CHAPTER I

INTRODUCTION

INTRODUCTION
MRF Ltd is India's No.1 tyre manufacturing company. The company is engaged in the
manufacturing of rubber products, such as tyres, tubes, flaps, tread rubber and conveyor belt. The
company's manufacturing facilities are located at Tiruvottiyur and Arakonam in Tamil Nadu,
Kottayam in Kerala, Ponda in Goa, Medak in Andhra Pradesh and Union Territory of
Pondicherry. MRF Ltd was established in the year 1946 by K M MammenMappillai as a small
toy ballon unit. Much later in November 1960, the company ventured in manufacturing of tyres
by entering a technical collaboration with Tire & Rubber company, USA. In the year 1964, the
company commissioned their main plant. Also, they established an overseas office at Beirut,
Lebanon to tap the export market. In the year 1967, the company became the first Indian
company to export tyres to USA. In the year 1980, the company entered into a technical
collaboration with the B. F. Goodrich Tyre Company, USA that paved the way to a significant
exercise in new product development and quality improvement. They introduced Nylogriptyres
for two-wheeler vehicles and also introduced Legend, a premium segment nylon car tyre in the
year 1985 and 1987 respectively. In 1989 the company collaborated with Hasbro International
USA, the world's largest toy maker and launched Funskool India. Also, they entered into a pact
with Vapocure of Australia to manufacture polyurethane paint formulations and with Pirelli for
MUSCLEFLEX conveyor and elevator belting. In the year 1996, they set up a factory dedicated
entirely for the manufacture of radial tyres at Pondicherry. In the year 1999, the company was
selected as the most ethical company in India by 'Business World' magazine. In the year 2004,
the company made a tie up with MarutiUdyog to boost motorsports in India. During the year
2004-05, the product range of the company expanded with Go-kart & Rally tyres and tyres for
two/three wheelers. The company received the TOP Export Awards from CAPEXIL as well as
AIRIA for the period ended 2005. In the year 2007, the company launched premium truck tyre
Super Lug 50-FS. In May 2008, the company signed the memorandum of understanding (MoU)
with government of Tamil Nadu for the new MRF plant to be located at Perambulur and also for
expansion of their existing plants in Tamil Nadu. During the year 2009-10, the company
increased the installed capacity of Automobile Tyres from 28,450,000 Nos to 31,700,000 Nos.

Also, they increased the installed capacity of Automobile Tubes from 29,700,000 Nos to
31,600,000 Nos. They launched two popular tyres, namely MRF Meteor, a bike tyre for both
tarmac and dirt; and the MRF Steel Muscle S3K4 truck radials for better mileage on diverse road
conditions. Also, they completed the Ankenpally project at Medak district, Andhra Pradesh.
During the year, the company won the All India Rubber Industries Association's (AIRIA) award
for 'Highest Export Awards (Auto Tyre Sector)' category and 'Top Export Award' from Chemicals
& Allied Products Export Promotion Council (CAPEXIL) for 2009-10. During the year 2010-11,
the company launched new products namely MRF Z.L.O, MRF Meteor M and MRF Steel
Muscle 53C8.
1.2 VISION & MISSION OF THE COMPANY:
Vision
To be amongst the most admired companies in India, committed to excellence
Mission
Be a Customer Obsessed Company - Customer First 24x7
Motivated and Committed team for excellence in performance
Deliver Enhanced Value to all stakeholders
Enhance global presence through Acquisition / JV / Strategic Partnerships

1.3 GOALS AND OBJECTIVES:

ORGANISATIONAL GOAL
To maintain global standards through continuous improvement in the quality of products and
services in order to maintain market leadership

Objectives
The main objective of the company is to attain global standard through continuous improvement
in the quality products and service in order to maintain market leadership. The main strategy of
the company in todays competitive world is cut cost and win the battle. As the number of

accidents in similar factories is comparatively more, the emphasis of the company is accident
free safe production. MRF Ltd achieves the objectives by taking the following actions;
Product / process improvement by performance monitoring and prompt ser
v i c e t o t h e customer.
Up gradation of all the machinery to meet the increasing needs of customer.
Continuous training is given to all employees in order to acquire necessary skills
and knowledge and improve the quality of work life

1.4 Other information related to the company

POLICIES OF MRF
1 . Q U A L I T Y P O L I C Y : T h e main quality objective of the company is to
maintain market leadership through continuousquality performance
2.

S A F E T Y P O L I C Y : S a f e t y and health of the employees shall be the first

priority of the company. It is the responsibility of each and every individual in the organisation,
regardless of the position he occupies, to ensure that everyone in the factory returns home
without any injury. The company offers ACCIDENTFREE SAFE PRODUCTION
not only in letter but also in spirit, for the benefit of one and all through this policy.
3 . E N V I R O N M E N T P O L I C Y : T h e environment Policy of MRF LTD. is
to manufacture the companys products in an environmentally friendly and safe manner
4. This is to maintain our products in an environmentally friendly and safe manner. To achieve
this goal, all the MRF plants, together with corporate office shall
5. Minimize the impact of our manufacturing activities on the environment especially the air,
water, and soil.
Comply with all applicable regulatory requirements
6. Develop environmental performance evaluation procedures for continuous monitoring
7. Optimizes the consumption of resources (water, energy and raw materials) by minimizing
wastage, recovering and recycling where ever possible.
8. Up gradation of the machinery and pollution control equipment when required

Train all

our employees

to perform their

responsible land safe manner

BOARD OF DIRECTORS:
K.M. Mammen Chairman & Managing Director
Arun Mammen Joint Managing Director
K.M. Philip Whole Time Director
Dr. K.C.Mammen Director

activities

in an environmentally

CHAPTER - II
Organization structure

2.1 Company Structure

2.2Products of Company

Automotive tyres are main products of the company

1. Truck tyre Tube tyre and Tubeless tyre
2. Light Truck tyre
3. Special tyre for defense
4. Tyre for industrial application
5. Agricultural tractor and tiller tyre
6. Off the road tyres Solid tyres and earth mover tyres
7. Passenger tyre Bias ply and radial
8. Two/ Three wheeler tyres

9. Specialized tyre for motor rallies

Non tyre products

1. Automotive tubes
2. Flaps
3. Conventional tread rubber
4. Pre- cured tread rubber
5. Vulcanizing solution
6. Tyre repair materials
7. Conveyor belts
8. Toys
9. MRF metal coat
10. MRF wood coat
11. MRF glass coat
12. MRF velour
13. MRF auto coat

Services of company
Warranty policy
1. Every effort is made by the company to secure the highest possible standard of excellence of
both material and workmanship. The company will not be liable for any claim whether arising in
contract or in tort for any injury, loss or damage caused to any person or property by or arising
out of the use of any company product.
2.Without prejudice to the above paragraph JK Tyre & tubes are warranted against
manufacturing defects arising out of any deficiency in design, Manufacturing, material or
workmanship.
Tyres accepted under warranty claims will be replaced on pro-rata wear based on percentage of
tread wear, on the basis of measurement of remaining Tread depth.
3. Warranty claim findings made by JK Tyre Technical Service Personnel or Trained and
Authorized Personnel would be final and binding to all concerned.

HEAL THE WHEEL

Heal The Wheel is a tyre check-up campaign for truck and bus fleets enrolled under the Fleet
Management program of JK Tyre. In this activity, all tyres are checked for inflation pressure,
irregular wear, and removed tyres are checked for scrap analysis.

FIX A TYRE

Tyre puncture is one of the major reasons of car breakdown, which can happen anytime,
anywhere, and with anybody. JK Tyre presents Indias first 24x7 On-Road Tyre Assistance
Service Fix-A-Tyre, for JK Tyre customers. Fix-A-Tyre ensures complete peace of mind by
providing 24x7 On-Road Tyre assistance service, available Only in Delhi-NCR and Chennai
(within City limits). It ensures freedom of driving even at odd hours without any fear or anxiety.

Fix-A-Tyre Services:
1. Tyre puncture repair
2. Tyre replacement (if required)

3. Vehicle towing (if required on actual charges)

4. Puncture/repair related consumables are chargeable to all the members

TYRE CARE CENTER

JK Tyre understands the importance of service in the commercial segment and hence was the
first company to establish a pan India network of tyre care centres on important national
highways. These centres provide the following services to transporters:
1. Tyre Repairs.
2.

Inflation pressure check.

3. Tyre Rotation.
4. Tyre service.

FLEET MANAGEMENT

Fleet Management is a concept created by JK Tyre to offer added value to its customers. The
program is aimed at increasing our connection with our customers. It offers total tyre solutions
from the purchase of new tyres to tyre disposal to ensure the optimum Cost PerKilometre
(CPKM) to our fleets.
The company also maintains a centralized record book for fleets to provide data management
software for tyre data entry and analysis. Tyre data records of fleets are synchronized with fleets
database for vehicle fitness and the vehicle fitness report is shared with the owner and
maintenance staff on a regular basis.

2.3 Market Performance

WORLD WIDE MARKET SEGMENTATION:

2.4Competitors analysis

Name of the company

market share

MRF ltd. (market leader)

24%

APOLLO TYRES ltd.

22%

JK TYRES &NDUSTRIES

17%

CEAT ltd.

14%

Others

17%

GOOD YEAR

6%

The prospectus of tyre exports from India appears healthy; following efforts by Indian
companiesto increasing entering into out sourcing agreement with tyre producers in South-east
Asia, Eastern Europeand Latin America. Overall, tyre manufacturers are likely to tap the export
market in an effort to boost sales.The increasing exports of bus and truck tyre from India to
developing countries is because of the fact thatdeveloping countries is because of the fact
that developing countries are unable to source them from developed countries as these
aremore produced there. Tyre imports are unlikely to pose a threat to the domestic industry, given
that domestic prices are lower than international tyreprices.In the domestic market, tyre
manufacturers are expected to increasingly focus on expanding their dealershipnetworks and
explore possibilities of tie-ups among themselves to penetrate the growing customer
base.They are also likely to pursue innovative measure to improve customer awareness.The
consolidation of the Indian tyre industry is likely to continue in the coming years
through mergersamong existing players. The industry is likely to expand through a
combination of organic and inorganicgrowth. While organic growth would come from

raising efficiency levels, inorganic growth would be achieved through alliances and
mergers & acquisitions.

2 . 5 AC H I EVE M E NTS AN D M I LE S TO N E S

TNS
MRF voted the "Most Trusted" Tyre Company in India by TNS 2006 global CSR study.

J D POWER ASIA PACIFIC

MRF won the award for customer satisfaction not once but 6 times in the last 7 years.

CAPEXIL
MRF won the award for exports.(MRF, 2010)

CHAPTER - III
FNIANCIAL STATEMENT ANALYSIS

FINANCIAL PERFORMANCE OF COMPANY

Financial Results
During the year under review, the Company achieved the following
Financial results:
(Rs. Crore)
2010-11 2011-12

2012-2013

Total Income

10670.17

13093.76 13482

Profit before tax

893.65

833.12

Provision for taxation

Net Profit

274.23
572.36

1227

260.76 425
572.36 802

Interpretation: During the year under review, your Company''s total income increased by
Around 3% to Rs. 13482 crore from Rs. 13094 crore in the previous year. There was an increase
of 4% in total tyre production in almost all Segments. During the year, the raw material prices
were stable and this contributed to the margins of the Company despite depreciation of rupee.
This apart, your Company could achieve improved results, due to improved operating
efficiencies and cost reduction measures which the Company has undertaken over a period of
time.

Balance Sheet of MRF

Sep '12
12 mths
Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Revaluation Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities

Application Of Funds
Gross Block
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Investments
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans & Advances
Deffered Credit
Current Liabilities
Provisions
Total CL & Provisions
Net Current Assets
Miscellaneous Expenses
Total Assets
Contingent Liabilities
Book Value (Rs)

Sep '11 Sep '10

12 mths
12 mths

4.24
4.24
0.00
0.00
2,853.56
0.00
2,857.80
1,433.34
198.09
1,631.43
4,489.23
Sep '12
12 mths

4.24
4.24
0.00
0.00
2,293.53
0.00
2,297.77
1,209.30
306.96
1,516.26
3,814.03
Sep '11
12 mths

4.24
4.24
0.00
0.00
1,686.44
0.00
1,690.68
541.95
410.54
952.49
2,643.17
Sep '10
12 mths

5,062.51
2,148.71
2,913.80
414.65
424.71
1,645.59
1,454.09
61.10
3,160.78
298.33
0.00
3,459.11
0.00
2,488.51
234.53
2,723.04
736.07
0.00
4,489.23
404.11
6,738.28

3,831.82
1,860.44
1,971.38
1,135.25
72.69
1,526.02
1,308.09
55.98
2,890.09
269.14
1.26
3,160.49
0.00
2,318.22
207.56
2,525.78
634.71
0.00
3,814.03
551.10
5,417.81

3,367.90
2,038.99
1,328.91
497.72
77.67
1,110.68
811.49
52.27
1,974.44
142.29
0.52
2,117.25
0.00
1,202.25
176.13
1,378.38
738.87
0.00
2,643.17
918.85
3,986.38

RATIO ANALYSIS

PARTICULAR
Investment Valuation Ratios
Face Value
Dividend Per Share
Operating Profit Per Share (Rs)
Net Operating Profit Per Share (Rs)
Free Reserves Per Share (Rs)
Bonus in Equity Capital
Profitability Ratios
Operating Profit Margin(%)
Profit Before Interest And Tax Margin(%)
Gross Profit Margin(%)
Cash Profit Margin(%)
Adjusted Cash Margin(%)
Net Profit Margin(%)
Adjusted Net Profit Margin(%)
Return On Capital Employed(%)
Return On Net Worth(%)
Adjusted Return on Net Worth(%)
Return on Assets Excluding Revaluations
Return on Assets Including Revaluations
Return on Long Term Funds(%)
Liquidity And Solvency Ratios
Current Ratio
Quick Ratio
Debt Equity Ratio
Long Term Debt Equity Ratio
Debt Coverage Ratios
Interest Cover

Sep '12

Sep '11

Sep '10

10.00
10.00
10.00
25.00
25.00
50.00
2,973.26 1,918.68 1,971.80
27,988.16 22,910.19 17,596.06
-- 5,365.51 3,976.38
41.98
41.98
41.98
10.64
8.07
8.09
7.34
7.33
4.80
4.81
22.09
20.02
20.02
6,738.28
6,738.28
25.04

8.37
5.81
5.82
4.72
4.72
6.36
6.36
15.21
26.95
9.23
5,417.81
5,417.81
17.04

11.20
7.70
7.71
8.02
8.02
4.73
4.73
22.01
20.93
20.04
3,986.38
3,986.38
24.72

0.91
0.67
0.57
0.39

0.94
0.64
0.66
0.48

1.08
0.72
0.56
0.39

6.25

6.24

9.22

Total Debt to Owners Fund

Financial Charges Coverage Ratio
Financial Charges Coverage Ratio Post Tax
Management Efficiency Ratios
Inventory Turnover Ratio
Debtors Turnover Ratio
Investments Turnover Ratio
Fixed Assets Turnover Ratio
Total Assets Turnover Ratio
Asset Turnover Ratio

0.57
8.14
6.50

0.66
8.90
10.32

0.56
13.35
10.74

7.94
8.58
7.21
2.35
2.65
2.86

7.35
9.17
7.35
2.55
2.56
3.01

7.68
10.73
7.68
2.22
2.84
3.47

--27.19

32.08
23.29
23.52

41.60
17.31
35.64

72.37

78.37

71.22

40.17

33.79

32.17

-10.79

4.78
8.47

5.95
8.97

Earnings Per Share

1.85
1.21
98.15
98.79
1.87
Sep '12
1,349.54

1.99
1.42
94.20
97.32
3.30
Sep '11
1,460.50

6.98
4.02
92.71
95.88
1.59
Sep '10
834.63

Book Value

6,738.28

5,417.81

3,986.38

Average Raw Material Holding

Average Finished Goods Held
Number of Days In Working Capital
Profit & Loss Account Ratios
Material Cost Composition
Imported Composition of Raw Materials
Consumed
Selling Distribution Cost Composition
Expenses as Composition of Total Sales
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit
Dividend Payout Ratio Cash Profit
Earning Retention Ratio
Cash Earning Retention Ratio
AdjustedCash Flow Times

Profitability ratio

18000
16000
14000
12000
10000
8000
6000
4000
2000
0

Interpretation:
From the above analysis, the Profitability ratio in the year 2011, (4.73%) 2012 (6.36%) and for
the year 2013(4.81%). From the Profitability ratio analysis, it is clear that the companys
Profitability position is not satisfactory.

Profit and loss ratio

250
200
150
100
50
0

Interpretation:
From the above analysis, the Profit and loss a/c ratio in the year 2011, (71.27%) 2012 (78.37%)
and for the year 2013(72.37%). From the Profitability ratio analysis, it is clear that the
companys Profitability position is not satisfactory.

Liquidity and solvency Ratio:

Long Term Debt Equity Ratio

Debt Equity Ratio

Quick Ratio

Current Ratio

Liquidity And Solvency Ratios

0

0.2

0.4

0.6

0.8

1.2

Interpretation:
From the above analysis, the Liquidity and Solvency ratios showing the liquidity and solvency
position of the company during the years 2011 through 2013. The current ratios are 2.40%
(2011), 1.59% (2012) and 1.31% (2013) respectively. The Quick ratios are 2.29%, 1.54% and
1.27% respectively showing the companys performance is satisfactory. The debt equity ratios
for the years 2011 through 2013 are 0.56%, 0.62% and 0.52%. Long term debt equity ratios are
0.56%, 0.62% and 0.52% respectively. Finally all the liquidity and Solvency ratios analysis
indicating that the overall performance of the company is not satisfactory.

CHAPTER IV
FINDINGS, SUGGESTIONS & CONCLUSION:

FINDINGS
MRF ltd. Is the no. 1 largest tyre manufacturer in the country and the 12th largest in the
world.
1 .MRF exports its products to more than 75 countries worldwide.
2. MRF is the first Indian company to export tyre to the US.
3 .The companies is providing good working environment.
4. M R F i s t h e f i r s t c o m p a n y i n I n d i a t h a t m a n u f a c t u r e a n d m a r k e t N yl o n
t y r e s , p a s s e n g e r t y r e s commercially.
5. Profit is comparatively low because of the rapid variations in the cost of the raw materials

SUGGESTIONS
The management must take sufficient step to install a grievance settlement
machinery with sufficient participation of workers
1. Improve employee relation. Open a show room at factory itself.
2. The company need to move and update itself according to new technologies in the market to
maximize quality production.
3 .The company should utilize railways to transport its materials which would reduce the overall
logistics cost.
4. More attractive advertisements in Visual Media would help in Marketing
5. More investment has to be made in Research and Development.
.

CONCLUSION:
Madras Rubber Factory mobilized itself as the market leader. The strong performance of MRF
is because of combined efforts of management and employees. MRF provides high
quality and technologically superior products to its customers. The company has the provision
to find out which tyre is manufactured by which worker. The effective management along with
successful workers is very dedicated and is aware of new developments taking place in
the industry. There is no compromise on the quality policy makes them King of Kings
in tyre industry. If they implement the suggestion put forward, will help them to improve
profit and helpful for the workers. So the company can attain global standard
through continuous improvement in the quality products and service in order to maintain
market leadership and can be the king in tyre Indus

BIBLOGRAPHY
BOOKS:
1. S.N.Maheswari, Financial Management, Himalaya Publisher, 2/e, 2002.

Websites
1. www.mrftyre.com
2. www.indiainfoline.com/Markets/Company/Fundamentals/ManagementDiscussions/MRF-Ltd/500290
3. http://www.moneycontrol.com
4. http://www.slideshare.net/AmitBishyer/45907503-mrftyres
5. www.scribd.com

Annexure
Balance Sheet of MRF
Sep '12
12 mths
Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Revaluation Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities

4.24
4.24
0.00
0.00
2,853.5
6
0.00
2,857.8
0
1,433.3
4
198.09
1,631.4
3
4,489.2
3
Sep '12
12 mths

Sep '11 Sep '10

12 mths
12 mths
4.24
4.24
0.00
0.00

4.24
4.24
0.00
0.00

2,293.53

1,686.44

0.00

0.00

2,297.77

1,690.68

1,209.30

541.95

306.96

410.54

1,516.26

952.49

3,814.03

2,643.17

Sep '11
12 mths

Sep '10
12 mths

3,831.82

3,367.90

1,860.44

2,038.99

1,971.38

1,328.91

1,135.25
72.69

497.72
77.67

1,526.02

1,110.68

1,308.09

811.49

Application Of Funds
Gross Block
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Investments
Inventories
Sundry Debtors

5,062.5
1
2,148.7
1
2,913.8
0
414.65
424.71
1,645.5
9
1,454.0

Cash and Bank Balance

Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans & Advances
Deffered Credit
Current Liabilities
Provisions
Total CL & Provisions
Net Current Assets
Miscellaneous Expenses
Total Assets
Contingent Liabilities
Book Value (Rs)

9
61.10
3,160.7
8
298.33
0.00
3,459.11
0.00
2,488.5
1
234.53
2,723.0
4
736.07
0.00
4,489.2
3
404.11
6,738.2
8

55.98

52.27

2,890.09

1,974.44

269.14
1.26
3,160.49
0.00

142.29
0.52
2,117.25
0.00

2,318.22

1,202.25

207.56

176.13

2,525.78

1,378.38

634.71
0.00

738.87
0.00

3,814.03

2,643.17

551.10

918.85

5,417.81

3,986.38