 3CEB upto the financial year ended on March 31, 2011 as required under section 92E of the Income Tax Act, 1961. In respect of the proposed transfer pricing adjustments suggested by the Assessing Officers in the Assessments already completed, the matters are pending before the Appelllate Authorities / Dispute Resolution Panel. Based on expert opinion the management is of the view that in all likelihood there will be no material liability.

(e) Disclosures under the Micro, Small & Medium Enterprise Development Act, 2006 (as amended in Schedule VI to the Companies Act, 1956 vide notification dated November 16, 2007) based on the information available with the company:

i) Delayed payments due as at the end of accounting year on account of Principal - Rs. Nil (Nil) and Interest due thereon - Rs. Nil (Nil)

ii) Total interest paid on all delayed payments during the year under the provisions of the Act - Rs. Nil (Nil)

iii) Interest due on principal amounts paid beyond the due date during the year but without the interest amounts under this Act - Rs. Nil (Nil)

iv) Interest accrued but not due- Rs. Nil (Nil)

v) Total Interest Due but not paid - Rs. Nil (Nil)

(f) In the Board Meeting held on Feb. 21, 2011, the board considered and approved the sale of a part of land located in Ballabgarh subject to obtaining of necessary approvals for such sale. As of February 27, 2012, the Company had still not received any Government approval and therefore the sale had not yet happened.

(g) Stock and book debts are subject to a maximum charge of Rs. 350,000 (Rs. 350,000) for all credit facilities / guarantees sanctioned by BNP Paribas Bank.

(h) Previous year figures have been regrouped and recast, wherever necessary, to make them comparable to those of the current year. Figures in brackets, wherever given are in respect of previous year unless stated otherwise.

(i) All the figures are in rupee thousand unless stated otherwise.


Dec 31, 2010

As at As at (a) CONTINGENT LIABILITIES* December31, 2010 December 31, 2009 (RS.000) (RS.000)

(i) Bills discounted 14,957 --

(ii) Guarantee to Gurgaon Gramin Bank 11,765 11,833

(iii) Claims against the Company not acknowledged as debts Rent cases 43,875 43,875

Sales Tax 30,176 19,733

Excise & Service Tax Matters 82,714 50,552

Income Tax Matters 48,447 15,281

Price Differential pending settlement 47,392 -

Others 28,146 31,856

*(excluding interest and penalty, if any)

(iv) During the year 2003, a demand of Rs. 66,222 thousand besides interest, was raised by the Haryana Urban Development Authority (HUDA) towards external development charges (EDC) which was challenged by the Company. During June 2009, the court of Honble Additional Civil Judge (Senior Division) (First Court) passed an interim order whereby the Company was directed to pay interest @ 10% for delayed payment amounting to Rs. 476 thousand which was duly paid. During the year the entire demand has been set aside by the First Court. However, HUDA challenged the same before the Court of Honble District & Session Judge, Faridabad. As the Company had, in earlier years, already paid EDC, based on legal opinion and management assessment the Company is of the view that no additional demand is legally tenable.

(v) Intheyear2007, Honble Punjab & Haryana High Court at Chandigarh, on a reference from the Honble Supreme Court of India, had held the Haryana Local Area Development Tax (HLADT) as unconstitutional. Subsequently in the year 2008 the state of Haryana introduced "Haryana Tax on Entry of Goods Into Local Area Act, 2008" (Entry Tax) by repealing the Haryana Local Area Development Tax Act, 2000 and the same was also held unconstitutional by the Honble Punjab & Haryana High Court.

Earlier based on the legal opinion obtained by the

Company and managements assessment, provision towards liability for Haryana Local Area Development Tax (HLADT) for the periods prior to March 2008 aggregating to Rs. 540 lacs was written back during the year 2008. The amount already paid for HLADT till December 2006 and expensed in earlier years is Rs. 1,938 lacs.

Pursuant to an interim order of Honble Supreme Court in October 2009, there is a stay on recovery of tax with a direction to assessees for filing their returns of tax and giving undertaking that in the event of their losing the matter, they will deposit the tax along with the interest at a rate which will be determined by the court. During the year 2010 on the matter being heard by a bench of five Honble judges of the Honble Supreme Court, it was requested to Honble Chief Justice of India to refer the matter to a suitable larger bench for deciding the consitutional validity of the levy. The larger bench of Honble Supreme Court is yet to be constituted. However, based on legal opinion obtained by the Company and management assessment, no provision for HLADT and Entry tax has been considered necessary.

(vi) In respect of certain assessment years under Income Tax laws there are appeals / objections pending before the Honble Supreme Court/Honble High Court/Income tax Appellate Tribunal/Dispute Resolution Panel etc., against which based on the expert opinion the management does not consider any cash outflow at this stage.

(b) As the Companys business activity falls within a single primary business segment viz. Automotive tyres, tubes, flaps and related rubber products, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting" are not applicable.

(c) Disclosures under Accounting Standard 18: I) List of related parties with whom the Company had transactions during the year.

Holding company:

The Goodyear Tire & Rubber Co., Akron, Ohio, USA.

Fellow subsidiaries:

i) Goodyear International Corporation

ii) Goodyear Dunlop Tires Operations SA

iii) Goodyear Middle East, FZE

iv) Goodyear Earthmovers Pty Ltd.

v) Goodyear Dalian Tire Company Limited

vi) Goodyear & Dunlop Tyres (NZ) Ltd.

vii) Goodyear Dunlop Italia

viii) Goodyear (Thailand) Public Company Limited

ix) Goodyear Taiwan Limited

x) Goodyear Do Brasil Produtos De Borracha Ltd.

xi) Goodyear De Colombia S.A.

xii) Goodyear Great Britain Ltd.

xiii) PT Goodyear Indonesia TBK

xiv) Goodyear SA (Luxembourg)

xv) Compania Goodyear Del Peru SA

xvi) Goodyear South Africa (Pty) Limited

xvii) Goodyear Wingfoot KK

xviii) Goodyear Philippines Inc.

xix) Goodyear Lastikleri T.A.S.

xx) Goodyear Dunlop Tires, France

xxi) Goodyear Singapore Tyres

xxii) Goodyear Marketing & Sales SDN Bhd.

xxiii) TC Debica SA.

xxiv) Goodyear & Dunlop Tyres (Australia) Pty Ltd.

xxv) Goodyear South Asia Tyres Private Limited

Key management personnel:

i) Mr. RajeevAnand

li) Mr. Hugo 0 Dedekind (upto March 31, 2010)

lii) Mr. Yashwant Singh Yadav (effective November 01, 2010)

iv) Mr. Jean Philippe Lecerf (effective July 01, 2010)

(d) Depreciation charge for the year includes an amount of Rs. 5,323 (Rs. 5,943) provided for on an accelerated basis in respect of a category of equipment due for replacement as per technical assessment by the management.

(e) Leases:

Cancellable : The Companys cancellable operating lease arrangement mainly consists of residential premises, warehouses and offices taken on lease for periods between 1-10 years. Terms of lease include terms for renewal, increase in rents in future periods and terms of cancellation.

(f) The management is of the opinion that its international transactions with associated enterprises have been undertaken at arms length basis at duly negotiated prices on usual commercial terms. The Company has submitted the Accountants Report in form 3CEB upto the financial year ended on March 31,2010 as required under section 92E of the Income Tax Act, 1961. In respect of the proposed transfer pricing adjustments suggested by the Assessing Officers in the Assessments already completed, the matters are pending before the Appellate Authorities / Dispute Resolution Panel. Based on expert opinion the management is of the view that in all likelihood there will be no material liability.

(g) Disclosures under the Micro, Small & Medium Enterprise Development Act, 2006 (as amended in Schedule VI to the Companies Act, 1956 vide notification dated November 16, 2007) based on the information available with the company:

h) Delayed payments due as at the end of accounting year on account of Principal - Rs. Nil (Nil) and Interest due thereon-Rs. Nil (Nil) li) Total interest paid on all delayed payments during the year under the provisions of the Act - Rs. Nil (Nil) lii) Interest due on principal amounts paid beyond the due date during the year but without the interest amounts under this Act - Rs. Nil (Nil) iv) Interest accrued but not due - Rs. Nil (Nil) v) Total Interest Due but not paid - Rs. Nil (Nil)

(i) During the year 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 Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 ("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 by way 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.

(j) In accordance with AS-15 (revised) "Employee Benefits", the Company has calculated the various benefits provided to employees as under:

A. Defined Contribution Plans

a) Superannuation Fund

b) Provident Fund

(k) Stock and book debts are subject to a maximum charge of Rs. 350,000 (Rs. 350,000) for all credit facilities / guarantees sanctioned by BNP Paribas Bank.

(l) Previous year figures have been regrouped and recast, wherever necessary, to make them comparable to those of the current year. Figures in brackets, wherever given are in respect of previous year unless stated otherwise.


Dec 31, 2009

(a) CONTINGENT LIABILITIES* As at As at December 31, 2009 December 31, 2008 (Rs.000) (Rs.000)

i) Bills discounted -- 30,341

ii) Claims against the Company not acknowledged as debts

Rent cases 43,875 43,875

Sales Tax 19,733 16,605

Additional Excise Duty 48,413 48,413

Others 33,995 28,083

*(excluding interest and penalty, if any)

iii) During the year 2003, a demand of Rs. 66,222 besides interest, was raised by the Haryana Urban Development Authority towards external development charges (EDC) which has been challenged by the Company. During June 2009, the first court passed an interim order whereby the company was directed to pay interest @ 10% for delayed payment amounting to Rs. 476 which was duly paid. As the Company had, in earlier years, already paid EDC, then demanded by the concerned authorities, the management is of the view that no additional demand against the Company is legally tenable.

iv) In the year 2007 Honble Punjab & Haryana High Court at Chandigarh, on a reference from the Honble Supreme Court of India, had held the Haryana Local Area Development Tax (HLADT) as unconstitutional. Subsequently in the year 2008 the state of Haryana introduced "Haryana Tax on Entry of Goods Into Local Area Act, 2008 (Entry Tax) by repealing the Haryana Local Area Development Tax Act, 2000 and the same was also held unconstitutional by the Honble Punjab & Haryana High Court.

Earlier based on the legal opinion obtained by the Company and managements assessment, provision towards liability for Haryana Local Area Development Tax (HLADT) for the periods prior to March 2008 aggregating to Rs. 540 lacs has been written back during the year 2008. The amount already paid for HLADT till December 2006 and expensed in earlier years is Rs.1,938 lacs.

During the year 2009, as per an interim order of Honble Supreme Court, there is a stay on recovery of tax With a direction to assessees for filing their returns of tax and giving undertaking that in the event of their losing the matter, they will deposit the tax along with the interest at a rate which will be determined by this court. The matter is pending before Constitutional bench of Honble Supreme court. Based on the fresh legal opinion obtained by the Company and management assessment, no provision for HLADT and Entry tax has been considered necessary.

v) In respect of certain assessment years under Income Tax laws there are appeals pending before the Honble Supreme Court / Honble High Court / Income tax Appellate Tribunal etc., against which the Management does not consider any contingent liability at this stage.

(b) Disclosures under Accounting Standard 18:

c) List of related parties with whom the Company had transactions during the year.

Holding company:

The Goodyear Tire & Rubber Co., Akron, Ohio, USA.

Fellow subsidiaries:

i) Goodyear do Brasil Produtos de Borracha Ltd.

ii) Goodyear Dunlop Tires Operations SA

iii) PT Goodyear Indonesia Tbk

iv) Goodyear South Africa (Pty.) Limited

v) Goodyear Philippines Inc.

vi) Goodyear Lastikleri TAS

vii) Goodyear Dunlop Tires Germany Gmbh

viii) Goodyear Marketing & Sales SDN Bhd

ix) Goodyear South Asia Tyres Private Limited

x) Goodyear Dalian Tire Company Limited

xi) Compania Goodyear Del Peru SA.

xii) Goodyear (Thailand) Public Co. Ltd.

xiii) Goodyear Middle East, FZE

xiv) Goodyear De Colombia S.A

xv) TC Debica SA

xvi) South Pacific Tyres, Australia

xvii) C.A.Goodyear De Venezuela

xviii) Goodyear Earthmover Pty Ltd, Australia

xix) Goodyear Luxemburg Tires, SA

xx) Goodyear Guatemala

xxi) Goodyear Great Britain Ltd.

xxii) Goodyear Singapore Pvt. Ltd.

xxiii) Goodyear Dunlop Tires France

xxiv) Goodyear Dunlop Tyres (NZ) Ltd.

xxv) Goodyear International Corporation

xxvi) Goodyear Dunlop Tyres Italia SPA PT

xxvii) Goodyear Taiwan Limited

xxviii) Goodyear Australia Pty. Limited

xxix) Goodyear Nippon Giant (Japan NGT)

Key management personnel:

i) Mr. Rajeev Anand (effective February 20, 2009)

ii) Mr. Hugo 0 Dedekind

iii) Mr. Prabhakar Jain (resigned effective April 30, 2009)

d) The depreciation charge for the current year represents gross Rs. 127,357 (Rs. 113,171) less transfer from revaluation reserve Rs.1,268 (Rs. 1,288). Such transfer represents the amount equivalent to the additional charge necessitated on account of revaluation of certain fixed assets referred to in (a) (ii) above, being the difference between the depreciation charged arid the depreciation calculated in accordance with the rates followed by the Company on such items not revalued.

The depreciation charge for the current year represents gross 127.357 (Rs. 113,171) less transfer from revaluation reserve Rs.1,268). Such transfer the amount equivalent to the additional charge necessiatated on account of revaluation of certain fixed assests referred to in (a) (ii) above, being the difference between the depreciation charged and the depreciation calculated in accordance with the rates followed by the Company on such items not revalued.

(f) i) Depreciation charge for the year includes an amount of Rs. 5,943 (Rs. 7,427) provided for on an accelerated basis in respect of a category of equipment due for replacement as per technical assessment by the management.

ii) Depreciation for the year is net of Rs, Nil (Rs, 5,550) on account of adjustment made for the earlier years,

(g) The management is of the opinion that its international transactions with associated enterprises have been undertaken at arms length basis at duly negotiated prices on usual commerciai terms, The company has submitted the Transfer Pricing (TP) report upto the financial year ended March 31, 2009 and there is no materia! liability on assessments completed by the income Tax Authorities,

(h) Disclosures under the Micro, Smaii & Medium Enterprise Development Act, 2006 (as amended in Schedule VI to the Companies Act, 1956 vide notification dated November 16, 2007} based on the

i) Delayed payments due as at the end of accounting year on account of Principal - Rs. Nil (Nil) and Interest due thereon-Rs. Nil (Nil)

ii) Total interest paid on all delayed payments during the year under the provisions of the Act - Rs. Nil (Nil)

iii) Interest due on principal amounts paid beyond the due date during the year but without the interest amountsunderthisAct-Rs. Nil (Nil)

iv) Interest accrued but not due - Rs. Nil (Nil)

v) Total Interest Due but not paid -Rs. Nil (Nil)

C. Defined Benefit Plans

a) Gratuity

b) Leave Encashment / Compensated Absence

c) Employers Contribution to Provident Fund (shortfall in interest on Provident Fund balance).

(i) Previous year figures have been regrouped and recast, wherever necessary to make them comparable to those of the current year. Figures in brackets, wherever given are in respect of previous year unless stated otherwise.

(j) All the figures in rupee thousand unless strated otherwise.

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