Annual Report 2007-2008 AND ON THE ASHOK LEYLAND LIMITED Corporate Office: 19, Rajaji Salai, Chennai - 600 001 Tel: + 91 44 2534 2141, Fax: +91 44 2534 2493, www.ashokleyland.com Ashok Leyland 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 bus … 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.