The Directors have pleasure in presenting to you the Fifty First
 Annual Report and the Audited Statement of Accounts for the year ended
 30th September, 2011.
 
 Working of the Company
 
 Financial Results
 
 During the year under review, the Company achieved the following
 financial results:
 
                                                          (Rs Crore)
 
                                                2010-11      2009-10
 
 Total Income                                  10670.17      8109.58
 
 Profit before tax                               893.65*      534.66
 
 Provision for taxation                          274.23       180.68
 
 Net Profit                                      619.42       353.98
 
 * Includes an exceptional item of f 404.23 crore which represents
 reversal of excess depreciation of earlier years, due to change in
 method of depreciation from Written Down Value (WDV) to Straight Line
 Method
 
 (SIM).
 
 Your Company''s turnover this year has for the first time crossed the
 
 Rs 10,000 crore mark, to settle at Rs 10,637.03 crore, which is a
 landmark achievement. This reflects a sales growth of 32%. Across the
 board, there were positive increases, with a 12% increase in volumes in
 al segments. During the year, the continued increase in the price of
 natura rubber and other key raw materials, has impacted the performance
 of the Company. The price of natural rubber reached its peak in April
 2011.  Similarly prices of other raw materials like synthetic rubber,
 carbon black etc. have increased substantially from February 2011. The
 increase has adversely impacted the margins during the year. Despite
 the above, your Company could manage and maintain its profit levels
 with better operating efficiencies and cost cutting measures which the
 Company has undertaken over a period of time.
 
 Two interim dividends of Rs 3 each per share (30% each) for the year
 ended 30th September, 2011 were declared by the Board of Directors on
 28-07-2011 and on 20-10-2011. The Board of Directors is now pleased to
 recommend a final dividend of Rs 1 9 per share (190%) on the paid- up
 equity share capital of the Company, for consideration and approve of
 the shareholders at the Annual General Meeting. With this, the tota
 dividend for the entire year works out to Rs 25 per share (250%). The
 tota amount of dividends aggregates to Rs 1 0.60 crore.
 
 The Directors recommend that after making provision for taxation,
 debenture redemption reserve and proposed dividend, an amount of Rs
 589.1 5 crore be transferred to General Reserve. With this, the
 Company''s Reserves and Surplus stands at Rs 2293.53 crore.
 
 Industrial Relations
 
 Overall, the industrial relations in all our manufacturing units have
 been harmonious and cordial, except in Thiruvottiyur and Kottayam
 factories for a short duration. Both production and productivity were
 maintained at the desired satisfactory levels throughout the year in
 all the units.
 
 The Management Discussion and Analysis which is attached with this
 report gives an overview of the developments in human resources/
 ndustrial relations during the year.
 
 Exports
 
 The Company''s exports stood at Rs 823.30 crore for the year ended 30th
 September, 2011 as against Rs 669.27 crore for the previous year.
 
 The Company sailed through another challenging year successfully,
 posting a revenue growth of 23% over the previous year. The year gone
 by, showed a continued volatility in raw material prices and increased
 nput costs which definitely affected profits.
 
 MRF''s strong distributor network and brand presence in key markets and
 segments have contributed to growing volumes by 7% and revenues by 31 %
 in the heavy commercial vehicle segment.
 
 Prospects for the Current Year
 
 While the demand outlook for tyres appears favourable with a 8 to10%
 annual growth forecast, the pressure on margins will continue unless
 the cost issues are addressed. Most tyre companies are planning
 capacity expansions especially in the truck radial segment and this
 development will fuel competition in this segment and the tyre industry
 in general. Also, the Government should study the inverted duty issue
 and take corrective action by providing a level playing field for the
 tyre industry.
 
 The rising raw material costs such as that of natural rubber, oil and
 oil derivatives which are used in the manufacture of tyres, interest
 costs and rising imports of tyres, will be the areas of concern for all
 tyre companies.  Since the tyre industry is highly competitive and
 price sensitive, it is unable to pass on completely the increase in raw
 material costs to its customers.  The above increases are bound to
 adversely impact the margins of the Company. However, in the past two
 months, the prices have shown a declining trend.
 
 Your Company hopes to record satisfactory results on account of MRF''s
 high brand preference and trust reposed by customers in MRF products.
 
 Directors'' Responsibility Statement
 
 In compliance with the provisions of Section 21 7 (2AA) of the
 Companies Act, 1956, your Directors confirm that:
 
 (i) in the preparation of the annual accounts, the applicable accounting
 standards have been followed and that there are no material departures;
 
 (ii) they have, in selection of the accounting policies, consulted the
 statutory auditors and applied them consistently making judgements and
 estimates that are reasonable and prudent so as to give a true and fair
 view of the state of affairs of the Company at the end of the financial
 year and of the profit of the Company for that period;
 
 (iii) proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Act for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities;
 
 (iv) the annual accounts have been prepared on a going concern basis.
 
 Subsidiaries
 
 Pursuant to the provisions of Section 21 2(8) of the Companies Act, 1
 956, the Ministry of Corporate Affairs, Government of India, vide its
 General Circular No. 2 /2011 dated 08-02-2011, has granted a general
 exemption subject to certain conditions to holding companies from
 complying with the provisions of Section 212 of the Companies Act,
 1956, which requires the attaching of the balance sheet, profit & loss
 account etc., of the subsidiaries. In view of the above, the annual
 reports of the subsidiary companies have not been annexed in this
 Annual Report. The statement pursuant to Section 21 2 of the Companies
 Act, 1 956 containing details of Company''s subsidiaries is attached.
 
 In accordance with the Accounting Standard AS-21 issued by the
 Institute of Chartered Accountants of India, Consolidated Financial
 statements presented by your Company include the financial information
 of all its subsidiaries.
 
 The annual accounts of the subsidiary companies along with the report
 of the directors and auditors thereon and all related detailed
 information will be made available to shareholders of the Company on
 request and will also be kept open for inspection at the registered
 office of the Company.
 
 Specialty Coatings Division
 
 During the year under review, the Directors, considering the Company''s
 long-term vision for its core business, decided to hive off the
 Specialty Coatings division of the Company to MRF Corp Limited, which
 is a 100% subsidiary of MRF Limited w.e.f. 01 -04-2011. The Directors
 expect rapid growth in the business of the division with added focus as
 a separate company. Upto 31-03-2011, the division reported a turnover
 of Rs 38.67 crore.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings and Outgo
 
 The details as required under the Companies [Disclosure of Particulars
 in the Report of Board of Directors] Rules, 1 988 are given as an
 annexure to the Directors'' Report.
 
 Board
 
 Mr N Kumar, Mr Ranjit I Jesudasen and Mr Ashokjacob retire by rotation
 at the Annual General Meeting and are eligible for re-election.
 
 Corporate Governance
 
 In accordance with Clause 49 of the listing agreement with the stock
 exchanges, a separate report on corporate governance along with the
 Auditors'' certificate confirming compliance, is attached to this
 report.
 
 The Chairman & Managing Director has confirmed and declared that all
 the members of the Board and the senior management have affirmed
 compliance with the code of conduct.
 
 Particulars of Employees
 
 Information as per Section 21 7(2A) of the Companies Act, 1 956 read
 with Companies (Particulars of Employees) Rules, 1975 forms an integral
 part of the Directors'' Report. However, in terms of the provisions of
 Section 21 9[1 ] [b] of the Companies Act, 1 956, the report and
 accounts are being sent to shareholders of the Company excluding the
 statement of particulars of employees under Section 21 7[2A] of the
 Companies Act, 1956. Any shareholder interested in obtaining a copy of
 such statement may write to the Company Secretary at the registered
 office of the Company and will be provided with a copy of the same.
 
 Deposits
 
 9 deposits aggregating Rs 1 9.40 lakhs remain unclaimed as at the close
 of the year ended 30th September, 2011.
 
 Awards received during the year
 
 During the year, MRF won the All India Rubber Industries Association''s
 (AIRIA) award for Highest Export Awards (Auto Tyre Sector) category
 and Top Export Award from Chemicals & Allied Products Export
 Promotion Council (CAPEXIL) for 2010-11.
 
 Auditors
 
 Messrs Sastri & Shah and M.M. Nissim and Co., who are our Auditors,
 retire at the ensuing Annual General Meeting and are eligible for re-
 appointment. The Company has received certificates from both the
 auditors to the effect that their appointments will be within the
 limits prescribed under Section 224[1 B] of the Companies Act, 1 956.
 
 Cost Audit
 
 Cost Audit for the year ended 30th September, 2011 will be conducted by
 the cost auditor Mr C Govindan Kutty, B.Com., ACA., AICWA., ACS.,
 Chennai and the report will be submitted to the Government.
 
 Appreciation
 
 Your Directors place on record their appreciation of the invaluable
 contribution made by our employees which made it possible for the
 Company to achieve these results. They would also like to take this
 opportunity to thank the customers, dealers, suppliers, bankers,
 financial institutions, business associates and our valued shareholders
 for their continuous support and encouragement.
 
                                 On behalf of the Board of Directors,
 
 Chennai                         K. M. MAMMEN
 
 29th November, 2011             Chairman & Managing Director