Chairman's Speech at 55th Annual General Meeting held on 26th March, 2008



Dear Fellow Shareholders,

I extend to you all a warm welcome to this 55th Annual General Meeting of the Company.

OPERATIONS

Your Company achieved an all time high turnover at Rs.3206 crores. Operating Profit for the year at Rs.265 crores recorded an increase of 57% over the previous year, Profit Before Tax for the year was the highest ever at Rs. 101 crores. The Board has recommended an increased dividend of 27% for the year.

It is indeed a matter of satisfaction that the Company has achieved all round improvements in its operations and profitability and has crossed several milestones during the year.

RADIAL REVOLUTION AND OUR LEADERSHIP

JK Tyre has been in the forefront of technological leadership and continues to be the undisputed leader in the radials in India, being the only manufacturer of the entire range of radial tyres i.e. for Truck & Buses, Cars, LCVs, Jeeps, MUVs and Tractors.

This journey started in 1977 with the launch of Passenger Car radial tyres when these tyres were unheard of in India. It is heartening, that Car radialization over the years has caught on to reach its current level of 95%. Your Company has made large investments to increase its capacity over the years, to sustain its commanding position in this important and growing segment of the Indian tyre market.

We continued this pioneering journey by introducing for the first time in the country-Truck/Bus Radials in 1999. Here again, we took the road less travelled and made large investments by setting up a state of the art facility at Mysore. These pioneering efforts have started yielding rich dividends in terms of increased demand for JK Truck / Bus Radials both in the domestic as well as international markets.

It is well established that the use of Radial tyres on truck and buses, not only results in higher mileage, but also in considerable fuel savings for the vehicles. It has been estimated that, if the radialization in this sector moves up merely to 25%, from existing levels of 3.5%, the savings in fuel cost, alone would be more than Rs. 19,000 crores per annum for the nation. It is, therefore, necessary that the usage of these tyres be encouraged.

Your company has laid the foundations for their usage and has been promoting these tyres by educating the customers as well as establishing JK Tyre "Truck Radial Tyre Care Centers" along the notional highways across the country. Apart from offering repair and care facility, the unique part of the services offered, at these centers, is making available to a trucker a "Service Tyre" which is given to him for use while his tyre gets repaired, yet another first in the country by JK Tyre.

Customer satisfaction is of a paramount importance at JK Tyre. Your company has invested in several value added programmes to ensure high customers satisfaction across all touch points and customer segments. Your company has successfully organized several meets during the year interacting with over 19,000 customers for fulfilling their service requirements be it one to one or enmass, depending upon their needs.

TECHNOLOGY OUR BACKBONE

If I were to attribute a single factor for the success of our radial journey, it will be our technology vision. This vision has helped your company take an enviable lead in the fast growing sunrise truck/ bus radial tyre segment, by being the first and only manufacturer with a world class high-tech plant in India. Several world-class cars have been launched in India, exclusively on JK car radial tyres. Our car radials exported as original fitment on various cars to number of advanced markets are performing extremely well, These indeed are testimony to company's leadership in technology.

The nerve center for our technology development continues to be, HARI SHANKAR SINGHANIA ELASTOMER & TYRE RESEARCH INSTITUTE (HASETRI), an independent institute dedicated to Elastomer and Tyre research, promoted by your Company years back. Furthermore the collaborative initiative with IIT Chennai by establishment of Centre of Excellence at their premises, continues to enhance our capability in high-end predictive technology. The various inputs of technology incapsuled in the tyre are ultimately evaluated at the company's dedicated test tracks also located in Chennai.

PEOPLE OUR PRIME ASSET

One of the challenges of a growing economy like ours is nurturing and retention of talent. One of the core values of JK Tyre is "Caring for People". In pursuit of this objective your company has launched several new initiatives to develop leadership and nurture talent at all levels by blending, company goals with growth aspirations of the individuals.

GLOBAL PRESENCE

Your company has been exporting tyres over 75 countries across 6 continents. This year's export was of the order of Rs. 481 crores. It is a matter of great pride that "JK Tyre" is recognized as a premium brand in a number of highly sophisticated global markets.

ECONOMY

Indian economy continues in its march ahead by registering 9% growth in the past 3 years and shown its resilience in the wake of global slow down. Manufacturing sector has contributed significantly to this impressive growth. Large investments are underway in oil major segments of the manufacturing sector. This will propel further growth in the year ahead.

Significantly higher spend on infrastructure, education, health, agriculture & rural development will ensure inclusive growth and provide boost to the Indian economy.

Easier availability of finances at competitive interest rates has led to increased demand for the manufactured products. This trend has been reversed in the recent past which has hampered growth. Despite Improved liquidity, interest rates have been superficially kept high, leading to higher cost of production. The developed nations have taken note of this trend and have taken several measures to reduce interest rates. Our responses has been slow and interest rates continue to be at significantly higher levels impacting competitiveness of the manufacturing sector.

OUTLOOK

The recent budget has provided further impetus to the growth of the automotive sector apart from laying emphasis on infrastructure development. This augurs well for the future of the tyre industry. Your company has positioned itself well to cater to the growing demand for tyres by undertaking several expansion projects. The Truck and Bus Radials capacity is being more than doubled to 8 lac tyres per annum. A facility at a new site is being set up for manufacture of giant Off-the-Road Tyres as also Speciality tyres. These projects will have an capital outlay of Rs. 480 crores and are expected to be completed by the end of calendar year 2008. Furthermore expansion plans are on the anvil to meet the fast growing needs of the passenger car segment. The completion of these projects will lead to higher sales and profitability of the company.

I look forward to your continued support in these endeavors.