sustainability report

apollotyres.com

SustainabilityReport 2011-2012

APOLLO TYRES LTDApollo House, 7 Institutional Area, Sector 32, Gurgaon, Haryana 122001, India

e may utilise

t h e g i f t s o f WNature just as we

choose, but in Her books the

debits are always equal to

credits”

Mahatma Gandhi

Beautiful and delicate looking Dandelions are

pioneer species living in damaged areas, repairing

the soil. They are the first step in the transformation

of a damaged area back to a forest. Our concept for

the report this year is derived from this ability of

Nature to create and re-create itself.

“

Sustainability Report 2011-12 01

02 Report Parameters 2011-12

Contents

Report Parameters.................................04

Chairman’s Message..............................06

Organisational Profile............................08

Corporate Governance...........................14

Management Approach..........................24

Economic Performance..........................36

Environment and Social Performance....40

Performance Indicators.........................80


To effectively collect the economic, environmental

and social efforts and achievements of Apollo Tyres

Ltd, the data collection process was performed

through onsite interactions within the scope of the

report. Other than this, the data were researched

and report developed through employee

discussions and information consulting. Collection

channels and computing methods were further

optimized to make the whole process more effective

and robust.

Data Collection

For the purposes of this report:

n Zone I refers to the manufacturing locations

in India – Limda, Perambara, Kalamassery

and Chennai

n Zone E refers to the manufacturing locations

in Europe – Enschede

n Zone A refers to the manufacturing locations

in South Africa – Durban and Ladysmith

The boundary of this report includes Apollo Tyres

Ltd's Chennai manufacturing location which was

not included in our previous report in 2010-11.

The report excludes the 2 manufacturing facilities

of Apollo Tyres Ltd in Zimbabwe – Bulawayo and

Harare.

04 Report Parameters 2011-12

Reporting Period of Report: April 2011 – March 2012

Date of most recent previous report: Sustainability Report 2010-11 (Internal Release)

Reporting Cycle: Annual

Report Profile

Report Parameters

Defining Report Content The methodo log ies and p r inc ip les o f

the Global Reporting Initiative G3 Guidelines (2006)

- Materiality Analysis, Stakeholder Inclusiveness,

Sustainability Context and Completeness - have

been used in preparing this report. These GRI G3

principles are considered while analysing the

key issues that relate to sustainability in business

operations, including identification of major

stakeholders. The information on key indicators

disclosed in this report have been researched,

assessed and selected by Apollo Tyres Ltd.

We engage with stakeholders on an ongoing basis

as part of our everyday business. Since 2010-11, we

have documented the formal and informal process

of stakeholder engagement with material issues

raised and priorities established. These have been

mapped to the relevant aspects of this report.

Efforts have been made to ensure disclosure on

parameters which we consider to be significant and

have a potential to affect the decisions of our

stakeholders.


Report Boundary

Section Coverage of Report

Economic

Environment

Labour Practices andDecent Work

Human Rights

Society

Product Responsibility

Contact Person:

For questions related to the report,

please contact:

Name: Harshita Pande / Kanika Pal

Email: [email protected]

[email protected]

Tel: +91-124-2383002

This report is only an internal release to a select

audience within Apollo Tyres Ltd. However as the

information is being tracked across various

indicators, as specified in the GRI Index of this

report, it can be made available to those interested.

Consolidated report at corporate level

Manufacturing locations in India, South Africa

Europe and

Manufacturing locations in India,Europe and South Africa




06 Chairman’s Message 2011-12

Onkar S KanwarChairman & Managing DirectorOnkar S KanwarChairman & Managing Director


Onkar S KanwarChairman & Managing Director

Treads of Responsibility

n our journey of business

excellence we are committed Ito increasing our stakeholder

value. Our ambition to be

amongst the top 10 global

players have a clear identified

path based on the four key

pillars of Business - Quality,

Sustainability, Innovation and

Culture.

Apollo's Sustainability journey began in 2010. In

2011, we published our first report, in accordance

with the Global Reporting Initiative Version 3 for a

select audience. Bringing out a report has been a

learning experience for the organisation. Most

beneficial was the fact that the gaps identified in

2010, were taken on board and helped in defining

and strengthening our internal systems relating to

the environment and social aspects. Over the

course of the next year, the process has matured;

and is now evident in our performance in terms of

disclosures on nearly all parameters.

I am very happy to share with you that our approach

and systems have ensured that we are positioned at

a Level B reporting standard. Disclosures across

our three regions have also improved significantly

over the last year. Corporate Responsibility is

actively discussed in our Supervisory as well as

Management Board meetings. We aim to reach

Level A across all our locations in the next two

years.

In the following pages you will read about our

efforts in managing the environment and social

issues related to our operations in India, South

Africa and the Netherlands. We have focused on

energy, water, health and safety issues in our

manufacturing locations. We have extensively

worked with our customers and developed products

from the environment and health aspects. In India

and South Africa we have helped vulnerable

communities around our plants to become self-

reliant.

I hope this report gives you an understanding of our

commitment towards sustainable development.

08 Organisational Profile 2011-12

Organisational Profile


pollo Tyres Ltd is a high-

performance company

and a leading tyre Amanufacturer with headquarters

in Gurgaon, India and operations

in 3 continents.

Registered as a company in 1976, Apollo is a young,

ambitious and dynamic organisation, built around

the core principles of creating stakeholder value

through reliability in its products and dependability

in its relationships.

In the year 2006 the company acquired Dunlop SA.

It holds brand rights for the Dunlop brand across 30

African countries. In 2009, Apollo acquired

Vredestein Banden B V in the Netherlands (since

renamed Apollo Vredestein BV), thereby adding

Europe as its third crucial market.

The company currently produces the entire range of

automotive tyres for ultra and high speed passenger

cars, truck and bus, farm, off highway, industrial

and specialty applications like mining, retreaded

tyres and retreading material. These are produced

across manufacturing locations in India,

Netherlands and South Africa. In terms of market

presence, India is the largest accounting for 67% of

revenues, Europe 23% and South Africa 10%; with

exports to 100+ countries across the world.

Registered Office: 6th FloorCherupushpam BuildingShanmugham RoadKochi 682031, Kerala

Corporate Office:Apollo Tyres Ltd.Apollo House, 7 Institutional AreaSector 32Gurgaon 122001, Haryana

Fll/NRIs/Foreign BodyCorporate, etc 23.28%

Financial InstitutionsBank/Mutual Funds 11.13%

Governmentof Kerala/KSIDC 1.98%

Public16.67%

Promoters48.94%

Shareholding as on March 31, 2012

Vision and Core Values

Vision

The Apollo Way

To be a significant player in the global tyre industry

and a brand of choice, providing customer delight

and continuously enhancing stakeholder value.

As an organisation, 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 flavours 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

organisation. 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. These values are:

Care for Customer

Business Ethics

Care for Society

Empowerment

One Family

Communicate Openly


Limda

ChennaiKalamasseryPerambra

Ladysmith

Durban

Enschede

Manufacturing Locations

Products Manufactured:

Truck and bus cross-ply, Light truck cross-ply, and Farm radial & cross-ply


Truck and bus cross-ply, Light truck cross-ply, Farm cross-ply and Re-treading material


Truck and bus radials, Passenger vehicle radial


Truck and bus radial & cross-ply, Light truck radial & cross-ply, Farm and Off-the-Road

Chennai

Kalamassery

Limda

Perambra

Zone I

Products Manufactured:Passenger vehicle radial, Collapsible passenger car spare tyres, Agriculture tyres

Products Manufactured:Passenger vehicle radial, and Light truck radial


Truck and bus radial & cross-ply, Light truck radial & cross-ply, Farm and Off-the-Road

Zone A

Zone E


Enschede

Ladysmith

Durban


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.

Products

Brand Portfolio

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.

Global challenger brandfor truck tyres

Global challenger brandfor passenger car tyres

Global niche brandfor passenger car & specialty tyres

Global brand cateringto vehicles across categories

Brand for 32 African countries across vehicle categories

Global brand for truckbus & passenger car tyres

Product Portfolio

Passenger Vehicle

Apollo

Bicycle

Vredestein

4x4

Apollo, Dunlop, Vredestein

Agriculture

Apollo, Dunlop, Vredestein

Light Truck

Apollo, Dunlop

Off Highway

Apollo, Dunlop

Truck/Bus

Apollo, Dunlop

Specialty

Apollo, Vredestein


Zone I (Apollo Tyres India)

Name of Award Awarding Body

nd2 Largest Importer in the Vadodara Region Container Corporation of India Ltd

TIA Hall of Fame Award

(To Mr. Onkar S Kanwar, Chairman, Apollo Tyres Ltd)Tire Industry Association

GBC Commendation for Community Investment Global Business Coalition, Health

State Pollution Control Award (for Large Factories) State Pollution Control Board

Top Company of the Year Award (Tyre Sector)Dun & Bradstreet – Rolta

Corporate Awards

Best Innovative HR Practices for Perambara PlantAnnual Management Convention

of Kerala Management Association

Best Innovative Cost Management System

for Perambara Plant

Annual Management Convention

of Kerala Management Association

Zone A (Apollo Tyres South Africa Pty Ltd )

Awards


South Africa's Most Iconic Tyre Brand TGI South Africa


Best Employers Research Intermediair

ADAC Summer Tyre Test Highly Recommended

Rating for Apollo Amazer 3G MaxxTCS

Best Summer Tyre 2011 for Sportrac 3

ADAC

Best All Season Tyre 2011 for Quatrac 3 AutoBild

AutoBild

ADAC Summer Tyre Test Good Score Rating

AutoBild Score Summer Tyre Test for Sportrac 3

Zone E (Apollo Vredestein BV)

14 Corporate Governance 2011-12

Corporate Governance


For Apollo Tyres Ltd, sustainable governance

means integrating sustainability with the various

aspects and ambits of company management. In

keeping with best practices, Apollo Tyres seeks to

execute the practices of Corporate Governance by

maintaining strong business fundamentals and by

delivering high performance through relentless

focus on the values known as 'Apollo Way'. These

include: Care for Customer, Business Ethics, Care

for Society, Empowerment, One Family,

Communicate Openly.

esponsible corporate

governance provides the Rf r a m e w o r k f o r a

company. It defines and ensures

the manner in which the

company works. The overall

governance structure of Apollo

has a supervisory board and a

management board. They work

with the objective of meeting

the regulatory compliance and

other standards to bring in

stakeholder value.


Corporate Governance StructureApollo Tyres follows a two-tier management and

decision making process to ensure incorporation of

diverse viewpoints and complete impartiality

before any major decision is executed.

Supervisory Board(Board Of Directors)

Management Board

Audit Committee

Remuneration Committee

Shareholders' / Investors' Transfer / Grievance

Committee

Risk Management Steering Committee

Apollo Tyres Ltd

The Apollo board consists of highly regarded

professionals in their field and together lend their

collective wisdom and chart the course for Apollo's

future.

Apollo Tyres' Board is committed to ensuring good

governance. The Board of Directors is at the core of

our corporate governance practices and oversees

how the management serves and protects the long –

term interests of all our stakeholders. We believe

that an active, well-informed and independent

Board is necessary to ensure highest standards

of corporate governance. The Directors bring in

expertise in the fields of human resource

development, strategy, management, legal, finance

and economics, among others. The Board provides

leadership, strategic guidance, objective and

independent view to the Company's management

while discharging its fiduciary responsibilities,

thereby ensuring that the management adheres

to high standards of ethics, transparency and

disclosure.

Board of Directors CommitteesAudit Committee

The primary objective of the Audit Committee is to

monitor and provide effective supervision of the

Management's financial reporting process with a

view to ensuring accurate and timely disclosures,

with the highest levels of transparency, integrity

and quality of financial reporting. The Committee

oversees the work carried out in the financial

reporting process by the Management, the internal

auditors and the independent auditor, and notes the

processes and safeguards employed by each. All

possible measures are taken by the Committee to

ensure the objectivity and independence of the

independent auditor.

Board of Directors

Shardul S Shroff Senior Partner Amarchand & Mangaldas & Suresh A Shroff & Co

Standing left to right

Neeraj KanwarVice Chairman & Managing Director Apollo Tyres Ltd

Arun Kumar PurwarFormer ChairmanState Bank of India

Robert SteinmetzFormer Chief of International Business Continental AG

K Jacob ThomasManaging DirectorVaniamapara Rubber Co Ltd

P N Wahal Company Secretary Apollo Tyres Ltd

Sunam SarkarChief Financial Officer &Wholetime Director Apollo Tyres Ltd

Sitting left to right

Onkar S KanwarChairman Apollo Tyres Ltd

& Managing Director V P Joy Secretary FinanceGovernment of Kerala (Nominee Director)

Nimesh N KampaniChairmanJM Financial Group

Dr S NarayanFormer Principal Secretary to the Prime Minister of India

U S Oberoi Chief, Corporate Affairs &Wholetime Director Apollo Tyres Ltd

M R B PunjaFormer ChairmanIDBI

Not in picture

Alkesh Kumar SharmaSecretary (IP), Industries Department Government of Kerala (Nominee Director)



The main responsibility of the committee is to

review and grant annual increments, vary and/or

modify the terms and conditions of appointment/re-

appointment including remuneration and

perquisites, commission etc. payable to Managing

Directors within the overall ceiling of remuneration

as approved by the members.

Remuneration Committee

Shareholders' / Investors' Transfer / Grievance Committee

Grievance Committee looks after the approval of

transfer / transmission of shares / debentures issued

by the Company, issue of duplicate certificates and

certificates after split / consolidation / replacement.

The committee is also responsible for looking into

the redressal of shareholders' and investors'

complaints and other areas of investor services.

The Company has constituted a Management Board

with a primary aim to follow the best practices of

Corporate Governance with a view to maintaining

strong business fundamentals and delivering high

performance through relentless focus on the affairs

of the Company including its India, South Africa and

Europe Operations. The Management Board

ensures uniformity and exchange of best practices

across geographies, debates and finalises the

growth plans of the company, and works to

implement them. It upholds regulatory and legal

compliances and works to ensure benefits accrue to

all stakeholders, across all geographies.

The objective of the Management Board thus is to:

n Bring uniformity in policy making process for key

functions undertaken at corporate level;

n Sharing & promoting implementation of process

improvements and best practices and

n Analyzing certain key operational matters /new

projects, to enhance stakeholders' value.

Management Board

Note: For more information on Governance,

Commitment and Engagement, please refer to the

Corporate Governance Report in the Annual Report

for the year 2011-12.

Governance-The Code of Conduct In compliance with Sescurity Exchange Board of

India (SEBI) guidelines apollo has framed three

defined code of conduct :

n Code of conduct for insider trading

n Code of conduct for directors and senior

management

n Code of conduct of corporate disclosure

practices

The Company 's activities exposes itself to a variety

of risks including market risk, sales risk,

environmental risks, regulatory risks, product

liability and liquidity risks. The Company's overall

risk management seeks to minimize potential

adverse effects on its performance.

A Risk Management Steering Committee of the

Company has been formed headed by Chief of India

Operations as Chairman of the Committee and

represented by the functional heads as Chief Risk

of f icers. The Committee embraces the

identification, assessment, mitigation, monitoring

and reporting of material risks faced by the

Company.

The Risk Management Steering Committee meets

quarterly and discusses the updated profiles of

major risks in each functional area together with

possible mitigation controls and action plans. The

objective is to assist the Board to maintain high

standards of business conduct and to protect the

Company's assets, achieve sustainable business

growth and ensure compliances with applicable

legal and regulatory requirements. The

Board/Audit Committee periodically reviews the

risks and opportunities and plans to mitigate the

same.


Risk Management Steering Committee


Key Impacts, Risks and OpportunitiesThe 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 capitalise and maximize benefits to

our operations.

Economic Risk

Our 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 centres, 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 capitalise on this, we have focused on

increasing our market share in the trucks and bus

radial (TBR) tyres business. Our approach centres

upon creating a dedicated brand for TBR tyres by

capitalising on the shift in technology to meet

customers' requirements, which will allow us to

enter profitable markets.

In Europe, there is a dedicated market for winter

tyres that allows for high profitability, but the

seasonal nature of this market creates a risk on

sustained profitability throughout the year. We have

implemented financial safeguards and expanded

our overall product range to compensate potentially

low winter sales.

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

n Slow down in the economy in India,

Europe & South Africa

n Currency fluctuation

n Changing business environment

impacting profitability in India

n Seasonal requirement of winter tyres

in Europe

n Raw Material Availability

n Energy Consumption

n EU Tyre Label for energy efficiency

of tyres

n Providing skilled manpower with a safe

working environment

n Organisational succession planning

n Providing awareness on serious diseases


At Apollo Tyres, we know that a fundamental part of

a motivated and skilled workforce centres 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 organisation. In

our Indian operations, we have developed and

promoted a Behavioural 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 organisation.

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 full

fledged HIV assistance program that provides

awareness and support to truck drivers on the

epidemic of HIV.

Public Policy Positions

Corporate

World Economic Forum

Brookings Institute

An independent international organisation committed to improving the state

of the world by engaging business, political, academic and other leaders of

society to shape global, regional and industry agendas.

Issue of Participation: Interact with industry peers to influence global,

regional and national policy decisions.

Level of Paticipation: Chairman, Vice Chairman & CEOs

The Brookings Institution is a non profit public policy organisation based in

Washington, DC. Their mission is to conduct high-quality, independent

research and, based on that research, to provide innovative, practical

recommendations that advance democracy, economic and social welfare and

secure a properous and cooperative international system.

Issue of Participation: Leverage thought and research to promote greater

welfare on a global, regional and national level.

Level of Participation: Chairman & Vice Chairman

Association Participation

Zone IAssociation


To work with government and industry partners to proactively develop

a better business climate in India and bilateral trade relations outside India.

To work with government and industry partners to proactively develop

a better business climate in India and bilateral trade relations outside India.

To create a strong Indian tyre manufacturing sector, producing high quality

products which address customer needs by leveraging the latest in research

and development

To interface with State and Central Labour Departments for conflict resolution

and policy formulation

As member of KMA Governing Body, voice the issues of general management

and concerns to government as well as to the public

Member of ESIC Regional Body, the policy making body of the ESIC

Faculty support for trainings organised by the Rubber Board, a central

government agency

Confederation of Indian Industry

Federation of Indian Chamber of Commerce & Industry

Automobile Tyre Manufacturers' Association

National Institute of Personnel Management

Kerala Management Association (KMA)

Employees State Insurance Corporation (ESIC)

Indian Rubber Institute

Zone EAssociation

RecyBem

European Tyre & Rubber Manufacturers' Association

Dutch Assn. of Rubber and Plastic Manufacturers

AWVN

To promote the recycling and-reuse of tires in Europe. CEO of Apollo

Vreidsten BV is the chairman of the organisation. RecyBem is an organisation

that works to stimulate recycling and re-use in the field of tires in Europe

To work with government and industry partners on EU legislations for tyres

To work with government and industry partners on Dutch legislation for

plastic and rubber. AVBV is a member of the steering committee on

Innovation Products

To work with government and industry partners on Dutch legislation for

employment


Participation

Participation


Zone AAssociation

To create a platform to effectively and adequately communicate with and

lobby all levels of government and other strategic stakeholders on behalf of

the eThekwini business community.

Durban Automotive Cluster (DAC)

Durban Chamber of Commerce and Industry (DCCI)

To promote and improve the commercial, industrial, civic and social welfare

of the Town of Ladysmith and its trade area.

KZN Growth CoalitionTo promote the image of KwaZulu-Natal (KZN) as the leading investment

destination for investment in the country.

Ladysmith Chamber of Commerce

To promote and improve the commercial, industrial, civic and social welfare

of the town of Ladysmith and its trade area

Manufacturing, Engineering & Related Services Education and Training Authority (merSETA

To ensure National Skills Development Strategy is fulfilled through

facilitating skill development in tyre manufacturing and plastics industries.

New Tyre Manufacturers Employers Association

To establish industry norms for wages and benefits in the tyre industry

National Association of Automotive Component and Allied Manufacturers (NAACAM)

To represent the interests of the automotive component manufacturers in

South Africa

National Business Initiative (NBI)

To promote sustainable growth and development in South Africa through

partnerships, practical programmes and policy engagement

New Tyre Manufacturing Bargaining Council

To negotiate Collective Agreements and serves as a forum between tyre

manufacturers and Unions for purposes of negotiating benefits and wages

South Africa Tyre Manufacturers Conference (SATMC)

To look at industry issues and interface with the government on policy

developments

South African Tyre Recycling Process Company (SATRP)

To promote effective waste management of tyres in South Africa through the

SATRP Integrated Waste Tyre Management Plan

Security Association of SA (SASA)

To promote awareness and act as a common voice to ensure businesses are

compliant and abide by the laws that govern industry


Participation

24 Management Approach 2011-12

Management Approach

inked to the vis ion

s t a t e m e n t , t h e Lo r g a n i s a t i o n ' s

management is conscious of the

responsibility it carries for all its

operations and has initiated a

journey on sustainability. The

objective is to put in systems to

integrate the triple bottom line

approach as a way of doing

business and involve, influence

a n d i m p a c t i t s m a j o r

stakeholders positively in the

process.

Sustainability at Apollo Tyres forms a part of the

larger corporate strategy. The Apollo growth

journey for the next five years is described as AGILE

– Apollo Growth Innovation Leadership Excellence.

Built around the key pillars of Quality, a Common

Culture, Sustainability and Innovation, AGILE is a

showcase of the management commitment towards

driving sustainable growth across all its operations.

Driving Sustainability


At our manufacturing locations, sustainability

teams work with quality and management system

teams to monitor compliance levels and

sustainability performance based on planned

activities, objectives and targets. These teams

report to the local coordinator who ultimately

reports to the corporate representative for

sustainability. This process is followed in all

operations in Zone I, E and A, respectively. The

corporate sustainability team supports the unit level

sustainability teams to strengthen the performance

locally and across the organisation collectively.

Currently we drive sustainability through existing

systems in place such as our Integrated

Management Systems. By utilizing available paths,

we are able to ensure that we progressively build on

our strengths to comprehensively integrate

sustainability into our operations.

Management Structure – Integrated Management Systems

The company's commitment towards continually

enhancing stakeholder value is demonstrated by

the Integrated Management Systems to continually

improve its environmental and social performance.

All operations of the organisation are certified to the

ISO 14001 standard for Environmental

Management Systems. Our India and South African

Plants are also certified to the Occupational Health

& Safety Management Systems of OHSAS 18001.

By instituting an Integrated Management System

for Environment and Occupational Health & Safety,

we have engrained a systematic approach for

continuous improvement on these 2 key areas of our

work. Policies for Environment and Health & Safety

(EHS) outline the commitment areas of the

organisation along with targets to be achieved, in

line with the overarching vision and strategy for

EHS management and performance.

Our activities on improving EHS performance

derive from the aims of our EHS policy and a

continuous process to build on previous objectives

and operations. At Apollo, we are focused at going

beyond statutory compliance with respect to

environmental factors. This approach is

demonstrated by investment in new facilities and

technologies and extended to improving product

quality to reduce their negative environmental

implications during use.

As we expand and incorporate new units to the

Apollo Tyres global operations, we will continue to

implement Integrated Management Systems at new

sites and streamline their operations by managing

quality, environment and occupational health and

safety in an integrated manner.

Human Resource Development

Apollo Tyres' sustainability journey is driven by our

employees, who are also one of our major

stakeholders. We ensure that our workforce is

skilled and qualified to drive our company forward,

by providing them with capacity building and

training opportunities that is aimed at creating a

mutual benefit in developing our employees to

enhance our business. To ensure a satisfied

employee population we have to ensure that their

work environment is safe, matched with monetary

satisfaction and equally robust rewards and

recognition schemes. We strive to push our

employees to realize their potential and continually

award them for their efforts in continuing the Apollo

Tyres' growth.

Monitoring and Review

The Board of Directors, at the time of review

meetings discuss the status of the key challenges

related to Apollo Tyres' sustainability journey.

This is a key part of the management update,

with special emphasis on the way forward, targets

and timelines.


Human Resource


An organisation is defined by the human capital

it holds. The bandwidth of experience, skills,

innovativeness and dynamism makes it a living

and breathing organism with human touch and feel.

At Apollo, we are very conscious of the strength

we possess as our employees. Our HR vision is ‘to

be a strategic partner to the business and create

value for the organisation by developing the human

capital’. Apollo has a clear growth strategy marked

for the next five years and people development

and management is vital to this growth.

We have been expanding our reach in new markets

and geographies. With operations in South Africa

and Europe, we have a multicultural, multilingual

workforce. A culture which helps the organisation

in bringing cross border teams together is the key

for a sustainable growth. As part of the integration

process a need to redefine and broad base the

existing values (CREATE) was felt. A process to

re look CREATE was initiated.

Under AGILE cross functional and cross regional

teams were formed. Common culture workshops

were conducted to take the feedback of these teams

to understand people sentiment and sensibilities

across the regions. As a process all suggestions

from all regions were incorporated and CREATE

became The Apollo Way.

The Apollo Way describes five simple values i.e.

Business Ethics, Care for Society, Empowerment,

One family and Communicate openly, as a way of

life in the organisation. Going forward a series of

workshops and communication is planned to now

take this new value system across the company.

In today's business environment businesses need

to innovate constantly to keep pace with the

challenges. To support our growth journey we

have been working towards creating an

integrated workforce that is future ready. Cross

geography movements, training and development

strategies, recruitment practices, reward &

recognition and employee motivation strategies are

the key focus areas.

Learning & Development

There is a structured process for training and

development within the organisation at both

corporate and local level. The skill requirements are

mapped and the training calendar is developed as

per the identified requirement. The trainings are

both in the functional as well as soft skill areas.

There is an established strategic leadership

programme under the aegis of Apollo Laureate.

Apollo Laureate has partnerships and tie ups with

various institutes, universities and industry to build

the learning culture.

The programme is across middle to senior

management level and spans all regions. For

example for mid management level employees we

have Advanced Learning Development Programme

(ALDP) which is in partnership with IIM Bangalore

in India and with Stallenbosch in SA. Similarly we

have Enhanced Leadership Programme for Senior

Management, which is a global program and is

partnered with a global consulting firm like Nelson

Cohen. We also have tie-ups with IMD Switzerland

and INSEAD for top management programs. Along

with management, there is focus on technical

leadership programmes (TLDP) in partnership with

global Universities and Industry experts

encouraging the development of technical know-

how for the R&D team and for them to understand

the latest developments in area of Tyre Design, Raw

Material & Compound and Process technology.

Cross Geography Movement

With the oversees acquisitions Apollo has not only

added profitable operations but a considerable

talent pool. As a strategy, we have worked

consciously at leveraging this talent pool. Cross

geography movements help in developing leaders

across borders. Knowledge and best practice

sharing has brought in efficiencies from which the

organisation has benefited.

We also have an intensive Manufacturing

Excellence program for our young engineers with

NITIE – to understand the latest developments in

the area of manufacturing and quality. Six Sigma

workshops are being regularly conducted,

certifying persons as Black / Green / Yellow belt. We

have also tied up with Apollo Technical Education

foundation for skill development of our junior team

members from Manufacturing, Quality and

Technical areas.

With immense focus on functional and technical

skill development, a lot of product knowledge

workshops for sales & marketing team has been

designed which would be conducted by our internal

trainers. Our plants too, locally have a strong

training calendar covering functional and

behavioral for the employees.

The organisation in its effort to create and

encourage a learning culture has online library

“KWENCH” in place. We have

also recently launched our “E-Learning” drive

wherein popular courses are assigned to employees

individually, as per their training needs which needs

to be completed online. This gives each employee

the ability to self-learn at their own pace and

addresses core skill area development.

workshops

and

learning systems

Performance Enhancement

The performance philosophy at Apollo Tyres seeks

to drive excellence across the organisation while

ensuring alignment of employee efforts with

company goals and maintaining the integrity of the

per formance management system. The

performance and competency enhancement

system (PACE) was a result of partnership with

Mercer India. PACE is an online system and brings

in the transparency in the entire performance and

evaluation system. It helps aligning the objectives

of operations and regions with the corporate

objectives; further streamlining it with department

and individual key result areas. PACE currently

operates in India and South Africa operations.

Going forward in our sustainability journey, the

company is focusing on strengthening system,

processes and policies to manage and develop

talent. We are working on a company wide

structured succession plan and focus on more

horizontal cross functional and cross region

movements.

Employee Engagement

We believe that an engaged employee is a happy

employee who will contribute more to the

organisation. With this, several employee

engagement activities are done both at corporate

level and at plant / field level. One of our core values

is “One Family” – encouraging this each location

has their own family day wherein employees come

together with their families for a day long

celebration. They interact with each other; get to

know each other's families and thereby

strengthening the bond between themselves and

the organisation. Some of these engagements

include children programmes during summer

break, corporate sports tournament and local

birthday celebrations.

We also have a robust reward & recognition

program at Apollo. Ranging from “pat –on –back”;

instant recognition schemes to long term service

recognition, we have a full kitty of innovative

schemes to keep an employee motivated and to

recognise the efforts put in by an individual. These

rewards range from cash rewards, coupons, foreign

trips, domestic trips, certificate of recognition and

other goods.

Along with this, equal importance is given to

employees health and wellness. We have a strong

Group Hospitalization policy, wherein each

employee and his/her family are covered for

medical aid up to a pre-set amount. An employee

therefore in cases of emergency and medical aid

can opt to take from the GHS at Apollo. This helps

the employee to address any of his/her medical

needs, which requires hospitalization with a stress-

free mind. Our locations – Head Office and Plants

have an in-house doctor who is there for any

employees immediate health problems. This is

given as a benefit to the employee – free of cost to

him for the betterment of his health. Along-side we

have regular health camps and talks on a better life

at each premise.

Safety too is of paramount importance at Apollo – as

we believe an employee's life is an extremely

critical and sensitive to be taken lightly. With this,

various safety sessions are held at the plants and

field wherein employees are coached on how to

safely manage their lives during and after office

hours – this includes things like road safety too for

field employees.

28 Management Approach 2011-12 Sustainability Report 2011-12 29

Purchase is a centralized function at Apollo, based

out of it's Corporate Office and is mainly

responsible for global purchasing of raw materials,

capital equipment and machinery.

Performance Enhancement

“To be a strategic partner to the business in the

Apollo Growth Innovation Leadership Excellence

(AGILE) journey through leadership in cost, quality

and service leading to customer delight”

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.

Approximately

HIV-AIDS Awareness Workshops for Supply Chain Partners

Stakeholder dialogue and management is essential

to the growth of any organisation. At Apollo we have

worked on the engagement aspect with our supply

chain partners on a proactive basis.

Apollo conducts HIV-AIDS awareness workshops

Corporate

Purchase and Corporate Social Responsibility

teams. These sessions are typically a day long, with

representation from both the managerial staff and

the workmen. These strategic initiatives are in line

on a periodic basis to spread awareness at the

vendor plants on HIV AIDS prevention. These

workshops are conducted jointly by

Purchase


with Apollo's risk minimization strategy by

integrating social and environment performance

with business strategy, and thereby also create

synergy with Corporate CSR initiatives.

Till date, 26 vendor plants have been covered under

this initiative by Apollo Master Trainers, directly

training approximately 550 participants from

vendor organisation. They have in-turn conducted

workshops at their end and further imparted

trainings to 10,000 persons in their

operations respectively.

approximately

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.

n New material selection

While selecting new materials, such materials are

adopted which satisfy various requirements related

to reduction of environmental burdens.

n 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.

n 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.

n 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.


The R&D vision of Apollo is to develop sustainable

technologies and products ensuring interest of all

stakeholders. This helps in formulating business

strategies that reduces risk and increases

shareholder value. With the mission to develop

tyres by “doing good to sustain our environment”,

R&D efforts have been able to improve the

conversion costs, achieve reduction in waste, better

frequency distribution of outgoing product quality

and enhancement of production capacities.

Our R&D philosophy, thus, is based on

‘The Four Principles’:

n

exploitation of non renewable materials from

the Earth by using biomaterials or green

materials in tyre.

n Eliminate contribution to the progressive

build up of chemicals or compounds/waste

(for example, dioxins, PCBs, and DDT)

n Eliminate our contribution to the physical

degradation and destruction of nature

and natural processes.

n Eliminate our contribution to conditions that

undermine people's capacity to meet their basic

human needs (for example, unsafe working

conditions).

Eliminate or reduce our contribution to the

Our commitment continues in our collaboration

with our customers to roll out products with

reduced fuel consumption by achieving low rolling

resistance (RR) and thereby reduced carbon

footprint. To cater emerging needs of the

organisation in its next ambitious journey of AGILE,

R&D is emphasising and evaluating lot of

sustainable innovation in the areas of new

materials, compound development, design and

simulation. This will make our products more

competitive, environmental friendly and a preferred

brand.

For this, the department is geared up by up-grading

its facility and skills, adopting various efficiency

improvement measures, adding experienced

manpower. Specialization through education,

training and exposure to application is accordingly

imparted and planned for the respective personnel.

Some of the key R&D sustainability focus areas

at Apollo include:

Development of Low RR Tyres

When a tyre rolls on the road, mechanical energy is

converted to heat as a result of the phenomenon

referred to as rolling resistance. Effectively, the tyre

consumes a portion of the power transmitted to the

wheels, thus leaving less energy available for

moving the vehicle forward. RR therefore plays an

important part in increasing vehicle fuel

consumption. In this remarkable journey, we were

able to reduce the rolling resistance of tyres by

adopting compounds containing silica fillers

without any loss of traction characteristics.

Mass Reduction & RR Improvement for Cross-ply Tyres

We were successful in designing truck bus cross-

ply tyres with reduced number of plies using special

quality nylon tyre cords.

This resulted in saving of precious petroleum

derived raw materials, energy reduction

(by manufacturing less material) and thereby

reduced CO emissions. Marginal improvement in 2

RR was also observed by this activity.

Research and Development

Utilisation of Powdered Tyre Crumb/Devulcanised Rubber in Compounds

Usage of powdered tyre crumb/ devulcanised

rubber help to eliminate waste that would otherwise

go to landfills; therefore, reducing the progressive

physical degradation and destruction of nature and

natural processes. Usages of 450g of rubber

Process Energy Savings

new construction will lead to significant power

saving (for not running squeegee calendar)

besides material cost saving (approximately Rs

45/tyre). In addition to this, new manufacturing

process will eliminate fabric waste generation at

squeegee application (approximately 30% of the

total fabric waste) and release extra production

capacity at squeegee calendar.

Health and Safety

Health and safety is duly considered during all

process of tyre manufacturing and distribution –

production, marketing and promotion, storage

distribution and supply, use and service, and finally

disposal, reuse or recycling. All kind of

carcinogenic and toxic materials have been

identified and substituted. The product is evaluated

and certified by independent agency keeping health

and safety norms in mind.

The usages pattern in different product categories

are closely studied, according to which the safety

of the product is developed. Educating customers

for correct usages, maintenance and fit to

application has enhanced health and safety aspect

of the product.

Key health and safety initiatives include:

n

(VOC) from process

- Elimination of outer lube for green tyre

(unvulcanised/ uncured tyre)

- Implementation of water base inner lube for

cross-plytyres

n Compliance to REACH regulation for all radial

products

In our approach we take the EU legislative

requirements as the leading edge, since they are

currently the most stringent in the world. We work

closely together with the European tyre industry in

the European Tyre and Rim Technical Organisation

(ETRTO) and the European Tyre and Rubber

Manufacturers Association (ETRMA). Examples of

those EU legislations are REACH and the labeling

directives that are closely followed and fully

supported. All our radial tyres are REACH

compliant. There is also periodic testing and

certification carried out for our radial products

Elimination of volatile organic compounds

n Single pass Banbury mixing of compounds

M i x i n g r u b b e r c o m p o u n d s f o r t y re

manufacturing are performed in multiple stages,

2 or more stages in internal 'Banbury' mixer. An

innovative mixing technique has been developed

for some of the high volume compounds by

completing entire mixing in a single step in place

of conventional two steps inside the banbury

mixer. This is done by a method called,

Sequential Programmed Addition of Ingredients

or SPAI. This mixing process has been

implemented in soft compounds and the time

saving achieved is approximately 1.0 minute per

batch, which on total volume of selected

compounds will translate into a saving of 400

minutes of Banbury time per day. This translates

into huge amount of energy saving and thereby

reduced CO emissions.2

n Adoption of optimized squeegee construction

Conventional bias tyre construction is with full

width squeegee application on all the plies. The

tyre construction was modified with a 'special

squeegee less' lay out with narrow width

squeegee strips only at the turn up area, thus

eliminating full width squeegee from all other

inner plies. This has helped to reduce the number

of squeegee in the tyre, eliminating squeegee

application process substantially. More than

15,000 number of truck tyres are being produced

every month with this special construction.

Performance of tyres so far has been very

encouraging. Complete implementation of this


powder is equivalent to saving of 10 KWh of

electricity.

R&D has thus suitably developed and implemented

several compounds for utilising powdered tyre

crumb/ devulcanised rubber and partially avoid the

use of virgin materials that are extracted from the

earth's crust. This includes oil or gas needed to

make synthetic rubber as well as carbon black,

silica and many other additives used in a typical tyre

compound that are derived from oil. Powdered tyre

crumb/ devulcanised rubber help avoid the increase

in the amount of industrial and consumer waste, as

well as carbon dioxide.

being free of SVHC's (Substances of Very High

Concern) and PAH (Polycyclic Aromatic

Hydrocarbon).

Way Forward

In the coming 5 years the reduction of RR without

compromising on Safety will be focus points in

all our developments. This will be tracked through

the grading levels of our European products.

New polymers and required processes will be

implemented. A new mixing technology will be

installed in Zone E.

Further, there will also be increased focus on the

development of Green materials such as:

n Alternate sources of natural rubber such as

Guayule & Dandelion

n Material having the potential of higher cut

growth resistance, better wear properties and

low RR such as, rice husk silica

n Utilisation of Nano Calcium Carbonate as new

generation filler, having huge potential

of reducing rolling resistance and better barrier

properties, without usage of coupling agent.

n Utilisation of Vegetable oil: Exploring possibility

for replacement of petroleum based oil as

process aid.

n Epoxidation of NR for increasing the polarity

of the polymer, glass transition temperature and

improving silica interaction, thereby eliminating

the use of coupling agent.



Method of Engagement FrequencyStakeholder

Employees

Function evaluation meeting

Employee Satisfaction Survey

Bilateral meetings

Works council

Information to employees (eg financial / results / sales versus budgets)

Collective bargaining discussions with unions (India only)

Formal meetings of New Tyre Bargaining Council (South Africa Only)

Customer interactions for requirements

Dealer interaction (India Only)

Customer satisfaction surveys (India only)

Customer and dealer regional meets (India Only)

Continuous dialogue with OEMs and dealers through face-to-face meetings, email and telephone

Disclosure between OEM and Apollo Tyres Ltd

Market survey to investigate expectations, developments to future tyre specs from customers

Customers (OEM)

Consumers (Replacement)

Dealers

Suppliers

Pre-business interactions through site visits between suppliers and Apollo Tyres Ltd

Global partner conference

Natural rubber meet (India Only)

Joint technical partnership programme (India Only)

Purchasing meetings

Vendor rating system

Investors& Analyst

Analyst interaction through calls, meetings and conferences

Business performance updates to investor community

Shareholders

Communication with shareholders through letterand report

Annual General Meeting

Regulatory Bodies Compliance to applicable statutory requirements

CommunityInteraction before conducting and during community development events/ programmes

Annual

Annual

Ongoing

Monthly

Biannually

Biennial

Quarterly

As and when required

Daily

Annual

Quarterly



Annual


Biennial

Annual


Annual / Biannual

Annual / Biannual

Weekly & monthly

Quarterly & annually

Annual

Annual

As per statutory requirements

As per planned frequency of events/ projects

Stakeholder Engagement

PRODUCT

ComplianceR

eporting

Economic

Performance

Transparency

ECNANREVOG

New

Pro

duct

D

evel

opm

ent

Qua

lity

Label

ing

End Of Life

Communication

Material Use

EMS: ISO 14001 Energy UseW

ater Use

Was

te

Man

agem

ent

Em

issi

ons

Hab

itAt A

pollo

LAI

CO

S

The

Apollo

Way

Apollo

Val

ues

Decent

Working

Environment

Health & Safety

Training

Human Rights


Local Community

Regulatory Bodies / International Requirements

Investors

Shareholders

Supply Chain

Customers

Employees

Stakeholders

Stakeholder Materiality

36 Economic Performance 2011-12

Economic Performance


conomic sustainability is

a crit ical driver of Egrowth . A t Apo l lo ,

economic value creation is the

main consideration while taking

any decisions, as opposed to

financial growth alone.

To ensure this Apollo has robust processes and

structures in place to meet the business and quality

goals. The year 2012 saw introduction of more

advanced products across customer segments.

Economic Value Generated and Distributed

Direct Economic Value Generated

Economic Value Distributed

FY 2010-11FY 2011-12

Mill

ion

Rup

ees

88,8

28

92,6

54

121,

533

128,

607150000

120000

90000

60000

30000

0

Economic Performance 2012 as per EC1 of GRI G3

NOTE: For detailed information on economic performance please refer to Annual Report 2011-12

0

30000

60000

90000

120000

150000

Net SaleEBIDTA

Net ProfitCash n Cash Equivalents

88,677

121,533

10,160

11,987

4,401

4,099

1,730

1,908

FY 2010-11

FY 2011-12All figures in million Rs.

Operating Costs 74.88%

Employee Wages and Benefits10.38%

Payments to Providers of Capital2.43%

Payments toGovernment12.28%

CommunityInvestments

0.03%

Details of Economic Value Distribution in 2011-12

38 Economic Performance 2011-12

Financial Performance

South Africa Significant Financial AssistanceRs. 179,067 million

India Significant Financial AssistanceRs. 1,610.23 million

Europe Significant Financial Assistance

Rs. 122,792 million

NOTE: The total significant financial assistance in Europe and South Africa has been converted from Euros and South African Rand, respectively, to Indian Rupee using the exchange rate conversion as on March 31, 2012.

Significant Financial Assistance from Government as per EC 4 of GRI G3


Significant Financial Assistance from GovernmentZone I (Apollo Tyres India)

We have received the following significant financial assistance from the Dutch government:

n Subsidies: Rs. 106,116

n Investment grants, R&D grants, and other relevant types of grants: Rs. 16,676 million

million

We have received the following significant financial assistance from the South African government:

n Financial Incentives: Rs. 26,925 million

We have received the following significant financial assistance from the Indian government:

n R&D expenditure: Rs 194.58 million

n Deduction U/s 80IA of Income Tax: Rs. 50.39 million

n Investment grants, R&D grants, and other relevant types of grants: Rs. 272 million

n Advance Licence Benefit: Rs. 753.26 million

n Imports under EPCG Scheme: Rs. 340 million

Zone E (Apollo Vredestein BV)

Zone A (Apollo Tyres South Africa Pty Ltd)

40 Environment & Social Performance 2011-12

Environment and Social Performance(Geography Specific)


he year 2011-2012 has

seen increasing focus on Tour environmental and

social performance. Efforts on

improving product quality,

new product development,

alternative material, energy and

water efficiencies and reduction

of emissions have been the driver

of our environment journey.

Increasing focus on safety and occupational health

of our workforce, community development and

ethical practices in our operations have been the

social agenda for us. In the next few pages the

achievements on environment and social

parameters have been disclosed.

Sustainability Report 2011-12 43 42 Environment Performance 2011-12

Environmental ManagementAt Zone I, we aim to ensure minimal impact to the

environment from our operations. Under integrated

management system we are certified for ISO

140001 for all our manufacturing locations in India.

We work throughout our value chain – upstream

and downstream – to develop products with a view

of mitigating the hazardous environmental impacts.

For example, our partnership with various car

manufacturer such as Tata Indica and Mercedes

Benz has led to customising tyres in order to reduce

their weight and increase performance. This not

only leads to lesser raw material usage but also

increasing energy efficiency.

The total environment management expenditure

in the reporting period was Rs 22.29 million.

Environment Management Expenditure

Material Consumption

Raw material security is a key area that is important

for our manufacturing activities. In India operations

we aim to address this by developing and improving

alternate supply channels for key raw materials,

primarily natural rubber. The major consumer of

natural rubber is the tyre manufacturing industry,

which is the main component in our products. The

use of synthetic rubber is not as predominant in

India due to abundance of natural rubber that is

grown within the country. Despite this, changing

weather patterns have been found to affect natural

rubber growth making it crucial for us to develop

alternative supply paths for materials.

Reduction of specific material consumption is

another area for addressing raw material security,

which we practice by ensuring efficient use of

materials in our processes. Listed below are key

achievements towards in our Indian operations

towards enhancing material consumption

efficiency:

n Reducing resource depletion by decreasing

tailings generation from 110 kg / day to 3 kg / day

from Extruder mixing mills

n Reducing resource depletion by decreasing

tailings generation from 90 kg / day to 3 kg / day

from Calender hold on mill

n 50 % reduction of compound degradation by

preventing lumpy compounds in calendering

process

n Reduction of tread cement spillage

n Reduction of Naphtha consumption from 5.9

litres / Mt to 5.0 litres / Mt

Recycled Materials

Raw Material Consumption as per EN1 of GRI G3 (Indexed)

Rubber, in the form of crumb rubber, is the main

material that is recycled in our Indian operations.

This is restricted primarily due to the nature of tyre

manufacturing, wherein most of the raw materials

are mixed to create a compound through heat and

pressure, rendering it difficult to recycle all the

excess materials from the manufacturing process. A

total of 1,646,733 kg of rubber was recycled in all

our locations.

Energy ConsumptionThe primary source of energy for our plants is

natural gas and coal, followed by grid electricity.

There has been a shift from furnace oil to coal for

boiler facilities, as a business decision. The

organisation is consciously exploring clean energy

mix in our consumption. For example, renewable

sources such as wind have also been utilised for

power generation in one of our plants. The focus

now is to increase this mix year on year.

Energy Management 68%

Water Management

10%

Pollution Prevention

10%

Waste Management 12%

Energy Consumption as per EN 3 & 4 of GRI G3

Diesel 0.42%

Coal29.44%Wind 2.6%

Electricity21.91%

Furnace Oil15.11%

Natural Gas30.51%

ZONE I

Total Indirect Energy Consumption758,001 GJ

Total Direct Energy Consumption

2,701,251 GJ

ENVIRONMENTAL PERFORMANCE

Material for packaging purposes

Quantity (%)Material

Strapping Rolls & Tyre wrapping material (kg)

Strapping Rolls (numbers)

92.89

7.11

Indexed Raw Material Consumption

Rubber 48.77%Carbon Black 24.91%

Chemicals 8.96%

Bead Wire 4.11%

Fabric 6.67% Steel Tyre Cord 6.59%

Note: Refer to the Material Consumption Table given on page-45

44 Environment Performance 2011-12

Energy Efficiency

Energy efficiency remains at the core of our

operations. Our approach is built around upgrading

the technologies of our processes and integrating

that with innovative IT software for monitoring and

maximizing efficiency.

These initiatives focus on thermal and electrical

efficiencies and improvements. For thermal

efficiency, our primary focus is on the use of steam.

In addition to reducing leakage, we aim to reduce

the quantity of steam required for key activities such

as boilers.

Thermal energy is primarily used in the component

preparation phase, where vulcanization occurs and

where the tyre compound is formed; and the curing

process where the uncured or green tire is

processed to become the final product. Electrical

energy is present throughout most processes due to

the high level of automation adopted by our

operations.

In our newest facility in Chennai, we have installed

an energy management software, ELNET, to

Energy Saved Due to Conservation and Efficiency Improvements as per EN 5 of GRI G3

Conversion and Retrofitting of Equipment95.59%

Process Redesign4.33%

Others 0.08%

Details of Energy Savings due to Efficiency Improvements as per EN5 of GRI G3

Process Redesign

Energy Savings (GJ)Energy Efficiency Activity

Maximising energy efficient screw chiller

Recovery of heat from contaminated condensate to

heat boiler feed water

Additional compressor at stage loading

1,900

1024

950

Conversion and Retrofitting of Equipment

Automation of coal feed control based on steam pressure in coal fired boiler

Replacement of header steam trap from Floatthermostatic (FT) & Thermodynamic (TD) to efficient Inverted Bucket (IB)

Steam cutoff installation over 4 idle hours in

steam trap

12,550

13,818

5,922

Leak correction cold water transfer in curing 2,534

Installation of Variable Frequency Drive for feed mills of Dual Extruder and Roll Calendar

1,900

Application of thermal insulation paint on hand hole flanges of tyre curing presses to reduce radiation losses

1.127

monitor the electrical energy consumption in the

plant. In this plant we have achieved savings of

13,222 GJ.

Total energy savings achieved across all plants

was 99,990 GJ

GHG Emissions as per EN 16 of GRI G3

200000

150000

100000

50000

0

Tonn

es o

f CO

Equ

ival

ent

2

Scope 1 Scope 2

197,049

160,175


Green House Gas (GHG) EmissionsFor the purpose of this report, we have considered

emissions under Scope 1 and Scope 2 as defined by

The GHG Protocol. The GHG emission factors for

the different energy sources, used to calculate our

GHG emissions, are based on the following

standards:

n Diesel, Furnace Oil and Natural Gas - IPCC

Guidelines

n Coal – India National Communication to

UNFCCC (2007)

n Electricity - Central Electricity Authority,

Government of India

Diesel 0.55%

Coal 48.73%

Natural Gas30.11%

Furnace Oil20.60%

Air EmissionsThe main sources of air emissions are boilers where

SOx and Suspended Particulate Matter (SPM) are

main air pollutants emitted. To address these

issues, we have implemented wet scrubbers,

electrostatic precipitators and mechanical dust

collectors at our plants to reduce emission levels.

Also, CFC free refrigerants are being used in our

operations in a phased manner to prevent ozone

depleting emissions.

NO , SO , and Other Significant Air Emissions x x

by Type and Weight as per EN 20 of GRI G3

500

400

300

200

100

0

Am

bien

t A

ir P

ollu

tant

s C

once

ntra

tion

3(u

g/m

)

NOx SOx Particulate Matter

34.0

284.

0

57.0

16.7

15.7

41.7

22.9

20.4 35

.1 48.2

432.

2

131.

2

ChennaiBaroda

Kalamassery

Perambara

Water ConsumptionOff the total water consumption in the reporting

period 2011-12 of 2,046,708 m3, our primary water

consumption (96%) is through surface water. The

remainder is from groundwater (3%). The

organisation is consciously working towards water

conservation projects. Currently we reduce, recycle

and reuse the process water in different

manufacturing and non-manufacturing processes.

For example, the installation of hot water deaerator

systems allows us to reduce the water consumed as

feedwater for boilers. Deaerators are primarily used

to remove the presence of oxygen and other

dissolved gases from the feedwater to prevent

corrosion damage to the steam systems.

Besides efforts to reduce the quantity of water used

in manufacturing processes, we reused or recycled

14.29% of the water consumed in our facilities back

into operations and activities. A common practice

across all our plants is reusing the treated water

from sewage and treatment plants for gardening

purposes. A reverse osmosis plant in our Limda

facility treats water from processes to be used back

again in the system, while the reject water is used

within the effluent treatment plants for chemical

dosing, cleaning and backwash.

Innovative systems for water conservation have

been implemented in our Chennai facility. As a

result, the specific water consumption has been

reduced from 5.12 litres / kg of product output to

3.32 litres / kg. A key feature in this plant is a zero

discharge effluent treatment plant where the

effluent outlet is recycled back to the processes

through ultra-filtration systems and reverse

osmosis plants.

46 Environment Performance 2011-12

At all our locations we have installed effluent

treatment plants (ETP) and sewage treatment

plants (STP).

The treated discharge from these plants is used for

various purposes including:

n Reuse back into the process

n Gardening

n Fire fighting purposes

n Land perculation

Total Water Discharge from STP and ETP was 3341,271.46 m / year.

The discharge quality of the ETPs and STPs are

regularly monitored towards compliance

standards. Contaminant levels throughout the

reporting period were found to be well within the

limits prescribed by regulatory authorities.

Water Discharge Quality

Quality of discharged water from ETP and STP as per EN 21 of GRI G3

Water quality parameters

LimitsConcentration

Kalamassery Perambara Chennai Baroda

pH 5.5-9.0 7.3 7.35 7.09 7.608

TSS (ppm) 100 42.3 mg/L 24.69 BDL 43.83

BOD (ppm) 30 20.6 mg/L 22.65 3 16.125

Oil & Gas (ppm) 10 1.0 mg/L 0.9 BDL 4.29

BiodiversityOur facilities in Limda, Kalamassery, Perambara

and Chennai are not located near any area within or

adjacent to protected areas and areas of high

biodiversity value outside protected areas.

Consequently none of our operations or products

have any significant impacts on biodiversity in

protected areas and areas of high biodiversity value

outside protected areas.

Note: Refer to the Water Discharge Quality Table below


Waste GenerationAs per the requirements of ISO 14001, a proper

waste management system has been implemented

in all the plants. Under this waste segregation

and reduction has been the focus area for the

year 2011-12.

Waste rubber and scrap tyres are the main sources

of waste material generated in our facilities,

reflective of the main raw material in our

operations. All waste products are disposed-off in a

responsible manner that is in compliance with legal

requirements either to authorized contractors or to

the common disposal facilities for hazardous

wastes.

Total Weight of Waste as per Type and Disposal Method as per EN 22 of GRI G3 (Indexed)

Non-Hazardous Waste

Waste Materials Quantity(%) Disposal

Beads removed from cut tyres (tons) 5.32 Disposal through authorized contractors

Other Rubber Wastes (tons) 6.17 Disposal through authorized contractors

Scrap Cut Tyres (tons) 27.63 Disposal through authorized contractors

Bladders (tons) 3.76 Disposal through authorized contractors

Workaway and rubber compound (tons) 8.77 Disposal through authorized contractors

Rubberised Fabric (tons) 9.90 Disposal through authorized contractors

Other Non-Hazardous Wastes (tons) 34.18 Disposal through authorized contractors

Empty oil drum (nos) 4.27 Disposal through authorized contractors

Environmental ComplianceApollo Tyres India takes all necessary approvals

from the relevant government authorities, such as

Pollution Control Boards, before embarking on

any project. The applicable environmental

requirements are monitored at all stages during

project execution at the manufacturing facilities to

ensure compliance with environmental legislations.

During the reporting period, no incident of non-

compliance was reported and no fines were

imposed.

ETP Sludge (tons) 10.30 Disposal to Common TSDF facility

Used Oil (tons) 11.95 Disposal through authorized contractors

Scrap rubber compound (tons) 53.50 Disposal through authorized contractors

Assorted Hazardous Wastes (tons) 7.27 Disposal through authorized contractors

Used Containers (tons) 16.98 Disposal through authorized contractors

Hazardous Waste

Waste Materials Quantity(%) Disposal

48 Social Performance 2011-12

SOCIAL PERFORMANCE

Labour PracticesThe majority of the workforce in Zone I is employed

on permanent basis. 78% of our labour force is

permanent; balance 24% of the work force

comprises contactors and casual labourers. Our

labour practices work towards ensuring a sense of

job security and comfort through benefits

applicable to permanent employees.

Currently the gender composition of the workforce

is primarily male dominated. However, the

organisation is consciously working towards

recruiting female workers/ employees to bring in

the gender balance.

Employee Benefits

Apollo's labour policies comply with statutory and

regulatory requirements for the payment of wages

and benefits. Payment of minimum wages

prescribed by the relevant authorities is 100% for

all employees. Statutory benefits like provident

fund, gratuity and medical care are provided.

Employees are provided with the benefits such as

life insureance, health care, disability/ invalidity

coverage, maternity/ paternity leave, retirement

pension. The Company has a defined benefit

gratuity plan. Every employee who has completed

five years or more of service receives gratuity on

leaving the Company at the rate of 15 days salary

(last drawn salary) for each completed year of

service. The plan liabilities are met by a fund

maintained with the Life Insurance Corporation of

India. There is no contribution made by the

employee towards the Gratuity scheme. The

contribution is made only by the employer to the

Life Insurance Corporation of India to the extent of

deficit in the value of fund assets with respect to

gratuity liability as at the balance sheet date.

Training and Development

In line with Apollo Tyres human resource

philosophy, there is a formalised system in place for

continuous training, skill development and

upgradation for all employees. The training needs

are identified as per the functional or behavioural

aspect. These are then subsequently provided as

per the training calendar identified. This is followed

up with a review mechanism to understand the

effectiveness of the trainings imparted.

Career and performance reviews are applicable

only to management employees and does not

account for workers. Out of a total of 4,068

management level employees, 69% receive

constant and continuous performance and career

development reviews.

The Average Hour Of Training Imparted per Employee per Year by Category as per LA 10 of GRI G3

2.5

2.0

1.5

1.0

0.5

0.0Workers Management

1.72

2.14

man

days

/ yea

r

Total Workforce: 10,526 Employees

Attrition rate of Permanent Employees: 13.41%

Extent of liability: Rs 603.76 million

Under integrated management system we are

certified for OHSAS 18001 in all our manufacturing

locations in India. The focus area for the year 2011-

12 has been Safety, wherein we have continuously

worked towards providing a safe work environment

at all our manufacturing locations. We have also

developed programmes focusing on health and

livelihood generation around our manufacturing

locations, demonstrating our commitment to

sustainable development.


As per statutory requirements of The Factories Act,

1948, we follow the requirements of providing a

minimum notice period of 21 days for all significant

operational changes of our employees. Freedom of

association is not at risk at any location of Apollo

Tyres Ltd. There is no published policy regarding

the same. However all operatives are members of

Trade Unions and right to freedom of association

and collective bargaining are legal rights available

to the workmen.

Health and SafetySafety has been a key focus area for us at Zone I.

To bring in a culture of Safety all across, a new

initiative called Behaviour Based Safety (BBS) was

launched in the year 2011-12. This initiative has

been launched in a phased manner, starting from

Limda. Under this training was undertaken with

the top management at Limda following up with

further training across the entire plant workforce –

including contractors and supervisors. BBS

compliments and enhances the Occupational

Health & Safety Manageent System as per OHSAS

18001:2007.

There is an IT based compliance dashboard

to monitor behaviour based safety. Currently

the dashboard is being revised with new

features inorder to monitor the on-time compliance

along with the adherence to the defined

specifications/parameters with respect to each

compliance, wherever applicable.

The fatality rate reported in 2011-12 was zero.

The total mandays lost through injuries,

occupational diseases and accidents for the

manufacturing location in India was calculated

at 5,839 mandays. Together with OHSAS and BBS,

our focus is to bring down the lost mandays rate

year on year.

The joint management-worker Health and Safety

committees are present Limda, Kalamassery and

Perambra . The topics covered and reviewed under

these committies are as per the formal agreements

with trade unions. For Chennai, the Health and

Safety committees are as per the new organisation

structure covering management and operators.

Some of the key health assistance programmes for

employees and their families undertaken across

plants includes:

n HIV-AIDS awareness across all plants

In June 2006 a workplace sensitization

programme on HIV-AIDS was rolled out in

partnership with International Labour

organisation. The programme targeted

employees across India operations. The

programme targeted employees across India

operations. The programme covers basics and

prevention aspect of HIV. It also focuses on the

behaviour change and de-stigmatization.

Regular and contract employees are reached

In Zone I, collective bargaining is applicable to Limda, Perambara and Kalamassery units. The Chennai plant, being a different organisation structure, is not covered under collective bargaining. The entire staff in Chennai is unaffiliated with any trade unions.

Percentage Of Employees Covered Under Collective Bargaining as per LA 4 of GRI G3

Note:n The graph does not include management, executive and operational personnel.

The 27% not covered by collective bargaining agreements are contract workers who are affiliated to third party contractors.

n

Collective Bargaining

Not Covered Under Collective Bargaining

Agreements 27%

Covered under Collective Bargaining Agreements 73%

Minimum Notice Period for Operational Change

Education, Training, Counselling, Prevention and Risk Control Programmes as per LA 8 of GRI G3

through more than 500 peer educators and 40

master trainers. Apollo also a workplace

policy on HIV-AIDS. The policy encompasses all

the ten principles of ILO code. Currently positive

employees and their families are benefiting

under the policy.

n

In order to curb the habit of tobacco chewing

among the contract labourers and employees,

preventive programme for awareness generation

on tobacco chewing was undertaken. Structured

workshops were conducted in partnership with

T.T. Ranganathan Clinical Research Foundation.

After one of the awareness programmes, an

employee came forward to seek guidance in

treating their family members in de-addiction

centers. An employee also came forward to

understand how to quit smoking. Similar training

sessions have been organised in Permabra plant

in Kochi as well.

n Anti-Alcoholism drive in Perambra and

Kalamassery

Alcoholism has been identified as a reason for

absenteeism in Perambra and Kalmassery. In

order to reduce absenteeism at workplace,

increase productivity and strengthen family

relations of the workers, Alcoholism awareness

has

Tobacco Chewing awareness in Chennai

Kalamassery

Perambara

Baroda

Chennai

Education / Training

Counselling Prevention / Risk Control

Treatment

Employees

Employees' families

Employees

Employees' families

Community members

Employees

Employees' families

Employees

programme was launched. In partnership with

TTK Hospitals, a training programme for

supervisors was undertaken targeting

alcoholism at workplace.

The programme has helped the officers to have

technical knowledge of how to deal with the

alcoholism in workforce, if any. This also helped

to improve the personal knowledge level of

officers. The counseling and awareness

generation through the training sessions has

overall contributed in safeguarding the families

from the psychological impact of alcoholism,

reducing absenteeism and thereby improvement

in the quality of work.

A total of 76 people were reached through

this programme in the first phase.

n General health check up camps focusing on

lifestyle diseases such as blood pressure, pulse

rate, health of the heart, weight check-up etc

across all plants

n Women Forum in Perambra, Kalamassery

and Limda

With the objective of improving the family relation

and also to improve the quality of life of our

employees we started the programme in Kochi and

Limda.


Human Rights

Product Responsibility

We do not have a dedicated policy on human rights.

However, principles of human rights are embedded

in our vision, values and code of conduct. The

Apollo Way provides the guidance on business

ethics and governance.

We ensure that across all our operations basic

human rights are respected and no violation with

respect to discrimination, child labour, forced

labour and security personnel, as per applicable law

is undertaken.

At Apollo we have a dedicated Research &

Development department that performs extensive

research and testing in order to meet customer's

expectations and provide them with highest quality

products and services. In line with the R&D work

conducted at a corporate level, our Indian

operations work towards enhancing the product

performance by monitoring health and safety

impacts, on a continual basis, of its products at the

following life-cycle stages:

n Development of product concept

n R & D

n Certification

n Manufacturing and production

Health & Safety Impacts of Products

Product Information and Labelling

Apollo Tyres Limited is committed towards

providing its customers adequate and accessible

information on the sustainability impacts of its

products and services. All such information is

disclosed to keep the customers well-informed.

Product information and labelling is particularly

disclosed for the safe use of the product. These

include:

n DOT, ECE, ISI & SNI Markings on each tyre where

it is required and applicable

n Brand Name, Size of Tyre, Speed Rating & Load

Index on each tyre

n Tyre Wear Life Indicator, Ply Rating and

Construction of Tyre

n Type of the tyres (Tube Type or Tube less) on each

export tyres


In order to ensure customer satisfaction with

respect to on-time delivery On Time In Full (OTIF)

tool is used. OTIF in supply chain describes the

logistic service level. The OTIF is fulfilled if the

product is delivered to the customer according to

the OTIF principles. It implies the percentage of

company's deliveries that are made on-time and in

full. It is also indicative of customer satisfaction.

The greatest value in measuring OTIF is to allow a

company to gauge its performance. Analysing the

reasons for OTIF moving up or down helps identify

issues to be addressed with respect to customer

satisfaction.

OTIF is a companywide report card. The system

requires takeoff and order entries to be exact,

appropriate inventory levels maintained, and

correct handling, staging and loading of materials.

As a result of OTIF, the efficiencies in our supply

chain have improved and resulted in customer

satisfaction.

Also, Apollo Tyres participates in a Vendor Rating

scheme whereby client carmakers rank the level of

performance of the vendor organisation based on

qualities including quality and delivery

performance. The Vendor Rating ranks a company

from 1 to 400, where an organisation achieving a

rating of 1 is recognised as a highly trusted and

valuable member. Over the reporting period,

Customer Satisfaction

The programmes are planned to make the women

self reliant and to develop entrepreneur skills.

These programmes cover topics such as:

n Leadership workshops

n Session on Gynaecology

n Session on health & nutrition

n Organic farming

n Session on Parenting

n Home visits

A total of 53 women were reached through the first

phase of the engagement.


Customer Privacy and Compliance

There has been no instance of breaches with

customer privacy and loss of customer data during

the reporting period.

Apollo Tyres Ltd takes all necessary approvals from

the relevant government authorities before

embarking on any project. The applicable

environmental requirements are monitored at

all stages during project execution at the

manufacturing facilities to ensure compliance

with relevant legislations pertaining to customer

health and safety, product and service labelling,

marketing communications and the use of our

products. During the reporting period, no incident

of non-compliance was reported and no fines

were imposed.

Cum

ulat

ive

Vend

or R

ank

Apollo Tyres has been able to generate a significant

rise in its image and performance amongst our

clients. We achieved a high average delivery

performance score of 233 out of a maximum of 300,

and correspondingly elevated quality performance

score of 648 out of a maximum of 700.The biggest and most comprehensive initiative

under company's CSR work is on HIV-AIDS

prevention and awareness. As per NACO, an

estimated 2.31 million people are living with HIV-

AIDS in India. Of these more than 88% infections

occur in the age group of 15-49 years. The HIV

prevalence among different populations is

considered to be highest among injectable drug

users, men who have sex with men, female sex

workers, migrant workers and truckers.

For Apollo Tyres Ltd, 70% of our revenues come

from the sale of commercial tyre vehicles.

Truckers form our largest consumer base.

Noticeably, however, they are at a high risk of

contracting the HIV virus. Apollo thus recognizes

HIV-AIDS as a business and development issue

having a potential of affecting not just truckers but

all our stakeholders. The company has targeted

interventions in the form of Health Care Centres in

transport hubs focusing on truck drivers,

commercial sex workers, and migrant labour in that

location; a workplace programme; and a supply

chain programme.

Society

HIV-AIDS Awareness & Prevention

Vendor Satisfaction Rank

Note: Refer to the Vendor Satisfaction Rank Graph below

2011-03 2011-04 2011-05 2011-06 2011-07 2011-08 2011-09 2011-010 2011-011 2011-12 2012-01 2012-02

Year - Month

401351301251151101

511

202

306

285

281

289 208

198 135

114

96

85

73


Small and medium corporate partners, from where

Apollo sources its raw materials, are identified and

prioritized to carry out the HIV sensitization and

awareness programmes. The programme typically

involves advocacy on the issue through a day long

sensitization session in the partner's premises. Till

date the programme has covered 21 companies

with approximately 420 peer educators trained,

who have in turn reached out to approximately 7000

employees.

Integration with Supply Chain

HabitAt Apollo

Paper Recycling HabitAt Apollo is Apollo Tyres umbrella

environment programme to make eco-friendly

behaviour, or green thinking, a matter of habit

within the organisation. Under this programme, the

focus is on conserving 3 key resources of paper,

energy and water; to be achieved through reducing

the usage of these resources, promoting reuse and

recycling.

The first initiative under the HabitAt Apollo

programme is related to recycling of paper. All

efforts are being made to ensure that every scrap of

paper which is used in Zone I is recovered and

recycled as far as possible. Championed by the

employees themselves, the initiative also attempts

to create a behaviour change, which goes beyond

the workplace and leads to employees adopting

eco-friendly practices even in their personal lives.

In just a few months, colleagues across head office

and all plants have collectively recovered 10, 433 kg

Health Care Centres for Customers (Truckers)

Targeted Interventions operate in the form of

'Health Care Centres' (HCC) in large trans-shipment

hubs in 20 locations across the country. The current

states and cities boasting of these clinics are

Delhi, Udaipur, Jaipur, Kanpur, Mumbai,

Nalagarh, Barmana, Kolkata, Ahmedabad,

Surat, Madhavaram, Poonamallee, Namakkal,

Krishnagiri, Tuticorin, Kochi, Ludhiana, Vijaywada,

Agra and Indore.

HCC are staffed with well qualified doctors,

paramedics, counselors and outreach workers. The

services (detailed below) include doctors'

consultation at a nominal fee, free medicines and

counseling facility:

Sexually Transmitted Infection (STI) -

Diagnosis and Treatment

The patients are given health registration cards

for a month at a nominal fee of Rs 15/-, which is

valid across all health care centres in the country.

Counseling

A patient who walks in, prior to and post the

medical check-up goes through a thorough

counseling session. The counselors at clinics also

look at partner's treatment and various linkages

with government agencies and people living with

HIV –AIDS (PLWHA).

Peer Educators (PEs)

Given the geographical spread of the transport

hubs and the migrant and mobile nature of

truckers, Peer Educators become effective

messengers of HIV-AIDS awareness and

referrals to the clinics. The PEs normally

constitute the mechanics, barbers, tea shop

owners etc in these transport hubs and remain in

close contact with the truckers on a day to day basis.

Behaviour Change Communication (BCC)

BCC aims to increase awareness and knowledge

about the spread and prevention aspect of HIV-

AIDS among truckers and allied population in

the transport hubs. BCC activities would be

carried out by the outreach workers and a

network of peer educators through one-to-one

and group sessions along with various

infotainment activities.

Condom Promotion

Condoms are made available at various outlets

n

n

n

n

n

HIV Programme Deliverables

Coverage through outreach activities 449732

Clients treated for STI 4701

HIV Testing 13366

and strategic points within the transport hubs.

The outreach workers and peer educators also

emphasize and educate the truckers on the

correct usage and disposal of condoms.

Note: The above graph recognises rating of 1 as being highest trusted and valuable.


Waste Management in Community

As per the needs assessment, waste management

has been identified as one of the prioritized needs of

the community of the Mathur and Oragadam

villages, Sriperumbudur taluk around Chennai

plant. Increased use and open dumping of plastics

and other wastes by the community, along with

deforestation, has lead to environmental

imbalance. The community thus needed to be

sensitized about this issue such that there is a

proper waste disposal system put in place, with

provisions for plastic recycling made.

Currently in the first phase of this programme, mass

awareness activities have been undertaken to

sensitize the community on the issue and the

associated health impacts that open dumping of

Project U – Livelihood Generation

As part of the identified need, income generation

and livelihood projects have been a focus area.

The aim of these projects is to empower,

underprivileged youth and women groups of the

communities around our plants so that they can

grow and lead better lives. Project U, a programme

focusing on skill up-gradation and job placement

for the youth has therefore been launched in all

locations. Depending on the need of the community

the programme focuses on modules such as retail,

computer operation, mobile repair, beauty course,

flower arrangement making, driving, apparel, and

housekeeping.

In order to carry out these activities, we have

partnered with technical expert organisations

which carry out training and certification activities.

In Limda the partnership is with SAATH (an NGO

based in Ahmedabad), in Chennai with Everonn,

and in Kochi with Rajagiri Outreach.

In the reporting period total 432 men and women

were enrolled.

of office paper and channelised it into proper

recycling stream rather than being sent to landfill.

The programme also complements the movement

towards use of less polluting and non-fossil fuel

sources of energy like gas, steam and wind power at

the manufacturing facilities. Mass awareness

activities are undertaken on world observance days

such as World Environment Day across all locations.

Organic Vegetable Garden

From the basic idea of Habitat Apollo to look at

conservation and recycling of resources in the most

effective way and there by ensure that 'Green'

becomes a matter of habit at Apollo, organic garden

was undertaken as a pilot project at guest house at

Perambra plant. The success of the pilot project

done at guest house and the report of the canteen

surveillance audit became the main driving factor to

launch the project in both the Kochi plants –

Perambra and Kalamassery.

The main objective of the garden is the proper

utilization of waste land, effective use of the slurry

from biogas plant and the efficient use of recycled

water; use of organic vegetables in the canteen such

as tomato, cabbage, pumpkin, and plantain, there

by improving the health of all. Limda guesthouse

also has similar programme running at the

backyard where vegetables like onion, tomato,

cabbage, cauliflower, carrot, coriander leaves,

green chili, radish, spinach etc are grown.

waste can have. This has led to an increased

understanding among the people about the ill

effects of plastics and waste dumping. The next

phase of the project will look into mobilization

efforts for putting waste disposal and recycling

systems in place.

Community Programmes

Around its manufacturing locations in India so far

the company had been organising several health

check-up camps and skill development workshops

for village community, alongside lending support to

infrastructure development. However, from 2009-

10 onwards formal needs assessment surveys have

been undertaken across manufacturing locations to

gauge the precise requirements of the community.

This is now being followed with the roll out of a plan

of action with specific focus on addressing issues of

health, sanitation, domestic habits and behaviours,

and environment.


Sustainable Agriculture

In order to strengthen farmers' capacity (including

their knowledge, skills, and expertise) to apply

appropriate agricultural practices, programme on

sustainable agriculture was started for the farmers

in Limda village. The aim of the programme is to

enable farmers to acquire new knowledge and skills

in modern crop practices and outputs expected in

the next 3 years (base year 2011-12); increase

awareness about modern techniques of farming;

raise agricultural productivity; providing access to

improved varieties of seeds; improving agricultural

practices with increased crop yield.

In the reporting period a total of 160 farmers were

trained.

Promotion of Health & Sanitation

As per the identified needs of the community in

Mathur and Oragadam villages, Sriperumbudur

taluk around the Chennai plant, project on health

and sanitation has been undertaken. The idea is to

change the habit of open defecation among the

community people including that of children in

balawadi or crèche. Special emphasis also needed

to be given to the hygiene issues for women, so as to

avoid associated problem of infections of the

urinary track.

A total 0f 2944 people were reached out in the

community. As a result, the community itself

constructed 7 toilets.

The panchayat has also renovated and painted the

Balwadi toilet and veterinary hospital.

ZONE E

The regulatory framework in Europe is clearly

defined with respect to environment aspects.

For Apollo Vredestein BV (AVBV) focua areas for

the year 2011-12 have been:

Life Cycle Assessment of European Tyres

Apollo Vredestein BV (AVBV) is participating in

the Life Cycle Analysis (LCA) study of Tyres

conducted by the European Tyres & Rubber

Manufacturers' Association (ETRMA) based on

tyres produced in Europe. The study intends to use

the LCA principle to assess the environmental

impacts associated with all the stages of product's

end of life cycle. Right from raw material extraction

(cradle) through mater ia ls process ing,

manufacture, distribution, use and disposal or

recycling (grave) issues are addressed to minimize

the environmental impact. The LCA will assist

Apollo Vredestein to understand the full range of

environmental effects attributable to our products

and will be used as a foundation for improve our

products and processes towards a People, Planet

& Profit Philosophy. The results of the LCA will be

available by the end of 2012.

Objectives of LCA

n Updating the Life Cycle Assessment: Update

information concerning the environmental

impact of tyres.

Evolution of the Impact of Tyres: Understand

how the environmental impact of a tyre has

evolved in the past 10 years.

Product Improvement: Provide updated

information in order to reduce the environmental

impact of tyres.

Communicate with Stakeholders: the study

and the results should be available and

n

n

n

Reducing Environmental Impact of Products

An important outcome of environmental

management activities in AVBV operations is to

create a product that has reduced environmental

impact associated with it. In our European

Operations we also extend this further to translate

these enhancements to our tyres during their use,

by focussing on the following areas:

Improvement in Rolling Resistance: Lower

rolling resistance in tyres improves a

significantly beneficial aspect of improving fuel

efficiency, and reducing emissions related to fuel

consumption such as CO .2

Weight Reduction of Tyres: Reduces the quantity

of resources that goes to manufacture the

product, reduces the waste generated at the end

of the product life cycle and enables lower rolling

resistance during use.

Improved Life of Tyres: Improving the life span of

tyres involves increasing the durability of tyres

and enables multiple benefits including

reduction of the overall resource consumption by

enabling consumers to use their tyres for longer

before acquiring a replacement.

QuatracLite: A 'green' product line

Apollo Vredestein BV has introduced the latest

addition to the Quatrac family, the revolutionary

QuatracLite. This first 'green' all season tyre meets

all the environmental regulations due to be

implemented across the European Union in 2012,

including the EU Tyre Label, and is focused on fuel

efficiency. An upgrade from the Quartrac3, the

QuatracLite has lowered rolling resistance by 15%

from the norm, uses 10% fewer materials and has

an extended lifespan by up to 30%. On average a

n

n

n


designed for external communication.

System Boundaries: environmental impacts

from cradle to grave of product

n

56 Environmental Performance 2011-12

Material ConsumptionThe majority of rubber consumed in our European

operations is from synthetic rubber. Synthetic

rubber, manufactured through polymerisation from

crude oil, is used due to the lack of availability of

natural rubber production near the European

operations. At AVBV, we have partnered in the EU-

PEARLS initiative to research into production

and extraction of natural rubber from a plant that

can be grown in European climate. Across all

our operations, rubber is the only material that

is recycled and reused back into our processes,

to alleviate the pressures of virgin rubber

consumption. In addition to reducing consumption

of materials, we also engage in reclaiming the

products we sell. In our PC Tires product category,

we manage to reclaim 97.8% of the tires that we

manufactured.

We have a continuous project to reduce the amount

of non-vulcanized downgraded unusable rubber by

Non-vulcanised Rubber used as Recycled Input Materials as per EN 2 of GRI G3

%w

rt P

rodu

ctio

n Vo

lum

e

Non-vulcanized Rubber6%

5%

4%

3%

2%

1%

0%2005 2006 2007 2008 2009 2010 2011

All efforts are being taken to use wood free or

reusable packaging at the upstream. Foldable

steel packaging, for transport of raw materials, is

used multiple times. Natural rubber is usually

transported in crates, while carbon black and silica

is transported through silo trucks. Transportation of

the materials from supplier is in full truck load.

A milk run is adopted in circumstances where a full

truck load is not attainable.

Apollo Vredestein tyres are usually carried in plastic

pallets which are reusable, and do not require any

special packaging. Customers within 400 km range

receive the tyres loosely without any packaging.

At greater distances, they are placed in foldable

racks before loading in the trucks and are delivered

to the customers. The use of foldable racks has

helped Apollo Vredestein to reduce the transport

of air. Vehicle routing is usually done on the basis

of full truck load principle in order to avoid

transportation of air. A total of 139,835 kg of

packaging material was used last year by AVBV. As

all transport of materials is outsourced, we have not

engaged in directly reclaiming the packaging

material, but do reuse items such as pallets which

are reusable.

5% reduction in the quantity of materials used can

reducevulcanization times and potentially lead to

energy savings of up to 10%. At the same time, the

new QuatracLite meets all premium quality and

safety standards. Our QuatracLite product line is

clear evidence of the results from our intensive R&D

work to reduce the environmental impacts of our

products during their use.

improving their reuse during production stages. In

the year 2011 we already realised 50% of the

project-target. A significant decrease of raw

materials is already visible. The project will be

continued in 2012-2013

EnergyAll our direct energy consumption is through

natural gas, which is one of the cleanest forms

of fossil fuels, and used predominantly in boilers

and heaters.In the past year, our quantity of

manufactured products has steadily increased,

but through better insulation of the plant and

vulcanization presses we have been able to reduce

the quantity of direct energy and indirect energy –

electricity – required to manufacture one unit of

product, increasing our overall energy efficiency.

This trend is expected to continue as we employ

energy efficiency measures and activities as listed.

Reduction non Vulcanized Downgraded Rubber

Packaging Material Used



Conversion and Retrofitting of Equipment


Repaired air leaks

Rework rubber waste

270

95200

ProcessRedesign


Frequenty controled pump

New mixer

270

13500



Total Direct Energy Consumption304,826 GJ

Total Indirect Energy Consumption

221,264 GJ

2005 2006 2007 2008 2009 2010 2011150

250

350

Consumption of Natural Gas and Electricity

MW

h/to

nne

of e

nd p

rodu

ct

NM

3/to

nne

of e

nd p

rodu

ct

Target for natural Gas Consumption of natural Gas (Nm3)

Target for Electricty Consumption of Electricty (MWh)

Energy Efficiency

AVBV has embarked upon a proactive energy

efficiency approach. As a result we have been able

to realise energy savings of 109,312 GJ – about

20% of the total energy consumption within

our facilities. We achieved this primarily through

process redesign, in particular our focus to rework

rubber waste, tire compounds with minor structural

defects that is still suitable for tyre manufacturing

after being re-mixed.

Energy Saved Due to Conservation and Efficiency Improvements as per EN5 of GRI G3

ProcessRedesign

87.34%

Conversion and Retrofitting

of Equipment 12.6%

Others 0.07%

Note: Refer to the Energy Efficiency Table below

No Air Emissions by Type and Weight as per x

EN 20 of GRI G3

2006 2007 2008 2009 2010 2011

0.2

015

0.1

0.05

0

No

Em

issi

on (

kg/t

onne

x

End

Pro

duct

)

No Emissionsx


Green House Gas (GHG) EmissionsThe total GHG emission for Scope 1 and 2 for the

reporting period were 47,984 million tons of CO2e.

Natural gas, our scope 1 emissions, accounts for

36% of total CO2 emissions while accounting for

58% of the energy consumption. Usage of natural

gas allows us to reduce our environmental impacts

including our GHG emissions. This GHG emission

figures has been calculated and submitted along

statutory requirements of the Emission Trading

Scheme developed by the Dutch government, the

Dutch Emissions Authority (NEa), to improve the

living environment. In the Netherlands there are

two emissions trading systems, one for emissions of

carbon dioxide and one for emissions of nitrogen

oxides.The ETS requires AVBV to develop a CO2

monitoring plan that is certified annually by an

authorized organisation. The Scope 2 emissions

attributed with electricity generation has been

calculated based on the defined emission factor

for grid electricity, 0.5 kg CO /Kwh of electricity 2

generated.

Characteristics of Emission Trading Scheme

n An emission permit: obligatory participants

draw up a monitoring protocol that they then

submit for approval to the NEa. In the event of

approval, the director of the NEa issues the

company with an emission permit.

Receiving emission allowances: licensed

companies are allocated emission allowances by

the government.

Monitoring: during the emissions year

companies monitor their emissions in

accordance with a monitoring protocol.

Verified emission report: at the end of an

emissions year, companies with an emission

permit report their emissions to the NEa in an

emission report. They have this report checked

by a verifier.

Turning in of emission allowances: companies

compensate the quota laid down in the emission

report by turning in emission allowances to the

registry.

n

n

n

n

n The supervisor: in the Netherlands, the Nea

supervises these two systems.


Scope 136%

Scope 264%

CO

em

issi

on (

kg/t

onne

end

pro

duct

)2

2006 2007 2008 2009 2010 2011

400350300250200150100

500

CO Emissions2

Air EmissionsAs mentioned above, AVBV participates in the

Emissions Trading Scheme developed by the Dutch

Government through the Dutch Emissions

Authority (NEa). The ETS is a flexible policy

instrument used to improve the living environment

through two emissions trading systems, one for

emissions of carbon dioxide (CO ) and one for 2

emissions of nitrogen oxides (NOx). Greater detail

of the ETS is given in the section on GHG emissions.

Nitrous Oxide emissions are generated through

combustion of Natural Gas at a rate of around 37

grams per GJ of fuel consumed, estimating the total

NOx generation at 11.3 tonnes in 2011-12.

Similarly, the use of silica in our manufacturing

process led to emission generation of volatile

organic compounds (VOCs) estimated at 13 tonnes.

2005 2006 2007 2008 2009 2010 2011

Consumption of Tap Canal Water in M3/Tonne of End Product

3.00

2.00

1.00

100.000

50.00

0.00

Target for Canal Water

Consumption of Canal Water

Target for Tap Water

Consumption of Tap Water

Ozone Depleting Emission

Ozone Depleting substances are only present in our

European operations through emissions of HCFC

from leakages in the air conditioning system. This

amount was calculated at 0.7 kg for the entire year.

WaterThe total water consumption in AVBV for the

reporting period 2011-12 was 3,899,564 m3.

Surface water, our main source of water

consumption is sourced from the Twente Canal,

located near the plant. Surface water is used only

for cooling purposes and conducted through a

closed pipe system. 100% of surface water

consumed in the European operations is discharged

back to the source in compliance with the relevant

regulations.

The increase of Canal water is caused by a

combination of higher average temperature and a

serious increase of produced number of tyres. The

consumption of drinking water has been reduced by

better monitoring, directly responding to excesses


Total Water Withdrawal by Source as per EN 8 of GRI G3

Municipal Water Supplies

2%Surface Water 98%

and water saving shower heads. Also the

replacement of defective steam traps has helped us

to reduce the drinking water consumption.

Discharge from municipal water supplies is sent to a

common sewage treatment plant for treatment

before being discharged.

Quality of Water Discharge

The quality of water discharged from our facilities is

regularly monitored and check by government

agencies, with the result that we have experienced

no violations with legislations and rules relating to

this. We have initiated the implementation of a

water quality monitoring system, for us at AVBV to

be able to continuously monitor our water quality

internally. The system is planned to be in operation

by December 2012.

WasteOur main focus revolves around minimizing the

quantity of waste generated with regards the

quantity of products manufactured. Over time we

have tailored our processes towards this, and seen a

significant reduction in the specific waste

generation of hazardous and non-hazardous

2005 2006 2007 2008 2009 2010 2011

3%

0%

% W

RT

Pro

duct

ion

Voul

me

Non-Hazardous Waste

7

6

5

4

3

2

1

Environmentally Hazardous Waste

KG

/Ton

e of

Pro

duct

ion

Volu

me

2005 2006 2007 2008 2009 2010 2011

wastes. As a result of an intensive improvement

program involving the whole production

organisation the number of waste compound was

reduced by more than 500 MT in one year. In 2011-

2012 different project teams worked on the

reduction of our scrap levels. This resulted in a

decrease of the scrap levels. A special cutter is

installed to cut ply material to the right dimension

preparing them for reuse, instead of disposing the

rolls resulting in substantial ply scrap savings.

Recycling of waste for other purposes is generated

such as the case of vulcanized waste which is

exported to an authorized agency as a fuel source.

The waste products are disposed of in a responsible

manner that is in compliance with legal

requirements either to authorized contractors and

common disposal facilities for hazardous wastes.

AVBV has partnered with a local waste processor

Van Gansewinkel to identify opportunities to reuse

residues and waste. Since October 2011, the goal of

this partnership has been towards:

n Optimization of waste resources

n Ensuring adequate visibility and optimum

placement of means for waste collection

n Efficient collection of the various substances

Total Weight of Waste as per Type and Disposal Method as per EN 22 of GRI G3

Non-Hazardous Waste

Waste Materials Quantity Disposal

Solid compounds (tonnes) 1407 Reused through authorized recyclers / re-users

Other Non-Hazardous wastes (tonnes) 1896 Recycled through authorized recyclers/ re-users

Vulcanized waste (tonnes) Used by authorized recyclers and exported as 1858a fuel source

Domestic waste (tonnes) 1346 Disposed to local incinerator

Hazardous Waste

Waste Materials Quantity Disposal

Chemical waste (tonnes) Exported abroad for treatment, segregation, 219 storage and disposal

Our general policy is to minimize the transport

movements required for the delivery of our

products to our customers. The transportation

mode is based on cost as well as environmental

efficiency. Reverse logistics is basically being

employed at both upstream and downstream of the

supply chain. In upstream the plastic bins and

crates are transported back to the suppliers

whereas in upstream the foldable racks are

transported on a regular basis. Tyres meant for

recycling are collected on a regular basis using the

reverse logistics mode. The key KPI used for green

logistics performance of Apollo Vredestein are:

total logistics cost, percentage of waste recycled,

carbon emissions, air pollutant emissions and

energy consumption.

A few of the green practices have direct impact on

the logistics performance, for example the use of

foldable racks have greatly helped in reducing

transportation cost per tyre. Our general policy

includes maximizing the usage of sea/barge

transport over road transport, using full containers

and full (high cube) trucks, maximizing direct

shipment and using shared-users services for

Transportation



Environmental Compliance

AVBV takes all necessary approvals from the

relevant government authorities, before embarking

on any project. The applicable environmental



ensure compliance with environmental legislations.



imposed.

transport solutions. GHG emissions caused by

transport by truck and inland barges, based on

actual tonne-kilometers and Dutch norms were

found to amount to a total of 3.65 tonnes of CO2

equivalent.

SOCIAL PERFORMANCEThe main driver of social performance in EU is

decent workplace agenda and fair labour practices

Labour PracticesSecondary and higher staff corresponds to those

that are employed at management and executive

levels, while general staff includes workers and

operators. At AVBV, labour and decent work is

conducted based on defined working conditions for

secondary and higher staff, through the MIHO

agreement, and for general staff through the CAO

agreement. When joining the company, employees

are required to sign the applicable agreement

to acknowledge their adherence to follow the

stipulated working conditions. The majority of our

workforce is workers and operators.

Like in India, our hiring policy focus is on

employing staff as permanent employees to

strengthen the notion of job security which given

the economic situation in Europe, is a pressing

issue in the Netherlands. The economic downturn

has also impacted labour conditions leading to a

Total Workforce by Employment Type, Employment Contract, and Region as per LA 1 of GRI G3

General Staff82% Secondary and

Higher Staff17%

Others1%

Fixed Term/Temporary

32%

Permanent68%


workforce with higher age due to the raising of

the retirement age and the elimination of early

retirement in the Netherlands.

The attrition levels of our employees is as

exceedingly low 3.67%, highlighting the high level

of job satisfaction that our employees experience

for them to continue working with us to develop

themselves and grow with the company. This is a

clear indicator of Apollo Tyres' role as an

organisation that looks out for the people that

enable success.

Employees are provided with the following benefits

according to Dutch Statutory requirements. These

benefits are provided to both permanent and non-

permanent employees


Employee Turnover: 3.67%

Local Hiring Policy

Specific to the job roles that we look to cover, AVBV

practices local hiring practices for operators and

management personnel.

Operators: We aim to employ the operator from the

local community and provide them with a one year

probationary contract. After one year, if

management deems the operator to be good at his

role, a long-term contract is provided to him and

a skill development program is charted out for him.

Management: Any vacancy in management

positions starts with an internal search for suitable

employees. If no person can be found to fit the

expected job role, then external persons will

be brought in.


At AVBV we have a long term HR policy from 2011-

15 that details out the following for the employees

and specific job roles at AVBV:

n Policy career development & mobility

Yearly education plan

Together with charting out a career development

path for our employees we also offer the following

career development assistance programs:

n

n

n

n

n

n

Pre-Retirement Planning for Intended Retirees:

AVBV has its own pension fund and regulations

Retraining for those intending to continue to

working: We also organize on a regular basis

early retirement meetings with Aegon

Severance pay: In Dutch law there can be a

severance pay in two cases:

- If AVBV chooses to terminate the employment

through courts

- Reorganization resulting in reduction of

employee numbers

The named factors are included. If Severance pay is

provided, it takes into account the employee's age

and years of service

Job Placement Services

Assistance on transitioning to non-working life

AVBV also started the Technical Leadership

Development Programme. This intensive training

programme, which brought together specialists

from different areas, started with a three-day

technology symposium. The symposium provided a

platform for exchanging insights in the

development and production of tyres, including the

latest technologies. In addition to the participation

of in-house specialists from different areas, the

event also featured presentations by suppliers.

Our philosophy of lifelong learning is embedded in

our ABC training courses and in the operator

training in order to have our employees think

explicitly about how life-long learning is related to

the concepts of career, mobility and vitality. The

next generation of employees and managers has

been trained in the principles and methodologies of

Lean Six Sigma and has participated in the various

Black, Green and Orange Belt training courses.

91% of our employees are provided with regular

performance and career development review.

Performance and career development reviews are

provided to all levels of employment categories at

AVBV, management and workers, but especially

towards those employed in direct roles to the

company's activities.


Minimum Notice Period

As per Dutch Statutory requirements we have

differing notice period for:

Works council – Notice period to be at such a

time that influence is still possible

Unions and employees – Notice Period of

3 months

The Works Council is a participatory and

representative body within AVBV. It consists of

employees on behalf of the staff who consult with

the management of AVBV on company policy and

staff interests.

n

n

Occupational Health & Safety

Safety is a priority area in our operations.

Highlighting the effectiveness of the safety culture,

we have achieved a low injury rate and no incidents

of occupational diseases during 2011-12, despite

the increase in the workforce. Our common goal is

to continuously bring this number down to zero.

Rates of Injury and Lost Days as per LA 7 of GRI G3

30

25

20

15

10

5

0Lost Day Rate Injury Rate

1.81

26.04


100% of full time and part time employees at both

management and worker levels are covered under

collective bargaining agreements. Through a

proactive HR policy within our company, we aim to

improve the employability and vitality of our staff

through collective labour agreements that aim to

implement of sustainable employability at Apollo

Vredestein BV.

Health and SafetyEmployee health and well being is a critical

consideration of our employee engagement

programme. Under this we have we provide health

assistance programs on risks related to life-style

diseases such as obesity, heart disease, lung

diseases, high blood pressure; and occupational

health related diseases like vision and hearing and

repetitive strain injury.

In particular, physical therapy was actively

promoted in 2011-2012. Employees with recurring

musculoskeletal disorders followed a training

course over 15 weeks to minimize the symptoms

and learn how to deal with the symptoms. In 2012-

2013, we will evaluate the physical therapy policy

and if it has proven to be successful, we will

continue this therapy.

We have three health & safety committees at

different levels of the organisation:

Commi t t ee managemen t and l abour

representation

Safety committee

Staff committees (each individual department)

The Health & Safety topics below are specified in

our collective labour agreements with employees:

Personal protective equipment

Joint workinggroups with employees and

management

Participation of employees in labour inspections,

audits and accident investigation

Education and training

Addressing complaints

Refuse unsafe work

Periodic inspections

Compliance with ILO rules

Structure for troubleshooting

n

n

n

n

n

n

n

n

n

n

n

n

Human RightsAt AVBV we ensure that there are no instances

of human rights violation with respect to

discrimination, child labour, forced labour and

security personnel, as per applicable law. In the

event any discrimination is reported, we have a formal

system to address the issues that have been raised.


Product StewardshipHealth & Safety Impacts of Products

Product and Service Information

We work towards providing our customers with

adequate and accessible information as required by

regulatory requirements and based on voluntary

commitments of AVBV. We have progressively

moved into disclosing information relating to

sustainability performance and indicators to keep

customers well informed of our activities and

initiatives. In the light of procedures for product and

services information and labelling, AVBV clearly

takes into account the following product and

service information.Tyre engraving, a key part of

product information, is always checked through the

involvement of employees and is in compliance to

regulations and codes.

Purpose Product information disclosed

The sourcing of components of the product or service

n Reach-statements, n Certificates of Origin,

Content, particularly with regard to substances that might produce an environmental or social impact

n Reach-statements, n Certificates of Origin

Safe use of the product or service

n Winter Information Brochure informing users how and when to use

winter tyres.

n Tyre info display, offered to dealers in Zone E informing customers

what are important parts of a tyre and focus on choosing a tyre.

n Campaign concerning checking your tyre pressure station in

Enschede and distributing tyre pressure sheets to all dealers and

fuel stations.

n Team in RTL Autowereld (television), which explains that a tyre is

so much more than just a piece of rubber.

n Participation in the Tire-change-week-campaign of the VACO,

which reminds customers that it is time to switch from summer to

winter tyres.

n Campaign concerning checking your tread depth regularly,

including placing a high tech tread depth measure station

n Item in Autoblog, in which we showed the viewer the difference

between an A-brand tyre and a discount tyre, to create awareness

of the importance of investing in a good tyre.

Disposal of the product andenvironmental/social impacts

n Documents regarding our participation in the Used Tyres Group of the ERTMA.n Documents regarding our participation in Vereniging Band & Milieu

Other (explain)

n Other (explain)1. Brochure regarding the EU tyre Label, in which we

inform dealers and consumers what this label contains and how the

label values are determined.

EU regulations mandate that we account for and

address health & safety aspects throughout the life

cycle of our products. 100% of all types of our

products are accounted for during the following

stages of a product life cycle:

Development of product concept

R&D

Certification

Manufacturing and production

Marketing and promotion

Storage distribution and supply

Use and service

Disposal, reuse, or recycling

n

n

n

n

n

n

n

n



Customer satisfaction practices are conducted to

understand customers' perception to AVBV as an

organisation, and pertaining to the specific tire

products we manufacture. AVBV assures that the

performance matches the customers' expectations.

Our target is “customer delight” by exceeding the

customers' expectations. AVBV experiences that

customers are more and more interested in

environmental aspects - REACH compliant

statements and ratings regarding recycling. AVBV

fully complies with the current REACH regulations

and gives its REACH statement on request.

Customer satisfaction levels are monitored on a

regular basis. All marketing and sales departments

have regular quarterly meetings. The reasons for

dissatisfaction are determined and actions for

improvement are planned. Follow-up is done on a

quarterly basis. We establish and maintain

important characteristics to gauge customer

satisfaction including:

n Quality

Fair prices

Good customer handling skills

Efficient delivery

Serious consideration of consumer complaints.

n

n

n

n

Marketing Communication

Marketing communication activities are conducted

in compliance with regulations to provide factual,

timely and reliable information during marketing of

our products. We have instituted internal standards

to complement the statutory requirements that we

adhere to.

In addition to continuous monitoring, we conduct

internal and external audits of our compliance

status to the below codes and standards.

Code or Standard for Marketing Communication Frequency of Monitoring

Society

We do not partake in any anti-competitive, anti-

trust or monopoly practices. We have consequently

faced no legal actions relating to these practices.

Anti-Competitive Behaviour

Social Engagement

Every year AVBV determines a number of events and organisations to support by donating money or sponsoring events to benefit the society and community where we are located in. In the year 2011-2012 donations included to:

Het Roessingh, a rehabilitation center inEnschede

Retired former AVBV employees

n

n

Sponsorships:

In terms of sponsoring events we cooperated with several local, national and international initiatives:

Local

The Good Cause Rally - giving children withcancer a carefree day

National

Alped'Huzes - a bicycle ride, aiming to collectmoney for further research for cancer

International

n Ride for the Roses - a bicycle ride, aiming tocollect money for further research for cancer

n FBK Games - international athletics-contest, heldin the Enschede-area

n Amstel Gold Race - international cycling race

Dutch Advertising Code Committee Continuous

Law on Gambling Promotion Continuous

General Media Law Continuous

Vredestein Brand Book Continuous

ZONE A

EnvironmentalManagementAt Apollo Tyres South Africa Pty Ltd (ATSA) the

management of environmental performance is

fundamental to our operations. At ATSA, we aim to

ensure minimal impacts to the surrounding areas

from our manufacturing activities.

Our focus areas of investment listed here are

restricted to external environmental management

services employed at our Durban and Ladysmith

facilities. The total recorded external services

investment amounted to 2.799 million South

African Rand, with an exchange rate conversion to

Indian Rupee as on March 31, 2012.

This information is only intended to be indicative of

our efforts and focus areas and does not constitute

the total extent of the environmental management

investment in our South African plants.

Managing our environmental impacts has also

allowed us to reduce costs associated with

environmental management. In Durban, we have

employed a waste management approach wherein

almost 88% of our total waste management cost is

recovered through income received through

recycling of wastes.

The total environment management expenditure in

the reporting period was Rs. 18.61 million.

WaterManagment

31.05%

WasteManagment68.52%

Pollution Prevention0.43%

Environment Management Expenditure

Material

for

packaging

purposes

Material Quantity (%)

Pentathene (metres)

Bags (numbers)

85.15

14.85


Indexed Raw Material Consumption

In South Africa, we use a mixture of natural and

synthetic rubber to manufacture tyres, at a

proportion of 58% and 42% respectively. This is

used to alleviate the issues regarding natural rubber

supply that is present in the tyre manufacturing

industry, and which has been covered within our

Indian and European operations. The materials

consumed in our operations are not re-used back

into our processes within their original state, but we

do rework the rubber compound that is generated

from the raw materials.

Material Consumption

Raw Material Consumption as per EN1 of GRI G3(Indexed)

Synthetic Rubber 27.23%

Carbon Black35.80%

Natural Rubber36.97%


EnergyThe energy savings initiatives focus on reducing

energy consumption. Indirect energy savings –

through steam consumption, electricity

consumption and air leakage from utilities – have

been achieved, but the actual energy savings

through these measures have not been

documented. This has been identified as a gap and

subsequent systems to document energy savings is

being worked upon.

Both our factories have initiated energy projects

with emphasis on reducing steam usage. Projects

included the recovery of steam at our large domes in

Truck Bus Radial (TBR) and Off The Road (OTR)

manufacturing process, as well as making use of

only one boiler instead of two during periods where

demand for steam is lower than required. At

Ladysmith and Durban, through a systematic

process accounting steam consumption, electricity

consumption and air reduction in utilities, we have

been able to initiate the below activities towards

achieving energy savings.

Energy Efficiency


Total Direct Energy Consumption293,147 GJ

Total Indirect Energy Consumption

366,001 GJ

Steam Consumption

Electricity Consumption

Air Leakage in Utilities

Electricity55.53%

Coal32.60%

LPG0.19%

Diesel0.46%

HFO11.22%

Due to easy availability and accessibility of coal in

South Africa, it is the most used fuel for the

generation of direct energy in our manufacturing

processes. 37% of indirect energy consumption is

used in steam generation. Steam is used in the

manufacturing process in activities such as curing

of the tyres after the building process. Indirect

energy consumption exceeds direct energy

consumption. Thus our energy efficiency initiatives

are focused towards reducing this along with steam

usage in our processes.


n Install 124 new steam traps

to replace old ones in Moulding.

n Repair of major air leaks.

n New cooling towers installed

to increase the efficiency of

chilled water system.

n Installation of power factor

correction equipment.

n Repair of Major air leaks.

n Upgrade to high efficiency

compressors.

n Installation of cooling

radiators.

Total energy savings achieved through conversion and retrofitting of equipment was 582.9 GJ

Note: Refer to the Energy Savings Table given on page-69

Green House Gas (GHG) EmissionsFor this reporting period, combustion of direct fuels

(Scope 1) and indirect emissions from generation of



Energy Efficiency Activity Energy Savings (GJ)

Conversion and

Retrofitting of

Equipment

Installation of Variable Speed Drives for pumps and fans

Energy saver light fittings

Installation of Variable Speed Drives on cooling towers

558

9.4

15.5

purchased electricity (Scope 2) have been

accounted. The GHG emission factors for the

different energy sources, used to calculate our GHG

emissions, are based on the following standards:

n Diesel, Furnace Oil, Natural Gas and Coal -

IPCC Guidelines

n Electricity – Journal of Energy in Southern Africa

Coal is the primary source of fuel for the grid

electricity in South Africa, contributing to a higher

emission factor. In our direct energy consumption

mix, coal accounts for about 75% of consumption,

while its GHG emissions contribution accounts for

almost a correspondingly similar figure. Likewise

fuel oil, which is 25% of our direct energy mix, is

responsible for 20% of the GHG emissions through

direct energy consumption.


100000

80000

60000

40000

20000

0

Scope 1Scope 2

Tonn

es o

f CO

equ

ival

ent

2

92415

26521

GHG emissions as per EN 16 of GRI G3

Fuel Oil21.65%

Diesel0.85%

LPG0.30.%

Coal77.19%

Air Emissions

At Durban and Ladysmith, there are no listed

activities on either site regulated by the National

Environmental Management Act: Air Quality Act.

Despite this, we continuously track our NOx and

particulate matter emissions in particular, to reduce

the air emissions generated from our operations.

NOx and Methane emissions given below are

attributed from consumption of high fuel oil and

diesel for energy sources.

No , SO , and other significant air emissions x x

by type and weight as per EN 20 of GRI G3

NOx 0.049 tons

Methane 0.247 tons

Particulate Matter 51.79 mg/cm3


Water Consumption

All water consumed is sourced from the Municipal

Water Supplies of Durban and Ladysmith. This

includes water for steam generation and cooling

purposes. During the year we have embarked on

several small projects to reduce water usage. A

project was initiated whereby we replaced all

shower heads with water saving shower heads as

well as reducing the cold water pressure resulting in

water savings of 500kL at our Durban Factory.

In Ladysmith, new dry type air-conditioning coolers

are used to conserve water. We have also

commissioned a project to investigate water

capture from our large roof surfaces over the factory

which will be further developed into a viable project

for 2012.

The total water withdrawal for the reporting period 3for ATSA was 470,190 m / year.

26% of the water consumed is recycled and reused

within the organisation.

WasteAt Durban and Ladysmith, we aim to reduce the

quantity of solid waste disposed through the

vigorous pursuit of recycling:

n Employment of waste management contractors

for waste handling, segregation and recycling.

n Construction of Waste Yard storage bay for

liquids to direct any spillage to the sump

n Re-construction of Waste Yard to include

water trap and closure of all storm water drains

At all our locations the treated discharge is sent to

common facilities for effluent and sewage

treatment that is run by the local municipal

corporation. At our Durban facility, only oil

separation, through an oil separation sump, is

conducted before the effluent is transported to the

common effluent treatment plant run by the Durban

municipal body. Sludge is pumped out of 5 sumps

(pump-house, 2 open wash-bay, mill grease trap

and waste yard trap), in both locations twice

monthly or if they fill up.

Water Discharge Quality

BiodiversityOur facilities in Ladysmith and Durban are not

located near any area within or adjacent to

protected areas and areas of high biodiversity value

outside protected areas. Consequently none of our

Total water discharge from STP and ETP during the

reporting period 2011-12 was 124,011 m3 / year.

Our activities to reduce air emission focus on

maintaining machinery and equipment that

contribute to air pollution include:

n Installation of BSF Plug and socket in Mixers

and Boiler House Stack to measure atmospheric

emissions

n Installation of spray booths in Moulding Spray

Painting Machine

n Install of new filters in Mixers

n Repair of all dust collector systems for all Mixers

We also aim to ensure that noise pollution is kept at

a minimum in the work environment to ensure that

it does not exceed 85 dBa.

operations or products have any significant impacts

on biodiversity in protected areas and areas of high

biodiversity value outside protected areas.

Recycling

Our Durban Factory uses pentethene plastic film as

part of the production process. This is a by-product

of the production process, and not used in the final

product. The waste collected is further recycled by

the waste removal company as LDPE plastics which

can be made into garbage can liners, floor tiles, film

and sheet, bins, landscape timber and piping.

At our Ladysmith Factory, our scrap tyres are

shredded, granulated, and finally crumbed and

bagged. The crumb is then mixed into bitumen

which is utilised in tarring road surfaces.

Note: Refer to the Waste Table given on page-71


Total Weight of Waste as per Type and Disposal Method as per EN 22 of GRI G3 (Indexed)

Non-Hazardous Waste

Waste Materials Disposal

General Waste

Rubble

Recyclables

Production Waste

Scrap Tyres

0.04

0.01

59.64

39.52

0.79

Disposed to local landfill

Co-Disposal

Recycled through authorized recyclers/ re-users

Recycled through authorized recyclers / re-users

Recycled through authorized recyclers / re-users

Hazardous Waste

Waste Materials Disposal

Sludge

Packaging

Crushed fluorescent tubes

Sump / trap / oil separator waste

Compound calendered tyre steel beads

27.77

14.64

0.02

2.60

17.49

Sent to authorized agency for treatment and disposal

Dry Hazardous Waste

Chemicals

Blasting Grit

36.00

0.30

1.17








Quantity (%)

Quantity (%)

Transportation of Hazardous Wastes

Hazardous waste is transported from the Durban

facility to the local Shongweni Landfill site for

effective treatment and disposal of the following

hazardous waste. An authorised waste

management firm to manage the hazardous waste

generated from our locations and ensure safe

disposal of the waste.

Weight of Hazardous Waste Transported to Authorised Disposal Site / Vendor

Hazardous waste transported

Weight (kg/tonnes)

Contaminated Packaging

Sludge (Mix of oil, water,

carbon black, soil, grease)

Paint, chemical and grease

containers plus thick and

dry sludge

Crushed fluorescent tubes

Sump / trap / oil separator waste

Compound calendered tyre

steel beads

98.9

54.3

36.5

0.15

17.55

118.2


Significant Spills

During the reporting period we have experienced

two significant spills:

n Diesel spilt from Engen delivery truck tank

during decanting into our underground diesel

tank. The volume of the spill was around 50 litres

and led to contamination of a cement area

and storm water drain located adjacent to the

diesel tank.

n Powder chemicals (Resorcinol and Stearic acid

blend) were spilt from a contractor's truck led to

contamination of the cement area near the raw

material store.

Appropriate measures were undertaken to address

the spill, minimize the impact of the spill and to

prevent re-occurrence of the event.

We undertake practices to prevent land pollution

from occurring and to continuously monitor and

check for pollution levels in the ground. These

include:

n Conduct sampling and analysis of the ground

water at locations of underground diesel and

chemical tanks

n Testing and treatment of soil samples for

pollutants

n Monitoring of underground water supply for

diesel contamination

Environmental Compliance

ATSA, obtains prior approval from the relevant

government authorities before embarking on any

pro jec t . The appl icab le env i ronmenta l



ensure compliance with environmental legislation.



imposed.

LabourOn the Industrial Relations front, management,

employees and the trade union, have put together a

draft recognition agreement which has the purpose

of regulating the relationship and parameters

within which business will be conducted.

In line with our company policy, we practice hiring

predominantly permanently contracted employees

to promote job security and enhancement of their

work through benefits applicable to permanent

employees. The attrition level of our employees is

low indicating the high level of job satisfaction. The

majority of the attrition is from workers,


Attrition rate of Permanent Employees:

9.57%

SOCIAL PERFORMANCE

People power is the core of Zone A operations.

Excellence through people innovation drives the

social agenda and policies for the region.

Weight of Hazardous Waste Transported to Authorised Disposal Site / Vendor

Management6%

Workers andOperaters94%

Permanent97%

Temporary3%


In SA we are governed by the Employment Equity

Act. This act creates the framework for the

prohibition of unfair discrimination in the

workplace and creates a framework for the planning

and advancement of previously disadvantaged

groups and their advancement in employment in

South Africa.


Zone A strongly believes in ensuring training and

skill development for its workers and management

employees, imparting them with the highest

technical knowledge and practices to further

develop their capabilities and capacities to sustain

the organisation in its place as one of the top

companies. The training programmes focus both,

on general practices and technical expertise. We

also provide sponsorships for external programs.

During the reporting period, 244 employees

participated in these training and development

programmes.

32% of our employees are provided with regular

performance and career development reviews.

Performance and career development reviews are

provided primarily towards management and

operational employees of Apollo Tyres South Africa.

The key career development assistance programs

offered at Zone A are :

n Pre-Retirement Planning for Intended Retirees

n Retraining for those intending to continue

to working

n Severance pay

n Assistance on transitioning to non-working life

The Skills Development Act and the Skills

Development Levies Act create a regulatory

framework for developing the broad skills of the

South African workforce by creating the

compulsory deduction from employees and

payment into the skills development levy, which in

turn funds the various skills development

programmes (namely learnerships and SETAS)

under the Skills Development Act. At Zone A, the

entry level employees' remuneration is at an

average of 9% above the local minimum wage .

The average hour of training imparter per employee per year by category as per LA 10 of GRI G3

5

4

3

2

1

0

Operators and Workers

Management

3.80

4.53

man

days

/ yea

r/ p

erso

n


100% of our operator level workers are covered

under collective bargaining agreements. We

conduct dealings with trade unions through respect

and compliance with Centralised Bargaining

Structures, as well as all Collective Agreements.

Freedom of Association is protected under SA

Constitutional Law, as well as Labour Relations Act.

There has been no risk of collective bargaining at

our South African locations during the reporting

period.

With regards to the Tyre Industry Bargaining

Council, the company has spear-headed a process

Local Hiring Policies

Employee Benefits

As per South African statutory requirements,

employees are provided with Health Care benefits,

Disability / Invalidity Coverage, Maternity /

Paternity Leave and Retirement Pension. These

benefits are provided only to permanent employees,

who constitute 97% of our total workforce


Minimum Notice Period

As per South African statutory rules, we have

differing notice periods for operational change:

n Restructuring – 90 days

n Dismissal based on operational requirement

–90 days

n Outsourcing – 90 days

Health and SafetyZone A is certified under OHSAS : 18001 .

Appointed SHE Managers and Officers ensure that

the company complies with relevant Safety, Health

and Environmental legislation. The company has

periodic internal and external audits performed

annually on Safety and Health.

Rates of injury and lost days as per LA 7 of GRI G3

Lost Day RateOccupational

Diseases Rate

Injury Rate

0.172

0.013 0.011

0.20

0.15

0.10

0.05

0.00

of regulating all agreements from a macro

perspective. Historically, numerous and sometimes

conflicting agreements were reached at the Tyre

Industry Bargaining Council. The purpose is to

ensure clarity is reached and all parties have an

explicit understanding of the meaning of various

agreements. The increase for the second year of our

three year wage increase agreement took place

during this period.

Health and Safety Topics

We have constituted four health and safety

committees at different levels of the organisation:

n SHE Internal Management Review

n Risk Management Steering Committee

n SHE Security and Insurance Sub-Committee

n SHE Area Committees

The Health and Safety topics below are specified

in our collective labour agreements with

employees:

n Safety, Health, Environment and Quality

(SHEQ) Agreement

Health Assistance Programmes

Education / Training

Counselling Prevention / Risk Control

Treatment

Employees

Employees' families


Some of the key health programmes undertaken

are:

HIV AIDS - Education, Testing, Counselling is

conducted for employees. Employees families also

Counselled in the event of positive testing

Sexually Transmitted Infection - As and when

symptoms are detected among employees, specific

protocols are followed

Tuberculosis - Part of annual Wellness

programmes, specific protocols are followed when

TB is detected among our employees

Risk Assessment - Risk Assessments are conducted

by occupational hygienists to identify hazards

relating to health of our employees

Occupational Diseases - As and when lung, ear and

other biological diseases related to occupational

diseases occur among employees, specific

protocols are followed

n

Meetings

n SHEQ Policy

n Weekly Safety Talks

Safety, Health and Environmental Reviews/

Human Rights At ATSA there is no defined policy specifically

on human rights. The fundamental principles of

human rights are part of various policies governing

the organisation. In the year 2011 -2012 there were

no instances of non compliance with respect to

discrimination, child labour, forced labour and

security personnel.

The company also supports the Broad Based Black

Economic Empowerment framework to ensure

equitable opportunities for the disadvantaged

in SA.

Product StewardshipOur regulatory framework requires that we account

for and address health and safety aspects

throughout the life cycle of our products. The

product development stages are similar to as

mentioned in the previous regions i.e. Zone I and

Zone E reflecting standardised approach of the

organisation. These stages are:

n Development of product conceptn Research and Developmentn Certificationn Manufacturing and productionn Marketing and promotionn Storage distribution and supplyn Use and service

Product and Service Information

At Zone A we are conscious of our responsibility for

fair and transparent communication. We ensure

that required information is disclosed with respect

to our products and activities and our sustainability

performance. Product information is provided on:

n The sourcing of components of the product

or service

n Content, particularly with regard to substances

that might produce an environmental or social

impact

n Safe use of the product or service

n Disposal of the product and environmental/social

impacts


The company conducts a customer satisfaction

survey every 2 years. The last survey was conducted

in 2010 and we are planning to conduct the next one

during 2012. In 2006 and 2010, independent

research was undertaken with Objectivity to

quantify levels of awareness and perceptions held

regarding the delivery of orders and efficiency with

a cross section of all tyre dealers.

The first survey in 2006 confirmed the view held by

a major competitor's logistics partner that Apollo

was considered the benchmark tyre company with

respect to logistical services. The second survey

held in 2010, showed that Apollo had maintained its

leadership status but that competitors were closing

the gap. The survey results were shared with all

sales and branch employees with a view to

implementing a strategy to further strengthen

Apollo's logistics competitive advantage.


ATSA also conducts annual regional customer

seminars where customers are briefed on the

Company strategy at a macro level, as well as

communicated with regards to new products and

products innovations. Feedback is also elicited from

these customers and strategic action plans put in

place to address any customer concerns which may

be highlighted.

Market research with regards to how end

consumers perceive our Brands are also conducted

every 2 years. Research is conducted every 2 years

since 2007 though an independent research

company TNS (previously Research International) -

the largest research company in South Africa and

globally. Research is undertaken to gain insight into

the South African tyre market as a whole, but more

specifically to protect and grow the Dunlop brand,

identify consumer buying behaviour patterns and

evaluate our offering, to track the Dunlop brand

saliency and brand equity, to measure the

effectiveness of brand communication and to

measure the awareness of the Dunlop Zone

Network.

Marketing Communication

The marketing communication process ensures

clear and correct messaging to our customers. The

effort is to disclose reliable and timely information

to the users. We adhere to the following standards

and codes of communication.

Code or Standard for Marketing Communication

Advertising Standards Association

Consumer Protection Act

Electronic Communications and Transactions Act

Continuous

Frequency of Monitoring

Continuous

Continuous

Note: Refer to the Marketing Communication Table below

Customer Privacy

There has been no instance of breaches with

customer privacy and loss of customer data during

the reporting period.

Local Suppliers

We define local suppliers as those that are located in

and operate from South Africa. As part of the

corporate purchase initiative, 71 suppliers signed

the "Partner Code of Conduct" with Apollo Tyres SA

covering Human Rights issues. We base our

selection of local suppliers on the following criteria:

n Price

n BBBEE Status

n SARS Tax clearance

n UIF Compliancy

n WCA Compliancy

Zone A actively encourages and promotes Small

and Medium Enterprises. The Apollo Tyres South

Africa – Small and Medium Enterprises and Black

Enterprises Development sourcing team is to be

established to specifically enable emerging

businesses into enterprises that are viable, and are

able to provide goods, equipment, site works and

services as may be required by the operations of

Apollo Tyres South Africa.

Percentage of total procurement budget spent on

local suppliers was 43.40%

Product Responsibility ComplianceApollo Tyres SA (Pty). Ltd. ensures prior approval

from the relevant government authorities before the

start of on any project. The applicable

environmental requirements are monitored at all

stages during project execution at the

manufacturing facilities to ensure compliance with

relevant legislation pertaining to customer health

and safety, product and service labelling, marketing

communications and the use of our products.



imposed.


Society

Broad-Based Black Economic Empowerment (BBBEE)

Broad-Based Black Economic Empowerment

(BBBEE) is a form of Economic Empowerment

initiated by the South African government to

distribute wealth across as broad a spectrum of

South African society as best possible.

Apollo Tyres SA Ltd. supports the intent and

purpose of BBBEE whilst striving to ensure that

equitable opportunities are created and offered to

predominantly historically disadvantaged South

Africans in its pursuit of achieving the goals and

targets set by the Broad Based Black Economic

Empowerment Act. In this pursuit of compliance

with broad based black economic empowerment,

the company has contracted with various

consultancies on the appropriate measures to be

implemented, as published by the DTI (Department

of Trade and Industry). As such the Company has

already achieved level 5 status, with a score of 80%

on the Broad Based Black Economic Empowerment

Balanced Scorecard from the Codes of Good

Practice

Anti-Corruption

At Zone A, both our business units are analysed for

business risks in general including corruption.

Awareness on anti-corruption issues is generated

through the general contract between Apollo Tyres

and the employee. Awareness is done through

workshops. Sales department employees undergo

competition act training (anti-competitive). Senior

management and sales personnel undergo National

Consumer Act Training as well. Number of people

trained in Anti-Corruption:

n 40 Management Personnel

n 699 Operators and Workers Personnel

There have been 21 instances of corruption within

our facilities during the reporting period. In 14

instances disciplinary action were taken against the

employees who participated in corruption

activities, while there were 12 instances of

employees being dismissed due to their

Political Funding

We do not provide any monetary contributions to

any political party

Anti-Competitive Behaviour

We have faced one case on anti-competitive action.

The case was brought to the South African

government and was resolved with a settlement

with the government. We have not faced any

instances or legal actions relating to anti- trust or

monopoly practices.

Social Compliance



imposed.

involvement in these activities. Indicative of the

action we have taken to address these incidents,

there have been no incidences of non-renewal of

contracts with suppliers and customers due to

corruption.

Community Development

Ladysmith Creche

The Company is supporting the crèche currently

financially to the value of R2500 / month, and

partnering with the Spar Supermarket group.

In addition we have approved capex of R60 000 for


Ladysmith High

The Company is supporting the establishment of a

modern Multi-Media Research and Resource

Centre, which will be called the Apollo Tyres Multi-

Media Centre. The project involves the installation

of 36 computer terminals with full internet access.

To further enhance the viability of the room, a data

projector, speakers and wall screen to achieve full

audio-visual functionality for enhanced teaching

and learning will be installed.

This media centre would allow all learners access to

research and resource material but more especially

to those who are not fortunate enough to have

computer and internet access in their homes. Such

a centre would, without a doubt, equip children to

be more compe t i t i ve , compe ten t and

knowledgeable in the broader context of skills

development for life.

The school has proved itself to be an exemplary

academic institution having achieved a 100%

Matric (Grade 12) pass rate for the last 19 years.

The learner demographic is completely multi-

cultural, reflecting all population groups of

Ladysmith.

upliftment projects such as Vegetable Gardens -

first subsistence and later supply to the factory

canteen for income.

We are also investing in a project to collect water via

a rain capturing project, via the use of large plastic

water tanks called a “JoJo”. Apollo has donated

used OTR Bladders which we will use to set up to

grow potato gardens and composting chambers.

Collection boxes for second hand goods at Apollo's

Factory has also been set-up, whereby employees

can donate their old clothes and toys for the benefit

of the children.

Inkanyezi Special School

Carbon Offsetting

The Ladysmith Factory has also embarked on a two-

year tree planting project, to green the area, and to

in part offset emissions from our coal burning

boilers. Over a two year period, we completed

planting more than 1000 indigenous trees. In the

previous year, we already planted 500 trees, and the

trees were sourced via the Wildlands Conservation

Trust, whom ATSA supports financially. This year

we planted another 500 trees, but also included

some large fruit trees and the fruit will be for local

consumption by employees.


80 Performance Indicators 2011-12

Performance Indicators


APOLLO G3 Critical Indicator Index 2011-2012

Performance Indicator

Core/ Additional

Description

Economic

ZoneE

ZoneA

ZoneI

Corporate

Aspect - Economic performance

Aspect - Market presence

Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.

EC1

EC5 Add

Core

Core

Y Y Y Y

EC2 Financial implications and other risks and opportunities for the organisation's activities due to climate change.

CoreEC3 Coverage of the organisation's defined benefit plan obligations.

CoreEC4 Significant financial assistance received from government.

Y Y Y Y

Y Y Y Y

Y Y Y Y

Y Y Y Y

Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation. EC6 Core Y Y N N

Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation. EC7 Core Y Y Y Y

Aspect - Indirect economic impacts

Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement. EC8 Core Y Y Y Y

Understanding and describing significant indirect economic impacts, including the extent of impacts. EC9 Add Y Y Y Y

EnvironmentalAspect - Materials

Materials used by weight or volume. EN1 Core Y Y Y YPercentage of materials used that are recycled input materials. EN2 Core Y Y Y Y

Aspect - Energy

Direct energy consumption by primary energy source. EN3 Core Y Y Y YIndirect energy consumption by primary source.EN4 Core Y Y Y YEnergy saved due to conservation and efficiency improvements.EN5 Add Y Y Y YInitiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives. EN6 Core Y Y Y YInitiatives to reduce indirect energy consumption and reductions achieved. En7 Core Y Y Y Y

Aspect - Water

Total water withdrawal by source. EN8 Core Y Y Y YWater sources significantly affected by withdrawal of water. EN9 Add Y Y Y YPercentage and total volume of water recycled and reused. EN10 Add Y Y Y Y

Aspect - Biodiversity

Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.EN11 Core Y Y Y Y

Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas. EN12 Core Y Y Y Y

Habitats protected or restored. EN13 Add Y N N NStrategies, current actions, and future plans for managing impacts on biodiversity.EN14 Add Y N N NNumber of IUCN Red List species and national conservation list species withhabitats in areas affected by operations, by level of extinction risk. EN15 Core Y N N N

Aspect - Emissions, effluents and waste

Total direct and indirect greenhouse gas emissions by weight. EN16 Core Y Y Y YOther relevant indirect greenhouse gas emissions by weight. EN17 Core

Initiatives to reduce greenhouse gas emissions and reductions achieved.EN18 AddEmissions of ozone-depleting substances by weight. EN19 Core Y Y Y YNox, SOx, and other significant air emissions by type and weight. EN20 Core Y Y Y YTotal water discharge by quality and destination. EN21 Core Y Y Y YTotal weight of waste by type and disposal method. EN22 Core Y Y Y YTotal number and volume of significant spills. EN23 Core Y Y N NWeight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally.

EN24 Add Y Y N N

Y Y N NY N N N

Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally.

EN25 Add Y Y Y Y

Aspect - Products and servicesInitiatives to mitigate environmental impacts of products and services, and extent of impact mitigation.EN26 Core Y Y Y YPercentage of products sold and their packaging materials that are reclaimed by category.

EN27 Core Y Y N N




Core/ Additional

Description

EnvironmentalAspect - Compliance

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations. EN28 Core Y Y Y Y

Y Y Y Y

Aspect - TransportSignificant environmental impacts of transporting products and other goods and materials used for the organisation's operations, and transporting members of the workforce.

EN29 Add Y N N N

Aspect - Overall

Total environmental protection expenditures and investments by type.EN30 Add

Social: Labor Practices and Decent WorkAspect - Employment

Total workforce by employment type, employment contract, and region. LA1 Core Y Y Y YTotal number and rate of employee turnover by age group, gender, and region. LA2 Core Y Y Y YBenefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations. LA3 Add Y Y Y Y

Aspect - Labor/management relations

Percentage of employees covered by collective bargaining agreements.LA4 Core Y Y Y YMinimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements. LA5 Core Y Y Y Y

Aspect - Occupational health and safety

Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.

LA6 Add Y Y Y Y

Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region.LA7 Core Y Y Y Y

Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.

LA8 Core Y Y Y Y

Health and safety topics covered in formal agreements with trade unions. LA9 Add Y Y Y YAspect - Training and education

Average hours of training per year per employee by employee category. LA10 Core Y Y Y Y

Y Y Y Y

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. LA11 Add Y Y N NPercentage of employees receiving regular performance and career development reviews.LA12 Add

Aspect - Diversity and equal opportunity

Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity.

LA13 Core

Core

Y Y Y Y

Y Y Y Y

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. LA14 Y Y N N

Social: Human Rights

Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening.

HR1 Core

Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken.

Core

Y N N N

HR2

HR3 Add Y N Y N

Y Y N NTotal hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.

Aspect - Diversity and equal opportunity

Aspect - Non-discrimination

Total number of incidents of discrimination and actions taken.HR4 Core

Aspect - Freedom of association and collective bargaining

Y Y Y YOperations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights.

HR5 Core

Aspect - Child labor

Y Y Y YOperations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor. HR6 Core

Aspect - Forced and compulsory labor

HR7 CoreOperations identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of forced or compulsory labor. Y Y Y Y

ZoneE

ZoneA

ZoneI

Corporate





Core/ Additional

Description

Social: Human Rights

Corporate

Aspect - Security practices

Percentage of security personnel trained in the organisation's policies or procedures concerning aspects of human rights that are relevant to operations. HR8 Add

Add

Y Y Y Y

HR9 Total number of incidents of violations involving rights of indigenous people and actions taken. Y Y Y Y

Aspect - Indigenous rights

Social: SocietyAspect - Security practices

Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting.

SO1 Core Y Y Y Y

Aspect - Corruption

Percentage and total number of business units analyzed for risks related to corruption.SO2 Core Y Y N N

Y Y N N

Percentage of employees trained in organisation's anti-corruption policies and procedures. SO3 Core Y Y Y Y

Actions taken in response to incidents of corruption.SO4 Core Y Y Y Y

Y Y Y Y

Y Y Y Y

Y Y Y Y

Y Y Y Y

Aspect - Public policy

Public policy positions and participation in public policy development and lobbying. SO5 Core

Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.SO6 Add

Aspect - Anti-competitive behavior

Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes. SO7 Add

Add

Aspect - Compliance

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations. SO8 Core

Social: Product Responsibility Aspect - Customer health and safety

Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.

PR1 Core Y Y Y Y

Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes.

PR2

Y Y N NAdd

Aspect - Product and service labelling

Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements. PR3 Core Y Y Y Y

Y Y Y Y

Y Y Y Y

Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes. PR4

Add Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. PR5

Y Y N N

Y Y N N

Add

Add

Aspect - Marketing communications

Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship. PR6 Core

Core

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes.

PR7

Aspect - Customer privacyTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data. PR8

Y Y Y Y

Aspect - Compliance

Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services. PR9

Report Level

Level A (Core 27 )Zone E

# Core # Add # Total GRI Level

Level B (Core Indicators 27)Zone SA

49 30 79 A

Level B (Core Indicators 28)Zone I

48 24 72 B

Level B ( Core Indicators 26)Corporate

40 20 60 B

40 19 59 B

ZoneE

ZoneA

ZoneI

sustainability report

Documents

Transcript of sustainability report