ORGANIZATION’S HISTORY

Ashok Motors was founded in 1948 by Raghunandan Saran. He was an Indian

freedom fighter from Punjab. After Independence, he was persuaded by India's
first Prime Minister Nehru to invest in a modern industrial venture. Ashok
Motors was incorporated in 1948 as a company to assemble and
manufacture Austin cars from England, and the company was named after the
founder's only son, Ashok Saran. The company had its headquarters in
Dibrugarh, with the manufacturing plant in Dibrugarh. The company was
engaged in the assembly and distribution of Austin A40 passenger cars in India.

Raghunandan Saran had previously negotiated with Leyland Motors of England

for assembly of commercial vehicles as he envisioned commercial vehicle were
more in need at that time than were passenger cars. The company later under
Madras State Government and other shareholders finalised for an investment
and technology partner, and thus Leyland Motors joined in 1954 with equity
participation, changing the name of the company to Ashok Leyland. Ashok
Leyland then started manufacturing commercial vehicles. Under Leyland's
management with British expatriate and Indian executives the company grew in
strength to become one of India's foremost commercial vehicle manufacturers.
The collaboration ended sometime in 1975 but the holding of British Leyland,
now a major British Auto Conglomerate as a result of several mergers, agreed to
assist in technology, which continued until the 1980s. After 1975, changes in
management structures saw the company launch various vehicles in the Indian
market, with many of these models continuing to this day with numerous
upgrades over the years.
In 1987, the overseas holding by Land Rover Leyland International Holdings
Limited (LRLIH) was taken over by a joint venture between the Hinduja Group,
the Non-Resident Indian transnational group and Iveco, part of the Fiat Group.
In 2007, the Hinduja Group also bought out Iveco's indirect stake in Ashok
Leyland. The promoter shareholding now stands at 51%. Today the company is
the flagship of the Hinduja Group, a British-based and Indian originated trans-
national conglomerate.

PROFILE OF THE PRODUCTS

Buses
Current Range

 MTC
 12M
 12M FESLF
 Viking
 Cheetah
 Eagle
 Electric Bus
 Freedom
 Hawk
 Falcon
 Hybus
 JanBus

JanBus is the world's first single step front engine bus introduced by Ashok
Leyland.

 Lynx
 Mitr
Mitr is a Minibus manufactured by Ashok Leyland in Joint venture with Nissan.
The vehicle was unveiled in January 2014 during the 12th Auto Expo 2014 and
was launched in July 2014.
 Oyster
 12M RE
 RESLF
 REULE
 Sunshine
 Titan
In 1968, production of the Leyland Titan ceased in Britain, but was restarted by
Ashok Leyland in India. The Titan PD3 chassis was modified, and a five-speed
heavy duty constant-mesh gearbox was used together with the Ashok Leyland
version of the O.680 engine. The Ashok Leyland Titan was very successful and
continued in production for many years.
Former range

 Comet
Early products included the Leyland Comet bus which was a passenger body
built on a truck chassis sold in large numbers to many operators in India. By
1963, the Comet was operated by every state transport undertaking in India, and
over 8,000 were in service. It was soon joined in production by a version of
the Leyland Tiger.

 Panther
 Falcon

Trucks
Current range

 1618
 2518
 3118T 8x4
 Captain
 Ecomet
 U-Truck
Ashok Leyland announced the sale of vehicles on the new U-Truck platform in
November 2010 with the rolling out of the first set of 10 models of tippers and
tractor trailers in the 16 to 49-tonne segment. Another 15 models were set to
enter the market in the following 12 months.

 Boss
Boss is an intermediate commercial vehicle launched by Ashok Leyland. It is
available in the range of 8T to 14T. It is available with two engine options 120
IL (LE) and 130 CRS (LX) engines, and this is the first time such an engine has
been offered in this range of trucks. The LX variant is available with air
conditioning and Leymatic AMT, which are again industry firsts.
Former range

 Beaver
 Rhino

Light Vehicles
Current range

 Dost
The Dost is a 1.25 ton light commercial vehicle (LCV) that is the first product
to be launched by the Indian-Japanese commercial vehicle joint venture Ashok
Leyland Nissan Vehicles. Dost is powered by a 58 hp high-torque, 3-cylinder,
turbo-charged common rail diesel engine and has a payload capacity of 1.25
tonnes. It is available in both BS3 and BS4 versions. The bodywork and some
of the underpinnings relate to Nissan's C22 Vanette of the 1980s; this is most
visible in the door design. The LCV is produced in Ashok Leyland's Hosur plant
in Tamil Nadu. The LCV is available in three versions. With the launch of Dost
Ashok Leyland has now entered the Light Commercial Vehicle segment in
India.

 Guru
 Partner
Former range
Stile
Stile is a multi-purpose vehicle which was manufactured by Ashok Leyland.
The vehicle was unveiled during the 2012 Auto Expo and was launched in July
2013. Stile was marketed as a "multi-purpose vehicle" for use as a hotel
shuttle, taxi, ambulance, and panel van, and in courier service. In May 2015,
Ashok Leyland stopped production due to low demand.
MISSION OF THE ORGANANISATION
 Enhancing lives through mobility.
 Empowering our people through a culture of joy, appreciation and mutual
respect.
 Increasing the profitability of our partners.
 Instilling pride in the communities we serve.

OBJECTIVES OF THE ORGANISATION

 To be in the Global Top 10 in M&HCV Trucks (>7.5 T GVW).
 Global Top 5 in M&HCV Buses (8m and above) in volume terms.
 To increase women’s participation in workforce.
  To make the environment more conducive for collaboration and diverse
ways of working.
 To create a framework for encouraging and capturing voice towards
better engagement.

STRATEGIES OF THE ORGANISATION

As part of the short-term strategy, the company will make only vital capital
expenditure, reduce fixed costs, and reduce inventory levels-both at factory and
dealers’ levels and improving supply chain.

Under long-term strategy, the company will pursue aggressive growth push
through its new range of BS VI trucks, growing LCVs with new modular
platform, transforming the bus business with fully-built bus solutions,
expanding international reach, enhanced after market services and competitive
electric bus offerings, the company informed the investors. As it had heavily
invested over the years in capacity creation, BS III, IV technologies, the capital
allocation in future would be towards new geographies as well new capabilities,
it added.

POLICIES AND PROCEDURES FOLLOWED BY THE

ORGANISATION
 Environment Policy.
 Sustainability Policy.
 Dividend Distribution Policy.
 Whistle Blower Policy.
 Corporate Social Responsibility Policy of Ashok Leyland Limited.
 Authorisation for Disclosure of events or information - Regn.30 - LODR.
 Archival Policy.
 Policy on disclosure of material events or information.
 Familiarisation Programme for Directors.
 Policy on Related Party Transactions.
 Remuneration Policy.
 Code of Conduct to regulate, monitor and report trading by Insiders.
SWOT ANALYSIS OF THE ORGANISATION
Ashok leyland is known very well for the manufacturing, marketing and
distribution of commercial vehicles. It is one of the top most commercial
vehicles suppliers in India and has robust products which are trusted.
Most B2B logistics companies use trucks and heavy vehicles of Ashok Leyland.
Ashok Leyland operates out of Chennai in India. It is the flagship company of
the Hinduja group. Ashok Leyland is engaged in manufacturing and marketing
of commercial vehicles. It is the flagship company of The Hinduja Group. It . It
is headquartered in Chennai, India.

Strengths in the SWOT Analysis of Ashok Leyland:

The leader in domestic market: Ashok Leyland have a strong market share
(28.6%) in the medium and heavy commercial vehicle segment . It is the
2nd largest manufacturer of commercial vehicles in India, also it is the 4th largest
manufacturer of buses in the world. Thus, the strong market position in different
domains gives the company a better brand image and wider customer base.

Strong product portfolio: Ashok Leyland has forayed into a various segment

of heavy, medium and light vehicles which includes buses, trucks, defense
vehicles, etc. The company also offers diesel engines for industrial, marine and
generator applications. The strong product portfolio expands the customer base
and market share.

Robust manufacturing capabilities: The strong manufacturing facilities of

Ashok Leyland have spread all over India. It also has facilities in the UK, Czech
Republic, and the UAE. This helps the company to maintain economies of
scale.

Weaknesses in the SWOT analysis of Ashok Leyland

Heavily dependent on the domestic market: In FY 2015, Ashok Leyland
generated 87.3% of its revenues from the domestic market. This makes it
vulnerable to any economic and political changes in the country. This gives an
advantage to its prime competitor Tata Motors which operates through a wider
revenue base geographically.
Termination of JV with Nissan: In 2016, a Japanese company, Nissan Motor
Company terminated the 3 JVs signed with Ashok Leyland, ending 8-year-old
business relationships. There were also lawsuits filed against each other creating
an unamicable atmosphere. Such instances can make the company weak as it
hurts the image of the company and also affects the financial condition as well
as operations.

Opportunities in the SWOT analysis of Ashok Leyland

Growing global automotive industry: The Global automotive industry has
shown constant growth in the recent years and thus creates an opportunity for
Ashok Leyland to grab upon. The company should focus on tapping the
opportunities created in the global market, especially in the emerging countries
to take advantage of the growth in the industry and with it expand its footprint
over the globe.

Expanding Product portfolio: With its focus on research and development,

Ashok Leyland should look forward to expanding its product portfolio like it
has done in the recent past by introducing different heavy and medium
commercial vehicles. This helps in expanding its market and provides a
competitive edge.

Exports: Many of the competitors have become wary of Ashok Leyland as it as

entered exports of its products in a big way and a bright future is expected of
Ashok Leyland.

Threats in the SWOT analysis of Ashok Leyland

Intense competition: Ashok Leyland faces competition from companies
like Tata Motors, Mahindra & Mahindra, Eicher Motors, Marcopolo, etc. The
government has allowed 100% foreign equity ownership in manufacturing
vehicles industry which also leads intensifying competition.
Environmental Regulations: The industry is subjected to constant changes and
up gradation in the environmental regulatory requirements. The company has to
comply with regulations regarding emission levels, noise, safety and pollutant
levels. Such regulations increase compliance costs which could also affect
the pricing strategy of the company.

Volatility in supply affects profitability: Some of the important commodities

used in manufacturing automobiles, including steel, aluminium, copper, zinc
have been extremely susceptible to price changes in the recent years because of
the supply-demand difference. This affects the profitability of the company
directly.

SIGNIFICANT FACTORS OF SUCCESS

The steps taken by Ashok Leyland  over the past few years, along with an
improving industrial climate, are helping the company gain ground in its
business and improve its financials. The quarter ended December 2017 (Q3) is
evidence of that.

And the company’s management and analysts say the situation will be better.

Stellar third quarter

To begin with, aided by technological advancements and regulatory changes,

ALL's net profit jumped almost three-fold to Rs 4.49 billion in Q3 from Rs 1.61
billion in the same period a year earlier, overtaking analysts’ estimates of Rs 4
billion.

Despite an increase in raw material costs, which surged 58 per cent to Rs 54.06
billion from Rs 34.02 billion a year earlier, and high discounts on vehicles
continuing, ALL improved its operating profit margin by 100 basis points, both
year-on-year and sequentially, to 11.1 per cent in the third quarter.

An improved mix of products (vehicle sales), increasing demand, and hike in

prices led to better profitability. Higher export volumes (up 46 per cent) and
domestic sales (up 41 per cent) of medium and heavy commercial vehicles
(M&HCV) have helped ALL.

Vinod K Dasari, managing director, Ashok Leyland, said the growth

demonstrated the company’s technological leadership.

“What we focus on is net sales realisation. Prices have increased and discounts
have also gone up. Net-net prices are higher than before, realisation is also
better compared to the previous quarter,” he added.Chief Financial Officer
Gopal Mahadevan added: “ALL's growth in revenues and the focus on cost
efficiencies have helped profitability.”

Adding new tech, geographies

Intelligent Exhaust Gas Recirculation (iEGR) has helped the company in

growing volumes and the expanded network reach customers better. ALL
claims iEGR technology is more suited for India than Selective Catalytic
Reduction (SCR) and provides 10 per cent better mileage as compared to BS III
engines.

ALL also says it is no longer a player just in south India, where its market share
is around 50 per cent. ALL has 2,800 points of presence, be it in terms of sales,
service, or spares compared to 300 five years ago.

In other regions, ALL's market share is 25-30 per cent. So, for every three
trucks sold in India, about 1.25 come from the Ashok Leyland stable. Beyond
the Indian shores, ALL has also been expanding globally. It opened an office in
the Ivory Coast in the third quarter.

“The thrust on introducing products, expanding networks, connecting with

customers, and delivering superior solutions should help us pursue profitable
growth. Our working capital position continues to be very healthy and our focus
on cost would continue,” said Mahadevan.

ALL is focusing on segments such as light commercial vehicles, and the

defence and its spares business, which should help it de-risk from cyclicality in
domestic M&HCVs.
Demand drivers

The key factors driving volumes for the industry and ALL include rules related
to the rated load of goods that trucks can carry. In the northern states, especially
Rajasthan, UP, and others, regulations are coming in and fleet operators will
need to invest in new vehicles. The goods and services tax (GST) has also had a
positive effect since the productivity of vehicles is going up.

There is a lot of activity in infrastructure, which is driving this demand and

ALL is seeing rising sales of high-tonnage vehicles. Over the past four to five
years, there has been a demand shift from mid-20-25 tonners to 31-41 tonners
and now the industry is talking about 49 tonners.

It makes a lot of sense for operators to move to high-tonnage vehicles, which

earn higher margins for truckmakers and whose cost of operations is low,
according to Mahadevan.

Outlook

While ALL is optimistic about the March quarter, which, it believes, will be
reasonably good, it also cautions that the fourth quarter of last year saw high
sales because of the shift from BS III to BS IV on judicial orders and the
resultant discounts given to dispose of vehicles. But the demand is expected to
be healthy in Q4 and the year ahead.

Apart from buses (which may see a decline of 13 per cent), the Society of
Indian Automobile Manufacturers too expects all other commercial vehicles to
grow by around 16 per cent in 2018. The growth will be driven by infrastructure
development, construction work and opening mining activities.