APOLLO TYRES:

Registered as a company in 1976, Apollo is a young, ambitious and dynamic organization, built
around the core principles of creating stakeholder value through reliability in its products and
dependability in its relationships. Apollo tyre ltd. is a high performance company and a leading
tyre manufacturer with headquarters in Gurgaon, India and operations in 3 continents.
As an organization, Apollo Tyres Ltd believes that the key to sustainable success lies in making
the lives of all its stakeholders better. This is Apollo's Noble Cause. In its journey of over 3
decades, Apollo Tyres has globetrotted and absorbed the hues and flavors of different cultures
from across the world. The Apollo of today is an amalgamation of some of the best people and
cultural ingredients that exist in any organization. In addition, there are some distinct traits which
are observed in, and expected of, all Apolloites. The 'Apollo Way' captures these values in their
simplest and purest form, enabling the unique identity of Apollo and Apolloites in the
mindscapes of consumers, business associates and all other stakeholders.

PRODUCT:

PRODUCT CHARACTERSTICS:
For Apollo Tyres, offering the right product to the right customer is essential. Special efforts are
made to understand customer needs and segment the market accordingly. After which, products
are developed for niche applications within a larger category to enable the company to provide
fuel efficient and cost-saving products to each customer segment. Innovation has always been an
integral part of the Apollo way of doing business, this applies as much to product development
and marketing as to how the company as a whole is focused on challenging existing boundaries.
Between the 6 key brands, manufactured in 3 countries, Apollo has tyres to suit nearly all kinds
of vehicles, applications, usage and terrains. From working underground to extract mineral
wealth, to enabling individuals and families move across destinations to create memorable
experiences with their friends and loved ones, Apollo Tyres produces the entire range of
automotive tyres for ultra and high speed passenger cars, truck and bus, farm, Off-The-Road,
industrial and specialty applications like mining, retreaded tyres and retreading material.

Product Portfolio:
Passenger Vehicle,
Bicycle,
4x4,
Agriculture,
Light Truck,
Off Highway
Truck/Bus
Specialty

Brands:
Apollo, Dunlop (32 countries in Africa) and Vredestein are the three key brands. Others are
Kaizen (truck bus tyres), Maloya (passenger car) Dura Tyres (retreaded tyres) and Dura Tread
(retreading material).

Key markets of operation:

India is the largest market accounting for 67% of revenues, Euro 23% and South Africa
10%, exporting to 100+ countries from India, Europe and South Africa.
Sales channels:
In each of the domestic markets the company operates through a vast network of branded.
exclusive and multi product outlet.

APOLLO GROWTH STRATEGY AND MERGER&ACQUISATION:

Apollo owed its success to the technology and marketing innovations that it had taken up with a
clear understanding of the needs of the customers. Though it had become the second largest
player in the country, it aspired to become a US$2 billion company. To realize this, it turned to

the global markets for future growth. After attaining a leading position in the Indian tire industry,
Apollo acquired South Africa's Dunlop Tires International Ltd. and Vredestein Banden BV of the
Netherlands in 2006 and 2009 respectively.
After tasting success with its overseas ventures, fulfilling its aspirations, and making a mark in
the global market, the company set out to become a US$6 billion company by 2015-2016. To
lead the company toward achieving its goals, the company executives were keen on further
expansion into China and the ASEAN region. However, analysts opined that challenges like
fluctuating raw material prices, regulations, price fixing, etc., might hinder its growth plans.
In 2011, Apollo Tyres had realized its dream of becoming a US$2 billion company by venturing
into the global markets. However, Satish Sharma (Sharma), Chief, India operations, hoped that
the company would grow three-fold by 2015 - 2016 and feature among the world's top 10 tire
companies. Apollo Tyres India Ltd. (Apollo), headquartered in Gurgaon, India, was incorporated
in 1976. The Indian tire industry, with a licensing regime prevalent during those times, was
highly competitive with both the domestic and international players competing for market share.
Apollo, a family-run business, went through changing leaderships over generations. It eventually
emerged as the leading player in the industry.
In India, Apollo had a secured market in 2005, but it had not ventured outside the country. To
achieve the US$ 2 billion company' goal it set its eyes on the international arena. For the first
time, in 2006, Apollo ventured outside India and acquired Dunlop Tires International (Pty) Ltd in
South Africa (Dunlop South Africa), taking Africa as its second market. Both the companies that
were acquired by Apollo had a presence in the global markets and a past history of more than
100 years.

MANUFACTURING LOCATION:
Apollo largest unit is in Limda, in the western Indian state of Gujarat. Two other units are
located in the southern Indian rubber producing state of Kerala, and the latest next generation
plant is near Chennai, Tamil Nadu. These 4 have a combined production capacity of 1250 tons a
day. In South Africa, the Ladysmith and Durban plants account for 180 tons, and the Enschede
plant in the Netherlands adds another 180 tons a day. Taking current production capacity to
around 1600 metric tons a day.
PURCHASE:
Purchase is a centralized function at Apollo, based out of its Corporate Office and is mainly
responsible for global purchasing of raw materials, capital equipment and machinery.
Purchasing Policies: Apollo considers its vendors as long term business partners and works
together with them on environmental, economic and social aspects to enable sustainable business

practices. Apollo is professional, fair and transparent in all our dealings with vendors who are
our business partners. It is our policy to deal directly with the manufacturers.
Vendor Partnerships:
The joint partnerships with vendors exist in various spheres of working like Memorandum of
Understanding (MoU) for purchasing volumes, joint technical projects, quality workshops with
natural rubber producers and processors, CSR partnerships etc. Apollo also seeks technical
collaboration from its vendors through active participation in various technical seminars and
Apollo's Technical Leadership Development Programs. Apollo conducts periodic partner meets
with its vendors every 2 years. Approximately 150 participants had participated in the Global
Partners' Summit, which was held at Chennai in February 2012, representing 85 companies from
across the globe. The representation consisted of Apollo's vendors for raw materials, outsourced
materials, indirect materials, capital equipment and machinery.
Partner Code of Conduct (PCC):
At Apollo, we believe that the policy can be implemented in spirit only through sustainable
practices throughout our value chain. The issues relating to environment and health are emerging
critical to the businesses. We have designed our Partner Code of Conduct to bring in
sustainability practices with in our supply chain. Apollo expects its business partners to show
concern on social and environmental responsibility as they conduct their business. Apollo's
endeavor is to work jointly with Partners to promote and encourage compliance with Apollo's
PCC and integrate environmental, occupational health and safety, human rights and labor
policies, and ethics into their business and decision-making processes. 95% of Apollo's raw
material and capital equipment vendors have accepted the Partner Code of Conduct.
Green Procurement:
Apollo is committed towards establishing green procurement standards in its procurement
activities and endeavors to achieve a society with healthy environment, thereby supporting
sustainable development. Apollo strongly recommends that all vendors must develop their
environmental systems in compliance with the requirements of ISO 14001 and to get their
systems certified by a third party. Apollo's raw material vendors have pre-registered for REACH
compliance and/or are in the process of registering for REACH compliance, as applicable. In
addition to this, in order to partially cover the Apollo's future requirement for Natural Rubber,
Apollo Tyres is exploring opportunities in rubber plantations. Apollo is geared up to meet all the
raw material related requirements with respect to usage of Polycyclic Aromatic Hydrocarbon
(PAH) free materials for supply of tyres to Europe and other markets. Apollo is also geared up to
meet all the current and future tyre labeling requirements, as and where applicable.
Vendor Management:
Other things being equal, preference is given to domestic vendors considering the benefits like
proximity to Apollo plants, lower lead time / transit time, inventory, lower carbon footprint etc.

Import vendors are developed for cost benefits, as an alternate vendor, for technical partnerships,
in cases of capacity constraints with domestic vendors.
As a part of risk mitigation policy for raw materials, it is an endeavor to develop at least one
active alternate source for all the raw materials. In case of a single source for any raw material, a
new vendor development plan is initiated, wherever possible.
New material selection
While selecting new materials, such materials are adopted which satisfy various requirements
related to reduction of environmental burdens.
New vendor selection
A new vendor evaluation process consists of a robust stage-wise evaluation and approval
system, which ensures that all aspects related to a vendor's capability assessment, vendor's
product quality, product validation, etc. are fully ascertained before a vendor is approved.
Vendor Audits
Vendor audits are conducted at the time of selection of new vendors as per standard audit
guidelines developed by Apollo. These are also conducted regularly with the existing vendors.
The scope of the vendor audits covers various elements like Quality Management System,
Environmental standards, Occupational Health and Safety standards, and other aspects as per the
Apollo's Green Procurement Standards and Apollo's Partner Code of Conduct.
Vendor Performance Evaluation
Vendor Performance evaluations are conducted periodically consisting of technical ratings,
delivery and service ratings, which are communicated to vendors, leading to continual
improvement of vendor performance.

REGIONAL: STRATEGIES DEVISED AS PER REGIONS, GEOGRAPHIES, ETC.

The Enhanced Leadership Programme went cross-geography this year, with participants from
Apollo India, Apollo South Africa and Apollo Vredestein. In the area of manufacturing expertise,
Apollo India launched its programme on manufacturing excellence with NITIE, while Apollo
Vredestein concentrated its programmes on Operator Training - with each operator on the shop
floor mandatorily going through a 3 to 5 year programme. Meanwhile, global commercial
vehicle tire development will be led by P. Mohamed and based on the campus as the Chennai
factory. In both cases, smaller teams in key markets will work on customizing global products to
market requirements and testing under local conditions, backed by the increased spending on
R&D that Apollo has pledged in recent weeks. The new R&D setup could also lead to business
with the vehicle OEMs in Europe. Apollo already supplies tires to a number of manufacturers
domestic and foreign, who build and sell cars in India; now some of those relationships could be
going global. Apollos are also being tested by BMW, Mercedes-Benz, and Toyota. The
management feels that their work in Europe dates back to long before they took over Vredestein.
In the past they have had collaborations with Michelin and Continental, so they always had a

vision that this is their growth market. Even though its a very crowded market, they believe that
once they have good acceptance from the replacement sector, there is no reason why they
shouldnt be able to go with the OEMs, because they already have great relationship
Strategies employed in the past 2 years:
R&D reorganization:
Apollo has been in the process of setting up passenger car R&D as a standalone business within
Europe, both in terms of basic research, and the implementation [into products], industrialization
part will be done by small groups at the various factories, but the research will be done at a
separate center and should be operational soon at a new location in Enschede, the Netherlands,
away from the factories. The idea is that people who are doing their ongoing [R&D] jobs should
not get involved [in the factories] once the product has been conceived and tested. Apollo plans
to develop PCR tires for all markets in the new center, which will be headed by the top
management. Various projects have been initiated to tap into the latest technology and research
trend. These include reduction of cycle time in all operations, optimization of components in the
tyres, and standardization of materials and processes. New technological approaches and
computing capabilities have also been tried to improve productivity and quality in manufacturing
processes like mixing, extrusion, calendaring, building and curing. While some projects are
underway to understand the possibility of using more of synthetic rubber and eco-friendly raw
materials for manufacturing.

CHALLENGES:
Key Impacts, Risks and Opportunities The impacts of the key risks and opportunities listed
below have been identified through a formal process driven by Apollo Tyres Corporate Risk
Management Steering Committee. Our approach has allowed for a systematic appraisal of the
business environment we work in and has allowed up to respond to capitalize and maximize
benefits.

Economic Risk:
Apollos business faces significant impacts through global and region specific economic risks
and opportunities. The global economic downturn has led to a slowdown in the economy of our
main market centers, India, Europe and South Africa. Apollo Tyres has focused its efforts to
expanding product reach to new markets in a cautious and researched manner. The economic

downturn has also led to currency fluctuation which can lead to a scenario where costs towards
our overseas suppliers increase and profits on exported products decrease. Bearing this in mind,
we have adopted a risk mitigation approach that focuses on limiting our exposures to currency
volatility. In India, our biggest market, we have witnessed a change in the business environment
with an increasing demand for radial tyres in heavy vehicles. To capitalize on this, we have
focused on increasing our market share in the trucks and bus radial (TBR) tyres business. Our
approach centers upon creating a dedicated brand for TBR tyres by capitalizing on the shift in
technology to meet customers' requirements, which will allow us to enter profitable
markets.

Environment Risk:
Raw Material availability is a key aspect of manufacturing industry. In tyre manufacturing this is
especially so given the nature of raw materials used. Our focus lies in ensuring a sustained
supply of raw materials for our production needs by developing alternative sources of raw
materials mainly with regards to natural rubber. Energy consumption is another factor that is
increasingly affecting all businesses today. Rising energy costs have a significant impact on
overall profitability. At our locations we proactively engage in energy conservation and energy
efficiency measures, and have also started to consciously increase our focus on renewable energy
sources. The EU has introduced a framework for tyre labelling. The tyre labelling requires all
tyres to be marked based on the energy efficiency they contribute to during product use effective
from November 2012.

Social Risk:

At Apollo Tyres, we know that a fundamental part of a motivated and skilled workforce centers
on continuously providing opportunities for our workforce to develop themselves and enhance
their capabilities and potential. In this regards, we provide employee trainings and enrichment
programmes to ensure the presence of a skilled workforce in a facilitating environment to create
mutual benefits for them and the organization. In our Indian operations, we have developed and
promoted a Behavioral Based Safety (BBS) programme. Our aim for creating a succession
planning framework is to develop a global management cadre that creates a pool of
motivated and capable employees with guaranteed potential for growth and
advancement within our organization. Truck drivers are major consumers of Apollo
Tyres products, due to our significant focus on tyres for heavy vehicles. Due to the
circumstances of the work they do, there is a high incidence of HIV related cases

among truck drivers. As part of our social responsibility practices, we have a fullfledged HIV assistance program that provides awareness and support to truck
drivers on the epidemic of HIV.

INITIATIVE TO FACE CHALLENGES:

-Since the acquisition of the former Dunlop Tyre facilities in South Africa in 2006, Apollo has
invested around 700 million rands ($85 million) towards upgrading machinery and increasing
manufacturing efficiencies in both plants.
-Apollo Tyres leases 10,000 hectares in Laos for rubber plantation. With the domestic tyre
industry facing a crisis due to the global shortage of natural rubber, Apollo Tyres Ltd has taken
on lease about 10,000 hectares of land in Laos, in South-East Asia, for rubber plantation.
-The company will pump Rs 40 crore into its Perambra unit, in Chalakudy, and Premier Tyre
facility, at nearby Kalamassery to be utilised for capacity augmentation at the Chennai plant,
which manufacturers tyres for trucks and cars. The plant capacity would be enhanced to produce
6,000 tyres per day for trucks, compared to3, 000 at present, and 16,000 cars tyres per day, as
against 8000 at present.
-On the industrial climate in Kerala, where Apollo declared a lockout some months ago at its
Perambra unit. By and large, labor was good. But in Chennai and Gujarat, there was very a
different environment.
-Human Resource at Apollo is guided by its vision to be a strategic partner to the business and
create value for the organization by developing human capital. Programmes geared to nurture
global leaders like the Enhanced and Advanced Leadership Development continue to enroll a
larger number of promising employees, giving them exposure and learning opportunities in some
of the best institutes in the world.
-Apollo Vredestein has been also chosen as the Best Business Education Employer in the Twenty
region of the Netherlands. The award was in recognition of the integrated education policy of the
Company.
-Apollo South Africa continued with its Care and Growth Leadership Development process, by
which practical skills around people management for day-to-day requirements are taught.
-Recognition programmes like Roll of Honor were held in India and South Africa. Long Service
Employees were also recognized and rewarded by South Africa.

-The Performance and Career Enhancement (PACE) module and online software has been
redeveloped to suit the organizations global growth needs, and operations have been moved to
SAP to enable a uniform approach to performance management.
-This year both India and South Africa hired a fresh batch of Graduate Engineer Trainees (GET)
from various leading engineering colleges. As is the norm, the GET will undergo a year-long
training programme to expose them to the various facets of tyre development, post which they
are assigned to their department of choice.
-Chennai, Apollo's newest plant produced its millionth passenger vehicle tyre and is well on its
way to becoming a leading top-notch facility. With the leanest structure of four levels, the plant
is setting a benchmark trend in aspects of culture, transparency, Empowerment, quicker decision
making and of course automation. The Chennai plant ushers in a new era in manufacturing at
apollo tyres.

FINANCIAL HEALTH:
Investment Valuation Ratios
Face Value
Dividend Per Share
Operating Profit Per Share (Rs)
Net Operating Profit Per Share (Rs)
Free Reserves Per Share (Rs)
Bonus in Equity Capital

13

12

1.00
2.00
25.84
175.59
---

1.00
.75
21.80
172.84
---

1.00
0.50
17.82
168.79
---

1.00
0.50
13.22
161.85
---

1
0
10
108

14.71
11.90
11.95
9.93
9.93
7.21
7.18
27.21

12.61
9.67
9.76
8.66
8.66
5.08
5.03
25.61

10.55
7.91
7.97
6.21
6.21
3.67
3.64
17.44

8.16
5.87
5.89
4.48
4.48
2.22
2.21
12.29

9
6
6
6
6
3
3
11

15

14

Profitability Ratios
Operating Profit Margin (%)
Profit Before Interest And Tax Margin (%)
Gross Profit Margin (%)
Cash Profit Margin (%)
Adjusted Cash Margin (%)
Net Profit Margin (%)
Adjusted Net Profit Margin (%)
Return On Capital Employed (%)

Return On Net Worth (%)

Adjusted Return on Net Worth (%)
Return on Assets Excluding Revaluations
Return on Assets Including Revaluations
Return on Long Term Funds (%)

19.74
19.74
64.19
64.25
30.71

16.23
18.84
54.08
54.14
27.04

13.42
13.42
46.18
46.24
20.06

8.86
8.86
40.56
40.63
15.08

10
10
37
37
15

0.84
0.46
0.24
0.10

0.81
0.36
0.33
0.26

0.86
0.48
0.81
0.58

0.80
0.55
0.98
0.62

0
0
0
0

Interest Cover

6.43

3.80

2.82

2.07

Total Debt to Owners Fund

Financial Charges Coverage Ratio
Financial Charges Coverage Ratio Post Tax

0.24
7.86
6.18

0.33
4.82
3.82

0.81
3.66
3.04

0.98
2.84
2.52

0
3
3

Inventory Turnover Ratio

Debtors Turnover Ratio
Investments Turnover Ratio
Fixed Assets Turnover Ratio
Total Assets Turnover Ratio
Asset Turnover Ratio

8.38
31.89
8.38
1.83
2.20
2.32

7.55
33.92
7.55
1.83
2.41
2.22

7.59
26.71
7.59
1.96
2.02
2.05

7.34
28.72
7.34
2.08
2.01
2.13

4
32
4
1
1
1

Average Raw Material Holding

Average Finished Goods Held
Number of Days In Working Capital

--17.01

--1.06

--27.34

--28.29

35

63.89
45.74
-10.69

69.19
44.08
-9.47

72.55
44.51
-9.63

76.71
45.06
-9.51

78
44

12
7
87
92
4

Liquidity And Solvency Ratios

Current Ratio
Quick Ratio
Debt Equity Ratio
Long Term Debt Equity Ratio
Debt Coverage Ratios

Management Efficiency Ratios

Profit & Loss Account Ratios

Material Cost Composition
Imported Composition of Raw Materials Consumed
Selling Distribution Cost Composition
Expenses as Composition of Total Sales

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit
Dividend Payout Ratio Cash Profit
Earning Retention Ratio
Cash Earning Retention Ratio
Adjusted Cash Flow Times

15.78
11.41
84.22
88.59
0.89

8.54
5.47
92.65
95.04
1.17

8.06
4.73
91.94
95.27
3.53

13.89
6.86
86.11
93.14
5.49

Mar
'15

Mar '14

Mar '13

Mar '12

Mar '1

Earnings Per Share

12.67

8.78

6.20

3.60

3.9

Book Value

64.19

54.08

46.18

40.56

37.5

Source : Dion Global Solutions Limited

The current ratio of the company increased from 2011 to 1015, it indicates companies increase
in ability to meet short term obligations, but quick ratio is lower in 2015 than 2011 which
indicate having less liquidity.
The debt equity ratio in 2011is higher than 2015 which indicate that the company was more
aggressive in financing in 2011 so the financial leverage was higher in 2011.
Earnings per share increases which indicate the company is doing well in the stock market and
financial health of the company is good.