Ashok Leyland

CHAPTER-1
INTRODUCTION ABOUT INTERNSHIP AND INDUSTRY PROFILE

1.1 Introduction to the Internship:

An internship is a professional learning experience that offers meaningful practical work related
to student’s field of study or career interest. It gives a student the opportunity for career
exploration and development and to learn new skills. It offers the employer the opportunity to
bring in new ideas and energy into the workplace, develop talent and potentially build a pipeline
for future full-time employees. It is a learning situation where the student has the opportunity to
gain practical experience. When placed in this situation the students expand their concepts of
different organizational structures and working relationships within the workplace. The
internship increases the student’s responsibility as it requires them to gather information and plan
the report throughout the work experience. The student has an opportunity to demonstrate
maturity as a technical writer by analyzing, presenting and evaluating his or her own work on the
job.

Internship is the position of a student or trainee who works in an organization, sometimes

without or with pay, in order to gain work experience and knowledge about the organization
structure. The interns may be high school students, college and university students or post-
graduate adults. It is performed to gain knowledge through training and get exposure to the
operations carried out in various departments in the organization.

A quality internship:

 Consists of a part-time or full-time work that includes no more than 25% clerical or
administrative duties.
 Provides a clear job/project description for work experience.
 Orients the students to the organization, its culture and proposed work assignments.
 Offers regular feedback to the student intern.

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Organization study refers to the study of an organization as a whole and getting relevant
knowledge of various departments in the organization. Study of an organization functioning is an
important factor for any organization to achieve its objectives. The objectives or setup as and
when the organization is started. The objectives are to be clear, candid and well defined for
future expansion. The activities and the functions which are followed by the employees in the
organization have to be in defined procedures. The methodology used for the study is collection
of relevant information through the secondary data. Secondary data is collected through
company website, existing records. It is aimed at seeking information such as its history, nature
of business, vision, mission, policies, turnover, market share and various financial ratio etc. An
internship is an opportunity to integrate career related experience into an undergraduate
education by participating in planned and supervised work. It is an opportunity offered by
employers both in the non-profit and profit sectors, to students interested in the industry. An
intern works at the company for a fixed period of time ranging from few weeks to months. Some
students will have a part time internship, where they work at the office for just a few days or
hours a week. Others will have full-time internships, meaning they work the same hours as the
company's full-time employees. Internships can be any time of the year, including over the
summer and during the regular semester. Internships are sought by both students as well as
graduates who are not yet hired.

Organization study ensures complete study of various factors like capital, manpower, machinery
and management of an organization. It is essential to know the actual working environment and
the overall structure of an organization. The main purpose of pursuing an organization study is to
analyze the various departments of the organization, understand their basic functions, work
procedure, purpose of the work and vision and mission of the company and also to know the
competitors and company’s strategy to overcome them.

1.1.1 Objectives of internship:

1. Apply business concepts and theories to real-world decision making.

2. Increase proficiency in specific business disciplines; such as human resource
management, operations management, marketing, accounting, statistics, economics and
finance.

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3. Develop and improve business skills in communication, technology, quantitative

reasoning and teamwork.
4. Observe and participate in business operations and decision making.
5. Meet professional role models and potential mentors who can provide guidance, feedback
and support.
6. Expand network of professional relationships and contacts.

1.1.2 Importance of internship:

1. A chance to develop your knowledge and skills in a particular field or industry.

2. Exploring different roles to see which one you would like to pursue.
3. Getting insight into the way business work and what challenges they face on a daily
basis.
4. The opportunity to create a network of contacts.
5. Gaining valuable work experience to set you apart from other candidates.
6. Applying the concepts and strategies of academic study in a live work environment.
7. It enables us to gain first- hand exposure of working in the real world.
8. Secure good references and recommendations.

1.1.3 Scope of the study:

 This study is an attempt to understand the organization as a whole and to study the
different departments in detail so that a student gets a detailed knowledge about the
organization. The study is directed towards the understanding of functions and work
culture of different departments.
 This report gives clear picture about the operations of Ashok Leyland. Next part of this
is concerned with specific topics covering the company profile and function of this
company. It gives background, vision, mission, quality policy, nature of business carried.
 This study will help us to understand the extent to which the theory matches with actual
practices and get clear idea regarding the products of the organization.

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1.2 Industry Profile:

The history of automobile industry is more than four centuries old the first invention of
automobile industry was as early as in 1769. A French Engineer, Nicolasan J. Cugnot invented
the first self-powered, three-wheeled, military tractor that made the use of a steam engine. The
range of the automobile however was very brief. These automobiles were driven by steam
engines, which made them very heavy and large. Besides, this the engine required ample starting
time. Thereafter, in the
U.S. Oliver Evans designed a steam engine driven automobile. Then came the era of electric
carriage. A Scotsman, Robert Anderson, invented an electric carriage between 1832 and 1839
first. In 1842 Thomas Davenport of the U.S.A and Scotsman Robert Davidson invented more
applicable automobiles, making use of non-rechargeable electric batteries. Col. Rookes
Crompton introduced public transport wagons strapped to and pulled by imported steam road
rollers called steamers. The maximum speed of these buses was 33 km/hr. The first theoretical
plans for a motor vehicle were drawn by Leonardo da Vinci and Isaac Newton. History of
Automobile Industry reveals that
US dominated the automobile markets around the globe. There were no notable competitors at
that time. After Second World War in 1945 the Automobile Industry of other technologically
advanced nation such as Japan and certain European nation gained momentum. The U.S.
Automobile Industry was flooded with foreign automobile companies, especially Japan Germany
within a very short period beginning early 1980s.
The history of automobile industry in India is also quite old. Simpson & Co established in 1840
were the first to build a steam car and a steam bus in India. The first car ran on India’s roads in
1898 in Bombay. Ager the end of the World War a large number of military vehicles come on
the roads in India in 1919. American General Motors, a wholly owned Indian subsidiary of
started assembly of CKD Trucks and Cares in 1928 In Bombay. Canadian Ford Motors started
assembly of cars in 1930-31 in Madras, Bombay and Calcutta. In 1942 Hindustan Motors Lt was
incorporated. Hindustan Motors produced its first vehicle in 1950. In 1944 premier Automobiles
Ltd incorporated. The first vehicle was produced by it in 1947. Thereafter, in 1947 Bajaj started
assembly of Auto in its scheme of replacing cycle rickshaw by auto under a license from
Piaggio. After independence, the Government if India and the private sector launched efforts to
create and automotive component manufacturing industry to supply to the automobile industry.

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Due to nationalization and the license raj, the growth was relatively slow in the 1950s and 1960s.
This hampered the Indian private sector. After 1970, the automotive industry stared to grow.
However, the growth was mainly driven by tractors, commercial vehicles and scooter. Cars were
still a major luxury. Till the early eighties, the automobile industry had very slow growth. Until
1982, there were only three manufacturers who had complete sway in the sector. They were,
Hindustan Motors, Premier Automobiles and Standard Motors. The Government allowed foreign
technology with or without equity participation with Indian companies. In 1982 Maruti Udyog
Limited (MUL) came up as a Government initiative in collaboration with Suzuki of Japan to
establish volume production of contemporary models. The fruits of first wave of initiatives were
consolidated and then in early 1990s another tranche of reforms was made by Government
allowed which paved way to develop the automobile sector further. Major reforms initiated were:
 De-licensing of automobiles and automobile components.
 Automobiles and automobile components, were among these industries who were
identified as ‘high priority’. Foreign equity participation in these companies were
allowed up to 51%.
 Procedures for approval of foreign collaboration involving technology transfer were
simplified for both with or without equity participation.
 Custom duty at that time was at its peak, which was as high as 110%. This was reduced
to 65% ad valorem.
 Full convertibility of rupee on current account was allowed.
 The condition of a ‘phased manufacturing Programme’ for indigenization before
allowing imports was withdrawn.

Indian automobile industry includes manufacture of trucks, buses, passenger cars, defence
vehicles, two wheelers etc. The industry can be broadly divided into the car manufacturing, two-
wheeler manufacturing and heavy vehicle manufacturing units.

The major car manufacturers are Hindustan Motors, Maruti Udyog, Fiat India Pvt. Ltd, Ford
India Ltd., General Motors Pvt. Ltd., Honda Siel Cars India Ltd., Hyundai Motors India Ltd.,
Skoda India Pvt. Ltd., Toyota Kirloskar Motor Ltd., to name a few.

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The two wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle &
Scooter India Pvt. Ltd., Hero Honda, Yamaha, and Bajaj.

The heavy motors like buses, trucks, defence vehicles, auto rickshaws and other multi-utility
vehicles are manufactured by Tata-Telco, Ashok Leyland, Eicher Motors, Bajaj, Mahindra and
Mahindra etc.

1.2.1 Present scenario of automobile industry:

Real growth journey of automobile industry started in 1991 by the announcement of New
Industrial Policy de licensing of Automobile industry by Government of India. The New
Industrial Policy of 1991 provided that except in some special cases industrial license is not
required for setting I of automobile manufacturing unit. Progressive liberalization was made by
Government of India in the norms for Foreign Investment and import of technology. This was
done with a view to make the automobile industry globally competitive. Continuous economic
liberalization since 1991 witnessed a rapid growth of automobile industry in India, thereby
making India as one of the sought after destination by global automotive players. Due to
continuous growth of the industry in India, the automobile sector has been aptly described as the
sunrise sectors of the Indian economy. Due to relaxed restrictions, positive support by
government and increased competitiveness, the Indian automobile industry has demonstrated
sustained growth in last two decades. Tata Motors, Maruti Suzuki, Mahindra and Mahindra,
Ashok Leyland are among those several automobile manufacturers who have expanded their
domestic and international operations. Continuous rapid growth of automobile industry resulted
in further expansion of domestic automobile market.
The automobile industry is expected to witness strong growth through 2020

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CHAPTER-2
ORGANIZATION PROFILE
Table 2.1 Organization Profile

Name of the company Ashok Leyland

Headquarters Chennai, Tamil Nadu, India

Incorporation Date 7th September 1948

Class of company Public

Industry Automobile

Area served Worldwide

Parent Hinduja group

Subsidiaries Albonair GmbH,Optare, Lanka Ashok Leyland, Hinduja

Tech, Hinduja Leyland Finance, Global TVS Bus Body
Builders Limited

Number of employees 10000+

Website www.ashokleyland.com

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2.1 Background:
Ashok Leyland has been a major presence in India’s commercial vehicle industry since 1948, the
year it was born. The origin of Ashok Leyland can be traced to the urge for self-reliance, felt by
independent India. Pandit Jawaharlal Nehru, India's first Prime Minister persuaded Mr.
Raghunandan Saran, an industrialist, to enter automotive manufacturing. They are one of the
India’s leading manufacturers of commercial vehicles and special vehicles, engines for industrial
purpose, gen sets and marine requirement equipments. For over five decades, Ashok Leyland has
been the technology leader in India’s commercial vehicle industry, molding the country’s
commercial vehicle profile by introducing technologies and product ideas that have gone on to
become industry norms.

Ashok Leyland at the time of its inception was known as Ashok Motors. It was
assembling Austin cars in its first plant at Ennore near Chennai. In 1950, the company started
assembly of Leyland commercial vehicles and soon the local manufacturing under license from
British Leyland, participation in the equity capital, in 1954, the company was re christened
Ashok Leyland.

In 1987 the overseas holding by LRLIH (LAND ROVER LEYLAND INTERNATIONAL

HOLDINGS LIMITED) was taken over by a joint venture between the Hinduja group, the Non
Resident Indian Transnational group and IVECO Fiat SPA part of the Fiat group and Europe’s
leading truck manufacturing company. Ashok P Hinduja is the chairman of the company. The
Hinduja group also associated with Ennore Foundries Limited, Automotive Coaches and
Components Limited, and Gulf Ashley Motors Limited. The subsidiary holdings are Ashley
Holdings Ltd., Ashley Investment Ltd, and Ashok Leyland Project Services.

With a commanding strength of the about 10000, employees the company is looking forwards to
enhance the scope of its action. It is aiming at expanding its production operation overseas to
make it a more globally accessible company. It is looking to acquire a small to medium sized
commercial vehicle manufacturers in China and other developing nations, which have an

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established product line. An example would be the 2007 acquisition of the Czech based Avia’s
truck business rechristened Avia Ashok Leyland Motors.

From 18 seater to 82 seater double-decker buses, from 7.5 tonne to 49 tonne in haulage vehicles,
from numerous special application vehicles to diesel engines for industrial, marine and genset
applications, Ashok Leyland offers a wide range of products such as buses, trucks, light vehicles,
defence vehicles, power solutions.

Ashok Leyland has seven manufacturing plants:

 Ennore Plant, Chennai.

 Hosur Plants Unit I, Unit II and Unit II A.
 Alwar, Rajasthan.
 Bhandara, Maharashtra.
 Pantnagar, Uttarakhand
Early products of Ashok Leyland included the Leyland Comet bus chassis sold to many
operators including Hyderabad Road Transport, Ahmedabad Municipality, Travancore State
Transport, Bombay State Transport and Delhi Road Transport Authority. In the popular metro
cities, four out of five state transport undertaking buses come from Ashok Leyland. Some of
them like the Double Decker and Vestibule buses are unique models from Ashok Leyland, tailor
made high-density routes.

Statistics reveal that the company is India’s largest exporter of medium and heavy duty trucks. It
sells close to 83,000 medium and heavy vehicles each year. The company has a near 98.5%
market share in the Marine Diesel engine markets in India. At 60 million passengers a day,
Ashok Leyland buses carry more people than the entire Indian Railway network.

2.1.1 Facilities:

 Ashok Leyland’s Technical Centre, at Vellivayal chavadi in the outskirts of Chennai, is a

state-of-the-art product development facility, that apart from modern test tracks and
component test labs, also houses India’s one and only Six Poster testing equipment.
 The company has an Engine Research and Development facility in Hosur.

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 The new plant in the North Indian state of Uttarakhand at Pantnagar is set up at an
investment outlay of Rs.1200 crores. This plant is expected to go on stream in the year
2010 to cater mainly to the North Indian market taking advantage of the excise duty and
other tax concessions. The facilities have been so designed as to accommodate further
expansion in terms of capacity and future models. At full capacity utilization, 75000
vehicles will roll out of the Pantnagar plant.
 The company has signed an agreement with Ras Al Khaimah Investment Authority
(RAKIA) in UAE for setting up a bus body building unit in the Middle east.

2.1.2 Clients:
 Indian Army.
 US Army.
 Honduras Armed Forces (HAF).
 Tamilnadu State Transport Corporation (TNSTC).
 Metropolitan Transport Corporation (MTC), Chennai.
 State Express Transport Corporation (SETC), Tamilnadu.
 Kerala State Road Transport Corporation.
 Maharashtra State Road Transport Corporation (MSRTC).
 Andhra Pradesh State Road Transport Corporation (APSRTC).
 Praveen Travels.
 Sharma Transport.

2.2 Nature of business:

 Automobile manufacturers: Every day, there is a relentless demand on the shop floor of
Ashok Leyland. They create world class engines, chassis, full vehicle bodies and
everything else in between. They are the second largest vehicle manufacturers in India,
the fourth largest manufacturer of buses and 10th largest manufacturer of trucks in the
world.

 Manufacturing and Technology: The company has consistently relied on its in-house
R&D talent and indigenous technology for leading innovations in the industry. Ashok

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Leyland introduced ‘Innoline’ world’s first BS4 engine driven by an inline fuel pump. In
order to meet the BS-VI emission standard, the company has developed the innovative
iGen6 technology that will ensure higher operating profits for customers.

 Services centers: State-of-the art pneumatically automated service centers equipped with
computerized wheel aligners and balancers and cabin repair facilities. These facilities
unique in the commercial vehicle industry, result in ever more efficient and effective
service at optimized costs. From braving the cold heights of 3500 meters in Leh to
bracing against the heat of insurgency in Jogighopa, Assam; from supporting the defence
personnel in far-away Tawang, to reaching into the deep mining best of Singrauli,
Madhya Pradesh; over 700+ service touch points represent more than just a wide spread.

2.3 Vision, Mission, Values and Quality policy:

2.3.1 Vision:
Achieving leadership in the medium/heavy duty segments of the domestic commercial vehicle
market and a significant presence in the world market through transport solutions that best
anticipate customer needs, with the highest value -to-cost ratio.

2.3.2 Mission:
 Identifying with the customer.
 Being the lowest cost manufacturer.
 Global benchmarking our products, processes and people, against the best in the industry.

2.3.3 Values:
The Five AL Values are:

1. International

2. Speedy

3. Value Creator

4. Innovative

5. Ethical

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2.3.4 Quality policy:

Ashok Leyland is committed to achieve customer satisfaction by anticipating and delivering

superior value to the customer in relation to their own business, through the products and
services offered by the company and comply with statutory requirements.
Towards this, the quality policy of Ashok Leyland is to make continual improvements in the
processes that constitute the quality management system, to make them more robust and to
enhance their effectiveness and efficiency in achieving stated objectives leading to
1. Superior products manufactured as also services offered by the company.
2. Maximum use of employees potential to contribute to quality and environment by
progressive up gradation of their knowledge and skills as appropriate to their functions.
3. Seamless involvement from suppliers and dealers in the mission of the company to
address customers changing needs and protection of the environment.

2.4 Products:
Ashok Leyland offers a comprehensive product range with trucks from 7.5 tons GVW to 49 tons
GVW(Gross Vehicle Weight). From 19 to 80 seaters in passenger transport, a host of special
application vehicles and diesel engines for industrial gensets and marine application. Product
profile can be broadly split into five categories viz. Buses, Trucks, defence vehicles, special
Vehicles and Engines.

BUSES

Ashok Leyland Janbus MIDI

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Ashok Leyland Cheetah

Ashok Leyland Sunshine School Bus

Ashok Leyland REULE

Ashok Leyland Viking City Bus

Ashok Leyland 12M FE Staff Bus

Ashok Leyland 12M FESLF

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Ashok Leyland Circuit Bus

TRUCKS

Ashok Leyland Dost Strong

Ashok Leyland 1920 Tipper

Ashok Leyland Partner 6 Tyre

Ashok Leyland Ecomet 1615 HE

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Ashok Leyland Boss 1115 HB

DEFENCE VEHICLES

Hardy Hippo: Used as a carrier and for mounting communication equipment, the Hippo was
regular in the Indian Army, Navy and Air Force, in the 1970s.

Trusted Retrofitters: Ashok Leyland used to repower (retrofit) the Shaktiman trucks–medium

capacity 4x4s manufactured by the German firm MAN, which were the most widely used
vehicles in the Indian Army until early 1990s.

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Early Spark: In the early 1980s, Ashok Leyland developed and supplied state-of-the-art 6x6
Crash Fire Tender and 4x4 Rapid Intervention Vehicles to the Navy and Indian Air Force to be
deployed at their air ports.

Viable Alternative: In 1984, Indian Army shortlisted the Ashok Leyland EO 370 engine as an
alternative for the Shaktiman engine for field replacement. Over 7000 engines were supplied for
field replacement and OE fitment at the Ordnance Factory in Jabalpur.

Tomorrow-Ready: The Indian Army decided to modernize the vehicles produced in the

Ordnance Factory in Jabalpur. When they began to look for alternative engines, Ashok Leyland
stood the tallest.
Birth of an Icon: In 1994, Ashok Leyland’s Stallion 4x4–an indigenous War Horse–was born
and selected to replace Shaktiman 4x4 after demonstrating superior performance even in high
altitude, deserts and cross-country terrain.

Trust, the Old-Fashioned Way: With periodical up gradation–engine, cabin, etc.–in the

product, Stallion 4x4 gained its place as the preferred mode of transport for the Indian Army.

The War Horse: By 1999, when the high-altitude warfare of Kargil unfolded, Stallion had
become the definitive logistics vehicle for the Indian Army. The Stallion recorded 95%
operational availability, transporting soldiers as well as carrying stores from airplanes to the war
zone in extreme hostile conditions. 

Staggering Versatility: In the new millennium, after Ashok Leyland began building other
variants, the Stallion also served the positions of Fuel Bowser, Water Bowser, Light Recovery
Vehicle, Field Artillery Tractors and Fire Fighting Trucks.

Beast of a Benchmark: When the Indian Army decided to induct New Generation High
Mobility Vehicles in 6x6 and 8x8 platforms, Ashok Leyland again rose to the task and built the

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Super Stallion. This powerful machine hefted the bar for mobility and utility higher than ever
before and the Power Horse of Super Stallion vehicles were born.

Leader, in Service of the Servicemen: Ashok Leyland

shattered competition in 2015 to become the preferred maker of
High Mobility Vehicles in 6x6 and 8x8 configuration for the
Ministry of Defence. In the same year, Ashok Leyland was also
shortlisted by DRDO and DPSU in HMV 6x6, 8x8, 10x10 and
12x12 configuration as Weapon, Radar and Bridging mobility
platforms.

ENGINES

Industrial Engine

Marine Engines

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Diesel Generator set

2.5 Ownership pattern:

Table 2.2 Ownership Pattern

Name Designation
Dheeraj G Hinduja Executive Chairman

R J Shahaney Chairman Emeritus

Vipin Sondhi Managing Director and CEO

Anuj Kathuria CEO

Nithin Seth CEO

Gopal Mahadevan Whole Time Director and CFO

N Saravanan CTO

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N Ramanathan Company Secretary

Jean Brunol Director

Manisha Girotra Director

Jose Maria Alapont Director

Andreas H Biagosch Director

Sanjay K Asher Director

Andrew C palmer Director

Saugata Gupta Independent Director

Dheeraj G Hinduja Nithin Seth

Gopal
R J Shahney
Mahadevan

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Vipin Sondhi N Saravanan

Anuj Kathuria N Ramanathan

2.5.1 Organization structure of Ashok Leyland:

MANAGING DIRECTOR

WHOLE TIME DIRECTOR

EXECUTIVE DIRECTOR

SPECIAL DIRECTOR

GENERAL MANAGER

DEPUTY GENERAL MANAGER

ASST. GENERAL MANAGER

DIVISIONAL MANAGER
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SENIOR MANAGER

MANAGER

DEPUTY MANAGER

ASSISTANT MANAGER

SENIOR OFFICER

OFFICER

Functions of the major departments selected:

The major functional areas of the unit and the major departments which oversee those areas are
catalogued as follows:

a) HR Department
b) Finance Department
c) Marketing Department
d) Production Department.
A brief review of each department and its activities as follows:

HUMAN RESOURCE DEPARTMENT:

Human resource management is defined as the managing function of employees, developing and
compensating HR resulting in creation and development of human relations with the view to
contribute proportionately to the organizational, individual and social goal.

VALUE STATEMENT

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“We consider our employees as our most valuable asset and are committed to provide full
encouragement and support to them, to enhance their potential and contribution to the company’s
business”.

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FINANCE DEPARTMENT:

Finance is considered as the life blood of business. This is because in the modern money-
oriented economy, finance is one of the basic foundations of all kinds of economic activities.
Finance function may be defined as the procurement of funds and their effective utilization.

 RESPONSIBILITIES OF FINANCE DEPARTMENT:

 The pricing department is responsible for the fixing of prices for sales of the vehicles and
for buying of raw materials and semi-finished goods.
 Treasury section is responsible for all kinds of funding managements such as
investments.
 Taxation section is responsible for remittance of tax, filing of returns, handling of
litigations etc..,
 Costing and Budgeting department is responsible for the unit costing of each product in
particular, such as spare parts and a vehicle as whole.
 The FSG (Finance account Service Group) deals with the payables and receivables at
regional offices.
 The Explore finance department deals with the FSG exporting of items.

MARKETING DEPARTMENT:

Marketing is concerned with the people and the activities involved in the flow of goods and
services from the producer to the consumer.

Ashok Leyland has been offering world class products to millions of customers to 40 countries
across the world.

Its main product line include Trucks, Buses, Defence vehicles and special vehicles and engines
for Indian and Overseas market.

Ashok Leyland is

 The market leader in Indian bus market offering CNG, Double decker and Vestibule bus
variants.
 The market leader and pioneer for multi-axle trucks and tractor-trailers.

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 Enjoys market supremacy in diesel engines for Industrial, Gen-set and Marine
applications.
 Largest supplier of logistic vehicles to the Indian Army.
 Offers “Total Maintenance Solutions” through maintenance contracts for its products,
relieving the customers of all maintenance worries.
KEY ASPECTS OF APPROACH:

SALES AND SERVICES

MARKETING CUSTOMER SUPPORT

ADVERTISING:

The need for advertising was felt by Ashok Leyland in 2006-07 when they had to project the
transformation that has occurred within Ashok Leyland, but as yet not communicated to the
public. They came up with a product related Ad campaign and a Corporate campaign. Their aim
was to let their target audience perceive their brand as International, Innovative and Speedy,
which has always been their core brand value. At the All India PR awards 2007 conducted by the
Public Relations Society of India (PRSI). Ashok Leyland won the second prize for their
corporate campaign. They gave a prelude to the campaign by exhibiting their product range and
their field of pioneering.

This was followed by a three ad campaigns.

 “Only an ashok Leyland engineer will be inspired by Raag Madhuvanti to create quieter
luxury coaches”.
 “Only an Ashok Leyland engineer will calculate the rpm of the ball, when a ‘Doosra’ is
bowled”.

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 “Only an Ashok Leyland engineer will watch ‘titanic’ to spot the design flaw in the ship”.
Also a television commercial was aired in 2007. The commercial was made in two languages-
Hindi and Tamil. It was broadcasted on mainline news channels for wider coverage. There were
translites placed at airports for greater visibility.

ASHOK LEYLAND- THE BRAND:

“ENGINEERING YOUR TOMMOROWS” has been Ashok Leyland’s Brand promise. The
tag line finds expression at two levels: on the hard core strategy level, that is the sum total of the
essential values of vehicle technology-safety, comfort, economy and ecology; on the aspirational
level, it denotes a warm and caring relationship with each stake holder in a unique way.

Brand values:

The two most visible- and recognized- components of the brand are the dynamic “L” logo and
the name of Ashok Leyland. The name has historic reasons- and time less meanings.

Ashok meaning Happy is the name of the company’s founder Raghunandan Saran’s son. The
second part of the company’s name has come to cue the international aspect while the first part,
so unmistakably Indian, has un-declined the custom built relevance of the company’s products
and operations in the Indian context.

Brand Ashok Leyland is essentially and experiential brand, its values felt in day to day life- more
palpably by its immediate customers and end users. The core of the brand has always been
innovative, international, speedy, moving with times- and often-even ahead of it. The innards of
Ashok Leyland vehicles have always been contemporary. The core is now being matched by
contours of the new, modern, future ready range of vehicles.

In 2006, Ashok Leyland felt a need for change in perception of image among its public after its
research feedback by its brand study. Though the company has pioneered many product
concepts, and technologies, it was perceived to be a slow, elderly and not modern brand. This
made it necessary for Ashok Leyland to bring about a shift in perception and reinforce the fact
that the company was fundamentally strong, masculine, traditional, sincere, transparent,
financially managed and innovative.

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Thus emerged the new Ashok Leyland with a new face. The tangible shift began with a change
in the typeface of the brand name along with a baseline. Various advertisements were aired to
promote the brand. The launch of a new website opened to doors to the world outside. Also
screening of its corporate film helped them gain publicity.

Fig 2.1 Logo of

Ashok Leyland

DISTRIBUTION CHANNEL – SALES:

Table 2.3 Distribution channel- sales

REGION REGIONAL OFFICE AREA OFFICE

South-1 Chennai Chennai, Madurai, Eranakulam

South-2 Bangalore Bangalore, Hubli

South-3 Secunderabad Secunderabad

West-1 Mumbai Mumbai

West-2 Ahmedabad Ahmedabad

Central Nagpur Nagpur, Indore

North-1 Delhi Delhi, Lucknow

North-2 Jaipur Jaipur

North-3 Chandigarh Chandigarh

East Kolkata Kolkata, Bhubaneswar, Jamshedpur,

Guwahati

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PRODUCTION DEPARTMENT:

Production is an organized process of manufacturing/producing goods and services through the

use of input resources of men, materials, money, machine, methods.

PRODUCTION MANAGEMENT STRATEGIES:

Long range strategies:

 Effective management of technology.

 Innovation in product management and process technology.
 Globalization in industry.
 Goodwill inside and outside the organization.
 An aggressive marketing strategy and risk taking ability.

Short range strategies:

 Location and layout.

 Product selection and technology.
 Capital selection and investment.
 Flexible strategy of production.
 Standardization of design.
 Economy of size and variety.

PRODUCTION SYSTEM:

Ashok Leyland employs a continuous production system, making use of special purpose
machines and produces standardized items in large quantities.

Characteristics:

 Standard products are manufactured.

 Small work in progress in involved.
 More maintenance is required.

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 Minimum cost of production per unit.

2.6 Achievements of Ashok Leyland:

 Alwar Plant has bagged “Golden Peacock Award” for Environment Management.

 Alwar & Bhandara Plants got the Aspirant – merit Certificate for Green Manufacturing
Excellence award from Frost & Sullivan.

 Hosur 2 won merit award from Ministry of Power, India conducted by BEE (National Energy

Conservation Awards 2013).

 Hosur 2 also secured “Gold” in the Environment Award 2013 conducted by Greentech
Foundation.

 Ashok Leyland is selected for the IRTE National Award, in recognition of their efforts
towards promoting the cause of road safety, traffic management and environment protection.

 Ashok Leyland's Ennore unit has received ISO 14001 certification for its environment
management system from Indian Registrar Quality Systems.

 The Company has crossed its first milestone in setting up an environmental management
system with its Ennore plant obtaining the ISO-14001 certification from the Indian Register
Quality Systems.

 Ashok Leyland's Hosur unit has bagged CII's award in safety, health and Environment.

 Ashok Leyland has received prestigious Deming Award in 2016 for its plant in Pantnagar
and in 2017 for its Hosur II plant.

 Bhandara Plant bagged “Excellent Energy Efficient Unit” and “Innovative Project “Award in
the 17th National Award for Excellence in Energy Management 2016 organised by
Confederation of Indian Industry.

 Ennore and Hosur 1 Plant bagged Platinum and Gold award at Raipur in NCQC national
level competition for best Energy conservation project and CPPS plant won Merit Award.

 Alwar Plant has won Rajasthan state Energy Efficiency award.

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 Ashok Leyland has received BS7799 certification for information security management
system.

 Ashok Leyland gets ISO/TS 16949 corporate certification.

2.7 Future growth and prospects:

 To consolidate and further grow its market position, the company is ready with its
indigenous, cost effective iGen6 mid-nox engine technology for BS-VI.
 The company is in the process of developing new modular platform on which it plans to
roll out its future medium and heavy products.
 With the introduction of new platform, the company will be able to introduce virtually
every product with left-hand drive version as well.
 With the LCV and ICV range they will be able to enter ASEAN market.
 In some markets where volumes are promising the company is looking to set up assembly
plants.
 With the AVTR and Phoenix range the company is looking to compete with global CV
makers in international markets.
 The company has set its focus on key export markets including Middle East, Africa and
the CIS countries.
 The company has announced a partnership with ABB Power Products to develop Electric
bus with the aim of providing mass public transportation bus system with zero local
emission, higher passenger capacity and which can be charged within seconds.

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CHAPTER-3
MCKINSEY'S 7S FRAMEWORK

3.1 Introduction:
The McKinsey 7S Framework is a management model developed by business consultants Robert
H. Waterman, Jr. and Tom Peters in the 1980s. This was a strategic vision for groups, to include
businesses, business units, and teams. The 7S’s are structure, strategy, systems, skills, style, staff
and shared values. The model is most often used as an organizational analysis tool to assess and
monitor changes in the internal situation of an organization.
The model is based on the theory that, for an organization to perform well, these seven elements
need to be aligned and mutually reinforcing. So, the model can be used to help identify what
needs to be realigned to improve performance, or to maintain alignment during other types of
change.

3.2 Meaning:
The 7S Framework of McKinsey's is a management model that describes seven factors to
organize a company in holistic and effective way.
Together these factors determine the way in which a corporation operates. Managers should take
into account all the seven of these factors, to be sure of successful implementation of a strategy,
large or small. They are all independent, so if the company fail to pay proper attention to one of
them, this may affect all others as well. On the top that, the relative importance of each factor
may vary over time. The 7S model provides a useful framework for analyzing the strategic
attributes of an organization. This framework has helped various consultants in their duties of
many companies. The most interesting fact is that this model is similar to managerial functions
that are widely followed i.e., Planning, Organizing, Staffing, Leading and Controlling. The
following diagram is the McKinsey's 7S model

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MCKINSEY’S 7S MODEL:

Fig 3.1 Mckinsey’s 7S Model

The model explains seven interdependent elements which can be classified as either “tough’ or
“gentle”.
“Hard” factors are easier to define or pick out and control can immediately impact them. These
are approach statements; business enterprise charts and reporting traces; and formal procedures
and IT systems.

“Soft” elements, alternatively can be tougher to describe, and are less tangible and more
prompted by using lifestyle. However, those soft elements are as crucial as then hard elements if
the corporations is going to be successful.

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1. Structure: The way the organization represents the business divisions and units are organized and
includes the information of who is accountable to whom. In other words, structure is the organizational
chart of the firm. It is also one of the most visible and easy to change elements of the framework.

2. Strategy: It is a plan developed by a firm to achieve sustained competitive advantage and

successfully compete in the market. In general, a sound strategy is the one that’s clearly
articulated, is long-term, helps to achieve competitive advantage and is reinforced by strong
vision, mission and values. But it’s hard to tell if such strategy is well-aligned with other
elements when analyzed alone. So the key in 7s model is not to look at the company to find the
great strategy, structure, systems and etc. but to look if it’s aligned with other elements.

3. Systems: The processes and procedures of the company, which reveal business’ daily
activities and how decisions are made. Systems are the area of the firm that determines how
business is done.

4. Skills: The abilities that firm’s employees perform very well. They also include capabilities
and competences.

5. Staff: This element is concerned with what type and how many employees an organization
will need and how they will be recruited, trained, motivated and rewarded.

6. Style: This represents the way the company is managed by top-level managers, how they
interact, what actions do they take and their symbolic value. In other words, it is the management
style of company’s leaders.

7. Shared Values: These are at the core of McKinsey 7s model. They are the norms and
standards that guide employee behavior and company actions and thus, are the foundation of
every organization.

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3.3 Mckinsey’s 7S Framework with reference to Ashok Leyland:

1. Structure:
Commercial vehicle maker Ashok Leyland has initiated an organizational rejig to create three
divisions — one each for trucks, buses and power solutions. Historically, Ashok Leyland’s
corporate structure has been organized functionally, in terms of human resources, marketing,
finance and sales.
2. Strategy:
Under long-term strategy, the company tries to pursue aggressive growth push through its new
range of BS VI trucks, growing LCVs with new modular platform, transforming the bus business
with fully-built bus solutions, expanding international reach, enhanced after-market services and
competitive electric bus offerings.
Automotive manufacturer Ashok Leyland has announced a two-pronged strategy for its defence
business. The strategy aims at expanding product lines and the integration of global weapon
systems with its mobility platforms.
In the last three years, the Company has diversified its product platform with the launch of 2.5
tonne truck; a new variant of its Super Stallion platform and a mine protected vehicle (MPV) to
its fleet. The Garuda 4x4, equipped with a fuel efficient engine (BS4-ready), is capable of
carrying payloads up to 2.5 tonne and offers enough mobility to the paramilitary forces and
security agencies both in India and abroad.

3. Systems:
These are the daily activities that are carried out in the organization every day.
 Quality Management System:
Every vehicle that leaves Ashok Leyland shop floor carries with it great pride in being part of a
customer’s journey towards success. To this end the company leverages Total Quality
Management (TQM), which brings together employees, suppliers and network partners in pursuit
of a common goal-ensuring quality in every process.
 Human Resource:
The company has continued to focus on three levers of people framework- Culture, Capability
and Capacity with the focus towards building a high performing, innovative and caring
organization where it is fun to work for the workforce.

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The company has launched the digital HRM and learning platform of success factors which
provides the employees with an opportunity to learn anytime-anywhere. A special 5-minute
learning capsule for senior leaders called 5ML has been launched to provide constant stimulation
to their intellect and to gain perspective on various business challenges.
 Risk Management:
The company has established a robust Enterprise Risk Management (ERM) framework
embodying the principles of COSO ERM framework and ISO 31000 standard that fosters a
sound risk management culture and facilitates informed decision making.

4. Skills:
The company has nine training centers across India where they train more than 8000 personnel
every year. Ashok Leyland has already established fully equipped modern training centers at
Alwar, Chennai, Bhubaneswar, Nagpur, Nasik, Ludhiana, Namakkal, and Pantnagar. The latest
in Kolkata which is spread over 5000 square feet. The training delivery models used are as
follows:
1. Service Training Centers (STCs)
2. Knowledge on wheels (KNOW)
3. Dealer point training
4. E- learning modules

5. Staff:
Staffing is the process of hiring eligible candidates in the organization or company for specific
positions. It is an operation of recruiting the employees by evaluating their skills, knowledge and
then offering them specific job roles accordingly. Ashok Leyland does is this through organizing
drives, consultancies, job portal, campus recruitment, lateral entries.

6. Style:
It runs on the motto ‘your success, our success’!. People’s development has always been the
foundation of the company. With its various learning programs, leadership development
frameworks, and 100 CEOs plan, the company has envisioned a strong pipeline of future P&L
leaders whose significant efforts have helped achieve remarkable accomplishments build a

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sustainable future and influence productivity in the organization. The company has reverse
mentoring program which allows the youngest to teach the oldest.

7. Shared Values:
Shared values are the identity by which an organization is known throughout its business areas.
The company’s constant endeavor has been to make their vehicles consume less, pollute less
which is reflected in their developmental work, eco-sensitive manufacturing systems, process,
energy conservation measures and conscious greening initiatives.

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CHAPTER-4

SWOT ANALYSIS

SWOT analysis is the most renowned tool for audit and analysis of the overall strategic position
of the business and its environment. Its key purpose is to identify the strategies that will create a
firm specific business model that will best align an organization’s resources and capabilities to
the requirements of the environment in which the firm operates.

In other words, it is the foundation for evaluating the internal potential and limitations and the
probable/likely opportunities and threats from the external environment. It views all positive and
negative factors inside and outside the firm that affect the success. A consistent study of the
environment in which the firm operates helps in forecasting/predicting the changing trends and
also helps in including them in the decision-making process of the organization.

SWOT analysis aims to identify the key internal and external factors seen as important to
achieving an objective. SWOT analysis groups key pieces of information into two main
categories:
 Internal factors- The strengths and weaknesses internal to the organization.
 External factors- The opportunities and threats presented by the environment external to the
organization.

1. Strengths - Strengths are the qualities that enable us to accomplish the organization’s mission.
These are the basis on which continued success can be made and continued/sustained.
Strengths can be either tangible or intangible. These are what you are well-versed in or what you
have expertise in, the traits and qualities your employees possess (individually and as a team)
and the distinct features that give your organization its consistency.
Strengths are the beneficial aspects of the organization or the capabilities of an organization,
which includes human competencies, process capabilities, financial resources, products and
services, customer goodwill and brand loyalty. Examples of organizational strengths are huge
financial resources, broad product line, no debt, committed employees, etc.

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2. Weaknesses - Weaknesses are the qualities that prevent us from accomplishing our mission
and achieving our full potential. These weaknesses deteriorate influences on the organizational
success and growth. Weaknesses are the factors which do not meet the standards we feel they
should meet. Weaknesses in an organization may be depreciating machinery, insufficient
research and development facilities, narrow product range, poor decision-making, etc.
Weaknesses are controllable. They must be minimized and eliminated.

3. Opportunities - Opportunities are presented by the environment within which our

organization operates. These arise when an organization can take benefit of conditions in its
environment to plan and execute strategies that enable it to become more profitable.
Organizations can gain competitive advantage by making use of opportunities.

Organization should be careful and recognize the opportunities and grasp them whenever they
arise. Selecting the targets that will best serve the clients while getting desired results is a
difficult task. Opportunities may arise from market, competition, industry/government and
technology.

4. Threats - Threats arise when conditions in external environment jeopardize the reliability and
profitability of the organization’s business. They compound the vulnerability when they relate to
the weaknesses. Threats are uncontrollable. When a threat comes, the stability and survival can
be at stake. Examples of threats are - unrest among employees; ever changing technology;
increasing competition leading to excess capacity, price wars and reducing industry profits; etc.

Fig 4.1 SWOT Analysis

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4.1 SWOT analysis of Ashok Leyland:

1. STRENGTHS:

 Strong market position in different domains gives the company a better brand image and
wider customer base.
 Strong product portfolio and robust manufacturing capabilities.
 Brand reliability.
 Quality service and best value for people

2. WEAKNESS:

 Heavily dependent on the domestic market.

 Termination of joint venture with Nissan.
 Market fluctuation and the continuous changes.
 Lack of coordination in supply chain management.

3. OPPORTUNITIES:

 The joint venture with John Deere will help Ashok Leyland get technological and
financial help to cover more market.
 International expansion.
 Opportunity in Bus segment due to the impact of Covid-19.
 Recent announcements made by the central government with regard to the defence.

4. THREATS:

 Government policies which are fluctuating the market like GST, demonetization, BS-IV
emission norms. .
 Its competitors like Tata Motors, Mahindra and Mahindra, Eicher, Bharat Benz,
Marcopolo etc.
 Volatility in supply affects profitability.
 Change in consumer tastes.

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CHAPTER-5

ANALYSIS OF FINANCIAL STATEMENT

Financial analysis is the process of evaluating businesses, projects, budgets, and other finance-
related transactions to determine their performance and suitability. Typically, financial analysis
is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to warrant a
monetary investment.

Financial analysis is used to evaluate economic trends, set financial policy, build long-term plans
for business activity, and identify projects or companies for investment. This is done through the
synthesis of financial numbers and data. A financial analyst will thoroughly examine a
company's financial statements—the income statement, balance sheet, and cash flow statement.
Financial analysis can be conducted in both corporate finance and investment finance settings.

One of the most common ways to analyze financial data is to calculate ratios from the data in the
financial statements to compare against those of other companies or against the company's own
historical performance.

Analyzing through financial statements involves many factors such as solvency, liquidity,
profitability and efficiency of operations is ascertained, thus by identifying the weakness, the
intent is to arrive at an appropriate recommendation and to take an appropriate decision and to
give the forecast for the future of business identity.
There are various types of financial analysis, some of them are mentioned below,
1. External Analysis:
This analysis is done based on the basis of published financial statements by those who don't
have the access to the accounting information, usually it is done by the general public.

2. Internal Analysis:
This analysis is performed to provide the information to the top management and helping them to
take the decisions and this analysis is done by the finance and accounting department.

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3. Short-term Analysis:
It refers to analysis of both current assets and current liabilities, so that the cash position
(liquidity) may be determined. It is concerned with the analysis of working capital.

4. Horizontal Analysis:
It involves analysis of financial statements for a number of years. Example of this analysis is
Comparative financial statements.

5. Vertical Analysis:
Usually it is preferred in situations when the ratios are required to be calculated for only one year

6. Trend Analysis:
In this kind of analysis, ratios of the different items of the financial statements for the various
period are calculated and comparisons are made accordingly.

7. Ratio Analysis:
It involves developing the meaningful relationship between individual items or group of items of
balance sheets and income statements. It highlights the key performance indicators such as
liquidity, solvency etc.

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Table 5.1 Balance Sheet

BALANCE SHEET OF 16-Mar 17-Mar 18-Mar 19-Mar 20-Mar

ASHOK LEYLAND (in
CRS)
EQUITIES AND
LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 284.59 284.59 292.71 293.55 293.55
TOTAL SHARE CAPITAL 284.59 284.59 292.71 293.55 293.55
Reserves and Surplus 5,122.56 5,841.48 6,952.83 8,031.75 6,947.25
TOTAL RESERVES AND 5,122.56 5,841.48 6,952.83 8,031.75 6,947.25
SURPLUS
TOTAL SHAREHOLDERS 5,407.15 6,126.07 7,245.54 8,332.43 7,263.99
FUNDS
NON-CURRENT
LIABILITIES
Long Term Borrowings 1,821.04 1,146.32 512.55 298.4 1,353.86
Deferred Tax Liabilities [Net] 329.1 126.9 298.58 249.73 264.82
Other Long Term Liabilities 203.47 86.48 205.18 305.25 327.32
Long Term Provisions 122.81 132.55 255.04 249.63 180.69
TOTAL NON-CURRENT 2,476.43 1,492.26 1,271.35 1,103.01 2,126.69
LIABILITIES
CURRENT LIABILITIES
Short Term Borrowings 25 198.64 100 100 1,710.97
Trade Payables 2,562.69 3,116.99 4,887.90 5,018.93 2,623.91
Other Current Liabilities 2,113.44 2,587.81 3,023.11 2,867.26 2,039.20
Short Term Provisions 189.05 518.31 808.49 802.77 624.85
TOTAL CURRENT 4,890.18 6,421.75 8,819.50 8,788.96 6,998.93
LIABILITIES
TOTAL CAPITAL AND 12,773.75 14,040.07 17,336.3 18,224.40 16,389.61
LIABILITIES 9
ASSETS
NON-CURRENT ASSETS
Tangible Assets 4,453.70 4,656.10 4,811.43 4,805.98 5,443.12
Intangible Assets 338.28 314.71 736.54 808.53 1,360.45
Capital Work-In-Progress 54.75 157.6 234.33 274.64 420.97
Other Assets 0 0 0 0 0
FIXED ASSETS 4,867.84 5,176.67 5,970.61 6,272.13 7,397.71
Non-Current Investments 1,980.44 2,001.68 2,451.51 2,636.50 2,719.63
Deferred Tax Assets [Net] 0 0 0 0 0
Long Term Loans And 97.62 45.57 33.54 31.71 32.42
Advances
Other Non-Current Assets 646.9 716.02 817.26 1,097.72 816.36

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TOTAL NON-CURRENT 7,592.80 7,939.95 9,272.92 10,038.06 10,966.12

ASSETS
CURRENT ASSETS
Current Investments 0 877.17 3,155.16 0 0
Inventories 1,625.01 2,631.03 1,758.33 2,684.67 1,238.00
Trade Receivables 1,250.95 1,064.39 944.78 2,505.53 1,179.82
Cash And Cash Equivalents 1,593.13 911.97 1,042.16 1,373.59 1,322.47
Short Term Loans And 70.6 21.47 24.1 22.46 23
Advances
Other Current Assets 641.25 594.09 1,138.94 1,600.09 1,660.20
TOTAL CURRENT 5,180.95 5,977.12 8,063.47 8,186.34 5,423.49
ASSETS
TOTAL ASSETS 12,773.75 14,040.07 17,336.3 18,224.40 16,389.61
9
OTHER ADDITIONAL
INFORMATION
CONTINGENT
LIABILITIES,
COMMITMENTS
Contingent Liabilities 547.55 665.35 713.07 927.91 856.79
CIF VALUE OF IMPORTS
Raw Materials 320.12 206.12 0 0 0
Stores, Spares And Loose 43.64 65.45 0 0 0
Tools
Trade/Other Goods 43.64 65.45 0 0 0
Capital Goods 22.02 45.72 0 0 0
EXPENDITURE IN
FOREIGN EXCHANGE
Expenditure In Foreign 456.87 444.3 417.35 237.47 168.97
Currency
REMITTANCES IN
FOREIGN CURRENCIES
FOR DIVIDENDS
Dividend Remittance In 43.19 -- -- -- --
Foreign Currency
EARNINGS IN FOREIGN
EXCHANGE
FOB Value Of Goods 2,009.03 1,710.73 1,967.19 1,486.88 1,389.56
Other Earnings 108.07 115.47 125.51 74.58 --
BONUS DETAILS
Bonus Equity Share Capital 139.26 139.26 139.26 139.26 139.26

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NON-CURRENT
INVESTMENTS
Non-Current Investments 22.06 -- -- -- --
Quoted Market Value
Non-Current Investments 2,516.32 2,410.33 3,123.98 2,635.93 2,719.06
Unquoted Book Value
CURRENT INVESTMENTS
Current Investments Quoted -- -- -- -- --
Market Value
Current Investments Unquoted -- 877.17 3,155.16 -- --
Book Value

Table 5.2 Profit And Loss Account

PROFIT & LOSS 16-Mar 17-Mar 18-Mar 19-Mar 20-Mar
ACCOUNT OF ASHOK
LEYLAND (in CRS)
INCOME
REVENUE FROM 19,616.44 21,054.59 26,242.38 28,614.0 17,267.22
OPERATIONS [GROSS] 3
Less: Excise/Service 1,055.67 1,313.01 276.6 0 0
Tax/Other Levies
REVENUE FROM 18,560.77 19,741.58 25,965.78 28,614.0 17,267.22
OPERATIONS [NET] 3
TOTAL OPERATING 18,937.30 20,140.13 26,356.40 29,054.9 17,467.47
REVENUES 5
Other Income 117.62 136.27 196.58 109.94 123.34
TOTAL REVENUE 19,054.92 20,276.40 26,552.98 29,164.8 17,590.81
9
EXPENSES
Cost Of Materials Consumed 12,092.66 13,148.80 16,496.62 20,872.2 10,384.46
7
Operating And Direct 0 0 0 0 0
Expenses
Changes In Inventories Of -429.02 -758.8 1,275.10 -958.8 1,191.47
FG,WIP And Stock-In Trade
Employee Benefit Expenses 1,385.06 1,480.05 1,837.78 2,098.77 1,615.06
Finance Costs 247.64 155.38 147.28 70.38 109.45
Depreciation And 487.9 517.89 598.48 621.01 669.8
Amortization Expenses
Other Expenses 2,102.75 2,484.16 3,124.02 3,140.87 2,309.61
TOTAL EXPENSES 17,418.21 18,610.87 24,138.64 26,610.6 17,073.07
0

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PROFIT/LOSS BEFORE 1,636.71 1,665.53 2,414.34 2,554.29 517.74

EXCEPTIONAL,
EXTRAORDINARY ITEMS
AND TAX
Exceptional Items -810.18 -335.45 -28.51 -57.49 -155.82
PROFIT/LOSS BEFORE 826.54 1,330.09 2,385.83 2,496.80 361.92
TAX
TAX EXPENSES-CONTINUED OPERATIONS
Current Tax 422.04 313.72 677.25 378.2 71.74
Less: MAT Credit Entitlement 0 0 0 0 0
Deferred Tax 14.9 -206.71 -9.15 135.4 50.66
Tax For Earlier Years 0 0 0 0 0
TOTAL TAX EXPENSES 436.94 107.01 668.1 513.6 122.4
PROFIT/LOSS AFTER TAX 389.6 1,223.08 1,717.73 1,983.20 239.52
AND BEFORE
EXTRAORDINARY ITEMS
PROFIT/LOSS FROM 389.6 1,223.08 1,717.73 1,983.20 239.52
CONTINUING
OPERATIONS
PROFIT/LOSS FOR THE 389.6 1,223.08 1,717.73 1,983.20 239.52
PERIOD
OTHER ADDITIONAL INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 1.37 4.24 5.87 6.76 0.82
Diluted EPS (Rs.) 1.37 4.24 5.85 6.76 0.82
VALUE OF IMPORTED
AND INDIGENOUS RAW
MATERIAL
STORES,SPARES AND
LOOSE TOOLS
Imported Raw Materials 298.88 0 0 0 0
Indigenous Raw Materials 11,818.04 0 0 0 0
STORES, SPARES AND LOOSE TOOLS
Imported Stores And Spares 0 0 0 0 0
Indigenous Stores And Spares 0 0 0 0 0
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 154.14 325.4 549.48 859.84 1,270.24
Tax On Dividend 0 0 0 0 0
Equity Dividend Rate (%) 95 156 243 310 50

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Table 5.3 Income Statement

Annual MARCH-16 MARCH-17 MARCH-18 MARCH-19 MARCH-20
Sales 21,259 22,870 29,619 33,196 21,951
Other Income 163 130 199 128 107
Total Income 21,423 23,001 29,819 33,324 22,059
Total 19,211 20,109 26,016 28,962 19,521
Expenditure
EBIT 2,212 2,891 3,802 4,362 2,537
Interest 925 1,048 1,231 1,502 1,801
Tax 496 196 751 677 279
Net Profit 790 1,647 1,819 2,183 456

5.1 RATIO ANALYSIS:

A ratio may be defined as an arithmetic expression which shows the relationship of one number
to another.
1. Liquidity Ratio:
These ratios are used to determine short-term solvency of the firm. In other words, it analyses the
firm’s ability to meet its current obligations.
 Current Ratio:
It is done by matching the total current assets of the firm with its current liabilities.
Current ratio = Current assets
Current Liabilities

YEAR MARCH-16 MARCH-17 MARCH-18 MARCH-19 MARCH-20

Current Ratio 1.08 1.07 1.02 1.08 1.03

Current Ratio
1.10
1.08
1.06
1.04

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1.00
0.98
MARCH--16 MARCH--17 MARCH--18 MARCH--19 MARCH--20
Ashok Leyland

Fig 5.1 Current Ratio

Interpretation: From the above graph we can observe that the current ratio has come down
which means that the business is trading over and above its capacity.

 Quick or Acid Test Ratio:

This ratio describes the relationship between current liabilities and quick assets.

Quick Ratio = Quick Assets

Current Liabilities
YEAR MARCH-16 MARCH-17 MARCH-18 MARCH-19 MARCH-20
ATR 0.88 0.82 0.89 0.90 0.95

Acid Test Ratio

1.00
0.95
0.90
0.85
0.80
0.75
MARCH--16 MARCH--17 MARCH--18 MARCH--19 MARCH--20

Fig 5.2 Acid Test Ratio

Interpretation: The above graph indicates increasing trend in quick ratio over the past five
years. So the company has ideal standard and ability to meet its short-term obligations with its
available liquid assets.

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2. Solvency Ratio:

These ratios offer an insight into the financial performance of a business.

 Debt –Equity Ratio:

This ratio shows the relationship between equity funding and debt funding.

Debt-Equity Ratio = Total Long Term Debt

Shareholders’ funds

YEAR MARCH-16 MARCH-17 MARCH-18 MARCH-19 MARCH-20

DEBT EQUITY 1.65 1.55 1.60 1.73 2.01
RATIO

Debt Equity Ratio

2.50

2.00

1.50

1.00

0.50

0.00
Mar--16 Mar-17 Mar-18 Mar-19 Mar-20

Fig 5.3 Debt Equity Ratio

Interpretation: The above graph shows a high debt equity ratio which indicates that more
creditor financing is used than investor financing.

 Proprietary Ratio:

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This ratio establishes the relationship between proprietors’ funds and the total assets of
the business.
Proprietary Ratio = Proprietors funds
Total Assets

YEAR MARCH-16 MARCH-17 MARCH-18 MARCH-19 MARCH-20

PROP-RATIO 1.01 1.12 1.25 1.40 1.04

Proprietary Ratio
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
MARCH--16 MARCH--17 MARCH--18 MARCH--19 MARCH--20

Fig 5.4 Proprietary Ratio

Interpretation: The graph clearly indicates high proprietary ratio which means that assets are
mainly funded using shareholders money.

3. Profitability Ratio:
It shows the efficiency of the management, worth of investment, the tax paying capacity of the
business and its overall effectiveness.

 Net Profit Ratio:

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Ashok Leyland

The ratio is calculated by dividing net profit by net sales for the concerned period.
Net Profit Ratio = Net Profit *100
Net Sales
YEAR MARCH-16 MARCH-17 MARCH-18 MARCH-19 MARCH-20
NPR 3.72 7.20 6.14 6.58 2.08

Net Profit Ratio

8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
MARCH--16 MARCH--17 MARCH--18 MARCH--19 MARCH--20

Fig 5.5 Net Profit Ratio

Interpretation: From the graph we can clearly see that Ashok Leyland has earned a good net
profit over the years and has seen the lowest net profit in the year 2020.

 Operating Profit Ratio:

It determines the relationship between operating profits and sales.
Operating Profit Ratio = EBIT *100
Net Sales
YEAR MARCH-16 MARCH-17 MARCH-18 MARCH-19 MARCH-20

OPTG- 10.41 12.64 12.84 13.14 11.56

RATIO

Operating Profit Ratio

14.00
12.00
10.00
8.00
6.00
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2.00
0.00
MARCH--16 MARCH--17 MARCH--18 MARCH--19 MARCH--20
Ashok Leyland

Fig 5.6 Operating Profit Ratio

Interpretation: The graph clearly shows gradual increase in its operating profits and has come
down in the year 2020.

 Earnings per Share:

This ratio is calculated to find profitability per share.

Earnings per Share = Net Profit

No. of Equity shares

YEAR MARCH-16 MARCH-17 MARCH-18 MARCH-19 MARCH-20

EPS 1.37 4.24 5.85 6.76 0.82

Earnings per Share

8
7
6
5
4
3
2
1
0
MARCH--16 MARCH--17 MARCH--18 MARCH--19 MARCH--20

Fig 5.7 Earnings per Share

Interpretation: The above graph shows upward trend which means that the earning per share is
increasing from year after year which indicates the company’s ability to pay dividends to its
shareholders.

4. Activity /Turnover Ratios:

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Ashok Leyland

These ratios shows the intensity with which the assets are converted into sales.

 Debtors Turnover Ratio:

This ratio shows the relation between average accounts receivable and net credits.
Debtors Turnover Ratio = Net Credit Sales
Average Accounts Receivable
YEAR MARCH-16 MARCH-17 MARCH-18 MARCH-19 MARCH-20
DTR 16.99 21.49 31.35 13.25 18.61

Debtor Turnover Ratio

35.00

30.00

25.00

20.00

15.00

10.00

5.00

0.00
MARCH--16 MARCH--17 MARCH--18 MARCH--19 MARCH--20

Fig 5.8 Debtor Turnover Ratio

Interpretation: From the graph it is observed that the company has had highest turnover in
the year 2018 that indicates better credit policies and efficiency and has had low turnover in
the year 2019 which indicates the problem of collection of debts.

CHAPTER-6
LEARNING EXPERIENCE
Every student doing a professional needs to undertake summer training or internship in his/her
respective field, which gives them a chance to explore their skills and suits them in the work
environment. All general information we get in course is all book knowledge, on which we

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Ashok Leyland

entirely cannot depend. It is very important to know the actual working of an organization and
the overall structure of an organization.

The Covid-19 pandemic has forced the people to get locked indoors which cost the students an
opportunity of working in the organization as interns. But the university came up with a
spectacular idea of allowing the students to do organization study on a company of their choice
for a period of one month and understand the business activities. Though this was not effective
compared to working as an intern, it was totally a great learning experience that has allowed us
to put our theoretical aspects into practical knowledge to some extent.

The organization study on Ashok Leyland has helped me to know the functioning of different
departments that would allow me to expand my career options. I found it difficult in the first few
days as there was no interaction possible with the company officials and had to work on my own.
This one month organizational study as exposed me to various aspects of business. This helped
me to get a clear idea about the functioning of the organization.

The main objective of the study was to understand the working of the organization.

 It has covered the aspects like Background, Nature of business, Vision, Mission, Quality
policy, Product profile, Organization structure, Achievements and Future growth.
 This study has helped me to understand the Mckinsey’s 7S framework with reference to
Ashok Leyland.
 I was able to understand the company’s strengths, weakness, opportunities and threats
through the SWOT analysis.
 The study has assisted me to know about the real financial practices at Ashok Leyland
through the analysis of financial statement using techniques such as comparative analysis
and ratio analysis.

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