A

PROJECT REPORT ON
BUSINESS EXPOSURE'
IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE
DEGREE
OF
BACHELOR OF BUSINESS ADMINISTRATION
SUBMITTED BY,
ANIRUDHA SAUDAGAR CHAVAN
ROLL NO. 4408
BBA IV SEM
UNDER THE GUIDANCE OF
PROF. VISHAL AKETKURE
PROF. HARSHA MEHTA
SUBMITTED TO,
SAVITRIBAI PHULE PUNE UNIVERSITY, PUNE.
HARIBHAL.V. DESAI COLLEGE,
PUNE-411002
ACADEMIC YEAR - 2022-2023

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 ACKNOWLEDGEMENT
I Mis. ANIRUDHA SAUDAGAR CHAVAN is thankful to PULGAM AND PROF.
HARSHA MEHTA, for the my internal guide, PROF. VISHAL AKETKURE
valuable guidance and kind help during completion of my industrial project. I feel
very grateful to express my sincere gratitude to HOD PROF. SWAPNIL SANGORE
and PROF. SANTOSH ADSUL, My family members and my friends also.

I am also thankful to my teachers for allowing me provide all facilities.

ANIRUDHA SAUDAGAR CHAVAN

SYBBA
Roll No. 4408

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 *INDEX*
SR Name of Date Pg Remark
No. Company No.
1
Mapro Food Private Limited

2
BALAJI WAFERS PVT. LTD.

3
Katraj Dairy

4
Ashok Leyland

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 COMPANY PROFILE

Name:-Mapro Food Private Limited.

Address:- 122, Shendurjane Wai-Surur Road,Wai 412 [Link].

Satara,Maharashtra

Head Office:- Panchgani-Mahabaleswar

Taluka: - Tehsil.
District:- Pune(India).
Year of Establish:-1959
Main Product:- jams, jellies, crushes, syrups, etc
Form of Organization:-Private Limited
Size of Unit:-Large Scale Industry
Directors:-1. Mayur Jaykumar Vora
[Link] Mayur Vora.

Total Area:-1.25,000 Sq.m

Bankers:- 1. Corporation Bank
2. Kotak Mahindra Bank

Phone No.:-(0281) 2783755

Fax: (0281) 2783747

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 Mapro Food Private Limited
Manufacturing facilities are Certified ISO 9001:2000 and HACCP by [Link]
in 1959, the Company had its humble beginnings in the hill-town of Panchgani,
near Mahabaleswar, when a businessman named Kishore Vora a pharmacist by
profession, decided to make some strawberry jam. He then went on to develop
innovative products such as jelly sweets. fruit cubes with fruit juice and rose
syrups with rose petals - all for the first time in country. Today, his 'hobby' has
borne fruit in the shape of Mapro, one of the most modern, hygienic, quality-
focussed fruit product manufacturing units in India. His vision has been taken
forward, thereby transforming the region around Mahabaleshwar and Panchgani,
the erstwhile sleepy hill stations of Maharashtra, into a flourishing fruit
processing [Link] Company has expanded capacity to now produce 30000MT
of processed frozen foods p. A. It is setting up a Frozen and Fresh Food
Distribution Chain in Indian Metros to service the fast growing modern Organised
Retail Supermarkets being set up in [Link] Food Private Limited is a fruit
processing company located in Panchgani, Western India. Built up in 1960s by
Kishore Vora, it has already become the 2nd largest producer of processed fruit
products.
Company Name: Mapro Food Private Limited
Estimated Annual Sales (USD): USSS Million - US$10 Million
Corporate Status: Corporation/Limited Liability Company
Year Established:1990
Legal Representative/CEO/Business Owner: Mayur Vora
Website:
[Link]
Employees: 501-1000 People
Main markets: Southeast Asia
Business Type: Manufacturer

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Product/Service: Fruit Jam, Frozen Pulp, Fruit Concentrate, Fruit Juice
Address: 122, Shendurjane, Wai-Surur Road, Wai 412 803 Dist. Satara,
Maharashtra, [Link] ID: info@[Link]
Mapro was founded in 1959. the Company had its humble beginnings in the hill-
town of Panchgani, near Mahabaleswar, when a businessman named Kishore
Vora a pharmacist by profession, decided to make some strawberry jam. He then
went on to develop innovative products such as jelly sweets, fruit cubes with fruit
juice and rose syrups with rose petals - all for the first time in country. Today, his
"hobby' has borne fruit in the shape of Mapro, one of the most modern, hygienic,
quality-focussed fruit product manufacturing units in India. His vision has been
taken forward. thereby transforming the region around Mahabaleshwar and
Panchgani, the erstwhile sleepy hill stations of Maharashtra, into a flourishing
fruit processing [Link] Foods Private Ltd. is a fruit processing company,
which is situated at Panchgani (near Mahabaleshwar) a panoramic and beautiful
hill station of western India. Panchgani is 100kms from Pune and 250 kms from
Mumbai and is just off the Golden Quadrilateral. Panchgani was established by
the British for the education of their offsprings, resulting into a hub of schools. It
is known for its famous schools. This beautiful hill station of India possesses the
health, housing and other amenities and attracts more than a million visitors
every year. Mapro is in the fruit processing business over more than forty years
and it is known for quality and innovation in the [Link] Brand Mapro is a
well-recognized brand in India. The company has shown organic growth over the
last four decades representing sound financials with sustained profitability. The
company was founded by visionary Shri Kishore Vora, a pharmacist, and at
present is headed by Shri Mayur [Link] who is the Managing director of the
Company. Shri Mayur [Link], an alumnus of IIMB, is Heading the Organization for
last 20 years and has enhanced the Vision of Kishore Vora by transforming
Mahabaleshwar/Panchgani, the scenic hill station of Maharashtra, into Fruit
processing zone of the Nation. Mapro Foods Private Limited is the flat
organization where management works along with their technical and sales
functionaries to achieve the vision and mission of MFPL...
Products

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Mapro has a range of nutritive, lip-smacking products. Mapro is a Manufacturer
and Exporters of Jams. Squashes, Sherbats. Fruity Sweets, Jelly Sweets and
Confectionery Mapro is a leading innovator of processed fruit products in western
India for the last 50 years. Their products include fruit based concentrates, jam
and preserves, ready-to-drink fruit drinks, and fruit jellies and confectionery. We
revitalized the brand and designed the package graphics for the range of
concentrates and drinks.

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 Syrups

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 Squashes are available in the packing of 700 ml (12 pet bottles).Syrups: Syrups
have a number of applications such as to make refreshing soft drinks in chilled
water, Soda water and in milk for milk shakes and add a taste to Faloodas and
Shahi Lassi and Mock tails. Syrup is also used in preparing Ice creams, as dessert
topping and to give a taste to ice lollies and Slush's. It uses the same indegrients
as the squashes. The various syrups available are:

Crushes: Crushes gives a refreshing and nourishing drink when prepared in chilled
water and Soda water. Kokum syrup is also used in Ice Lollies and in the
preparation of slush's. Mapro Foods uses sugar, water, citric acid, pectin and the
respective fruit juice or pulp. The various Mapro Crushes are listed in the table
below.

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 Mapro Crushes are available in 700 ml (12 pet bottles), 1000 ml (12 pet bottles)
and 5000 ml (12 pet boules),
Manufacturing Operations
As we mentioned above the company produces jams, confectioneries, crushes,
squashes, jellies, sweets, toppings and many more. So basically they have three
sections where there are ranges of products produced. The sections are Liquid
Section, Jam Section and Falero Section.

Squashes Under Liquid Section, syrups (Rose, Khus, Thandai, Pineapple.

Strawberry. Kesar and Mahakool), crushes (Strawberry. Litchi Kiwi. Mango, Kokum
and Pineapple) and squashes (Orange. Lemon. Lemon Barley Water. Strawberry.
Lime Juice Cordial. Lemon Ginger, Strawberry Cordial, and Pineapple cordial) are
manufactured. In one day there are 8 lots are manufactured. As manufacturing of
liquid section is a cold process, so, normal temperature is to be maintained. There
is just one working shift inthis [Link] Under Jam Section, there are a variety
of flavours of jams that produced. These flavours are mango, pineapple,
strawberry. orange marmalade, raspberry, mix fruit, ete. There are more than 30
flavours of jams. The production capacity is 10-14 tonnes. The temperature in this
section is very high as the boiling process is done at more than 95°C. There is just
one working shift in this section.
Under Falero Section, the fruity sweet with taste of pure jam is produced. This is
the product which earns more than 50% of the profit. The Faleros have a

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monopoly as they are produced by Mapro only. It is one of leading product of
Mapro as the Rose Syrup. The production capacity in this section is about 18
metric tonnes. It has flavours like Strawberry, Raw Mango, and Alphas. In future
Litchi and Guava flavours will also be available in market. The Mazana chocolates
also come under this section. Production of Falero is critical and a temperature of
22°C is maintained for its production. The working hours are 24 X 7 2 shifts Faler
the i.e..
2. Production Process
We are just showing the production process of jams and jellies just to understand
how the company works in this technical [Link] Materials: Jams and jellies are
made from a variety of fruits, either singly or in combination. Most of the fruits
are harvested in the fall. The level of ripeness varies. Pears, peaches, apricots,
strawberries, and raspberries gel best if picked slightly under ripe. Plums and
cherries are best if picked when just ripe. The fruit is purchased from farmers.
Most jam and jelly producers develop close relationships with their growers in
order to ensure quality. The production plants are built close to the fruit farms so
that the time elapsed between harvest and preparation is between 12-24
[Link] Manufacturing Process: The ingredients must be added in carefully
measured amounts. Ideally, they should be combined in the following manner.
1% pectin, 65% sugar, and an acid concentration of pH 3.1. Too much pectin will
make the spread too hard; too much sugar will make it too sticky.

Inspection: When the fruit arrives at the plant, it is inspected for quality, using
colour. ripeness, and taste as guides. Fruit that passes inspection is loaded into a
funnel-shaped hopper that carries the fruit into pipes for cleaning and crushing.

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Cleaning:Crushing and Chopping: As the fruit travels through the pipes, a gentle
water spray clears away surface dirt. Depending on whether the finished product
is to be jam or jelly, paddles push the fruit and or just its juice through small
holes, leaving stems and any other excess debris behind. Some fruits, such as
citrus and apples may be manually peeled, cored, sheed and diced. Cherries may
be soaked and then pitted before being crushed.

Pasteurizing the Fruit: The fruit and/or juice continue through another set of
pipes to cooking vats. Here, it is heated to just below the boiling point (212° F
[100° C) and then immediately chilled to just below freezing (32 F [0° C]). This
process, pasteurization. prevents spoilage. For jelly, the pulp is forced through
another set of small openings that holds back seeds and skin. It will often then be
passed through a dejuicer or filter. The juice or fruit is transferred to large
refrigerated tanks and then pumped to cooking kettles as [Link] the
jam and jelly: Premeasured amounts of fruit and/or juice, sugar, and pectin are
blended in industrial cooking kettles. The mixtures are usually cooked and cooled
three times. If additional flavourings are to be included, they are added at this
point. When the mixture reaches the predetermined thickness and sweetness, it
is pumped to filling machines.

Filling the jars: Presterilized jars move along a conveyer belt as spouts
positioned above pour premeasured amounts of jam or jelly into them. When the
fruit arrives at the plant, it is inspected for quality, using colour, ripeness, and
taste as guides. Fruit that passes inspection is cleaned, crushed, and pasteurized.
Next, the premeasured mixture is cooked with added sugar and pectin until it
reaches the appropriate thickness and taste. Then it is vacuum-packed in jars and
labelled. Metal caps are then vacuumed sealed on top. The process of filling the
jars and vacuum packing those forces all of the air out of the jars further insuring
the sterility of the product.

Labelling and Packaging: The sealed jars are conveyed to a machine that
affixes pre- printed labels. According to law, these labels must list truthful and
specific information about the contents. The jars are then packed into cartons for
shipment. Depending on the size of the producer's operation, labelling and
packaging is either achieved mechanically or manually.

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 The Process of Preparing Jam

CUSTOMERS AND COMPETITORS

Customers: Mapro Foods Pvt. Ltd has customers from a wide range of people.
Mostly the customers of the company are children as the products of Mapro are
targeted for this group only i.e. Mapro produces chocolates and jellies and jams
and many more which is mostly liked by the children only. But this doesn't mean
that other age groups are not covered.

Competitors: Mapro Foods Pvt. Ltd is in food business which is highly and
rapidly growing business & has few competitors also. Some of them are listed
below:

Haldiram: Manufactures Syrups & exports of the syrups have increased by 20%
since 2003 touching 18,000 bottles in 2005.

Kissan: In jams. Mapro Foods Pvt. Ltd is close second to Kissan in market share.
Mala's: It manufactures jam, crush, squash, cordials, syrups which is same as the
manufacturing of Mapro Foods Pvt Ltd.

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Manama: Their range of products consists of cordials, syrups, fruit and chocolate
dessert toppings.

OBJECTIVE OF THE PROJECT

The project is prepared to fulfil various objectives. The objective to prepare this
project is:
1. For better understanding of the working of the food industry.
2. To make the students understand the importance of quality and hygiene.
3. To understand how the firm works in a real world.
Mapro's portfolio of products provides a high quotient of natural fruit in the form
of Jams, Fruit bars and chews, Syrups, Crushes, Squashes, and Dessert Toppings.
Its range of premium products such as Thandai crush and Kesar syrup are made
from the finest selection of exotic ingredients. Mapro's products are known for
their wholesome taste and quality, as also their natural goodness and nutritive
value Mapro was the pioneer of fruit-based confectionery in India, with its first
jelly sweets being made from fruit juices and liquid glucose. The 'Falero' pulpy
fruit chews, which are better known as 'pates de Fruit in the rest of the world are
excellent exemplars of Mapro's very own Innovation Labs. Fa Faleros come in
unique indigenous flavours that are suited to the Indian palate, like Kacchi Kairi
(Raw Mango), Alphonso Mango and Strawberry.

Quality

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With its state-of-the-art production facilities, Mapro is committed to developing,
producing. packaging, storing and selling food products, with high regard for
safety, nutrition and taste, by continually improving quality and food safety
management systems to meet and exceed customers' [Link] company
has obtained ISO 9001:2000 certification and HACCP Certification from BVQi. ISO
22000 Certification is currently under implementation and the implementation of
B. R. C. Standards is being planned in the near future.

Having started with a capacity of 10MT of processed fruit products a year, the
Company today has a processing capacity of about 30,000MT per Year with its
factories in the Shendurjane village of Satara district. Panchgani town. Gureghar
village of Mahabaleshwar tehsil and Indora town of Kangra district in Himachal
[Link] development of the village of Gureghar, comprising around 70
families, between 1971 and 1985, is a case-study in itself. It started out with 12
persons working as permanent employees at the Gureghar fruit processing unit,
with the rest into subsistence farming. But for them too, there was hope. They
had continuous and sustained income with a ready market at their doorstep. They
started growing strawberries, with technical guidance from Mapro, and today the
region has the highest produce of strawberries in all of India, one of the major

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catalysts for the manifold increase in tourist inflow over [Link] these
achievements have been through sustainable means, keeping the region's ecology
in mind. Gureghar boasts of being one of the first villages to have 100% sanitation
with every house having their own biogas plant. Today, statistics reveal 100%
employment in the village, with none under poverty line, and 100% literacy with a
0% dropout rate. Mapro's vision does truly extend beyond business

Recent Trends

Mapro has recently launched its fruit flavoured ice teas available in three
flavours- lemon, peach and strawberry. It has also launched Falero Kacchi Kairi
which is a pulpy fruit chew made from fruit pulp of raw mangoes and is available
in two flavours of strawberry and kacchi kairi [Link] product launched
by Mapro, are fruit bites made from fruit pulp and juice. Frutons are available in
an assorted mix of orange, strawberry, pineapple and [Link] Jam:
Get a head start to your day with this delicious, deep red, fruit-filled, healthy jam.
Apart from being a perfect topping for toast at breakfast, it is often used on cakes,
cookies and tarts. Roll some jam for a quick snack in a chapati or puri or just lick it
off a spoon for a lip- smacking, delightful explosion of [Link]
Squash: A squash with all the goodness of Ginger. Originally grown in Asia, ginger
helps in digestion and blood circulation. In the form of gingerale, it works as an
effective stomach settler with its antacid properties. It is used in mocktails or had
as a healthy, delicious drink by mixing one part of squash with three parts water
or soda

Recent News From Mapro

Mapro Foods to foray into F&B segment: With growing demand for fruit-
based products- Mapro Foods has decided to augment their fruit processing
capacity at Mapro Food Park. Panchgani. According to a company official, the

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food park has a capacity to process over 60,000 litres of SCS (squash crush and
sharbat) range and process over 2 lakh litres ready-to-serve beverages every day.

Savour India's largest strawberry harvest: This place is heaven for strawberry
lovers, you pluck your own strawberries right on the farm, eat as much as you
want and walk away without paying a penny. This is what hundreds of tourists are
doing in Mahableshwar, 150 kms from Pune. Faced with a bumper crop farmers
are celebrating the strawberry festival for the second year in a row.

Mapro to bring back Vimto fruit squash: This place was grandpa's favourite
drink back in 1912, and now Mapro Foods, the second-largest producer of
processed fruit products in Western India, is set to bring back into the country
Vimto, the fruit-based beverage brand from the UK. The Panchgani- based
company signed an agreement last month with the £100-million Nichols to
manufacture the brand under licence at its facilities. The brand will be available in
India in its popular avatar, a mixed fruit squash, beginning March, the CEO of
Mapro Foods, Mr Mayur Vora, told Business Line.

Mapro Foods Plans to Spread Its Wings: Mapro Foods CEO Mayur Vora told
FE that the focus is now on the northern and southern regions after establishing a
presence in cities like Mumbai, Pune and Ahmedabad. The strategy adopted by
the company is to focus on cities offering high potential. That is why it is more
bullish on its foray into the northern and southern

Photo Gallery

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 Mapro Foods Private Limited Processing Unit

REFERNCES AND BIBLIOGRAPHY

I took certain references and various help while preparing the product. The
internet was the main source from where we found the information and also the
employee of the firm Mr. Mangesh Sarode who was our guide during our visit to
the company. The list of URLs used for the reference is listed below:
1. [Link]
2. [Link]
3. [Link] news Mapro-Foods-Plans-To-Spread-lts-
Wings 89342
4. [Link] [Link]/newfood
5. [Link]
6. [Link]
7. [Link] [Link]
8. [Link]

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9. [Link]
10. [Link]
[Link]://[Link]/

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 COMPANY PROFILE

Name:-BALAJI WAFERS PVT. LTD.

Address:-Balaji Wafers Pvt. Ltd.,Vajdi (Vad), Kalawad Road, District:- Rajkot - 360
003.
Taluka: - Lodhika,Gujarat (India).

Head Office:-Balaji Wafers Pvt. Ltd.,Vajdi (Vad), Kalawad Road,

Taluka: - Lodhika.
District:- Rajkot-360 [Link] (India).
Year of Establish:-1982
Main Product:- 1. Wafers
2. Namkeens

Form of Organization:-Private Limited

Size of Unit:-Large Scale Industry
Directors:-1. Mr. Bhikhubhai Virani
2. Mr. Chandubhai Virani
3. Mr. Keyurbhai Virani
4. Mr. Kanubhai Virani
5. Mr. Mihirbhai Virani
6. Mr. Pranaybhai Virani

Total Area:-1.25,000 Sq.m

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Bankers:- 1. Corporation Bank
2. Kotak Mahindra Bank

Phone No.:-(0281) 2783755

Fax: (0281) 2783747

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Balaji Wafers began as a micro-retail enterprise in 1974,managed by the Virani
brothers at Astron Cinema, Rajkot. By 1982, spurred by the initiative of Virani
brothers, this grew to a home-based manufacturing venture. A decade later, the
brothers set up an international standard automatic plant in Gujarat, with steps
to increase capacity and quality. In 2000, Balaji Wafers installed its first fully
automatic plant. By 2014, Balaji Wafers captured a 70% market share insnacks
market. Today, the company employs more than 1800 personnel in their Rajkot
and Valsad manufacturing facilities. Balaji has the capacity to manufacture
100,000 kg of potato wafers, along with 500,000 kg of savouries per day.

Accounting year:-1st April to 31 march

Auditor:-D.K. Patel & Company
Email:-contact@[Link]
Website:[Link]
Working tim[Link] am to 5:00 p.m.

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Lunch tim[Link] am. To 1:00 p.m.
Weekly off:-Wednesday

THE STORY OF BALAJI

Entrepreneurship was thrust on the Virani brothers at a young age, when drought
forced their father to sell ancestral agricultural land and give his sons a mere Rs.
20,000 with the advice to go forth and start a business. The road ahead saw
Bhikhubhai, Chandubhai and Kanubhai fail at their first venture of fertilizers and
then take up working at a boarding mess in Rajkot. Two years later, the brothers
got associated with Astron Cinema and performed all necessary jobs with
immense sincerity. This led the owner to offer them a profit sharing deal for
running the canteen. The Virani's initially bought prepackaged snacks for patrons.
Subsequently, the brothers got into sourcing unpackaged wafers and finally
started making them self at their residence.

This was their first own production and soon, the brothers decided to sell their
product "Balaji Wafers" not just to the Astron visitors, but also to customers
outside. This was easier said than done, due to a harrowing experience of half-
eaten packets returned by shopkeepers and soiled notes being paid. However, the
Virani's persisted and ultimately created a name that was so deeply respected,
that Oit nearly wiped off all other competition. The moped, which carried the
wafers to the market, soon gave way to an auto and then to a tempo taking
financial support through a nationalized bank.

Realizing that the key to constant success and profits was quality, the brothers
ensured that if cooks failed to show up, he personally made the wafers and
insisted on the best quality raw material to make Balaji wafers a premium
product. Taking inspiration from the bittersweet experiences in life, the Virani's

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went on to create different snacks that were then sold under the same brand
name of "BALAJI'.
The key elements behind the phenomenal success of Balaji are the strong
fundamental values of Virani brothers, which chiefly include "Trust, Passion and
Steady Hard Work!"

HISTORY

The story started in 1972, when Virani and his brothers Bhikhubhai, Chandubhai,
Kanubhai and Meghjibhai migrated from a small village in Jamnagar district to
Rajkot. Popatbhai Virani, a farmer who sold ancestral agriculture land and gave
Rs. 20,000 to his sons to venture into [Link]'s invested money given by
their father in farm equipments business, but could not succeed and lost the
money. Chandubhai Virani and his brothers started wafer business from a
canteen of a cinema hall in Rajkot in 1974. Till 1989, wafers used to be made at
Virani's house and distributed in and around Rajkot [Link] the initial stage Balaji
Group had set up their plant at Aji Vasad (Industrial Zone,Rajkot) with their new
concept of making the potato chips. The main benefit they got isthe readymade
infrastructure availability due to which their cost is reduced to larger extent.
They have operated over there around 20 to 22 [Link] key elements behind
the phenomenal success of Balaji are the strong fundamental values of Virani
brothers, which chiefly include "Trust, Passion and Steady Hard Work!"

Now Balaji Group has set up their new fully automatic plant near Metoda G.I.D.C.
which is in the area of the village named Vajdi (Vad) and also outside the town of
[Link] setting up the factory in Valsad, Balaji was working on the project of
making factory of Balaji in Rajkot and then the allowance was passed to Balaji to
construct Balaji factory in Rajkot between Rajdhani and Khirasra Palace and now

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 we can see a huge factory over Rajkot which supply nankeen's to the Saurastra
part of Gujarat and even some other parts of Gujarat other than Saurastra.

PRODUCTS
• Wafers
1. Plain Wafers
2. Chat Chaska Wafers
3. Kela Mari Wafers
4. Masala Wafers
5. More-Wafers
6. Simply Salted Wafers
7. Kela Masala Wafers 8. Tomato Wafers
9. Pizzy

Namkeens
1. Aloo Sev
2. Chana Dal
3. Chataka Pataka Masala
4. Farali Chevdo
5. Gathiya
6. Khatta Mitha Mix
7. Mung Dal
8. Ratlami Sev
9. Shing Bhujia

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10. Chataka Pataka Tomato
11. Masala Shing
12. Tikha Mitha Mix
13. Vatana
14. Sev Mumra

RAW MATERIALS
• Choicest Potatoes
• Edible Oil
• Chili Powder
• lodized Salt
• Sugar
• Choicest Banana
• Pipers Powder
• Peanuts Splits
• Choicest Gram Splits
• Choicest Peas
• Black Gram Blown
• Math Bean Flour
• Starch
• Mint Oil
• Rich Flakes
• Corn Flakes
• Green Gram
• Curry Leaves
• Sesames
• Coriander
• Black Peppers

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 • Curium Seeds
• Ajovan
• Roasted Gram Splits
• Amchur Powder
• Turmeric Powder
• Black Salt
• Rich Meal

FINDINGS

1. The findings of this study exposed the current consumer's perception of food
products related to its consumer satisfaction and suggestion of ways to improve
its consumer satisfaction with the perceived price, quality, quantity, overall
satisfaction and consumer's expectation towards the products.
2. Perceived quality is a major driver of consumer satisfaction although achieving
a satisfactory level of perceived quality has become more difficult as continual
improvements over the years have led to heightened consumer expectations of
the food products.
3. However, satisfying consumers" expectation is critical to businesses because
high consumer satisfaction will lead to brand loyalty. The quality of goods and
services will increase consumer satisfaction and loyalty.
4. Once the consumers are persuaded that the brand offers what they expected,
they stay with the brand. Thus, perceived quality must be perceived by
consumers. 5. Consumer satisfaction is a consumer's evaluation of their purchase
and consumption experience with a product, service, brand, or company. Interest
in satisfaction stems from its role in affecting consumers' repeat purchase
decisions and subsequent company profits.

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6. As the link to profitability has become clear, consumer satisfaction is now a
prominent metric in business accounting and reporting. The study ends with a call
to better understand the psychological and behavioral consequences of
satisfaction going forward.
7. Specifically, greater attention should be given to how satisfaction, in
conjunction with a company's or brand's image (reputation), and strength of
relationship with consumers explain consumer loyalty and retention.

CONCLUSION

These results can be used to development of the company. This research has
certain implications. Firstly, consumer satisfaction is the important factor for the
organization and it is important for the development of the company. Thus, this
research report could enable organization to make changes in the company and
company can increase its profit by satisfying its consumers.

SUGGESTION

This project will be useful to the companies to know their overall satisfaction level
of consumers.

⚫ Project will be also useful to the researchers to gain learning experience from
the research into an upcoming topic.

⚫ The project will also be useful for the students for future reference.

⚫ The concept of satisfaction focuses on what is expected from consumers.

Therefore, the study raises the need for further researches in other areas and
cities. The future research can explore the effect of other topics of marketing
field. The data is collected only from 100 respondents so the scope for future
study can be done with more than 100 respondents which can give better results
for further research.

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 COMPANY PROFILE

Name:- Katraj Dairy

Address:- . Katraj Dairy, Katraj, Pune - Satara Road, Pune – 411046.
Taluka: - Haveli,Maharashtra(India).

Head Office:- Pune Zilha Sahakari Dudh Utpadak Sangh Ltd.

District:- Pune,Maharashtra(India).
Year of Establish:-1960
Main Product:- Homogenized-Cow milk, Toned milk, Double toned milk,
Standardized Milk, Full cream milk, Cow & Buffalo Cream and Ghee, Shrikhand,
Amrakhand, Malai Paneer, Dahi, Flavoured Milk, Lassi, JeeraTak, Table Butter,
Milk Powder, Softy Ice cream, Pedha, Khoa, sterilized milk in 200 ml bottle and
hard Ice-cream with different flavours in different pack sizes and Mango, Anjeer &
Malai Burfi, Kalakand & KajuKatali.

Form of Organization:-Private Limited

Size of Unit:-Large Scale Industry
Directors:- Smt. Keshartai Sadashiv Pawar.
Shri. Rahul Divekar.
Shri. Gopalrao Mhaske.
Shri. Vishnusheth Hinge.
Shri. Balasaheb Newale.

Total Area:-1.25,000 Sq.m

Bankers:- 1. Corporation Bank
2. Kotak Mahindra Bank

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Phone No.:- . +91 9881 933 998
Fax: (0281) 2783747

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 INTRODUCTION:

Katraj Dairy was incorporated in 1960 with an intension of providing an organized

facility of milk collection for the village level farmers situated in Pune district.
Katraj Dairy started with milk collection of about 0.30 lakh (30.000) litres per day
in the first year of operation and today, has steadily grown to over 2.00 lakh (0.20

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million) litres per day and has a financial turnover of over Rs.250 crores Katraj
Dairy has acheived ISO 22000:2005 certification from Det Norskey Veritus. Katraj
Dairy with its nine chilling plants and 72 BMC spread almost all over the district
has an installed milk handling capacity of over 5 lakh liters per day. The main plant
of Katraj is equipped with modern Pasteurizer, homogenizer, Cream separator,
Ghee processing, Milk Clarifier, Condense Milk Plant, Automatic packing of milk
and milk products and other quality testing devices and well equipped labs, Katraj
Dairy has an installed processing capacity of 2 lakh (0.2 million) liters per day.
Katraj dairy manufactures / Distributes milk and milk products like
Pasteurized/Homogenized-Cow milk, Toned milk, Double toned milk,
Standardized Milk, Full cream milk, Cow & Buffalo Cream and Ghee, Shrikhand,
Amrakhand, Malai Paneer, Dahi, Flavoured Milk, Lassi, JeeraTak, Table Butter,
Milk Powder, Softy Ice cream, Pedha, Khoa, sterilized milk in 200 ml bottle and
hard Ice-cream with different flavours in different pack sizes and Mango, Anjeer &
Malai Burfi, Kalakand &KajuKatali.
All these products are available at Katraj owned parlours at various locations in
Pune City and through appointed distributors and retailing circuits. Very soon,
Katraj plans to introduce an online ordering system for its distributors/ retailers
and consumers.
Katraj products have been in use in thousands of homes in Pune since 1961.
Katraj Milk, Katraj Ghee, Katraj Shrikhand, Katraj Amrakhand, Katraj Lassi, Katraj
Jeeratak (buttermilk), Katraj cream have made Katraj a leading food brand in
Western Maharashtra. Today Katraj is a symbol of high-quality milk products sold
at reasonable prices, the genesis of a vast co-operative network triumph of
indigenous technology, the marketing of a farmers' organization.

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 Board of Director

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 MANUFACTURING PROCESS

Initially, the milk is collected in the collection centers in the villages. This where all
the villagers come and sell their milk to Katraj Dairy. After which, the milk is
transported to the Katraj plant, situated in Katraj, Pune. The milk is transported in
special vehicles designed for the sole purpose of milk transportation.
[MILK TRANSPORTAION VEHICLE]

Once the milk has reached the plant, it is first checked for itsquality. After which it
is primarily filtered and added to the holding tanks. After which the milk is
transferred through pipelines to the boiler unit. This is where the milk is the milk
is boiled to kill germs and makethe milk last longer, known as pasteurization.

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[fuel from farms unwanted substance]

After this process the milk is stored in its specially designedstorage containers.
After which it is ready for further processing and packaging. The milk can be
further be utilized in the production of rest of the products like flavored milk, ice
cream, butter, ghee etc.

[Storage tanks]

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 QUALITY CONTROL
Katraj Dairy is very strict when it comes to the quality of the milk and its products.
It strictly maintains its standard as per ISO9001:2000 regulations. The work of this
department begins, as soon asthe milk enters the gates of the factory. They
initially check the quality of the milk when it is in the milk tanker or milk
transportation vehicle. Theydo so to ensure that the milk is not spoiled and does
not match the standards of Katraj Dairy. This process is carried out to ensure that;
badmilk does not get added to the rest of the milk in the storage units.

This department uses the method of random sampling for selection of samples to
test. It picks up random samples from all the batches of products produced. If
even one product in the batch is not upto the mark, the entire batch of the
product produced is discarded. This department uses a variety of testing methods
for thevarious products that are produced at the plant. They usually check for pH,
fat, acidity, water content, saturation levels, lactic acid, etc. A hew of the
chemicals that they use for testing are given below-

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 • lodine Solution
• Sodium Bicarbonate
• Lactic Acid
• Silver Hydroxide
Under this programme and using the software developed by NDDB, the farmers
get knowhow of making balanced cattle feed, at the minimum cost, from the
available feed in their cowshed/byre and to suit the animal weight, fat, milk
quality & quantity, capability etc.
Today 70% of the total expenditure is spent on the animal feed. Apart from the
reduction in these expenses, there are improvements seen in the milk quantity
and quality in terms of fat, SNF. Moreover the animal health and fertility improve.
This programme is regularly in operation in the area under Pune District Co-
operative Milk Producers' Association. Under the programme, 10 days' training is
imparted to persons from each village in the area, along with the training
material. These individuals have been assigned to the Dudh Utpadak Sangh in
their respective village. Those desirous of having the programme in their village or
in their Society, are requested to contact our Input Division.

Fodder Development Programme:The programme includes demonstrations

of various machines, construction of Biomass Bunker, Murghas preparation and
information about fodder & seeds. The machinery is made available to the
farmers on nominal rent.

Village based milk procurement programme at village level:Objective of

the programme is to strengthen the old DCS as well as to form new DCS.
Necessary equipment and material is made available under the aegis of NDDB.
Construction of Bulk Cooler and and supply of stainless steel cans is made as per
the related guide lines and rules & regulations. Training is also given to the board
of directors of newly formed DCS.

Clean Milk production programme:

Training is imparted to Milk Producing farmers in their village. Maintaining
cleanliness of the cowshed, that of the person milking the animal, of the utensils,
of the collection centre, inspection and awareness regarding udder related
diseases are some of the topics covered in the programme animal, of the utensils,

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of the collection centre, inspection and awareness regarding udder related
diseases are some of the topics covered in the programme.

SERVICE

We provide following services to the milk supplying farmers through

Inputs/PIT Divisions of Sangh

Artificial Insemination facilities at concessional rates. → Supply of cattle

feed at fair prices to maintain good health of the livestock.

→ Supply mineral mixture with 25% subsidy.

→ Arrange common programme for tick, gadfly and worm eradication.
Supply of machines for hay, straw, fodder, seeds and milking machines to
milk supplying farmers with 25% subsidy..
→ Supply of Theileria vaccine on demand.→ Arrange camps for medical
checkup of barren cattle, on [Link] guidance of experts in the
field of veterinary science and arrange seminars.

Supply of medicines for the cattle at fair prices.

→ Guidance on Azolla, Murghas.
→ Give fodder cutting machines on rental [Link] National Dairy
Scheme 1:
1. Ration balanced programme
2. Fodder development programme
3. Village based milk procurement programme at village level
4. Clean milk production programme
5. Environmental and social activities

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 Balanced animal feeding programme:
Katraj Dairy carries out a very simple form of packaging. It isappealing to
the consumer's eyes even if they are from a metropolitancity or a local village in
Maharashtra. All of their packaging has the localdiet, "Marathi" on them along
with the universal language, "English".
The packaging is done in a very hygienic environment. All theworkers that come in
contact with the products have hair caps and gloveson their hands. They also
have a special uniform that has to be worn. The packaging of all the milk except
the flavored milk is donein polythene bags. The bags are manufactured in other
parts of Maharashtra and are inserted into the packaging machines. The
flavoredmilk is packaged 200 ml. glass bottles, Ice cream is packaged in
plasticcups as well as cardboard boxes.

[Packaging milk]

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 Environmental and Social Activities:

In this porogramme, milk producing farmers from SC & ST categories are

given training on milk business, by organising mela's. Awareness also is created in
them regarding damage to environment caused by excessive use of pesticides,
insecticides, use of organic manures rather than chemical fertilizers, integrated
pest control, harvest protection. water management, social afforestation etc. Our
farmer brethren are requested to make use of this programme.

National Dairy Plan-1 Village Based Milk Procurement System

Various factors such as rising incomes, urbanization, changing food habits,
increase in population and export opportunities fuel the demand for milk. Based
on the Planning Commission's estimates and subsequent corrections on account
of consistently higher growth in GDP, it is expected that the demand for milk is
likely to be about 155 million tonnes by 2016-17 (end year of 12th Five Year Plan)
and over 200 million tonnes by 2021-22. To meet the growing demand for milk, it
is necessary to maintain the annual growth of over 4 percent in the next 15 years.
It is therefore imperative that a scientifically planned multi state initiative is
launched to increase productivity in existing herds through a focussed programme
of breeding and [Link] to increase milk production through key scientific
and technical considerations involving genetic enhancements (Breeding) and
scientific nutrition programmes for milch animals would need to be supported by
providing milk producers greater opportunities for sale of surplus milk to the
organized sector.
This would require: Strengthening of procurement systems of the existing dairy
cooperatives and Promoting producer companies where cooperatives have low
presence and procurement.
The objectives of milk pooling are to:
Set-up a sustaining procurement system ensuring fairness and transparency.
Ensure quality milk collected by bringing in maximum milk producers under
organized [Link] companies

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producer companies. The project will finance the training costs, necessary
equipments, and a modest monthly stipend for the LRPS on a tapering basis for
about two years. Thereafter, the LRPS would be expected to earn a self-sustaining
income from the commission through sale of area specific mineral mixture
(ASMM) and other neutraceutical [Link] project aims to demonstrate a
new approach to extension by underlining the importance of unique identification
of animals, their performance measurement and advisory support at farmers
doorstep. It is envisaged under the project that each animal covered under RBP
would be uniquely identified with an ear tag so as to enable monitoring of its
productivity as well as efficiency of RBP through data to be fed into a
performance recording system. Proper and effective training is the key for
successful countrywide implementation of ration balancing programme (RBP)
envisaged under NDP I. The technical officers, animal nutritionists and trainers of
end implementing agencies (EIAs) would be trained at NDDB who in turn would
impart training to local resource persons (LRPS) at EIA [Link] LRPS will
provide advisory services to dairy farmers feeding balanced ration to their
animals. LRPs would also educate milk producers on the latest technologies such
as feeding milch animals with bypass protein, bypass fat, ASMM, treated or
enriched crop residues etc. Besides, milk producers would also be educated on
importance of drinking water, proper mangers for feeding the animals,
significance of colostrum feeding to newly born calves, chaffing of fodder, de-
worming, vaccination, timely insemination etc.

Benefits of Ration Balancing Programme

Proper use of locally available feed resources to balance the ration of animals at
least cost
Increases milk production with more fat and solids-not-fat Helps increasing the
net daily income
Improves reproduction efficiency Helps reducing inter-calving period, thereby
increasing the productive life of animals
Helps reducing inter-calving period, thereby increasing the productive life of
animals are getting fodder, fuel, drinking water from commons. However, such

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lands are being continuously degraded due to overgrazing and overexploitation
by locals. Re-vegetation of such lands on scientific lines suiting to agro-climatic
conditions is to be demonstrated through strengthening institutional
arrangement at village level. Fodder production from such lands can be enhanced
substantially by introducing high yielding cultivated fodder crops, grasses and
pasture legumes. An integrated approach of growing cultivated crops, grasses,
trees and shrubs under silvi-pastural/ horti - silvipasture system will improve
overall productivity of such land. B. Crop Residue Management
[Link] of Mowers
Due to rising cost of agricultural workers use of grain harvesters is increasing
leading to wastage of straw in the field of farmers, especially when tractor or
engine driven straw mowers and pick up devices are not available. Various types
of mowers are to be demonstrated under NDP
2. Simple mowers: These mowers harvest the fodder crops at ground level and
leave the biomass in the field for sun drying or direct grazing or manual collection
or by mechanical means.
3. Mowers with auto pick up: Such mowers are designed to perform many
operations in single pass of tractor. Activities like fodder harvesting, chopping,
loading of trailer, baling etcare carried out automatically by tractor power in
single action without any labour. Depending on usage and attachments, the auto
pick up mowers are further classified into following categories: b.1 Mower with
auto threshing and loading (wheat straw or Rabi harvest special)
4. Mower with auto chopping and loading (multi crop universal design) b.3
Mower with auto binder or auto liner for cereal crops, green fodder & stubble
attachments. Such mowers are termed as combine prevention mowers
[Link] or crop liner attachments for collection, aeration & sun drying
6. Automatic pick up baler with or without cutter head depending on tractor
capacity Universal design multi crop mowers have better pay back due to
7. Create more village level institutional structures following cooperative
principles and safeguarding the interests of small farmers.

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8. Provide the rural milk producers access to organized market and thereby
enhance their income. Milk pooling activities proposed under NDP I consist of
milk collection,testing for quality of the milk supplied quintessential with
standardized Automated Milk Collection Units (AMCU) and Data Processor based
Milk Collection Units (DPMCU) and improving milk quality substantially by
installing bulk milk coolers in villages/ cluster of villages.

Fodder Development Programme

1. Green Fodder Production Enhancement Green fodder is an economic source of

nutrients for the livestock. However its availability in the country is limited. With
the limited land under fodder cultivation, there is a need to focus to improve
productivity of fodder crops & common grazing lands and demonstrate to
conserve surplus green fodder to enhance availability during the lean period. 1.
Improved Fodder Seed Production Programme
Seed is the most critical input to enhance the productivity of fodder crops. To
ensure supply of quality seeds to the farmers, production of seeds will be
enhanced by establishing seven new seed processing units. The seed units
involves production, processing & marketing of quality fodder seeds and
comprises seed cleaning and grading machines, civil buildings and human
resource. It aims at producing additional 8000 MT certified/truthfully labelled
fodder seeds, annually by the end of 6th year of the project through registered
seed growers, following standard seed production protocol.

2. Silage Making Demonstration To ensure year round availability of quality

fodder silage making, a practice to conserve surplus quantity of green fodder, is to
be popularised. Through silage making large quantity of green fodder can be
preserved for longer period without significant loss of quality and palatability.
Silage contains around 65-70 percent moisture and preserved due to
fermentation of sugars available in the green fodder through anaerobic
fermentation. Silage can be fed to livestock in place of green fodder.

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3. Demonstration of Re-vegetation of Common Grazing Land The grazing lands
play an important role in the lives of rural people who

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1. Demonstration of Biomass Stores Infrastructure for straw management and
storage has been grossly neglected in India. Universal design stores and bunkers
for straw, pellets, bales, blocks and silage having better pay back would be
demonstrated under NDP I.
2. Crop Residue Enrichment & Densification Crop residues form bulk of basal diet
of ruminants in India. Crop residues are not uniformly available across the
country, some areas are surplus while some are deficit on regular basis. For such
locations crop residues can be fortified with feed ingredients like cakes, brans,
grains, molasses, hay, minerals and then densified into blocks or pellets to save on
storage and transport costs. Also balanced ration in the form of complete diet or
total mixed ration as per need of animals can be supplied for improved
productivity.

[Link] Balancing Programme

It will not be possible to achieve higher productivity in a milch animal by merely
increasing its genetic potential. There is evidence to show that when a milch
animal is fed a balanced diet, it receives the required nutrients to produce milk
commensurate with its genetic potential. Research and field trials indicates that
this approach to feeding has the potential to increase milk yield, reduce cost of
milk production, and contribute to reducing methane emissions. Milch animals
are usually fed one or two locally available concentrate feed ingredients, grasses
and crop residues. This often leads to an imbalanced ration-resulting in proteins,
energy, minerals and vitamins being either in excess or deficient. Imbalanced
feeding adversely impacts not only the health and productivity of animals but also
affects income from milk production since an estimated 70 percent of the total
cost of milk production is contributed by feed.
Therefore there is a need to educate milk producers on feeding balanced ration to
their animals so that the nutrients required by their individual milch animals is
fulfilled in an optimum manner, thereby improving milk production efficiency and
the economic return. NDP I plan to cover about 2.7 million milch animals in
40,000 villages using about 40,000 local resource persons (LRPs) who would be
identified, trained and supervised by existing dairy cooperatives

47 | P a g e
 Award
पुणे संघ. सहकार िन� पुर�ार

Maharashtra Energy Development Agency (MEDA) - 2015-16

Referral: 1)[Link]
2)[Link]

48 | P a g e
 COMPANY PROFILE

Name:- Ashok Leyland

Address:- Sardar Patel Road, Guindy, Chennai - 600032, India..
Taluka: - Chennai (India).

Head Office:- Sardar Patel Road, Guindy, Chennai - 600032, India

District:- ,Guindy, Chennai (India).
Year of Establish:-1948
Main Product:- rucks, buses, defence vehicles, diesel engines & much more.

Form of Organization:-Private Limited

Size of Unit:-Large Scale Industry
• Directors:- Jose Maria Alapont
 Gopal Mahadevan
 Manisha Girotra,
 Andrew Charles Palmer

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  Sanjay Khatau Asher
 Canakapalli Bhaktavatasala Rao
 Vipin Sondhi
 Jean Brunol
 Andreas Hubertus Biagosch
 Saugata Gupta
 Dheeraj Gopichand Hinduja, .

Total Area:-1.25,000 Sq.m

Bankers:- 1. Corporation Bank
2. Kotak Mahindra Bank

Phone No.:- . +91 9881 933 998

Fax: (0281) 2783747

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 2.1 INTRODUCTION:
In 1948, when independent India was one year old, Ashok Leyland was born. We were
Ashok Motors then, assembling Austin cars at the first plant, at Ennore near Chennai. In 1950
started assembly of Leyland commercial vehicles and soon local manufacturing under license
from British Leyland. With British Leyland participation in the equity capital, in 1954, the
Company was rechristened Ashok Leyland.
Since then Ashok Leyland has been a major presence in India's commercial vehicle industry.
These years have been punctuated by a number of technological innovations which went on to
become industry standards. This tradition of technological leadership was achieved through tie-
ups with international technology leaders and through vigorous in-house R&D.
Ashok Leyland vehicles have built a reputation for reliability and ruggedness. The 375,000
vehicles we have put on the roads have shared the additional pressure placed on road
transportation in independent India.
The share of goods movement by road rose from 12% in 1950 to 60% in 1995. In passenger
transportation, the jump is equally dramatic: from 25% to 80%. At 60 million passengers a day,
Ashok Leyland buses carry more people than the entire Indian rail network. In the populous
Indian metros, four out of the five State Transport Undertaking (STU) buses come from Ashok
Leyland. Some of them like double decker and vestibuled buses are unique models from Ashok
Leyland, tailor-made for high density routes.
In 1987, the overseas holding by LRLIH (Land Rover Leyland International Holdings Limited)
was taken over by a joint venture between the Hinduja Group, the Non-Resident Indian
transnational group and IVECO Fiat SPA, part of the Fiat Group and Europe's leading truck
manufacturer.

Global Standards, Global Markets The blue-print prepared for the future reflected the global
ambitions of the Company, captured in four words: Global Standards, Global Markets
(Liberalisation and globalisation were not yet in the air). Buoyed by the backing of the two
international giants, Ashok Leyland embarked on a major product and process technology
Up gradation to world-class standards of technology. In the journey towards global standards of
quality, Ashok Leyland reached a milestone in 1993 when it became the first in India's
automobile industry to win the ISO 9002 certification. The more comprehensive ISO 9001
certification came in 1994. 1994 was also the year, when international technology changed the
way India perceived trucks. The year when a new breed of world class trucks- technologically

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 superior and eco-friendly - rolled out on Indian roads. From our state-of the-art manufacturing
Plant at Hosur, near Bangalore. They carried the name Cargo. Cargo brought with it, a new set
of values and an unmatched basket of benefits, ushering in a change.

2.2 VISION:

Achieving leadership in the medium/heavy duty segments of the domestic commercial

vehicle market and a significant presence in the world market through transport solution that
best anticipate customer needs, with the highest value-to-cost ratio

2.3 MISSION:

• Identifying with the customer

• Being the lowest cost manufacturer

• Global benchmarking our

• products, processes and people

2.4 HISTORY:
The origin of Ashok Leyland can be traced to the urge for self-reliance, felt by
independent India. Pandit Jawaharlal Nehru, India's first Prime Minister persuaded Mr.
Raghunandan Saran, an industrialist, to enter automotive manufacture. In 1948, Ashok Motors
was set up in what was then Madras, for the assembly of Austin Cars. The Company's destiny
and name changed soon with equity participation by British Leyland and Ashok Leyland
commenced manufacture of commercial vehicles in 1955.

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 Since then Ashok Leyland has been a major presence in India's commercial vehicle
industry with a tradition of technological leadership, achieved through tie-ups with
international technology leaders and through vigorous in-house R&D.

Access to international technology enabled the Company to set a tradition to be first with
technology. Be it full air brakes, power steering or rear engine busses, Ashok Leyland
pioneered all these concepts. Responding to the operating conditions and practices in the
country, the Company made its vehicles strong, over-engineering them with extra metallic
muscles. "Designing durable products that make economic sense to the consumer, using
appropriate technology”, became the design philosophy of the Company, which in turn has
moulded consumer attitudes and the brand personality.

Ashok Leyland vehicles have built a reputation for reliability and ruggedness. The 5,
00,000 vehicles we have put on the roads have considerably eased the additional pressure
placed on road transportation in independent India.

In the populous Indian metros, four out of the five State Transport Undertaking (STU) buses
come from Ashok Leyland. Some of them like the double-decker and vestibule buses are
unique models from Ashok Leyland, tailor-made for high-density routes
.

In 1987, the overseas holding by Land Rover Leyland International Holdings Limited
53 | P a g e
 (LRLIH) was taken over by a joint venture between the Hinduja Group, the Non-Resident
Indian transnational group and IVECO. (Since July 2006, the Hinduja Group is 100% holder
ofLRLIH).
The blueprint prepared for the future reflected the global ambitions of the company, captured
in four words: Global Standards, Global Markets. This was at a time when liberalisation and
globalisation were not yet in the air. Ashok Leyland embarked on a major product and process
up gradation to match world-class standards of technology.

In the journey towards global standards of quality, Ashok Leyland reached a major milestone
in 1993 when it became the first in India's automobile history to win the ISO 9002
certification. The more comprehensive ISO 9001 certification came in 1994, QS 9000 in 1998
and ISO 14001 certification for all vehicle manufacturing units in 2002. It has also become the
first Indian auto company to receive the latest ISO/TS 16949 Corporate Certification (in July
2006) which is specific to the auto industry.

This is part of a series of articles peeking into clean car industries and car manufacturers of
China, India, South Korea and Germany.

Among many other goals, Ashok Leyland aims to expand its operations to penetrate into
overseas markets. Included in the company’s plans is to acquire smaller car manufacturers in
China and in other developing countries. In October 2006, Ashok Leyland bought a majority
stake in the Czech based- Avia. Called Avia Ashok Leyland Motors s. r. o., this will give Ashok
Leyland a channel into the competitive European market. According to the company, in 2008
the joint venture sold 518 LCVs in Europe despite tough economic conditions. Furthermore,
the company will expand its product offers into construction equipment, following a joint
venture with John Deere. Newly formed in June 2009, the John Deere partnership is a 50/50
split between the companies. The company says negotiation is progressing on land acquisition,
and the production plans are in place. The venture is scheduled to start rolling out wheel loaders
and backhoe loaders in October 2010. Aside from the full expansion planned for the company,
Ashok Leyland is also paying close attention to the environment. In fact, they are one of the
companies showing the strongest commitment to environmental protection, utilizing eco-
friendly processes in their various plants. Even as they thrust into different directions, Ashok
Leyland maintains an R&D group that aims to uncover ways to make their vehicles more fuel
efficient and reduce emissions.

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 In fact, even before laws were placed on car emissions, Ashok Leyland was already
producing low-emission vehicles. Back in 1997, they have already released buses with quiet
engines and low pollutant emission based on the CNG technology. In 2002 it developed the
first hybrid electric vehicle. Ashok Leyland has also launched a mobile emission clinic that
operates on highways and at entry points to New Delhi. The clinic checks vehicles for emission
levels, recommends remedies and offers tips on maintenance and care. This work will help
generate valuable data and garner insight that will guide further development.

When it comes to the development of environmentally friendly technologies, Ashok

Leyland has developed Hythane engines. In association with the Australian company EDEN
ENERGY, Ashok Leyland successfully developed a 6-cylinder, 6-liter 92 kW BS-4 engine
which uses Hythane (H-CNG,) which is a blend of natural gas and around 20% of hydrogen.
Hydrogen helps improve the efficiency of the engine but the CNG aspect makes sure that
emissions are at a controlled level. A 4-cylinder 4-litre 63 KW engine is also being developed
for H-CNG blend in a joint R&D program with MNRE (Ministry of New and Renewable
Energy) and Indian Oil Corporation.

The H-CNG concept is now in full swing, with more than 5,500 of the technology’s
vehicles running around Delhi. The company is also already discussing the wide-scale use of
Hythane engines with the Indian government. Hythane engines may be expected in the near
future, but these may not be brought to the United States as yet. Ashok Leyland’s partnership
with Nissan is also focusing on vehicle, power train, and technology development listed under
three joint ventures. With impressive investment, the joint ventures will focus on producing
trucks with diesel engines that meet Euro 3 and Euro 4 emission standards.

In the coming years, Ashok Leyland also has some hybrid trucks and buses in store for
its market. The buses and trucks are set to feature a new electronic shift-by-wire transmission
technology as well as electronic-controlled engine management for greater fuel efficiency.
Ashok Leyland focuses on improving fuel efficiency without affecting automotive power, and
the vehicles will have a 5% improvement on fuel efficiency. Ashok Leyland is also developing
electric batteries and bio-fuel modes.

55 | P a g e
 Ashok Leyland Ltd’s March quarter results were expected to be impressive, as its
monthly vehicle output reports had indicated a 138% jump in volumes. But what impressed
was its net profit growth of 317%, to Rs223 crore, over the year-ago period, even as sales rose
by 139%. Ashok Leyland’s operating profit margin rose to 13% compared with 10.5%. Higher
volume growth, a better product mix due to higher sales of multi-axle vehicles and tractor
trailers, and cost reduction were key reasons for margin expansion. its estimate for volume
growth in 2011 is conservative, at 15% compared with over 30% in FY2010.

Around 1,200 buses under the Jawaharlal Nehru National Urban Renewal Mission
scheme are yet to be delivered of the 5,098 ordered. Besides, it has orders on hand from state
transport undertakings for another 2,000 buses. The firm is investing to increase its capacity,
with Rs1,200 crore proposed for expansion plans over the next two years; mainly to increase
output of engines and new generation cabs. Besides, it plans to invest Rs800 crore in joint
ventures. Analysts believe that its Uttarakhand plant is expected to deliver 22,000-25,000
vehicles in fiscal 2011, in its first full year of operation. The company has also steadily gained
market share, from 21-22% in the first quarter of 2010 to 28-29% in the fourth quarter. One
concern is that it is not yet a strong player in the eastern market. Besides, the southern market,
traditionally its stronghold, has grown by only 15% in volume terms in 2010. The rest of India
(mainly north and west) grew by 40% during the year.

MANUFACTURING PLANTS
Ashok Leyland has seven manufacturing plants - the mother plant at Ennore near
Chennai, three plants at Hosur (called Hosur I and Hosur II, along with a Press shop), the
assembly plants at Alwar, Bhandara and state-of-the-art facility at Pantnagar. The total covered
space at these seven plants exceeds 650,000 sq m and together employs over 11,500
personnel.
ENNORE
Spread over 135 acres, Ashok Leyland Ennore is a highly integrated Mother Plant accounting
for over 40% ALL production. The plant manufactures a wide range of vehicles and house
production facilities for important aggregates such as Engines, Gear Box, Axles and other key
in-house components.
HOSUR: UNIT 1

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 Established in 1980, Hosur-I is the engine-manufacturing center within the Ashok Leyland
production system. Apart from producing various types of diesel engines (including the engines
manufactured under license from Hino of Japan) and CNG engines, the plant also manufactures
and assembles heavy duty and special vehicles, Axles, AGBs, Marine Gear Box,etc. The
facility is spread over 103 acres and is innovatively laid out, optimising the use of all resources.
HOSUR: UNIT 2
Ashok Leyland established this state-of-the-art production facility in 1994 at Hosur. Spread
over 236 acres, Hosur II houses finishing and assembly facilities including sophisticated
painting facilities. The complex also houses one of the largest press facilities in India for
pressing frame side members. Laid out with an eye for the future, Hosur II has won acclaim
from several automotive experts who have visited the facility.
HOSUR: UNIT 2A
Ashok Leyland’s brand new Cab Panel Press Shop is an imposing addition to the industrial
skyline of Hosur. At 800 m above sea level, it is also the tallest in the Hosur industrial belt. This
state-of-the-art facility is housed in a 99-acre expanse with a built up area of over 15,000 sq.m.
The Shop is equipped to stamp select panels for Cargo cab, G-45 and C-45 FES - totally, 55
panels and their variants. Right now it houses eight presses and has the provision to
accommodate four more. The versatility of the presses can be utilised for making panels of
complex shapes and profiles with appropriate tooling and dies. In addition to catering to our
present needs, the Press Shop can take up additional panels of new / current models. Right at
the design stage, a rainwater harvesting facility was integrated into the Shop. A 60,000-sqm
lawn and the 2,500 saplings planted recently in the premises will give the Shop a cool, green
cover. Built with an investment of Rs 1350 million, the Shop is designed and developed to be a
state-of-the-art facility. The 210m long Press Shop consists of two bays with a 36m span in
each bay. The 24m high Press bay has an underground tunnel, 7.1m deep and 90m long, to
handle the end bits generated during the process of panel pressing. The other bay is 17m high

ALWAR:
Established in 1982, the Alwar Unit in Rajasthan is an assembly plant for a wide range of
vehicles with an emphasis on passenger chassis, including CNG buses, situated close to the
northern market.
PANTNAGAR:

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 Set over 190 scenic acres, the Pantnagar plant of Ashok Leyland is also its largest and one of
the most integrated manufacturing facilities in Indian commercial vehicle industry. On 200,000
[Link] of built up area, it houses best in class industrial architecture combined with the latest
manufacturing technologies that is also ecology sensitive as reflected in the selection of
machinery and processes. Highly energy efficient, the plant is designed to be remarkably
operator friendly. The shop floors receive the maximum natural light and ventilation while the
insulated high roof reduces the inside temperature by up to 8oC in the summer months
BHANDARA:
Ashok Leyland's Bhandara Unit houses manufacturing and assembly facilities for
sophisticated synchromesh transmission and also has facilities for assembly of vehicles.
Designed on lean manufacture principles, process control for high quality of output and
flexibility to manage variety with quick changeovers are built into the machine and process
selection. The factory boasts of latest generation equipment sourced from global leaders in
Japan, USA, Europe and India.

The facilities have been so designed as to accommodate further expansion in terms of capacity
and future models. At full capacity utilization, 75,000 vehicles will roll out of the Pantnagar
plant.

RESEARCH AND DEVELOPMENT:

WORLD-CLASSTECHNOLOGY

To offer world-class technology that is relevant and affordable to the Indian customer is

the philosophy that drives R&D at Ashok Leyland. Over the years, this philosophy has been
translated time and again into products that seamlessly integrate international technology with
local needs. "The role of R&D is central in fulfilling the company-wide commitment to total
customer satisfaction" states Mr. R. Seshasayee, Managing Director, and adds that the increased

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 infrastructural and financial support expresses the company's determination to become self-
reliant in R&D.

VALUETOTHECUSTOMER

The immediate R&D priorities are to pro-actively address safety and environmental

issues, harness and adopt technologies that provide value to the customer in an atmosphere
enabling creativity and innovation. Powering those who "engineer tomorrows" with an enabling
infrastructure has been top priority for the company.

TESTTRACKS:

: Our R&D is not confined within walls. It extends to the test tracks as well.

Rigorous tests are carried out under stringent simulated conditions that replicate the
mosttreacherouslandscapes.

Vehicle ruggedness and longevity are a prime customer concern, as they directly

impact earnings. Ever conscious of this, Ashok Leyland makes extensive use of a
modern CAD set-up, a comprehensive test track facility (where cobble-stones are
calibrated and reset periodically), accelerated fatigue testing rigs and rigorous durability
testing facilities. Together they ensure that there is a constant improvement in the life
and on-road performance of every make of Ashok Leyland vehicle to hit the roads.
Safety, durability, through our R&D efforts.

INNOVATIONS:

Ashok Leyland product development successes have come from a keen sense of
anticipation and attentiveness. The company initiated research into alternative fuels well before
legislative debate had even begun in the country. The result was the implementation of CNG

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 technology ahead of the rest promising a breath of fresh air for polluted cities.
ASSOCIATES COMPANIES:

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 • Automotive Coaches & Components Ltd (ACCL)

• Lanka Ashok Leyland

• Hinduja Foundries

• IRIZAR-TVS

• Ashok Leyland Project Services Limited

• Albonair GmbH

JOINT VENTURE:

• Nissan Motor Company

• John Deere & Company

• Automotive Infotronics

• Ashley Alteams India Pvt Ltd

• Optare

2.5 SNAPSHOT

1948 – 1987 THE FIRST FOUR DECADES:

□ Pandit Jawaharlal Nehru persuaded Raghunandan Saran, an industrialist, to enter

automotive manufacture

□ In 1948, Ashok Motors was set up for the assembly of Austin cars. With equity
participation by British Leyland, Ashok Leyland commenced manufacture of
commercial vehicles in 1955

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 □ Access to international technology enabled the Company to introduce a host of trend-
setting product innovations in the country, supported by product development and
marketing capabilities Multi-axle vehicles, tractor trailers, double decker and
vestibuled buses, power steering

□ Units at Ennore, Hosur, Bhandara and Alwar became part of a pan-India growth plan of
the Indian leadership

□ Tie-ups with international technology majors for engine and gearbox technology

□ Battled formidable competition, gaining and sustaining a 25% plus market share

□ Withstood the unprecedented business depression of the early 80s, proved its resilience
– a quality that has stood the Company in good stead in subsequent trying times too

□ Made a habit of earning profits and declaring dividends

1987 –MID 90S THE GROWTH PHASE:

□ Transnational Hinduja Group took over the principal overseas shareholding of the
Company in 1987, infusing vital capital and technology. Emboldened, Ashok Leyland’s
long-term plan to become a global player by benchmarking global standards of
technology and quality was soon firmed up
□ A state-of-the-art manufacturing base set up at Hosur to roll out international class
products
□ Anticipated growing market demand and pioneered CNG technology
□ Production capacity up from 23,000 units in 1987 to 50,000 units in 1998.
□ International Quality Certifications:
• first automotive manufacturer in India to receive the ISO 9002 Certification
• ISO 9001(1994) and QS 9000 (1998)
MID 90S TILL NOWTHE EFFICIENCY PHASE:

□ Expansion of in-house R&D infrastructure including some first in India facilities, in

tandem with continuous strengthening of talent pool
□ Took in its stride the accelerated emission norms, utilising in-house engine R&D
capabilities
□ Company-wide IT initiatives bring in speed of operations as well as connectivity
□ Internal supply chain initiative - Project OSCARS - creates a ‘pull’ environment (rather
than ‘push’) aiding in Just-in-Time culture

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 □ Various shop floor initiatives, aimed at employee participation and efficiency
improvements, create a flexible manufacturing/assembly network tuned in to
customer needs
□ Model proliferation – products that fit customers’ unique needs
□ Enlarged and deepened market coverage, reaching new customer groups – within and
outside India
□ Set up a state-of-the-art Driver Training Centre at Namakkal. Also introduced
innovative customer support products that engage the customer more
comprehensively (AMC, 24x7 Helpline)
□ Management Development Centre set up at Hosur
□ EVA positive since 2002-2003: created shareholder value by registering returns higher
than cost of capital
THE FUTURE DIRECTION:
□ Having made the manufacturing technology and the innards of its vehicles
contemporary, catching the winds of globalisation,
□ Ashok Leyland is on a ‘global’ quest:
• Acquired the Truck Business Unit of AVIA as., based in Prague

• Bus assembly unit in UAE

• Assembly unit in South Africa in the offing

□ A whole new range of modern, fully built, high performance vehicles in line with
emerging market requirements
□ Plans for rapid expansion of capacity beyond one lakh vehicles per annum
□ Entry into new areas that go beyond the core business of commercial vehicles.
• Ashley Design and Engineering Services (ADES) in the area of engineering
services (developing, testing and validating vehicular designs and components)
• ACG Ashok Leyland (Auto Components Group) targets USD 100 million in three
years

MANAGEMENT DETAILS:
Board of Directors : Dheeraj G Hinduja, Chairman (Alternate: Y M Kale)
: R Seshasayee, Executive Vice Chairman
: Anil Harish
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 : D J Balaji Rao

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 : A K Das
: Jean Brunol (from 20.10.2010)
: Jorma Antero Halonen (from 19.05.2011)
: S anjay K Asher (from 21.12.2010)
: F Sahami
: Shardul S Shroff
: Dr V Sumantran
: Vinod K Dasari, Managing Director
Chief Financial Officer : K Sridharan

Executive Director And

Company Secretary : A R Chandrasekharan

Executive Directors : Anup Bhat

: A K Jain
: Jayendra Parikh
: R R G Menon
: P G Nilsson
: Nitin Seth
: Rajive Saharia
: Shekhar Arora

Auditors : M S Krishnaswami & Rajan

: D eloitte Haskins & Sells

Cost Auditors : Geeyes & Co.

Business Operation : Automobiles-Trucks/Lcv

Background

The origin of Ashok Leyland, a Hinduja group company can be traced to the urge for self-
reliance, felt by independent India. Pandit Jawaharlal Nehru, India's first Prime Minister

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 persuaded Raghunandan Saran, an industrialist, to enter automotive manufacture. In 1948,

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 Ashok Motors was set up in what was then Madras, for the assembly of Austin Cars. The
Company's destiny and name changed soon with equity par

Financials: Total Income - Rs. 114065.872 Million ( year ending Mar 2011)
Net Profit - Rs. 6312.993 Million ( year ending Mar 2011)

Market Share:

Name

Last Price

Market Cap.

(Rs. Cr.)

Sales Turnover

Net Profit

Total Assets

Tata Motors

193.45

61,399.84

47,807.42

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 1,811.82

35,912.05

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 Ashok Leyland

26.20

6,970.97

11,117.71

631.30

6,621.14

Eicher Motors

1,688.00

4,555.00

442.67

75.44

474.14

Tata Motors (D)

102.95

3,303.44

SML Isuzu

388.45

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 562.15

893.01

36.56

297.79

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 2.6 VALUES:

CUSTOMERS:

We value of customers and will constantly endeavour to fulfil their needs by proactively
offering them products and service appropriate to their diverse application.

EMPLOYEE:

We consider our employee as our most valuable asset and are committed to provide full
encouragement and support to them to enhance their potential and contribution to 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 between the company and the customers and we are
committed to advice and support our distributors to continuously upgrade their infrastructure,
skills and capability 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 this economic development while maintaining the highest
level of environment and safety standards.

THE FIVE ASHOK LEYLAND CORPORATE VALUES ARE:

• International

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 • Speedy

• Value creator

• Innovative

• Ethical

2.7 POLICIES AND OBJECTIVES OF ASHOK LEYLAND:

QUALITY POLICY:

Ashok Leyland is committed to achieve customer satisfaction, by anticipating and

delivering superior value to the customers in relation to their own business, through the product
and services offered by the company and comply with statutory requirement.

Towards this, the quality policy of Ashok Leyland is to make continual improvement in the
process that constitutes the quality management system, to make them more robust and to
enhance their effectiveness and efficiency in achieving stated objectives leading to:

□ Superior product manufactured as also service offered by the company.

□ Max use of employee potential to contribute to quality and environment by

progressive up gradation of their knowledge and skills as appropriate to their
functions.

□ Seamless involvement from vendors and dealers in the mission of the company
to address customers changing needs and protection of the environment.

ENVIRONMENT POLICY:

We at Ashok Leyland committed personal environment measures.

□ We follow all legal reasons.

□ Adopt pollution prevent technology in design and manufacturing projects.

□ Conserve all resources such as power, water, oil, gas, compressed air etc.. and
optimise their usage through scientific methods.

□ Provide clean working environment to employees.

□ Set and review objectives and targets for continually improving environment.

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 2.8 PRODUCT RANGE OF THE COMPANY INCLUDES:

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 • Buses
• Trucks
• Engines
• Defence & Special Vehicles

2.9 MILESTONES:

• 1966 - Introduced full air brakes

• 1967 - Launched double-decker bus

• 1968 - Offered power steering in commercial vehicles

• 1979 - Introduced multi-axle trucks

• 1980 - Introduced the international concept of integral bus with air suspension

• 1982 - Introduced vestibule bus

• 1992 - Won self-certification status for defence supplies

• 1993 - Received ISO 9002

• 1997 - India's first CNG powered bus joined the BEST fleet

• 2001 - Received ISO 14001 certification for all manufacturing units

• 2002 - Launched hybrid electric vehicle

2.10 AWARDS/ACHIEVEMENTS

• In the journey towards global standards of quality, Ashok Leyland reached a major
milestone in 1993 when it became the first in India's automobile history to win the ISO
9002 certification.

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 • The more comprehensive ISO 9001 certification came in 1994, QS 9000 in 1998 and
ISO 14001 certification for all vehicle manufacturing units in 2002.

• It has also become the first Indian auto company to receive the latest ISO/TS 16949
Corporate Certification (in July 2006) which is specific to the auto industry.

• Ashok Leyland buses carry 60 million passengers a day, more people than the entire
Indian rail network

• Ashok Leyland has a near 85% market share in the Marine Diesel engines markets in
India

• In 2002, all the vehicle-manufacturing units of Ashok Leyland were ISO 14001 certified
for their Environmental Management System, making it the first Indian commercial
vehicle manufacture to do so.

• In 2005, received the BS7799 Certification for its Information Security Management
System (ISMS), making it the first auto manufacturer in India to do so.

• In 2006, received the ISO/TS 16949 Corporate Certification, making it the first auto
manufacturer in India to do so.

• It is one of the leading suppliers of defence vehicles in the world and also the leading
supplier of logistics vehicles to the Indian Army.

• It is the largest manufacturer of CNG buses in the world.

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 WORKING CAPITAL MANAGEMENT

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 3.1 INTRODUCTION:
Working capital management is concerned with the problems arise in attempting to
manage the current assets, the current liabilities and the inter Relationship that exist between
them. The term current assets refers to those Assets which in ordinary course of business can
be, or, will be, turned in to cash within one year without undergoing a diminution in value and
without Disrupting the operation of the firm. The major current assets are cash marketable
securities, account receivable and inventory. Current liabilities ware those liabilities which
intended at their inception to be paid in ordinary course of business, within a year, out of the
current assets or earnings of the concern. The basic current liabilities are account payable, bill
payable, bank over-draft, and outstanding expenses. The goal of working capital management is
to manage firm current assets and current liabilities in such way that the satisfactory level of
working capital is mentioned. The current should be large enough to cover its current liabilities
in order to ensure a reasonable margin of the safety.

Capital required for a business can be classified under two main categories via,

1) Fixed Capital
2) Working Capital

Every business needs funds for two purposes for its establishment and to carry out its day-
to-day operations. Long terms funds are required to create production facilities through
purchase of fixed assets such as plant and machinery, land, building, furniture, etc. Investments
in these assets represent that part of firm’s capital which is blocked on permanent or fixed basis
and is called fixed capital. Funds are also needed for short-term purposes for the purchase of
raw material, payment of wages and other day – to- day expenses etc.

These funds are known as working capital. In simple words, working capital refers to that part
of the firm’s capital which is required for financing short- term or current assets such as cash,
marketable securities, debtors & inventories. Funds, thus, invested in current assts keep
revolving fast and are being constantly converted in to cash and this cash flows out again in
exchange for other current assets. Hence, it is also known as revolving or circulating capital or
short term capital.

DEFINITIONS OF WORKING CAPITAL:

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 □ Working capital is the difference between the inflow and outflow of funds. In other
words it is the net cash inflow.
□ Working capital represents the total of all current assets. In other words it is the Gross
working capital, it is also known as Circulating capital or Current capital for current
assets are rotating in their nature.
□ Working capital is defined as the excess of current assets over current liabilities and
provisions. In other words it is the Net Current Assets or Net Working Capital

3.2 NEED OF WORKING CAPITAL MANAGEMENT:

The need for working capital gross or current assets cannot be over emphasized. As
really observed, the objective of financial decision making is to maximize the shareholders
wealth. To achieve this, it is necessary to generate sufficient profits can be earned will naturally
depend upon the magnitude of the sales among other things but sales cannot convert into cash.
There is a need for working capital in the form of current assets to deal with the problem arising
out of lack of immediate realization of cash against goods sold. Therefore sufficient working
capital is necessary to sustain sales activity. Technically this is refers to opening or cash cycle.
If the company has certain amount of cash, it will be required for purchasing the raw material
may be available on credit basis. Then the company has to spend some amount for labour and
factory overhead to convert the raw material in working in progress, and ultimately finished
goods. These finished goods convert in to sales on credit basis in the form of sundry debtors.
Sundry debtors are converting into cash after expiry of credit period. Thus some amount of
cash is blocked in raw material, WIP, finished goods, and sundry debtors and day to day cash
requirements. However some part of current assets may be financed by the current liabilities
also. The amount required to be invested in this current assets is always higher than the funds
available from current liabilities. This is the precise reason why the needs for working capital
arise

3.2.1 CONSTITUENTS OF CURRENT ASSETS:

1. Cash in hand and cash at bank

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 2. Bills receivables

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 3. Sundry debtors
4. Short term loans and advances.

5. Inventories of stock as:

• Raw material

• Work in process

• Stores and spares

• Finished goods
6. Temporary investment of surplus funds.

7. Prepaid expenses

8. Accrued incomes.

9. Marketable securities.

In a narrow sense, the term working capital refers to the net working. Net working
capital is the excess of current assets over current liability, or, say:

3.2.2 CONSTITUENTS OF CURRENT LIABILITIES:

1. Accrued or outstanding expenses.

2. Short term loans, advances and deposits.
3. Dividends payable.
4. Bank overdraft.
5. Provision for taxation, if it does not amt. to app. of profit.
6. Bills payable.
7. Sundry creditors.
The gross working capital concept is financial or going concern concept whereas net working
capital is an accounting concept of working capital. Both the concepts have their own merits.

The Gross Concept Is Sometimes Preferred To The Concept Of Working Capital

For The Following Reasons:

□ It enables the enterprise to provide correct amount of working capital at correct time.

□ Every management is more interested in total current assets with which it has to

operate then the source from where it is made available.

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 □ It take into consideration of the fact every increase in the funds of the enterprise

would increase its working capital.

□ This concept is also useful in determining the rate of return on investments in

working capital. The net working capital concept, however, is also important for
following reasons:
□ It is qualitative concept, which indicates the firm’s ability to meet to its
operating expenses and short-term liabilities.
□ It indicates the margin of protection available to the short term creditors.
□ It is an indicator of the financial soundness of enterprises.
□ It suggests the need of financing a part of working capital requirement out of
the permanent sources of funds.

3.3 TYPES OF WORKING CAPITAL:

WORKING CAPITAL MAY BE CLASSIFIED IN TWO WAYS:

1. On the basis of concept.

2. On the basis of time.

1. ON THE BASIS OF CONCEPT:

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 a) Gross Working Capital

b) Net Working Capital

a) Gross Working Capital:

Gross working capital refers to the firm’s investment I current assets. Current assets are
the assets which can be convert in to cash within year includes cash, short term securities,
debtors, bills receivable and inventory.

b) Net Working Capital:

Net working capital refers to the difference between current assets and current
liabilities. Current liabilities are those claims of outsiders which are expected to mature for
payment within an accounting year and include creditors, bills payable and outstanding
expenses. Net working capital can be positive or negative.

NET WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITIES.

Net working capital can be positive or negative. When the current assets exceeds the
current liabilities are more than the current assets. Current liabilities are those liabilities, which
are intended to be paid in the ordinary course of business within a short period of normally one
accounting year out of the current assts or the income business.

2. ON THE BASIS OF TIME:

• Permanent or fixed working capital.

• Temporary or variable working capital

Permanent or Fixed Working Capital:

Permanent or fixed working capital is minimum amount which is required to ensure

effective utilization of fixed facilities and for maintaining the circulation of current assets.
Every firm has to maintain a minimum level of raw material, work- in-process, finished goods
and cash balance. This minimum level of current assets is called permanent or fixed working
capital as this part of working is permanently blocked in current assets. As the business grow
the requirements of working capital also increases due to increase in current assets.

Temporary or Variable Working Capital:

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 Temporary or variable working capital is the amount of working capital which is
required to meet the seasonal demands and some special exigencies. Variable working capital
can further be classified as seasonal working capital and special working capital. The capital
required to meet the seasonal need of the enterprise is called seasonal working capital. Special
working capital is that part of working capital which is required to meet special exigencies such
as launching of extensive marketing for conducting research, etc.

Temporary working capital differs from permanent working capital in the sense that is required
for short periods and cannot be permanently employed gainfully in the business.

IMPORTANCE OR ADVANTAGE OF ADEQUATE WORKING CAPITAL:

□ SOLVENCY OF THE BUSINESS: Adequate working capital helps in maintaining the

solvency of the business by providing uninterrupted of production.

□ GOODWILL: Sufficient amount of working capital enables a firm to make prompt

payments and makes and maintain the goodwill.

□ EASY LOANS: Adequate working capital leads to high solvency and credit standing

can arrange loans from banks and other on easy and favorable terms.

□ CASH DISCOUNTS: Adequate working capital also enables a concern to avail cash

discounts on the purchases and hence reduces cost.

□ REGULAR SUPPLY OF RAW MATERIAL: Sufficient working capital ensures regular supply

of raw material and continuous production.

□ REGULAR PAYMENT OF SALARIES, WAGES AND OTHER DAY TO DAY

COMMITMENTS: It leads to the satisfaction of the employees and raises the morale of

its employees, increases their efficiency, reduces wastage and costs and enhances

production and profits.

□ EXPLOITATION OF FAVORABLE MARKET CONDITIONS: If a firm is having

adequate working capital then it can exploit the favourable market conditions such as
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 purchasing its requirements in bulk when the prices are lower and holdings its

inventories for higher prices.

□ ABILITY TO FACE CRISES: A concern can face the situation during the depression.

□ QUICK AND REGULAR RETURN ON INVESTMENTS: Sufficient working capital enables a

concern to pay quick and regular of dividends to its investors and gains confidence of

the investors and can raise more funds in future.

□ HIGH MORALE: Adequate working capital brings an environment of securities,

confidence, high morale which results in overall efficiency in a business.

EXCESS OR INADEQUATE WORKING CAPITAL:

Every business concern should have adequate amount of working capital to run its
business operations. It should have neither redundant or excess working capital nor
inadequate nor shortages of working capital. Both excess as well as short working capital
positions are bad for any business. However, it is the inadequate working capital which is
more dangerous from the point of view of the firm.

DISADVANTAGES OF REDUNDANT OR EXCESSIVE WORKING CAPITAL:

□ Excessive working capital means ideal funds which earn no profit for the

firm and business cannot earn the required rate of return on its
investments.
□ Redundant working capital leads to unnecessary purchasing and

accumulation of inventories.
□ Excessive working capital implies excessive debtors and defective credit

policy which causes higher incidence of bad debts.

□ It may reduce the overall efficiency of the business.

□ If a firm is having excessive working capital then the relations with banks

and other financial institution may not be maintained.

□ Due to lower rate of return n investments, the values of shares may also

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 fall.

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 □ The redundant working capital gives rise to speculative transactions

DISADVANTAGES OF INADEQUATE WORKING CAPITAL:

Every business needs some amounts of working capital. The need for working capital
arises due to the time gap between production and realization of cash from sales. There is an
operating cycle involved in sales and realization of cash. There are time gaps in purchase of
raw material and production; production and sales; and realization of cash.

Thus working capital is needed for the following purposes:

• For the purpose of raw material, components and spares.

• To pay wages and salaries.

• To incur day-to-day expenses and overload costs such as office expenses.

• To meet the selling costs as packing, advertising, etc.

• To provide credit facilities to the customer.

• To maintain the inventories of the raw material, work-in-progress, stores and spares
and finished stock.

For studying the need of working capital in a business, one has to study the business
under varying circumstances such as a new concern requires a lot of funds to meet its initial
requirements such as promotion and formation etc. These expenses are called preliminary
expenses and are capitalized. The amount needed for working capital depends upon the size
of the company and ambitions of its promoters. Greater the size of the business unit,
generally larger will be the requirements of the working capital.

The requirement of the working capital goes on increasing with the growth and expensing
of the business till it gains maturity. At maturity the amount of working capital required is
called normal working capital.

There are others factors also influence the need of working capital in a business.

Working Capital Operating Cycle:

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 3.4 FACTORS DETERMINING THE WORKING CAPITAL REQUIREMENTS:

1. NATURE OF BUSINESS: The requirements of working is very limited in public utility

undertakings such as electricity, water supply and railways because they offer cash sale only
and supply services not products, and no funds are tied up in inventories and receivables. On
the other hand the trading and financial firms requires less investment in fixed assets but have
to invest large amt. of working capital along with fixed investments.

2. SIZE OF THE BUSINESS: Greater the size of the business, greater is the requirement of
working capital.

3. PRODUCTION POLICY: If the policy is to keep production steady by accumulating

inventories it will require higher working capital.

4. LENTH OF PRDUCTION CYCLE: The longer the manufacturing time the raw material and
other supplies have to be carried for a longer in the process with progressive increment of
labour and service costs before the final product is obtained. So working capital is directly
proportional to the length of the manufacturing process.

5. SEASONALS VARIATIONS: Generally, during the busy season, a firm requires larger
working capital than in slack season.

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 6. WORKING CAPITAL CYCLE: The speed with which the working cycle completes one cycle
determines the requirements of working capital. Longer the cycle larger is the requirement of
working capital.

DEBTORS

CASH FINISHED GOODS

RAW MATERIAL WORK IN PROGRESS

7. RATE OF STOCK TURNOVER: There is an inverse co-relationship between the question

of working capital and the velocity or speed with which the sales are affected. A firm having a
high rate of stock turnover will needs lower amt. of working capital as compared to a firm
having a low rate of turnover.

8. CREDIT POLICY: A concern that purchases its requirements on credit and sales its product
/ services on cash requires lesser amt. of working capital and vice-versa.

9. BUSINESS CYCLE: In period of boom, when the business is prosperous, there is need for
larger amt. of working capital due to rise in sales, rise in prices, optimistic expansion of
business, etc. On the contrary in time of depression, the business contracts, sales decline,
difficulties are faced in collection from debtor and the firm may have a large amt. of working
capital.

10. RATE OF GROWTH OF BUSINESS: In faster growing concern, we shall require large amt.
of working capital.

11. EARNING CAPACITY AND DIVIDEND POLICY: Some firms have more earning capacity
than other due to quality of their products, monopoly conditions, etc. Such firms may
generate cash profits from operations and contribute to their working capital. The dividend
policy also affects the requirement of working capital. A firm maintaining a steady high rate
of cash dividend irrespective of its profits needs working capital than the firm that retains
larger part of its profits and does not pay so high rate of cash dividend.

12. PRICE LEVEL CHANGES: Changes in the price level also affect the working capital
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 requirements. Generally rise in prices leads to increase in working capital.

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 OTHERS FACTORS:

□ Operating efficiency.
□ Management ability.
□ Irregularities of supply.
□ Import policy.
□ Asset structure.
□ Importance of labour.
□ Banking facilities, etc.
3.5 REQUIREMENTS OF FUNDS:

Funds Requirements of company

Fixed Capital Working Capital

Preliminary Expenses Raw materials

Purchase of Fixed Assets Inventories

Establishment work exp. Goods in Progress

Fixed working capital Others

Every company requires funds for investing in two types of capital i.e. fixed capital, which
requires long-term funds, and working capital, which requires short-term funds.

Sources of Working Capital

Long-term source Short-term source

(Fixed working capital) (Temporary working
capital)

a) Loan from financial institution a) Factoring

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 b) Floating of Debentures b) Bill
discounting

c) Accepting public deposits c) Bank

overdraft

d) Issue of shares d) Trade credit

e) Cash credit

f) Commercial paper

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 4. RESEARCH METHODOLOGY
OBJECTIVE OF RESEARCH

• Estimation of working capital requirement

• Evaluation of working capital management

• Evaluation of Liquidity position & working capital utilization

• Analysis of relationship between working capital and profitability

• Analysis & sources of working capital

• Analyzing the level of current assets with relation to current liabilities.

COLLECTION OF DATA:

• Data has been collected from various sources like:

• Annual reports of last three years

• Manual of concerned departments

• Internet sites like [Link],

METHODS OF QUANTITATIVE ANALYSIS

• Calculation of net working capital requirements.

• Ratio analysis

• Operating cycle & cash cycle

• Cash flow analysis

• Determining the Financing mix

• Statistical tools like graphical presentation

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 LIMITATIONS

• The data is mostly secondary in nature

• Data has been recalculated & regrouped wherever necessary

• In the absence of sufficient data personnel judgment have been taken on

reasonable assumption.

• In the absence of sufficient data in-depth study of cash, Receivables and

inventory management was not possible.

ASSUMPTION:

• Number of days in a year is 365 days.

• All purchases have been taken as credit purchases.

• All sales have been taken as credit sales.

In the absence of relevant data the data from internet site is taken as the relevant information’s.

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 4.1 RATIO ANALYSIS

1. WORKING CAPITAL RATIOS:

Turnover Ratio:

• Net Working Capital Ratio

• Working Capital Turnover Ratio

• Current Asset Turnover Ratio

• Fixed Asset Turnover Ratio

Liquidity Ratio:

• Current Ratio

• Acid Test Ratio

• Absolute Ratio

Profitability Ratio:

• Gross Profit Ratio

• Net Profit Ratio

• Operating Profit Ratio

2. INVENTORY MANAGEMENT RATIO:

• Inventory Turnover Ratio

• Inventory Holding Period

• Inventory Proportion

3. RECEIVABLE MANAGEMENT RATIO (DEBTORS):

• Debtors Turnover Ratio

• Debtors Collection Ratio

4. PAYABLE MANAGEMENT RATIO (CREDITORS):

• Creditors Turnover Ratio

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 • Creditors Collection Period

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 5. CASH MANAGEMENT RATIO:
• Cash Ratio

• Cash Turnover Ratio

DATA ANALYSIS AND INTERPRETATION

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 INVENTORY MANAGEMENT

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 5.3 Inventory Management:
Managing inventory is a juggling act. Excessive stocks can place a heavy burden on the
cash resources of a business. Insufficient stocks can result in lost sales, delays for customers etc.
The key is to know how quickly your overall stock is moving or, put another way, how long each
item of stock sit on shelves before being sold. Obviously, average stock-holding periods will be
influenced by the nature of the business. For example, a fresh vegetable shop might turn over its
entire stock every few days while a motor factor would be much slower as it may carry a wide
range of rarely-used spare parts in case somebody needs them.

Nowadays, many large manufacturers operate on a Just-In-Time (JIT) basis whereby all the
components to be assembled on a particular today, arrive at the factory early that morning, no
earlier - no later. This helps to minimize manufacturing costs as JIT stocks take up little space,
minimize stock holding and virtually eliminate the risks of obsolete or damaged stock. Because
JIT manufacturers hold stock for a very short time, they are able to conserve substantial cash. JIT
is a good model to strive for as it embraces all the principles of prudent stock management.

The key issue for a business is to identify the fast and slow stock movers with the objectives of
establishing optimum stock levels for each category and, thereby, minimize the cash tied up in
stocks.
Inventory management is the active control program which allows the management of sales,
purchases and payments.

Inventory management software helps create invoices, purchase orders, receiving lists, payment
receipts and can print bar coded labels. An inventory management software system configured
to your warehouse, retail or product line will help to create revenue for your company. The
Inventory Management will control operating costs and provide better understanding. We are
your source for inventory management information, inventory management software and tools

A complete Inventory Management Control system contains the following components:

• Inventory Management Definition
• Inventory Management Terms
• Inventory Management Purposes

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 • Definition and Objectives for Inventory Management
• Organizational Hierarchy of Inventory Management
• Inventory Management Planning
• Inventory Management Controls for Inventory
Inventory Management must tie together the following objectives, to ensure that there is
continuity between functions:
• Company’s Strategic Goals
• Sales Forecasting
• Sales & Operations Planning
• Production & Materials Requirement Planning.
Inventory Management must be designed to meet the dictates of market place and support the
company’s Strategic Plan. The many changes in the market demand, new opportunities due to
worldwide marketing, global sourcing of materials and new manufacturing technology means
many companies need to change their Inventory Management approach and change the process
for Inventory Control.

Factors to be considered when determining optimum stock levels include:

• What are the projected sales of each product?

• How widely available are raw materials, components etc.?

• How long does it take for delivery by suppliers?

• Can you remove slow movers from your product range without compromising
best sellers?

Remember that stock sitting on shelves for long periods of time ties up money, which is not
working for you. For better stock control, try the following:

• Review the effectiveness of existing purchasing and inventory systems.

• Know the stock turn for all major items of inventory.

• Apply tight controls to the significant few items and simplify controls for the trivial many.

• Sell off outdated or slow moving merchandise - it gets more difficult to sell the longer you
keep it.
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 • Consider having part of your product outsourced to another manufacturer rather than
make it yourself.

Review your security procedures to ensure that no stock "is going out the back door!"

Higher than necessary stock levels tie up cash and cost more in insurance, accommodation costs
and interest charges.

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 DEBTORS MANAGEMENT

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 5.4 RECEIVABLES MANAGEMENT:
INTRODUCTION:
The term debtors are defined, as debts owed to the firm by the customers arising
from sales of goods or service in the ordering course of business. Debtors or receivables are
assets accounts representing amount owed to the firm by customers from sale of goods or
service. It has to be mentioned that the credit that is open account in the sense that no formal
acknowledgement of debts obligation is required. In fact, a credit sale, which leads to debtors,
is treated as one of the marketing tools.
Great majority of firm does not demand immediate cash payment when goods or service are
sold to their regular and credit worthy customers. Because of this practical, most sales require
the firm to maintain debtors account for customer or a group of them for some period.
Accordingly debtors or receivables occupy a significant role in firm’s current assets structure
usually next to inventories
Objectives of Maintaining Receivables:
□ Achieving growth in sales and profits. If a firm allows sales, it will usually be able to sell
more goods or service then if it insists on immediate cash payment. Similarly, an
addition sale normally results in higher profits for the firm. This proportion will hold
goods only when the margin contribution or gross margin greater than the addition
cost associate with the administering the credit policy.

□ Meeting competition
To survive in the competitive market, firm have to establish credit policies similar
to competitors. Thus, by adopting its term of trade to the industry norms, a firm will
avoid of sale form customers who would by elsewhere if they did not receive the
expected credit.
The above 2 objective have a single purpose, that is generate larger flow of operating revenue
and hence profit, than would e achieved in the absence of a commitment of the funds to debtors.
Extension of credit involves cost and risk management should weigh benefit against cost. The
optimum point may be considered as the point where “the return on investment in further
funding of receivables is less than cost of funds raised that addition credit (i.e. cost of capital”)
Cost of Maintaining Receivables:
Credit sales, and hence maintaining of debtors, involve certain costs. They are:

□ Cost of financing debtors.

□ Collection costs

□ Delinquency costs

□ Default costs
Facts affecting size off receivables:
The size of a firm is determined by is:

□ Level of sales

□ Credit terms

□ Collection Policies

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 Credit Policy:
The credit policy relating to sales and purchase also affects the working capita
The credit policy influences requirement of working capital in 2 ways.
□ Through credit term granted by the firm to its customers/ buyer of goods
□ Credit term available to the firm its creditors
The credit term granted to customers bearing on magnitude of working capital by determining
the level of level of book debts. The credit sales results in higher book debts. Higher book debts
mean more working capital. On the other need for working capital is less. The working
requirements of a business are, thus affected by the term of purchase and sale, and the role
given to credit by a company in its dealing with creditors and debtors.
Similarly, collection procedure will differ from customer. With the permanent but temporary
defeating customers, the firm may not be very strict in following the collection procedures. The
credit evaluation procedure involves the following step.
1. Credit information
2. Credit investigation
3. Credit limits and
4. Collection procedure

For effective management of credit, a firm should lay down clear-cut guidelines and procedures
for granting credit to individual customers and collection individual accounts.
Size of Receivables:
An analysis of the percentage of receivables in relation assets indicates the recovery
efficiency of the company of the company. Moreover, the % receivable in relation to sales
indicates the firm credit sales requirement. However, this kind of analysis reveals the overall
operational efficiency of the company in relation to credit sales and their recovery.

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 CREDITOR MANAGEMENT

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 5.5 MANAGING PAYABLES:

Creditors are a vital part of effective cash management and should be managed
carefully to enhance the cash position.

Purchasing initiates cash outflows and an over-zealous purchasing function can create liquidity
problems. Consider the following:

• Who authorizes purchasing in your company - is it tightly managed or spread among

a number of (junior) people?

• Are purchase quantities geared to demand forecasts?

• Do you use order quantities, which take account of stock holding and purchasing costs?

• Do you know the cost to the company of carrying stock?

• Do you have alternative sources of supply? If not, get quotes from major suppliers
and shop around for the best discounts, credit terms, and reduce dependence on a
single supplier
• .
• How many of your suppliers have a returns policy?

• Are you in a position to pass on cost increases quickly through price increases to
your customers?

• If a supplier of goods or services lets you down can you charge back the cost of
the delay?

• Can you arrange (with confidence!) to have delivery of supplies staggered or on a

just- in-time basis?

There is an old adage in business that if you can buy well then you can sell well. Management
of your creditors and suppliers is just as important as the management of your debtors. It is
important to look after your creditors - slow payment by you may create ill feeling and can
signal that your company is inefficient (or in trouble!).

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 CHART: 19

LAST FIVE YEARS RECORDS

INTERPRETATION:

□ This graph shows the last five years income, profit before depreciations and taxes and
profit after tax.

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 FINDINGS
1. STATEMENT SHOWING THE SCHEDULE OF CHANGES IN WORKING CAPITAL:
□ There has been decrease in the working capital for the year 2007-08.
□ There has been decrease in the working capital for the year 2010-11.

2. WORKING CAPITAL RATIOS:

Turnover Ratio:
□ Ashok Leyland Ltd is maintained balanced in all years efficiently and effectively.
□ Sales decreased in 2009 and gradually increased in 2011
Liquidity Ratio:
□ In 2007, 2009 and 2010 are near to the ideal acid test ratio that is 1:1.
□ From the table given above, it is clear that receivable to current asset ratio is low in
2007-08. That means receivables management is very efficient in that year. But in the
year 2008-09 it is the highest.
Profitability Ratio:
□ Net profit for the year 2009 is decreased when compared to other years.
□ From the table shown gross profit of the firm is satisfactory in all the years.
.

3. INVENTORY MANAGEMENT RATIO:

□ Raw materials consumed are increasing from year by year.

4. RECEIVABLE MANAGEMENT RATIO (DEBTORS):

□ Receivables turnover ratio is highest in 2007-08.
□ Receivables turnover ratio is lowest in 2009-10.

5. PAYABLE MANAGEMENT RATIO (CREDITORS):

□ In the year 2006-07 creditors’ collection period are low 67days.
□ In the year 2009-10 the creditor’s collection period are very high 104 days.

6. CASH MANAGEMENT RATIO:

□ Cash is not properly managed in the year 2009 and 2011.

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 □ From the above table it is clear that percentage of cash in current assets is very less
and decreasing from year by year.

7. General:
□ Inside the factory near the petrol tank, employees are smoking there. Please take
this consideration as to save valuable of life of employees.
□ Some of the workers in factory have leg problem. So I request you to utilize medical
check-up properly.
□ Overall performance of the company is very effective.

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 RECOMMENDATIONS

Recommendations can be use by the firm for the betterment increased of the firm after study
and analysis of project report on study and analysis of working capital.

I would like to recommend.

□ Company should raise funds through short term sources for short term requirement
of funds, which comparatively economical as compare to long term funds.

□ Company should take control on debtor s collection period which is major part
of current assets.

□ Company has to take control on cash balance because cash is non earning assets
and increasing cost of funds.

□ Company should reduce the inventory holding period with use of zero
inventory concepts.

□ Company should make a policy in respect of investment of excess cash, if any; in

marketable securities and overall cash policy should be introduced.

□ Management should develop a credit policy and proper self realization system
from customers so that efficient and effective management of accounts receivable
can be ensured. This will significantly improve the profitability and liquidity of the
company.

Over all company has good liquidity position and sufficient funds to repayment of liabilities.
Company is increasing sales volume per year which supported to company to increase the
market share year by year

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 CONCLUTION

Working capital management is important aspect of financial management. The study of

working capital management in Ashok Leyland ltd has revealed that the current ration was as
per the standard industrial practice but the liquidity position of the company showed an
increasing trend. The study has been conducted on working capital ratio analysis, working
capital leverage, working capital components which helped the company to manage its working
capital efficiency and affectively.

□ Working capital of the company was increasing and showing positive working capital
per year. It shows good liquidity position.

□ Positive working capital indicates that company has the ability of payments of short
terms liabilities.

□ Working capital increased because of increment in the current assets is more than
increase in the current liabilities.

□ Company’s current assets were always more than requirement it affect on profitability
of the company.

□ Current assets are more than current liabilities indicate that company used long term
funds for short term requirement, where long term funds are most costly then short
term funds.

□ Current assets components shows sundry debtors were the major part in

□ Current assets it shows that the inefficient receivables collection management.

The company has a good operating cycle, liquidity position, and has sufficient funds to repay
its liabilities. It is being found that components of working capital like inventory management,
receivables management and cash management was managing effectively. It is being found that
the production target of the company has been achieved in time; thereby the profit percentage
of company is good.

The company is matured one and it has contributed towards the countries growth and
development and will also continue to perform and contribute to the whole nation. To conclude

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 company has sound and effective management of working capital, which helps them
to control the cost and increase the profit.
BIBLIOGRAPHY

BOOK REFENCE:

□ T.S REDDY – MANAGEMENT ACCOUNTING: Margham Publication

□ M. PANDEY- FINACIAL MANAGEMENT: Vikas Publishing House Pvt Ltd.

□ HRISHIKESH BHATTACHARYA –WORKING CAPITAL MANAGEMENT:

Prentice-Hall of India Pvt Ltd.

WEBSITES:

[Link]
[Link]
Leyland-Limited

[Link]
Ltd [Link]

[Link]
[Link]
d [Link]
[Link]

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