JK Tyre and Industries

The Directors have pleasure in presenting the Annual Report and Audited
 Accounts of the Company for the year ended 30th September, 2007.
 
 The turnover during the year under review was at an all-time high of
 Rs. 3206 crores as against Rs. 2970 crores in the previous year. The
 operating Profit for the year at Rs. 265 crores registered an increase
 of 57% over the previous year, and after providing for cost of
 borrowings and depreciation, the Profit Before Tax was Rs. 101 crores,
 an all-time high registering an increase of 362%. Profit After Tax for
 the year was Rs. 67 crores.
 
 The Company has achieved this improved performance due to all-round
 improvement in operations, drive on cost compression, plant
 efficiencies, stable input prices and better sales realisation.
 
 APPROPRIATIONS
 
 The amount available for appropriation, including surplus from previous
 year and debenture redemption reserve no longer required is Rs. 99.86
 crores. The Directors propose this to be appropriated as under :-
 
                                              Rs. Crores
 
 Debenture Redemption Reserve                    5.02
 
 General Reserve                                60.00
 
 Dividend                                        8.32
 
 Corporate Dividend Tax                          1.41
 
 Surplus carried to Balance Sheet               25.11
 
 MOVING UP THE TECHNOLOGY LADDER
 
 Several high performance tyres both in the Commercial Vehicle as well
 as the Passenger Car Radial segment were launched. A new tyre, offering
 high mileage, JET ONE introduced during the year is already enjoying
 a premier position in the truck and bus segment. Apart from this,
 several new tyres introduced both in the HCV as well as LCV range have
 received encouraging consumer response.
 
 New Semi-Lug and Rib pattern Truck Radial tyres launched during the
 year are performing extremely well in their respective segments.
 
 In the Radial Passenger Car tyre category, high performing V-Rated
 ZEPHYR, capable of speeds upto 240 Kms / hour, was introduced - a first
 of its kind.  The latest generation VECTRA tyre in a range of sizes
 has received customer preference in the market place. Ultra high
 performance Z-Rated tyres in speed rating of 300 Kms / hour or more,
 were launched especially for Formula racing cars -
 
 Manufacturers (OEMs) for new Generation world cars such as
 Maruti-Suzukis SX4 - ZXi, Swift, Mahindra - Ranaults Logan and M&Ms
 Scorpio for their export models.
 
 EXPANSIONS
 
 The pace of radialisation in the commercial 4yre segment in India has
 accelerated. The Company is seizing this opportunity and has taken on
 hand a project for more than doubling the capacity of its Truck/Bus
 Radial Plant to 8.00 lac tyres from 3.67 lac tyres per annum. This
 expansion estimated to cost Rs.315 crores will be completed by the end
 of calendar year 2008 and will further strengthen JK Tyres commanding
 position in the Truck/Bus Radial segment.
 
 During the year, JK Tyre also diversified into Special Application
 Tyres and commenced their exports.  A project to scale up the
 manufacturing capacity of these tyres has been taken up. This niche
 tyre segment will also boost our exports to Central and South America,
 Europe and Australia.
 
 With renewed emphasis being given in the country on infrastructure
 development, we foresee growing demand for Off The Road (OTR) tyres. We
 have entered into an arrangement with BEML for supply of OTR tyres on a
 long term basis. Accordingly, the Company has undertaken a project for
 substantial expansion of its OTR tyre capacity at a capital outlay of
 Rs. 120 crores. This project will also be completed by end of the
 calendar year 2008 and will add significantly to the turnover and
 profitability in the years ahead.
 
 Equity Share Capital of Rs 30.79 crores. The dividend outgo will be
 Rs.9.73 crores (inclusive of dividend tax of Rs, 1.41 crores) as
 against Rs. 8.78 crores in the previous year.
 
 RIGHTS ISSUE
 
 The Board has already approved issue of Rights Shares in the proportion
 of 1 Equity Share for every 3 Equity Shares held by the shareholders.
 Necessary steps for the same are well under way.  been awarded Cll GBC
 Excellence Energy Efficient Plant Award - the Green Tech Environmental
 Award (Gold Category).
 
 DIRECTORS
 
 Shri Arvind Singh Mewar, Shri Bakul Jain and Shri O.P. Khaitan retire
 by rotation and being eligible offer themselves for re-appointment at
 the forthcoming Annual General Meeting.
 
 During the year, Shri Arvind Narottam Lalbhai resigned from the Board
 of Directors of the Company due to his advanced age and health reasons.
 The Directors place on record their deep sense of appreciation and
 thanks for very valuable services and advice rendered by Shri Lalbhai
 during his long tenure of over 30 years as a Member of the Board. The
 Board records its deepest regret on his demise recently.
 
 SUBSIDIARY COMPANIES
 
 The particulars required under the provisions of the Companies Act,
 1956 in respect of the subsidiary companies are appended.
 
 COST AUDIT
 
 The Audit of the Cost Accounts of the Company for the year ended 30th
 September, 2007 has been conducted by the Cost Auditor and the Cost
 Audit Report will be submitted to the Ministry of Corporate Affairs,
 Government of India.
 
 CORPORATE GOVERNANCE
 
 Your Company reaffirms its commitment to the good corporate governance
 practices. Pursuant to Clause 49 of the Listing Agreement with the
 Stock Exchanges, a Management Discussion and Analysis, Corporate
 Governance Report and Auditors Certificate regarding compliance of
 conditions of Corporate Governance are made a part of this Annual
 Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 As required under Section 217 (2AA) of the Companies Act, 1956 your
 Directors state that :-
 
 (i) in the preparation of Annual Accounts, the applicable accounting
 standards have been followed along with proper explanation relating I
 to material departures;
 
 (ii) the accounting policies selected and applied are consistent and
 judgements and estimates made are reasonable and prudent so as to give
 a true and fair view of the state of affairs of the Company at the end
 of the financial year and of the profit or loss of the Company for that
 period;
 
 (iii) proper and sufficient care has been taken for maintenance of
 adequate accounting records in accordance with the provisions of the
 said Act for safeguarding the assets of the Company and for preventing
 and detecting
 
 ACKNOWLEDGEMENTS
 
 Your Directors wish to place on record their appreciation for the
 continued support and co-operation received from the financial
 institutions, banks, various central and state government agencies, the
 technical collaborators M/s Continental AG-
 
 Germany, shareholders, suppliers, dealers and in particular the valued
 customers. Your Directors also record their appreciation for the
 dedication and passion of Team-JK Tyre1 which has enabled the Company
 to remain at the forefront of the industry.
 
                                              On behalf of the Board
 
 The 29th January, 2008                              H.S.SINGHANIA
 New Delhi                                              CHAIRMAN