Project

PROJECT REPORT ON

A STUDY ON CAPITAL STRUCTURE WITH SPECIAL REFERENCE OF APOLLO TYRES PERAMBRA, THRISSUR

Submitted in partial fulfilment of the

Requirements for the award of

The Degree of

MASTER OF BUSINESS ADMINISTRATION

BY

NEETHU FRANCIS

Enrolment No. 10AMBFM 0981

Register No. 10 NFM 5981

FINANCIAL MANAGEMENT

Sakthan Thampuran College of Mathematics & Arts Thrissur, Kerala

Centre Code: KL 130

Under the Guidance of

JOJU MELAYIL T.A

MBA, Managing Director of

Sakthan Thampuran College of Mathematics & Arts

And Jayaram Education Private Ltd. Thrissur.

BHARATHIAR UNIVERSITY

SCHOOL OF DISTANT EDUCATION

COIMBATORE – 641046

MAY 2012

DECLARATION

I NEETHU FRANCIS hereby declare that this project work titled

“ A STUDY ON CAPITAL STRUCTURE OF APOLLO TYRE PERAMBRA, THRISSUR” submitted to the Bharathiar University in partial fulfilment of the

requirements for the award of the Degree of MASTER OF BUSINESS ADMINISTRATION and under the guidance of Mr. JOJU MELAYIL T.A, MBA, Managing Director Of Sakthan Thampuran College Of Mathematics & Arts, and Jayaram Education Private Ltd.Thrissur. And this project report has not been submitted to any other university for the award of any Degree, Diploma,and Associateship, fellowship or my other similar title to any university.

DATE Signature of the Candidate

NEETHU FRANCIS

Enrolment No. 10 AMBFM 0981

Financial Management

Countersigned by

Signature of the Guide Signature of the centre Co-ordinator

(with seal) (with seal)

CERTIFICATE

This is to certify that the project report titled “A STUDY ON CAPITAL STRUCTURE OF APOLLO TYRES PERAMBRA, THRISSUR”Submitted to Bharathiar University in parial fulfilment of the requirements for the award of the Degree of MASTER OF BUSINESS ADMINISTRATION IN FINANCE is record of the original work done by NEETHU FRANCIS under my supervision and guidance and that this project work has not formed the basis for the award of any Degree, Diploma or fellowship or other similar titles of any university or institution.

(Seal) Signature of the Guide

JOJU MELAYIL T.A

MBA, Managing Director of

Sakthan Thampuran College of Mathematics &Arts

Jayaram Education Private Ltd. Thrissur.

Forwarded by

DIRECTOR,

SCHOOL OF DISTANCE EDUCATION,

BHARATHIAR UNIVERSITY

COIMBATORE-46

Submitted for University Examination held on May 2012 ………………………………..

Internal Examiner External Examiner

ACKNOWLEDGEMENT

First of all I am dedicated this humble and sincere work of inline to God almighty for

shower strength and blessing he has bestowed on the for doing this work.

With great happiness I submitted this project entitled “A STUDY OF CAPITAL

STRUCTURE OF APPOLO TYERS PERAMBRA”, with due respect for invaluable

suggestions made by esteem well wishers.

I take this opportunity to express my sincere thanks and sense of gratitude to my

beloved principal Mr. Ajith Kumar Raja .M and co-ordinator institution. I express my

gratitude to the project guide Mr.JOJU MELAYIL T.A for the advices, suggestions and

guidance provided.

I acknowledge my sincere thanks to the

I would like to thank my parents, family, friends and wishes for

contributing their skills, creativity and much need help.

NEETHU FRANCIS

SYNOPSIS

Apollo Tyres is a Public Limited company. Company suggested doing the project on

capital structure by using financial leverage analysis to know the financial position of the company.

The capital structure of a business is the mix of the types of debt and equity. The

company has own its balance sheet. One of the main factors affecting the capital structure of a

business is leverage. Leverage are three types-operating leverage, financial leverage and combined

leverage. Here the study is given more emphasis to the financial leverage only. Financial leverage

defined as the ability of a firm to use fixed financial charges to magnify the effects of changes in

EBIT or operating profits, on the firm’s Earning Per Share (EPS). The main aim of the study is the

capital structure of the company by using financial leverage techniques. The research type is

historical in nature. Data collection is done through secondary sources (Annual Reports, websites

etc). Data analysis is done with the help of ratio analysis (leverage ratios). Leverage or solvency

ratios are used to analyse the long-term financial position (capital structure) of a business. Tables

and bar graphs are used for making analysis more clear and understanding.

After the study it reveals that APPOLO TYERS is maintaining sound financial position.

INTRODUCTION OF THE STUDY

Finance has become so much important for every business undertaking that all

managerial activities are connected with it. Financial viability of various propositions

influence decision on them. Finance function has become so important that it has given birth

to financial management as a separate subject. Financial management refers to that part of the

management activity, which is concerned with the planning and controlling of firms financial

resources. The resources must be suitable and economical for the needs of the business.

The basic task of a finance manager is the procurement of funds and the basic

objective of financial management is wealth maximisation. The finance manager is required

to select such a finance mix or capital structure, which maximises shareholders wealth in

procurement of funds. For designing the optimal capital structure, he is required to select

such a mix of sources of finance so that overall capital is minimum. The funds required by a

business enterprise has to can be raised either through the ownership securities ie, Equity

shares and preference shares or creditor ship securities ie, DebenturesG bonds.

The financial or capital structure decision is of tremendous significance for the

management, since it influences the debt-equity mix of the company, which ultimately affects

shareholders return and risk. Financial management is applicable to every type of

organisation irrespective of its size , kind or nature. It is as useful to a small concern as to big

unit. In the case of borrowed fund are more when compared to the owner’s funds, it results in

increase in shareholder’s earnings. Whether the organisations status profitable or not for this

purpose to analyse the capital structure is compulsory. So the researcher as selected the topic

“The Capital Structure of the Apollo Tyres”.

Capital structure is the permanent financing of the company represented primarily

by long term debt and shareholders funds but excluding all short-term credit. Thus, a

company’s capital structure is only a part of its financial structure.

NEED FOR THE STUDY

The study of capital structure is conducted to identify the financial structure of

APOLLO TYRES. The study helps to give information about debt ,equity, and profitability,

etc.It helps to understand the profitability of the organisation.

Capital structure of the company is mainly depends upon the profitability of the

organisation. The capital structure of the company should be most profitable ie, Is on that

tends to minimise cost of financing and maximise earning per equity shares

THEORETICAL FRAME WORK

INTRODUCTION

The capital structure of a business is the mix of types of debt and equity the company

has on its balance sheet .The capital ownership of a business can be evaluated by knowing

how much of the ownership is in debt and how much in equity .The company ,s debt might

include both short-term debt and long-term debt (such as mortgages),and equity ,including

common stock, preferred shares, and retained earnings. Capital structure can affect the value

of a company by affecting either its expected earnings or the cost of capitals or both. The

capital structure decisions can influence the value of the firm through the earnings available

to the share holders.

MEANING OF CAPITAL STRUCTURE

Capital structure required in a business may be raised .capital structure means the

composition of the firms financing consisting of equity, preference and debt. Some of the

authoritive definitions are as follows

According to Gerstenberg ,capital structure means' the makeup of a firms capitalization' .In

other words ,it represents the proportional mix of equity share capital , preference share

capital ,internal sources ,debentures , and other sources of funds in the total amount of capital

which an undertaking may raise for establishing its business .

“Capital structure of the firm is the combination of different permanent long-term financing

like debt, stock, preferred capital etc ”.

OBJECTIVES OF CAPITAL STRUCTURE

The Objective of the capital structure decisions is 'Judicious use of different long- term

sources of financing such that the overall cost of capital of the firm does not increase and

remains minimum and constant ,thereby maximizing the value of the firm '.The determination

of capital structure is necessary both at the time of establishment of the business enterprise and at

any time ,the firm changes its capital structure .However the fund managers it should always take

care that this optimal capital structure is kept flexible enough to take care of solvency threat and

other bankruptcy costs.

FACTORS AFFECTING CAPITAL STRUCTURE

There are three major factors affecting capital structure ie, risk, cost of capital and control

determine the capital structure of a particular business undertaking at a given point of time, the

finance manager attempts to design the capital structure in such a manner that his risk and costs are

the least and the control of the existing management is dilated to the least extent. However, there

are also subsidiary factors like marketability of the issue, maneuverability and flexibility of the

capital structure and timing of raising the funds.

• Risk

• Cost of capital

• Control

• Leverage

• Size of the company

• Dilution of control

• Floatation cost

• Cash flow projections of the firm

• Lenders attitude

• Management attitude

• Sales of stability

Risk

Risk is two kinds, financial risk and business risk. Financial risk is also is of two types:

a. Risk of cash insolvency

b. Risk of variation in the expected earnings available to equity shareholders

Cost of capital

Cost is an important consideration in capital structure decision .It is obvious that a business should

be at least capable of earning enough revenue to meet its cost of capital and finance its growth.

Control

Along with cost and risk factors, the control aspect is also an important consideration in

planning the capital structure .When a company issues further equity shares , it automatically

dilutes the controlling interest of the present owners.

Leverage

By use of fixed costs financing (source of funds having fixed cost like debt, preferred, capital

for which the firm pays fixed interest ,fixed preferred dividend respectively; Interest payments

preferred dividend payments are fixed in nature hence we say that their cost is also fixed)

profitability of the firm is magnified and enhanced due to leverage effect (leverage firm uses debt

as a source of finds .By using debt the firm is able to decrease tax payable thereby increasing

profits).

Size of the company

As size of the company increases so does its requirement of funds due to large operational

activities. The capital structure is very prominent and critical for such a firm. A slight change in

capital structure may affect the overall profitability of the firm.

Dilution of control

A firm that issues more and more equity dilutes the power of existing shareholders as number

of shareholders increases. Hence the investors, to an extent, prefer to new issue of equity.

Floatation cost

It is the cost involved in issuing a security or a debt. If such cost is too high for new issue of

any component of capital structure, then the use such source of fund is minimized

Cash flow projections of the firm

With use of each type of fund, related cash flows (benefits and costs) arise. If cash inflows

(benefits) are higher than the cash outflows (costs) by employing the funds productively then that

component of capital is profitable for the firm and hence it should adopt a capital structure with

large proportion of that component of capital.

Lender's attitude

If lenders have a very strict and restricting attitude towards the borrower on the use of the

lended amount of funds, then the profitability of the firm is greatly hampered .The normal activities

and dynamism of such enterprise is restricted and limited to the fulfilment of the lender's personal

objectives only. Such funds should not be encouraged to be used by the firms. If they have been

borrowed then repayment of such funds should be done as soon as possible.

Management attitude

If directly influences the choice of capital structure of the firm. A conservative attitude opts

for zero debt in its capital structure .Use of debt increases the financial risk of the firm and even

increases the risk of bankruptcy and insolvency .An aggressive attitude opts for high use of debt

ie ;financial leverage and increases the financial risk of the firm.

Sales stability

Greater is the stability of sales and earnings of a firm the better is its position to pay of its

debt (principal + interest) .Thus the firm can opt freely for debt as a medium of financing without

any risk (risk of not being able to pay off debt due to low /zero operating profits).

ASSUMPTIONS OF CAPITAL STRUCTURE THEORIES

1. There are only two sources of funds used by a firm .Perceptual riskless debt and

ordinary shares.

2. There are no corporate taxes. This assumption is removed later.

3. The dividend pay out ratio is 100. This is, the total earnings are paid out as dividend to

the shareholders and there are no retained earnings.

4. The total assets are given and do not change. The investment decisions are, in other

words, assumed to be constant

5. The total financing remains constant. The firm can change its degree of leverage

(Capital structure) either by selling shares and use the proceeds to retire debentures or

by raising more debt and reduce the equity capital.

6. The operating profits (EBIT) are not expected to grow.

7. All investors are assumed to have the same subjective profitability distribution of the

future expected EBIT for a given firm.

8. Business risk is constant overtime and is assumed to be independent of its capital

structure and financial risk

9. Perceptual life of the firm

APPROACHES FOR CAPITAL STRUCTURE THEORIES

There are 4 major theories/approaches explaining the relationship between capital structure, cost of

capital and value of the firm

1. Net Income Approach ( N.I. Approach)

2. Net Operating Income Approach (N.O.I. Approach)

3. Traditional Approach

4. Modigliani and Miller Approach (MM Hypothesis)

i. Net Income Approach(N.I. Approach)

This approach was suggested by Durand David. According to this approach, a firm can

increase its value or lower the overall cost of capital by increasing the proportion of debt in the

capital structure. In other words, if the degree of financial leverage increases, the weighted average

cost of capital will decline with every increase in the debt content in total funds employed, while

the value of the firm will increase. Reverse will happen in a convers situation.

Net Income Approach is based on the following assumptions

The cost of debt is less than cost of equity or equity capitalization rate, and

The use of debt content does not change the risk perception of investors as a

result both the Kd (debt capitalisation rate) and Ke (equity capitalisation rate)

remains constant.

There are no corporate taxes;

The value of the firm on the basis of net income approach can be ascertained as follows:

V=S+B

Where,

V= Value of the firm

S= Market value of equity or stock

B/D = Market value of debt

However, market value of equity (S) can be ascertained as below:

Market value of equity (S) =NI

Ke

Where,

NI = Net Income (Earnings available for two equity shareholders)

Ke = Equity capitalisation rate

Under NI approach the value of the firm will be maximum at a point

where weighted average cost of capital is minimum. Thus, the theory suggests that use of

maximum possible debt financing will minimize the overall cost of capital

The overall cost of capital under this approach can be calculated as below;

Overall cost of capital = EBIT

Value of firm

2.Net Operating Income Approach (N.O.I. Approach)

This approach was suggested by Durnad David . According to this approach, the market

value of the firm is not affected by the capital structure changes. The market value of the firm is

ascertained by capitalising the net operating income at the overall cost of capital that is constant.

The market value of the firm is determined as follows:

Market value of the firm (V) = Earning before interest and tax (EBIT)

Overall cost of capital

= EBIT

9Ko

The value of equity can be determined by the following equations:

Value of equity(S)= V(market value of firm) — B(Book value of debt)

Therefore, the cost of equity can be calculated by the following formula:

Cost of equity = Net Income available to equity shareholders

Market value of equity

Ke = Ko + (KO – Ka ) B/S

The Net Operating Income Approaches is based on the following assumptions;

i. The overall cost of capital remains constant for all degree of debt-equity mix

ii. The market capitalizes the value of firm as a whole. Thus, the the split between debt

and equity is not important

iii. The use of debt funds increases the risk f shareholders. This causes the equity

capitalisation rate to increase. Thus, the advantage of debt is set off exactly by

increase in equity capitalisation rate.

iv. There are no corporate taxes.

v. The cost of debt remains constant

Under NOI approach, the overall cost of capital is constant, therefore, there is no optimal capital

structure, rather every capital structure is a good as any other and so every capital structure is

optimal one.

3. Traditional Approach

The traditional approach is also called an intermediate approach as it takes a midway

between NI approach (that the value of the firm can be increased by increasing financial leverage)

and NOI approach (that the value of firm is constant irrespective of the degree of financial

leverage). According to this approach, the firm should strive to reach the optimal capital structure

and its total value through a judicious use of the both debt and equity in capital structure.

At the optimal capital structure, the overall cost of capital will be minimum and the value

of the firm is maximum. It further states that the value of the firm increases in financial leverage up

to a certain point. Beyond this point, the increase in financial leverage will increase its overall cost

of capital and hence the value of the firm will decline.

This approach partly contains features of both the NI and NOI approaches as given

below:

i. The traditional approach is similar to NI approach to the extent that it accepts that

the capital structure or leverage of the firm affects the cost of capital and its

valuation. However, it does not subscribe to the NI approach that the value of the

firm will necessarily increase with all degree of leverages.

ii. It subscribe to the NOI approach that beyond a certain degree of leverage, the

overall cost of capital increases resulting in decrease in the total value of the firm.

However, it differs total value of the firm. However, it differs from NOI approach

in the sense that the overall cost of capital will not remain constant for all degrees

of leverage.

Thus as per the traditional approach, the cost of capital is a function of financial leverage and the

value of the firm can be affected by the judicious mix of debt and equity in capital structure. The

increase of financial leverage up to a point favourably affects the value of the firm. At this point,

the capital structure is optimal and the overall cost of capital will be the least.

Traditional approach states that moderate degree of financial leverage (use of debt)

increases the cost of equity but not to a very large extent as proposed by MM approach. Cost of

equity increases slowly at first when Debt Equity Ratio is increased but after a point as debt

increases further, cost of equity increases at an accelerated rate.

4. Modigliani and Miller Approach/Theory

The Modigliani- Miller (MM) approach is similar to the Net Operating Income (N.O.I)

approach. In other words, according to this approach,the value of a firm is independent of its

capital structure . However, there is a basic difference between the two. The N.O.I. approach is

purely definitional or conceptual. It does not provide operational justification for irrelevance of

the capital structure in the valuation of the firm. While MM approach supports the N.O.I.

approach providing behavioural justification for the independence of the total value and the cost

of capital of the firm from its capital structure. In other words, MM approach maintains that the

weighted average cost of capital does not change with change in the debt equity mix or capital

structure of the firm.

INDUSTRIAL PROFILE

History of tires:

The most important application of rubber relates to the transport sector of

which tyre industry consumes over 60% of the total rubber produce. During the last

20 years tyre has been virtually reinvented with most modern technologies like steel

radial tyres, a milestone in the tyre technology. Tyre sector is experiencing a rapid

improvement with the advent of newer technologies.

The tyre industry begin to grow in India during 1930’s.The growth of tyre

industry in India may be divided into 3 phase. In the first phase, multinational came

to India and started selling tyres. The first among them was Firestone followed by

multinational like Good year Dunlop etc.

In the second phase multinationals started their production in India. Then they

become the first generation tyre company. Dunlop was the first company started the

production.

The third phase of tyre industry began, where Indian company’s started

producing tyres ,which come to be called second generation tyres The important

among them are MRF tyres ,Good Year, CEAT etc. The main third generation tyres

are Apollo tyres , Vikrant tyres, JK tyres, Modi tyres etc.

The entire tyre companies which started after 1970’s and the companies,

which are yet to start production are classify under the head fourth generation tyres.

World Scenario

The world tyre industry is worth around US $ 70 billion. The industry is marked by the

presence of around half a dozen major players who together occupy to 70% of the world

market share.

Company Market share-:

COMPANY MARKET SHARE

Michelin 19.4

Bridgestone 19.4

Goodyear 16.6

Continental 7.1

Sumihomo 4.9

Pirelli 3.9

Yokohama 3.5

Kumho 1.7

Others 23.5

INDIAN SENARIO

Salient features of Indian tyre industry:

Adaptability and absorption.

Exports

Innovations

Indigenous and ready availability

Technology progression

Wide product range for diverse use

Self- sufficiency and vibrant marketing setup

Highlights of the Indian Tyre Industry:

The tyre industry is a Rs. 9,000 crore industry.

The fortune of this industry depends on the agricultural and industrial performance of

the economy, the transportation needs and the production of vehicles.

While the tyre industry is mainly dominated by the organized sector, the unorganized

sector holds sway in bicycle tyres.

In the last five years (1994-95 to 1998-99), the industry managed to achieve a

compounded annual growth of only 4.40 per cent. However in the last fiscal the

industry registered a growth of 7 per cent.

Natural rubber constitutes 25 per cent of the total raw material cost of the tyres.

The ratio of natural rubber content to synthetic rubber content is 80:20 in Indian tyres,

whereas world wide, the ratio of natural rubber to synthetic rubber is 30:70.

Ranking of Indian tyre companies on the basis of production:

1. MRF Tyres Limited

2. Apollo Tyres Limited

3. JK Tyres Limited

4. CEAT Tyres Limited

5. Modi Rubber Tyres Limited

6. Birla Tyres Limited

7. Good Year India Limited

8. Vikrant Tyres Limited

Domestic Rank:

Companies

Segment

Truck Light Commercial Vehicle

Apollo Tyres 1 2

JK Tyres 2 4

MRF 3 3

CEAT 4 1

Market share of Companies in the Indian Tyre Industry:

Companies % share

MRF 24

Apollo Tyres 22

JK Tyres 17

CEAT 14

GOOD year 6

Others 17

COMPANY PROFILE:

The history of Apollo tyres can be traced back 70’s when

MNC’s and Indian tyre major’s dominated the tyre industry. Apollo Tyres Ltd a

leader in the Indian tyre industry and a significant global player, providing customer

delight and enhancing shareholder value was registered in 1972. The license was

firstly given to Ruby Rubber works to start a tyre factory at Changanassery. In 1975

Raunaq Singh purchased the license from Ruby Rubber works. It is one of the flagship

companies of Raunaq group. The plant is situated at Perambra 50 km north of Cochin. Total

area covered where 97 acres which was bought from people who stayed there by, at

cheaper rate. At the starting time the production capacity was 54 tones per day.

The Apollo tyre ltd owned by Raunaq group of industries place an

important rolling world tyre industry. The products include tyres , tubes and flaps for all

vehicles. The head office of company is at New Delhi and registered office is at

cochin. The main marketing activities are concentrated in New Delhi and around 2400

exclusive dealers for Apollo cover the entire area of India. During 1977 to 1981 the

company was under heavy loss. The capacity utilization was only 40 to 50 % capacity. The

emphasis is given on growth quality and objectives are redefined when Mr .Onkar S

Kanwar took over the company’s affairs . Company began to earn profit and

accumulated losses of 26 crores could be wiped out with short spam of time.

There second plant was installed at Limda village at Baroda

in Gujarat, which started production in 1991 having capacity of 6.5 lakh tyre/annum.

This is most modern plant. The R&D centre is also functioning at this location.

The third plant at kalamassery was taken over by Apollo from Premier

tyres .While take over this plant was a sick unit. After the takeover Apollo spent a good

amount in modernizing the plant and now it is profit earning unit. The fourth plant

was commissioned in 1996 at pune for manufacturing tubes. The entire requirement of

tubes for all plants of Apollo is done from here.

MISSION:

“A journey called “agile” to be a us$6 billion company by the year 2016”.

VISION

‘’ A leader in the Indian tyre industry and a significant global player, providing customer

delight and enhancing shareholder value.”

VALUES:

The one word that symbolizes all that we believe is CREATE.

C - CARE FOR CUSTOMERS.

R - RESPECT FOR ASSOCIATES.

E - EXCELLENCE THROUGH TEAM WORK.

A - ALWAYS LEARNING.

T - TRUST MUTUALLY.

E - ETHICAL PRACTICES.

GOALS:

Creating Social Responsibility.

Learning & Development.

Family Focus.

Hygienic Factors.

Employee Involvement & Cultural Building.

Parambra Plant Vision:

“ It’s be the most successful profit Centre through innovation, capacity expansion and by

embracing newer technologies and work culture, thus synergizing our efforts to achieve

cooperate goals”.

Quality Policy:

“We will achieve customer delight by striving for excellence in the quality of our products

and services using a fact based approach for continual improvement that ensures all processes

contribute to business success”.

Management Board:

Mr. Onkar S Kanwar : Chairman and Managing Director

Mr .Neeraj Kanwar : Vice Chairman and Managing Director

Mr. Luis C Ceneviz : Chief, Africa Operations

Mr.Gaurav Kumar : Group Head, Corporate Strategy & Finance

Mr.Tapan Mitra, : Chief, Human Resources

Mr.P K Mohamed : Chief Advisor, Research & Development

Mr.Rob Oudshoorn : Chief, Europe Operations

Mr.Kaushik Roy : Group Head, Corporate Purchase

Mr.Sunam Sarkar : Chief Financial Officer

Mr.Satish Sharma : Chief, India Operations

MILESTONES OF APOLLO TYRES:

1972 The company’s license was obtained by Mr. Mathew T. Marattukalam, Jacob

Thomas and associates.

1974 The company was taken over by Dr. Raunaq Singh and his associates.

1975 April 13, foundation stone of the Perambra plant was laid.

1976 Apollo Tyres was registered.

1977 Plant commissioned in Kerala with 49 TPD capacities.

1982 Manufacturing of Passenger Car Radial Tyres in Kerala

1991 Second plant commissioned in Baroda.

1995 Acquired Premier Tyres Ltd in Kerala.

1996 Exclusive tubes plant commissioned in Ranjangaon

2000 Exclusive radial capacity established in Baroda.

2003 Radial Capacity expanded to 6600 Tyres per day.

November 17, Joint Venture with Michelin.

2004 Launch of Apollo Aclere-‘H’ Speed Rated Car Radials.

2005 April 13, Perambra plant completes 30 years.

2006 January 30, Acquires Dunlop South Africa.

August 7, Announced the launch of new plant in Chennai.

2007 Launch of Regal Truck and bus radial tyres

2008 Apollo Tyres Ltd. announced the public Greenfield plant to be ready by 2010 for

the European markets

2009 Apollo Tyres Ltd. Announced the acquisition of VBBV Tyres, Netherlands.

2010 Apollo won an agreement with Volkswagen AG to supply the VW Polo assembled

in India

MANUFACTURING CENTRES:

Corporate office - Gurgaon

Other plants in India:-

- Baroda

- Pune

- Perambra

- Kalamassery

- Chennai

International plants:-

Zimbabwe - Bulawayo

South Africa - Ladysmith,

- Durban

Organisation details;

Name : Apollo Tyres Ltd.

Place : Perambra, Thrissur (50 Km north of Kochi, Kerala)

Year of Inception: 1976

Land Area : 97 acres

Building Area : 69500 sq.mts

Head Office : New Delhi

Registered Office : Kochi , Kerala

Present capacity : 340 MT per day

Product range : Truck, LCV, REAR TRACTORS, FARM RADIALS, PASSENGER &

ADV TYRES

No. of people: 2790

MAN POWER

Number of employees in the Apollo

CATEGORY NUMBER

Management

Staff

270

Permanent staff 1819

Workman

Trainees

248

Contract

Workman

453

Total 2790

Working Hours:

Shift A : 6 AM – 2 PM

Shift B : 2 PM – 10 PM

Shift C : 10 PM – 6 AM

Shift D (general): 9 AM – 5 PM

Departments:

There is a high degree of departmentalisation in Apollo Tyres Ltd. The

departmentalisation helps in specialization of work in each field. It helps in better planning

and better concentration in the particular work handled by a particular department. The

various departments in Apollo Tyres Ltd are as follows;

1. Human Resource Department

a) HR and Industries Relations

b) Security and training

c) Safety and First Aid

d) Time Office

2. Stores

a) Raw Material Stores

b) Engineering Material Stores

c) Finished Goods Stores

3. Purchase Department

4. Industrial Engineering Department

5. Quality Assurance Department

6. Accounts & Finance Department

7. Systems

8. Production Planning & Control

a) Production A

b) Production B

c) Production C

Perambra Plant (in Focus):

Single largest truck tyre plant in India.

Fastest growing plant in Apollo family.

It is known as the mother plant.

Continuous expansion.

Total employee involvement.

NEW PRODUCTS OF APOLLO, PERAMBRA

11.00 – 20 SL 9

8.25 -20 KAIZEN KZ XLM

8.25 – 20 LSS GOLD

8 -18 KRISHAK PREMIUM

5.00 – 15 KRISHAK PREMIUM

4.75 – 14 KRISHAK PREMIUM

13.00 – 20 XTRAX GRADER

14.00 – 24 XTRAX GRADER

23.1 – 26X TRAX ROAD COMPACTOR

APOLLO KEY DIFFERENTIATION TO OTHER FIRMS:

Superior product Quality.

Strong Brand Equity.

Committed Marketing Team.

High Consumer Loyalty

Product Segmentation in Truck Tyres.

Benched marked for planning efficiency parameters.

Power consumption.

Quick response to market needs.

Fuel efficiency.

Least scrap generation.

HIGHLIGHTS OF APPOLLO TYRES LTD:

7th fastest growing Tyre Company in the world.

17th largest Tyre Company in the world.

First Tyre Company in India to obtain ISO9001 certification for all its operations.

First Company to introduce packaging for tubes, two wheeler Tyres and Car Tyres.

GOLDEN ACHIEVEMENTS:

Apollo Tyres Ltd Perambra unit was ranked the first among large scale

industries for productivity and energy conservation in the year 2002-2003 by

Kerala state productivity council.

Apollo Tyres Ltd received the pollution control award by the central

government during the year 2003-2004

ATL group crossed a turnover of a billion US $ during 2006-2007

ATL group was announced as a leader in Indian Tyre Industry and as a significant

global player providing customer satisfaction and enhancing shareholder value

PRODUCT PROFILE:

1. TRUCK

Overload Technology Loadstar Super.

Loadstar Super Gold.

Loadstar Super Hercules.

Kaizen 50L.

Load & Mileage Technology XT7.

XT7 Gold.

XT7 Haulug.

Amar Delux.

Amar.

Commando.

Kaizen 36L

Kaizen 99R plus

Kaizen 77R

Premium Mileage Technology XT9

XT9 Gold

Amar Gold

Kaizen XTD

Mileage Technology Segment Champion

Champion Gold

Champion DXL

Amar AT Rib

Kaizen 27L

2. LIGHT COMMERCIAL VEHICLE:

Overload Technology Loadstar Super.

Load & Mileage Technology Mile star

Premium Mileage Technology Amar De lux

Amar Gold Rib

XT9

XT9 Gold(lug)

Dura mile (radial)

Regular Mileage Champion

3. PASSENGER CAR RADIALS:

Tubeless Radial Passenger Car Amazer XL

Acelere

Tubeless Radial MUV & SUV Hawks

Tube type Radial for Passenger Car Amar

Amazer XL

Quantum

Tube type Radial MUV & SUV Amar

Amazer XL

Storm

Hawks

Passenger Car & Jeep Bias Armour

Panther

Gripper Maha Trooper

4. FARM:

Cultivation Krishak Super

Sarpanch

Haulage Power Haul

Multipurpose Farm King (Radial)

Krishak Premium

(bias)

Tractor Trailer Types Dhruv

Hunter

AWARDS & RECOGNITIONS

National Safety Council Award 2005, 2006, 2008.

Kerala State Pollution Control Board Award 03-04, 06-07.

Best Productivity Award 2006-2007 (MKK Nayar Memorial

Award) .

Best Productivity Award 2007-2008 (MKK Nayar Memorial Award).

State Energy Conservation Award 2007- second prize (Large Scale

Enterprises).

Kerala State Safety Award from National Safety Council 2007.

Top Duty Payer Awards from Central Excise 2007-2008.

India Manufacturing Excellence Award Gold Certificate of Merit 2008.

Outstanding Performance in Industrial Safety Award 2008 (Govt. of

Kerala).

Kerala State Level Quality Circle Competition 2009, CII.

Kerala State Energy Conservation Award 2009, EMC Kerala.

Department of Factories & Boilers safety Awards 2010.

Best in Innovative HR Practices KMA 2010.

Innovative Cost Management measure implemented KMA 2011.

Innovative HR Practices implemented KMA 2011.

Capital Structure (Apollo Tyres)

Period Instrument Authorized Capital

(Rs. cr)

Issued Capital

(Rs. cr)

- P A I D U P -

Shares (nos)

Face Value

Capital

From To

2010 2011 Equity Share 73 50.4 504024770 1 50.4

2009 2010 Equity Share 73 50.4 504024770 1 50.4

2008 2009 Equity Share 73 50.4 504024770 1 50.4

2007 2008 Equity Share 73 48.84 488444770 1 48.84

2006 2007 Equity Share 73 46.4 46402477 10 46.4

2005 2006 Equity Share 48 38.34 38337977 10 38.34

2004 2005 Equity Share 48 38.34 38337977 10 38.34

2003 2004 Equity Share 48 38.34 38337977 10 38.34

2002 2003 Equity Share 48 36.32 36315477 10 36.32

2001 2002 Equity Share 48 36.32 36315477 10 36.32

2000 2001 Equity Share 48 36.32 36315477 10 36.32

1999 2000 Equity Share 48 36.32 36315477 10 36.32

1998 1999 Equity Share 48 33.05 33054420 10 33.05

1997 1998 Equity Share 48 30.04 30040104 10 30.04

1996 1997 Equity Share 48 29.87 29874898 10 29.87

1995 1996 Equity Share 48 29.45 29457509 10 29.46

1994 1995 Equity Share 48 27.88 27879350 10 27.88

1993 1994 Equity Share 48 27.88 27879350 10 27.88

1992 1993 Equity Share 48 27.88 27879350 10 27.88

1989 1992 Equity Share 48 27.88 27879350 10 27.88

1987 1988 Equity Share 10 8.4 8402000 10 8.4

1985 1986 Equity Share 10 7.75 7750000 10 7.75

1984 1985 Equity Share 10 7.75 7750000 10 7.75

1983 1984 Equity Share 10 7.39 7386300 10 7.39

1981 1983 Equity Share 10 6.7 6697350 10 6.7

1980 1981 Equity Share 10 6.7 6696050 10 6.7

1978 1979 Equity Share 10 6.47 6466000 10 6.47

1976 1977 Equity Share 10 7.75 7750000 10 7.75

1972 1976 Equity Share 10 7.75 77 10 0

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