EXECUTIVE SUMMARY

Vikrant Tyre Ltd was a Public Ltd Co with available areas of 53 acres in
Karnataka.The company has good infrastructure facilities, abundant labour & man
power, good housetrain facilities, (encouraged with the retirement plans to) selected
Mysore as their ideal factory location. J.K. Industries, Vikrant Tyres unit has a devoted
work force of around 2.200 employees.

The company has come into existence as a prestigious Organisation which is

connected to the manufacturing of quality tyres in the future electronic city of Mysore.

In May 1997, HJ I was inducted as a strategic alliance plans (SAP) with a view to
give a turn around to the co as a profit making unit. A memorandum of understanding
was signed between ISSIDC and JK tyres by which ISSIDC has invested majority of
shares with JK Tyres Ltd. Thus JKL has acquired more than 51% of enhanced issued and
paid-up Capital of Vikarath Tyres Ltd(VTL). The board of Vikranth Tyres Ltd VTL was
reconstituted with nominated Shri Arun Kumar- Bajaria to be the president and Managing
director and to be the Executive Director of VTL. As a result the VTL is now under the
contral of J.K. Industires Ltd.

Exports now a burgeoning field after the liberalisation, due to the dynamic nature
of the foreign markets. India has now realized that exports is the gateway to sell its
products abroad and has come a long way from selling its surplus to the present day
status of ( exclusive /manufacturers) export market potential .

1
 PART –A

INDUSTRY
PROFILE

2
Introduction:

The rubber industry in the world made its beginning in 1887. It was because of the
invention of the processing of rubber vulcanization by Charles Goodyear. The growth of
the industry, however received a good boost by century end, when John Boyd Dunlop
succeeded in making of vulcanized rubber tyres into inflatable pneumatic tyres. Since
then the tyre industry has continued to be a major segment of rubber industry all over the
world.
Even in India, automobile tyre and tubes account for a major part of Indian
Rubber product industry.

The History of the Tyre manufacturing

The following chronicles development of the tyre as we know it today.

R.W. Thomson invented and patented the Pneumatic Tyre in 1845. His first design used
a number of thin inflated tubes inside a leather cover (illustrated). This design actually
had its advantages over later designs. It would take more than one puncture o deflate the
whole tyre, and varying the pressures could after the ride conditions.
It was not until the late Ninteenth Century 1888 to be precise, that John
Boyd Dunlop invented the Rubber Pneumatic Tyre. Despite these technological
Breakthroughs the solid rubber tyre continued to be the dominant tyre and its was not
until 1889 that the pneumatic tyre caught on.

Dunlop first advertised his tyres in December 1888 in ‘The Irish Cyclist’, & in
may of the following year the tyre had its first break though. A Belfast cycle Race was
won on pneumatic rubber tyres & by now the Public was starting to take note.

3
 Unfortunately the original tyre has its drawbacks. The inner tube was difficult to
get at because the tyre was stuck to the wheel. In 1890 CK welsh patented the design of a
wheel rim & outer cover with inextensible lip. By now we had the basics for today’s
tyre. Over the years the tyre has developed into today’s high technology offerings. Two
of the most important technical development include Michelin’s creation of the redid
tyre, with its vastly superior grip in 1948, & the developments when Dunlop did away
with the inner tube on car tyres in1972.
Time has given the motor industry tyres the capability of many different
applications. This ranges from High Speed Racing, such as Formula one, to tyres deliver
a comfortable ride, have a relative puncture resistance, wear out & affect performance.
The importance of tyre must not be taken for granted. After all a tyre is your vehicles
only point of contact with the road.

The tyre industry has evolved from the more basic cross ply to the more
sophisticated radial. Nylon cords that import low weight & additional strength, to the
tyres have also replaced cotton ply. This industry is strongly linked to the automobile
sector. This industry is also driven by agriculture & infrastructure an activity that takes
place in the region, as these two have an impact on the transport sector.

Indian Tyre Industry Past & Present:

The Indian tyre industry is about 55 years old. It is to be noticed that, the tyre
industry was covered under essential commodities Act. The Pre dominance of foreign
multinational prevailing in our country till 1960’s has been considerably reducing now
due to development of technology.

The Indian tyre industry’s past can be studied under the periods:

1920.1935 NMC trading in Tyres

1936.1960 MNX manufacturing in Indian selling domestically Exporting

4
1962.1974 The entry of Indian Companies this sector.

1975 onwards Broadening of production bases.

Firestone was the company that started the selling of tyres fist in our country.
They were then, followed by good year in1992 and later by Dunlop in 1926. Dunlop set
up the first MNC tyre industry at Saharjung –West Bengal, in the year 1939. In 1936
Firestone setup its factory in Bombay.

At present there are more than 20licensed companies and 25 factories, which
include 11 large-scale sectors manufacturing the full range of tyres and tubes. The Indian
tyre companies are having collaboration with giant tyre companies of U.S.A, U.K, west
Germany, France and Japan, etc., significant changes have occurred in the tyre industry’s
manufacturing processes change from Rayon to Nylon and the introduction of Radial
Tyres o both steel belt and fiber glass.
The tyre industry in India has a range of tyres for trucks, busses light
trucks and busses, cars, jeeps, trailers, short and long tillers, off road vehicles heavy and
light, earth moving equipments, dumpers defense vehicles aircrafts and specially
designed vehicles and two wheelers.
The large tyre unit in India Apollo, Bombay tyre international, Ceat, Madras Rubber
Factory (MRF), Dunlop, Good year, JK tyre, Birla tyre and Vikrant tyres etc.,
The company that manufactures tyres primarily for the two-wheeler segments
are TVS Srichakra , Falcon, Metro tyres, Ceat, MRF and Stauion.
The production of tubs by the large and the medium sector of is 8-% of the tyre
production tubes manufactured from natural rubber as well an imported Butye rubber.
The inner rubber is covered under packaged commodities act.
The government for the tyre industry way backs in1955 setup various
commodities that Tariff Commission was the best example. The major thrust of this
commission was the decentralize of the tyre industry.
In May 1974, the governments setup the committee on tyre industries with Mr.
Satyapal as chairman. This committee submitted its report to the government in 1985.

5
Present Status of Tyre Industry

Automotive Tyre Manufacturer’s Association (ATMA) was setup in 1975 as

representative body of automotive tyre industry in India 8a. The association constitutes of
companies manufacturing tyres ranging from animal driven vehicles to aero tyres of
defense applications. The association’s represents approximately 90% of the tyre
production in the country. The association interest with the government on a continuous
basis and function as a link between government and the tyre industry. According to
ATMA demand for the tyre was estimated at 242 lakh tyres in 1991 and 1992 against the
installed capacity of 296 lakhs tyres. The demand estimate for 1994-95 was 287. 16 lakh
tyres against the production of 308 lakhs and still growing at the very steady pace.

Among the individual companies MRF is moving into aircraft tyres and formula
racing tyres manufacturing in collaboration with uniroyal good rich. The total capacity of
Ceat tyres has gone up to 45 lakhs with commencement of nylon cord tyres. Modi
rubber tyre industry ahs modernized the modipuram plant and modinagar plan is under
implementation. Vikrant tyres with a new plant for all steel radial tyre for trucks and
busses fare the first company in India with such a state of art technology, Vikrant tyres
after taken over by JK tyres are having a major supplier of tyres to various countries and
are no way short of foreign companies in terms of quality and quantity.
Indian Tyre Industry
 The tyre industry has witnessed a CAGR of 83% over the last decade mainly
fuelled by the strong growth in the domestic auto industry. Through the replacement
market has driven the industry growth for long time; the OEM market has seen a robust
growth over the last couple of years.
 The industry is highly capital intensive as it requires around Rs. 4 billion to
setup a radial tyre plant with a capacity of 1.5 million tyres and around Rs. 1.5-
2billion for a cross ply tyre plant of a capacity to manufacture 1.5 million tyres.

6
 The profitability of the industry has high correlation with prices of key raw
materials such s rubber and crude oil as they account for more than 70% of the total costs.
The raw materials to sales ratio in the industry is around 65%
 The industry has entry barriers because of its capital intensive nature and low
operating margins with demands increasing at a steady pace. The industry is
expected to go through a consolidation phase.
 The industry is dominated by four players i.e., MRF , Apollo Tyres, JK
industries ad Ceat and enjoys more than 70% of total market share.
 The fortunes of the industry are linked o the trend in the domestic auto industry
retrading, trend in road transportation and spending on road infrastructure.
 The companies have lined up further expansion plans to meet the increasing
demand.

Features of the Tyre Industry

• High capacity cost
• Large distribution network
• Demand is cyclical nature
• Technological intensive
• Rising cost of new materials

The tyre manufacturing technology is highly soph9st9cated and is

increasing to meet the needs of revolutionary changes in the automobile industry.
Today the entire range of tyres are manufacturing by the industry truck, bus. Power
tiller. Light truck, jeep, care, etc. The industry meets the indigenous requirements
fully in weigh the range in 1 kg moped tyre to 1 ton earth mover tyre, Most of the
raw materials is available in the country and the short falls are met by imports.

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GLOBAL TYRE INDUSTRY
• Too tyre companies in the world.
• Sales, top 75 cos. – US$ 70.6 billion
• Top 10 cos. – 80%
• Chinese cos. -4.5%
• Indian cos. - 2.5%
• 19 Chinese tyre Cos. Included in world’s 7.5 largest tyre companies’, combined
turnover of $5.5 billion, amounts to 6% of global tyre business
• US department of transportation data – 160 tyre units in China – DOT code for
new tyre production for selling tyres in the US. 3 years ago these were 45.20
plants operated by 12 foreign companies represented 3 billion USD in sales
turnover.
• Over last 25 years, China’s top 40 companies have invested billions of dollars
• To acquire most modern machinery.
• Top 10 tyres cos. In the world – Michelin, Bridge stone, Good year Continental,
Pirelli, Sumitomo, Yokohama, Cooper, Han kook, Toyo.
• Derived demand products (automobile dependent): boom in automobile industry
drives the impressive growth in tyre industry.
• Raw material and labour intensive’, high turnover, low profit margin @ 2to 3%
• Dependent on NR, Steel, Crude oil; price rises cause big cost push pressure on
manufacturers.

8
COMPANY PROFILE

9
 J. K. Industries Ltd

Name : J.K Industries Ltd

Address : “Vikrant Houses”
No. 54, I Main Road,
V.V. Mohalla,
Mysore- 570002
Factory
(Administrative office) : K.R.S. Road, Metagalli,
Mysore-570016
Constitution : Private Ltd., Co.,
Date of Incorporation : October 3, 1973
Commencement of Business : October 11, 1973
Product : Automobile tyres, tubes, flaps and camel back promoter,
originally promoted by Sri R.B.Jesudasen and his associates. Karnataka
State Industrial Investment and Development Corporation Ltd., [KSIIDE]
later joined and became he main promoter.

Registered Office:
“Vikrant Houses”
No. 4, I Main Road,
V. V. Mohalla, Mysore – 570002

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Administration Office & Factory [Main Plant] :
J.K. Industries Tyres Ltd.,
K. R. S. Road,
Metagalli,
Mysore – 570016
Telephone No, 2511540, 2582954, 2582272, 2582310

Radial Tyre Plant :

No. 437,
Hebbal Industrial Area,
Metagalli Post,Mysore – 570016
Telephone No. 2517572, 2517244, 2517456

Communication Links:

Grames - Vikrant Tyres

Fax - 0821-2582404
E-mail - hrd @ VTP.jkmail. com
hrd@vikrant .com

11
 COMPANY PROFILE
Vikrant Tyres Ltd-An Overview

VIKRANT TYRES LTD., (VTL) the company is situated in an area of 53 acres in

the outskirts of Mysore VTL is a major tyre manufacturing company and one of the most
successful industrial ventures in the state of Karnataka.
In the year 1970 this company was conceived as a joint venture by the participation of
South Indian Company Pvt Ltd., Madras for establishing an automobile tyres and tubes
manufacturing unit at Metagalli industrial area Mysore. In 19787 the management was
taken over by the Govt of Karnataka through Karnataka state Industrial Investment &
Development Corporation Ltd., (KSIIDC) The Commercial production started from 19th
May 1980.
During 1985 a pilot plant was set up for manufacture of Radial tyres; Commercial
production of Radial Tyre was started in Feb 1991 at the new Radial Tyre Plant.
The company served the Prestigious ISO-9001, QS 9000, ISO-14001 & ISO/TS
16949:2002 certifications. For design manufacture & sale of automobile tyres, tubes,
flaps & tread rubber in December 1994, for other two JK Industries Ltd., was inducted as
strategic alliance partner (SAP) during May 1997 with a view of improve the over all
performance of the company.
Collaboration agreement was entered in to the M/s Continental tyres Germany in 1980.
Vikrant Tyres Limited a JK tyres associate manufactures cutting edge innovative
products that conform to the highest international standards. In 1977, JK Industries Ltd
acquired Vikrant Tyres Limited, Mysore.
VTL has the first truck/Bus steel Radial Tyre plant in India. This has state of the art
technology in technical collaboration with continental A.G. Germanyu.
Vikrant tyres have successfully launched high performance Steel Truck Radial Tyres in
the latest international pattern for the Indian as well as international market.

The continuous emphasis on quality system has led to VTL receiving the ISO-90001
certification, QS-9000 certification, ISO/TS 16949:2002 certifications towards quality
management system for the design and manufacture of its entire range of products and

12
the ISP 14001 certification for protection of environment and conservation of natural
resources.
The company is now racing ahead by focusing on exports. The synergy in sales and
marketing operations with JK Tyre has enabled VTL to expand its distribution network. It
is now exporting truck tyres to over 45 countries across 6 continents with DOT, IN
METRO and SASO product certifications: tyres from VTL are supplied to international
Markets including North Central & South America, and the Middle East & South East
Asia. New markets are being continuously explored to expand the multi brand
international sale. .

B. Nature of business carried:

Vikrant Tyres Limited is engaged in design, development, manufacturing and marketing
automotive pneumatic tyres, tubes. The product range includes the following.
Cross Ply and Radial Tyres for Trucks and Buses.
Cross Ply and Radial Tyres for light Commercial vehicles.
Cross Ply Tyres for Passenger Cars.
Cross ply Tyres for Agricultural Vehicles.
Cross Ply Tyres for Off-The-Road Vehicles.
Automotive inner Tubes for Trucks, Buses, Light Commercial vehicles,
passenger Cars and Agricultural Vehicles.
Flaps for Trucks, Buses and Light Commercial Vehicles.

C. Our Vision:
“To be amongst the most admired companies in India committed to
excellence”

Mission:
To be the largest most profitable Tyre company in India.
To retain # 1 Position in Truck and Bus segment and to be amongst Top 2 in all 4
wheelers Tyre segment.

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To make Truck/Bus Radial operations Profitable and Retain Leadership in the passenger
Radial Market.
To be the largest Indian Tyre exporter continues to be a significant player in the world in
the truck Bias segment.
To be a customer obsessed company.
To develop a highly motivated team with a sense of Ananda.
To excel as a value driven organization.
To be the most preferred Tyre Brand in India.

Quality policy of the company:

The employees of Vikrant Tyres Limited assure the quality of products by ensuring strict
compliance with the approved quality standards and documented materials and
components as also proper upkeep of our machinery.
The principal goal for every Vikrant Employee will be customer satisfaction. They
shall reach this goal by proper training of personnel at all levels, continuous technology
up gradation and minimization of waste.
They continuously anticipate and understand customer requirement, convert these
into performance standards for their product and service and meet the standards every
time.
D. Products profile:
The company manufactures product such as Automobile tyres (Nylon tube type,
Radial tube type and tubeless), Tubes and Flaps.

The products are sold under different brand names:

Truck tyres:
• Jet rib
• Vikrant track king
• Star lug
• Super T.K
• JT king
• Hi Life

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 • Jet star
• Jet Track
• Sand cum hiway
• Track plus
• J T classic
• JETRK

Light Truck:
• Jet Rib
• Star lug
• Fleet king
• Track king
O.T.R (Of the Road):
• JK Tubes
• Vikrant tubes
• Tube V EX

Flaps:
• JK Flaps
• J.K RDFLAPS
• JK EXP FLAP

E. Ares of operations:
The head office at Mysore is connected with various Regional Offices, District
Offices, Branch Offices and Carrying and Forwarding Agents throughout the country.
The common Marketing Organization (CMO) manages the marketing of Nylon Bias
Tyres of both VTL and JK. The head of the CMO is at New Delhi.
The Truck Radial Group (TRG) manages the marketing of All Steel Truck Radial
Tyres. The Head office of TRG is situated at Bangalore.

15
The exports of the company
VTL exports its products to over 6ountries. The major countries include United States
of America, Australia, United Kingdom, New Zealand Hong Kong, Netherlands and host
of Middle East African and Asian countries.

The management of the company:

The company was under the control of Government of Karnataka right from its
inception in the year 1979. The chief promoter has been KSIIDC however,
consequent to the Memorandum of understanding signed between KSIIDC and JK
industries Limited

the majority of shares have been vested with JK Industries Limited. As such Vikrant
Tyres have remained a separate entity, but it is under the control of J.K. Industries
Limited.

The technical collaboration of the company:

Formerly Vikrant Tyres Limited had Technical collaboration with Techno Export
Foreign Trade company Limited, Praha, Czechoslovakia, for the manufacturing of
conventional tyres and subsequently with AVON Technical services, Melksham, United
Kingdom (2 subsidiary of AVON Tyres Limited) for the manufacturing of conventional /
Radial Tyres. Presently the company has foreign collaboration with M/s
CONTINENTAL TYRES, Germany effective 1998.

The Milestones of the Company are as follows:

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 In November 1970 the Government of India issued a letter of intent to the South
Indian Export Company Private Limited, Madras, to establish an automobile
Tyres and Tubes manufacturing factory at Mysore. Vikrant tyres Limited was
conceived as a joint venture by the participation of Karnataka State Industrial
Investment and Development Corporation Limited, as another Promoter. The
factory is situated in an area of 53 acres in the outskirts of Mysore city, by the
side of the road leading to the famous
 Brindavan Gardens. The land was obtained from the Karnataka Industrial Areas
Development Board on lease cum sale basis.
 In February 1973, collaboration agreement was entered into with the Techno-
Export Foreign Trade Company Limited, Praha, Czechoslovakia.
 In July 1973, Industrial license was obtained for the manufacturing of 4 lakhs
tyres and tubes per annum.
 In October 1973, Vikrant Tyres Limited was commissioned as a Public Limited
company
 In July 1974, Construction works at the site started. Arrangements were made for
the purchase of machinery.
 In 1976, imported machinery reached Madras Port.
 In 1977, the Management was taken over by Karnataka State Industrial
Investment and Development Corporation (KSIIDC) as the private promoter had
resigned.
 In March 1978, the Government of Karnataka and KSIIDC revived the project.
 In June 1978, machines and equipments were moved to the site and
commissioning of machines started.
 In November 1978, the Financial Institutions re-appraised the project post and
agreed to finance the revised capital.
 In December 1978, the project was appraised again.
 In June 1979, Industrial License was obtained for the manufacturing of 5 lakhs
Tyres and Tubes per annum.

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 In September 1979, the trail production of tyres started. The first tyre rolled out
on 14tth September 1979.
 In May 1980, Commercial production of tyres started that is on 19th may 1980.
 In December 1980, Industrial License was obtained for manufacturing of 7.5
lakhs tyres
 and tubes per annum.
 In February 1981, The Technical Collaboration with Techno-Export Foreign
Trade Company Limited, Czechoslovakia ended.
 In May 1982, Technical collaboration agreements were entered into with AVON
Technical Services of England for the manufacturing of Radial Tyres.
 In January 1989, foundation stone was laid for the construction of Radial Tyre
Plant in an area of 27.4 acres in Hebbal Industrial Area in Mysore City, for the
manufacturing of All Steel Radial Tyres.
 In August 1991, Commercial production of Radial Tyre plant started.
 In March 1992, The Union Minister of Finance dedicated radial Tyre Plant to the
Nation.

 In December 1994, the Company secured the prestigious ISO 9001 Certification
from the
 International Organization. National Quality Assurance-Quality Systems
Registrar (NQA-QSR), for design, manufacturing and sale of automotive tyres,
tubes flaps and tread rubber.
 In May 1997, the J K Industries Limited, (JKI) inducted as a strategic Alliance
Partner (SAP) with a view to give a turn around to the Company as a profit
making unit.
 In the year 1998, Collaboration agreement was entered into with M/s
CONTINENTAL TYRES, Germany.
 In the year 1999, the company secured the prestigious QS 9000and ISO 14001
certifications.
 In the Year 2002, the Company has decided to implement ISO / TS 16949:2002
Quality Management System and achieve Certification by March 2003.

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  VTL has a marked reputation in exporting All Steel Truck Radial Tyres. It is the
first Tyre Company in India to manufacture All Steel Truck Radial Tyres.VTL
has devoted work force of around 2,184 persons. Among them 1538 are workers,
169 are staff and 477 are executive. It has a net work of 2,000 dealers scattered all
over the country.

The important raw materials of VTL are:-

Natural Rubber
Synthetic Rubbers.
Carbon Blacks
Process Oils
Chemicals
Nylon and Steel Tyre Cords.
Copper coated Steel Wires etc.

The main departments of VTL are:-

Production, Engineering Technical Production Planning, Quality Assurance, Materials,

Human Resource Development, Personnel and Administration Secretarial, Internal Audit,
Electronic Data Processing, Industrial Engineering, Finance, Marketing and Technical
Services.

F. Ownership pattern:

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 Rs. in lakhs
Authorized:
Equity shares (3,50,00,000 of Rs.10 each) 3,500.00
14% Redeemable cumulative preference shares 500.00
(5,00,000 shares of Rs. 100 each)
4,000.00
Issued, subscribed and paid up:
Equity shares 2.56.34.487 of Rs.10 each 2,563.45
(1,34,09,148 shared are held by
M/s JK Industries Ltd.
The holding company & its subsidiary

2,563.45

G. Competitors:
National Market:
MRF, Good year, Falcon, CEAT, Apollo, etc.
International Market:
Bridgestone, Michelin, Pirelli, Cooper, Sumitomo, etc.

H. Infrastructural facilities:

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 Infrastructural facilities mean the basic requirements that the company should
look after in order ensure free flow of activities. The company is providing following
infrastructural facilities in order to satisfy its workers, distributors and customers. The
company provides all facilities stated by Factories Act of 1948.
• Canteen Facilities
The canteen is well maintained and well kept with hygiene
and clean drinking water facility .The food items are nutritious and are provided to the
employees in concession price.

• Latrines and Urinals

These are well maintained built in a manner as to it is
very well ventilated .The cleanness is maintained by using anti-bacterial solution.

• Safety
Safety of the employees are taken care and it is ensured
that the machineries which is used in the factory are subjected to regular maintainance so
that the M/c are in good condition technically which ensures safety to the employees
while working with machineries.

• Health Care Centre

The management takes care of the health of the
employees by providing them with clean drinking water hygienic food apart from this it
has provided its employees with health care facility in its premises .

• Security
• Parking Facilities

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 • Lighting and Ventilation

JK Tyre plants:
Kankoli - Rajasthan
Banmore - Madhya Pradesh
Mysore Plant-1 (VTP) - Karnataka
Mysore Plant-1 (VTP Radial) - Karnataka

I. Achievements/Awards:
 J.K. Tyres ranked 16th largest tyre company in the world.
 ISO – 14001 accreditation for environment and safety.
 India’s first T – rated tyre launched.
 Mercedes Benz launched on JK STEEL RADIALS first tyre manufactures in
the world to get ISO 9001.
 Only tyre manufacturer to get E marks certifications.
 First tyre manufacturer in the world to get QS 9000.

 Awarded CAPEXIL’S highest export award for 1997-98.

 J.K. introduced national Go- carting championships.
 J.K. industries received FOCUS LAC EXPORT award for the year 1999-
2000.
 Certified to ISO 9001:1994 quality managements systems.
 First Indian Tyre Company to adopt process based management through
business process re-engineering (BPR).
 It has ranked number one in customer satisfaction by the JD power Asia
pacific study.
 “ISI” for Cross Ply Nylon Truck and Non Truck Tyres
 “IN METRO” for Cross Ply Nylon Tyres and All Steel Truck Tyres.

22
  “STATE AWARD XFOR EXPORT EXCELLENCE” from VTTC.

J. Work flow model: Manufacturing process:

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 Nylon cord Zell Plan
(Compound + Chemicals) Banbury

4 Roll 3 Roll Santhosh

Extruder
Calendar Calendar Calendar

Bias
Cutter

Breaker Doubling
Slitter
Pocket
Making Bead Winding
Tyre
Building

Auling

Curing

Post cure
inflation

Trimming
Cutout

Inspection
Buffing

Warehousing

1. Compound at banbury:
Compounding is the process of mixing the necessary raw materials with selected
elastomer in the banbury. Banbury is an internal mixer, which consists of a completely

24
enclosed mixing chamber with two spiral shaped rotors. There is a hoper to feed the
ingredients and door to discharge the mix. The rubber ingredients like chemicals are
weighted as mentioned in specification file and fed into the hoper. Then the mixing
process takes place. Required mixing time is fixed to get better quality mixing.

2. Extruder:
The main function of an extruder is to produce tread and side wall, bead, apex.
Extrusion is a process of forcing the mixed compound by means of screw, which rotates
inside the barrel. There are two types of extruder.
Screw extruder
Ram extruder

Screw extruder
In screw extruder the screw is rotated by means of a motor through reduction
gear. The extruder consists of hoper, a dye-hard, barrel and dyes.
There are two types of screw extruder:
Cold feed extruder.
Hot feed extruders.
In cold extruder the feeding compound is in cold condition while in hot feed
extrusion the feeding compound is in hot or warm condition.

Screw is commonly used because they cannot get the continuous extrusion from
the ram extruder. The extruder temperature is about 100 to 200C.

3. Zell plant:
The dipping process takes place in a zell plant. Here rayon, nylon, polyesters are
dipped in a solution containing normally a latex based resorcinol formaldehyde to
improve adhesive properties. Then the fabric is dried at a temperature of about 280-300 F
for 150-180 sec the fabric stretches to about 0-15%.

25
4. Calendaring:
Calendar is a machine, which consists of there or four rolls held in a frame work
used to produce the rubber sheets of required strength and lengths. To get a better quality
calendared fabric with uniform gauges, viscosity is important. In the same way, hot
temperature of about 110-137 mm.

5. Bias cutter:
It is a machine used to make the plys or to the rubber coated fabrics at required
width and angle, which are used in the production of tyres. Bias angle is the angle of
cords in tyres with respect to the central line. Based on the ideal cured angle, required for
particular type size and pattern, bias angle is calculated for the particular drum. If the
angle is not as per the specification, it will affect the performance of the tyre. In general
the angle 45 and the width of the sheet is 100-137mm.

6. Pocket mixing:
It is a process of making the pocket from the angle cutter fabrics. In pocket
making section, three types of pockets are constructed. They are first, second and third
pocket. The plys used for the first and second pocket are known as inner ply and those
used for third pocket are known as outer ply, Pockets are made for easy building of heavy
vehicle tires.

7. Bladder:
Butyl rubber compound is used for making the bladder. As first, butyl rubber is
mixed with specified chemicals properly and then it enters the extruder section by the use
of the extruder, a specific length and width of slug is extruded. Then the ends of the slugs
are cut into the specified angle for proper joining.

26
 Bladder press: there are two numbers of bladders presses namely 400 tones and
800 tones presses. These presses operate with hydraulic pressure. The hydraulic pressure
aid used is bill. At first the bladder rum is lowered down and the slugs are loaded. Then
the lower portion of the mould is raised to touch the upper pattern. After sufficient curing
is specified time mould will automatically opened and the bladder is released. It is then
trimmed off for excess materials.
Some of the possible defects that occur during the manufacturing of bladders are.
Splice opening: this is due to improper joining caused by pressure.
Porosity: this is due to the high extrusion temperature.

8. Tyre moulding:
Before moulding operations, the green tyre has to be made ready for painting with
inner lubricants inside the tyre for easy release from the bladder and the side walls are to
be coated with blemish paints. Blemish paint contains carbon blacks, naphtha, styrene
butadiene rubber components and this enables easy flow of compound while curing to
the, mould pattern. The blemish paint is applied to minimize the surface flow marks. On
the whole, to get better results, green tyre should not touch the floor and there should not
touch the floor and there should not by any contamination on the tyre surfaces.

Tyre moulding is a complex type of compression moulding normally cured in

presses. The raw tyre has to be placed over a bladder, then the bladder and tyre expands

together due to steam pressure and simultaneously the tyre gets compressed between 2
moulds in closed position. In this operation cycle time, pressure, temperature, are
important to get optimum vulcanization during moulding on tyre.

9. Tyre curing:
It is process of cross-linking the rubber compounds through heat and pressure. For
the process of curing tyres presses are used. These presses are pre warmed before loading

27
of green tyre is done in top ring raise condition with vacuum. Shaping is done by
centering the green tyre correctly. Bladders are used as modern technology for tyre
curing.

10. Tyre finishing and inspection:

After curing, the tyres obtained are further finished by trimming of the extensions
on the tyres surfaces are checked for defects. Thus the process of removing excess
materials from the tyre after curing is called finishing. The finishing process is done
either by buffing or trimming method. Buffing is done by using emery paper wrapped on
a cylindrical rubber press.
All cured tyres are inspected and the defective tyres are separated. They are then repaired
and non-defective tyres and Okayed. But some defective tyres, which cannot be repaired,
are scraped.

11. Tyre testing: There are two types of tests

Non destructive tests.
Destructive tests.
Non Destructive tests:
Visuals inspection is carried out on the tyre to check any sidewall surface defects,
blows blisters, flow cracks under cure. The outer sides of the tyres are checked for
engravings, brand name, company logo, company name, load range etc.

K. Future growth and prospectus:

 High quality of products.
 To be the No. 1 Tyre Company in India.
 Profit maximization.
 To be the large Tyre Export Company in India.
 To be a customer obsessed company.
 To enhance value to share holders and service to all stakeholders.

28
GROWTH OF SALES:

Sl.No. Year Value in Crores

1980-81 24.06
1981-82 58.07
1982-83 58.44
1983-84 70.82
1984-85 69.91
1985-86 121.71
1986-87 159.42
1987-88 144.51
1988-89 200.64
1989-90 219.32
1990-91 246.32
1991-92 285.59
1992-93 288.28
1993-94 327.81
1994-95 332.29
1995-96 380.60
1996-97 371.78
1997-98 377.58
1998-99 385.96
1999-00 377.40
2000-01 419.39
2001-02 563.00
2002-03 745.00
2003-04 805.00

29
 PART
B

MCKENSY’S 7S
FRAME WORK

30
 Structu
re

Strateg System
y s

Shared
values

Skills Style

Staff

Introduction to 7S Model:

The 7s framework has first appeared in the book “The Art of Japanese Management”
by Richard Pascal and Anthony Athos in 1981. The two authors were looking at how
Japanese industry had been so successful, at around the same time Tom Peters and Robert
Waterman were exploring what made a company excellent. The 7S Model was born at a
meeting of the four authors in 1978. It then appeared in the book “IN search of
Excellence” by Peters and Waterman in 1982. Subsequently, it was taken up as a basic
tool by the global Management Consultancy Company McKinsey to diagnose the cause
of organizational problems and to formulate programs for improvement, then on it
became famous as McKinsey 7S Model.

31
 The 7 – S model is a tool for managerial analysis and action that
provides a structure with which the whole of the organization can be considered so that
the organizational problems can be diagnosed and a strategy may be developed and

implemented. The 7 – S models is a framework for analyzing the organization and their
effectiveness as a whole.
The 7 – S diagram illustrates the multiplicity, interconnectedness of the elements
that design an organizations ability to change. The theory helps to change the managerial
thinking about how the Companies can be improved.
To be more effective, an organization must have high degree of fit or the internal
alignment among all the 7 – S. All the 7 – S are interrelated. So a change in one will have
a ripple effect on the others. Thus, in order to improve the organization, to solve the
problems and to ensure its effectiveness due care and attention is to be given to all the 7 –
S or elements at the same time.
The 7 – S framework first appeared in “The Art of Japanese Management” by
Richard Pascal an Anthony Athos in 1981. They had been looking at how Japanese
industry had been so successful, at round the same time that Tom Peters and Robert
Waterman were exploring what made a company excellent. The 7 – S model was born at

a meeting of the four authors in 1978. It went on to appear in “In Search Of Excellence”
by peters and Waterman, and was taken up as a basic tool by the global management
consultancy McKinesy it’s sometimes known as the McKinesy 7 – S model.
Managers, they said, need to take account of all seven of the factors namely style,
structure, strategy, system, staff, shard values and skills for a successful
implementation of a strategy – large or small. They are all interdependent, so if you fail
to pay proper attention to one of them, it can bring the others crashing down around the
company. The relative importance of each factor will vary over time, and company can’t
always tell how that’s changing. Strategy, structure and systems can be considered the

32
“Hardware” of success while style, staff, skills and shared values can be seen as the
“software”. Of the Companies, in which these soft elements are present, are usually
more successful at the implementations of strategy

1. Structure:

33
 UNIT HEAD

BUSINESS UNITS G.M. (EXPORT) SHARED SERVICE UNITS

SSUI ENGINEERING
SERVICES PLANT 1 SSU-6 HEAD
MS
BU-1 HEAD
SUPPLIES G.M. (OTR)

SSU-6 HEAD
SSU-3 HEAD MS
BU-2 HEAD COMMERCIAL
STOCK SSU-6 HEAD-MS
SSU-4 HEAD VP WORKS
TECHNOLOGY
BU-3 HEAR SSU-6 PLANT
TYRE CURING SHIFT INCHARGE
CURING SSU-4 HEAD - QA
SSU-6 PLANT
SHIFT INCHARGE
BU-4 & SSU-2 SSU-4 HEAD - HR
HEAD TRUCK SSU-6 PLANT
RADIAL SHIFT INCHARGE
SSU-4 HEAD –
BU-5 OUTPUT INFORMATION
MANAGEMEN
T
SSU-5 HEAD –
PEOPLE SERVICE

JK Industries limited formerly being public sector unit, is a democratic and well
organized structure in itself. The lower level and functional level managers are consulted
and consultations are analyzed before the top management takes any decisions.

34
Task to be performed are assigned to separate functional heads.
JK Industries limited adopted the BPR (Business process re-engineering)
concepts, its objectives are
Radically improve the process and make changes in the way business is done.
Integrate and align all business processes and sub processes.
Reduction of cycle time a reducing cost for all business transactions.
To reduce Bureaucracy and excess fat.

JK Industries (VIP) Board of Directors:

Chairman : Hari Shankar Singhania
Vice Chairman & Managing Direction : Raghupathi Singhania
Directors : Arvind Narottam Lalbhai
Arvind Singh Mewar
Bhakul Jain
I.M. Vittala Murthy
Om Prakash Khaitan
LIC Nominee : B.C. Bose
IDBI Nominee : Dr. Vinayashil Gautam
Managing Director : Bharat Hari Singhania
Dy. Managing Director : Vikrampati Singhania
Whole – time Director : Swaroop Chand Sethi
AUDITORS : Lodha & Co., Chartered
Accountants

The Financial institutions assisting VTL are:-

o Karnataka State Industrial Investment and Development Corporation Limited.
o Industrial Development Bank of India

35
 o industrial Credit and investment Corporation of India Limited
o Industrial Finance Corporation of India
o Life Insurance Corporation of India
o Industrial Rehabilitation Bank of India
o Government of Karnataka.
o Unit trust of India.
o H.D.F.C.

The Bankers assisting VTL are:-

o Indian Bank
o Syndicate Bank
o State Bank of India
o Punjab National Bank.
o Vijaya Bank
o State Bank of Mysore.
o Corporation Bank.

VTP has the following departments:

1) Finance department:

36
 UNIT HEAD

HEAD COMMERCIAL

Commercial Finance Finance Finance

Commercial Manager2 Manager Manager Manager
Manager 1 (capital 1 2 3
(capital coordination (MIS) (Costing)
equipment & & licenses
Procurement)

Finance Finance Finance Finance

Manager 4 Manager 5 (bill Manager 6 Manager 7
(Banking) Passing (Payroll and (Imports and
Indigenous) Insurance) Exports)

Commercial Services:
Accounts
Costing
Banking and Treasury

Purchase – Capital equipment

37
Contracts
Customer coordinator and licenses

Procurement of capital equipment’s / spares, is done in co-ordination with HO for

commercial for placement of orders. Vendor rating system for capital / imported spares
related parties.

Customs coordinator and licenses, applications and reconciliation of customer and

carry forward services related activity for coordination for imports.

Finance and Accounts:

Preparation of MIS & BRR (Business Review Report)
Finalization of monthly quarterly, half yearly and annual reports of the company.
Coordination with statutory auditors and tax auditors.
Finalization of cost accounts.
Cost reduction and cost of quality report.
Review of books of accounts.
Preparation of Trail balance.
Overhead position of BRR.

HO unitary reconciliation, prepaid and OSL reviews support for preparation of

over head budget, assisting for finalization of accounts and statutory audits.
Factory budget and monetary standard costing, up gradation of special changes
for standard costing valuation of monthly progress and closing stock, OMC (Outside
mixing centre) stock reconciliation.

Monetary daily bank balances and inter bank fund transferring, bank payment and
reconciliation, coordination with financial institutions and banks, creation of security and
public deposit schemes and its related refunds, correspondence and reports, maintenance
of fixed asset records (addition, deletion and depreciation) bank books and cash books.

38
 Bill passing of raw materials stores and spares and contracts of all kinds, review
of party ledgers, Issue of PFC forms and TDS certificate, ONC and freight payments,
entry tax details. Miscellaneous MIS and for RM, sundry creditors and freight.
Payment of salary and wage, Payments under workmen compensation act, Employee’s
reimbursement viz. Traveling, Conveyance, medical, LTA etc finalization of provident
fund, benevolent fund (both employees and executives) and superannuating trust
accounts, employees TDS all insurance related activities.

2) Marketing department:

39
 VICE PRESIDENT

GENERAL MANAGER

DEPUTY GENERAL MANAGER

DEPUTY MANAGER TERRITORY MANAGER

OFFICER OFFICER

STAFF
STAFF

Duties and Responsibilities:

Sales and marketing overseas.
Customer interactions
Sales planning, forecast and targeting
Interaction with HO and other parties
Regular monitoring with production department.
Monitor CHA (customer house
Coordinate with exporting for smooth work flow.
Timely dispatch to insure schedule shipping of tyres to customers
The marketing (export department is such a department that the people associated will
have to work with all other department)
Finance for there banking transaction.
Purchase of advance licenses DEPB (duty entitlement pass book) benefits.

40
 Production for meeting the customers requirements
CHA for interaction with customs.
Export inspection agencies for inspection of the cargo (Export)
Shipping companies like Maresk, APL (American President Lines) for documents
after the cargo is shipped

Marketing Networks:
Head office at Mysore connected with various regional offices, districts offices, branch
offices and carrying and forwarding agents through out the country
Common marketing organization (CMO) manages the marketing of Nylon bias tyres of
JK industries the head of CMO is at Delhi.
The marketing of all steel truck radials tyre is managed by the Truck Radial Groups
(TRG) head office at TRG in Bangalore.

3) Exports department:
JK industries are exported to over 68 countries. Major countries include United
States of America, Australia, United Kingdom New Zealand, Hong Kong Netherlands
and most of Middle East, Africa and Asian countries.

Main problems in Exports:

The exporter is fully geared up to meet the expectation of the customer there is no
authority or control for lot of other aspects which are behind the control some of the
problems are common to the exporter

41
 Availability of container ships.
Date of departure of ships.
Delay by the concerned people of the inspection agencies.
Port strike and other disturbances
Customs authority.

4) Human Resource Department:

PRESIDENT AND
DIRECTOR

DEPUTY GENERAL
MANAGER

DEPUTY
MANAGER

OFFICER

The main functions of HR Dept- of JKI at VTP is

Recruitment and Selection
Training & Development
Performance Appraisal
Implementing Incentive Schemes
Coordinating among different departments.
Maintenance of Industrial Relationship.

Work Culture:

JK tyres provides enabling work culture with a clear sense of vision; mission and
strategies in which people work with clear goals and there by achieve more. Goals are

42
set, performance are reviewed transparently, starting with self assessment. Merit is
recognized through proportionate reward and growth opportunities.

5) Quality Assurance Department:

Quality Assurance - Head

Quality Assurance - Manager

EMS (Environmental Management

Services) & Safety Manager

Quality Maintenance Service –

Manager

The people of JK tyres have an organization committed to quality in everything they do.
They continuously anticipate and understand customer’s requirement, convert these into
performance standards for there products and services and meet these standards every
time. Full customer satisfaction both internal and external is the motto.

Certificate of Quality:
ISO 9001
QS 9000
Environment Management System (ISO 14001)
E-MARK

43
DOT (department of transport)
INMETRO(institute national de materiologia-Brazil)

Technical collaboration:

Formerly Vikrant tyres limited had technical collaboration with techno – export
foreign trade company, Praha, Czechoslovakia, for the manufacturing conventional tyres
and subsequently with Avon Technical Services, Melksham, England (subsidiary for
Avon tyres limited) for the manufacturing of Conventional / Radial Tyres. Presently the
company has foreign collaboration with M/S “Continental Tyres Germany” (effective
from 1998).

6) Stores department:
There are the three stores in JK industries (Vikrant tyre plant):
Raw materials stores
Engineering stores
Finished goods stores

The function of raw materials stores and finished goods stores are centralized in
the Head Office itself. For all 4 plants of JK industries the Head Office itself controls
purchase decisions and supply of raw materials.
a) Raw materials department:
The stores manger does inventory management of raw materials stores. In JK
Industries (Vikrant Tyre Plant) first-in-first-out (FIFO) method is followed. The head of
purchase department (raw material purchase department) does any purchases regarding
the raw materials.

b) Engineering stores:
In this stores materials like spares parts of machinery’s needed for the purposes of
production in dealt. This department does the inventory management itself. This
department takes the purchase decisions. Are ordering level is fixed for each material,

44
when the materials reaches the re-ordering level the computer itself identifies it and keeps
purchase request to purchase department.
The reordering level is calculated on the basis of lead time. Buffers stock is also
maintained to meet emergent requirement.

c) Finished goods stores:

The finished goods are stores and preserved in finished goods stores in order to
protect it from rain, dust and water.
It is the duty of FGS head to distribute the finished goods directed by the supply
chain management. Supply chain management decides to day to day distribution.
All the finished goods after the final inspection are kept at the transferring area. A
finished goods transfer note is prepared in triplicate. The content of this note are
materials, descriptions and quantity. The original copy is sent to central excise wing and
duplicate is sent to production department and triplicate copy is sent to PPC department.

Verification of goods is done by checking the stock with the details in transfer note. If the
finished goods require packing with tube flaps it is transferred to packing area. If the
packing is not required it is transferred to storage / loading bay.

2. Skills:

A skill is the ability, knowledge, understanding and judgment to accomplish a

task. Skills may be defined as what the company does best; the distinctive capabilities
and competencies that reside in the organization.

The job requirements, type of job and importance of job gives rise to different
skills in the different jobs and different department of the company. The skills differ with
respect to performance of job the skills differ with the performance of job for instance-in
Quality Control they need a Engineer and in HR Department they require a post graduate
with specialization in Human Resource Management.

45
Training:

TRAINING AT JK TYRES LTD.

ON THE JOB TRAINING

OFF THE JOB TRAINING

JOB ROTATION
LECTURE
METHODS
COACHING
DISCUSSION
JOB INSTRUCTIONS

STEP BY STEP TRAINING

3. Style:

In VTP there exists a highly participative style of management. The workers have
enough freedom to express there ideas, and there freedom to work is also unlimited. The
company has educated the employees about there rights. The company values the opinion
of workers, believes in “total acceptance” rather than acceptance by the management or
the workers. There is a long term agreement between the management and the workers
for wages and production. This agreement takes place once in 4 years where the opinions
of both management and workers are taken into consideration and agreement is made.
Small changes can be made yearly.
There exists only one union representing the workers for ensuring a batter quality of work
life for the workers and the staff.

46
4. Strategy:

Pricing:
All the marketing mix efforts are cost oriented only the price factor is revenue
oriented . Therefore it is necessary to fix such a pricing policy which may recover all the
cost of other 3Ps and leave a valuable profit to the company .
Pricing strategy of OTR tyres:
Marginal pricing policy
This policy simply means that the price of the product is based on the cost of the product
and certain percentage of profit is included in it .
Factors that are considered in fixation of price of OTR tyres:
• Cost of production
• Customer needs
• Location of customer
• Prevailing competition in the market
• Transpotation cost of both raw materials and finished products
• Prices of various raw materials like natural rubber
• Import price of synthetic rubber and chemicals
• Price of crude petroleum.
International Scenario:
In international market quality and customer satisfaction plays a very important role in
the sales and not just price which is the most important factor in the national market.
JK Tyre implements premium pricing strategy for the international market. It simply
means that JK tyre prices its products in international market slightly higher than its
competators.
JK Tyre prices in this manner as:-
• It maintain high quality and
• Better customer satisfaction for its foreign customers.

47
 JK Tyre can ask such a price for simple reason as it implements quality procedure at
each and every plant and manufacturing process . The company has also acquired
quality certification like QS9000 ISO/TS 16949:20002 etc.

5. System:

System refers of the procedure and the process such as the information system,
manufacturing process, budgeting and the control process. The managerial function of
controlling or the measurement and correction of the performance in order to ensure that
the enterprise objectives and plans devised to attain them are being accomplished. It is a
function of every manager from the President to the Supervisor.

The HRIS in JK VIKRANT PLANT has a very wide scope and covers all most all areas
of Human Resources. Mainly it covers the following areas:
Attendance: Attendance recording system is maintained daily, covering issues like
daily attendance, late punching reports, employees who have omitted to punch out
details, pertaining to man – hour utilization, absenteeism etc.,
Leave Maintenance: It is a part of time keeping, and has provisions for issues like,
daily updating, leave cancellation, punching omissions, compensatory off, out door
duty, indoor duty, leave details, leave credit or leave change.
Payroll package: It has provision for deductions with respect to PF, VPF, HRA,
SPECIAL ALLOWANCE; ES etc., leave encashment, arrears, over time, loan details,
deductions etc.,
Personnel/HR: It has a package that deals with recruitment, career development;
service exit etc. In Recruitment, the package handles application processing, test and
interview, preparation of selection list, appointment order etc., In career development it
deals with training, performance appraisal, transfer, promotion etc.,

48
 In service exit module, it deals with issues like retirement, resignation,
retrenchment, dismissal and death.

6 Staff:
The person in an organization is called Staff. Here it is very useful to think not about
individual personality but corporate demographics.

An analysis of the corporate demographics of VTP reveals that most of the worker
and staff belong to the 30–40 age groups. As such they are very active and learning
oriented. The workers are quality conscious and aid the management to produce better
quality of products, by cooperating with them in the mot efficient manner. Almost all the
employees are punctual and rate of accidents is very less in the staff as compare to the
workers. The workers are provided with the uniforms this is the important way of ensuring
equality among the workers and there by aiding the concept of team work and
interdependence, for better production both qualitative and quantitatively.
After the BPR the organization structure has change. Now it has two main units.
Business unit
Shared service unit.

The employees demographic are as follows

Workers – 1327
Executives – 189
Staff – 168
Badly workers – 917
Apprentice trainees – 55
The number of employees – 2656.

The Duties and Responsibilities of Technical Staff are as follows.

To maintain quality systems
To maintain safe working conditions

49
 Following statutory norms like Factories Act, Boilers Act.
Operation and maintenance of equipment
Issue of Spares.

The duties and Responsibilities of Clerical Staff are follows:

To maintain the records
Prepare a payroll
To maintain proper Accounts of organization

7. Shared value:
The values that go beyond, but might well include simple goal statement in
determining corporate destiny. To fit the concept, these values must be shared by most
people in the organization.

VTP is company that insist the following some core values most of these can be
found in the companies vision statements as well as quality policy.

The company considers employees are the greatest of its assets. Production and
productivity come only next to employee welfare. JK industries limited believe that
productivity is a derivative of employee welfare. JK industries lit., take initiative to do
social project such activities like literacy program for village people, conduct medical
camps in villages, digging bore wells in villages, building bus shelter and employee
welfare program. Like wise the company is always willing to participate in welfare
activities.

The company’s focus on the customer and creating culture of interdependence are
embodied in its statements of vision and quality. While the concept of TQM, TPM and
QC are visible in the form of slogans, posters and well meaning clichés, the first serious
attempt to institutionalize has started.
Thus, some of the values that are shared by the both employees and the
management at JK industries limited are as follows.

50
 Product and service quality
 Productive efficiency
 Punctuality
 Compensation
 Employee and societal welfare
 Customer satisfaction
 Team work concept
 TQM (Total Quality Management)
 TPM (Total Productive Maintenance)
 Quality circle

PART-C

51
 SWOT
ANALYSIS

Strength:

 Over six decades of experience in tyre manufacturing

 Self sufficient in tyre production
 Successful & fast absorption of international technology to suit Indian
condition & needs.
 Well knit distribution network.
 Tyre is easily available & serviced even in remotest parts of the country.

Weakness:

52
 In comparison with the global standards, smaller size of plant & hence
less economic units.
 Lower productivity of labour in comparison to world standards.
 Out dated labour laws
 Proliferation of units
 High cost of raw materials.

Opportunities
 Robust economic growth, particularly vehicle production growth
resulting in health demand growth for tyre in the feature.
 Export culture inculcated enabling participation in world tyre market.
 Excellent brand equity of Indian cross ply/bias truck Tyres in the world
market can open market opportunities for radial tyre.
 Emergence of Indian as a hub for production of small car is expected to
give a thrust to auto component & tyre segment.
 Improved road infrastructure especially on the golden quadrilateral &
north-south, cast-west national highway project will result in significant
increase in movement of goods & passenger traffic through roads with
resultant growth in demand for tyres.

Threats
 Faster pace of opening up of the economy will increase import of tyre.

53
 Reduction in important duties will lead to high volume of type imports.
 Multinationals with financial muscle setting do manufacturing facilities
in the country.
 Concenssional import tariffs for countries like china & South Korea
under regional trade agreements will lead to additional imports.

PART-D

SUMMARY OF ANNUAL
REPORT

54
 SUMMARY OF ANNUAL REPORT
Consolidated Profit and Loss Account for the
Year Ended 30th September, 2006
Rs. In Crores (10 Million)
Particulars 2005-2006 2004-2005
Sales 2952.69 2383.82
Less: Excise duty 343.48 2609.21 304.74 2079.08
Other income 8 17.61 16.44
Increase (+) decrease (-) 9 92.16 22.32
goods
2718.98 2117.84
Expenditure
Materials and 10 2150.32 1611.30
manufacturing
Employees 11 155.70 142.66
Freight and 88.70 83.24
Transportation
Other Expenses 12 155.38 149.10
2550.10 1986.30
Operating Profit
(Before interest and 168.88 131.54
depreciation)
Interest 13 76.15 64.45
Profit before depreciation 92.73 67.09
Depreciation 97.50 90.22
Transfer from capital 26.57 26.57
reserve
Profit before tax 21.80 3.44
Provision for current tax 0.47 -

55
Mat credit entitlement (0.47) -
Deferred tax/(deferred tax 1.44 (14.52)
credit)
Provision for fringe benefit 3.31 1.20
tax
Profit after tax 17.05 16.76
Additional excise duty – 36.70
earlier years -
Less transfer from general 36.70
reserve -
Tax provision for earner - 0.28
years written back
Debenture redemption 3.35 1.01
reserve no longer required
Surplus from previous year 41.53 40.32
(net of transfer)
61.93 57.81
Appropriations
Debenture redemption 5.27 5.99
reserve
General reserve 20.00 1.75
Proposed dividend 7.70 7.49
Corporate dividend tax 1.08 1.05
Surplus carried to balance 27.88 41.53
sheet
61.93 57.81
Basic/diluted earnings per 31.50 17.51
share (Rs)-cash
After tax 6.01 4.40

Consolidated Balance Sheet As at 30th September, 2006

Rs. in Crores (10 Million)

Schedule 30.09.2006 30.09.2005
Source of funds
Share holders founds 1 30.79 37.46
Capital 2 560.93 745.14

56
Reserves and Surplus
591.72 782.60
Loans 3
Secured Loans 724.77 671.28
Unsecured loans 219.10 159.22
943.87 830.50
1535.59 1613.10
Application of funds
Fixed Assets
Gross block 4 2084.22 1938.72
Less: Depreciation 860.03 764.74
Net Block 1224.19 1173.98
Capital work in Progress 22.51 61.63
1246.70 1235.61
Investments 5 61.46 250.04
Deferred Tax 1.61 3.05
Current Assets, Loans and Advances 6 1013.52 812.83
Less: Current Liabilities and 7 796.86 701.37
Provisions
Net Current Assets 216.66 111.46
Miscellaneous Expenditure (To the 9.16 12.94
extent not written off or adjusted)
1535.59 1613.10

Ratio Analysis

RATIO 2006 2005 STANDARDS

LIQUIDITY RATIO
Current Ratio 1.02:1 1.06:1 2:1
Quick Ratio 1.12:1 0.88:1 1:1
LEVERAGE RATIO
Debt Equity Ratio 1.00:1 0.62:1 2:1
Proprietary Ratio 0.44:1 0.59:1 0.75:1
Solvency Ratio 0.74:1 0.68:1 -
PROFITABILITY
RATIO
Gross profit Ratio 7.98% 6.25% 25%
Earning per share Ratio 0.49 per share 0.33 per share -

57
 Net profit Ratio 4.69% 3.26% 16%
ACTIVITY RATIO
Total assets Turnover Ratio 1.40 times 1.09 times -
Debtors Turnover Ratio 5.31 times 4.91times -
Creditors Turnover Ratio 3.51 times 3.23 times -
Stock Turnover Ratio 36.83 times 29.94 times 8 times
Fixed assets Turnover Ratio 2.94 times 3.00 times 5 times
Working capital Turnover 12.04 times 18.65 times -
Ratio

Ratio analysis:

Ratio analysis is widely used tool of financial analysis. It is defined

as the systematic use of ratio to interpret the financial statement so that the strength and
weakness of a firm as well as its historical performance and current financial condition
can be determined.

Liquidity Ratio
Current Ratio:
Current Ratio of the firm shows 1.06:1 in 2005 and 1.02:1 in 2006, which
shows good liquidity position.

Quick Ratio:

The term Quick Ratio establishes a relationship between liquid assets

and current liabilities. The quick ratio of the company in 2005 is 0.88:1 but it decreased
in 2006 by 0.12:1 and is not good condition for the firm to convert its current assets
quickly into cash in order to meet its current liabilities.

Leverage Ratio
Debt Equity Ratio:

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 Debt equity Ratio is used to analyze long – term solvency of the firm.
The debt equity Ratio of the company for year 2005 0.62:1 it has increased to 1.00:1 for
the year 2006 which is greater than previous year. It is less when it is compared with
standard value of 2:1.

Proprietary Ratio:

It expresses the relationship of net worth and total assets. It is the

excess of total assets over the owner’s funds. The proprietary ratio in 2005 is 0.59:1 and
in 2006 is 0.44:1 as against standard 0.75:1.

Solvency Ratio:

This ratio expresses the relationship between the total assets and total
liabilities of a concern. It measures the solvency of the concern. The solvency ratio in
2005 is 0.68:1 and in 2006 is 0.74:1. There is increase in solvency of the company.

Profitability Ratio:
Gross Profit Ratio:
Gross profit ratio is 2005 was 6.25% and 7.98 for 2006 of the JK
industries. So the cost of production is low and high profitability and it is favorable for
purchasing policy of the company. Since it represents high profitability of the company.

Earning per Share Ratio:

Earning per share ratio in the year 2005 was 0.33 per share and it was
increased in the year 2006 to 0.49 per share which shows that the company is able to earn
proper earnings per share.

Net Profit Ratio:

Net profit ratio of the company for the year 2005 was 3.26% and 2006
the net profit its 4.69% which shows the relationship between net profits and rates.

Activity Ratio:

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Total Assets Turnover Ratio
Total assets include net fixed assets and current assets. The
total asset turnover of the company for the year 2005 was 1.09 times. It has increased for
the year 2006 by 1.40 times. This ratio shows a firm ability, comparatively better will be
generating sales from all financial resources committed to total assets.

Debtors Turnover Ratio:

Debtor’s turnover ratio indicates the number of times the debtors are
turned over during a year. The debtors’ turnover ratio of the company for the year 2005
was 4.91 times. It has increased for the year 2006 by 5.31 times. This ratio indicates that
debtors are more efficiently managed.

Stock Turnover Ratio:

Stock turn over ratio in 2005 in 29.94 times and in 2006 is 36.83
times. This measures the velocity of movement of goods and indicates stock rotated 3 to
4 times. It is considered to be the normal ratio, JKI has stock rotated more than the
normal ratio, and this shows efficiency of inventory management.

Creditors Turnover Ratio:

The creditor’s turnover ratio of the company fro the year 2005 was
3.23 times. It has increased to 3.51 times for the year 2006, which shows that efficiency
utilizing creditor’s turnover ratio is comparatively becoming less.

Working Capital Turnover Ratio:

It expresses the relationship between the working capital and sales. The
working capital turnover ratio in 2005 in 18.65 times and in 2006 is 12.04 times.

Fixed Assets Turnover Ratio:

It expresses the relationship between fixed and sales. The fixed assets
ratio in 2005 is 3.00 times and 2006 in 2.94 times.

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61
 PAR
T-E

LEARNING
EXPERIENCE

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 In-plant training is part of the curriculum to expose students to the actual day
activities of a particular company and theoretical aspects of McKinsey’s 7s model to
organizational functioning.
` My experience in JK Tyre enriched my knowledge and understanding. To
start with, JK Tyre has implemented BPR and its effect can be felt on structure of the
organization as it acquires structure on the basis of similar and closely related processes
segregated into single unit and not on functional basis. As a result of this the structure
has fewer hierarchies so now more decision are taken relating tyre an activity even at
lower level also. Employees have been empowered and made responsible. All this has
resulted in improvement of productivity.
Another important aspect was the sharing Shared Value in the
organization. Company firmly believes in ‘Creating excellence’ and it does this by
working for TPM i.e. Total Productivity Management. TPM aims at ‘Zero breakdown in
manufacturing process and machinery, Zero accidents for employees’. This aims at
creating value for customers and employees at the same time. To keep employees aware
about these pricing policies regular training is given to them.
Visit to the production facility made me realize how tyres are being
manufactured. I actually witnessed various stages in conversion of the rubber and
various chemicals to tyre. Many processes are automated with fewer labour
requirements.
Vikrant Tyres Limited has got certification of TS 16949 and this fact proves that the
company is providing quality related training at all levels for its employees.
Based on the analysis of the data it can be concluded that the company’s professionally
conducting training and Development & Management Development program to
constantly upgrade the skill & knowledge of its employees.

In the modern competitive business environment every company should try to increase
the productivity and maintain quality of its products. In order to be competitive in the
market the company should constantly upgrade IN Training & Development program.

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 The present study has thoroughly looked into the various aspects of Training &
Development initiated b the company. The study points that the efforts made by VTP to
maintain competitive edge in the industry are very encouraging. A significant majority of
the training program offered by the company has helped the employees to increase their
knowledge & skills. And it is also observed that management is providing efficient
training program for its employees. Due to this it ahs achieved greater heights of success.

The study has helped the researcher to understand the functioning of a major
Tyre company like Vikrant Tyres Ltd., located at Mysore. The company has been able to
maintain a competitive edge through its various development & training program. The
fact that the company has been able to get the triple ISO certification proves its efficient
handing of Human Resources Management.
The success of organization is lies in Co-Ordination between the management and
workers. The relationship between the management and the workers directly decides the
development of organization. If the management and workers mutually co-ordinate then
nothing can prevent them from success.

The study of different working situations gave the knowledge of importance of the
enthusiasm in workplace and our work. The success of any organization is lies in the
efficiency of their human resource. Laziness, negative attitude towards work, always to
escape from responsibilities instead of taking new responsibilities will take the
organization to failure.

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