History of the company corporate governance Directors Chairman speech Press releases about the company Products

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History of Ashok Leyland

Following the independence of India, Pandit Jawaharlal Nehru, India’s

first Prime Minister, persuaded Mr. Raghunandan Saran, an

industrialist, to enter automotive manufacture. The company began in

1948 as Ashok Motors, to assemble Austin cars. The company was

renamed and started manufacturing commercial vehicles in 1955 with

equity participation by British Leyland. Today the company is the

flagship of the Hinduja Group, a British-based and Indian originated

transnational conglomerate.

Early products included the Leyland Comet bus which was a passenger

body built on a truck chassis, sold in large numbers to many operators,

including Hyderabad Road Transport, Ahmadabad Municipality,

Travancore State Transport, Bombay State Transport and Delhi Road

Transport Authority. By 1963, the Comet was operated by every State

Transport Undertaking in India, and over 8,000 were in service. The

Comet was soon joined in production by a version of the Leyland Tiger.

In 1968, production of the Leyland Titan ceased in Britain, but was

restarted by Ashok Leyland in India. The Titan PD3 chassis was

modified and a five speed heavy duty constant-mesh gearbox utilized,

together with the Ashok Leyland version of the O.680 engine. The

Ashok Leyland Titan was very successful, and continued in production

for many years.

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Over the years, Ashok Leyland vehicles have built a reputation for

reliability and ruggedness. This was mainly due to the product design

legacy carried over from British Leyland.

Ashok Leyland had collaboration with the Japanese company Hino

Motors from whom the technology for the H-series engines was bought.

Many indigenous versions of H-series engine were developed with 4 and

6 cylinder and also conforming to BS2 and BS3 emission norms in

India. These engines proved to be extremely popular with the customers

primarily for their excellent fuel efficiency. Most current models of

Ashok Leyland come with H-series engines.

An Ashok Leyland bus run by the Chennai Metropolitan Transport

Corporation

In 1987, the overseas holding by Land Rover Leyland International

Holdings Limited (LRLIH) 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 manufacturer. Ashok Leyland’s long-term plan to become a

global player by benchmarking global standards of technology and

quality was soon firmed up. Access to international technology and a

US$200 million investment programmed created a state-of-the-art

manufacturing base to roll out international class products. This

resulted in Ashok Leyland launching the 'Cargo' range of trucks based

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on European Ford Cargo trucks. These vehicles used Iveco engines and

for the first time had factory-fitted cabs. Though the Cargo trucks are

no longer in production and the use of Iveco engine was discontinued,

the cab continues to be used on the 'ecomet' range of trucks.

In the journey towards global standards of quality, Ashok Leyland

reached a major milestone in 1993 when it became the first in India's

automobile history to win theISO 9002 certification. The more

comprehensive ISO 9001 certification came in 1994, QS 9000 in 1998

and ISO 14001 certification for all vehicle manufacturing units in 2002.

In 2006, Ashok Leyland became the first automobile company in India

to receive the TS16949 Corporate Certification. Editor’s note: This is

part of a series of articles peeking into clean car industries and car

manufacturers of China, India, South Korea and Germany.

Among many other goals, Ashok Leyland aims to expand its operations

to penetrate into overseas markets. Included in the company’s plans is

to acquire smaller car manufacturers in China and in other developing

countries. In October 2006, Ashok Leyland bought a majority stake in

the Czech based- Avia. Called Avia Ashok Leyland Motors s.r.o., this

will give Ashok Leyland a channel into the competitive European

market. According to the company, in 2008 the joint venture sold 518

LCVs in Europe despite tough economic conditions. Furthermore, the

company will expand its product offers into construction equipment,

following a joint venture with John Deere. Newly formed in June 2009,

the John Deere partnership is a 50/50 split between the companies. The

company says negotiation is progressing on land acquisition, and the

production plans are in place. The venture is scheduled to start rolling

4

out wheel loaders and backhoe loaders in October 2010. Aside from the

full expansion planned for the company, Ashok Leyland is also paying

close attention to the environment. In fact, they are one of the

companies showing the strongest commitment to environmental

protection, utilizing eco-friendly processes in their various plants. Even

as they thrust into different directions, Ashok Leyland maintains an

R&D group that aims to uncover ways to make their vehicles more fuel

efficient and reduce emissions.

In fact, even before laws were placed on car emissions, Ashok Leyland

was already producing low-emission vehicles. Back in 1997, they have

already released buses with quiet engines and low pollutant emission

based on the CNG technology. In 2002 it developed the first hybrid

electric vehicle. Ashok Leyland has also launched a mobile emission

clinic that operates on highways and at entry points to New Delhi. The

clinic checks vehicles for emission levels, recommends remedies and

offers tips on maintenance and care. This work will help generate

valuable data and garner insight that will guide further development.

When it comes to the development of environmentally friendly

technologies, Ashok Leyland has developed Hythane engines. In

association with the Australian company Eden Energy, Ashok Leyland

successfully developed a 6-cylinder, 6-liter 92 kW BS-4 engine which

uses Hythane (H-CNG,) which is a blend of natural gas and around

20% of hydrogen. Hydrogen helps improve the efficiency of the engine

but the CNG aspect makes sure that emissions are at a controlled level.

A 4-cylinder 4-litre 63 KW engine is also being developed for H-CNG

5

blend in a joint R&D program with MNRE (Ministry of New and

Renewable Energy) and Indian Oil Corporation.

The H-CNG concept is now in full swing, with more than 5,500 of the

technology’s vehicles running around Delhi. The company is also

already discussing the wide-scale use of Hythane engines with the

Indian government. Hythane engines may be expected in the near

future, but these may not be brought to the United States as yet. Ashok

Leyland’s partnership with Nissan is also focusing on vehicle,

powertrain, and technology development listed under three joint

ventures. With impressive investment, the joint ventures will focus on

producing trucks with diesel engines that meet Euro 3 and Euro 4

emission standards.

In the coming years, Ashok Leyland also has some hybrid trucks and

buses in store for its market. The buses and trucks are set to feature a

new electronic shift-by-wire transmission technology as well as

electronic-controlled engine management for greater fuel efficiency.

Ashok Leyland focuses on improving fuel efficiency without affecting

automotive power and the vehicles will have a 5% improvement on fuel

efficiency. Ashok Leyland is also developing electric batteries and bio-

fuel modes.

Ashok Leyland Ltd’s March quarter results were expected to be

impressive, as its monthly vehicle output reports had indicated a 138%

jump in volumes. But what impressed was its net profit growth of

317%, to Rs223 crore, over the year-ago period, even as sales rose by

139%. Ashok Leyland’s operating profit margin rose to 13% compared

6

with 10.5%. Higher volume growth, a better product mix due to higher

sales of multi-axle vehicles and tractor trailers, and cost reduction were

key reasons for margin expansion. Its estimate for volume growth in

2011 is conservative, at 15% compared with over 30% in FY2010.

Around 1,200 buses under the Jawaharlal Nehru National Urban

Renewal Mission scheme are yet to be delivered of the 5,098 ordered.

Besides, it has orders on hand from state transport undertakings for

another 2,000 buses. The firm is investing to increase its capacity, with

Rs1,200 crore proposed for expansion plans over the next two years;

mainly to increase output of engines and new generation cabs. Besides,

it plans to invest Rs800 crore in joint ventures. Analysts believe that its

Uttarakhand plant is expected to deliver 22,000-25,000 vehicles in fiscal

2011, in its first full year of operation. The company has also steadily

gained market share, from 21-22% in the first quarter of 2010 to 28-

29% in the fourth quarter. One concern is that it is not yet a strong

player in the eastern market. Besides, the southern market, traditionally

its stronghold, has grown by only 15% in volume terms in 2010. The

rest of India (mainly north and west) grew by 40% during the year.

An Ashok Leyland-Nissan joint venture produced light commercial

vehicles (LCVs) from the former's House facility near Bangalore as well

as from Renault-Nissan's car plant near Chennai.

7

REPORT ON CORPORATE GOVERNANCE Annual

Report 2010-11

The Remuneration Policy of the Company is

summarized as follows:

The remuneration is governed by the external

competitive environment, track record, potential,

individual performance, Company’s performance and

industry standards. Remuneration is subject to the

approval of the Board of Directors and shareholders.

i) For the Managing Director and for the Managing

Director (Designate)

The total remuneration consists of:

• a fixed component – consisting of salary,

allowances (including Special Allowance) and

perquisites; the perquisites and benefits are in line

with the Company’s Rules for senior managerial

Personnel.

• A variable component – linked to the performance

Of the Company as well as that of the Managing

Director or the Managing Director (Designate), as

The case may be – consisting of Commission as

Determined by the Remuneration Committee.

No sitting fee is payable

ii) For Non-executive Directors

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Sitting Fee of Rs.20,000/- was paid to each of the

Non-executive Directors for attending the meetings

Of the Board or Committee thereof. All Directors

Are also reimbursed actual travel costs and

Incidental expenses incurred for attending such

Meetings or in connection with the Company’s

Business. There are no pecuniary relationship or

Transactions between any of the Non-executive

Directors and the Company.

No other remuneration was paid to Non-executive

Directors other than the above.

d) The details of remuneration paid/payable to the

Directors for the year 2010-11 are:

i) Non-executive Directors - Sitting Fees: (excluding

reimbursement of travel and other expenses

incurred for the Company’s business).

Annexure-B to Directors’ Report

REPORT ON CORPORATE GOVERNANCE

Rs. Rs.

Mr R J shahaney 2,20,000 Mr f sahami 1,80,000

Mr dheeraj G Hinduja 2,60,000 Mr sanjay K Asher 80,000

Mr Anil Harish 2,40,000 Mr shardul s shroff nil

Mr d J Balaji Rao 3,40,000 dr V sumantran 2,20,000

Mr A K das 1,40,000 Mr Anders spare 1,20,000

Mr Jean Brunol 40,000 Mr prabal Banerjee 20,000

Mr Ramachandran R Nair (**) 60,000

9

(**) Amount paid to Lick of India by means of cheque30 Ashok

Leyland Limited

5. Shareholders/Investors Grievance

Committee

a) The Shareholders/Investors Grievance Committee was

constituted in 2000. The Committee consists of Mr

Sanjay K Asher, an Independent Director as Chairman

(Mr R J Shahaney was the Chairman up to 20/10/2010),

Mr D J Balaji Rao, an Independent Director as a

member and Mr R Seshasayee, Executive Vice

Chairman as a member.

b) The Committee approves issue of new share

certificates and looks into investor complaints/

grievances on a periodical basis.

c) The Committee also reviews the performance of

the Company’s Registrar & Transfer Agent (R&TA)

and their system of dealing with and responding to

correspondence from all categories of shareholders.

The manner and timeliness of dealing with complaint

letters received from Stock Exchanges/ SEBI/ Ministry

of Corporate Affairs etc., and the responses thereto

are reviewed by this Committee.

d) Based on the delegated powers of the Board

of Directors, the Managing Director/Managing

Director(Designate) approved the share transfers/

transmissions on a fortnightly basis and the same

reported to at the next meeting of the Committee,

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normally held every quarter.

e) Mr A R Chandrasekharan, Executive Director and

Company Secretary is the Secretary to the Committee

and is also the Compliance Officer appointed for the

compliance of capital market related laws.

f) Meetings and Attendance during the year 2010-11:

April 29, 2010 3

July 27, 2010 3

October 20, 2010 3

January 22, 2011 3

During the year, 2459 complaint/correspondence

letters were received from investors (including 23

letters from SEBI / Stock Exchanges/ MCA); 1983

Annexure-B to Directors’ Report

11

Directors

Mr. Dheeraj Gopichand Hinduja

Mr. Anil Harish

Mr. D. J. Balaji Rao

Mr. A. K. Das

Mr. Jean Brunol

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Mr. Jorma Antero Halonen

Mr. Sanjay K. Asher

Mr. F. Sahami

Mr. Shardul S. Shroff

Mr. R. Seshasayee

Mr. Vinod K. Dasari

Dr. V. Sumantran

13

Board committee

AUDIT COMMITTEE 

Mr. Anil Harish, Chairman

Mr. D.J. Balaji Rao 

Mr. F. Sahami 

Mr. Sanjay K. Asher

SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE 

Mr. Sanjay K. Asher (Chairman)

Mr. D. J. Balaji Rao

Mr. R. Seshasayee 

NOMINATION AND COMPENSATION COMMITTEE 

Mr. D. J. Balaji Rao (Chairman)

Mr. Dheeraj G. Hinduja

Mr. Anil Harish

Mr. A. K. Das

Mr. A. R. Chandrasekharan is the Secretary for all the Committees.

14

Chairman speech

You will be pleased to note that 2010-11 was another successful year for

Ashok Leyland. Taking advantage of a buoyant domestic market and

recovering traditional export markets, Your Company has set a new

watermark by selling 94,106 commercial vehicles, the highest ever in its

history, registering an increase of 47% over the previous year.

The domestic commercial vehicle volume grew in 2010-11 by 27%

within which Ashok Leyland present core medium and heavy segment

was up by 32%. In the medium and heavy segment, you will be happy to

know that your Company has been able to maintain its leadership

position in the bus segment and register share increase in every truck

segment. The export volume has surged by 72% over the previous year

to 10,306 vehicles with footprints in some new markets. The sales

turnover has increased to Rs 11,117.71 Crores (+53.5% YOY) and Net

Profit to Rs 631.30 Crores (+49% YOY). There have also been

significant gains in the Spare Parts, Defense and Power Solutions

businesses. On your behalf, I would like to record my appreciation for

the creditable performance from the Ashok Leyland team during the

year that went by.

Looking in Retrospect

As you are probably aware, your Company is taking strides to realize

the Vision of becoming global. In that journey, in addition to the

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strengthening of the position in the Indian market, last year witnessed

some significant developments, which I would like to highlight.

Your Company acquired a 26% controlling stake in Optare pic, U.K. a

reputed bus manufacturer with a proven experience in hybrid and

electric vehicles. They manufacture a range of urban buses with integral

architecture including the iconic Solo midi

Bus range. The acquisition will further strengthen the leadership

position of your Company in the domestic market and is also expected

to open up new frontiers in the developed markets.

In the medium and heavy truck segment, as you are aware, your

Company has introduced the versatile future ready - U-truck that will

cover the 16-49 Tonne GVW/GCW range and the initial feedback from

the market has been very encouraging. Further range extension would

follow progressively.

To build on the platform as the largest supplier of logistics vehicles to

the Indian Army and leverage on the overseas opportunities in the

segment, your Company has promoted a new entity Ashok Leyland

Defense Systems. To extend the product line-up to include tactical

vehicles and develop other advanced defense systems, a MoU has been

signed with the renowned Krauss-Maffei Wegmann (KMW) of

Germany.

On the export front, forays have been made into Russia, Ukraine and

Mozambique which are new market extensions.

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Registering the highest ever R&D spend in a year of Rs 312.62 Crores,

Your Company has widened the fully built offerings in bus and truck

and has undertaken focused efforts across the range to further improve

product performance, fuel efficiency and durability, the hallmarks of

Ashok Leyland products.

I am also happy to share with you that Hinduja Leyland Finance, which

finances vehicle purchase, has grown significantly during the year.

Ramping up quickly, in its second year of operations it has disbursed

over Rs 1200 Crores, Operating from 420 locations in 20 States with

nearly 700 employees, Hinduja Leyland Finance provides solid support

to your Company’s growth in volumes.

You are aware of the enlarging profile of Ashok Leyland that includes

an equal JV with John Deere, U.S.A, for construction equipment, a

growing Power Solutions Business, an end-to-end Engineering Services

& Business Consultancy and a high technology emissions solutions

company based in Germany. Some of these initiatives are aimed at de-

risking against cyclically in the bus and truck business and some

opportunistic.

Looking into the future

Building on the strengths of extending product line- up, growing sales

volume and product engineering capability, as the next logical step,

your Company has charted out an aggressive plan of volume growth to

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be among the Global Top 10 players in trucks in the category of 7.5

Tonne GVW and above and Top 5 in buses in the category of 8m and

above, within the next 5 years. The well-developed R&D infrastructure

now has over 1000 engineering professionals and is still growing. Apart

from maintaining the thrust to develop and position conventional

products and options to global standards, your Company’s R&D has

clear road maps for alternate propulsion and advanced engineering

activities also.

Contemporary cabins developed in-house and the globally

benchmarked, best-in-class Neptune engines for the intermediate,

medium and heavy truck range will enable progressive launch of a slew

of products that can compete well in the global markets.

In the growing intermediate vehicle range, action is already on hand to

renew the current Ecomet models with a major upgrade aimed at both

domestic and overseas markets.

Market extensions are being vigorously pursued. Breakthroughs are

expected soon in South Africa, Middle East, Russia, CIS, Latin America

and some growing markets in the Far East.

To address the evolving trends in freight transportation in the country,

your Company’s truck range gets further reinforced with the LCV

range (3-6 Tonne GVW) through the equal JV with Nissan Motors. I am

happy to inform that the first of the series under this co-operation,

unveiled as Ashok Leyland DOST is planned for launch this year in the

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3 Tonne truck category. This would be followed by the 6 Tonne range

and subsequently by an award-winning passenger minivan.

2011-12 should also see the launch of the backhoe, first of the

construction equipment range from the JV with John Deere.

In parallel to the product-market initiatives, there is emphasis on

creating a vibrant organization commensurate with the challenges

ahead. To steer your Company through this crucial period, Mr. R

Seshasayee has been elevated by the Board to the position of Executive

Vice Chairman and Mr. Vinod Dasari as the Managing Director. I

would like to congratulate them both and wish them every success.

In this context, I wish to record my deepest respect and regard for the

invaluable contribution and exemplary professionalism of Mr. R J

Shahaney who has stepped down as Chairman since the last Annual

General Meeting. To recognize his invaluable contribution to your

Company over the last 32 years and to continue to benefit from his

extensive experience and wisdom, the Board has conferred on him the

status of Chairman Emeritus. Please join me in wishing Mr. Shahaney

good health and happiness in the future.

I gratefully acknowledge the confidence and faith reposed by the

shareholders on the Board and the Management team which has, in my

view, spurred the Company to take on more challenges. I have great

pleasure in announcing that taking into account the performance and

prospects, the Board has recommended issuance of bonus shares in the

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ratio of 1:1. I am aware that you have been waiting for a bonus issue for

some time now and I must thank you for your patience.

Finally, I must applaud the tireless efforts, dedication and commitment

of our employees who have helped us reach where we are now and look

forward to the benefit and comfort of their association in the journey

forward. On behalf of your Company, I sincerely appreciate the loyalty

and support of the extended family of dealers and countless customers

as we re-dedicate ourselves to serve them better.

Looking forward to your continuing support,

Yours sincerely,

Dheeraj G Hinduja Chairman, Ashok Leyland Limited

Dated: June 16, 2011

20

Press releases about the company

Net profit up 54%

EBITDA also up 27%

Hinduja Group flagship, Ashok Leyland has reported a 29% increase in

its revenue for the third quarter of the current fiscal at Rs. 2,880 crores

as against Rs.  2,227 crores for the corresponding quarter of 2010-11.

Net profit for the quarter was up by 54% at Rs. 67 crores (Rs. 43

crores). EBITDA was up 27%. Sales volume for the quarter witnessed a

healthy increase of 26% at 23,175 nos. (18,437 nos.).

Employee Cost rose by 12% at Rs. 272 crores (Rs. 244 crores) on the

back of bonus payouts in the quarter. Other Expenditure increased by

42% at Rs. 268 crores as against Rs. 189 crores for the corresponding

quarter of the previous fiscal as also did Financial Expenses, up by 16%

at Rs. 55 crores (Rs. 47 crores) due to increase in working capital and

higher interest costs on CAPEX loans.

Production volume for the quarter improved by 25% at 24,153 nos.

(19,291 nos).

For the nine months ended December 2011, sales revenue was higher by

16% at Rs. 8,470 crores (Rs. 7,289 crores). Net profit was, however,

down 7.8% at Rs. 307 crores (Rs 333 crores). 

21

"Despite a substantial improvement in our quarter sales and profits, Q3

was a challenging one due to a few supply chain issues," said Mr. Vinod

K. Dasari, Managing Director, Ashok Leyland. "These have since been

resolved. STU demand was weaker in Q3 but is expected to bounce back

in Q4. The initial feedback from customers for DOST have been very

favorable and we are quickly ramping up production to meet the

demand," added Mr. Dasari. 

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Applications: Tarmac Coach

Engine: H Series 4 cylinder BS3

Maximum Power: 120 hp (88 kW) @ 2400 rpm

Maximum Torque: 400 nm (41 mkg) @ 1600 rpm

Gearbox:  Automatic transmission

Rear Axle: Fully floating, hypoid gear

Front Suspension: Air suspension

Rear Suspension: Air suspension

Steering: Integral Power steering

Brakes: Full air brakes

Wheelbase: 5100 mm

Overall Length: 11000 mm

Tyres: 10R20 - 16 PR

GVW: 13000 kg

Floor height: 380 mm stepless entry

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Applications: City bus - 42 seats BRTS one / two door(s) - ahead of

front axle / rear overhang

Engine: "H" Series - 6 CYL. CNG BS4

Maximum Power:124 hp (92 kW) @ 2400 rpm

Maximum Torque:  42.8 mkg (416 nm) @ 1200 rpm

Gearbox: 5 Speed Synchromesh

Clutch: 353 mm dia single plate dry type

Rear Axle: Fully floating, single reduction hypoid axle

Front Suspension: Rubber ended suspension

Rear Suspension: air suspension

Steering: Integral Power steering

Brakes: Full air brakes

Wheelbase: 5639 mm

Overall Length: 10931 mm

Tyres: 10R20 - 16 PR

GVW: 16200 kg

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Seats:  42

Applications: Voluminous material movement at ports & Surface

transportation

Engine: H Series HA57L165 CRS - BS3 turbocharged intercooled

Power: 225 hp @ 2500 rpm

Torque: 800 nm @ 1400-1900 rpm

Clutch: Axial type 381 mm dia with organic lining and actuated by

clutch booster

Transmission: 9 speed GB - First Gear Ratio (FGR) - 8.83:1, Crawler

Gear Ratio (CGR) - 12.73:1

Suspension: Heavy duty bogie in rear

Cabin: Factory built G91 day cab with sleeping provision; a/c option

Tyre: 11.00 x 20 - 16 PR nylon ply

Max speed: 82 kmph

Grade ability: 33%

GVW: 31000 kgs

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Wheelbase:  5250 mm

Body Capacity:  19 cum box 22 cum box

Applications: Construction, roadwork, coal

Engine: H Series HA6ETI3K BS3 turbocharged intercooled

Power: 160 hp @ 2400 rpm

Torque: 550 nm @ 1500 -1700 rpm

Clutch: Axial type 352 mm dia with organic lining and mechanical

actuation

Transmission: 6 speed OD GB - First Gear Ratio (FGR) - 8.28:1

Suspension: Semi Elliptical multileaf

Cabin: G45 FES and cabin

Tyre: 10.00 x 20 - 16 PR nylon - ply

Max speed: 96 kmph

Grade ability: 27%

GVW: 16200 kgs

Variants: 1616 1616 XL

26

Wheelbase: 2920 3607

Body Capacity: 4.5 cum Box UBT & 6.5 cum box UBT&FET

6 cum box UBT , 8.5 cum box UBT & FET, 10.5 cum Box FET, 8.5 cum

scow FET and 7.5 cum rock UBT

Applications: Market load, construction, cement, Tankers

Engine: HA135LT3

Power: 180 hp @ 2400 rpm

Torque: 550 nm @ 1500 - 2100 rpm

Clutch: 15" facing dia clutch with superior lining material & booster

Transmission: ZF S6 36 FGR 8.51

Suspension: Semi elliptical laminated multileaf

Cabin: Factory built G45 Cowl

Tyre: 10.00 x 20 - 16 PR Nylon - radial option available

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Max speed: 76 kmph

Grade ability: 15.03%

GVW: 31000 kgs

Wheelbase: 5200 mm

Loading span: 24.5 feet

Applications: Cement, Steel, ODC

Engine: H Series CRS BS III

Power: 225 hp @ 2500 rpm

Torque: 800 nm @ 1400-1900 rpm

Clutch: 380 mm dia disc with organic lining actuated with clutch

boosters

Transmission: 9 speed synchromesh GB (ZF9S1110); First Gear

Ratio 8.83:1, Crawler Gear Ratio 12.73:1

Front : Parabolic suspension Rear : Semi elliptic multileaf; bogie option

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Cabin: Factory built G91 sleeper cab

Tyre: 11.00 x 20 - 16 PR cross ply; radial tyres optional

Max speed: 80 kmph

Grade ability: 21%

GVW: 49000 kgs (with tri-axle trailer)

Wheelbase: 3900 mm

RATIO ANALYSIS

GROSS PROFIT

NET PROFIT

RETURN ON NET WORTH

FIXED ASSET TURNOVER RATIO

CURRENT RATIO

LIQUIDITY RATIO

INVENTORY TURNOVER RATIO

DEBTORS TURNOVER RATIO

DIVIDEND PAYOUT RATIO

EARNING PER SHARE

29

GROSS PROFIT

Definition of gross profit ratio:

Gross profit ratio (GP ratio) is the ratio of gross profit to net

sales expressed as a percentage. It expresses the relationship

between gross profit and sales.

Formula:

Following formula is used to calculate gross profit ratios:

[Gross Profit Ratio = (Gross profit / Net sales) × 100]

30

Significance:

Gross profit ratio may be indicated to what extent the selling prices of

goods per unit may be reduced without incurring losses on operations.

It reflects efficiency with which a firm produces its products. As

the gross profit is found by deducting cost of goods sold from net sales,

higher the gross profit better it is.

YEAR 2007 2008 2009 2010 2011

GROSS PROFIT 773.49 877.99 519.05 833.29 1232.89

SALES 7358.88 7972.52 6168.99 7436.18 11407.15

GROSS PROFIT RATIO 10.51 11.01 8.41 11.20 10.80

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Interpretation

In the year 2007 gross profit ratio was 10.51. It was increased in 2008

11.01 .But in 2009 gross profit ratio was decreased 8.41 and it was lower

in comparing with last five year. 2010 ratio is increased with 2.79%. But

in 2011 ratio was decreased with 0.4%. In 2011 sale is higher even gross

profit.

NET PROFIT RATIO

Definition of net profit ratio:

Net profit ratio is the ratio of net profit (after taxes) to net sales. It is

expressed as percentage.

Formula:

Net Profit Ratio = (Net profit / Net sales) × 100

32

Significance:

NP ratio is used to measure the overall profitability and hence it is very

useful to proprietors. The ratio is very useful as if the net profit is not

sufficient, the firm shall not be able to achieve a satisfactory return on

its investment.

Higher the ratio the better is the profitability. But while interpreting the

ratio it should be kept in minds that the performance of profits also is

seen in relation to investments or capital of the firm and not only in

relation to sales.

YEAR 2007 2008 2009 2010 2011

NET PROFIT 441.29 469.31 190.00 423.68 631.30

NET SALES 7358.88 7972.52 6168.99 7436.18 11407.15

NET PROFIT RATIO 5.99 5.88 3.07 5.69 5.53

33

Interpretation

In 2007 net profit ratio is 5.99 and 2008 ratio is decreased with 0.10%.

2009 ratio is decreased with 2.81% comparing with 2008. But 2010 ratio

is increased up to 2.62%. 2011 ratio is decreased 5.53

Return on Shareholders Investment or Net worth Ratio:

Definition:

It is the ratio of net profit to share holder's investment. It is

the relationship between net profit (after interest and tax) and share

holder's/proprietor's fund.

34

This ratio establishes the profitability from the share holders' point of

view. The ratio is generally calculated in percentage.

Formula of return on shareholder's investment or net

worth Ratio:

[Return on share holder's investment = {Net profit (after interest and

tax / Share holder's fund}

Significance:

This ratio is one of the most important ratios used for measuring the

overall efficiency of a firm. As the primary objective of business is to

maximize its earnings, this ratio indicates the extent to which this

primary objective of businesses being achieved. This ratio is of great

importance to the present and prospective shareholders as well as the

management of the company. As the ratio reveals how well the

resources of the firm are being used, higher the ratio, better are the

results. The inter firm comparison of this ratio determines whether the

investments in the firm are attractive or not as the investors would like

to invest only where the return is higher.

year 2007 2008 2009 2010 2011

Net profit 441.29 469.31 190.00 423.67 631.30

Share holders 132.39 133.03 133.03 133.03 133.03

Return on net worth 3.33 3.52 1.42 3.18 4.74

35

3.333.52 1.42

3.18

4.74

2002

2004

2006

2008

2010

2012

2014

2016

1 2 3 4 5

Return on Net worth

net worth

year

Interpretation

In year 2007 net on net worth ratio is 3.33. But in 2008 ratio increased is

3.52 and 2009 ratio is decreased 1.42 because net profit is decreased.

2010 ratio increased 3.18 comparing with 2009. Net profit is increased

in 2011 and ratio was 4.74 comparing with last five year.

36

Fixed Assets Turnover Ratio:

Definition:

Fixed assets turnover ratio is also known as sales to fixed assets ratio.

This ratio measures the efficiency and profit earning capacity of the

concern.

Higher the ratio, greater is the intensive utilization of fixed assets.

Lower ratio means under-utilization of fixed assets. The ratio is

calculated by using following formula:

Formula of Fixed Assets Turnover Ratio:

Fixed assets turnover ratio turnover ratio is calculated by the following

formula:

Fixed Assets Turnover Ratio = Cost of Sales / Net Fixed Assets

Year 2007 2008 2009 2010 2011

Cost of sales 7358.88 7972.52 6168.99 7436.18 11407.15

Net fixed assets 1307.04 1525.55 3399.11 4249.56 4633.79

FATO ratio 5.63 5.22 1.81 1.74 2.46

37

Interpretation

Fixed asset turnover ratio of 2007 is 5.63 but in 2008 & 2009 ratio is

deceased from 5.22 to 1.81. 2010 ratio is deceased 1.74 this lower ratio

comparing to last five year.

38

-1

1

3

5

7

Fixed assets turnover ratio

year 2007 2008 2009 2010 2011

Fato ratio 5.63 5.22 1.81 1.74 2.46

1 2 3 4 5

CURRENT RATIO

Definition :

Current ratio may be defined as the relationship between current

assets and current liabilities. This ratio is also known as "working

capital ratio". It is a measure of general liquidity and is most widely

used to make the analysis for short term financial position or liquidity

of a firm. It is calculated by dividing the total of the current assets by

total of the current liabilities.

Formula:

Following formula is used to calculate current ratio:

Current Ratio = Current Assets / Current Liabilities

Or

Current Assets: Current Liabilities

Significance :

A relatively high current ratio is an indication that the firm is liquid

and has the ability to pay its current obligations in time and when they

become due. On the other hand, a relatively low current ratio represents

that the liquidity position of the firm is not good and the firm shall not

be able to pay its current liabilities in time without facing difficulties.

39

YEAR 2007 2008 2009 2010 2011

CURRENT ASSET 1681.75 1644.30 2374.91 2849.22 3573.64

CURRENT LIABILITES 1865.97 2196.49 2207.29 3002.68 3505.26

CURRENT RATIO 0.90 0.74 1.07 0.94 1.01

Interpretation

The rule of thumb of current ratio is 2:1 the ratio and here it shows a

fluctuating. In year 2007 ratio was 0.90 it not good. After 2007 ratio was

going on deceased 0.74 in 2008. But 2009 ratio is increased up to 1.07. In

2010 ratio again decreased because of current liabilities’ but 2011 ratio

is increased up to 1.01.

40

00.2

0.4

0.60.8

1

1.2

1.41.6

1.8

2

1 2 3 4 5

current ratio

year

current ratio

Liquid or Liquidity or Acid Test or Quick Ratio:

Definition:

Liquid ratio is also termed as "Liquidity Ratio",”Acid Test Ratio" or

"Quick Ratio". It is the ratio of liquid assets to current liabilities. The

true liquidity refers to the ability of a firm to pay its short term

obligations as and when they become due.

Formula of Liquidity Ratio / Acid Test Ratio:

[Liquid Ratio = Liquid Assets / Current Liabilities]

Significance:

The quick ratio/acid test ratio is very useful in measuring the liquidity

position of a firm. It measures the firm's capacity to pay off current

obligations immediately and is more rigorous test of liquidity than the

current ratio. It is used as a complementary ratio to the current ratio.

Liquid ratio is more rigorous test of liquidity than the current ratio

because it eliminates inventories and prepaid expenses as a part

of current assets. Usually high liquid ratios and indication that the firm

is liquid and has the ability to meet its current or liquid liabilities in

time and on the other hand a low liquidity ratio represents that the

firm's liquidity position is not good. As a convention, generally, a quick

ratio of "one to one" (1:1) is considered to be satisfactory.

41

YEAR 2007 2008 2009 2010 2011

QUICK ASSET

611.43 420.39 1044.9 1210.98 1364.74

CURRENT LIABILITIES

1865.97 2196.49 2207.29 3002.68 3505.26

Liquid RATIO

0.32 0.19 0.47 0.40 0.38

Interpretation

According to rule ratio must be high it indicate that firm or company is

in good position. But in 2007 ratio was not good because ratio is low last

five year ratio going on decreased. In 2009 ratio is increased up to 0.47

this is highest ratio comparing to five year

42

Inventory Turnover Ratio or Stock Turnover Ratio (ITR):

Every firm has to maintain a certain level of inventory of finished goods

so as to be able to meet the requirements of the business. But the level of

inventory should neither be too high nor too low.

A too high inventory means higher carrying costs and higher risk of

stocks becoming obsolete whereas too low inventory may mean the loss

of business opportunities. It is very essential to keep sufficient stock in

business.

Definition:

Stock turn over ratio and inventory turn over ratio are the same. This

ratio is a relationship between the cost of goods sold during a particular

period of time and the cost of average inventory during a particular

period. It is expressed in number of times. Stock turn over

ratio/Inventory turn over ratio indicates the number of time the stock has

been turned over during the period and evaluates the efficiency with

43

which a firm is able to manage its inventory. This ratio indicates

whether investment in stock is within proper limit or not.

.

Formula of Stock Turnover/Inventory Turnover Ratio :

The ratio is calculated by dividing the cost of goods sold by the amount

of average stock at cost.

 

(a) [Inventory Turnover Ratio = Cost of goods sold / Average inventory at cost] (b) [Inventory Turnover Ratio = Net Sales / Average Inventory at Cost](c) [Inventory Turnover Ratio = Net Sales / Average inventory at Selling Price](d) [Inventory Turnover Ratio  = Net Sales / Inventory]

Significance of ITR :

Inventory turnover ratio measures the velocity of conversion of stock

into sales. Usually a high inventory turnover/stock velocity indicates

efficient management of inventory because more frequently the stocks

are sold; the lesser amount of money is required to finance the

inventory. A low inventory turnover ratio indicates an inefficient

management of inventory.

44

Year 2007 2008 2009 2010 2011

Cost of good sold 6585.39 7094.53 5649.94 6602.89 10174.26

Average inventory 1070.32 1223.91 1330.01 1638.24 2208.90

Inventory turn over ratio

6.15 5.76 4.24 4.03 4.60

Interpretation

45

Inventory turn over ratio of 2007 is higher it show that company is in

good position. But after 2007 ratio is decreased 2008 & 2009 ratio is 5.76

& 4.24 in 2010 ratio is low comparing to last five year because if average

inventory. Last year ratio is higher.

Debtors Turnover Ratio /Accounts

Receivable Turnover Ratio:

A concern may sell goods on cash as well as on credit. Credit is one of

the important elements of sales promotion. The volume of sales can be

increased by following a liberal credit policy.

Definition:

Debtor’s turnover ratio or accounts receivable turnover ratio indicates

the velocity of debt collection of a firm. In simple words it indicates the

number of times average debtors (receivable) are turned over during a

year.

Formula of Debtors Turnover Ratio:

Debtors Turnover Ratio = Net Credit Sales / Average Trade Debtors

Significance of the Ratio:

Accounts receivable turnover ratio or debtor’s turnover ratio indicates

the number of times the debtors are turned over a year. The higher the

46

value of debtor’s turnover the more efficient is the management of

debtors or more liquid the debtors are. Similarly, low debtors turnover

ratio implies inefficient management of debtors or less liquid debtors. It

is the reliable measure of the time of cash flow from credit sales. There

is no rule of thumb which may be used as a norm to interpret the ratio

as it may be different from firm to firm.

year 2007 2008 2009 2010 2011

Net credit sales 8513.93 9178.82 6826.96 8071.74 12393.36

Average trade debtors 522.88 375.84 957.97 1022.06 1185.21

Debtors turn over ratio 16.28 24.42 7.12 7.89 10.4

1 2 3 4 5

year drstor0

5

10

15

20

25

30

Debtors turn over ratio

year

drstor

47

Interpretation

In 2007the ratio was 16.28 time and it increased to 24.42 in 2008. But in

2009 ratio decreased to 7.12 and 2010 slightly increased up to 7.89 in

2011 ratio is increased 10.4 times this highest comparing to last two

years 2009&2010.

It implies in efficient management of the company in reducing

its sales and increasing the net credit sales.

Dividend Payout Ratio:

Dividend payout ratio is calculated to find the extent to which earnings

per share have been used for paying dividend and to know what portion

of earnings has been retained in the business. It is an important ratio

because plaguing back of profits enables a company to grow and pay

more dividends in future.

Formula of Dividend Payout Ratio:

Following formula is used for the calculation of dividend payout ratio

Dividend Payout Ratio = Dividend per Equity Share / Earnings per

Share

A complementary of this ratio is retained earnings ratio. Retained

earning ratio is calculated by using the following formula:

48

Retained Earning Ratio = Retained Earning Per Equity Share / Earning

Per Equity Share

Significance of the Ratio :

The payout ratio and the retained earning ratio are the indicators of the

amount of earnings that have been ploughed back in the business. The

lower the payout ratio, the higher will be the amount

of earnings ploughed back in the business and vice versa. A lower

payout ratio or higher retained earnings ratio means a stronger

financial position of the company

year 2007 2008 2009 2010 2011Dividend 150 150 110 150 200EPS 5.09 6.24 5.20 6.81 9.08Dividend pay out ratio

29.4 24.0 19.23 22.02 22.02

49

Dividend Payout ratio

0

5

10

15

20

25

30

1 2 3 4 5 6

Year

Rti

o year

DPR

Interpretation

According to significance higher ratio mean company finance position is

good. In 2007 ratio is good 29.4 and 2008 ratio was decreased 24.0.

Again ratio was decreased 19.23 in 2009. But ratio is increased because

of earning per share was increased and 2011 ratio was 22.02

Earnings per Share (EPS) Ratio:

Definition:

Earnings per share ratio (EPS Ratio) are a small variation of return on

equity capital ratio and is calculated by dividing the net profit after

taxes and preference dividend by the total number of equity shares.

Formula of Earnings per Share Ratio:

The formula of earnings per share is:

Earnings per share (EPS) Ratio = (Net profit after tax

− Preference dividend) / No. of equity shares (common shares)

Significance:

The earnings per share are a good measure of profitability and when

compared with EPS of similar companies, it gives a view of the

comparative earnings or earnings power of the firm. EPS ratio

50

calculated for a number of years indicates whether or not the earning

power of the company has increased.

Year 2007 2008 2009 2010 2011Net profit 631.30 423.67 190.00 469.31 441.29Equity share

132.39 133.03 133.03 133.03 133.03

EPS ratio 4.76 3.18 1.42 3.52 3.31

Interpretation

In 2007 ratio was good comparing last five year. After that ratio is

decreased in 2008 &2009 that is not good for the company 3.18 &1.42.

But 2010 ratio is increased up to 3.52 and then again it decreased in

2011.

51

EPS Ratio

0

1

2

3

4

5

2006 2007 2008 2009 2010 2011 2012

Year

Rat

io EPS

STATISTICAL ANALYSIS

1. SALES TREND

2. NET PROFIT TREND

3. WORKING CAPITAL TREND

4. DIVIDEND TREND

52

Year Sales Sales trend2007 7358.88 6556.7042008 7972.52 7312.7242009 6168.99 8068.7442010 7436.18 8824.7642011 11407.15 9580.7842012 10337.804 10336.802013 11092.824 11092.82

Note: Expected value for the year of 2012 & 2013 (10336.80 &11092.82).

These values are finding on the base sales value

a= Ey/n

53

b=Exy/x2

y= a+b(x)

a= 40343.72/5 =8068.744

b= 7560.2/10=756.02

YEAR NET PROFIT NET PROFIT TREND

2007 441.29 364.2382008 469.31 397.6762009 190.00 431.1142010 423.67 464.5522011 631.30 497.9902012 531.428 531.4282013 564.866 564.866

Note: Expected value for the year 2012 & 2013 (531.428 & 564.866). These

values are finding on base of net profit.

54

a= Ey/n

b=Exy/x2

y= a+b(x)

a= 2155.57/5 = 431.114

b= 334.38/10=33.438

YEAR WORKINGCAPITAL

WORKING CAPITALTREND

2007 407.70 49.6342008 661.08 336.7672009 1043.19 623.92010 619.71 911.0332011 387.82 1198.1662012 599.561 1485.2992013 591.448 1772.432

55

Note: Expected value for the year 2012 & 2013 (1485.299 & 1772.432).

These values are finding on base of working capital..

a= Ey/n

b= Exy/x2

y= a+b(x)

a= 3119.5/5 = 623.9

b= 2871.33/10=287.133

Year Dividend Dividend trend2007 150 1302008 150 1402009 100 1502010 150 1602011 200 1702012 180 1802013 190 190

56

Note: Expected value for the year 2012 & 2013 (180 &190). These values

are finding on base of Dividend.

a= Ey/n

b= Exy/x2

y= a+b(x)

a= 750/5 = 150

b= 100/10=10

CORRELATION ANALYSIS

SALE SAND NET PROFIT

SALES AND DIVIDEND PAID

NET PROFIT AND DIVIDEND PAID

DIVIDEND PER SHARE AND EARNING PER SHARE

WORKING CAPITAL AND NET PROFIT

57

Correlation Co-efficient Definition:

     A measure of the strength of linear association between two variables.

Correlation will always between -1.0 and +1.0. If the correlation is positive,

we have a positive relationship. If it is negative, the relationship is negative.

Formula:

Correlation Co-efficient :

Correlation(r) =[ NΣXY - (ΣX)(ΣY) / Sqrt([NΣX2 - (ΣX)2][NΣY2 -

58

(ΣY)2])] 

where 

              N = Number of values or elements 

              X = First Score

              Y = Second Score

              ΣXY = Sum of the product of first and Second Scores

              ΣX = Sum of First Scores

              ΣY = Sum of Second Scores

              ΣX2 = Sum of square First Scores

              ΣY2 = Sum of square Second Scores

1. Correlation coefficient between sales and net profit is 0.895

Year 2007 2008 2009 2010 2011Sales (x) 7358.88 7972.52 6168.99 7436.18 11407.15Net profit (y) 441.29 469.31 190.00 423.67 631.30

2. correlation coefficient between sales and dividend paid is 0.935

Year 2007 2008 2009 2010 2011Sales (x) 7358.88 7975.52 6168.99 7436.18 11407.15Dividend paid (y) 150 150 150 150 200

3. correlation coefficient between net profit and dividend paid is 0.987

Year 2007 2008 2009 2010 2011Net profit (x) 441.29 469.31 190.00 423.67 631.30Dividend paid (y) 150 150 150 150 200

59

4. correlation coefficient dividend per share and earning per share is 0.987

Year 2007 2008 2009 2010 2011DPS (x) 1.50 1.50 100 1.50 2.00EPS (y) 3.33 3.53 1.43 3.18 4.75

5. correlation coefficient working capital and net profit is 0.892

Year 2007 2008 2009 2010 2011Working capital (x) 407.70 661.08 1043.19 619.71 387.82Net profit (y) 441.29 469.31 190.00 423.67 631.30

FINANCIAL ANALYSIS

BALANCE SHEET

PROFIT AND LOSS

CASH FLOW

CAPITAL STRUCTURE

DIVIDEND

YEARLY RESULT

60

Balance Sheet of Ashok Leyland

------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of FundsTotal Share Capital 133.03 133.03 133.03 133.03 132.39

Equity Share Capital 133.03 133.03 133.03 133.03 132.39

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 2,523.65 2,190.10 1,976.00 1,993.57 1,739.23

Revaluation Reserves 1,306.28 1,333.17 1,364.86 22.38 22.96

Networth 3,962.96 3,656.30 3,473.89 2,148.98 1,894.58

Secured Loans 1,272.22 788.12 304.41 190.24 360.22

Unsecured Loans 1,385.97 1,492.33 1,657.57 697.26 280.18

Total Debt 2,658.19 2,280.45 1,961.98 887.50 640.40

Total Liabilities 6,621.15 5,936.75 5,435.87 3,036.48 2,534.98

61

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of FundsGross Block 6,691.89 6,018.63 4,953.27 2,942.44 2,620.20

Less: Accum. Depreciation 2,058.10 1,769.07 1,554.16 1,416.89 1,313.16

Net Block 4,633.79 4,249.56 3,399.11 1,525.55 1,307.04

Capital Work in Progress 387.82 619.71 1,043.19 661.08 407.70

Investments 1,230.00 326.15 263.56 609.90 221.09

Inventories 2,208.90 1,638.24 1,330.01 1,223.91 1,070.32

Sundry Debtors 1,185.21 1,022.06 957.97 375.84 522.88

Cash and Bank Balance 179.53 188.92 86.93 44.55 88.55

Total Current Assets 3,573.64 2,849.22 2,374.91 1,644.30 1,681.75

Loans and Advances 787.17 928.31 819.63 708.26 516.78

Fixed Deposits 0.00 330.01 1.15 406.82 346.39

Total CA, Loans & Advances 4,360.81 4,107.54 3,195.69 2,759.38 2,544.92

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 3,505.26 3,002.68 2,207.29 2,196.49 1,865.97

Provisions 490.33 368.69 268.08 345.23 104.23

Total CL & Provisions 3,995.59 3,371.37 2,475.37 2,541.72 1,970.20

Net Current Assets 365.22 736.17 720.32 217.66 574.72

Miscellaneous Expenses 4.31 5.17 9.69 22.29 24.42

Total Assets 6,621.14 5,936.76 5,435.87 3,036.48 2,534.97

Contingent Liabilities 881.77 445.03 754.37 1,783.97 1,129.49

Book Value (Rs) 19.97 17.46 15.85 15.99 14.14

Profit & Loss account of Ashok Leyland

------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

IncomeSales Turnover 12,393.36 8,071.74 6,826.96 9,178.82 8,513.93Excise Duty 986.21 635.56 657.97 1,206.30 1,155.05Net Sales 11,407.15 7,436.18 6,168.99 7,972.52 7,358.88Other Income 40.60 89.34 71.07 95.15 101.02Stock Adjustments 175.54 251.85 1.05 97.48 48.98Total Income 11,623.29 7,777.37 6,241.11 8,165.15 7,508.88

62

ExpenditureRaw Materials 8,406.17 5,534.24 4,554.36 5,952.86 5,570.18Power & Fuel Cost 65.19 44.47 38.42 45.28 45.44Employee Cost 974.60 671.61 566.26 616.17 480.70Other Manufacturing Expenses 86.04 45.51 50.30 57.48 41.70Selling and Admin Expenses 857.00 645.89 495.68 263.55 259.50Miscellaneous Expenses 0.19 0.16 0.13 330.84 324.31Preoperative Exp Capitalised -24.06 -15.25 -8.20 -0.67 -0.13Total Expenses 10,365.13 6,926.63 5,696.95 7,265.51 6,721.70

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 1,217.56 761.40 473.09 804.49 686.16PBDIT 1,258.16 850.74 544.16 899.64 787.18Interest 188.92 101.85 157.30 83.63 31.82PBDT 1,069.24 748.89 386.86 816.01 755.36Depreciation 267.43 204.11 178.41 177.36 150.57Other Written Off 0.00 0.00 0.00 0.49 0.30Profit Before Tax 801.81 544.78 208.45 638.16 604.49Extra-ordinary items 0.00 0.00 0.26 0.00 2.96PBT (Post Extra-ord Items) 801.81 544.78 208.71 638.16 607.45Tax 170.50 121.10 18.45 168.84 163.22Reported Net Profit 631.30 423.67 190.00 469.31 441.29Total Value Addition 1,958.96 1,392.39 1,142.59 1,312.66 1,151.50Preference Dividend 0.00 0.00 0.00 0.00 0.00Equity Dividend 266.07 199.55 133.03 199.77 198.58Corporate Dividend Tax 43.16 33.14 22.61 33.95 27.85Per share data (annualised)Shares in issue (lakhs) 13,303.38 13,303.38 13,303.38 13,303.38 13,238.70Earning Per Share (Rs) 4.75 3.18 1.43 3.53 3.33Equity Dividend (%) 200.00 150.00 100.00 150.00 150.00Book Value (Rs) 19.97 17.46 15.85 15.99 14.14

63

Cash Flow of Ashok Leyland

------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax 801.80 544.77 208.45 638.15 604.51

Net Cash From Operating Activities 591.38 1090.17 -525.58 1065.69 499.95

Net Cash (used in)/fromInvesting Activities

-917.73 -783.17 -664.18 -809.68 -749.69

Net Cash (used in)/from Financing Activities

-13.64 123.31 459.18 364.52 -289.38

Net (decrease)/increase In Cash and Cash

-339.98 430.32 -730.58 620.53 -539.12

64

EquivalentsOpening Cash & Cash Equivalents 515.36 85.15 815.73 195.20 850.32

Closing Cash & Cash Equivalents 175.37 515.46 85.15 815.73 311.21

Capital Structure (Ashok Leyland)

Period Instrument Authorized Capital

Issued Capital

- P A I D U P -

From To (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital

2010 2011 Equity Share 200 133.05 1330338317 1 133.03

2009 2010 Equity Share 200 133.05 1330338317 1 133.03

2008 2009 Equity Share 150 133.05 1330338317 1 133.03

2007 2008 Equity Share 150 133.05 1330338317 1 133.03

2006 2007 Equity Share 150 132.41 1323870317 1 132.39

2005 2006 Equity Share 150 122.18 1221586776 1 122.16

2004 2005 Equity Share 150 118.95 1189294200 1 118.93

2003 2004 Equity Share 150 118.93 118929420 10 118.93

2002 2003 Equity Share 150 118.93 118929420 10 118.93

2001 2002 Equity Share 150 118.93 118929420 10 118.93

2000 2001 Equity Share 150 118.93 118929420 10 118.93

65

1994 2000 Equity Share 150 118.93 118929420 10 118.93

1993 1994 Equity Share 100 100 69513696 10 69.51

1992 1993 Equity Share 100 69.51 69513696 10 69.51

1991 1992 Equity Share 100 31.5 31496309 10 31.5

1990 1991 Equity Share 50 31.5 31496309 10 31.5

1989 1990 Equity Share 50 31.34 31342976 10 31.34

1986 1989 Equity Share 25 21.39 21390000 10 21.39

1984 1986 Equity Share 25 18.13 18130000 10 18.13

1981 1984 Equity Share 25 16.5 16500000 10 16.5

1979 1981 Equity Share 25 16.5 33000000 5 16.5

1977 1978 Equity Share 25 14.02 28038651 5 14.02

1975 1976 Equity Share 15 9.35 18692434 5 9.35

1972 1973 Equity Share 10 7.79 15577029 5 7.79

1969 1972 Equity Share 10 7.79 15578549 5 7.79

1965 1966 Equity Share 10 8.62 12575068 5 6.29

1963 1964 Equity Share 10 5.53 11047464 5 5.52

1960 1963 Equity Share 10 4.97 9942998 5 4.97

1959 1960 Equity Share 3.25 3.25 4000000 5 2

1957 1958 Equity Share 3.25 2 3742000 5 1.87

1956 1957 Equity Share 2 1.5 1713360 5 0.86

1952 1955 Equity Share 2 0.75 1091360 5 0.55

Announcement Date

Effective Date

Dividend Type

Dividend (%) Remarks

19-05-11 29-06-11 Final 200.00 -

29-04-10 16-07-10 Final 150.00 -

15-05-09 14-07-09 Final 100.00 -

08-05-08 16-07-08 Final 150.00 -

14-03-07 28-03-07 Interim 150.00 -

03-05-06 12-07-06 Final 120.00 AGM

66

Yearly Results of Ashok Leyland

------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Sales Turnover 11,117.71 7,244.71 5,981.07 7,729.12 7,168.18

Other Income 15.33 70.45 49.62 74.00 70.80

Total Income 11,133.04 7,315.16 6,030.70 7,803.12 7,238.98

Total Expenses 9,900.15 6,481.87 5,511.64 6,925.13 6,465.49

Operating Profit 1,217.56 762.84 469.43 803.99 702.69

Profit On Sale Of Assets -- -- -- -- --

Profit On Sale Of Investments -- -- -- -- --

Gain/Loss On Foreign Exchange -- -- -- -- --

VRS Adjustment -- -- -- -- --

Other Extraordinary Income/Expenses -- -- -- -- --

Total Extraordinary Income/Expenses -- -3.27 -13.49 -8.41 -13.08

Tax On Extraordinary Items -- -- -- -- --

Net Extra Ordinary Income/Expenses -- -- -- -- --

Gross Profit 1,232.89 833.29 519.05 877.99 773.49

Interest 163.66 81.13 118.71 49.74 5.33

PBDT 1,069.23 748.89 386.86 819.84 755.08

Depreciation 267.43 204.11 178.41 177.36 150.57

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Depreciation On Revaluation Of Assets -- -- -- -- --

PBT 801.80 544.78 208.45 642.48 604.51

Tax 170.50 121.10 18.45 173.17 163.22

Net Profit 631.30 423.68 190.00 469.31 441.29

Prior Years Income/Expenses -- -- -- -- --

Depreciation for Previous Years Written Back/ Provided

-- -- -- -- --

Dividend -- -- -- -- --

Dividend Tax -- -- -- -- --

Dividend (%) -- -- -- -- --

Earnings Per Share 4.75 3.18 1.43 3.53 3.33

Book Value -- -- -- -- --

Equity 133.03 133.03 133.03 133.03 132.39

Reserves 2,523.65 2,202.55 1,976.00 1,993.57 1,739.23

Face Value 1.00 1.00 1.00 1.00 1.00

FINDINGS AND SUGGESTION

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FINDINGS

In 2009 gross profit ratio was decreased 8.41 and it was lower

Comparing with last five year

Net profit 2009 ratio is decreased with 2.81% .Because of the

expenses is increased

Return on net worth also fluctuating in 2009 &2010 ratio was

decreased 1.42 to 3.18 because of the net profit

Fixed asset also effected in 2009 & 2010 ratio is lower than 2007 &

2008 because cost of sales is reduce

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Current ratio is decreased because company not maintained

current asset because of that ratio is decreased still it was 1.01 in

2011

Liquid ratio was decreasing from date of calculation in 2007 and

2008 ratio was 0.32 & 0.19. Because of current liabilities is

increasing

Inventory turn over ratio was slightly decrease in 2010

debtors turn over ratio was decreased in 2009 and 2010 slightly

increased up to 7.89 in 2011 ratio is increased 10.4 times this

highest comparing to last two year 2010 &2011.

Dividend pay out ratio in 2007 ratio is good 29.4 and 2008 ratio

was decreased 24.0. Again ratio was decreased 19.23 in 2009

Earning per share was decreased in 2009 because of net profit is

deceased.

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SUGGESTION

The current ratio and absolute ratio was maintained lower cash

than ideal ratio. So, the company cab take step to increase the

cash position to meet its expenses.

The company is allowed credit period for 50 days. The debt

collection period can be reduced with in 30days.

The company have to maintained there expenses and liabilities

To reduce the investor cost of the company must follow average

inventory system,

Otherwise, the company was making investment in current asset

and reducing cost of sales at the same time increasing sales

and profit was good in earlier days.

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MY EXPERIENCE

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MY EXPERIENCE

My first day started with small work like filling the form and enter the

value of VAT in ms excel. This work is done by me nearly five day and I

was successfully done. After then they given some bill books like sales

bill book and purchases bill book bank document etc, they briefly

explain about all things. I have to complete that work within three day

because they have to pay the tax to government so my supervisor going

putting pressure on me that you have to complete within time. Whole

day I enter all the sales entries in tally. Second day all most work was

completed I feel very happy that I completed my work within the time

limited. I told to my supervisor they check my work there was some

mistake in entries that time I feel little sad but my supervisor told me

the way to find mistake. Next day they given work for the income tax

department and pan card work laxmi madam help me to fill the form

and procedure regarding the pan card and each me the E-filing,

calculation of income. next step is to auditing and preparing the balance

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sheet gopal ji was old person among us and great experience in auditing

he teach me the auditing and that day old client have some problem in

regarding tax so gopal ji told me that read and find out the problem and

I am totally blank because I don’t have any idea I read all document I

find out that client was not preparing the proper bills. gopal ji told the

problem and find out solution and prepared report and paid previous

year tax and increased the bank balance.

When I gone for internship I feel nervous because I never done any

work like that and I have to completed project because without project I

can’t completed my graduation. When I started working there I feel

comfortable and it increased my willingness and confidence level. This

internship given me great experience it teaches me that if you doing the

work then only you get success.

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BIBLIOGRAPHY

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WWW.ashokleyland.comWWW.wikipedia.com

WWW.money controller.com

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