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 statements - written and oral - that we periodically make, contain forward-looking statements that set our anticipated results based on the managements plans and assumptions. We have tried wherever possible to identify such statements by using words such as anticipate, estimate, expects, project, intends, plans, believes, and words of similar substance in connection with any discussion of future performance. We cannot, of course, guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
AND ON THE

Dear Shareholder, On 7th September your Company completes 60 years of participation in the daily life and economic growth of independent India. Our sixty years of growth and success have been founded on the bedrock of delivering value to our customer by always keeping him and his emerging needs in sharp focus. That has also been our way of remaining profitable 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 last 60 years. It is also a cavalcade of products that have met the changing needs of the nation, developed and delivered innovatively and with a passion for engineering.

The same passion for engineering defines our present and our future aspirations. Investments in technology renewal is creating futuristic products and facilitating a setting for a 13000 strong team to excel and to grow. The changing age profile has injected the exuberance of youth coupled with the experience of the past that has built our engineering capabilities. Adding momentum to a Company on the go. We thank you for your trust and look forward to continuing this relationship that we cherish.

Contents
Highlights Passion at work: case studies Environment & Safety Corporate Social Responsibility 60 years performance highlights Directors Report CEO/CFO Certification Auditors Report to the Members Balance Sheet Profit and Loss Account 02 04 18 21 24 26 61 62 64 65 Cash Flow Statement Statement on Significant Accounting Policies Schedules to Balance Sheet Schedules to Profit and Loss Account Notes to the Accounts Balance Sheet Abstract and Companys General Business Profile 88 66 68 70 77 80

Yours truly,

R. Seshasayee
Managing Director

R. J. Shahaney
Chairman

Ashok Leyland Annual Report 08

Performance Passion
Performance highlights for 2007-08
Revenue PAT

Our passion for engineering

Rs. 89 bn
(2007-08)

Rs. 4.7 bn
(2007-08)

We direct our passion for engineering to the task of offering products with the best value-to-cost equation to our customers. It means listening to the customer to understand his/her business, to engineer product configurations that best answer his/her needs. It means empowering employees to add value.

Market Capitalisation

Sales Volume

Rs. 46.96 bn
(as on March 31, 2007-08)

83,307
vehicles (2007-08)

Ashok Leyland Annual Report 08

Max

Payload to the max

Modern roadways and stricter legal payload adherence have created the need for higher-powered, high performance vehicles. Here are three modern vehicles that offer the highest payload in their respective classes, with enhanced power to drive up customer profitability.

Modern expressions of efficiency

In the fiercely competitive world of goods transportation, appropriate modern technology makes for ease and efficiency of operations, improving productivity and revenues. Here are two future-ready vehicles that give convenience and efficiency a whole new meaning.

payload

efficiency
4921 (6x4) Tractor with Side Tip Trailer

3130 (8x4) Heavy Duty Tipper

Built for better pulling power, superior acceleration and exceptional gradeability to take on the rugged and demanding deep mine terrains and conditions.

A novel concept as side tipping renders tipping easier, more stable, more convenient (especially on roadsides and in closed areas) and a whole lot quicker compared to conventional end-tippers. 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% extra rated payload, faster and with greater fuel efficiency. The additional front steered axle provides for better stability, safety and load distribution.
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4930 (6x4) Tractor Trailer

Offers the highest payload backed by max torque and power for faster turnaround.

4921 (6x4) Tractor with Curtain Side Trailer

Another novelty that comes with a lightweight, highly durable, PVC-coated side curtain that can be opened and shut in minutes and makes for quick and easy loading and unloading which again means more trips, better turnaround time and improved profitability.
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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 testing the functional aspects of the electronic systems that were embedded in the bus, informs Vivek Uppadhyay. The level of electronics used in iBus has no precedent in Indian CV industry. A virtual lab set-up was created for the 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 nerve centre of all the electronically controlled units in the bus. So, what do we do? was the first question, followed of course by some crazy arguments here and endless debates there. Till one day, someone said: We can reach out to a lot of people if we create a city bus and all of them decided on creating one like no other innovative, intelligent and appropriate to the Indian market. We first wanted to find out why people are averse to traveling by bus, and then pack our creation with features that would pull them back to public transport, says M Sriram. An e-survey among friends who normally do not prefer traveling by bus confirmed certain widely-held opinions: Oh it is a pain during peak hours!, You feel so dirty., Such a waste of time. Subsequently, a more elaborate survey was taken up in four major cities and the feedback gave further shape to the product.
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We got great support from all colleagues not only iBus team members even into the late hours of the night. Vendors too co-operated fully to realise the action plan in time. - L Yaamini Devi

i-features
Compartmentalisation: economy and executive class options Automated Manual Transmission Electronics Controlled Suspension 152 kw eCORE engine low noise and vibration 635mm low floor chassis with one-step entry 1500mm wide door ABS and Disc Brakes Pedestrian-safe Front End Structure Rear collision warning system with parking assistance Aesthetic exterior and aerodynamic bus facia At-home interiors and soft lighting, seats and hat rack Telematics-enabled Passenger Information System LCD screens, internet on the move and entertainment Electronic driver workplace and driver access areas Centralised vehicle diagnostics GPS for fleet monitoring and management Noise Vibration Harshness solutions
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In March 2007, it was decided that the Company would display our creation at Auto Expo 2008. That meant less than ten months to translate our dream into a tangible entity, recalls S Venkatsubramanian. Ideas were pooled in and cyberstormed; sub-groups formed to take care of project management, design, opportunity assessment and sourcing. Mentors were kept in the loop and review sessions with Management were held once in two months. All the innovative concepts that we see in the bus compartmentalisation (the bus has separate executive and economy class), automated manual transmission (combining the luxury of a fully automatic transmission with an Indian cost) and eCORE (the first common rail engine used in a bus in India) found their genesis circa this period.

Then came the real world sourcing of materials. Keeping in mind the affordability factor, the team members went about judiciously mix-n-matching the most cost-effective yet state-of-the-art components and aggregates. The time at protoshop was one of the most memorable. It was a learning experience to interact with suppliers, constantly follow up for material procurement and resolve issues relating to vehicle integration with various sub-components, remembers J Lakshminarasimhan. Some freezing days at the body builders at Jaipur later, the collective dream became a spanking reality. And a few miles later, the cynosure of all eyes at the Ashok Leyland stall at Auto Expo 2008. The frantic finish is what I would recount many times over! Above all, it helped us realise our potential. Elsewhere iBus would be remembered for its innovative features or for redefining urban travel, but to me iBus means the experience of my lifetime. Thank you, Ashok Leyland, sums up Barath Rajagopalan.

It was a fulfilling experience I still recount with satisfaction the days when a group of us sat together and put pencil to paper for sketching our dream bus. - R S Ayyappan

Ashok Leyland Annual Report 08

PIS

Next bus expected at 3.23 pm on Bay 1

Real time information to keep everyone in the loop

This is a very good system to keep branch managers informed of their vehicle/driver performance, says Sajiv, Senior Programmer at Pallavan House. There were at least two separate occasions when vehicle breakdowns were intimated to us and immediate action taken, cites J Satishkumar, a junior engineer with SETC. The scene: The Chennai Mofussil Bus Terminus (CMBT) arguably Asias largest bus station that witnesses the comings and goings of some 3,000 buses daily. The project: To test the effectiveness of a track and trace system that could facilitate a more efficient fleet management for the operator and the comfort of information for the passenger. The genesis of this project lay in the formation of an expert Core Group of Automotive R&D (CAR) to focus on technologies for the future, with Ashok Leyland playing a key role in it. One of the many areas that CAR looked at was bus travel, which for long has been plagued by the problem of unpredictability both for the fleet owner and the passenger. A road map to develop a system to capture and relay real time information was drawn up. Ashok Leyland took the lead in translating the concept to reality by devising all the supporting hardware and software for implementation. What the engineers at Ashok Leyland came up with was a Passenger Information System (PIS) that gives the right information at the right time. A compact and robust GPS device fitted on the bus captures location, direction and speed of the vehicle from GPS satellites,
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This little box connects me directly to the officials beams G Vetriveeran, a seasoned driver on the Chennai-Tiruchirapalli route. He welcomes the change, saying, in case of an emergency, I need not desperately search for phone numbers or depend on others for help. While, for G Ramesh, a daily commuter from and to Tambaram, a suburb of Chennai, it is bliss. I can actually plan my day. Gone are the endless hours I used to waste at bus stops without a clue as to when I would reach home. Now, on arrival at the stop, he checks the PIS and then actually finds time to hop over and pick up a couple of things for home (and surprise his wife!).

which is stored and transmitted via GPRS network to the state-of-the-art Ashok Leyland Data Centre at Ennore, and further to a dedicated control room at Pallavan House, the headquarters of Madras Transport Corporation, for real-time monitoring by the operator. At the Pallavan House facility, buses that are equipped with the GPS device can be tracked and traced on a real time basis with the help of a robust digital map. The information provided includes the exact location of the bus, the speed it is traveling at, the direction it is headed. It is also a two-way communication system: the driver can call the control centre if he gets caught in a jam or suffers a breakdown. Based on this information, the ETA (Estimated Time of Arrival) of the bus is flashed on a display system at the bus stop so that those waiting can know exactly when the next bus is expected. For outstation passengers, even the vacancy status can be intimated! At present, run as a pilot project on 55 Madras Transport Corporation buses within the city of Chennai and 50 State Express Transport Corporation (Tamil Nadu) buses on the Chennai-Tiruchirapalli sector, PIS is already a runaway success.

S Rajendran, DM-Operations, SETC, who oversees the operation of 525 SETC buses in and out of CMBT, feels that the PIS brings with it a sense of certainty not only to passengers but also to operators like us we can be assured that a bus that has reached the outskirts of the city would be in the terminus by a certain time.

ALERT is a strategic initiative of Ashok Leyland to introduce a host of cutting-edge Telematics services for the Indian transportation industry. The objective of ALERT is to improve viability of the transportation industry with state-of-the-art, innovative, user-friendly and cost-effective services with proven ROI. ALERT currently offers Fleet Tracking & Management Service (FTMS) and Passenger Information System (PIS) for fleet operators, public utility services, passenger bus corporations and operators. ALERT plans to launch several value added telematics services to its portfolio through allied applications like fuel pilferage monitoring, diagnostics and prognostics, route optimization, telemetry and infotainment services in India.

Ashok Leyland Annual Report 08

Heavyweight loaded
A heavyweight loaded with advantages!
The newly launched 4921 that delivers fuel efficiency of up to 12% more than competition!
The results that followed were quite astonishing: more than our greatest expectations enthused, a delighted Jain, with a smile wreathing his face. Rates per ton came down from Rs. 283/- to Rs. 215/- per metric tonne: -- a saving of almost 25% for HZL! The number of trips jumped to 50 per month as against the 40 trips that other operators were managing. A higher payload and the elimination of manual unloading further upped efficiencies and GVJ were able to transport the allotted 750MT/day with plenty 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 Jain was toying with a pencil in his hand and a thought in his head. A partner in M/s. Ghewar Chand Vinod Kumar Jain (or GVJ, short and sweet), one of the fastest growing bulk transport companies around with a diversified portfolio and a fleet of some 185 vehicles, he was wondering how he could best capitalize on a great business opportunity that was beckoning. The opportunity involved one of his prime customers Hindustan Zinc Ltd. (HZL), a Vedanta Group company, who were seeking to completely overhaul transportation of zinc ore from their Agucha Mines (near Bhilwara in Rajasthan) to the smelter in Chanderiya (near Chittaurgarh) about 120 kms away. Thanks to higher production, there was more ore to be moved: from 2000 metric tones a day to 3000 metric tones a day and they wanted it all done more efficiently in terms of cost and time.
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than what other brands of 49-tonners were giving, was quite a boon! Add to that a lower acquisition cost and you really had a winner on your hands. Whats more, the lower un-laden weight of the vehicle made it a perfect fit for HZLs ore transportation needs. Not surprisingly, GVJ has bagged another HZL contract for the transportation of 250MT/day of semi-finished Zinc products form Chanderiya to Haridwar leading to a further requirement of 50 numbers of 49-tonners. No two guesses for the vehicle that Jain has opted for.

In a market situation where we often have to be satisfied with small benefits, to get fuel efficiency of almost 10 12% more than what other brands of 49-tonners were giving, was quite a boon!

The answer to this stiff challenge, Jain knew from his years of experience, lay in a breakthrough product. Even as his thoughts ran along those lines, he recalled the launch of Ashok Leylands new vehicle the 4921. In fact, the Ashok Leyland marketing team had met me even before their formal launch and had made a full-scale presentation highlighting the vehicles advantages and how it would definitely enhance operator viability, remembers Jain. Later, just a couple of calls to the market were enough to tell me that Leyland had a winner on their hands. So, I decided to take a closer look at the 4921. Jain obviously liked what he saw, because he at once decided to, jointly with Ashok Leyland, pitch the 4921 to HZL as the vehicle that could meet all their specific requirements. The pitch was successful. GVJ offered an initial lot of fifteen 4921 Tip Trailers to HZL.
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Ashok Leyland Annual Report 08

Technological Technological renewal at Ennore Renewal

cold test (a requirement for the futuristic EURO IV & V engines) as also reduced testing time, thanks to auto docking a first in the Indian commercial vehicle sector. The assembly has the flexibility to quickly accommodate model changes in line with market demand. In-process gauging and SPC interface with CPK output are part of quality built into the machines which are connected to a central server. Through MES (Manufacturing Execution System), all machines can be tracked and monitored real time, with web-based maintenance support from overseas OEMs.

Reflecting the techological renewal of the mother plant at Ennore are the modern shops for H engine machining and assembly.
The high sandwich roofing cools the inside by 3 to 4 C. Robots, gantries and automated guided vehicles (AGVs) as also automated electrified monorail system used in conjunction with RFID for pre-setting of tools and auto tool identification, eliminate fatigue-generating activities. The assembly allows in- process verification, leak test, provision for

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Ashok Leyland Annual Report 08

Why and why not

'Why' and 'why not'
The two questions that have led to human progress also propel Ashok Leyland employee teams to think up and implement improvement projects. In 2007, over 2,100 projects qualified for Improve, the annual Company-wide contest, now in its tenth year.
For brake pedal, the team's target was to reduce the 'travel' the extent of movement for brake to come into play. In other words, to make the brake pedal more responsive. They tried out the floor-mounted brake pedal as in passenger vehicles but fitting them would require costly changes in the front end Why?, the essence of curiosity, when combined with Why not?, the confidence to challenge the status quo, breaks new ground, often spurred by dormant learnings even from school days. For many years, a regular 'class room' for members of Zen Quality Circle at Hosur I - all colleagues from the MDV assembly and Pre Delivery Inspection (PDI) departments has been the nearby check post at the Karnataka-Tamil Nadu state border. There, they will stop by to chat with waiting truck drivers. Expert drivers themselves, they would also get to scrutinise and drive all models of trucks. One feedback that stuck in their subconscious was the extra clutch and brake pedal effort in Ashok Leyland vehicles. Armed with a digital pressometer, they measured the clutch pedal effort of competition vehicles. They set their task: reduce clutch pedal effort in Ashok Leyland vehicles by 20% - that will make them best in class. Their minds went back to the basic physics of lever and how the distance from the pivot determined the mechanical advantage of the system.
14 Brake panel: old (above) and new (below) arrangements

The air-conditioning plant supporting the engine shop at Ennore has always produced condensed water that would quietly flow down the gutter. Till one day, a couple of Ashok Leyland engineers stopped by the outflow pipe and asked: can we put the water to use? Of course, all waste water collected is directed to a water re-cycling plant that yields over one million litres every day for gardening. But then, here was pure water, some 1500 litres of it everyday a learning from school days: when evaporation and then condensation produced pure water drops at the tail of the round bottom flask. The rest was easy. The water quality was checked and, as anticipated, met the quality requirement for industrial use. It could replace the costly water, purified through reverse osmosis process, used to dilute coolants. Being engineers, they also created a low cost automation device to ensure unsupervised flow, storage and supply of the condensed water. This reduced consumption of reverse osmosis water, with annual savings of Rs 50,000. Given the unavoidable wastage of water in the reverse osmosis process, this also meant a saving of 300,000 litres of raw water, otherwise wasted in a year.

Followed study of other models in the market, including modifications made by the customer. It helped to have one team member from a trucking family in Sankagiri, a trucking centre with a population of over 30,000 trucks.

structure. That was when they had a close look at one of the Ashok Leyland ecomet trucks used for inter-unit material transfer. They found its clutch pedal the friendliest and the brake pedal very responsive. Eureka! But, soon it was clear that to fit the ecomet pedal assembly would require changes in the FES, involving high die cost. Experienced problem solvers, they found the way out in creating a new panel to mount the operating pedal assembly, which would be fitted onto the FES. This ability to question status quo has led to the switch over of the operating pedal assembly in all multi-axle vehicles and tippers across the Company from April 2007. Through re-design and material elimination, savings of Rs 314 per chassis has been achieved, for annual savings of Rs. 250 million across the Company. Not just that. The benefit of their work has been reaped by the drivers of some 75,000 trucks, taking away some 5kgs of effort during each of the hundred times they apply the clutch everyday. Also in the fail-safe braking, thanks to a significantly reduced brake pedal travel of six centimeters.

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Ashok Leyland Annual Report 08

Award
The rewards of our passion
Some accolades we won at home and abroad

Indian Manufacturing Excellence Award (IMEA) 2007

CV manufacturer of the year

Ashok Leylands 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. Vinod Dasari, COO, receives the award

International awards for Quality Circles

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.

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Ashok Leyland Annual Report 08

Partnerships forged
Partnerships for growth
opportunities offered by diversification and globalisation.
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 components and software such as instrument cluster applications, cockpit electronics and various control units for both commercial vehicles and passenger cars. R. Seshasayee, MD, Ashok Leyland and Christoph Maximilian Eisenhardt, CEO, Commercial Vehicles & After Market, Continental Corporation, Germany

During the year, Ashok Leyland entered into some significant partnerships, seizing growth

Carlos Ghosn, President and CEO, Nissan Motor Company and R Seshasayee, MD, Ashok Leyland exchange documents in the presence of (from L to R) Andy Palmer, Corporate Vice President, Nissan Motor Company; Gopichand Hinduja, President, Hinduja Group; Carlos Tavares, Executive Vice President, Nissan Motor Company; Ashok P Hinduja, Chairman, Hinduja Group (India); Dheeraj G Hinduja, Co-Chairman, Ashok Leyland and R J Shahaney, Chairman, Ashok Leyland MCA with Nissan Motor Company for LCV Partnership: Ashok Leyland and Nissan Motor Company signed a binding Master Co-operation Agreement (MCA) for the formation of three joint venture companies supporting the Light Commercial 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 manufacture High Pressure Die Casting (HPDC) aluminium products predominantly for the automotive and telecommunications sectors. The 50:50 JV will synergize Ashok Leylands experience and expertise in the automotive sector with Alteams know-how of HPDC and their insights in the telecommunications sector. The JV reflects the expansion of Ashok Leyland groups presence in the auto components sector to take advantage of the rapidly growing opportunities both in India and abroad. R Seshasayee, MD, with R Thyagarajan, Chairman, R Seshasayee, MD with Panu Routila, CEO, Alteams Group Shriram Group (left) and J K Rajagopal, Chief Executive, Transport Exchange (right). Shriram Transport Finance becomes a strategic partner in Ashley Transport Services: Ashok Leyland and Shriram Transport Finance Company, the largest asset financing NBFC in the country, entered into a strategic partnership in Ashley Transport Services Limited, which has been operating the unique Transport Exchange, a brand-neutral freight intermediation service. This strategic tie-up is another step in actualizing Ashok Leylands vision of providing a comprehensive suite of products and services in the transport value chain.

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Ashok Leyland Annual Report 08

Environment Environment and Safety and Safety

Ecologically sustainable growth is gaining significance and is increasingly becoming relevant to Ashok Leyland as the Company expands operations. Ashok Leyland is signatory to the CII code on Mission on Sustainable Growth. The various eco-sensitive initiatives of the past are now getting channelised under The Ten Natural Capital Commandments. These initiatives include: awareness creation, recycling, energy conservation, waste reduction/management and health and safety drive with local outreach programmes broadening the scope. 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 identify significant environmental issues and implement appropriate management programmes to control and improve them. It also allows the Company to address the mg / cubic meter environmental impact of activities, services, products and people. The Company continues to undertake internal education programmes to ensure that employees are aware of the steps they can take to improve their environments. While ISO 14001/2004 focuses on factory environment in general, OHSAS 18001/2007 - the most current in the series - addresses the interlink between workplace environment and its impact on employees and surroundings. All the manufacturing units of Ashok Leyland are in an which would complement ISO 14001/2004. mg / cubic meter advanced stage of preparation for OHSAS certification,
600 500 400 300 200 100 0 05-06 06-07 07-08 140 120 100 80 60 40 20 0 05-06 06-07 07-08 140 120

SO2 Emissions
Permissible Limit
mg / cubic meter

BOD Values
120 100 80 60 40 20 0 05-06 06-07 07-08

TSS Levels
120

Permissible Limit mg / cubic meter

Permissible Limit

100 80 60 40 20 0 05-06 06-07 07-08

mg / cubic meter

100 80 60 40 20 0 05-06 06-07 07-08

Period

Period

Period

NOX Emissions
Permissible Limit

Water Consumption Trend

250000 200000 300 250

COD Values
Permissible Limit

mg / cubic meter
05-06 06-07 07-08

Kilolitres

150000 100000 50000 0

200 150 100 50 0 05-06 06-07 07-08

Period

Period

Period

SPM Levels
Permissible Limit
100 90 80 70 60 50 40 30 20 10 0

Accident Statistics
20000000 15000000

Power Consumption Trend

Mandays lost / 1000 empl

Kwh

10000000 5000000 0

05-06

06-07

07-08

05-06

06-07

07-08

Period
20

Period

Period
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Ashok Leyland Annual Report 08

Corporate Corporate social responsibility social responsibility

Robotic painting system
For the painting of vehicle cabins, a new state-of-the-art paint line with a 7-axis robotic painting system has been installed at Ashok Leylands Hosur II Unit, with a capacity of 50,000 units per annum. With this system, along with the introduction of polyester paints in place of alkyd amino paints, the paint finish would be on par with passenger cars. The automated painting brings with it considerable saving in paint and other consumables, as also a drastic reduction in waste generation and load on sub-systems. At the end of it all, a cleaner environment. Better quality in terms of fine crystal structure in phosphating Reduced phosphate chemical consumption Minimised phosphate sludge generation Being a socially responsible and sensitive corporate citizen has always been part of business at Ashok Leyland. The effort has been to produce vehicles that are eco-friendly, pioneer the research and development of alternative fuels, provide comprehensive on- and off-road training to drivers, address the health concerns of the trucking community and reach out to the community through a number of small initiatives that have had far-reaching benefits for the Companys stake holders. Ashok Leylands CSR initiatives revolve around the welfare of employees and their families, the driver community and the immediate community around the units. In all CSR efforts, the Company partners with other individuals and institutions, including government agencies, local communities, not-for-profit and social organizations, and academic institutions which, while complementing the Companys strengths, helps it to leverage their expertise, reach and resources.
A self-help group at Hosur

Reaching out to employee families

In the last two years, Ashok Leyland has helped the spouses of some of its employees to set up self help groups; trained them in managing micro-credit and micro-enterprises; and linked them to local markets. To scale up and take the initiative forward, the Company has also started to help the SHGs to source job-work from local units the units that provide the SHG members with job-work also train them to acquire the necessary skills.

Sludge disposal
A natural by-product of the painting process, sludge disposal has always been a problem faced by the auto industry. At Ashok Leyland, various actions have been initiated over the years towards safe storage of sludge, ultimately leading to the construction of secured landfills within the campus. Not resting with landfill as the alternative, Ashok Leyland engineers pursued other means of disposal too. Since paint had a high calorific value, its use as a fuel was explored. The effort yielded positive results.

Water conservation through chemical change

In any automobile, the Cathodic Electro Deposition (CED) layer of paint acts as the major protective layer against corrosion. The process of depositing the layer on the substrate requires usage of huge quantity of water - almost 2000 litres/cab. Hence any reduction of water consumption is a welcome relief.

Employee Outreach
The Cement Division of Grasim Industries tried this as a supplement to coal for their cement kiln. Over a period of 18 months, with clearance from TNPCB, 193 tonnes of sludge was disposed.

Volunteerism
Ashok Leyland encourages employee volunteerism to provide employees an opportunity to look beyond the call of routine work, to enable them be part of the Companys social initiatives and to open up an avenue for their social spirit. The key movers of all outreach programmes in the Units, the volunteers, are involved in several CSR initiatives of the Company. Ashok Leyland also has payroll contribution to a worthy cause. Under this initiative, the Company channels employee contribution from their pay every month to help their desired cause one of the five social organisations working for the marginalised and the vulnerable - identified by the Company.

Disaster and crisis management

The first of its kind in the corporate world, Ashok Leyland has provided training in internationally-validated disaster and emergency management modules to over 100 of its volunteers from its manufacturing units. The volunteers are trained to manage disasters arising from geological disturbances such as earthquakes; natural calamities such as floods; fire hazards, industrial and road accidents; and man-made hazards such as pollution. This core group, which is to train others in their respective units and also people in the adjoining community, are now certified and empanelled by the Red Cross to be sent out for help during national emergencies and calamities.
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Recovering cutting oil in steel chips for recycling

A time-bound chemical powder (NIPAFIN ZS) was being used for replenishment in the surface activation tank. This meant discarding 1260 kl de-mineralized water per annum. To reduce water consumption, an alternate liquid chemical (PL-X) has been introduced in place of ZS, resulting in reduction of 180 kl discarded water per annum. Benefits reaped are: Water conservation to the tune of 1080 kl per annum (Rs 0.57 million)
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Production of gearbox components involves machining operations. The chips generated during machining carry considerable amount of cutting oil even after the operation. After trying out various options for the recovery of cutting oil from the chips, three chip wringers were installed at the Bhandara unit. As a result of which, huge amount of oil is recovered from the chips and re-used in cutting operations. The recovered oil is also directly used to top up the cutting oil sumps of the machines.

Ashok Leyland Annual Report 08

A crisis management workshop for employees

Computer training at Hosur

Affirmative Action in Ashok Leyland in Affirmative Action Ashok Leyland

Community Outreach
Ashok Leyland is involved in a number of development initiatives such as construction and repair of public buildings, drilling public bore wells, erecting bus shelters and putting up streetlights around its manufacturing facilities. These development initiatives are supported by a Community Development Scheme contributed and managed by representatives from the Management and the Union. The manufacturing units have conducted over 100 medical, blood donation and HIV awareness camps benefiting thousands of people in the immediate community. Career guidance for high school students, skill development for unemployed youth and vocational training for women of Self Help Groups around the manufacturing units have been organised with help from specialists in the respective fields. Computer training is being provided to economically marginalised students in Hosur at Ashok Leylands Management Development Centre by the Companys resource people. The students, identified and selected by Ashok Leyland, are put through a carefully-designed 4-module session and certified on successful completion of the course. A batch of 25 students is trained every month and the programme aims at covering 200 students every year. Ashok Leylands FunBus for free use by differently-abled children and children of orphanages, corporation primary schools and other underprivileged groups based in Chennai continued its successful run last year too.
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Driver Outreach
With a view to addressing the wide-ranging needs of the driver community, Ashok Leyland trains drivers comprehensively on- and off-the-road in its driver training schools in Namakkal (Tamil Nadu) and Burari (Delhi). Ashok Leyland has also signed an MoU with the Haryana Government to set up a driver training school in the State. CSR is a way of life at the driver training centres. For example, Ashok Leyland has rented a small two-room space for the Alcoholics Anonymous group to conduct alcohol rehabilitation programme for truck drivers and their families a gap identified by Ashok Leyland to complete the comprehensiveness of driver outreach in Namakkal. Awareness programme on HIV prevention and management is being conducted for convoy drivers at the manufacturing units on a continuing basis. A holistic health outreach programme for truck drivers, Arogya, was rolled out this year. Implemented along with a dealer in Andhra Pradesh, the CSR initiative began its first component of Arogya by conducting comprehensive health outreach camps for drivers in four major trucking centres in Andhra Pradesh. While the first component would continue, the second component of Arogya setting up a permanent health outreach centre within the dealer service centre is in an advanced stage of formulation.

Recognising the importance of inclusive growth, Ashok Leyland pursues affirmative action in the workplace and has voluntarily introduced a code of conduct for its employees. A quick analysis of caste/community-wise data of Ashok Leylands employees (caste/community information is collected discreetly to understand the situation and to put in place an Affirmative Action Plan) shows that there already exists a fair degree of social diversity among the workforce. Of the total employees in Ashok Leylands units as on March 31, 2008, 81.55% are from the SC/ST, MBC, BC and other socially marginalised communities.

With a focus on inclusive growth some of the concrete steps for affirmative action taken by Ashok Leyland this year include the following: Employability: Partnering with PSG College, Coimbatore, to train SC/ST/BC/MBC students in post graduate diploma. Training: Providing driver training to SC/ST/MBC/BC individuals in the Driver Training Schools in Namakkal (Tamil Nadu) and Burari (Delhi); and training SC/ST/BC/MBC individuals in the Service Training Centre in Chennai. Apprenticeship: Taking in at least 70 per cent of youth from the SC/ST/BC/MBC communities into our Apprenticeship Programme in our manufacturing units.

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Highlights of Highlights of performance perfomance

The Companys passion for engineering has helped it evolve into an entity that has seen consistent growth across the 60 years of its existence.

Ashok Leyland Annual Report 08

Vehicles (numbers)
85000

Sales Value (Rs. mn)

90000

Profit After Tax (Rs. mn)

5000

Capital Employed (Rs. mn)

35000

80000

80000

4500

31500

4000 70000 70000

28000

3500 60000 60000

24500

3000 50000 50000

21000

2500 40000 40000 2000

17500

14000

30000

30000 1500 10500

20000

20000 1000 7000

10000

10000

500

3500

0 2008 1949 1959 1969 1979 1989 1999

0 1949 1960 1970 1980 1990 2000 2008

0 1949 1960 1970 1980 1990 2000 2008

0
1949 1959 1969 1979 1989 1999

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2008
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Ashok Leyland Annual Report 08

60 years of passion for engineering

1948

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

1950

Assembly and distribution of Leyland commercial vehicles started

1952

The Company submitted a proposal for progressive manufacture of commercial vehicles in India.

1954

After obtaining license for manufacturing 1000 Comet range of commercial vehicles, assembly of Austin cars ceased, to give way to the production of 312 Comet vehicles.

1955

With equity participation from Leyland Motors Ltd,UK, the Company was renamed Ashok Leyland Limited.

Ashok Leyland Annual Report 08

1966

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

ASHOK

LEYLAND

1968

Introduced power steering, another first in commercial vehicles.

1972 1967
Launched double-decker Titan bus.

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

ASHOK
TRUCKS BUSES

LEYLAND

1969

1976
The Company achieved 95% indigenisation level.

Viking, the first ever bus with an alternator, was introduced. It was also unique for the front overhang that enabled additional seats and front entry for the first time in a bus.

1977

Cheetah - a bus with higher carrying capacity - was launched.

1970

1979
Hippo 6x4 Tractor was specially developed for the Indian Army. 1000 vehicles were supplied.

Tusker, India's first 13 tonner with a higher capacity and a 125 hp engine and Taurus, India's first three-axled vehicle were introduced. This followed advocacy for a third axle to increase load and reduce road damage.

1979

Leopard - the first rear-engine bus in the country - was introduced.

Ashok Leyland Annual Report 08

1987

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

1980

New manufacturing unit at Hosur started operations.

1991

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

1982

Plants in Alwar and Bhandara started operations.

1982

Vestibule bus introduced.

1982

Lanka Ashok Leyland was set up as a joint venture with the Government of Sri Lanka.

1992

The Company became the first automotive manufacturer in India to receive the ISO 9002 Certification, followed by the ISO 9001 Certification in 1994.

1995

A residential Management Development Centre set up at Hosur

Ashok Leyland Annual Report 08

1996

A driver training centre was set up at Namakkal, the trucking heartland of Tamil Nadu. Since then, more than 200,000 drivers have been trained.

2001

The Company received ISO 14001 Certification for Environmental Management System first time for a commercial vehicle manufacturer in India.

2002

Hybrid Electric Vehicle was launched as a concept at Auto Expo 2002.

1997

Stallion, the all terrain logistic vehicle, was inducted by the Indian Army. Till date, more than 50,000 Stallions have joined the Armed Forces, making Ashok Leyland the largest supplier of logistics vehicles to the Army.

2004

Megabus, the 15m CNG vestibule bus was launched.

2004

Driver Training Institute set up in Burari as a joint venture with Government of Delhi.

1997

Thanks to pioneering research in alternative fuel technology, ahead of regulations, Indias first CNG-powered bus joined the BEST, Mumbai. Since then, more than 2000 CNG buses have joined the fleet of the Delhi Transport Corporation.

1998-99

Ashok Leyland Vikings were the choice in the historic cross border services between Delhi-Lahore and Calcutta-Dhaka.

2004

An export order for 3322 trucks for the United Nations Oil for Food programme in Iraq was executed - the largest ever in Indian commercial vehicle industry.

2005

A Stag bus was chosen for the historic Srinagar Muzaffarabad service.

2001

The cab panel press shop started operations in Hosur.

2001

A warehouse was established at Sharjah to support the Middle East and neighbouring markets.

2006

The R&D complex near Chennai got a state-of-the-art design office to seat 400 engineers.

2006

Supply of Topchi 4x4 gun tow vehicle to the Indian Army began.

Ashok Leyland Annual Report 08

2006 2006

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

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

2006

The global footprint of the Company was enlarged with the acquisition of the truck business unit of Prague-based AVIA.

2006

Luxura, a 12m luxury bus to redefine inter-city travel, was launched.

Photo courtesy: Outlook India.

2007 2007 2007

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

4921 TT, a 6x4 tractor with a gross vehicle weight of 49 ton (the highest weight class of commercial vehicle), was launched.

Indias first multi-point fuel injection (MPFI) CNG engine for buses developed.