1.  We have audited the attached Balance Sheet of Apollo Tyres Ltd.
 (the Company) as at March 31, 2011, the Profit and Loss Account and
 the Cash Flow Statement of the Company for the year ended on that date,
 both annexed thereto.  These financial statements are the
 responsibility of the Companys Management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the significant estimates
 made by the Management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 (CARO)
 issued by the Central Government in terms of Section 227(4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report as follows:
 
 (a) we have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (b) in our opinion, proper books of account as required by law have
 been kept by the Company so far as it appears from our examination of
 those books;
 
 (c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (d) in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) of the
 Companies Act, 1956;
 
 (e) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956 in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2011;
 
 (ii) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5.  On the basis of the written representations received from the
 Directors as on March 31, 2011 taken on record by the Board of
 Directors, none of the Directors is disqualified as on March 31, 2011
 from being appointed as a director in terms of Section 274(1)(g) of the
 Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS REPORT
 (Referred to in paragraph 3 of our report of even date)
 
 (i) Having regard to the nature of the Companys
 business/activities/result, clauses 4(x), 4(xii), 4(xiii), 4(xiv),
 4(xviii) and 4(xx) of the Companies (Auditors Report) Order, 2003 are
 not applicable.
 
 (ii) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) The fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanation given to us, no material discrepancies were noticed on such
 verification.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the inventories were physically verified during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of inventories
 followed by the Management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iv) The Company has neither granted nor taken any loans, secured or
 unsecured, to/from companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining comparable quotations, there is an
 adequate internal control system commensurate with the size of the
 Company and the nature of its business with regard to purchases of
 inventory and fixed assets and the sale of goods and services. During
 the course of our audit, we have not observed any major weakness in
 such internal control system.
 
 (vi) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs.5 lakhs in
 respect of any party, the transactions have been made at prices which
 are prima facie reasonable having regard to the prevailing market
 prices at the relevant time except in respect of certain purchases for
 which comparable quotations are not available and in respect of which
 we are unable to comment.
 
 (vii) According to the information and explanations given to us, the
 Company has not accepted any deposit from the public during the year.
 In respect of unclaimed deposits, the Company has complied with the
 provisions of Sections 58A & 58AA or any other relevant provisions of
 the Companies Act, 1956.
 
 (viii) In our opinion, the Company has an adequate internal audit
 system commensurate with the size and the nature of its business.
 
 (ix) We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209(1) (d) of the Companies
 Act, 1956 in respect of manufacture of automobile tyres and tubes and
 are of the opinion that prima facie the prescribed accounts and records
 have been made and maintained. We have, however, not made a detailed
 examination of the records with a view to determining whether they are
 accurate or complete. To the best of our knowledge and according to the
 information and explanations given to us, the Central Government has
 not prescribed the maintenance of cost records for any other product of
 the Company.
 
 (x) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has generally been regular in depositing undisputed
 dues, including Provident Fund, Investor Education and Protection Fund,
 Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
 Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
 applicable to it with the appropriate authorities.
 
 (b) There were no undisputed amounts payable in respect of Income-tax,
 Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
 dues in arrears as at March 31, 2011 for a period of more than six
 months from the date they became payable.
 
 (c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
 Custom Duty, Excise Duty and Cess which have not been deposited as at
 March 31, 2011 on account of disputes are given below:
 
 
                              Amount   Period to which    Forum where
 
 Name of the 
 statute      Nature of dues (Rs in 
                              Million) the amount relates dispute is 
 
                                                           pending
 
 Custom Act, 
 
 1982         Custom Duty        23.50  Assessment Years   Assistant/
                                                           Deputy
 
                                       1989-90 & 1994-95 
                                                           commissioner 
                                                           of Customs/
 
                                                           Supreme Court
 
 Sales Tax 
 Act          Sales Tax          94.61* Assessment Years    Various 
 
                                                            Appellate
 
 applicable to                          1991-92 to 2003-04, Authorities/
 
 various States                         2005-06 & 2006-07    Revenue 
 
                                                              Board/
 
                                                             High Court
 
 Central Excise  Excise Duty    704.92** Assessment Years    Various 
                                                             Appellate
 
 Act, 1944       and Additional          1995-96 to 2009-10  Authorities/
 
                 Excise Duty                                 High Court
 
 * Net of deposits Rs 15.65 Million 
 
 ** Net of deposits of Rs 22.53 Million
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues to
 banks, financial institutions and debenture holders.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company for loans taken by others from banks and financial institutions
 are not, prima facie prejudicial to the interests of the Company
 including bank deposits pledged by the Company as referred to in
 Schedule 6 to the financial statements.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purposes for
 which they were obtained, other than temporary deployment pending
 application.
 
 (xiv) According to the information and explanation given to us and on
 an overall examination of the balance sheet of the Company, we report
 that funds raised on short-term basis have not been used during the
 year for long-term investment.
 
 (xv) According to the information and explanations given to us, during
 the period covered by our audit report, the Company had issued 1,000
 numbers of 9.40% Redeemable Non-Convertible debentures of Rs. 1 Million
 each. The Company has created security in respect of the debentures
 issued.
 
 (xvi) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no material fraud
 on the Company has been noticed or reported during the year.
 
                                         For DELOITTE HASKINS & SELLS
 
                                            Chartered Accountants
 
                                          (Registration No.008072S)
 
                                                   sd/-
 
                                             Geetha Suryanarayanan
 
                                                   Partner
 
                                             (Membership No.29519)   
 
 Place: Gurgaon 
 
 Date : May 11, 2011