Annual Report 2007-2008

AND ON THE

ASHOK LEYLAND LIMITED Corporate Office: 19, Rajaji Salai, - 600 001 Tel: + 91 44 2534 2141, Fax: +91 44 2534 2493, www.ashokleyland.com Annual Report 08

Forward-looking statement

In this Annual Report we have disclosed forward-looking information to enable investors to fully appreciate our prospects and take informed investment decisions. This report and other Dear Shareholder, statements - written and oral - that we periodically make, contain forward-looking statements that set our anticipated On 7th September your Company completes 60 years of participation in the results based on the management’s plans and assumptions. daily life and economic growth of independent India.

We have tried wherever possible to identify such statements by Our sixty years of growth and success have been founded on the bedrock of using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘project’, delivering value to our customer by always keeping him and his emerging ‘intends’, ‘plans’, ‘believes’, and words of similar substance in needs in sharp focus. That has also been our way of remaining profitable connection with any discussion of future performance. since inception and, in the process, creating shareholder value.

The pictorial section at the end of this report is a nostalgic look back over the We cannot, of course, guarantee that these forward-looking last 60 years. It is also a cavalcade of products that have met the changing statements will be realised, although we believe we have been needs of the nation, developed and delivered innovatively and with a passion prudent in our assumptions. The achievement of results is for engineering. subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results AND ON THE

could vary materially from those anticipated, estimated or The same passion for engineering defines our present and our future projected. Readers should bear this in mind. aspirations. Investments in technology renewal is creating futuristic products and facilitating a setting for a 13000 strong team to excel and to grow. We undertake no obligation to publicly update any The changing age profile has injected the exuberance of youth coupled with forward-looking statements, whether as a result of new the experience of the past that has built our engineering capabilities. information, future events or otherwise. Adding momentum to a Company on the go.

We thank you for your trust and look forward to continuing this relationship Contents that we cherish. Yours truly, Highlights 02 Cash Flow Statement 66

Passion at work: case studies 04 Statement on Significant Accounting Policies 68

Environment & Safety 18 Schedules to Balance Sheet 70

Corporate Social Responsibility 21 Schedules to Profit and Loss Account 77

60 years’ performance highlights 24 Notes to the Accounts 80

Director’s Report 26 Balance Sheet Abstract and Company’s General Business Profile 88 CEO/CFO Certification 61

Auditor’s Report to the Members 62

Balance Sheet 64 R. Seshasayee R. J. Shahaney Managing Director Chairman Profit and Loss Account 65

1 Ashok Leyland Annual Report 08

PerformancePerformance highlights for 2007-08 PassionOur passion for engineering

Revenue PAT We direct our passion for engineering to the task of offering products with the best value-to-cost equation to our customers. Rs. 89 bn Rs. 4.7 bn It means listening to the customer to understand his/her business, to engineer product configurations that best answer his/her needs. (2007-08) (2007-08) It means empowering employees to add value.

Market Capitalisation Sales Volume Rs. 46.96 bn 83,307 (as on March 31, 2007-08) vehicles (2007-08)

2 3 Ashok Leyland Annual Report 08

Payload to the max Modern expressions of efficiency Modern roadways and stricter legal payload adherence have created the need for higher-powered, In the fiercely competitive world of goods transportation, appropriate modern technology Maxhigh performance vehicles. Here are three modern vehicles that offer the highest payload in makes for ease and efficiency of operations, improving productivity and revenues. payloadtheir respective classes, with enhanced power to drive up customer profitability. Here are two future-ready vehicles that giveefficiency convenience and efficiency a whole new meaning.

3130 (8x4) Heavy Duty Tipper 4921 (6x4) Tractor with Side Tip Trailer Built for better pulling power, superior acceleration and A novel concept as side tipping renders tipping easier, more stable, more convenient (especially exceptional gradeability to take on the rugged and demanding on roadsides and in closed areas) and a whole lot quicker compared to conventional end-tippers. deep mine terrains and conditions. All this translates into faster turnaround time and thereby greater profitability.

3121 (8x2) Multi Axle Vehicle

A new leader in its category that helps deliver 25% 4921 (6x4) Tractor with Curtain Side Trailer 4930 (6x4) Tractor Trailer extra rated payload, faster and with greater fuel Another novelty that comes with a lightweight, highly durable, PVC-coated side curtain that efficiency. The additional front steered axle provides for Offers the highest payload backed by max torque and power can be opened and shut in minutes and makes for quick and easy loading and unloading better stability, safety and load distribution. for faster turnaround. which again means more trips, better turnaround time and improved profitability.

4 5 Ashok Leyland Annual Report 08

Oh! To be young and to build a … A clean drawing board and 25 young minds, challenged - and empowered - to create an innovative, showcase product. That is how it began, late 2006.

The real time compressor was the near total use of virtual designing techniques. “Everything was simulated … even “We got great support testing the functional aspects of the electronic systems that from all colleagues – not only iBus team were embedded in the bus”, informs Vivek Uppadhyay. members – even into the late hours of the night. The level of electronics used in iBus has no precedent in Vendors too co-operated fully to realise the Indian CV industry. A virtual lab set-up was created for the action plan in time.” - L Yaamini Devi entire electronic architecture. “Display of error messages on electronic cluster during testing helped us identify, diagnose and rectify the problems”, Vivek adds. The indigenously developed Central Body Control Unit (CBCU) acts like the i-features nerve centre of all the electronically controlled units in the bus.

So, “what do we do?” was the first question, followed of “In March 2007, it was decided that the Company would Then came the real world sourcing of materials. Keeping in Compartmentalisation: economy and executive class options course by some crazy arguments here and endless debates display our creation at Auto Expo 2008. That meant less mind the ‘affordability’ factor, the team members went about Automated Manual Transmission there. Till one day, someone said: “We can reach out to a lot than ten months to translate our dream into a tangible judiciously mix-n-matching the most cost-effective yet Electronics Controlled Suspension

of people if we create a city bus” and all of them decided on entity”, recalls S Venkatsubramanian. state-of-the-art components and aggregates. “The time at 152 kw eCORE engine – low noise and vibration creating one “like no other” – Ideas were pooled in and protoshop was one of the most memorable. It was a learning 635mm low floor chassis with one-step entry innovative, intelligent and “It was a fulfilling experience … experience to interact with suppliers, constantly follow up for ‘cyber’stormed; sub-groups formed to 1500mm wide door “appropriate to the Indian market”. I still recount with satisfaction the days material procurement and resolve issues relating to vehicle take care of ‘project management’, ABS and Disc Brakes when a group of us sat together integration with various sub-components”, remembers Pedestrian-safe Front End Structure “We first wanted to find out why ‘design’, ‘opportunity assessment’ J Lakshminarasimhan. Some freezing days at the body people are averse to traveling by bus, and put pencil to paper Rear collision warning system with parking assistance and ‘sourcing’. Mentors were kept in for sketching our dream bus.” builders’ at Jaipur later, the collective dream became a and then pack our creation with Aesthetic exterior and aerodynamic bus facia the loop and review sessions with - R S Ayyappan spanking reality. And a few miles later, the cynosure of all features that would pull them back to At-home interiors and soft lighting, seats and hat rack Management were held once in two eyes at the Ashok Leyland stall at Auto Expo 2008. public transport”, says M Sriram. Telematics-enabled Passenger Information System months. All the innovative concepts that we see in the bus - An e-survey among “friends who normally do not prefer “The frantic finish is what I would recount many times over! LCD screens, internet on the move and entertainment compartmentalisation (the bus has separate ‘executive’ and traveling by bus” confirmed certain widely-held opinions: “Oh Above all, it helped us realise our potential. Elsewhere iBus Electronic driver workplace and driver access areas ‘economy’ class), automated manual transmission it is a pain during peak hours!”, “You feel so dirty.”, “Such a would be remembered for its innovative features or for Centralised vehicle diagnostics waste of time.” Subsequently, a more elaborate survey was (combining the luxury of a fully automatic transmission with redefining urban travel, but to me iBus means the GPS for fleet monitoring and management taken up in four major cities and the feedback gave further an ‘Indian’ cost) and eCORE (the first common rail engine experience of my lifetime. Thank you, Ashok Leyland”, sums Noise Vibration Harshness solutions shape to the product. used in a bus in India) – found their genesis circa this period. up Barath Rajagopalan.

6 7 Ashok Leyland Annual Report 08

Next bus expected at 3.23 pm on Bay 1 PISReal time information to keep everyone in the loop

“This is a very good system to keep branch managers “This little box connects me directly to the officials” beams informed of their vehicle/driver performance”, says Sajiv, G Vetriveeran, a seasoned driver on the Chennai-Tiruchirapalli Senior Programmer at Pallavan House. “There were at least route. He welcomes the change, saying, “in case of an two separate occasions when vehicle breakdowns were emergency, I need not desperately search for phone numbers intimated to us and immediate action taken”, cites or depend on others for help”. J Satishkumar, a junior engineer with SETC. While, for G Ramesh, a daily commuter from and to

The scene: The Chennai Mofussil Bus Terminus (CMBT) – which is stored and transmitted via GPRS network to the S Rajendran, DM-Operations, SETC, who oversees the Tambaram, a suburb of Chennai, it is bliss. “I can actually arguably Asia’s largest bus station that witnesses the comings state-of-the-art Ashok Leyland Data Centre at Ennore, and operation of 525 SETC in and out of CMBT, feels that plan my day. Gone are the endless hours I used to waste at and goings of some 3,000 buses daily. further to a dedicated control room at Pallavan House, the “the PIS brings with it a sense of certainty not only to bus stops without a clue as to when I would reach home.” passengers but also to operators like us – we can be assured Now, on at the stop, he checks the PIS and then The project: To test the effectiveness of a track and trace headquarters of Madras Transport Corporation, for real-time that a bus that has reached the outskirts of the city would be actually finds time to hop over and pick up a couple of things system that could facilitate a more efficient fleet monitoring by the operator. At the Pallavan House facility, in the terminus by a certain time”. for home (and surprise his wife!). management for the operator and the comfort of information buses that are equipped with the GPS device can be for the passenger. tracked and traced on a real time basis with the help of a robust digital map. The information provided includes the The genesis of this project lay in the formation of an expert exact location of the bus, the speed it is traveling at, the Core Group of Automotive R&D (CAR) to focus on direction it is headed. It is also a two-way communication technologies for the future, with Ashok Leyland playing a key system: the driver can call the control centre if he gets role in it. One of the many areas that CAR looked at was bus caught in a jam or suffers a breakdown. ALERT is a strategic initiative of Ashok Leyland to introduce a host travel, which for long has been plagued by the problem of of cutting-edge Telematics services for the Indian transportation unpredictability both for the fleet owner and the passenger. Based on this information, the ETA (Estimated Time of industry. The objective of ALERT is to improve viability of the A road map to develop a system to capture and relay real Arrival) of the bus is flashed on a display system at the bus transportation industry with state-of-the-art, innovative, time information was drawn up. stop so that those waiting can know exactly when the next user-friendly and cost-effective services with proven ROI. ALERT currently offers Fleet Tracking & Management Service (FTMS) and Ashok Leyland took the lead in translating the concept to bus is expected. For outstation passengers, even the vacancy Passenger Information System (PIS) for fleet operators, public utility reality – by devising all the supporting hardware and software status can be intimated! services, passenger bus corporations and operators. ALERT plans for implementation. What the engineers at Ashok Leyland At present, run as a pilot project on 55 Madras Transport to launch several value added telematics services to its portfolio came up with was a Passenger Information System (PIS) that Corporation buses within the city of Chennai and 50 State through allied applications like fuel pilferage monitoring, gives the right information at the right time. Express Transport Corporation (Tamil Nadu) buses on diagnostics and prognostics, route optimization, telemetry and A compact and robust GPS device fitted on the bus captures the Chennai-Tiruchirapalli sector, PIS is already a infotainment services in India. location, direction and speed of the vehicle from GPS satellites, runaway success.

8 9 Ashok Leyland Annual Report 08

HeavyweightA heavyweight loaded with advantages! The newloadedly launched 4921 that delivers fuel efficiency of up to 12% more than competition!

The results that followed were quite astonishing: “more than than what other brands of 49-tonners were giving, was quite a our greatest expectations” enthused, a delighted Jain, with a boon! Add to that a lower acquisition cost and you really had a smile wreathing his face. Rates per ton came down from winner on your hands. What’s more, the lower un-laden weight Rs. 283/- to Rs. 215/- per metric of the vehicle made it a perfect fit for tonne: -- a saving of almost 25% HZL’s ore transportation needs.” for HZL! The number of trips “In a market situation where we often have Not surprisingly, GVJ has bagged jumped to 50 per month as to be satisfied with small benefits, to get fuel another HZL contract for the against the 40 trips that other efficiency of almost 10 – 12% more than transportation of 250MT/day of operators were managing. what other brands of 49-tonners were semi-finished Zinc products form A higher payload and the giving, was quite a boon! Chanderiya to Haridwar leading to a elimination of manual unloading further requirement of 50 numbers further upped efficiencies and of 49-tonners. No two guesses for the vehicle that Jain has GVJ were able to transport the allotted 750MT/day with plenty opted for. of time to spare.

“In a market situation where we often have to be satisfied with small benefits, to get fuel efficiency of almost 10 – 12% more

Sitting in his Ajmer Road office, in Jaipur, one evening, Ashok The answer to this stiff challenge, Jain knew from his years of Jain was toying with a pencil in his hand and a thought in his experience, lay in a breakthrough product.

head. A partner in M/s. Ghewar Chand Vinod Kumar Jain (or Even as his thoughts ran along those lines, he recalled the GVJ, short and sweet), one of the fastest growing bulk transport launch of Ashok Leyland’s new vehicle – the 4921. “In fact, companies around with a diversified portfolio and a fleet of the Ashok Leyland marketing team had met me even before some 185 vehicles, he was wondering how he could best their formal launch and had made a full-scale presentation capitalize on a great business opportunity that was beckoning. highlighting the vehicle’s advantages and how it would definitely enhance operator viability,” remembers Jain. “Later, The opportunity involved one of his prime customers – just a couple of calls to the market were enough to tell me that Hindustan Zinc Ltd. (HZL), a Vedanta Group company, who Leyland had a winner on their hands. So, I decided to take a were seeking to completely overhaul transportation of zinc ore closer look at the 4921.” from their Agucha Mines (near Bhilwara in Rajasthan) to the smelter in Chanderiya (near Chittaurgarh) about 120 kms Jain obviously liked what he saw, because he at once decided away. Thanks to higher production, there was more ore to be to, jointly with Ashok Leyland, pitch the 4921 to HZL – as the moved: from 2000 metric tones a day to 3000 metric tones a vehicle that could meet all their specific requirements. day – and they wanted it all done more efficiently in terms of The pitch was successful. GVJ offered an initial lot of fifteen cost and time. 4921 Tip Trailers to HZL.

10 11 Ashok Leyland Annual Report 08

cold test (a requirement for the futuristic EURO IV & V engines) as also reduced testing time, thanks to auto docking - Technological renewal at Ennore a first in the Indian commercial vehicle sector. The assembly has the flexibility to quickly accommodate model TechnologicalReflecting the techological renewal of the mother plant at Ennore are the modern shops for H engine machining and assembly. changes in line with market demand. In-process gauging and SPC interface with CPK output are part of quality built The high sandwich roofing cools the inside by 3º to 4º C. Robots, gantries and automated guided vehicles (AGVs) as into the machines which are connected to a central server. Through MES (Manufacturing Execution System), all also automated electrified monorail system used in conjunction with RFID for pre-setting of tools and auto tool machines can be tracked and monitored real time, with web-based maintenance support from overseas OEMs. Renewalidentification, eliminate fatigue-generating activities. The assembly allows in- process verification, leak test, provision for

12 13 Ashok Leyland Annual Report 08

'Why' and 'why not' The two questions that have led to human progress also propel Ashok Leyland employee Whyteams to think up and implement andimprovement projects. In 2007, over 2,100 projects qualified fwhyor ‘Improve’, the annual Company-wide contes t, nownot in its tenth year.

For brake pedal, the team's target was to reduce the 'travel' - The air-conditioning plant supporting the engine shop at the extent of movement for brake to come into play. In other Ennore has always produced condensed water that would words, to make the brake pedal more responsive. They tried quietly flow down the gutter. Till one day, a couple of Ashok out the floor-mounted brake pedal as in passenger vehicles Leyland engineers stopped by the outflow pipe and asked: but fitting them would require costly changes in the front end “can we put the water to use?” Of course, all waste water structure. That was when they had a close look at one of the ‘Why?’, the essence of curiosity, when combined with Followed study of other models in the market, including collected is directed to a water re-cycling plant that yields Ashok Leyland ecomet used for inter-unit material ‘Why not?’, the confidence to challenge the status quo, breaks modifications made by the customer. It helped to have one over one million litres every day for gardening. But then, here transfer. They found its clutch pedal the friendliest and the new ground, often spurred by dormant learnings even from team member from a trucking family in Sankagiri, a trucking was pure water, some 1500 litres of it everyday – a learning brake pedal very responsive. Eureka! school days. centre with a population of over 30,000 trucks. from school days: when evaporation and then condensation But, soon it was clear that to fit the ecomet pedal assembly produced pure water drops at the tail of the round For many years, a regular 'class room' for members of Zen would require changes in the FES, involving high die cost. bottom flask. Quality Circle at Hosur I - all colleagues from the MDV Experienced problem solvers, they found the way out in The rest was easy. The water quality was checked and, assembly and Pre Delivery Inspection (PDI) departments - creating a new panel to mount the operating pedal assembly, as anticipated, met the quality requirement for industrial use. has been the nearby check post at the Karnataka-Tamil Nadu which would be fitted onto the FES. It could replace the costly water, purified through reverse state border. There, they will stop by to chat with waiting This ability to question status quo has led to the switch over osmosis process, used to dilute coolants. Being engineers, drivers. Expert drivers themselves, they would also get of the operating pedal assembly in all multi-axle vehicles and they also created a low cost automation device to ensure to scrutinise and drive all models of trucks. One feedback that tippers across the Company from April 2007. Through unsupervised flow, storage and supply of the condensed water. stuck in their subconscious was the extra clutch and brake Brake panel: old (above) and new (below) arrangements re-design and material elimination, savings of Rs 314 per pedal effort in Ashok Leyland vehicles. Armed with a digital chassis has been achieved, for annual savings of This reduced consumption of reverse osmosis water, with pressometer, they measured the clutch pedal effort of Rs. 250 million across the Company. annual savings of Rs 50,000. Given the unavoidable competition vehicles. They set their task: reduce clutch pedal wastage of water in the reverse osmosis process, this also Not just that. The benefit of their work has been reaped by the meant a saving of 300,000 litres of raw water, otherwise effort in Ashok Leyland vehicles by 20% - that will make drivers of some 75,000 trucks, taking away some 5kgs of wasted in a year. them best in class. Their minds went back to the basic effort during each of the hundred times they apply the clutch physics of lever and how the distance from the pivot everyday. Also in the fail-safe braking, thanks to a significantly determined the mechanical advantage of the system. reduced brake pedal travel of six centimeters.

14 15 Ashok Leyland Annual Report 08

The rewards of our passion Some accolades we won at home and abroad Indian Manufacturing Excellence Award Award (IMEA) 2007

CV manufacturer of the year

Ashok Leyland’s Bhandara unit bagged the ‘Platinum’ under the ‘Indian Manufacturing Excellence Award (IMEA) 2007’ conducted by Frost & Sullivan – regarded one of the highest award ratings in Indian Manufacturing. J N Amrolia, then ED-HR and A K Chatterjee, GM-Bhandara, receive the award.

Ashok Leyland was declared ‘CV manufacturer of the year’ at ‘NDTV Profit Car India, Bike and Commercial Vehicle’ Awards. International awards for Quality Circles Vinod Dasari, COO, receives the award At the International Convention for Quality Control Circles (ICQCC 2007) held at Beijing in October 2007, Ashok Leyland Quality Circles won two Golds and one Silver. More than 200 teams from 13 countries had participated.

Gold Medal: New Horizon QC, Ennore Gold Medal: Google QC, Hosur Best Employer in the Manufacturing Sector

Silver Medal: Sun QC, Ennore

Ashok Leyland won the CNBC-TV18 Award for ‘Best Employer in the Manufacturing Sector’. J N Amrolia, then ED-HR, receives the award.

16 17 Ashok Leyland Annual Report 08

Partnerships for growth During the year, Ashok Leyland entered into some significant partnerships, seizing growth Partnershipsopportunities offered by diversification and globalisation. forged

Automotive Infotronics: Ashok Leyland and Siemens VDO Automotive (Now, Continental Corporation (VDO Automotive AG – A Company of Continental Corporation)) signed an agreement for a joint venture to design, develop and adapt Infotronics products and services for the transportation sector. Infotronics content is expected to grow exponentially in the Indian Commercial Vehicle segment. The joint venture will develop electronic Carlos Ghosn, President and CEO, Motor Company and R Seshasayee, MD, Ashok Leyland exchange documents in the components and software such as instrument cluster presence of (from L to R) Andy Palmer, Corporate Vice President, Nissan Motor Company; Gopichand Hinduja, President, applications, cockpit electronics and various control units Hinduja Group; Carlos Tavares, Executive Vice President, Nissan Motor Company; Ashok P Hinduja, Chairman, Hinduja Group (India); for both commercial vehicles and passenger cars. Dheeraj G Hinduja, Co-Chairman, Ashok Leyland and R J Shahaney, Chairman, Ashok Leyland

R. Seshasayee, MD, Ashok Leyland and Christoph MCA with Nissan Motor Company for LCV Partnership: Ashok Leyland and Nissan Motor Company signed a binding Maximilian Eisenhardt, CEO, Commercial Vehicles & Master Co-operation Agreement (MCA) for the formation of three joint venture companies supporting the Light Commercial After Market, Continental Corporation, Germany Vehicle (LCV) business. The MCA formalises the partnership between the companies, which will include the development and manufacture of LCV products under both the Ashok Leyland and Nissan brands as well as co-operation in sales. The three JVs are for vehicle manufacturing, powertrain manufacturing and technology development.

ASHLEY ALTEAMS: Ashok Leyland entered into a joint venture with the Alteams Group, Finland to Shriram Transport Finance becomes a strategic partner manufacture High Pressure Die Casting (HPDC) in Ashley Transport Services: Ashok Leyland and Shriram aluminium products predominantly for the automotive Transport Finance Company, the largest asset financing and telecommunications sectors. The 50:50 JV will NBFC in the country, entered into a strategic partnership synergize Ashok Leyland’s experience and expertise in in Ashley Transport Services Limited, which has been the automotive sector with Alteams’ know-how of operating the unique Transport Exchange, a brand-neutral HPDC and their insights in the telecommunications freight intermediation service. This strategic tie-up is sector. The JV reflects the expansion of Ashok Leyland another step in actualizing Ashok Leyland’s vision of group’s presence in the auto components sector to providing a comprehensive suite of products and services take advantage of the rapidly growing opportunities in the transport value chain. both in India and abroad. R Seshasayee, MD, with R Thyagarajan, Chairman, R Seshasayee, MD with Panu Routila, CEO, Shriram Group (left) and J K Rajagopal, Chief Executive, Alteams Group Transport Exchange (right).

18 19 Ashok Leyland Annual Report 08

EnvironmentEnvironment and Safety and Safety

Ecologically sustainable growth is gaining significance and SO2 Emissions BOD Values TSS Levels is increasingly becoming relevant to Ashok Leyland as the 140 120 120 Permissible Limit Permissible Limit Permissible Limit Company expands operations. Ashok Leyland is signatory to 120 100 100 the CII code on ‘Mission on Sustainable Growth’. 100 80 80 meter meter

meter 80 The various eco-sensitive initiatives of the past are now 60 60 cubic cubic / getting channelised under ‘The Ten Natural Capital 60 / cubic 40 40 / mg Commandments’. These initiatives include: awareness mg 40 creation, recycling, energy conservation, waste mg 20 20 20 reduction/management and health and safety drive with 0 0 local outreach programmes broadening the scope. 0 05-06 06-07 07-08 05-06 06-07 07-08 05-06 06-07 07-08 Period Period Period All manufacturing units of Ashok Leyland were recently certified for ISO 14001(2004) till January 2011. The standard provides a framework so that Ashok Leyland can NOX Emissions Water Consumption Trend COD Values identify significant environmental issues and implement 140 250000 300 Permissible Limit Permissible Limit appropriate management programmes to control and 120 200000 250 improve them. It also allows the Company to address the 100 200 environmental impact of activities, services, products and 150000 meter 80

meter 150

people. The Company continues to undertake internal cubic Kilolitres

100000 / education programmes to ensure that employees are aware 60

cubic 100 mg / of the steps they can take to improve their environments. 40 50000 mg 50 20 0 While ISO 14001/2004 focuses on factory environment in 0 05-06 06-07 07-08 05-06 06-07 07-08 general, OHSAS 18001/2007 - the most current in the 0 Period series - addresses the interlink between workplace 05-06 06-07 07-08 Period Period environment and its impact on employees and surroundings. SPM Levels Accident Statistics Power Consumption Trend All the manufacturing units of Ashok Leyland are in an 600 100 20000000 Permissible Limit 90 advanced stage of preparation for OHSAS certification, 500 80 15000000 which would complement ISO 14001/2004. 400 70 meter

lost 60 10000000 300 empl 50 cubic Kwh / 40 200 1000 / mg 5000000 Mandays 30 100 20 10 0 0 0 05-06 06-07 07-08 05-06 06-07 07-08 05-06 06-07 07-08 Period Period Period

20 21 Ashok Leyland Annual Report 08

CorporateCorporate social responsibility social responsibility

Robotic painting system • Better quality in terms of fine crystal structure in phosphating Being a socially responsible and sensitive corporate citizen has Reaching out to employee families • Reduced phosphate chemical consumption For the painting of vehicle cabins, a new state-of-the-art paint always been part of business at Ashok Leyland. The effort has • Minimised phosphate sludge generation In the last two years, Ashok Leyland has helped the spouses of line with a 7-axis robotic painting system has been installed at been to produce vehicles that are eco-friendly, pioneer the some of its employees to set up self help groups; trained them Ashok Leyland’s Hosur II Unit, with a capacity of 50,000 units research and development of alternative fuels, provide Sludge disposal in managing micro-credit and micro-enterprises; and linked per annum. comprehensive on- and off-road training to drivers, address the A natural by-product of the painting process, sludge disposal them to local markets. To scale up and take the initiative With this system, along with the introduction of polyester has always been a problem faced by the auto industry. At health concerns of the trucking community and reach out to paints in place of alkyd amino paints, the paint finish would be forward, the Company has also started to help the SHGs to Ashok Leyland, various actions have been initiated over the on par with passenger cars. The automated painting brings the community through a number of small initiatives that have source job-work from local units – the units that provide the years towards ‘safe storage’ of sludge, ultimately leading to the with it considerable saving in paint and other consumables, had far-reaching benefits for the Company’s stake holders. construction of ‘secured landfills’ within the campus. Not SHG members with job-work also train them to acquire the as also a drastic reduction in waste generation and load on resting with landfill as the alternative, Ashok Leyland engineers Ashok Leyland’s CSR initiatives revolve around the welfare of necessary skills. sub-systems. At the end of it all, a cleaner environment. pursued other means of disposal too. Since paint had a high employees and their families, the driver community and the calorific value, its use as a fuel was explored. The effort yielded immediate community around the units. A self-help group at Hosur Water conservation through positive results. chemical change In all CSR efforts, the Company partners with other individuals In any automobile, the Cathodic Electro Deposition (CED) layer and institutions, including government agencies, local of paint acts as the major protective layer against corrosion. communities, not-for-profit and social organizations, and The process of depositing the layer on the substrate requires academic institutions which, while complementing the usage of huge quantity of water - almost 2000 litres/cab. Hence any reduction of water consumption is a welcome relief. Company’s strengths, helps it to leverage their expertise, reach and resources. Employee Outreach The Cement Division of Grasim Industries tried this as a Volunteerism supplement to coal for their cement kiln. Over a period of 18 months, with clearance from TNPCB, 193 tonnes of sludge Ashok Leyland encourages employee volunteerism to provide Disaster and crisis management was disposed. employees an opportunity to look beyond the call of routine The first of its kind in the corporate world, Ashok Leyland has work, to enable them be part of the Company’s social Recovering cutting oil in steel chips provided training in internationally-validated disaster and initiatives and to open up an avenue for their social spirit. emergency management modules to over 100 of its volunteers for recycling The key movers of all outreach programmes in the Units, from its manufacturing units. The volunteers are trained to Production of gearbox components involves machining the volunteers, are involved in several CSR initiatives of A time-bound chemical powder (NIPAFIN ZS) was being used operations. The chips generated during machining carry manage disasters arising from geological disturbances such as the Company. for replenishment in the surface activation tank. This meant considerable amount of cutting oil even after the operation. earthquakes; natural calamities such as floods; fire hazards, discarding 1260 kl de-mineralized water per annum. To After trying out various options for the recovery of cutting oil Ashok Leyland also has ‘payroll contribution to a worthy industrial and road accidents; and man-made hazards such as reduce water consumption, an alternate liquid chemical (PL-X) from the chips, three ‘chip wringers’ were installed at the cause’. Under this initiative, the Company channels employee pollution. This core group, which is to train others in their has been introduced in place of ZS, resulting in reduction of Bhandara unit. As a result of which, huge amount of oil is contribution from their pay every month to help their desired 180 kl discarded water per annum. Benefits reaped are: recovered from the chips and re-used in cutting operations. respective units and also people in the adjoining community, • Water conservation to the tune of 1080 kl per annum The recovered oil is also directly used to top up the cutting oil cause – one of the five social organisations working for the are now certified and empanelled by the Red Cross to be sent (Rs 0.57 million) sumps of the machines. marginalised and the vulnerable - identified by the Company. out for help during national emergencies and calamities.

22 23 Ashok Leyland Annual Report 08

AffirmativeAffirmative Action in AshokAction Leyland in A crisis management workshop for employees Computer training at Hosur Ashok Leyland

Community Outreach Driver Outreach Recognising the importance of inclusive growth, With a focus on ‘inclusive growth’ some of the concrete steps Ashok Leyland pursues affirmative action in the workplace for affirmative action taken by Ashok Leyland this year include Ashok Leyland is involved in a number of development With a view to addressing the wide-ranging needs of the and has voluntarily introduced a code of conduct for its the following: initiatives such as construction and repair of public buildings, driver community, Ashok Leyland trains drivers employees. drilling public bore wells, erecting bus shelters and putting up comprehensively on- and off-the-road in its driver training Employability: Partnering with PSG College, Coimbatore, to streetlights around its manufacturing facilities. These schools in Namakkal (Tamil Nadu) and Burari (Delhi). A quick analysis of caste/community-wise data of Ashok train SC/ST/BC/MBC students in post graduate diploma. Leyland’s employees (caste/community information is development initiatives are supported by a Community Ashok Leyland has also signed an MoU with the Haryana Training: Providing driver training to SC/ST/MBC/BC collected discreetly to understand the situation and to put in Development Scheme contributed and managed by Government to set up a driver training school in the State. individuals in the Driver Training Schools in Namakkal representatives from the Management and the Union. place an Affirmative Action Plan) shows that there already CSR is a way of life at the driver training centres. For (Tamil Nadu) and Burari (Delhi); and training SC/ST/BC/MBC exists a fair degree of social diversity among the workforce. The manufacturing units have conducted over 100 medical, example, Ashok Leyland has rented a small two-room space individuals in the Service Training Centre in Chennai. Of the total employees in Ashok Leyland’s units as on blood donation and HIV awareness camps benefiting for the Alcoholics Anonymous group to conduct alcohol Apprenticeship: Taking in at least 70 per cent of youth from March 31, 2008, 81.55% are from the SC/ST, MBC, BC and thousands of people in the immediate community. rehabilitation programme for truck drivers and their families - the SC/ST/BC/MBC communities into our Apprenticeship other socially marginalised communities. Career guidance for high school students, skill development a gap identified by Ashok Leyland to complete the Programme in our manufacturing units. for unemployed youth and vocational training for women of comprehensiveness of driver outreach in Namakkal.

Self Help Groups around the manufacturing units have been Awareness programme on HIV prevention and management is organised with help from specialists in the respective fields. being conducted for convoy drivers at the manufacturing units

Computer training is being provided to economically on a continuing basis.

marginalised students in Hosur at Ashok Leyland’s A holistic health outreach programme for truck drivers, Management Development Centre by the Company’s resource Arogya, was rolled out this year. Implemented along with a people. The students, identified and selected by Ashok dealer in Andhra Pradesh, the CSR initiative began its first Leyland, are put through a carefully-designed 4-module component of Arogya by conducting comprehensive health session and certified on successful completion of the course. outreach camps for drivers in four major trucking centres in A batch of 25 students is trained every month and the Andhra Pradesh. While the first component would continue, programme aims at covering 200 students every year. the second component of Arogya – setting up a permanent Ashok Leyland’s ‘FunBus’ for free use by differently-abled health outreach centre within the dealer service centre – is in children and children of orphanages, corporation primary an advanced stage of formulation. schools and other underprivileged groups based in Chennai continued its successful run last year too.

24 25 Ashok Leyland Annual Report 08 HighlightsHighlights of per forofmance The Company’s passion for engineering has helped it evolve into an entity tha t has seen consistent growperfomanceth across the 60 years of its existence.

Vehicles (numbers) Sales Value (Rs. mn) Profit After Tax (Rs. mn) Capital Employed (Rs. mn) 85000 90000 5000 35000

4500 31500 80000 80000

4000 28000 70000 70000

3500 24500

60000 60000

3000 21000

50000 50000

2500 17500

40000 40000

2000 14000

30000 30000

1500 10500

20000 20000 1000 7000

10000 10000 500 3500

0 0 0 0 8 8 8 9 9 9 9 9 9 9 0 0 0 0 0 9 0 0 0 0 0 9 9 9 9 9 9 8 0 4 5 6 7 8 9 4 6 7 8 9 0 4 6 7 8 9 0 4 5 6 7 8 9 0 9 9 9 9 9 9 9 9 9 9 9 0 9 9 9 9 9 0 9 9 9 9 9 9 20 0 20 0 2 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 2 1 1 1 1 1 1 20 0

26 27 Ashok Leyland Annual Report 08

60 years of passion for engineering

Ashok Motors was founded by Raghunandan Saran for assembling Austin A40 and 1948 A70 cars in collaboration with Austin Motor Co. Ltd, England.

Assembly and distribution of Leyland The Company submitted a proposal for progressive 1950 commercial vehicles started 1952 manufacture of commercial vehicles in India.

After obtaining license for manufacturing 1000 Comet range 1954 of commercial vehicles, assembly of Austin cars ceased, to With equity participation from Leyland Motors Ltd,UK, give way to the production of 312 Comet vehicles. 1955 the Company was renamed Ashok Leyland Limited. Ashok Leyland Annual Report 08

Introduced full air brakes – a first in the industry that became 1966 a norm after decades. And later, also the differentiator that helped the Company win World Bank orders for buses. ASHOK

LEYLAND Introduced power steering, another first in 1968 commercial vehicles.

The Company received a Letter of Intent for 1972 expanding production capacity to 10,000.

1967 Launched double-decker ‘Titan’ bus.

ASHOK

TRUCKS BUSES

LEYLAND

Viking, the first ever bus with an alternator, was introduced. Cheetah - a bus with higher carrying capacity - was 1976 It was also unique for the front ‘overhang’ that enabled 1977 launched. additional seats and front entry for the first time in a bus. 1969 The Company achieved 95% indigenisation level.

Tusker, India's first 13 tonner with a higher capacity and a Leopard - the first rear-engine bus in the country - was 1979 125 hp engine and Taurus, India's first three-axled vehicle 1979 introduced. were introduced. This followed advocacy for a third axle to Hippo 6x4 Tractor was specially developed for the Indian Army. 1000 vehicles were supplied. 1970 increase load and reduce road damage. Ashok Leyland Annual Report 08

The principal overseas shareholding of the Company was taken over by the Hinduja Group along with . 1987 (20 years on, the Hinduja Group fully acquired IVECO’s stake in Ashok Leyland.)

1980 New manufacturing unit at Hosur started operations.

Aided by a Rs.1,000 crore modernisation and expansion 1991 plan, the Hosur II Unit rolled out the Cargo range of world class trucks.

1982 Plants in Alwar and Bhandara started operations.

The Company became the first automotive manufacturer A residential Management Development Centre set up 1992 in India to receive the ISO 9002 Certification, followed by 1995 at Hosur Lanka Ashok Leyland was set up as a joint venture with the ISO 9001 Certification in 1994. 1982 Vestibule bus introduced. 1982 the Government of Sri Lanka. Ashok Leyland Annual Report 08

A driver training centre was set up at Namakkal, the The Company received ISO 14001 Certification for Hybrid Electric Vehicle was launched as a concept at 1996 trucking heartland of Tamil Nadu. Since then, more than 2001 Environmental Management System – first time for a 2002 Auto Expo 2002. 200,000 drivers have been trained. commercial vehicle manufacturer in India.

Stallion, the all terrain logistic vehicle, was inducted by 1997 the Indian Army. Till date, more than 50,000 Stallions Megabus, the 15m CNG vestibule bus was launched. Driver Training Institute set up in Burari as a joint venture have joined the Armed Forces, making Ashok Leyland the 2004 2004 with Government of Delhi. largest supplier of logistics vehicles to the Army.

Thanks to pioneering research in alternative fuel technology, Ashok Leyland ‘Vikings’ were the choice in the An export order for 3322 trucks for the United Nations Oil A Stag bus was chosen for the historic Srinagar ahead of regulations, India’s first CNG-powered bus joined historic cross border services between 1997 1998-99 2004 for Food programme in Iraq was executed - the largest 2005 Muzaffarabad service. the BEST, Mumbai. Since then, more than 2000 CNG buses Delhi-Lahore and Calcutta-Dhaka. ever in Indian commercial vehicle industry. have joined the fleet of the Delhi Transport Corporation.

A warehouse was established at Sharjah to support the The R&D complex near Chennai got a state-of-the-art Supply of Topchi 4x4 gun tow vehicle to the Indian 2001 The cab panel press shop started operations in Hosur. 2001 Middle East and neighbouring markets. 2006 design office to seat 400 engineers. 2006 Army began. Ashok Leyland Annual Report 08

Ashok Leyland became the first Indian auto company to 2006 receive the ISO/TS 16949-2002 Corporate Certification.

The Company displayed the country’s first Common Rail 2006 Engine for commercial vehicles at Auto Expo 2006.

The global footprint of the Company was Luxura, a 12m luxury bus to redefine 2006 enlarged with the acquisition of the truck 2006 inter-city travel, was launched. business unit of Prague-based AVIA.

Photo courtesy: Outlook India.

Carrying the aspirations of a nation: The victorious Indian T20 cricket team in Mumbai rides 2007 on an Ashok .

4921 TT, a 6x4 tractor with a gross vehicle weight of 49 ton India’s first multi-point fuel injection (MPFI) 2007 (the highest weight class of commercial vehicle), was launched. 2007 CNG engine for buses developed.