Submitted to Dr. Vandana Khetarpal (Offg.

Director 5 year MBA) GGSBS, Yamuna Nagar

Submitted by Pooja ENR No. 108 Batch No. 2010-15

In partial fulfillment of Management Studies For the award of the degree of Bachelor in Business Administration

GURU GOBIND SINGH BUSINESS SCHOOL City Centre Road, Near Khalsa College, YAMUNA NAGAR Ph: 01732-236904, 236744

AUTOMOBILE INDUSTRY IN INDIA

INTRODUCTION
Driving the most luxurious car has been made possible by the stiff competition in the automobile industry in India, with overseas players gathering the same momentum as the domestic participants. Every other day, we have been hearing about some new launches, some low cost cars - all customized in a manner such that the common man is not left behind. In 2009, the automobile industry is expected to see a growth rate of around 9%, with the disclaimer that the auto industry in India has been hit badly by the ongoing global financial crisis.

The automobile industry in India happens to be the ninth largest in the world. Following Japan, South Korea and Thailand, in 2009, India emerged as the fourth largest exporter of automobiles. Several Indian automobile manufacturers have spread their operations globally as well, asking for more investments in the Indian automobile sector by the MNCs.

Potential of the Automobile industry In 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors plans to export 250,000 vehicles manufactured in its India plant by 2011. Similar plans are for General Motors.

Segmentation of market share of automobile industry in India

Passenger Vehicle: 15.96% Commercial Vehicle: 3.95% Three wheelers: 3.60% Two wheelers: 76.49%

History
The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly, but in very small numbers. Embryonic automotive industry emerged in India in the 1940s. Mahindra & Mahindra was established by two brothers as a trading company in 1945, and began assembly of Jeep CJ-3A utility vehicles under license from Willys. The company soon branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors.[20] Following the independence, in 1947, the Government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the automobile industry. However, the growth was relatively slow in the 1950s and 1960s due to nationalisation and the license raj which hampered the Indian private sector. After 1970, the automotive industry started to grow, but the growth was mainly driven by tractors, commercial vehicles and scooters. Cars were still a major luxury. Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian companies.[21] In the 1980s, a number of Japanese manufacturers launched joint-ventures for building motorcycles and light commercial-vehicles. It was at this time that the Indian government chose Suzuki for its jointventure to manufacture small cars. Following the economic liberalization in 1991 and the gradual weakening of the license raj, a number of Indian and multi-national car companies launched operations. Since then, automotive component and automobile manufacturing growth has accelerated to meet domestic and export demands.[21] Following economic liberalization in India in 1991, the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions. Several Indian

automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international operations. India's robust economic growth led to the further expansion of its domestic automobile market which has attracted significant India-specific investment by multinational automobile manufacturers.[22] In February 2009, monthly sales of passenger cars in India exceeded 100,000 units[23] and has since grown rapidly to a record monthly high of 182,992 units in October 2009.[24] From 2003 to 2010, car sales in India have progressed at a CAGR of 13.7%, and with only 10% of Indian households owning a car in 2009 (whereas this figure reaches 80% in Switzerland for example [25]) this progression is unlikely to stop in the coming decade.[26] Congestion of Indian roads, more than market demand, will likely be the limiting factor. [27] SIAM is the apex industry body representing all the vehicle manufacturers, home-grown and international, in India.[28]

TOP AUTOMOBILE COMPANIES IN INDIA

Tata Motors Tata Motors is the largest automobile manufacturing companies in India. Established way back in 1945 Tata Motors is a multinational automobile company with its headquarters in Mumbai. Previously known as Telco TATA Engineering and Locomotive Company Tata Motors belongs to Tata Group. This company manufactures compact medium sized utility vehicles. Over the last few decades it has stood as the undisputed leader in the commercial vehicles segment. It is also the third largest producer of passenger cars in India. This automobile company in India is listed on both the Bombay Stock Exchange and the New York Stock Exchange. The revenues earned by Tata Morts in 2010 accounted to $20.572 billion. Some of the well known cars manufactured by Tata Motors are: Tata Indigo, Tata Indica, Tata Sumo Tata Indigo Marina and Tata safari. Hindustan Motors Limited Hindustan Motors Limited was founded in the year 1942 by B.M Birla. It is an operative subsidy of the Birla Technical Services group. This company held the title of the biggest manufacturer of cars in India before Maruti Udyog. Hindustan Motors was the pioneer in manufacturing automobiles in India. The company accounted for a sales turnover of Rs 150.66 crore in 2010. Some of the important cars and multi utility vehicles manufactured by Hindustan Motors Limited include; Mitsubishi Lancer, Trekker, Contessa, Ambassador, Porter, Pushpak and the Mitsubishi. Ashoke Leyland Ashoke Leyland is a leading commercial vehicle manufacturer in India. It was established in 1948.

The company over the years has become synonymous with the production of trucks, passenger buses and emergency military vehicles. It happens to be the second largest commercial vehicle producer in India holding a market share of almost 30 percent. The company holds a record for selling almost 60, 000 vehicles and almost 7000 engines per years. Ashok Leyland accounted for consolidated revenues of US$ 1.4 billion in 2009. Some of the popular products by this company are; Panther BS-II Muti-axle Vehicles, Cheetah Bus-III, Tractors and Ecomet, Lynx BS-II, Diesel and Natural Gas gensets from 15KVA to 250KVA. Maruti Suzuki India Limited Maruti Suzuki India Limited was established in 1981. A part of this company is owned by Suzuki Motor Corporation of Japan. It is the country's largest passenger car manufacturing company. Credited for having brought in the automobile revolution in the country Maruti Suzuki India Limited was known as Maruti Udyog Limited till 2007. With its headquarters in Delhi this automobile company in India happens to be the largest producer and market share holder of cars. The company accounted for consolidated revenues of US$4.8 billion in 2010. Maruti Suzuki India Limited is credited for manufactures a variety of passenger cars SUVs, and Sedans. Some of Maruti's most popular cars are: Alto, Gypsy, Omni, Wagon R, Maruti 800, Versa, Zen, Esteem, Baleno and Swift. Hyundai Motor India Limited Hyundai Motor India Limited (HMIL) is owned entirely by Hyundai Motors of South Korea. Hyundai Motors happens to be the largest car manufacturer in South Korea and the sixth largest in the world. This automobile company in India is also the largest passenger cars exporter in India. Established on May 6 1996 this company in a short span of time has taken the Indian automobile industry by storm. Some of the popular cars manufactured by this company are; Santro, Getz Prime, Hyundai i10, Hyundai i20 Accent and the Verna and Sonata Bajaj Auto Bajaj Auto is another important automobile manufacturing company in India. It is one of the India's most trusted car manufacturers. It is an operative subsidy of the Bajaj Group. Bajaj Auto happens to be the largest two and three wheeler manufacturer in India and also ranks in this field across the globe. This automobile company was established on 2 November 1945. The company was then known as M/s Bachraj Trading Corporation Private Limited. The company made a modest beginning by importing and then selling two and three wheelers in India. Today Bajaj Auto has become synonymous with two and three wheelers in the country. Some of its popular two wheelers are; Pulsar 220DTS and Kawasaki Ninja 250R.

AUTOMOTIVE INDUSTRY IN INDIA

Mahindra Scorpio, one of India's best selling indigenously developed SUV.

Foreign carmakers have built plants in India. The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India manufactures over 17.5 million vehicles (including 2 wheeled and 4 wheeled) and exports about 2.33 million every year.[1] It is the world's second largest manufacturer of motorcycles, with annual sales exceeding 8.5 million in 2009.[2] India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010.[3] According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12.[4] In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand.[5] As of 2010, India is home to 40 million passenger vehicles and more than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020.[8] By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads.[9] A chunk of India's car manufacturing industry is based in and around Chennai, also known as the "Detroit of India"[10] with the India operations of Ford, Hyundai, Renault and Nissan headquartered in

the city and BMW having an assembly plant on the outskirts. Chennai accounts for 60 per cent of the country's automotive exports. Gurgaon and Manesar in Haryana are hubs where all of the Maruti Suzuki cars in India are manufactured.[12] The Chakan corridor near Pune, Maharashtra is another vehicular production hub with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Fiat and Force Motors having assembly plants in the area. Ahmedabad with the Tata Nano plant, Halol again with General Motors, Aurangabad with Audi, Skoda and Volkswagen, Kolkatta with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country

MAJOR PLAYERS OF AUTOMATIVE INDUSTRY:Honda

Honda Motor Co. (HMC) was established by Soichiro Honda in 1946. It originally began producing motorcycles in the mid 20th century and began manufacturing automobiles (the Honda Civic) in 1972.After the original Civics inception, Honda produced many variants of this highly successful vehicle, suchas the four-door sedan, wagons, hatchback, coupe, and more recently the hybrid. Honda currently has two automotive brands (Honda and Acura) and it produces over 20 other vehicle models, such as the Accord, Element, Insight, Odyssey Minivan, Pilot SUV, and Ridgeline Truck, in addition to producing motorcycles and power products. Since Honda began producing automobiles it has been a leader in producing fuel efficient and low emissions vehicles. In 1977 and 1983, Civic models ranked first in U.S. fuel-economy tests. Honda has also introduced hybrid vehicles such as the Insight, Civic, and Accord, in 1999, 2002, and 2004, respectively, with the 2006 Insight being the most fuel efficient car of 2006. Currently, Honda ranks sixth in sales within the automotive industry. They have overseas plants in over 12 countries including the U.K., Italy, Brazil, Taiwan, Indonesia, Malaysia, Thailand, Nigeria, U.S., and Canada. Honda has been increasing their production capacity worldwide in response to their steady growth in total sales over the last few years. From 2002 to 2003, Honda increased sales by 95,000 units, and from 2003 to 2004, sales increased by 259,000 units. With this growth in sales Honda has seen a commensurate increase in its revenues (see Figure 7 in Appendix A). In China, they saw approximately a 50% increase in sales from the fiscal years of 2003 to 2004, and they expect sales to keep increasing.

In the future, Honda has stated that they will keep improving the fuel efficiency of all their vehicles. They will continue to expand their production capacity in Asia, due to the expected increases in demand in those regions. In the U.S., they plan on launching new models targeted to younger people to create a new base of loyal customers. Given Hondas past record on delivering high quality and fuel efficient vehicles, their strong position in the current market, their strategic direction for the next few years, and the rising costs of fuel worldwide, it is evident that Honda will have a strong presence in the automotive market in the future.

Hyundai
Hyundai Motor Co. (HMC) was established in Korea in 1967. The companys first model (Cotina) was released, in cooperation with Ford Motor Company, in 1968. In 1998, Hyundai acquired a 51% stake in Kia, but has since reduced its share to 37%. In 2004, Hyundai was South Koreas largest car maker and the worlds seventh largest car maker selling 2.3 million units. Hyundai currently offers about a dozen cars and minivans, as well as trucks, buses, and other commercial vehicles. Some popular entries in their product lineup include the Accent, Sonata, Tucson, Elantra, Santa Fe, and Tiburon, which all earned the title Best Bet in Jack Gillis The Car Book 2005. Team A 8 Hyundais outlook is on the upswing. Hyundais parent company, Hyundai Motor Group, began investing heavily in the quality, design, manufacturing, and long-term research of its vehicles starting in 1998. This investment paid off in 2004 when Hyundai tied with Honda for initial brand quality in a survey from J.D. Power and Associates. Hyundais increase in both quality (named Best Value Car Award Winner Smart Money magazine 2005) and safety (received Automotive Excellence in Safety Award Popular Mechanics 2005) along with its low prices will allow it to continue to grab new market share. Reflecting this trend of low prices and increased market share, in 2004 Hyundai reported a dramatic increase in annual revenues to 50.7 billion dollars and only a small gain in net income to 1.78 billion dollars Hyundais growth is fueled by increasing international sales. From January-September 2005, sales in Russia increased 100% and sales in the U.S. increased 10% yearon-year. To meet this new demand, Hyundai has been investing in manufacturing plants in North America, India, China, Turkey and research and development centers in North America, Japan and Europe. In June 2004, Hyundai opened its first plant in the U.S. In 2006, Hyundai plans to start construction on a new production plant in Europe. Counteracting these positive international sales trends, Hyundai has recently run into trouble in its domestic (Korean) plants. In August 2005, the production of 25,683 vehicles was delayed due to a strike by the companys unionized workers. Later

that week, Kias workers joined the strike causing Kia to delay the production of 21,273 vehicles. The economic effects of these strikes have yet to be reported. If Hyundai can overcome these recent strikes, the companys future outlook is promising.

Maruti Udyog
A license and Joint Venture agreement was signed between the government of India and Suzuki Motor Company (SMC) in Oct. 1982 to launch Maruti Udyog Limited (MUL). Today, MUL offers 11 models, including the Maruti 800, Omni, premium small car Zen, international brands Alto and WagonR, off roader Gypsy, mid size Esteem, luxury car Baleno, MPV, Versa, Swift, and Luxury SUV the Grand Vitara XL7. MULs dominant position in the Indian car market and its ability to satisfy its customers have made it the success it. MUL has been the leader in the Indian car market for two decades. Today, MUL holds about 50% of the total Indian market. For a record sixth year in a row, MUL was ranked highest in customer satisfaction, according to the J.D. Power Asia Pacific 2005 India Customer Satisfaction Index Study. In 2004, Business World ranked MUL among the countrys five most respected companies and the countrys most respected automobile company. As the dominant player in the Indian automobile market, MUL is focusing on entering new markets in India to increase market share. MUL recently added service businesses including sale and purchase of pre-owned cars, lease and fleet management service for corporate clients, Maruti Insurance and Maruti Finance. In April, MUL made large investments in a new plant that will produce diesel engines. Once this plant is operational, MUL plans to increase its role in the diesel segment of the market, which now accounts for about one-fifth of the total passenger car market in India. Competition has become fierce in some Indian market segments, especially entry level compact cars. MULs major competitor in this market, Hyundai Motor Company, is aggressively expanding its sales and network across India. MUL has reduced the price of the Maruti 800 three times this year to keep this

model cheaper than those offered by Hyundai. Even with the planned expansion to new Indian markets, MULs future success will depend greatly on how well it can compete with its new international competitors.

Nissan
Nissan Motor Co., Ltd. (NSANY), was established in 1933 in Japan, but its roots go back to 1914 when the first Datsun automobile was produced. Nissan first appeared on American shores in 1958 when a Datsun sedan was released on the U.S. market. Nissan furthered its influence on the American market in 1960 when Nissan Motor Corporation, U.S.A. was established in Gardena, California. In 1989, Nissan founded Infiniti, the luxury division of Nissan North America, Inc. The most recent major corporate event, however, came in 1999 with the formation of the Renault-Nissan alliance. While Renault, a French corporation, and Nissan remain independent corporations, both companies share a single joint strategy of profitable growth and a community of interests. More specifically, as a result of the alliance, Renault holds a 44% stake in Nissan, while Nissan owns a 15% stake in Renault. Excluding Renault, Nissan supports two major brands Nissan and Infiniti, and produces a total of 18 different vehicle models. Nissans stated mission is investment in the future. Nissan has experienced a substantial recovery over the past six years. Carlos Ghosn became CEO of Nissan in 1999 after leading both Renault and Michelin U.S. through economic turnarounds. Before Ghosns arrival, Nissan had experienced seven years of losses. After posting a -$6.456 billion net income in 2000, Nissan has steadily recovered under Ghosns leadership such that in 2004 they earned $4.882 billion in net income. Since 2002, revenue has increased approximately 50%. Sales have risen 22% over that same period. In 2004, Nissan was able to sell 3,388,000 automobiles. Nissan, including all consolidated subsidiaries, currently employs 123,748 workers in 18 countries on 4 continents. Nissans market share in the U.S. stands at around 6% as of 2004 while, in Japan, Nissan holds 19.3% of the market as of 2005. Along with Toyota, Nissan has recently become one of the most successful Japanese automobile companies in the U.S. The Infiniti brand has regularly been the recipient of industry awards. In 2005, the Infiniti G35 won the Automotive Lease Guides (ALG) Residual Value Award given to the vehicle expected to retain the highest percentage of its original value. Also, the G35 was a recipient of Car and Drivers 10 Best Award. In 2004, Auto Week named the G35 Americas Best Coupe. Two other models, the Q45 and the M, have been given the Insurance Institute for Highway Safetys (IIHS) highest possible safety rating of Best Pick.

Nissan is not optimistic about the sales outlook in the U.S. or Chinese markets. Ghosn recently predicted that growth in the U.S. market is at the beginning of the end, and that the sales bonanza in China is a thing of the past. In the face of an industry-wide decrease in growth, Nissans outlook is not outstanding. However, good management and a strong global presence will serve Nissan well as the competition moves to emerging markets.

Shanghai AIC
The Shanghai Automotive Industrial Company (SAIC) Group, representative of the numerous up-and coming auto manufacturers in Asia, is a government controlled firm that produces passenger cars, tractors, motorcycles, trucks, buses, and automotive parts. SAIC was established in the 1960s, but only started to make a significant impact in the automotive market upon entering into a joint venture with Volkswagen in 1984 to manufacture Santana sedans. In 1997, SAIC expanded further by creating a second major joint venture, this time with General Motors. With approximately 50 plants in the Shanghai area and over 40 joint ventures with global automotive companies, SAIC is now the largest automotive manufacturer in China. SAIC is not publicly traded, but has one subsidiary, an auto parts manufacturer titled Shanghai Automotive Co., Ltd, listed on the Shanghai Stock Exchange. Although SAICs origins were small, the joint partnerships with Volkswagen and GM served as a way for SAIC to jumpstart their enterprise in terms of capital, expertise, and designs. By 2000, SAICs production Team A 10 capacity had reached 400,000 vehicles and accounted for 45 percent of Chinas car market. In 2003, SAIC produced over 600,000 cars just in the joint ventures with VW and GM, a dramatic increase of 57% from 2002. That catapulted SAIC onto FORTUNEs list of the worlds 500 largest companies at number 461, with revenues in 2003 of US$11.8B and profits of US$689M. However, SAIC has ambitious intents to go beyond the opportunities afforded by these joint ventures. SAIC plans to develop its own brands and to have them on the market as early as 2007, with goals of producing 2 million cars in 2010 and 3 million in 2020. Doing so would make SAIC one of the six largest automotive manufacturers worldwide. To achieve this semi-independence, SAIC has put great emphasis on research and development. Among other things, it acquired intellectual property rights for the Rover 25 and 75 before MG Rovers collapse and last year purchased Ssangyong, a South

Korean maker of sport utility vehicles. This purchase makes SAIC the first Chinese automaker to have a controlling interest in a foreign carmaker, helping achieve two other goals: expanding beyond China to enter the global automotive market and getting ahead of its two main local competitors, Dongfeng Motor and First Auto Works. As a goal for its world market, SAIC aims to hit export revenues of US$5B in 2010.

Toyota
Toyota was established as a public company in Japan in 1937. It entered the U.S. market in 1957, but only became successful with the introductions of the Corona in 1965 and the Corolla in 1968. By 1970, Toyota was the worlds fourth-largest carmaker and by 1975 had displaced Volkswagen as the U.S.s #1 auto importer. Toyota began auto production in the U.S. in 1984 through a joint venture with GM, and launched the successful Lexus line in the U.S. in 1989. Since then, Toyota has continued to grow steadily, becoming the third largest global automotive manufacturer as of 2003, with sales last year of 7.4 million vehicles. Unlike many other large auto manufacturers, Toyota carries only 4 brands: Toyota, Hino, Scion, and Lexus; it also has a majority interest in Daihatsu. Known for their quality and reliability, Toyota cars and light trucks such as the Camry (Best-selling passenger car in America, 2004), Corolla, Lexus LS330, Prius (Motor Trends Car of the Year, 2004).

IMPORTANCE OF AUTOMOTIVE INDUSTRY :The Indian automotive components industry has fast emerged from a supplier of the domestic market only, to one of the central and best auto parts supplier of Asia. Apart from being a significant player in the global automotive supply chain, auto component companies India also supply high-value and sophisticated auto components to renowned auto makers such as General Motors, Toyota, Ford, Volkswagen to name a few. Most global auto makers purchase Indian auto components to meet the growing demands for hardy and genuine spare parts. According to statistics revealed by the Automotive Component Manufacturers Association of India (ACMA), the estimated turnover of the auto component industry will be around US .2 billion, in the year 2009-10. Whereas exports from the auto component companies India will be around US .2 billion. The maximum percentage of Indian automotive

components is dominated by engine parts that accounts to almost 31%, 19% by drive transmission and steering parts and 12% each by suspension and braking parts and body and chassis respectively. The best auto parts supplier from India covers three main clusters mainly, commercial vehicle suppliers Delhi and NCR regions, Pune and Chennai. Initiatives of the UNIDOSPX further helped the Indian Auto component manufacturers to reach out to the global auto majors by organizing noteworthy and useful events such as the Auto Expo 2010 held from 5-11 January 2010 in New Delhi. The UNIDO-SPX India is a technical information and match making centre for industrial subcontracting and supply chain management that helps small and medium sized companies to reach out to the global audience and make a foothold in the international market. Various auto component companies India, especially from the small and medium sectors were immensely benefited from this Auto Expo fair that strengthened their chance of creating tie-ups with big international as well Indian players in the automobile industry. The various delegations from all around the world who were participating in this Auto Expo also got a chance to get into contract with commercial vehicle supplier Delhi & NCR, Pune and Chennai to purchase Indian auto components. According to the Investment Commission of India, India is among the most competitive manufacturers and best auto parts supplier in the world. More and more international auto component makers including big names like Delphi, Visteon, Bosch and Meritor are interested to purchase Indian auto components and have set up operations in India. Apart from this India is also becoming the main hub for research and development of automotive components with companies like Bosch, Suzuki, Johnson Control etc setting up research and development centers in this country. ACMA is the main agency for the Indian automotive components industry that helps the auto parts manufacturers to participate in international trade and technology fairs, send delegates abroad, bringing out publications on various automotive industry issues etc. ACMA also helps the auto component companies India to maintain their standard and quality of products and keep themselves upgraded according to international standards. India is the second largest producer of motorcycles in the world after China. The vast range of vehicles made in India includes; Light passenger vehicles including passenger cars, MUVs, SUVs, Commercial

vehicles including light commercial vehicles, medium and heavy commercial vehicles and buses, Tractors that include earth moving, and construction equipments,

Two wheelers including motorcycles, scooters, mopeds and Three wheelers including passenger carriers and goods carriers.

Current comparative statistics

The production of automobiles has greatly increased in the last decade. It passed the 1 million mark during 2003-2004 and has more than doubled since. Car Production Total Vehicles Prodn. 3,536,783 2,641,550 2,332,328 2,253,999 2,019,808 1,628,755 1,511,157 1,161,523 894796 814611 801360 818193

Year

% Change Commercial % Change

% Change

2010 2,814,584 2009 2,175,220 2008 1,846,051 2007 1,713,479 2006 1,473,000 2005 1,264,000 2004 1,178,354 2003 907,968 2002 703,948 2001 654,557 2000 517,957 1999 533,149 Year

29.39 17.83 7.74 16.33 16.53 7.27 29.78 28.98 7.55 26.37 -2.85

722,199 466,330 486,277 540,250 546,808 362, 755 332,803 253,555 190,848 160,054 283,403 285,044

54.86 -4.10 -9.99 -1.20 50.74 9.00 31.25 32.86 19.24 -43.52 -0.58

33.89 13.25 3.35 10.39 19.36 7.22 23.13 22.96 8.96 1.62 -2.10

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 9,743,503 11,087,997 10,853,930 11,175,479

Motor Vehicle Production 8,467,853

Industry Revenue Exports (Units) Exports (Revenue)

24,379 629,544 1,915

26,969 806,222 2,231

30,507 1,011,529 2,552

32,383 1,238,333 3,008

33,342* 1,530,660 3,718*

Automobile Production
Type of Vehicle Passenger Vehicles 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 1,209,876 1,309,300 391,083 434,423 7,608,697 9,743,503 1,545,223 519,982 556,126 8,466,666 1,777,583 549,006 500,660 8,026,681 1,838,697 417,126 501,030 8,418,626

Commercial Vehicles 353,703 Three Wheelers Two Wheelers Total 374,445 6,529,829 8,467,853

11,087,997 10,853,930 11,175,479

Automobile Sales
Type of Vehicle Passenger Vehicles 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 1,061,572 1,143,076 351,041 359,920 7,052,391 8,906,428 1,379,979 467,765 403,910 7,872,334 1,549,882 490,494 364,781 7,249,278 1,551,880 384,122 349,719 7,437,670 9,723,391

Commercial Vehicles ] 318,430 Three Wheelers Two Wheelers Total 307,862 6,209,765 7,897,629

10,123,988 9,654,435

Automobile Exports
Type of Vehicle Passenger Vehicles 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 166,402 175,572 198,452 218,401 335,739

Commercial Vehicles
[18]

29,940

40,600

49,537

58,994

42,673

Three Wheelers [18] Two Wheelers [18] Total

66,795 366,407 629,544

76,881 513,169 806,222

143,896 619,644 1,011,529

141,225 819,713 1,238,333

148,074 1,004,174 1,530,660

Source: http://enwikipedia.org/wiki/utomotive_industry_in_india

Top 20 Export destinations in 2007-2008 and growth from previous year

Rank Country 2007-2008 (in USD Millions) 2008-2009 (in USD Millions) Percentage Growth

United States of America Italy Sri Lanka South Africa United Kingdom United Arab Emirates Algeria Bangladesh Egypt Germany Colombia Nepal Mexico Turkey Spain France

593.64

525.24

-11.52

2 3 4 5

332.35 249.14 224.93 165.57

359.68 216.11 188.57 246.32

8.22 -13.26 -15.79 48.77

164.44

192.74

17.21

7 8 9 10 11 12 13 14 15 16

147.34 137.26 134.43 133.52 118.88 111.33 93.80 83.53 81.01 76.77

265.63 164.86 143.54 409.63 120.71 98.13 94.10 73.82 56.96 134.21

80.28 20.11 5.99 206.8 1.54 -11.86 0.32 -11.63 -29.69 74.83

17 18 19 20

Nigeria Greece Netherland Ghana

66.01 65.75 65.19 59.91

148.74 127.63 163.66 38.30

125.03 94.1 151.05 -36.07

MAJOR ISSUES FACED BY THE AUTOMOBILE INDUSTRY:Economic Affairs

In this section we are giving the latest information on various economics and commercial aspects governing the Indian Automobile Sector. In the first section we have given the Auto Policies of Government of India to facilitate sustainable development of Indian Automobile industry.

In the second section we have given the current rates of major duties and taxes applicable to vehicles in India. Excise Duty is essentially a manufacturing tax imposed on all vehicles manufactured in India. The same rate is applicable to imported vehicles in the form of Counter Vailing Duty (CVD). Custom Duty is essentially an import duty applicable on all imports. VAT has recently replaced Local Sales Tax in India. However, VAT has not yet been adopted by all states in India. In the next sub-section we have given the SIAM activities related to Union Budget. We have given the SIAM Pre-Budget Memorandum, which was submitted to Ministry of Finance before the Union Budget and is essentially a compilation of SIAM suggestions for changes in policy and procedure issues related to the Budget. We have also given the Union Budget highlights which are related to the Automotive Sector.

Finally, in the Trade Policies section we have given write-ups on Indias engagements in various Trade Negotiations, Indian Preferential Trade agreements and NAMA negotiations in WTO and Indian Automobile Industry. The major problems that inhibit good performance by the industry are the following : Smuggling of clocks and ICs. Price cutting by unorganised sector by using low cost, smuggled components and resorting to unaccounted sale. Non-availability of good quality plastics, brought out by small manufacturers who use recycled plastics to keep cost down. Non availability of raw material from domestic source. Spurious watches Restriction on manufacture of straps. High duties

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Critical managerial observation and implications

Having gone through the status of automotive industry in India, the Committee finds that Indian auto industry has the potential to become a key growth driver of the Indian economy. Indian automobile industry has since long been governed by regulations. Imports, collaborations and equity ventures were restricted by the Government. Capacity expansion was restricted and required licenses were issued by the Government. Technology transfer from foreign companies and payments therefore were also restricted and subject to Government approval. However, with the onset of liberalization and globalization process, the global automotive industry is on the move, therefore, the domestic automotive industry needs to catch up with pace of global development. For this to be achieved the Government needs to play a more active role in developing this industry. The policy levers adopted so far by the government do not provide a sufficiently strong support framework to the industry players. Other countries seem to have not only clearly stated goals, but also a more comprehensive and coherent approach to policies. Successful development of the auto industry in other countries reveal several principles for effective policy. India needs a more proactive auto policy, for India to achieve the industry vision. Such an effective auto policy has to target the specific needs of each segment of the industry depending upon its maturity level and competitiveness.

SUMMARY
The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting about 1.5 million every year. The dominant products of the industry are two wheelers with a market share of over 75% and passenger cars with a market share of about 16%. Commercial vehicles and three wheelers share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes. The industry has attained a turnover of more than USD 35 billion and provides direct and indirect employment to over 13 million people.

The supply chain of this industry in India is very similar to the supply chain of the automotive industry in Europe and America. This may present its own set of opportunities and threats. The orders of the industry arise from the bottom of the supply chain i. e., from the consumers and goes through the automakers and climbs up until the third tier suppliers. However the products, as channelled in every traditional automotive industry, flow from the top of the supply chain to reach the consumers.

Interestingly, the level of trade exports in this sector in India has been medium and imports have been low. However, this is rapidly changing and both exports and imports are increasing. The demand determinants of the industry are factors like affordability, product innovation, infrastructure and price of fuel. Also, the basis of competition is the sector is high and increasing and the life cycle stage is growth. With a rapidly growing middle class, all the advantages of this sector in India are yet to be leveraged.

Note that, with a high cost of developing production facilities, limited accessibility to new technology and soaring competition, the barriers to enter the Indian Automotive sector are high and these barriers are study. On the other hand, India has a well-developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government. The cost structure of the industry is fairly traditional, but the profitability of motor vehicle manufacturers has been rising over the past five years. Major players, like Tata Motors and Maruti Suzuki have material cost of about 80% but are recording profits after tax of about 6% to 11%.

The level of technology change in the Motor vehicle Industry has been high but, the rate of change in technology has been medium. Investment in the technology by the producers has been high. System-suppliers of integrated components and sub-systems have become the order of the day. However, further investment in new technologies will help the industry be more competitive. Over the past few years, the industry has been volatile. Currently, Indias increasing per capita disposable income which is expected to rise by 106% by 2015 and growth in exports is playing a major role in the rise and competitiveness of the industry.

Tata Motors is leading the commercial vehicle segment with a market share of about 64%. Maruti Suzuki is leading the passenger vehicle segment with a market share of 46%. Hyundai Motor India and Mahindra and Mahindra are focusing expanding their footprint in the overseas market. Hero Honda Motors is occupying over 41% and sharing 26% of the two wheeler market in India with Bajaj Auto. Bajaj Auto in itself is occupying about 58% of the three wheeler market.

Consumers are very important of the survival of the Motor Vehicle manufacturing industry. In 200809, customer sentiment dropped, which burned on the augmentation in demand of cars. Steel is the major input used by manufacturers and the rise in price of steel is putting a cost pressure on manufacturers and cost is getting transferred to the end consumer. The price of oil and petrol affect the driving habits of consumers and the type of car they buy.

The key to success in the industry is to improve labour productivity, labour flexibility, and capital efficiency. Having quality manpower, infrastructure improvements, and raw material availability also play a major role. Access to latest and most efficient technology and techniques will bring competitive advantage to the major players. Utilising manufacturing plants to optimum level and understanding implications from the government policies are the essentials in the Automotive Industry of India.

Both, Industry and Indian Government are obligated to intervene the Indian Automotive industry. The Indian government should facilitate infrastructure creation, create favourable and predictable business environment, attract investment and promote research and development. The role of Industry will primarily be in designing and manufacturing products of world-class quality establishing

cost competitiveness and improving productivity in labour and in capital. With a combined effort, the Indian Automotive industry will emerge as the destination of choice in the world for design and manufacturing of automobiles.

REFERENCES: http://enwikipediaorg/wiki/automotive-industry_in_india http://www.plastickachirugia.info/2011/05/ http://www.siamindia.com/scripts/economicaffairs.aspx http://www.siamindia.com/scripts/industrystatistics.aspx http://www.srl.gatech.edu/members/bbradley/me 6753.industryanalysis.teama.pdf http://www.hmtindia.com/hmt/frame.asp?page=rtiact.hmt http://www.hmttractors.co.in/htm/milestones.hmt http://en.wikipediaorg/wiki/financial_analysis http://bizfinance.about.com/od/yourfinancial position/a/compbalsheets.hmt http://finance.yahoo.com/q/ks?shmt http://www.moneycontrol.com/annual_report/hmt/directors_report/hmt http://www.yhaindia.org/test123/files/about/about/achievements.php http://infinance.yahoo.com/q/bs?=f&annual http://www.moneycontrol.com/india/financials/competentautomobilescompany/balance_sheet/c ac http://financ/e.yahoo.com/q/bs?s=tm?balance?sheet&annual

INTRODUCTION OF HMT
HMT was the fulcrum on which the industrial development of India was envisaged. It was set up in 1953 to meet the challenge and take up the pioneering role in the development of machine tools - the vital component for industrial development. HMT successfully diversified into diversified areas of engineering. Leading this diversification drive was the HMT Tractor Business Group. Since its inception in 1971, HMT Tractor Business Group has increasingly contributed its might in building HMT into an organisation to reckon with. Presently Tractor Business Group is part of HMT Ltd., the holding company of HMT Group.

HMT TRACTORS-The POWER Behind Farm Mechanization

Pioneers of Farm Mechanization in India: HMT rolled out its first 25 HP tractor in collaboration with Motokov of erstwhile Czekoslovakia from its Pinjore plant in the state of Haryana. The success of the 25 HP tractor in Indian conditions led HMT to indigenize the 25 HP in a short span of five years. And that was just the beginning... The passing years, saw the needs of the Indian farmer change. Farm mechanization was growing at a rapid pace and called for more powerful and multi-role tractors. HMT stepped in by introducing tractors that met the specific needs of the agricultural sector. HMT manufactures a wide range of tractor from 25 HP to 75 HP. Keeping in tune with HMT's philosophy of introducing innovative products and continuously upgrading its tractors with better technology, these models incorporate contemporary technology viz. fuel efficient engine meeting emission norms, floor

gears, direct axle, latest styling giving value for money to its customers. Strong Manufacturing Base: HMT's Tractor Project commenced its operations from Pinjore in June 1971.This unit is the main unit today fully integrated with foundry, manufacturing, assembly and testing facilities for 20000 tractors and engines. Beside, assembly unit at Hyderabad (Andhra Pradesh, India). The Tractor unit is certified with ISO 9001 Quality Standards. Tractor Business Group: PINJORE

Integrated plant having captive foundry of capacity 2250 TPA Facilities to manufacture components for 20000 tractors & engines p.a. Facilities to assemble 15000 tractors & 20000 engines p.a. Research & Development Centre Marketing headquarters Spare Parts Management Centre

HYDERABAD

Set up in 1992 Having Facilities to assemble 1500 tractors p.a.

MARKETING

Area offices: 15 Stockyards : 7 Dealers: 305 Exports thru' its subsidiary, HMT (International )Limited, a recognized export house.

COMPANY HISTORY - HMT

In year 1953 - The Company was In corporate in Bangalore. The Company was converted into a Public Limited Company on May 13, 1977. The main objects of the Company is Manufacturing of the Machine Tools, Metal forming presses and press brakes, pressure die, casting machines and automatic plastic injection moulding machines, Automatic plastic injection moulding machines, Paper cutting machines, Automatic plastic injection moulding machines, Paper cutting machines, Tractors 25/35/55 HP, Lamps and Lamp making machines, Printing Machinery, Printing Machinery, Watches Some of the trade names of the watches manufactured are Janata, Sona, Pilot, Tarun, Nutan, Jawhar, Automatic Day and Date, Priya, Chinar, Nishat, Rakhee, Avinash and Kohinoor. - The Machine Tool Division at HMT Bangalore, was the oldest manufacturing unit of the Company and the product lines consist of 16 types of metal working machines. The Die Casting Division was set up for the manufacture of Die Casting and Plastic Injection Moulding machines in technical collaboration with Reifenhaeuser GmbH & Co.o Watch Factory Division: set up during the year in technical collaboration with Citizen Watch Co., Ltd., Tokyo, this division started with manufacture of hand winding watches. A new plant was set up to manufacture self-winding watches in collaboration West Germany. 1961 - The Watch Factory at Bangalore had two operating divisions the with the same Japanese firm and Horological Machinery: Division was established for the manufacture of sliding headstock automatics in technical collaboration with M/s. Jos Petermann, Switzerland. The Watch Factory at Srinagar was set up for the manufacture of 3 lakh hand winding watches. 1963 - The HMT, in Pinjore have two operating divisions attached to it, viz., Machine Tool Division and Tractor Division. The Machine Tool Division was set up during the year. The Tractor Divisions was set up in technical collaboration with Mototov Foreign Trade Corporation, Prasha, Czechoslavakia. 1964 - The Two operating divisions attached to HMT, Kalamassery, were the Machine Tool Division and the Printing Machine Division set up in collaboration with Societa Nebiolo, Turin, Italy. 1965 - The HMT at Hyderabad had 3 operating divisions, the Machine Tool Division primarily for the manufacture of special purpose machine tools. The Press Division was set up in technical collaboration with M/s. Verson Allsteel Press Co., Chicago, U.S.A. The Lamp Division was established for the manufacture

of lamps and lamp components in collaboration with United Incandescent Lamp and Electrical Co., Ltd. (Tungsram), Budapest, Hungary. 1975 - The HMT at Ajmer was set up by the Govt. of India as the unit of Machine Tool Corporation of India, Ltd. with effect from 1st April, the unit was merged with HMT. 1976 - The manufacture of critical components like hair spring and main spring were also taken up by setting up a new plant by the Watch Factory Division at Bangalore. The following collaborations agreements were concluded during the year: With the Cross Company, Fraser, Michigan, U.S.A. for the manufacture of special purpose machines in Hyderabad, With M/s. Creusot - Loire, Paris, for the manufacturing of rotary web offset printing machines, With M/s. Laeis Werke AG, Trier, West Germany, for the manufacture of refractory presses, A MOU with M/s. Tesa SA, Renens, Switzerland, a subsidiary of Brown & Sharpe Manufacturing Co., Rhode Island, U.S.A., for the manufacture of precision measuring instruments. 1977 - All shares issued to Govt. of India. 1978 - The Company undertook a scheme to expand the capacity of Watch Factory to 4 lakh watches in 1979 and 5 lakh watches in 1980. 1979 - All shares issued to Govt. of India. 1980 - The Company entered into a collaboration agreement with Pegard S.A. of Belgium for adding new models to the existing range of Horizontal boring machines. 1981 - The Company proposed to manufacture silver oxide miniature batteries in collaboration with Hitachi-Moxcell Ltd., Japan. These would be used in electronic and quartz watches. 1993 - To capture the growing urban market for fashionable watches, two new brands viz., `Ramani' for gents and `Utsav' for ladies were launched. 1995 - All shares issued to Govt. of India. 1996 - The Company has decided to convert Lamp Division into a separate wholly owned subsidiary. 1997 - Production also suffered due to slowdown in the economy coupled with stiff competition from imported machines.

1998 - HMT International Ltd, a wholly-owned subsidiary of HMT, has bagged a Rs.13-crore order for setting up an Entrepreneur Technical Development Centre (ETDC) at Dakar in Senegal. 1999 - The Industry Ministry has directed the state-owned Hindustan Machine Tools to explore possibilities of joint venture Formation for its watch division. 2000 - Icra has assigned an LAAA (SO) rating and an MAAA (SO) rating to the Hindustan Machine Tools (HMT) bonds of Rs 469 crore 10-year tenure and Rs 40.43 two-year tenure. 2001- Mr. Manohar Joshi, Union Minister for Heavy Industries and Public Enterprises, has unveiled the HMT 4922 tractor at a launch ceremony organised at Pinjore, Chandigarh. 2002 -HMT Ltd has informed that consequent upon relinquishing of the charge of Chairman & Managing Director, Tractor, upon resignation by Mr. R A Sharma on July 04, 2002 Mr. M S Zahed, Director, Organisation & Management has taken additional charge of the post of Chairman & Managing Director, Tractor of the Company. 2003 -HMT Ltd has informed BSE that pursuant to Order dated January 9, 2003 from the Department of Heavy Industry, Ministry of Heavy Industries & Public Enterprises, Government of India, New Delhi, Shri M.S. Zahed, Chairman & Managing Director (Acting) and Director (Organisation & Management) has been appointed as Chairman & Managing Director of the Company for a period of 5 years from the date he assumes charge of the post or till the date of his superannuation or until further orders, whichever is earlier. Shri.M.S Zahed assumed charge of the post of January 09, 2003. 2004 HMT Ltd. has informed that the equity shares of the Company have been delisted from the Bangalore Stock Exchange Limited, the Regional Exchange for HMT Limited, with effect from January 3, 2004. HMT signs agreement with UK-based Trantor for high power tractors HMT bags CMTI-PMT Trust Award HMT enters into a Technology Collaboration Agreement with M/s Trantor Vehicles Ltd HMT Ltd. enters into a Technology Collaboration Agreement with Trantor Vehicles Ltd. U.K. Signs MoU with State Bank of India (SBI) for tractor finance 2005 HMT inks agreement with ONGC, MRPL

 HMT in dialogue with Japanese co for MUV 2006 HMT Ltd has Shri. R Asokan, Director (Finance), Department of Heavy Industry, New Delhi has been appointed as Part-time Official Director on the Board of the Company vice Presidential Order dated October 30, 2006, with effect from October 30, 2006 Hmt Ltd. has informed that HMT (International) Limited, the wholly owned Subsidiary of HMT Limited, Bangalore, would set up Indo-Zimbabwe Technology Centre (IZTC) in Harare and India Technology Centre (ITC) in Bulawayo. HMT Ltd has informed that the Company has established a high tech Engine Emission Testing Laboratory in R&D Centre at its Tractor Division, Pinjore at an investment of Rs 50 million.

2007 HMT Ltd has appointed Shri. N Gokulram, Additional Secretary & Financial Adviser, Ministry of Heavy Industries & Public Enterprises, as Part-time Official Director on the Board of the Company video Presidential Order dated January 22, 2007, with effect from January 22, 2007 and until further orders vice Shri. R Asokan, Director (Finance), Department of Heavy Industry, New Delhi. Dr. Surajit Mitra has been appointed as Part-time Official Director on the Board of the Company vice Presidential Order F.No.5(35)/1995-PE.X (Vol.II) dated March 06, 2007, until further orders with effect from March 06, 2007. 2008 HMT Ltd. has informed that Shri B.S. Meena has been appointed as Part-time Official Director on the Board of HMT Limited vide Presidential Order F. No. 5 (35)/ 1995- PE. X dated January 25, 2008, until further orders with effect from January 25, 2008. Hmt ltd has appointed Shri S. Behuria, Additional Secretary & Financial Adviser to Government of India, Ministry of Heavy Industries & Public Enterprises, New Delhi, as Part-time Official Director on the Board of HMT Limited vide Presidental Order F. No. 5(35)/1995-PE.X dated October 14, 2008, until further orders with effect from October 14, 2008. Further the Company has submitted the List of Directors of the Company as on October 14, 2008.

 HMT Ltd has appointed Shri S G Sridhar, General Manager (Technical), Hindustan Latex Ltd, as Director (Operations) on the Board of the Company with effect from December 15, 2008, video Presidential Order dated October 22, 2008. 2010-Hmt Ltd has informed that Shri Harbhajan Singh has been appointed as Part-time Official Director on the Board of the Company with effect from January 11, 2010.

ORGANIZATIONAL STRUCTURE
unit level HMT ltd. Pinjore , the executive Director is the head of the unit and the organization is further divided into two main division: Tractor division Machine tools

oth the units are controlled by the General Manager. The General Manager of (HRM) Human Resource Management

overall in charge of matter relation to the personnel and industrial relations of both the divisions.

arketing department of Machine tools division and Tractor division is headed by the Joint General Manager and

eputy General Manager respectively and assisted by the following staff . Sharing the chain of responsibility of the

spective departments. DEPARTMENT MTP a) b) c) d) e) f) g) h) Design Planning Progress Inspection Store Purchase Sales Personnel Dep.General Manager Joint General Manager Joint General Manager DGM(QA) DGM DGM Manager GM(HRM) DESIGNATION TRP GM(R&D) JGM(ET) AGM(RT) JGM(IT) AGM DGM DGM

R.NO.

st of Public Information Officers of the Company and its Subsidiaries Name & Designation Dr. M.N. Kulkarni Joint General Manager (HR) HMT Machine Tools Smt. D.V Ramadevi Limited Asst. General Manager (HRM Contact Address HMT Bhavan, #59, Bellary Road , Bangalore 560 032 HMT Bhavan, #59, Bellary Road , Bangalore 560 032 (080)23547985 (080)23337800 [email protected] , [email protected] HMT Watches Limited Vijay Jyoti Dant HMT Watches Limited, (080)23558484 (080)23338950 [email protected] , [email protected] (080)28381779 (080)23457137 [email protected] Phone / Fax/ e-mail (080)23337585 (080)23339111 [email protected]

N Company HMT Limited

Deputy General Manager Watch Factory, (HR) HMT P.O, Bangalore - 560 031

HMT Chinar Watches Limited

Raina, V.C. Joint General Manager (Corporate Services)

Srinagar Cell Office, CSD Building , HMT P.O., Bangalore-560 031

HMT Bearings Limited

S. Ammaji Assistant General Manager

Moula Ali, Hyderabad-500040

(040)27242237

(040)27242737 [email protected] [email protected]

HMT (International) Jerome Kujur Limited

HMT Bhavan, #59, Bangalore 560 032

(080)23339060-65 (080)23339286/9048 [email protected] , [email protected]

Deputy General Manager Bellary Road , (HR)

st of Assistant Public Information Officers of the Company and its Subsidiaries Name & Designation Jatinder Vijh Deputy General Manager(HRM) Contact Address Tractor Division, PINJORE 134101 (Dist. Panchkula) HARYANA K.L.Kaithwas General Technical Manager Food Processing Machinery P: (0240) 248 5348 Divn. H-2 MIDC, Chikalthana, AURANGABAD 431210 R K Sadhu Common Services Division P: (080) 5662 6751 F: (080) 2345 3737 E: [email protected] P: (080) 2363 3178 F: (080) 2333 7800 E: [email protected] BANGALORE 560031 Marketing Division HMT Bhavan, 59, Bellary Road , BANGALORE 560032 M.Ravindranatha Prabhu Manager (PR) Machine Tool Division, HMT P.O BANGALORE 560031 P: (080) 6662 6885 F: (080) 2838 2797 E: [email protected] : [email protected] Jatinder Vijh Tractor Division, P: (01733) 264 266 F: (01733) 264 114 E: [email protected] : [email protected] P: (0484) 255 9423 F: (0484) 253 2166 Deputy General Manager PINJORE 134101 (HRM) (Dist. Panchkula) HARYANA V Vinayan Deputy General Manager(HRM) Machine Tools Division, HMT Colony P.O F: (0240) 248 5007 E: [email protected] Phone / Fax / e-mail P: (01733) 264 761 F: (01733) 264 242 E: [email protected]

ompany

MT LIMITED

Dy. General Manager (E) HMT P.O

MT MACHINE Nirmala Vijayakumar Jt. General Manager (SY)

OOLS

MITED

KALAMASSERY 683503 E: [email protected] : Ernakulam Dist. [email protected] P: (040) 2308 5721 F: (040) 2308 5952 E: [email protected] :

K. Seshagiri Rao Public Relation Officer

Machine Tools Division, HMT Township P.O Narsapur Road ,

HYDERABAD 500054 J.P.K. Minz Manager, Human Resource Machine Tools Division, Beawar Road , AJMER - 305003

[email protected] P: (0145) 244 0620 / 244 0670 F: (0145) 244 0082 E: [email protected] : [email protected]

M. Ramakrishna Rao

Machine Tools Division,

P: (040) 2307 3051 Extn: 342 F: (040) 2307 0061

Deputy Manager (S&HR) Praga Division

60-010, CIE, Gandhinagar E: [email protected] Qutbullapur HYDRABAD - 560037 S. Harsha Vardhana Rao Watch Marketing Division HMT Bhavan BANGALORE 560032 HMT Watch Factory, HMT P.O, BANGALORE 560013 G. Venkateshalu Dy. General Manager (HR) K.V Shylaja Deputy Manager (F) HMT Watch Factory Devarayapatna Tumkur-572103. Specialised Watch Case Division, HMT P.O, BANGALORE 560013 S.P Sharma Dy. Manager (F) HMT Watch Factory, RANIBAGH 263 126 P: (05946) 244 219 F: (05946) 266 910 P: (080) 2838 2823 F: (080) 2838 2338 E: [email protected] P: (0816) 228 1507 F: (0816) 228 0133 E: [email protected] hmtwftdataone.in P: (080) 2357 6799 F: (080) 2337 5774 E: [email protected] P: (080) 2333 8956 F: (080) 2333 8950 E: [email protected]

MT

ATCHES

MITED

Deputy General Manager 59, Bellary Road , (HR) C.S. Sharadha Deputy Manager (HR)

(Dist. Nainital),Uttaranchal E: [email protected] M.A Khanpuri Asst. General Manager (Unit Chief) R.N Handoo Manager (JAU) Zainakote SRINAGAR 190012 (J&K) Jammu Assembly Unit, Lane 2, Phase 1, P: (0194) 249 6539 F: (0194) 249 6122 E: [email protected] P: (01923) 222 714 F: (01923) 222 714

MT CHINAR

ATCHES

MITED

SIDCO Industrial Complex, E: [email protected]

Bari Brahamuna JAMMU - 181133 (J&K) APPELLATE AUTHORITY ( FOR RTI ACT 2005) SN 1. Company HMT Limited Name & Designation Director (Operations) Contact Address HMT Limited, HMT Bhavan, #59, Bellary Road , Bangalore 560 032 2. HMT Machine Tools Ltd. Managing Director HMT Machine Tools Limited HMT Bhavan, #59, Bellary Road , Bangalore 560 032 3. HMT Watches Ltd. Managing Director HMT Watches Ltd. HMT Bhavan, #59, Bellary Road , Bangalore 560 032 4. HMT Chinar Watches Ltd. Managing Director HMT Chinar Watches Ltd. Zainakot Srinagar - 190012 Jammu & Kashmir 5. HMT Bearings Ltd. Managing Director HMT Bearings Ltd. Moula Ali, Hyderabad-500040 6. HMT Managing HMT (International) Ltd. HMT Bhavan, #59, Bellary Road , Bangalore 560 032 (040)27242237 (040)27242737 [email protected] (080)23339287 (080)233399286 [email protected] (0194)2496122 (0194)2496122 [email protected] (080)23333721 (080)23338950 [email protected] (080)23336217 (080)23338949 [email protected] Telephone / Fax/ e-mail (080)2350318 (080)23338832 [email protected]

(International) Director Ltd.

1. A request for obtaining information under Sub-Section (1) of Section 6 shall be accompanied by an application fee of Rupees ten by way of cash against proper receipt or by Demand Draft or Banker's cheque or Indian Postal Order payable to the Accounts Officer of the Company.

2. For providing the information under Sub-Section (1) of Section 7, the fee shall be charged by way of cash against proper receipt or by Demand Draft or Banker's cheque or Indian Postal Order

Comparative financial statistics

View: Annual Data | Quarterly Data Period Ending Assets Current Assets Cash And Cash Equivalents 884,000 31-Mar2010

All numbers in thousands 31-Mar2009 31-Mar2008 31-Mar2007

1,178,000 92,000 1,487,000 2,121,000 797,000 5,676,000 25,000 (11,000)

2,033,000 92,000 2,037,000 2,165,000 811,000 7,139,000 25,000 9,000

7,052,000 89,000 2,317,000 2,129,000 917,000 12,503,000 25,000 16,000

Short Term Investments 92,000 Net Receivables Inventory Other Current Assets Total Current Assets Long Term Investments Property Plant and Equipment Goodwill Intangible Assets Accumulated Amortization Other Assets Deferred Long Term Asset Charges Total Assets Liabilities 1,437,000 1,676,000 756,000 4,844,000 23,000 (11,000)

36,060,000 33,417,000 31,133,000 33,484,000

Current Liabilities Accounts Payable Short/Current Long Term Debt 1,654,000 1,559,000 1,557,000 1,908,000

16,312,000 13,916,000 11,762,000 13,694,000 3,425,000 9,092,000 3,485,000 9,027,000 3,941,000 10,405,000 10,972,000 255,000 -

Other Current Liabilities 3,434,000 Total Current Liabilities Long Term Debt Other Liabilities Deferred Long Term Liability Charges Minority Interest Negative Goodwill Total Liabilities Stockholders' Equity Misc Stocks Options Warrants 9,472,000

14,328,000 12,065,000 9,845,000 1,000 4,000 90,000 -

23,800,000 21,157,000 18,872,000 21,451,000

7,604,000 4,657,000 -

7,604,000 4,657,000 -

5,157,000 6,877,000 -

Redeemable Preferred Stock Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity Total Stockholder Equity Net Tangible Assets Currency in INR. 3. 7,604,000 4,657,000 -

Data provided by Capital IQ, except where noted. Valuation Measures Market Cap (intraday)5: Enterprise Value (18-Aug2011) : Trailing P/E (ttm, intraday): Forward P/E (fye 30-Mar2012) : PEG Ratio (5 yr expected)1: Price/Sales (ttm): Price/Book (mrq): Enterprise Value/Revenue (ttm) : Enterprise Value/EBITDA (ttm) : Financial Highlights Fiscal Year Float: Fiscal Year Ends: Most Recent Quarter (mrq): Profitability Profit Margin (ttm): Operating Margin (ttm): Management Effectiveness Return on Assets (ttm): Return on Equity (ttm): Income Statement Revenue (ttm): Revenue Per Share (ttm): 4.09B 5.38 -2.79% -26.89% -80.65% -37.94% 30 Mar N/A % Held by Insiders1: % Held by Institutions1: Shares Short 3: Short Ratio 3: Short % of Float 3: N/A N/A N/A N/A N/A N/A
3 3 1 3

Trading Information 34.10B 35.43B N/A N/A N/A 8.63 2.88 8.67 Stock Price History Beta: 52-Week Change3: N/A -37.62%

S&P500 52-Week Change3: 9.11% 52-Week High (02-Dec2010)3: 52-Week Low (15-Aug2011)3: 50-Day Moving Average3: 200-Day Moving Average3: Share Statistics 84.00

46.60 56.75 59.73

-25.06

Avg Vol (3 month)3: Avg Vol (10 day)3: Shares Outstanding5:

195,955 93,309 760.35M

Shares Short (prior month)3: N/A Dividends & Splits Forward Annual Dividend Rate4: Forward Annual Dividend Yield4: Trailing Annual Dividend N/A

N/A N/A

Qtrly Revenue Growth (yoy): N/A Gross Profit (ttm): EBITDA (ttm): Net Income Avl to Common (ttm): Diluted EPS (ttm): 1.36B -1.41B -3.30B N/A

Yield3: Trailing Annual Dividend Yield3: 5 Year Average Dividend Yield4: Payout Ratio4: Dividend Date3: Ex-Dividend Date4: N/A

N/A N/A N/A N/A N/A N/A

Qtrly Earnings Growth (yoy): N/A Balance Sheet Total Cash (mrq): N/A

Last Split Factor (new per old)2: Last Split Date3:

Total Cash Per Share (mrq): N/A Total Debt (mrq): Total Debt/Equity (mrq): Current Ratio (mrq): N/A N/A 0.51

Book Value Per Share (mrq): 16.13 Cash Flow Statement Operating Cash Flow (ttm): Levered Free Cash Flow (ttm): View Financials Income Statement - Balance Sheet Cash Flow See Key Statistics Help for definitions of terms used. Abbreviation Guide: K = Thousands; M = Millions; B = Billions mrq = Most Recent Quarter ttm = Trailing Twelve Months yoy = Year Over Year lfy = Last Fiscal Year (as of 30-Mar-2010) fye = Fiscal Year Ending
1 2

-831.30M -1.44B

Data provided by Thomson Reuters Data provided by EDGAR Online

3 4 5

Data derived from multiple sources or calculated by Yahoo! Finance Data provided by Morningstar, Inc. Shares outstanding is taken from the most recently filed quarterly or annual

report and Market Cap is calculated using shares outstanding.

Currency in INR. 5. Source: http://www.moneycontrol.com/annual_report/hmt/directors_report/hmt

MAJOR COMPETITORS
The Tractor Manufacturers' Association of India (TMA) is housed under The Confederation of Indian Industry (CII), New Delhi. Though not all manufacturers are members TMA is recognized as the main trade group representing the agricultural tractor industry in India. Rohtash Mal, Executive Director & Chief Executive Officer of Escorts Ltd (Agri Machinery Group) is the current President of TMA.[2] Current Manufacturers of Tractors in India

Angad Tractors, SAS Motors Limited SAS Motors Limited, the manufacturer of 'Angad' Tractors, is a public limited company incorporated in April 2003. Its flagship product is Angad 240 D tractor. The company is engaged in sourcing, assembling, manufacturing, and marketing of Angad brand tractors and farm machineries. SAS Motors also provides a range of agricultural equipments. Angad Tractors (SAS Motors Limited) main mission is to make low cost tractors, power tillers, and other farm machineries designed on appropriate technology platform available to the Indian farmers. Currently, SAS Motors Limited currently manufactures Tractors(ranging from 15-35 horsepower), Power Tillers, Mini Tillers / Power Weeders and Agricultural Machineries such as Rotavator etc. [3]

Balwan Tractors, Force Motors Ltd Formerly known as Bajaj Tempo Ltd. until 2005, Force Motors Ltd., makers of India's ubiquitous 3wheeler Tempos since 1957 in a collaboration with Vidal & Sohn Tempo Werke, Germany. In 1999 began production of Ox and Ox 45 Brand Tractors both which incorporated transmission technology from the German manufacturer ZF. Additional line Balwan was introduced in 2004 and between the lines Force Motors offers a line of two-wheel and four-wheel tractors in a horsepower range from 10 to 50 HP.[4] In India BALWAN 600 launched shortly. It has a 60 HP engine. Balwan Tractors are one of the good tractors in India for agricultural purposes. They have a Benz engine.

Captain Tractors Pvt. Ltd Founded in May 1994 and located in Rajkot, India, Captain Tractors manufactures mini-tractors under the Captain brand.[5]

Crossword Agro Industries

Located in Rajkot, India, Crossword manufactures small tractors under the Nissan, Atmak and Captain brand names.[6]

Eicher In 1949, Eicher GoodEarth, was set up in India with technical collaboration with Gebr. Eicher a of Germany, imported and sold about 1500 tractors in India. On April 24, 1959 Eicher came out with the first locally assembled tractor from its Faridabad factory and in a period from 1965 to 1974 became the first fully manufactured (100% indigenization) tractor in India. In December, 1987 Eicher Tractors went public and in June, 2005 Eicher Motors Limited sold Eicher Tractors & Engines to a subsidiary of TAFE called TAFE Motors and Tractors Limited. Eicher also produced tractors under the Euro Power and Eicher Valtra brands under license from Valtra, an AGCO brand.[7]

Escorts (Escort, Powertrac and Farmtrac) Escorts Ltd began local manufacture of Ford tractors in 1971 in collaboration with Ford, UK and total production climbed steadily to 33,000 in 1975, reaching 71,000 by 1980. Ford (Ford - New Holland) was sold in 1992. Ford Motor Company proper quit the tractors business, but the name was allowed to continue as per agreement until 2000, when Escorts relabeled its Ford models under the Escort brand. Escort manufactures produces tractors in the 27-75 HP range and has already sold over 6 lakh tractors. Its tractors are marketed under three brand names, Escort, Powertrac and Farmtrac. The Escorts Group, is among India's leading engineering conglomerates operating in the high growth sectors of agri-machinery, construction & material handling equipment, railway equipment and auto components.

HMT TRACTORS HMT is a large public sector unit and began manufacturing Agricultural Tractors in 1972 under the HMT brand name with technology acquired from Zetor of the Czech Republic. It manufactures its tractors in Pinjore, Panchkula in a large factory that also manufactures machine-tools, and Hyderabad It has a capacity of 20,000 tractors per annum. In the Machine-tool company is a large foundry. It produces tractors in a range from 25 HP to 75 HP. HMT has also exported tractors to the USA under the Zebra brand, which were marketed by Zetor distributors and dealers there. The company is controlled by the Ministry of Heavy industry that provides to the public its financial performance.

Indo Farm

www.indofarm.in Founded in Baddi, Himachal Pradesh, India in 1999, Indo Farms builds tractors in the 33 to 90 hp ranges. company is also manufacturing 9 to 18 ton cranes and 15 to 50 kv silent gen sets. ursus Poland is its technical partners. indo farm tractors are becoming famous in Indian tractor customers because of their better working performance, quality and resaonable prices. company is exporting their products to many developed countries like: New Zealand, uk, Poland, Germany etc. tractor manufacturing is fully computerised and marketing team is very dedicated and experienced. [8]

John Deere In 2000, John Deere set up production in a joint venture with Larsen & Toubro Ltd in Sanaswadi, in a rural area near Pune, Maharashtra. It was known as L&T John Deere Private Ltd, and manufactured tractors under the L&T - John Deere name for sale in India, and under the John Deere name for worldwide sales.[9][10] In 2005, Deere & Company acquired nearly all the remaining shares in this joint venture. The new enterprise, is known as John Deere Equipment Private Limited. The factory currently produces tractors in of 35, 38, 40, 42,45, 50, 55, 65, 75 and 89 HP capacities for domestic markets and for export to the USA, Mexico, Turkey, North and South Africa, and South East Asia. Pune factory started to produce new 55 to 75 Hp 5003 series tractors for European market in 2008. John Deere India Private Limited is a subsidiary of Deere & Company, USA in India. Its factory, located at Sanaswadi, Pune, manufactures 5000 Series agricultural tractors. The Indian operations of Deere & Company include a technology center located at Magarpatta City Pune and John Deere Water Vadodara. The technology center provides services in the areas of Information technology, engineering, supply management, embedded systems and technical authoring for companys operations world wide. John Deere Water, formed by the acquisitions of Plastro Irrigation Systems, T-Systems International, and Roberts Irrigation Products, is one of the leading irrigation companies in the world today.

Mahindra Gujarat Tractor Limited (MGTL) The company was originally incorporated in the state of Gujarat in 1963 with technical collaboration with Motokov-Praha of Czechoslovakia as Gujarat Tractor Corporation Ltd. It was taken over by Mahindra & Mahindra Limited on 17 December 1999 (holds 60% equity) and rechristened Mahindra Gujarat Tractor Ltd as part of Mahindra Group. The company is engaged in manufacturing of tractors in a range of 30-60 hp which are marketed under Shaktimaan brand.[11]

They were previously marketed under the Mahindra Gujarat name, and before that the 'Hindustan' name. Mahindra & Mahindra has now incorporated the Shaktimaan Brand of Tractors of Mahindra Gujarat Tractor Limited (MGTL) as its subsidiary, and is manufacturing its 30 HP and 35 HP Models at its own plant at Nagpur, which are marketed by MGTL. For the other models, only the Engines are manufactured at MGTL plant, and the Transmissions are manufactured by M&M itself. Strict Quality Control is maintained by M&M. The Vadodara plant has also been renovated and modern assembly systems have been installed there. Mahindra Gujarat Tractor Limited (MGTL) has its Head Office at 'Vadodara' (formerly Baroda), Gujarat. Sri S.O. Tyagi is the Head- MGTL, and Sri Balmukund Verma is the General Manager (Marketing). MGTL is an ISO 9001:2008 and OHSAS18001:2007 certified company The company has a very good Marketing network across India having 13 area offices and around 200 dealers.

Mahindra & Mahindra M&M's Farm Equipment Sector origins lie in a joint venture in 1963 between the Company, International Harvester Inc., and Voltas Limited, and was named International Tractor Company of India (ITCI). In 1977, ITCI merged with M&M and became its Tractor Division. After M&M's organizational restructuring in 1994, this division was called the Farm Equipment Sector. The Farm Equipment Sector has also ventured into manufacturing of Industrial Engines. M&M Industrial engines are used for various applications like generator sets, industrial, construction, marine, compressors, etc. These engines are manufactured at the Company's engine assembly plants at Kandivli and Nagpur. M&M has two main tractor manufacturing plants located at Mumbai and Nagpur in Maharashtra. Apart from these two main manufacturing units, the Farm Equipment Sector has satellite plants located at Rudrapur in Uttarachal and Jaipur in Rajasthan. The Farm Equipment Sector as reported by the Company has a dealer network of over 450 dealers. This dealer network is managed by 28 area offices, situated in all the major cities and covering all the principal states and M&M tractors has sold more than 13,00,000 tractors since its inception. M&M's Farm Equipment Sector is perhaps the largest exporter of Indian tractors to the USA and the west. And in a reversal to earlier trends of Indian tractor manufactures with joint ventures with western tractor companies, M&M, in 2004 announced that they had bought majority stake (80%) in Jiangling Tractor Company, and renamed it Mahindra Jiangling Motor Co Group (JMCG). This is the first instance of Indian tractor industries participating in India's reverse FDI. The plant in China reportedly has a production capacity of 12,000 tractors annually.

In March 2007, M&M bought a controlling 43% stake in the Mohali-based tractor firm Punjab Tractors (Swaraj) that will reportedly increase M&M's share in the domestic farm equipment market from just over 30% to 40%. The 43% stake includes 29% owned by private equity firm Actis Capital and 14.2% by the Delhi-based Burman family. In July 2007, Mahindra upped its stake to 64.6%.[12]

MARS Farm Equipments Ltd. Originally established in 1976, the MARS Group is engaged in manufacturing/marketing of dump trucks, loaders, foggers, and agricultural tractors and attachments. Based in Lucknow, U.P., it began manufacturing two mini-tractor models under the Marshal name in 2005, Captain DI 2600 of 25 HP and Trishul MT DI 625 10 HP. [13]

New Holland ===Preet Tractors=== Preet Agro began manufacturing tractors in 2002 at nabha, Punjab, India. They currently manufacture in the 35-70 hp range.[14]

Sonalika (International Tractors Ltd.) International Tractors Limited was incorporated on October 17, 1995 and began manufacturing tractors designed by Central Mechanical Engineering Research Institute (CMERI). Its engines were initially designed on the successful HMT brand of engines, and gear-box as per PTL design. ITL currently is manufacturing Sonalika tractors between 30 HP to 90 HP, and the CERES brand between 60HP to 90HP. ITL went into collaboration with Renault Agricultural of France in July 2000. Renault Agriculture is a subsidiary of the Renault Group. Renault Agriculture was bought by CLAAS of Germany in 2003. Incidentally CLAAS already has a strong presence in India market producing its Crop Tiger range of Combine Harvesters in a plant in Faridabad (near New Delhi) since 1992. CLASS has opened a new plant in Punjab at Morinda in 2006. Sonalika is now having collabration with YANMAR(Japan), and raised its production to 200 tractors per day.

MILESTONES AND MAJOR ACHIEVEMENTS:1942 First Youth Hostel was opened at Tara Devi near Shimla on June 9, 1945 by H.E. Sir Bertrand Glancy, Chief Scout and Governer of Punjab. 1949 1952 A committee was set up in Mysore for promotion of the movement. Indian Association received Associate Membership of International Youth Hostel Federation. 1956 The First National Conference of the YHAI was held in Delhi, which marked the movement on a national level. On this occasion, Late Pt. Jawahar Lal Nehru, the then Prime Minister of India summed up the philosophy of Youth Hostelling : " I welcome the growth of the youth hostel movement in india. Apart from the obvious advantages of travel in various parts of the country, there is I think a basic significance in men and women doing so in the impressionable years of their lives. Fashioning of new India." 1970 National Youth Hostel Trust was created on 5th October 1970 through a Resolution passed by the National Council of YHAI. As a result a 120 bed Youth Hostel Complex in Chanakyapuri, New Delhi with Administrative office came into existence. 1970 YHAI embarked upon a adventure activity programme on the National Level in 1970. First Trekking Programme was conducted in 1970 at Solang Nallah, Manali (H.P.). 1977 International Youth Hostel, New Delhi Training Centre and National Office was inaugurated by Sh. Neelam Sanjeeva Reddy, Former President of India on 4th December 1977. 1992 The Training Centre of International Youth Hostel, New Delhi was inaugurated on March 28, 1992 by Sh. John Bourke, the then first Vice President, IYHF. 1993 Sh. John Parfitt, the then President of IYHF inaugurated the Recreation Centre of International Youth Hostel on 23rd January 1993. 1995 Silver Jubilee of YHAI Trekking Programme was organized on 12th November 1995 where Sh. P.A.Sangma, Minister of Information and Broadcasting was the Chief Guest. 1996 Dr. Harish K. Saxena, National Chairman, YHAI was elected as Board

Member of IYHF at 41st IYHF Conference at Vienna, Austria in 1996. 1998 42nd IYHF Conference was hosted in India in August 1998. Dr. Harish K. Saxena was re-elected as Board Member with highest ever votes. 1998 Coincided with the Conference was the Golden Jubilee Year Celebration of YHAI. Government released a commemorative postage stamp depicting an environment friendly Youth Hostel. HMT brought out a special Yuva watch with YHAI insignia on its dial. 2000 Dr. Harish K. Saxena, National Chairman, YHAI became the 1st Vice President at 43rd IYHF Strassbourg Conference. Later he was elected President of IYHF in 2000 and remain the President for 8 years continuously. It was indeed a great thing to hold such a high position of the Federation by a non-European. He became the First non-European to hold this post. 2000 After Dr. Harish K. Saxena became the President of IYHF, First Board meeting was held in Goa in 2000 and before demitting the Presidentship, the last Board meeting was held in Kerela in 2007. 2000 YHAI has launched a scheme of Licensee Youth Hostels throughout India through franchising as a part of " Strategy and Vision 2000-2006 Plan" of IYHF. 2001 First Licensee Youth Hostel in India was opened in Manali, Himachal Pradesh in September 2001. 2003 A Memorandum of Understanding of Youth Hostelling for Peace and International Understanding was signed between UNESCO and IYHF under the Presidentship of Dr. Harish K. Saxena. 2004 Under the Youth Hostel Leader's Exchange Programme, a delegation of 28 members visited Pakistan in April 2004 under the able leadership of Dr. Harish K. Saxena, National Chairman, YHAI and Pakistan reciprocated the visit in November 2004 taking a 32 member Delegation led by Mr. Anwaar H. Siddiqui, Vice-President, PYHA to India. 2006 First National Mountain Biking Expedition was started in 2006 in Jalori Pass, Kullu-Manali, H.P. which was successful. 2007 IYHF Board meeting was held in December 2007 at Kerela, India.

2009

YHAI celebrated 60 Years of YHAI and 100 Years of Hostelling International by organizing various special programmes. Very New innovative programmes were organized to commemorate this celebration such as National Motor Bike Expedition, National Mountain Biking Expedition, National Bullock Cart Trekking Expedition, National Camel Cart Trekking Expedition, Keep Rohtang Pass Clean, etc.

SWOT Analysis

Strengths HMT brand value. Extensive dealership and service network. Fully integrated plant in Pinjore. Support of HMT in term of developing latest manufacturing technology, providing engineering solution and maintenance backup for trouble- free running of tractors. Wide product range. HMT has experienced staff. It has adequate infrastructure, qualified manpower, and office space and computer network to support its activities. As a Government concern, it enjoys the full support of Government. Efficiency of HMT tractors and machines is better than other competitors. Its brand has been well accepted in the market.

Weakness Turnover mainly coming from product tractor division. Morale of employees in not high. Present market share other than in machine tool is very less. Less usage of media for marketing. Production image among customer is not good. Old plant requires substantial moderisation. Financial health of company is poor. Since it is a government, so change in government policies may affect the profitability.

OPPORTUNITY It is the biggest among India manufacturers of tractors (in terms of area). Availability of cheap and liberty

THREATS Being a government undertaking its business may be affected due to change in government policy. Competition from other manufacture

finance to consumers. Multipurpose machines will offer new market for the company. Free service camps are organized for the customers satisfaction. It has huge network of dealership all over the country. Provides good after sales services. Continuous growth in tractor industry in the country.

of transport vehicles. Slowdown of expected demand of some of its products consumers. Increased completion from domestic market as well as from international market. Lack of leadership in some cities.

CRITICAL MANAGERIAL OBSERVATION & IMPLICATION

Hmt Limited has informed the Exchange vide notes to Accounts in the Unaudited Financial Results for the quarter ended March 31, 2010 (taken on record by the Board of Directors of the Company at its meeting held on May 04, 2010) that "The Auditors have observed during 2008-09 that in respect of three Subsidiaries, no provision is made for the loss in the value of Investments and Loans & Advances made in the Subsidiaries due to erosion of their Net Worth. However, the Company is of the view that the market value of the assets of these Subsidiaries are more than the amount Invested/advanced to them by the Company and keeping in view the future projections for these Companies, the Investment/Loans & advance made therein are fully realisable".

SUMMARY
HMT Limited, together with its subsidiaries, operates as a machine tool manufacturing company in India and internationally. It manufactures and sells agriculture and haulage tractors, and tractor mounted/ drawn implements, as well as provides diesel engines, spares, and after sales services for tractors. The company also offers various machine tools, including turning machines, grinding machines, gear manufacturing machines, machining centers, special application machines, diecasting and plastic injection molding machines, precision ball screws, CNC systems, and GPMs, as well as presses, such as mechanical presses, hydraulic presses, and mechanical press brakes and other presses. In addition, it manufactures various watches, including mechanical range and quartz series watches; special clocks, such as tower, solar, population, display, floral, international, and master slave clocks; and customized watches for institutions. Further, the company offers bearings, including ball, cylindrical roller, and taper roller bearings; printing machinery comprising sheet fed offset printing machines, Web offset printing machines, programmable guillotines, punching and stitching machines, and numbering attachment machines; and food processing machines consisting of butter making and packing machines, plate heat exchangers, centrifugal pumps and separators, oil purification and clarification systems, and homogenisers. Additionally, it provides various services, including refurbishing services, testing and inspection services, precision tooling solutions, and projects consultancy and technical services. HMT Limited was founded in 1953 and is based in Banglore (India). Amounts are as of and compensation values are for the last fiscal year ending on that date. Pay is salary, bonuses, etc.Exercised is the value of options exercised during the fiscal year.

REFERENCES: http://www.moneycontrol.com/company_facts/hmt/history/HMT http://www.moneycontrol.com/stocks/stock_market/corp_notices.php?autono=32 6735 http://www.moneycontrol.com/competition/hmt/comparison/HMT http://www.hmtmachinetools.com/scb_fast_forward.htm http://en.wikipedia.org/wiki/extrenality http://in.finance.yahoo.com/q?s=HMT.BO http://www.hmtmachinetools.com/objectives_goals.htm http://www.hmtmachinetools.com/managing_director.htm http://www.hmtmachinetools.com/quality_policy.htm http://www.hmtmachinetools/miles_stone.htm http://www.hmtmachinetools/corporate_strength.htm
http://www.moneycontrol.com/annual_report/hmt/directors_report/hmt