Nissan Ashok Leyland Powertrain Ltd

A REPORT ON INTERNSHIP TRAINING Undergone at NISSAN ASHOK LEYLAND POWERTRAIN LTD.

For the partial fulfillment of the requirement of MASTER OF BUSINESS ADMINISTRATION DEGREE

Submitted by Mr.DIVAKAR.R

SCHOOL OF MANAGEMENT D.G.VAISHNAV COLLEGE CHENNAI-600106 2010-2012 A REPORT ON INTERNSHIP TRAINING Undergone at NISSAN ASHOK LEYLAND POWERTRAIN LTD.

For the partial fulfillment of the requirement of MASTER OF BUSINESS ADMINISTRATION DEGREE

Submitted by Mr.DIVAKAR.R

SCHOOL OF MANAGEMENT D.G.VAISHNAV COLLEGE CHENNAI-600106 2010-2012 CERTIFICATE

This is to certify that this Internship training report is submitted by

Mr.DIVAKAR.R a bonafide student of First year, Master of Business

Administration, School of Management, D.G.Vaishnav College,

Chennai-600106 who had undergone training at

NISSAN ASHOK LEYLAND POWERTRAIN LTD from 02nd May 2011 to

31st may 2011 in Partial fulfillment of the requirement for the degree of Master of

Business Administration

(Mr.V.GANESHAN) Faculty in Charge

College seal ACKNOWLEDGEMENT

I extend my sincere thanks to Mr.V.GANESHAN, DEAN, School of Management. D G Vaishnav College, Arumbakkam, CHENNAI, for having given me an opportunity to undergo the Institutional training at NISSAN ASHOK LEYLAND POWERTRAIN LTD.

I express my heartfelt thanks to Dr. (Mrs.) ASHWINI RAVI, DIRECTOR School of Management. D G Vaishnav College, Arumbakkam,CHENNAI, for her kind co-operation, Invaluable guidance and More over Personal care for the completion of my report successfully. I also thanks MR.V.A.JEROLD and other Lectures of the department for their consistent Guidance.

I would be failing in my duty if I do not express my sincere thanks to my Parents, I also thanks my Mentor Mr.S.PRADEEP KUMAR, and the staff of NISSAN ASHOK LEYLAND POWERTRAIN LTD for providing all facilities to complete the training successfully.

DATE: PLACE: Chennai (DIVAKAR.R)

CONTENTS

CHAPTER PARTICULARS PAGE NO NO

1 INDUSTRY INTRODUCTION & 1-16 COMPANY INTODUCTION

2 ORGANISATION CHART & 17-24 PRODUCT PROFILE

3 FINANCIAL PERFORMANCE 25-31 ANANLYSIS 4 PRODUCT PRICING SKILL & 32-65 PROFITABILTY ESTIMATION

5 FINANCE DEPARTMENT- 66-76 PROFITABILITY

6 INDUSTRYCONCLUSION INTRODUCTION 77-&81 COMPANY INTODUCTION

ANNEXURES 82-85 Chapter No: 1 Industry Introduction & Company Introduction

INDUSTRY INTRODUCTION The truck was first manufactured in 1896 by Daimler. This truck had a four hp two-cylinder 1.1 liter engine. In 1898 the Winton Company in USA produced a gasoline-powered delivery wagon which had a single-cylinder six-horsepower engine fitted into it. The idea of using automobiles to carry freight around had not become popular yet. Absence of good roads and inability of these automotives to run at high speeds were the reasons why trucks were not very popular.

Daimler made certain changes to the design of the truck engine. He increased horse power of the engine from 4 HP to 10 HP thereby enabling the truck to carry payloads as high as 5,000 kilograms. Engine capacity too had been enhanced to 2.2 liters.

The earliest Truck Engines ran on gasoline. They were not very powerful machines. Trucks faced a lot more criticism as compared to passenger cars. However, World War I changed everything. Trucks proved to be invaluable in transporting large number of troops and large quantities of supplies in a single run. After this war, trucks became an integral part of the movement of men and materials in a war.

This led to more innovation in the field of truck engines. In 1923, the first truck with diesel engine was made by different manufacturers including Benz and Daimler. In 1924, trucks fitted with diesel engines were made available for commercial use. It took diesel engines three more decades to become the primary choice for all those purchasing a truck engine. Truck diesel engines retain its popularity even today. Diesel has always been cheaper than gasoline. It has replaced paraffin and other fuels and diesel truck engines are the most popular engines in the market today. Today, finding the best truck engines for your high power truck is not an easy task. Whether you are buying a brand new truck engine or used truck engine for sale, you have to give due regard to the history of the manufacturer and the manufacturer's reputation in the market. Different truck manufacturers focus on different types of truck engines. Make sure you are aware of these things before taking a final decision. There are many websites offer detailed information on trucks, truck engines and truck engine parts on the web. www.automotix.net is one of the best sites offering detailed information.

COMPANY INTRODUCTION

Ashok Leyland is one of the largest manufacturers of commercial vehicles and Diesel engines in India. Ashok Leyland is the leading manufacturer of trucks, buses, special application vehicles and engines in India. The products of Ashok Leyland are at par with the best in the world. Ashok Leyland is the leaders in the Indian bus market, offering unique models such as CNG, Double Decker and Vestibule bus. More than 80% of the State Transport Undertaking (STU) buses come from Ashok Leyland. The company is a pioneer in multi axle trucks and tractor-trailers. Ashok Leyland is the largest provider of logistic vehicles to the Indian army. It also manufactures diesel engines for Industrial, Genset and Marine applications, in collaboration with technology leaders.

Ashok Leyland was launched by Mr. Raghunandan Saran, an industrialist, under the persuasion of Pandit Jawaharlal Nehru. In 1948, Ashok Motors was set up in Madras (Chennai) for the assembly of Austin Cars. Soon, British Leyland acquired an equity stake in the company and the name of the company was changed from Ashok Motors to Ashok Leyland. In 1955, Ashok Leyland commenced of commercial vehicles. Since then Ashok Leyland has maintained its technological leadership in the India's commercial vehicle industry.

Ashok Leyland was the first to introduce full air brakes, power steering and rear engine busses in India. In 1987, the overseas holding by Land Rover Leyland International Holdings Limited (LRLIH) was taken over by a joint venture between the Hinduja Group and IVECO, a fully owned subsidiary of FIAT. Since July 2006, the Hinduja Group is 100% holder of LRLIH.

Mission, Vision and Values:

Vision: Be among the top Indian Corporations acknowledged nationally and internationally for – Excellence in Quality of its products – Excellence in Customer focus and Service

Mission: Be a Leader in the business of the commercial vehicles, excelling in technology, Quality, Value to customer, fully supported by customer service of the highest order and meeting national and international environmental and safety standards.

Values:

Customers: We value our customers and will constantly Endeavour to fulfill their needs by proactively offering them products and service appropriate to their diverse applications.

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

Vendors: Our vendors are our valued partners in our business development and we will work with them in a spirit of mutual co-operation to meet our business objectives.

Distributors: Our distributors are the vital link between the company and the customers and we are committed to advise and support our distributors to continuously upgrade their infrastructure, skills and capabilities to serve our customers better.

Shareholders: We value the trust reposed in us by our shareholders and strive unstintingly to ensure a fair and reasonable return on their investment.

Society: We are committed to add to the wealth and well-being of our society by enhancing the quality of life and contributing to its economic development while maintaining the highest level of environmental and safety standards. A. Ashok Leyland’s Units or Factories

i.Ennore

ii.Hosur

iii.Bhandara

iv.Alwar

Ashok Leyland Plants b. Products & Solutions c. Associate Companies

1. Automotive Coaches & Components Ltd (ACCL): ACCL was promoted by Ashok Leyland and the Tamil Nadu Industrial Development Corporation (TIDCO) in the 1980s. The company has two Divisions: ACCL Division and PL Haulwel Trailers (PLHT). ACCL is the largest Tipper Body manufacturer in the organised sector in India. Apart from the tippers, it also manufactures bus bodies, front-end structures (FES), tankers, aluminum containers, OB vans, energy vans and the like. PLHT manufactures a wide variety of after-chassis products. These include Fifth Wheel Couplers and Hoists, Semi Trailers, Container trailers, Ladle Carriers, for foundries (Steel / Aluminum), Running gears for LPG tankers, Car / Truck / Tractor Carriers, Bottom dumpers, and all types of user-specific custom- designed trailers for niche applications.

2. Lanka Ashok Leyland: The Company was established in 1982. It is a joint venture between Ashok Leyland and the Government of Sri Lanka. Ashok Leyland supplies chassis in both completely built-up and knocked down conditions to Lanka Ashok Leyland, which in turn assembles the chassis and builds bodies.

3. Ennore Foundries: Ennore Foundries was established in 1959. It is India's largest automotive jobbing foundry and caters to different segment like automobiles, tractors, industrial engines and power generators.

4. IRIZAR-TVS: IRIZAR-TVS is a joint venture between Ashok Leyland, TVS & Sons Ltd and IRIZAR, the internationally reputed bus body builder from Spain. The company was started in 2001 and it manufactures luxury coaches.

5. Ashok Leyland Project Services Limited: Ashok Leyland Project Services Limited (ALPS) looks after the project development activities of the Hinduja Group in India. It assists the investment entities of the Group and provides professional services to help international companies interested in projects in India. 1. Nissan

Nissan Motor Company, Limited,, shortened to Nissan is a multinational automaker headquartered in Japan. It formerly marketed vehicles under the "Datsun" brand name and is one of the largest car manufacturers... In 1999, Nissan entered an alliance with Renault S.A. of France. Nissan is among the top three Asian (also known as the Japanese Big 3 Automakers) rivals of the "Big Three" in the U.S. Currently they are the third largest Japanese car manufacturer. It operates the Infiniti brand. Products Automotive products

Infiniti G35 Main articles: List of Nissan vehicles andList of Nissan engines.

Nissan has produced an extensive range of mainstream cars and trucks, initially for domestic consumption but exported around the world since the 1950s.

It also produced several memorable sports cars, including the Datsun Fairlady 1500, 1600 and 2000 Roadsters, the Z-car, an affordable sports car originally introduced in 1969; and the GT-R, a powerful all-wheel-drive sports coupe. Until 1982, Nissan automobiles in most export markets were sold under the Datsun brand. Since 1989, Nissan has sold its luxury models in North America under the Infiniti brand. Nissan also sells a small range of keicars, mainly as a joint venture with other Japanese manufacturers like Suzuki or Mitsubishi. Nissan does not develop these cars. Nissan also has shared model development of Japanese domestic cars with other manufacturers, particularly Mazda, Subaru, Suzuki and Isuzu. Alternative propulsion Carlos Ghosn, chief executive of Nissan Motor, which is 44% owned by Renault, plans to start selling electric cars in 2012 as the company anticipates demand from city drivers. It would be good date for both for Renault and Nissan to introduce mass-market electric cars, Ghosn told a group of journalists at the Tokyo Motor Show on Wednesday October 24, 2007.When Nissan launches its new line of electrical vehicles in America in 2010; it will initially target fleet buyers, which can provide their own charging stations. Nissan is also hedging its bets by developing both a "parallel hybrid" system (akin to that found in the Toyota Prius) and a plug-in "series hybrid" similar to the Chevy Volt. But it favours the all-electric approach, even though it will be a tough sell, says Mr. Lane. As for Mr. Ghosn, he has no doubts. "We must have zero- emission vehicles Non-automotive products Nissan has also had a number of ventures outside the automotive industry, most notably the Tu-Ka mobile phone service (est. 1994), which was sold to DDI and Japan Telecom (both now merged intoKDDI Corporation) in 1999. Nissan also owns Nissan Marine, a joint venture with Tohatsu Corp that produces motors for boats and other maritime equipment.

Vision

Nissan: Enriching People’s Lives Mission

Nissan provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders * In alliance with Renault. * Our stakeholders include customers, shareholders, employees, dealers, suppliers, as well as the communities where we work and operate.

Meeting the Diverse Needs of Customers Everywhere—Nissan Cars Sustainable Mobility for Society—Investing in the Future For All Stakeholders—Nissan Corporate Social Responsibility

Nissan is dedicated to building appealing cars that customers can delight in driving. Attractive bodylines and refined interiors—matched with dynamic driving characteristics—are key attributes that appeal to customers. At Nissan, we endeavor to build cars that offer better fuel consumption and environmental performance coupled with advanced safety technology, built on the philosophy of “protecting people with our cars.” Nissan’s R&D focuses on breakthrough technologies that give our products both a clear competitive edge and value-add to our customers. Exceeding customer expectations and gaining their trust and confidence are hallmarks of Nissan vehicles. Ashok Leyland and Nissan Joint Venture – Sunrise:

On October 29, 2007, Ashok Leyland and Nissan Motor Company Ltd. signed a binding Master co-operation Agreement (MCA) for the formation of the three joint venture companies supporting the Light commercial vehicle (LCV) business.

The formation of the JV is a significant initiative in achieving the vision of theHinduja Group and the Ashok Leyland Management to transform the company into a full range commercial vehicle and in that process, both organically and inorganically extend its footprints across the globe. The JV offers both low and high-end versions of LCVs (Ashok Leyland branded vehicles at the lower end, Nissan at the higher end). The JV leverages Ashok Leyland’s manufacturing competitiveness, market insight and a strong presence in India and other countries, core engineering capabilities and widespread marketing network, while Nissan’s solid engineering foundation, product development and a design capability and a global marketing network.

The JV project was coined Project Sunrise internally – reflecting partnership with a company from the land of the rising sun. The project comprises of three JVs (Vehicle Manufacturing Company, Power train Manufacturing Company and Technology Development Company) covering the following business areas. Vehicle Manufacturing Company – a company with exclusive rights to manufacture LCV products in India for both the partners. Manufacturing facility is located in India and the company is owned 51% by Ashok Leyland and 49% by Nissan. Production is expected to start in 2010 and will include the new generation Nissan Atlas F24 light-duty truck, in addition to a range of products covering applications from 2.5 to 8 ton gross vehicle weight (GVW). In the medium term, production volume, intended for both Indian and export markets, is expected to grow beyond 1,00,000 units annually.

Power train Manufacturing Company – responsible for the manufacture and assembly of engines and other drivetrain components to be fitted in LCV products and for export. Manufacturing is located in India and the company is owned 51% Nissan and 49% by Ashok Leyland.

Technology Development Company – responsible for the development of LCV products and related powertrains, destined for the Indian and select global markets. This JV is owned 50:50 by the two partners and located in Chennai. The products developed will be sold under both the Ashok Leyland and Nissan brands.

In addition this, the two partners also expect to cooperate to leverage each other’s dealer networks in specific global markets. For example, this could provide Nissan with access to Ashok Leyland’s dealers in India and for Ashok Leyland, access to Nissan dealer networks in specific export markets.

The JV is also set to benefit from leveraging the sourcing strengths of both the partners. ORGANISATION CHART & PRODUCT PROFILE Chapter No: 2 Organisation Chart & Product Profile

ORGANISATION CHART

PRODUCT PROFILE

Ashok Leyland and Nissan unveil their first LCV for India The Ashok Leyland DOST to be market-launched by second quarter of FY 2011-12

Chennai, 29th March, 2011:

The Hinduja Group flagship, Ashok Leyland and Nissan Motor Company today unveiled their first Light Commercial Vehicle (LCV) – the Ashok Leyland DOST. The product will be launched to the market, as indicated earlier, in the second quarter of FY 2011-2012. The ‘Ashok Leyland DOST’ will be produced in Ashok Leyland’s Hosur manufacturing plant.

Powered by a specially-developed, 55 hp high-torque, 3-cylinder, turbo- charged Common Rail Diesel engine, the vehicle has a payload capacity of 1.25 Tonnes. Reflecting the growing expectations of the Indian LCV customer, the Ashok Leyland DOST will be available in 3 versions: a base version with manual steering, a mid version with power steering and a higher version which will have dual tone interiors, power steering and AC. The vehicle will be available in both BSIII and BSIV versions.

Mirroring the evolution of the entire Indian car and light truck market, the Small Commercial Vehicle segment (vehicles less than 3.5 Tonnes) has been witnessing a perceptible upward shift in terms of features, performance and payload and the Ashok Leyland DOST has been positioned as a contemporary, powerful yet highly efficient product. With the hub-and-spoke model fast gaining ground, it is well-placed to ride the robust demand for vehicles making last-mile deliveries. The Ashok Leyland DOST will be available through a newly developed LCV exclusive network to give customers a new level of experience. “The Indian market is rapidly evolving and customer expectations are growing. We believe that the LCV segment is ready for a substantial upgradation of products that yet offer low cost of ownership. The Ashok Leyland DOST, with its carefully calibrated design and features, attempts to offer a new level of experience to the Indian customer,” said Dr. V. Sumantran, Executive Vice Chairman, Hinduja Automotive Ltd. and Chairman, Nissan Ashok Leyland Powertrain Ltd. “Its design reflects the philosophy of both partners: blending the long traditions of quality and comfort of Nissan with the proven record of rugged reliability and fuel efficiency of Ashok Leyland,” he elaborated. Dr. Andy Palmer, Senior Vice-President, Nissan Motor Company and Chairman, Ashok Leyland Nissan Vehicles Ltd., said, “The product blends the best in terms of Japanese engineering from Nissan, with local relevance that Ashok Leyland brings to the table. It represents a very attractive value proposition to the small and medium businesses that it is targeted at and we are confident that it will find wide acceptance when launched.” FINANCIAL PERFORMANCE ANALYSIS Chapter No: 3 Financial Performance analysis

CAPITAL BUDGETING

Definition:

“Capital Budgeting consists in planning for development of available capital for the purpose of maximizing the long term profitability (Return on investment) of the firm” -R.M.LYNCH

Meaning:

Capital budgeting means planning the capital expenditure in acquisition of fixed (capital) assets such as land, building, plant or new projects as a whole. It includes replacing and modernizing a process, introducing a new product and expansion of the business. It involves the preparation of Detailed Project Report (DPR) and cost and revenue statements indicating the profitability. The project which gives the highest return on investment is to be selected and then investment is to be made in such a project as to maximize the profitability of the firm. CAPITAL BUDGETING PROCESS

OBJECTIVES OF CAPITAL BUDGETING

The objectives of capital budgeting are summarized as given below: i) It aims at deciding the most profitable among the numerous investment proposals available.

ii) It decides the most suitable among different sources of finance on the basis of capital market constraints.

iii) The growth and expansion of the firm and modernization can be taken care of.

TYPES OF CAPITAL BUDGETING DECISIONS

I. On the basis of firm’s existence: i. Replacement and Modernisation Decisions ii.Expansion Decisions iii.Diversification Decisions

II. On the basis of Decision situation:

i.Mutual exclusive Decisions ii.Accept-Reject Decisions iii.Contingent Decisions

I. Traditional (or) Non-discounting methods

As the name itself suggests, these methods do not discount cash flows to find out their present worth. There are two such methods available i.e., PAY BACK PERIOD METHOD, and THE ACCOUNTING OR AVERAGE RATE OF RETURN METHOD. These are essentially rules of thumb that intuitively grapple with the trade-off between net investment and operating cash inflows. Both these traditional evaluation criteria are discussed below:

1. Pay Back Period Method: This method, sometimes called the payout or pay off or replacement period method, determines the length of time required to recover the initial outlay of a project. In other words, it is the period within which the total cash inflows from the project equals the cost of investment in the project. The lower the pay back period, the better it is since initial investment is recouped faster.

Example : Suppose a project with an initial investment of Rs.5,00,000, yields profit of Rs. 1,00,000, after writing off depreciation of Rs. 25,000 per annum. In this case, the pay back period is computed as given below:

CALCULATION OF PAY BACK PERIOD

= INITIAL INVESTMENT

CASH ACCRUAL AFTER TAX BEFORE DEPRECIATION

Solution: CFATp.a = Profit after tax + Depreciation = 1,00,000 + 25,000 = Rs. 1,25,000

PAYBACK PERIOD=500000125000 = 4 years

In the case of uniform CFATp.a.

= INITIAL INVESTMENT CFAT p.a

In the case of differential CFAT for various years,

i) Compute cumulative CFAT at the end of each year.

ii) Find out the year in which cumulative CFAT exeeds initial investment.

iii) Payback period = Time at which cumulative CFAT= Initial investment (calculation on time proportion basis)

iv) Accept if the payback period is less than maximum or bench mark period, else reject the project. PRODUCT PRICING SKILL & PROFITABILTY ESTIMATION

OBJECTIVE

• To study the profitability for the current selling price for all the Engine models. • To Determine the Pay Back Period of the Investment. Capital Investment

Description FY'09-10 FY'10-11 FY'11-12 Total Specific Equipment 50 107 33 190 Vendor Tooling 11 83 126 220 Others 1 2 3

Sub Total 62 192 159 413

INVESTMENT on LAND is not considered.

Gross Profit, Net Profit, Tax Rate

Gross Profit Selling Revenue *** (A) Less- Material Cost *** (B) Conversion Cost *** (C) Royalty *** (D) FACTORY COST *** (E) = (B)+(C)+(D) GROSS PROFIT *** (F) = (A)-(E) Net Profit Gross Profit *** (F) Less- Fixed Cost *** (G) Operating Expenses *** (H) Total Expenses *** (K) = (G)+(H) NET PROFIT *** (L)=(F)-(K)

Tax Rate – 30 %

ADMINISTRATION Overhead - Revision - 2

Tentative Budget for Particulars FY' FY' FY' FY' FY' FY' FY' FY' 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16

MnINR

Salary Expatriates 16.07 16.07 10.01 10.01 10.01 10.01 10.01

Accomodation for Expatriates 4.55 4.55 3.72 3.72 3.72 3.72 3.72

Salary Stuff 16.46 16.46 15.00 17.50 17.50 17.50 17.50

Recruit expence 1.00 1.00

Staff Welfare 1.60 1.60

Contingency 0.80 0.80

HR Cost 40.48 40.48 28.73 31.23 31.23 31.23 31.23

R&D & Testing Cost

Research & Development Cost 0.50 1.00 1.00 1.00 1.00 1.00

Technical Consultancy 37.31 50.00 50.00 50.00 50.00 50.00 50.00

Consumable Tools & Stores 4.68 1.40 1.40 1.40 1.40 1.40

Administration Expense

Consultancy Charges 19.15 9.58 2.30 1.00

Travel - Domestic 14.86 5.00 3.00 1.00 1.00 1.00 1.00

Travel - International 17.84 5.00 3.00 3.00 1.00 1.00 1.00

Rental Charges for Office 8.30 8.30 4.05 4.05 4.05 4.05 4.05 Networking & IT expense 9.60 9.60 18.00 3.00 3.00 3.00 3.00

Other expense 12.05 12.05 5.00 5.00 3.00 3.00 3.00

TOTAL 39 165 140 116 101 96 96 96

Accum 165 305 421 522 618 713 809

Cal Data for CPU -Adm OH yellow 40 95.68 95.68 95.68 95.68 95.68 95.68 95.68

Cal Data for CPU -PIC / Common Green 69 44 21 5 0 0 0

Phase-2 (JV's plant establish) is not considerred

NPT-CO-CO-017_N_300511_P15 CPU 55K KPI sheet for P15 Profitability Estimation Per Unit Cost Inhouse Rejection Marginal Selling Material Cost (3% Conversion Factory Profit Model Royalty price Cost of cost Cost (W/o JV Material Expense) Cost) C22 Truck 77100 66847 2005 5500 1569 75921 1179 BS3 C22 Truck LX 78400 67985 2040 5500 1595 77120 1280 BS3 C22 Truck VX 79900 69255 2078 5500 1626 78459 1441 Model BS3 wise C22 Truck Cost 89800 77810 2334 5500 1828 87472 2328 BS4 C22 Truck LX 91100 78947 2368 5500 1854 88669 2431 BS4 C22 Truck VX 92500 80217 2407 5500 1882 90005 2495 BS4

Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16

Depreciation 7yrs 67 67 67 67 67

10% Interest on Capital on Investment (10%) Dep. 40 34 27 20 13 NALPT Value Fixed Cost (Mn.INR) 2% Maintenace Cost on (2%) Dep. 7 6 4 3 1 Value TOTAL 115 107 99 91 82

Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Administration expense 96 96 96 96 96 (Mn.INR) NALPT Engine Transportation Cost Operating 15 17 19 19 19 / unit Expense Warranty Cost / unit 1600 1600 1600 1600 1600

Case-1 Case-3 Case-4 Volume for Case-5

Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16

Model 27,500 39,100 55,000 55,000 55,000

C22 Truck BS3 4,260 6,057 8,520 8,520 8,520

C22 Truck LX BS3 9,100 12,939 18,200 18,200 18,200

C22 Truck VX BS3 910 1,294 1,820 1,820 1,820

C22 Truck BS4 3,970 5,645 7,940 7,940 7,940

C22 Truck LX BS4 8,590 12,213 17,180 17,180 17,180

C22 Truck VX BS4 670 953 1,340 1,340 1,340 Volume for Case-2

Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16

Model 27,500 49,000 100,000 100,000 100,000

C22 Truck BS3 4,260 7,591 15,491 15,491 15,491

C22 Truck LX BS3 9,100 16,215 33,091 33,091 33,091

C22 Truck VX BS3 910 1,621 3,309 3,309 3,309

C22 Truck BS4 3,970 7,074 14,436 14,436 14,436

C22 Truck LX BS4 8,590 15,306 31,236 31,236 31,236

C22 Truck VX BS4 670 1,194 2,436 2,436 2,436

Expenditure Before Commencement Of Sale

IT FY'09-10 FY'10-11 FY'11-12 Total 1 Total 2 3 18 23

PIC FY'09-10 FY'10-11 FY'11-12 Total 2 Technical Consultancy 16 24 15 55

R&D Cost 1 0 180 181

Consultancy Charges 16 4 6 26

Contract Casual 0 0 1 1

Total 33 27 202 262

PIC + Testing Charges FY'09-10 FY'10-11 FY'11-12 Total 3 Total 14 2 16

HR Cost FY'09-10 FY'10-11 FY'11-12 Total 4 Expat Salary 2 18 10 31

Expat Rent 4 7 4 15

Staff Salary 16 23 19 58

Recruitment Expense 0 0 0 1

Staff Welfare 1 0 1 2

Total 23 49 34 106

Office Rent FY'09-10 FY'10-11 FY'11-12 Total 5 Total 4 7 4 15

Travel (Dom. & Int.) FY'09-10 FY'10-11 FY'11-12 Total 6 Total 3 8 3 14

Others FY'09-10 FY'10-11 FY'11-12 Total

Total 3 9 7

Sub Total 68 117 262 447 CASE NO: 1 (Present Selling Price, Present Volume)

REVENUE FORECASTING

Selling Factory PARTICULARS No.Of.Units Marginal profit -1 price Cost

27,500 Per unit Per unit Per unit FY C22 Truck BS3 4,260 77,100 75,921 1,179 ' C22 Truck LX BS3 9,100 78,400 77,120 1,280 11 C22 Truck VX BS3 910 79,900 78,459 1,441 - C22 Truck BS4 3,970 89,800 87,472 2,328 12 C22 Truck LX BS4 8,590 91,100 88,669 2,431 C22 Truck VX BS4 670 92,500 90,005 2,495

39,100 FY C22 Truck BS3 6,057 77,100 75,921 1,179 ' C22 Truck LX BS3 12,939 78,400 77,120 1,280 12 C22 Truck VX BS3 1,294 79,900 78,459 1,441 - C22 Truck BS4 5,645 89,800 87,472 2,328 13 C22 Truck LX BS4 12,213 91,100 88,669 2,431 C22 Truck VX BS4 953 92,500 90,005 2,495

55,000 F C22 Truck BS3 8,520 77,100 75,921 1,179 Y' C22 Truck LX BS3 18,200 78,400 77,120 1,280 1 C22 Truck VX BS3 1,820 79,900 78,459 1,441 3- C22 Truck BS4 7,940 89,800 87,472 2,328 1 C22 Truck LX BS4 17,180 91,100 88,669 2,431 4 C22 Truck VX BS4 1,340 92,500 90,005 2,495

55,000 F C22 Truck BS3 8,520 77,100 75,921 1,179 Y' C22 Truck LX BS3 18,200 78,400 77,120 1,280 1 C22 Truck VX BS3 1,820 79,900 78,459 1,441 4- 1 C22 Truck BS4 7,940 89,800 87,472 2,328 5 C22 Truck LX BS4 17,180 91,100 88,669 2,431 C22 Truck VX BS4 1,340 92,500 90,005 2,495

F 55,000 C22 Truck BS3 8,520 77,100 75,921 1,179 Y' C22 Truck LX BS3 18,200 78,400 77,120 1,280 1 C22 Truck VX BS3 1,820 79,900 78,459 1,441 5- C22 Truck BS4 7,940 89,800 87,472 2,328 1 C22 Truck LX BS4 17,180 91,100 88,669 2,431 6 C22 Truck VX BS4 1,340 92,500 90,005 2,495

Fixed Operating Net Total Cost Marginal profit -1 Cost Expenses Profit incurred

Per unit Per unit Per unit Per unit Per unit 1,179 4175 5094 (8,090) 85,190 1,280 4175 5094 (7,989) 86,389 FY' 11-12 1,441 4175 5094 (7,828) 87,728 2,328 4175 5094 (6,941) 96,741 2,431 4175 5094 (6,838) 97,938 2,495 4175 5094 (6,775) 99,275

1,179 2729 4064 (5,614) 82,714 1,280 2729 4064 (5,513) 83,913

FY' 1,441 2729 4064 (5,352) 85,252 12-13 2,328 2729 4064 (4,465) 94,265 2,431 2729 4064 (4,363) 95,463 2,495 2729 4064 (4,299) 96,799

1,179 1793 3359 (3,973) 81,073 1,280 1793 3359 (3,871) 82,271

1,441 1793 3359 (3,710) 83,610 FY' 13-14 2,328 1793 3359 (2,823) 92,623 2,431 1793 3359 (2,721) 93,821 2,495 1793 3359 (2,657) 95,157 1,179 1646 3359 (3,826) 80,926 1,280 1646 3359 (3,724) 82,124 1,441 1646 3359 (3,563) 83,463 FY' 14- 2,328 1646 3359 (2,676) 92,476 15 2,431 1646 3359 (2,574) 93,674 2,495 1646 3359 (2,510) 95,010

1,179 1499 3359 (3,678) 80,778 1,280 1499 3359 (3,577) 81,977 1,441 1499 3359 (3,416) 83,316 FY' 15- 2,328 1499 3359 (2,529) 92,329 16 2,431 1499 3359 (2,426) 93,526 2,495 1499 3359 (2,363) 94,863

CASE 1 (Present Selling Price, Present Volume)

Calculation Of Marginal Profit In Rs. Mn Particulars Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Sales Revenue 2316 3292 4631 4631 4631 Less Material Cost 2067 2940 4135 4135 4135 conversion cost 151 215 303 303 303 Royalty 43 61 86 86 86 2262 3216 4524 4524 4524 (Gross Profit) Marginal Profit - 1 54 76 108 108 108 Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Calculation Of Net Profit In Rs. Mn Marginal Profit - 1 (Gross Profit) 54 76 108 108 108 Less Fixed Cost 115 107 99 91 82 Operating Expenses 140 159 185 185 185 (Net Profit) Marginal Profit - 2 -201 -189 -176 -168 -160 CASE NO: 2 (Present Selling Price, Increased Volume)

REVENUE FORECASTING

Selling PARTICULARS No.Of.Units Factory Cost Marginal profit -1 price

27,500 Per unit Per unit Per unit

77,100 C22 Truck BS3 4,260 75,921 1,179

78,400 FY C22 Truck LX BS3 9,100 77,120 1,280 ' 79,900 11 C22 Truck VX BS3 910 78,459 1,441 - 89,800 12 C22 Truck BS4 3,970 87,472 2,328

91,100 C22 Truck LX BS4 8,590 88,669 2,431

92,500 C22 Truck VX BS4 670 90,005 2,495

49,000

77,100 C22 Truck BS3 7,591 75,921 1,179

78,400 FY C22 Truck LX BS3 16,215 77,120 1,280 ' 79,900 12 C22 Truck VX BS3 1,621 78,459 1,441 - 89,800 13 C22 Truck BS4 7,074 87,472 2,328

91,100 C22 Truck LX BS4 15,306 88,669 2,431

92,500 C22 Truck VX BS4 1,194 90,005 2,495

100,000

77,100 C22 Truck BS3 15,491 75,921 1,179

78,400 F C22 Truck LX BS3 33,091 77,120 1,280 Y' 79,900 1 C22 Truck VX BS3 3,309 78,459 1,441 3- 89,800 1 C22 Truck BS4 14,436 87,472 2,328 4 91,100 C22 Truck LX BS4 31,236 88,669 2,431

92,500 C22 Truck VX BS4 2,436 90,005 2,495

100,000

77,100 C22 Truck BS3 15,491 75,921 1,179

78,400 F C22 Truck LX BS3 33,091 77,120 1,280 Y' 79,900 1 C22 Truck VX BS3 3,309 78,459 1,441 4- 89,800 1 C22 Truck BS4 14,436 87,472 2,328 5 91,100 C22 Truck LX BS4 31,236 88,669 2,431

92,500 C22 Truck VX BS4 2,436 90,005 2,495

F 100,000 Y' 77,100 1 C22 Truck BS3 15,491 75,921 1,179 5- 78,400 1 C22 Truck LX BS3 33,091 77,120 1,280 6 C22 Truck VX BS3 3,309 79,900 78,459 1,441

89,800 C22 Truck BS4 14,436 87,472 2,328

91,100 C22 Truck LX BS4 31,236 88,669 2,431

92,500 C22 Truck VX BS4 2,436 90,005 2,495

Marginal profit -1 Fixed Cost Operating Expenses Net Profit

Per unit Per unit Per unit Per unit 1, (8,09 179 4175 5094 0) 1, (7,98 FY 280 4175 5094 9) ' 1, (7,82 11 441 4175 5094 8) - 2, (6,94 12 328 4175 5094 1) 2, (6,83 431 4175 5094 8) 2, (6,77 495 4175 5094 5)

1, (4,56 179 2178 3570 9) 1, (4,46 FY 280 2178 3570 7) ' 1, (4,30 12 441 2178 3570 6) - 2, (3,41 13 328 2178 3570 9) 2, (3,31 431 2178 3570 7) 2, (3,25 495 2178 3570 3)

F Y' 1 1, (2,38 3- 179 986 2576 3) 1 1, 986 2576 (2,28 280 2) 1, (2,12 441 986 2576 0) 2, (1,23 328 986 2576 4) 2, (1,13 4 431 986 2576 1) 2, (1,06 495 986 2576 7)

1, (2,30 179 905 2576 2) 1, (2,20 F 280 905 2576 1) Y' 1, (2,03 1 441 905 2576 9) 4- 2, (1,15 1 328 905 2576 3) 5 2, (1,05 431 905 2576 0) 2, (98 495 905 2576 6)

F Y' 1 1, (2,22 5- 179 824 2576 1) 1 1, (2,12 6 280 824 2576 0) 1, (1,95 441 824 2576 9) 2, (1,07 328 824 2576 2) 2, 824 2576 (96 431 9) 2, (90 495 824 2576 5)

CASE 2 (Present Selling Price, Increased Volume) Calculation Of Marginal Profit In Rs. Mn Particulars Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Sales Revenue 2316 4126 8420 8420 8420 Less Material Cost 2067 3684 7518 7518 7518 conversion cost 151 270 550 550 550 Royalty 43 77 157 157 157 2262 4030 8225 8225 8225 (Gross Profit) Marginal Profit - 1 54 96 195 195 195 Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Calculation Of Net Profit In Rs. Mn Marginal Profit - 1 (Gross Profit) 54 96 195 195 195 Less Fixed Cost 115 107 99 91 82 Operating Expenses 140 175 258 258 258 (Net Profit) Marginal Profit - 2 -201 -186 -161 -153 -145

CASE NO: 3 (For Present Selling Price & Reduced Costs) REVENUE FORECASTING

Marginal profit PARTICULARS No.Of.Units Selling price Factory Cost -1

55,000 F C22 Truck BS3 8,520 77,100 75,921 1,179 Y' C22 Truck LX BS3 18,200 78,400 77,120 1,280 1 C22 Truck VX BS3 1,820 79,900 78,459 1,441 4- C22 Truck BS4 7,940 89,800 87,472 2,328 1 C22 Truck LX BS4 17,180 91,100 88,669 2,431 5 C22 Truck VX BS4 1,340 92,500 90,005 2,495

55,000 F C22 Truck BS3 8,520 77,100 75,921 1,179 Y' C22 Truck LX BS3 18,200 78,400 77,120 1,280 1 C22 Truck VX BS3 1,820 79,900 78,459 1,441 5- C22 Truck BS4 7,940 89,800 87,472 2,328 1 C22 Truck LX BS4 17,180 91,100 88,669 2,431 6 C22 Truck VX BS4 1,340 92,500 90,005 2,495

Marginal profit -1 Fixed Cost Operating Expenses Net Profit

Per unit Per unit Per unit Per unit 1, (8,09 179 4175 5094 0) 1, (7,98 280 4175 5094 9) 1, (7,82 FY' 11-12 441 4175 5094 8) 2, (6,94 328 4175 5094 1) 2, (6,83 431 4175 5094 8) 2, (6,77 495 4175 5094 5)

1, (5,61 179 2729 4064 4) 1, (5,51 280 2729 4064 3) 1, (5,35 FY' 12-13 441 2729 4064 2) 2, (4,46 328 2729 4064 5) 2, (4,36 431 2729 4064 3) 2, (4,29 495 2729 4064 9)

FY'1 1, (3,97 179 1793 3359 3) 1, (3,87 280 1793 3359 1) 1, (3,71 441 1793 3359 0) 3-14 2, (2,82 328 1793 3359 3) 2, (2,72 431 1793 3359 1) 2, (2,65 495 1793 3359 7)

1, (3,82 179 1646 3359 6) 1, (3,72 280 1646 3359 4) 1, (3,56 FY'1 441 1646 3359 3) 4-15 2, (2,67 328 1646 3359 6) 2, (2,57 431 1646 3359 4) 2, (2,51 495 1646 3359 0)

FY'1 5-16 1, (3,67 179 1499 3359 8) 1, (3,57 280 1499 3359 7) 1, (3,41 441 1499 3359 6) 2, (2,52 328 1499 3359 9) 2, (2,42 431 1499 3359 6) 2, 1499 3359 (2,36 495 3)

CASE 3 (For Present Selling Price & Reduced Costs) Calculation Of Marginal Profit In Rs. Mn Particulars Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Sales Revenue 2316 3292 4631 4631 4631 Less Material Cost 2026 2881 4052 4052 4052 conversion cost 94 133 187 187 187 Royalty 43 61 86 86 86 2163 3075 4326 4326 4326 (Gross Profit) Marginal Profit - 1 153 217 306 306 306 Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Calculation Of Net Profit In Rs. Mn Marginal Profit - 1 (Gross Profit) 153 217 306 306 306 Less Fixed Cost 115 107 99 91 82 Operating Expenses 140 159 185 185 185 (Net Profit) Marginal Profit - 2 -102 -48 22 30 39 CASE NO: 4 (Estimated Selling Price for Reduced Cost)

REVENUE FORECASTING

Operating PARTICULARS No.Of.Units Factory Cost Fixed Cost Expenses

27,500 Per unit Per unit Per unit FY C22 Truck BS3 4,260 72,444 4175 5094 ' C22 Truck LX BS3 9,100 73,619 4175 5094 11 C22 Truck VX BS3 910 74,932 4175 5094 - C22 Truck BS4 3,970 83,769 4175 5094 12 C22 Truck LX BS4 8,590 84,943 4175 5094 C22 Truck VX BS4 670 86,253 4175 5094

39,100 FY C22 Truck BS3 6,057 72,444 2729 4064 ' C22 Truck LX BS3 12,939 73,619 2729 4064 12 C22 Truck VX BS3 1,294 74,932 2729 4064 - C22 Truck BS4 5,645 83,769 2729 4064 13 C22 Truck LX BS4 12,213 84,943 2729 4064 C22 Truck VX BS4 953 86,253 2729 4064

55,000 F C22 Truck BS3 8,520 72,444 1793 3359 Y' C22 Truck LX BS3 18,200 73,619 1793 3359 1 C22 Truck VX BS3 1,820 74,932 1793 3359 3- C22 Truck BS4 7,940 83,769 1793 3359 1 C22 Truck LX BS4 17,180 84,943 1793 3359 4 C22 Truck VX BS4 1,340 86,253 1793 3359

55,000 F C22 Truck BS3 8,520 72,444 1646 3359 Y' C22 Truck LX BS3 18,200 73,619 1646 3359 1 C22 Truck VX BS3 1,820 74,932 1646 3359 4- 1 C22 Truck BS4 7,940 83,769 1646 3359 5 C22 Truck LX BS4 17,180 84,943 1646 3359 C22 Truck VX BS4 1,340 86,253 1646 3359

55,000 F C22 Truck BS3 8,520 72,444 1499 3359 Y' C22 Truck LX BS3 18,200 73,619 1499 3359 1 C22 Truck VX BS3 1,820 74,932 1499 3359 5- C22 Truck BS4 7,940 83,769 1499 3359 1 C22 Truck LX BS4 17,180 84,943 1499 3359 6 C22 Truck VX BS4 1,340 86,253 1499 3359

Estimated Marginal Profit - 2 Marginal Total Cost Incurred Selling (Net Profit) Profit - 1 Price (Gross Profit) Per unit Per unit 81713 9079 90,792 18,348 FY 82888 9210 92,098 18,479 ' 11- 84201 9356 93,557 18,625 12 93038 10338 103,376 19,607 94212 10468 104,680 19,737 95522 10614 106,136 19,883

79237 8804 88,041 15,597 FY 80412 8935 89,347 15,728 ' 12- 81725 9081 90,806 15,874 13 90562 10062 100,625 16,856 91736 10193 101,929 16,986 93046 10338 103,385 17,132

77596 8622 86,217 13,773 FY 78771 8752 87,523 13,904 '1 3- 80083 8898 88,982 14,050 14 88921 9880 98,801 15,032 90095 10011 100,105 15,162 91405 10156 101,561 15,308

77448 8605 86,054 13,610 FY 78624 8736 87,359 13,740 '1 79936 8882 88,818 13,886 4- 88773 9864 98,637 14,868 15 89947 9994 99,942 14,999 91257 10140 101,397 15,144

FY '1 77301 8589 85,890 13,446 5- 78476 8720 87,196 13,577 16 79789 8865 88,654 13,723 88626 9847 98,473 14,704 89800 9978 99,778 14,835 91110 10123 101,233 14,980

CASE 4 (Estimated Selling Price for Reduced Cost) Calculation Of Marginal Profit In Rs. Mn Particulars Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Sales Revenue 2691 3718 5130 5121 5112 Less Material Cost 2026 2881 4052 4052 4052 conversion cost 94 133 187 187 187 Royalty 43 61 86 86 86 2163 3075 4326 4326 4326 (Gross Profit) Marginal Profit - 1 528 643 804 795 786 Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Calculation Of Net Profit In Rs. Mn Marginal Profit - 1 (Gross Profit) 528 643 804 795 786 Less Fixed Cost 115 107 99 91 82 Operating Expenses 140 159 185 185 185 (Net Profit) Marginal Profit - 2 273 377 521 520 519

CASE NO: 4 A (Estimated Selling Price for Reduced Cost)

REVENUE FORECASTING Operating PARTICULARS No.Of.Units Factory Cost Fixed Cost Expenses

27,500 Per unit Per unit Per unit C22 Truck BS3 4,260 72,444 4175 5094 FY C22 Truck LX BS3 9,100 73,619 4175 5094 ' 11- C22 Truck VX BS3 910 74,932 4175 5094 12 C22 Truck BS4 3,970 83,769 4175 5094 C22 Truck LX BS4 8,590 84,943 4175 5094 C22 Truck VX BS4 670 86,253 4175 5094

39,100 C22 Truck BS3 6,057 72,444 2729 4064 FY C22 Truck LX BS3 12,939 73,619 2729 4064 ' 12- C22 Truck VX BS3 1,294 74,932 2729 4064 13 C22 Truck BS4 5,645 83,769 2729 4064 C22 Truck LX BS4 12,213 84,943 2729 4064 C22 Truck VX BS4 953 86,253 2729 4064

55,000 C22 Truck BS3 8,520 72,444 1793 3359 FY C22 Truck LX BS3 18,200 73,619 1793 3359 '1 C22 Truck VX BS3 1,820 74,932 1793 3359 3- C22 Truck BS4 7,940 83,769 1793 3359 14 C22 Truck LX BS4 17,180 84,943 1793 3359 C22 Truck VX BS4 1,340 86,253 1793 3359

FY 55,000 '1 C22 Truck BS3 8,520 72,444 1646 3359 4- C22 Truck LX BS3 18,200 73,619 1646 3359 15 C22 Truck VX BS3 1,820 74,932 1646 3359 C22 Truck BS4 7,940 83,769 1646 3359 C22 Truck LX BS4 17,180 84,943 1646 3359 C22 Truck VX BS4 1,340 86,253 1646 3359

55,000 C22 Truck BS3 8,520 72,444 1499 3359 FY C22 Truck LX BS3 18,200 73,619 1499 3359 '1 C22 Truck VX BS3 1,820 74,932 1499 3359 5- C22 Truck BS4 7,940 83,769 1499 3359 16 C22 Truck LX BS4 17,180 84,943 1499 3359 C22 Truck VX BS4 1,340 86,253 1499 3359

Total Cost Marginal Profit - Estimated Selling Marginal Profit - 1 (Gross Incurred 2 (Net Profit) Price Profit) Per unit Per unit 81713 6056 87,769 15,325 FY 82888 6143 89,031 15,412 ' 11- 84201 6240 90,441 15,509 12 93038 6895 99,933 16,164 94212 6982 101,194 16,251 95522 7080 102,602 16,349

79237 5873 85,110 12,666 FY 80412 5960 86,372 12,753 ' 12- 81725 6057 87,782 12,850 13 90562 6712 97,274 13,505 91736 6799 98,535 13,592 93046 6896 99,942 13,689

FY '1 77596 5751 83,347 10,902 3- 78771 5838 84,609 10,990 14 80083 5935 86,019 11,087 88921 6590 95,511 11,742 90095 6677 96,772 11,829 91405 6774 98,179 11,926

77448 5740 83,188 10,744 FY 78624 5827 84,451 10,831 '1 79936 5924 85,861 10,929 4- 88773 6579 95,353 11,584 15 89947 6666 96,614 11,671 91257 6763 98,021 11,768

77301 5729 83,030 10,586 FY 78476 5816 84,293 10,673 '1 79789 5913 85,703 10,771 5- 88626 6568 95,195 11,426 16 89800 6655 96,456 11,513 91110 6753 97,863 11,610 CASE 4A (Estimated Selling Price for Reduced Cost) Calculation Of Marginal Profit In Rs. Mn Particulars Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Sales Revenue 2601 3594 4959 4950 4942 Less Material Cost 2026 2881 4052 4052 4052 conversion cost 94 133 187 187 187 Royalty 43 61 86 86 86 2163 3075 4326 4326 4326 (Gross Profit) Marginal Profit - 1 438 519 633 625 616 Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Calculation Of Net Profit In Rs. Mn Marginal Profit - 1 (Gross Profit) 438 519 633 625 616 Less Fixed Cost 115 107 99 91 82 Operating Expenses 140 159 185 185 185 (Net Profit) Marginal Profit - 2 183 254 350 350 349 CASE NO: 5 (Estimated Selling Price ,No Cost Reduction)

REVENUE FORECASTING

Operating PARTICULARS No.Of.Units Factory Cost Fixed Cost Expenses

27,500 Per unit Per unit Per unit 75,9 C22 Truck BS3 4,260 21 4175 5094 77,1 FY C22 Truck LX BS3 9,100 20 4175 5094 ' 78,4 11 C22 Truck VX BS3 910 59 4175 5094 - 87,4 12 C22 Truck BS4 3,970 72 4175 5094 88,6 C22 Truck LX BS4 8,590 69 4175 5094 90,0 C22 Truck VX BS4 670 05 4175 5094

39,100 75,9 C22 Truck BS3 6,057 21 2729 4064 77,1 FY C22 Truck LX BS3 12,939 20 2729 4064 ' 78,4 12 C22 Truck VX BS3 1,294 59 2729 4064 - 87,4 13 C22 Truck BS4 5,645 72 2729 4064 88,6 C22 Truck LX BS4 12,213 69 2729 4064 90,0 C22 Truck VX BS4 953 05 2729 4064

F 55,000 75,9 C22 Truck BS3 8,520 21 1793 3359 77,1 C22 Truck LX BS3 18,200 20 1793 3359 Y' 78,4 1 C22 Truck VX BS3 1,820 59 1793 3359 3- 87,4 1 C22 Truck BS4 7,940 72 1793 3359 4 88,6 C22 Truck LX BS4 17,180 69 1793 3359 90,0 C22 Truck VX BS4 1,340 05 1793 3359

55,000 75,9 C22 Truck BS3 8,520 21 1646 3359 77,1 F C22 Truck LX BS3 18,200 20 1646 3359 Y' 78,4 1 C22 Truck VX BS3 1,820 59 1646 3359 4- 87,4 1 C22 Truck BS4 7,940 72 1646 3359 5 88,6 C22 Truck LX BS4 17,180 69 1646 3359 90,0 C22 Truck VX BS4 1,340 05 1646 3359

55,000 75,9 C22 Truck BS3 8,520 21 1499 3359 77,1 F C22 Truck LX BS3 18,200 20 1499 3359 Y' 78,4 1 C22 Truck VX BS3 1,820 59 1499 3359 5- 87,4 1 C22 Truck BS4 7,940 72 1499 3359 6 88,6 C22 Truck LX BS4 17,180 69 1499 3359 90,0 C22 Truck VX BS4 1,340 05 1499 3359

Estimated Total Cost Marginal Profit - 2 Selling Marginal Profit - 1 Incurred (Net Profit) Price (Gross Profit) Per unit Per unit 94, 18, 85190 9466 656 735 95, 18, FY 86389 9599 987 868 ' 97, 19, 11 87728 9748 475 017 - 107, 20, 12 96741 10749 490 018 108, 20, 97938 10882 820 151 110, 20, 99275 11031 305 300

91, 15, 82714 9190 905 984 93, 16, FY 83913 9324 237 117 ' 94, 16, 12 85252 9472 724 266 - 104, 17, 13 94265 10474 739 267 106, 17, 95463 10607 069 400 107, 17, 96799 10755 554 549

F Y' 90, 14, 1 81073 9008 081 160 3- 91, 14, 1 82271 9141 413 293 4 92, 14, 83610 9290 900 442 102, 15, 92623 10291 915 443 93821 10425 104, 15, 245 576 105, 15, 95157 10573 730 725

89, 13, 80926 8992 917 996 91, 14, F 82124 9125 249 129 Y' 92, 14, 1 83463 9274 737 278 4- 102, 15, 1 92476 10275 751 279 5 104, 15, 93674 10408 082 413 105, 15, 95010 10557 566 561

89, 13, 80778 8975 754 833 91, 13, F 81977 9109 085 966 Y' 92, 14, 1 83316 9257 573 114 5- 102, 15, 1 92329 10259 588 116 6 103, 15, 93526 10392 918 249 105, 15, 94863 10540 403 397

CASE 5 (Estimated Selling Price ,No Cost Reduction) Calculation Of Marginal Profit In Rs. Mn Particulars Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Sales Revenue 2801 3875 5350 5341 5332 Less Material Cost 2067 2940 4135 4135 4135 conversion cost 151 215 303 303 303 Royalty 43 61 86 86 86 2262 3216 4524 4524 4524 (Gross Profit) Marginal Profit - 1 539 659 826 817 808 Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Calculation Of Net Profit In Rs. Mn Marginal Profit - 1 (Gross Profit) 539 659 826 817 808 Less Fixed Cost 115 107 99 91 82 Operating Expenses 140 159 185 185 185 (Net Profit) Marginal Profit - 2 284 393 543 542 541 CASE NO: 5A (Estimated Selling Price ,No Cost Reduction)

REVENUE FORECASTING

Operating PARTICULARS No.Of.Units Factory Cost Fixed Cost Expenses

27,500 Per unit Per unit Per unit FY C22 Truck BS3 4,260 75,921 4175 5094 ' C22 Truck LX BS3 9,100 77,120 4175 5094 11 C22 Truck VX BS3 910 78,459 4175 5094 - C22 Truck BS4 3,970 87,472 4175 5094 12 C22 Truck LX BS4 8,590 88,669 4175 5094 C22 Truck VX BS4 670 90,005 4175 5094

39,100 FY C22 Truck BS3 6,057 75,921 2729 4064 ' C22 Truck LX BS3 12,939 77,120 2729 4064 12 C22 Truck VX BS3 1,294 78,459 2729 4064 - C22 Truck BS4 5,645 87,472 2729 4064 13 C22 Truck LX BS4 12,213 88,669 2729 4064 C22 Truck VX BS4 953 90,005 2729 4064

F 55,000 Y' C22 Truck BS3 8,520 75,921 1793 3359 C22 Truck LX BS3 18,200 77,120 1793 3359 C22 Truck VX BS3 1,820 78,459 1793 3359 C22 Truck BS4 7,940 87,472 1793 3359 1 3- C22 Truck LX BS4 17,180 88,669 1793 3359 1 C22 Truck VX BS4 1,340 90,005 1793 3359

55,000 F C22 Truck BS3 8,520 75,921 1646 3359 Y' C22 Truck LX BS3 18,200 77,120 1646 3359 1 C22 Truck VX BS3 1,820 78,459 1646 3359 4- C22 Truck BS4 7,940 87,472 1646 3359 1 C22 Truck LX BS4 17,180 88,669 1646 3359 5 C22 Truck VX BS4 1,340 90,005 1646 3359

55,000 F C22 Truck BS3 8,520 75,921 1499 3359 Y' C22 Truck LX BS3 18,200 77,120 1499 3359 1 C22 Truck VX BS3 1,820 78,459 1499 3359 5- C22 Truck BS4 7,940 87,472 1499 3359 1 C22 Truck LX BS4 17,180 88,669 1499 3359 6 C22 Truck VX BS4 1,340 90,005 1499 3359

Total Cost Marginal Profit - 2 Estimated Marginal Profit - 1 Incurred (Net Profit) Selling Price (Gross Profit) Per unit Per unit Per unit Per unit FY 85190 6412 91,602 15,681 ' 86389 6502 92,891 15,771 11 87728 6603 94,331 15,872 - 96741 7282 104,022 16,551 12 97938 7372 105,310 16,641 99275 7472 106,747 16,741

FY 82714 6226 88,940 13,019 ' 83913 6316 90,229 13,109 12 85252 6417 91,669 13,210 - 94265 7095 101,360 13,888 13 95463 7185 102,648 13,979 96799 7286 104,085 14,079

F 81073 6102 87,175 11,254 Y' 82271 6192 88,464 11,344 1 83610 6293 89,903 11,445 3- 92623 6972 99,595 12,123 1 93821 7062 100,883 12,213 4 95157 7162 102,319 12,314

F 80926 6091 87,017 11,096 Y' 82124 6181 88,305 11,186 1 83463 6282 89,745 11,287 4- 92476 6961 99,437 11,965 1 93674 7051 100,724 12,055 5 95010 7151 102,161 12,156

F 80778 6080 86,858 10,937 Y' 81977 6170 88,147 11,027 1 83316 6271 89,587 11,128 5- 92329 6949 99,279 11,807 1 93526 7040 100,566 11,897 6 94863 7140 102,003 11,997 CASE 5A (Estimated Selling Price ,No Cost Reduction) Calculation Of Marginal Profit In Rs. Mn Particulars Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Sales Revenue 2710 3750 5177 5169 5160 Less Material Cost 2067 2940 4135 4135 4135 conversion cost 151 215 303 303 303 Royalty 43 61 86 86 86 2262 3216 4524 4524 4524 (Gross Profit) Marginal Profit - 1 449 534 654 645 636 Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 Calculation Of Net Profit In Rs. Mn Marginal Profit - 1 (Gross Profit) 449 534 654 645 636 Less Fixed Cost 115 107 99 91 82 Operating Expenses 140 159 185 185 185 (Net Profit) Marginal Profit - 2 194 268 370 370 369 FINANCE DEPARTMENT- PROFITABILITY Chapter No: 5 FINANCE DEPARTMENT- PROFITABILITY

CALCULATION OF PAY BACK PERIOD

= INITIAL INVESTMENT

CASH ACCRUAL AFTER TAX BEFORE DEPRECIATION

CASE NO: 1 (Present Selling Price, Present Volume)

Table No:1

Calculation of CFAT(Profit After Tax Before Depreciation Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 (Net Profit) Marginal Profit - 2 -201 -189 -176 -168 -160 less Tax@30% 0 0 0 0 0 Add Depreciation 67 67 67 67 67 CFAT -134 -122 -108 -100 -92 Cumulative CFAT -134 -255 -364 -464 -556

FINDINGS : For the current Selling price, only loss will be incurred through out the project life.

CASE NO: 2 (Present Selling Price, Increased Volume) Table No:2

Calculation of CFAT(Profit After Tax Before Depreciation Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 (Net Profit) Marginal Profit - 2 -201 -186 -161 -153 -145 less Tax@30% 0 0 0 0 0 Add Depreciation 67 67 67 67 67 CFAT -134 -118 -93 -85 -77 Cumulative CFAT -134 -252 -345 -430 -507

FINDINGS : For the current Selling price, only loss will be incurred through out the project life.

CASE NO: 3 (For Present Selling Price & Reduced Costs)

Table No:3

Calculation of CFAT(Profit After Tax Before Depreciation Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 (Net Profit) Marginal -102 -48 22 30 39 Profit - 2 less Tax@30% 0 0 0 0 0 Add Depreciation 67 67 67 67 67 CFAT -35 19 90 98 106 Cumulative CFAT -35 -15 74 172 278

FINDINGS :

With the Current selling price the project may achieve it Pay Back Period in more than 11 years. CASE NO: 4 (Estimated Selling Price for Reduced Cost) .

Table No:4

Calculation of CFAT(Profit After Tax Before Depreciation Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 (Net Profit) Marginal Profit - 2 273 377 521 520 519 less Tax@30% 82 113 156 156 156 Add Depreciation 67 67 67 67 67 CFAT 259 332 432 432 431 Cumulative CFAT 259 590 1022 1454 1885

FINDINGS : The project with the estimated current selling price may get the pay back in 3 years and 1 month, which is beneficiary since the company may go for a new project after 3 years.

CASE NO: 4 A (Estimated Selling Price for Reduced Cost)

Table No:5

Calculation of CFAT(Profit After Tax Before Depreciation Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 (Net Profit) Marginal Profit - 2 183 254 350 350 349 less Tax@30% 55 76 105 105 105 Add Depreciation 67 67 67 67 67 CFAT 196 245 313 312 312 Cumulative CFAT 196 441 754 1066 1377

FINDINGS :

The project with the current estimated selling price may get the pay back for the initial investments in 4 years and 2 months, which is also beneficiary. CASE NO: 5 (Estimated Selling Price ,No Cost Reduction) Table No:6

Calculation of CFAT(Profit After Tax Before Depreciation Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 (Net Profit) Marginal Profit - 2 284 393 543 542 541 less Tax@30% 85 118 163 163 162 Add Depreciation 67 67 67 67 67 CFAT 266 343 448 447 446 Cumulative CFAT 266 609 1057 1503 1950

FINDINGS :

The project with the current estimated selling price may get the pay back for the initial investments in 3 years, but may increase the selling price at a higher level. CASE NO: 5A (Estimated Selling Price ,No Cost Reduction) Table No:7

Calculation of CFAT(Profit After Tax Before Depreciation Fy'11-12 Fy'12-13 Fy'13-14 Fy'14-15 Fy'15-16 (Net Profit) Marginal Profit - 2 194 268 370 370 369 less Tax@30% 58 80 111 111 111 Add Depreciation 67 67 67 67 67 CFAT 203 255 327 326 326 Cumulative CFAT 203 458 785 1111 1437

FINDINGS :

The project with the current estimated selling price may get the pay back for the initial investments in 4 years , but may increase the selling price at a higher level, and even reduces the net profit rate. CONCLUSION

Chapter No: 6 Conclusion

1. Case-1 & Case-2 will incur losses in subsequent years. Hence are not desirable.

2. Case-3 will Payback period is over 11 years. Hence not desirable. 3. Case-4 is estimated with 15% to 18% increase in present selling price so as to Net profit of 10% .Payback period will be 3year 1months. Hence Desirable.

4. Case-4A is estimated with 11% to 14% increase in present selling price so as to Net profit of 7% .Payback period will be 4year 2months. Hence Desirable.

5. Case-5 is estimated with 19% to 23% increase in present selling price so as to Net profit of 10% .Payback period will be 3years.

6. Case-5A is estimated with 15% to 19% increase in present selling price so as to Net profit of 7% .Payback period will be 4years.

Comparision Of Net Profit

Each case shows the level of net profit from the business over 5 years. Comparision Of Gross Profit

Descript Case- Case- Case-1 Case-2 Case-3 Case-4 Case-5 ion 4A 5A

Estimat Estimat Estimat Estimat Present Present Present Selling ed ed ed ed Selling Selling Selling Price Selling Selling Selling Selling Price Price Price Price Price Price Price 15% to 11% to 19% to 15% to Price 18% in 14% in 23% in 19% in Increas ------first first first First e year year year year Peak 55k 100k 55k 55k 55k 55k 55k Volume Present Present Present Present Material Reduce Reduce Reduce Material Materia Material Material Cost d by 2% d by 2% d by 2% Cost l Cost Cost Cost Reduce Reduce Reduce d from d from d from Convers Rs. Rs. Rs. Rs. Rs. Rs. Rs. ion Cost 5,500 5,500 5,500 to 5,500 to 5,500 to 5,500 5,500 Rs. Rs. Rs. 3,400 3,400 3,400 Royalty Rs. Rs. Rs. Rs. Rs. Rs. Rs. Cost 1,600 1,600 1,600 1,600 1,600 1,600 1,600 2% in 2% in 7% in 20% to 17% to 20% to 17% to Gross all all all 15% in 12% in 15% in 12% in Profit years years years 5years 5years 5years 5years -9% to -9% to -4% to Net 10% in 7% in all 10% in 7% in all -3% in -2% in 1% in Profit all years years all years years 5years 5years 5years Pay 3 years 4 years Cannot Cannot Over 11 Back 1 2 3years 4years be met be met years Period months months OVER ALL COMPARISON AND CONCLUSION OF EACH PROJECT WITH THE CHANGE IN EXPENDITURE, SELLING PRICE AND PROFITS. ANNEXURE MODEL OF P15 MODEL OF P15

MODEL OF P15