The Directors present the Annual Report and the Audited Accounts for
 the year ended 31st March 2002.
 
 Operations
 
 Your Company attained an all-time high turnover of Rs. 524 crores
 during the year, as against Rs. 402 crores in the previous year; an
 increase of 30%. Operating profit for the year increased to Rs. 29.87
 crores. After providing financial charges of Rs. 32.81 crores,
 depreciation of Rs. 15.93 crores and tax credit of Rs. 6.93 crores,
 there was a deficit of Rs. 11.94 crores.
 
 It was yet another challenging year. The continued slowdown in the
 economy has particularly impacted the transport sector which in turn
 has affected demand for tyres. It is satisfying to note that despite
 this, your Company has registered a significant increase in sales
 turnover and operating profit. Interest and depreciation were higher
 on account of the investments made in modernisation of Companys
 plants. The full benefits of modernisation will be derived in the
 coming years.
 
 As reported earlier, several initiatives taken to synergise the
 activities of Vikrant and JK Tyre in the areas of sales, distribution,
 procurement and supply chain management have yielded substantial
 benefits to your Company.
 
 The Company signed a long-term productivity linked wage agreement with
 the workmen in February 2002. A voluntary retirement scheme was also
 introduced to rationalise the workforce. This should lead to
 significant increase in production and better plant performance which
 augurs well for the Companys future.
 
 Dividend
 
 Considering the loss during the year, your Directors are unable to
 propose any dividend.
 
 All-Steel Truck/Bus Radials
 
 Your Company has the distinction of being the only one in India to
 commercially manufacture Ail-Steel Truck/Bus Radials. It is indeed
 heartening to note that concept selling approach being pursued by your
 Company to promote radial tyres in the truck and bus segments has been
 a major boost to the radialisation process in the country. The
 Companys All-Steel Truck/Bus Radial Tyres incorporating the latest
 technology are finding increasing acceptance with the consumers.
 
 With the Governments increased focus on development of road network,
 radialisation in commercial sector is bound to pick up and your
 Company is well-positioned to take full advantage of the opportunity.
 
 Exports
 
 Your Company achieved yet another landmark by achieving the highest
 ever export of Rs. 119 crores - 51% higher than the previous year.
 Your Companys products enjoy high customer satisfaction in export
 markets. The Award of Certificate of Merit from Capexil was received
 for the fourth year in succession.
 
 Human Resource and Industrial Relations
 
 The Company regards Human Resource among its most valuable assets.
 Shared vision and building result-oriented teams have been the
 cornerstone for improving the performance of the Company. Emphasis is
 laid on constantly upgrading the job related skills and imparting new
 management techniques to its people to enable them to achieve
 corporate goals in the challenging times and at the same time,
 fulfilling individual aspirations.
 
 Industrial relations during the year remained cordial.
 
 Directors
 
 Shri K. S. K. Khare was nominated as a Director by LIC in place of
 Shri B. R. Sethi. Shri B. Ravindranath was nominated as a Director by
 IDBI in place of Shri R. Balasubramaniam. Shri Chiranjiv Singh, IAS
 and Shri S. Swatantra Rao, IAS, were appointed as Directors
 respectively in the casual vacancies caused by Shri C. Gopal Reddy,
 IAS and Shri C. K. Neelakanta Raj, IAS, ceasing to be Directors.
 KSIIDC withdrew the nomination of Dr. H. Basker to the Board. The
 Board of Directors place on record their appreciation of the valuable
 services rendered by Shri C. Gopal Reddy, Shri C. K. Neelakanta Raj,
 Shri B. R. Sethi, Shri R. Balasubramaniam and Dr H. Basker during
 their tenure as Directors.
 
 Shri Srawan Kumar Bagla, Shri Om Prakash Khaitan and Shri Kama Singh
 Mehta, retire by rotation at the forthcoming Annual General Meeting
 and being eligible, offer themselves for re-appointment.
 
 Auditors
 
 M/s K. P. Rao & Co., Chartered Accountants, Mysore, the Auditors of
 the Company, retire at the conclusion of the ensuing Annual General
 Meeting and are eligible for re-appointment. The appointment of
 Auditors is required to be made by a Special Resolution pursuant to
 Section 224A of the Companies Act, 1956. The observations of the
 Auditors in their Report on Accounts read with the relevant notes are
 self-explanatory.
 
 Cost Audit.
 
 Cost Audit for the year ended 31st March 2002 will be conducted by the
 Cost Auditors and the report will be submitted to the Department of
 Company Affairs, Government of India.
 
 Particulars Of Employees
 
 None of the employees, during the whole or part of the year, was in
 receipt of remuneration prescribed under the Companys (Particulars of
 Employees) Rules, 1975 as amended.
 
 Conservation of Energy etc.
 
 The details as required under the Companies (Disclosure of Particulars
 in the Report of Board of Directors) Rules, 1988 are annexed.
 
 Corporate Governance
 
 Pursuant to Clause 49 of the revised Listing Agreement with the Stock
 Exchanges, a Management Discussion & Analysis and a Corporate
 Governance Report are annexed.
 
 Audit & Shareholders/Investors Grievance Committee.
 
 Audit Committee - Your Company has an Audit Committee of Directors in
 place since 1986. The Terms of Reference of the Committee have been
 revised as per the provisions of Section 292A of the Companies Act,
 1956 and Clause 49 of the Listing Agreement.
 
 Shareholders/Investors Grievance Committee -
 
 Your Company has been having a structured system of reviewing
 shareholders/ investors complaints. A specific Committee of
 Directors has now been constituted, as per provisions of the Listing
 Agreement to look into redressal of such complaints.
 
 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 to
 material departures;
 
 ii. the accounting policies have been selected and applied
 consistently and judgements and estimates have been reasonably and
 prudently made when required 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 and 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
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 iv. the annual accounts for the financial year have been prepared on a
 going concern basis.
 
 The Board places on record its appreciation for the valuable inputs
 provided by J. K. Industries Ltd. in all areas of operation. The Board
 also acknowledges the support extended by Government of Karnataka,
 Financial Institutions, Banks and the Technical Collaborators, M/s
 Continental AG. The Directors wish to thank all the Shareholders,
 State Transport Undertakings, Dealers and the valued Customers for
 their patronage and support. The Directors also convey their
 appreciation Shri Om Prakash Khaitan to the employees at all levels
 for their continued support.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 The Companies (Disclosure of Particulars in the Report of the Board of
 Directors) Rules, 1988.
 
 A. CONSERVATION OF ENERGY
 
 The Company has taken various measures for Energy Conservation like
 maximising use of daylight and time clock for streetlight, Steam Trap
 Management, Upgradation of Induced Draft/ Forced Draft fan by
 providing Variable Frequency Drive along with Combustion Management.
 Optimisation of chilled/ cooling water depending on process needs.
 Automatic control of cooling water temperature by monitoring operation
 of fans.
 
 B. AREA OF ADDITIONAL INVESTMENT PROPOSAL.
 
 Further Energy Saving projects identified for implementation are
 replacement of Oil fired boiler by Coal fired boiler, revamping of hot
 water generator and providing auto control for heavy duty equipments.
 
 3. Consumption Per unit of Production
 
 i) Electricity (Kwh/MT)          1056            1189
 
 ii) Furnace Oil (Litre/MT)        275             308
 
 C. TECHNOLOGY ABSORPTION.
 
 1. RESEARCH & DEVELOPMENT (R&D)
 
 a) Area of R&D Activities:
 
 Development of new sizes of All-Steel Truck/Bus Radial Tyres both for
 Indian and International markets was the focus of R&D. In the bias
 tyre category, new tyres for various identified segments of the market
 were developed.
 
 The Company has arrangement with Hari Shankar Singhania Elastomer and
 Tyre Research Institute (HASETRI) for R&D support.
 
 b) R&D Expenses
 
 Total expenditure incurred during the year was Rs. 87.56 lacs which
 amounted to 0.17% of the net turnover.
 
 2, TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION
 
 The Company is putting greatest emphasis on absorption of technology.
 All efforts are made to adopt the latest technology as well as to
 implement the same on continuous basis with the assistance of the
 collaborators, M/s Continental AG.
 
 D. EXPORT, FOREIGN EXCHANGE EARNINGS AND OUTGO
 
                                              (RS. IN LACS)
                                 2001-2002        2000-2001
 
 Foreign Exchange                 11919.20          7936.61
 Earnings (on account
 of Export Sales - FOB value)
 
 Foreign Exchange Outgo            8646.46          7450.55
 
                                          For and on behalf of the Board
 
 New Delhi                                                   B. S. Patil
 28th June 2002                                                 Chairman