MIRA INFORM REPORT

Report Date :

29^th January, 2007

IDENTIFICATION DETAILS

Name :	ASHOK LEYLAND LIMITED
Registered Office :	19 Rajaji Salai, Chennai – 600 001, Tamilnadu, India
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	07.09.1948
Com. Reg. No.:	18-105
CIN No.: [Company Identification No.]	L34101TN1956PLC00105
TAN No.: [Tax Deduction & Collection Account No.]	CHEA00171D / CHEA07627E
PAN No.: [Permanent Account No.]	AAACA4651L
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing of Commercial Vehicles, Engines and Ferrous Castings.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 56000000
Status :	Good
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. The company is a part of Hinduja Group. Available information indicates high financial responsibility of the company. Directors are reported as experienced, respectable and resourceful businessmen. Their trade relations are reported as fair. Payments are reported as correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	19 Rajaji Salai, Chennai – 600 001, Tamilnadu, India
Tel. No.:	91-44-25342141
Fax No.:	91-44-25342493
E-Mail :	1. sesh@ashokleyland.com 2. jv@alc.global.net.in
Website :	http://www.ashokleyland.com
Factory 1 :	Ennore Post Box No. 3 Ennore Chennai 600 057 Tamil Nadu Hosur – Unit IIA Cab Panel Press Shop SIPCOT Industrial Complex Mornapalli Village Hosur 635 109 Tamil Nadu Hosur - Unit I 175 Hosur Indl. Complex Hosur 635 126 Tamil Nadu Hyderabad (***) Ductron Castings B-15, IDA-Uppal Hyderabad 500 039 Andhra Pradesh Bhandara Plot No.l MIDC Industrial Area Village Gadegaon .Sakoli Taluk Bhandara 441 904 Maharashtra Ambattur, Chennai 3A/A&2 North Phase Sidco Industrial Estate Ambattur, Chennai 600 098 Tamil Nadu Hosur - Unit II 77 Electronic Complex Perandapalli Village Hosur 635 109 Tamil Nadu Alwar Plot No.SPL 298 Matsya Indl. Area Alwar 301 030 Rajasthan Technical Centre Vellivayal Chavadi Via Manali New Town Chennai 600 103
Sales and Marketing Division :	480 Anna Salai, Nandanam, Chennai – 600 035, Tamilnadu Tel. 91-44-24341536 Fax. 91-44-24346220 E-Mail. edm@alm.sprintrpg.ems.vsnl.net

DIRECTORS

Name :	Mr. R J Shahaney
Designation :	Chairman
Name :	Mr. D G Hinduja
Designation :	Vice Chairman (Alternate : Y M Kale)
Name :	Mr. D J Balaji Rao
Designation :	Director
Name :	Mr. F J Colon Martinez (Alternate : G Sagone)
Designation :	Director
Name :	Mr. A K Das (Alternate : IN Chatterjee)
Designation :	Director
Name :	Mr. P N Ghatalia
Designation :	Director
Name :	Mr. H Klingele (Alternate : A Spare)
Designation :	Director
Name :	Mr. S R Krishnaswamy (Representing LIC)
Designation :	Director
Name :	Mr. E A Kshirsagar
Designation :	Director
Name :	Mr. F Sahami
Designation :	Director
Name :	Mr. R Seshasayee,
Designation :	Managing Director
Name :	Mr. A Spare
Designation :	Director
Name :	Mr. S V Young
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Vinod K Dasari
Designation :	Chief Operating Officer
Name :	Mr. J N Amrolia
Designation :	Executive Directors
Date of Joining :	16/05/1980
Qualification :	BA(Hons.), M. A.(P.M & L.W)
Previous Employment :	Selection and Training Manager, Brooke Bond India Ltd, Kolkata
E-mail :	jna@alc.global.net.in
Name :	Mr. S Balasubramanian
Designation :	Executive Directors
Name :	Mr. K S Kumar
Designation :	Executive Directors
Name :	Mr. R Malhan
Designation :	Executive Directors
Name :	Mr. S Nagarajan •
Designation :	Executive Directors
Name :	Mr. M Natraj
Designation :	Executive Directors
Name :	Mr. K Sridharan
Designation :	Executive Directors
Name :	Mr. A Bhat
Designation :	Executive Director
Name :	Mr. A R Chandrasekharan
Designation :	Executive Director
Name :	Mr. B M Udayshankar
Designation :	Executive Director
Name :	Mr. N Sundararajan
Designation :	Executive Director Company Secretary
E-mail :	ns@alc2.global.net.in

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoter - LRLIH Ltd (Includes 164600070 shares in GDR Form)	605766750	49.59
Resident Individuals/ Clearing Members	140263936	11.48
Financial Institutions / Insurance Company/ State Government/ Government Companies / UTI	169086840	13.84
Foreign Institutional Investors	178868949	14.64
Non-Resident Indians/ OCBs/ Corporate Bodies – Foreign/ Bank – Foreign/ Foreign Nationals	23797280	1.95
Corporate Bodies	22174100	1.82
Mutual Funds	65576156	5.37
Trusts	236000	0.02
Banks	831265	0.07
Others - GDR	14985500	1.22
Total	1221586776	100.00

BUSINESS DETAILS

Line of Business :	Manufacturing of Commercial Vehicles, Engines and Ferrous Castings.
Products :	Item Code No. (ITC Code) 87060042 Product Description Commercial Vehicles Item Code No. (ITC Code) 84089010 Product Description Engines Item Code No. (ITC Code) 73259910 Product Description Ferrous Castings
Imports from :	Germany, Italy and Japan

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Commercial Vehicles	Nos.	77200	65085
Ferrous Castings	Tonnes	--	7190
Engines @	Nos.	--	--

GENERAL INFORMATION

No. of Employees :	13218
Bankers :	· Bank of America · Bank of Baroda · Canara Bank · Central Bank of India · Citibank N.A. · HDFC Bank Limited · ICICI Bank Limited · IDBI Bank Limited · Punjab National Bank · Standard Chartered Bank · State Bank of India · The Hongkong and Shanghai Banking Corporation Limited
Facilities :	SECURED LOANS Debentures Rs. 1390.000 millions Term loans - From banks Rs. 450.000 millions - From financial institutions Rs. 6.910 millions UNSECURED LOANS Fixed deposits Rs. 0.000 millions Loans and advances - From banks Rs. 0.000 millions - Deferred Sales Tax Rs. 1623.630 millions • Foreign currency convertible notes Rs. 3448.740 millions

Banking Relations :	Satisfactory
Auditors :	M S Krishnaswami and Rajan Deloitte Haskins and Sells Chartered Accountants
Cost Auditors :	Geeyes and Company
Collaboration:	IVECO Fiat SpA, Italy
Holding Company :	LRLIH Limited, United Kingdom Machen-Iveco Holding SA
Subsidiaries :	v Ashok Leyland Information Technology Limited v Ashok Leyland Investment Services Limited
Membership :	Confederation of Indian Industry
Associates :	v Automotive Coaches & Components Limited C1&D6 Sipcot Industrial Complex, Gummidipoondi – 601 201, Tamilnadu Tel No. 91-4119-222568 Fax No. 91-4119-222560 E-Mail: snb@smc.sprintrpg.net v Lanka Ashok Leyland, Sri Lanka 24, Duplication Road, Colombo – 4, Sri Lanka Tel No. 0094-1-502532 Fax No. 0094-1-502286 E-Mail: cowsik@alm.sprintpg.net.in v PL Haulwel Trailers 480, Anna Salai, Nandanam, Chennai – 600 035, Tamilnadu Tel No. 91-44-24330824 Fax No. 91-44-24346840 E-Mail: al@ashokleyland.com v Ashok Leyland Finance Limited 86, Chamiers Road, Chennai, Tamilnadu Tel No. 91-44-24351934 Fax No. 91-44-24343646 E-Mail: agm.bp@alf.sprintrpg.ems.vsnl.net.in v Ennore Foundries Limited Ennore, Chennai – 600 057, Tamilnadu Tel No. 91-44-25733103 Fax No. 91-44-25733390 E-Mail: al@ashokleyland.com v Ashok Leyland Project Services Limited 477-480, Anna Salai, Nandanam, Chennai – 600 035, Tamilnadu Tel No. 91-44-24331120 Fax No. 91-44-24338344 E-Mail: afc@alc2.global.net.in v Ashley Holdings Limited v Ashley Investments Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1500,000,000	Equity Shares	Rs.1/- each	Rs.1500.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
	Issued Capital
165,025,815 341,742,940 323,157,240 359,572,880 32,292,576	(2005: 165,025,815) Equity shares (2005: Rs.1/-) (2005: 341,742,940) Equity shares (2005: Rs.1/-) issued by way of conversion of debentures (2005: 323,157,240) Equity shares (2005: Rs.1/-) issued through Global depository receipts (2005: 359,572,880) Equity shares (2005: Rs.1/-) (2005: Nil) Equity shares (2005: Rs.1/-) issued by way of conversion of Foreign currency convertible notes (FCCN)	Rs.1/- each Rs.1/- each Rs.1/- each Rs.1/- each Rs.1/- each	Rs. 165.030 millions Rs. 341.740 millions Rs. 323.160 millions Rs. 359.570 millions Rs. 32.290 millions
	Total		Rs. 1221.790 millions
	Subscribed & Paid-up Capital
1,221,586,776	(2005 : 1,189,294,200) Equity shares (2005: Re.l) fully paid up	Rs.1/- each	Rs.1221.590 millions
Add	Forfeited shares (Rs.3,800/-)
	Total		Rs. 1221.590 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		1221.590	1189.290	1189.290
3] Reserves & Surplus		12902.940	10489.360	9328.680
NETWORTH		14124.530	11678.650	10517.970
LOAN FUNDS
1] Secured Loans		1846.910	2634.960	3103.560
2] Unsecured Loans		5072.370	6169.100	1885.520
TOTAL BORROWING		6919.280	8804.06	4989.080
DEFERRED TAX LIABILITIES		1796.890	1708.480	1802.860
TOTAL		22840.700	22191.190	17309.910
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		9432.710	8938.460	8748.290
Capital work-in-progress		1414.170	851.550	462.710
INVESTMENT		3681.780	2291.900	1466.020
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	9025.610	5680.810	5069.410
	Sundry Debtors	4243.370	4587.660	4056.190
	Cash & Bank Balances	6028.760	7966.820	3249.740
	Loans & Advances	3026.390	3337.340	2261.330
Total Current Assets		22324.130	21572.630	14636.670
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	11468.950	9611.870	6856.710
	Provisions	2616.210	2044.80	1470.310
Total Current Liabilities		14085.160	11656.670	8327.020
Net Current Assets		8238.970	9915.960	6309.650
MISCELLANEOUS EXPENSES		73.070	193.320	323.240
TOTAL		22840.700	22191.190	17309.910

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	52806.310	42361.330	34106.390
Profit/(Loss) Before Tax	4523.000	3550.100	2864.600
Provision for Taxation	1249.800	836.000	928.800
Profit/(Loss) After Tax	3273.200	2714.100	1935.800
Export Value	4513.050	5228.750	3028.560
Import Value	1457.420	1062.740	841.300
Total Expenditure	48500.460	38715.400	31146.600

QUARTERLY RESULTS

PARTICULARS	30.06.2006	30.09.2006
Type	1st Qtr	2nd Qtr
Sales Turnover	14238.700	16757.200
Other Income	138.800	336.600
Total Income	14377.500	17093.800
Total Expenditure	13090.600	15437.600
Operating Profit	1286.900	1656.200
Interest	5.100	3.700
Gross Profit	1281.800	1652.500
Depreciation	327.700	264.500
Tax	183.200	289.100
Reported PAT	691.800	953.600

200606 Quarter 1 :-- Expenditure Includes (Increase)/Decrease in finished / trading goods Rs (821.36) million Consumption of Raw Material & movement in work-in-progress Rs 11266.69 million Staff Cost Rs 1291.24 million Other expenditure Rs 1315.59 million Tax Includes Provision for Current Taxation Rs 175.70 million Deferred Taxation Rs 79.10 million Fringe Benefit Tax Rs 7.50 million.

200609 Quarter 2 :-- Expenditure Includes (Increase)/Decrease in finished / trading goods Rs (554.36) million Consumption of Raw Material Rs 13215.60 million (including work in progress) Staff Cost Rs 1203.48 million Other expenditure Rs 1542.05 million Tax Includes Provision for Current Taxation Rs 282.40 million Deferred Taxation Rs 45.30 million Fringe Benefit Tax Rs 6.68 million.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	0.62	0.64	0.62
Long Term Debt-Equity Ratio	0.62	0.64	0.62
Current Ratio	1.50	1.54	1.58
TURNOVER RATIOS
Fixed Assets	3.02	2.55	2.19
Inventory	8.39	9.09	8.68
Debtors	13.97	11.31	8.62
Interest Cover Ratio	12.79	12.68	5.82
Operating Profit Margin(%)	9.99	10.12	11.11
Profit Before Interest And Tax Margin(%)	7.95	7.89	8.69
Cash Profit Margin(%)	7.35	7.79	7.29
Adjusted Net Profit Margin(%)	5.30	5.55	4.86
Return On Capital Employed(%)	24.07	22.04	22.00
Return On Net Worth(%)	25.86	25.02	19.75

STOCK PRICES

Face Value	Rs. 10.00
High	Rs. 48.00
Low	Rs. 46.15

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject was incorporated on 7^th September 1948 at Chennai in Tamilnadu having Company Registration Number 105.

The company was incorporated under the name & style of ASHOK MOTORS LIMITED and started with manufacture of diesel engines and vehicles chases. The Leyland Group of UK, acquired a controlling interest in 1955. In that year, the company started production of vehicles using Leyland designs. Leyland’s stake was held through LRLIH Limited. LRLIH was purchased jointly by the Hinduja Group and IVECO with 70:30 contribution.

The company, the flagship company of Hinduja Group was a leading manufacturer of commercial vehicles in India. All incorporated in 1948 as Ashok Motors started business as assembler of Austin car parts in India.

In 1955, the company entered into an agreement with Leyland motors, UK, to manufacture Leyland vehicles and changed its’ name to the company. The Hinduja Group and IVECO, Italy (a subsidiary of Fiat) acquired Leyland, UK in 1987 thus making Land Rover Leyland International, UK as the holding company of the company. The holding company holds 50.9% of stake in company’s equity.

The company is the second largest manufacturer of medium/heavy-duty vehicles in India today. The company is also into manufacture of industrial marine engines. The company’s manufacturing facilities are located at Ennore (Chennai, Tamilnadu), Hosur (Tamilnadu), Bhandara (Maharashtra) and Alwar (Rajasthan).

The company has given a lot of thrust to new range of intermediates commercial vehicles, which fall between the light and heavy range of commercial vehicles, with the technical assistance from IVECO. Commercial production of the 709 and 909 models had commenced and the range was expected to be expanded in future. Under the first phase of expansion cum modernisation, a substantial sum had been invested. The company proposes to further expand and modernise capacities over the next four years, for which it raised Rs. 4360.000 millions through a GDR issue in 1995.

The company obtained the ISO 9002 certification from the India Register of Quality Systems (IRQS) for the Hosur and Ennore units. It also obtained ISO 9001-94 certification covering design/development, manufacturing and service functions.

The company supplies both to State Transport undertakings (STUs) and Defence. The company and ministry of Defence’s vehicle factory in Jabalpur had signed manufacturing agreements, which facilitate manufacture of a new bree of commercial vehicles for defece applications. The company had supplied specially developed light recovery vehicles (LRVs) to the Indian Army. The company had also pioneered Buses running on CNGT fuel in India and this type of buses are running successfully in Mumbai and Delhi.

The company and Sundaram Industries had together joined hands with Irizar of Spain, an internationally acclaimed luxury bus manufacturer, to float a joint venture company, Irizar TVS, to manufacture bus bodies in India. The assets of TVS Coach (the erstwhile JV of Sundaram Industries and company), which owns two bus body building factories in Tamilnadu will be transferred to the new JV Company Irizar TVS in which all the three partners will have equal shareholdings.

The company has obtained contemporary rear axles technology support from Dana Corporation, USA and Arvin Meritor, USA. The gear box proposed to be manufactured at its’ Bhandara plant was a transmission designed for medium and heavy duty commercial vehicle application to permit both the higher torque output demanded of drive lines envolving in India as well as higher realibility and durability.

In 2002-03, the company has successfully developed indigenously, the upgraded versions of 5 and 6 speed gear boxes and this will be offered for select vehicle applications.

The new technology had been obtained from ZF Friedchshafen, Germany, for a new 6 speed synchromesh gear box and this will be introduced during 2003-04 in the company’s products.

The company had set up its’ Centralised R & D facility near Chennai to cater to all chasis engineering activities.

During the year 2002-03, the company has successfully upgraded IT infrastucture at its’ manufacturing units and marketing offices.

The company has promoted a new company called Ashley Transport Services Limited (ATSL) during November 2004 to provide information exchange and integrated logistic service to handle the business of freight contractors, etc. It has subscribed Rs. 70.000 millions (0.700 million shares of Rs. 100/- each) to the equity capital of ATSL and shares were allotted during November 2004 which represent 70% of the paid up capital of ATSL, thus making it a subsidiary of company with effect from 16.11.2004.

In 1948 Subject was born. Subject was assembling Austin Cars at the first plant, at Ennore near Chennai. In 1950 it started assembly of Leyland commercial vehicles and soon local manufacturing under license from British Leyland. With British Leyland participation in the equity capital, 1954, the company was rechrishtened Ashok Leyland.

Since then subject has been a major presence in India's commercial vehicle industry. These years have been punctuated by a number of technological innovations, which went on to become industry standards. This tradition of technological leadership was achieved through tie-ups with international technology leaders and through vigorous in-house R&D.

The company’s vehicles have built a reputation for reliability and raggedness. The 375,000 vehicles put on the roads have shared the additional pressure placed on road transportation in independent India. The share of goods movement by road, rose from 12% in 1950 to 60% in 1995. In passenger transportation, the jump is equally dramatic: from 25% to 80%. At 60 million passengers a day, the subject’s buses carry more people than the entire Indian rail network. In the populous Indian metros, four out of the five State Transport Undertaking (STU) buses come from the company. Some of them like double decker and vestibuled buses are unique models from subject, tailor-made for high density routes.

In 1987, the overseas holding by LRLIH (Land Rover Leyland International Holdings Limited) was taken over by a joint venture between the Hinduja Group, the non-resident Indian transnational group and IVECO Fiat SpA, part of the Fiat Group and Europe’s leading truck manufacturer.

Subject is the second largest manufacturer of medium/heavy duty vehicles and also manufactures industrial marine engines.

The company started by assembling Austin car parts in India. In 1955, the company entered into an agreement with Leyland Motors, UK, to manufacture Leyland vehicles and changed its name to Ashok Leyland, In 1987, the Hinduja Group and IVECO, Italy (a subsidiary of Fiat), purchased shares of Leylan, UK. Land Rover Leyland International, UK is the holding company of ALL with a 50.93% stake.

Today, the company is the second-largest manufacturer of medium/heavy duty vehicles and also manufactures industrial marine engines. The company has factories at Alwar, Rajasthan, Chennai, Hosur, and Ambattur all in Tamilnadu, Bhandara, Maharashtra, Hyderabad and Andhra Pradesh.

Business Operations

The year 2005-06 continued to be a good year when the Company achieved several new records and milestones riding on the overall economy and buoyancy in the market. The highlights are discussed in detail in the Management Discussion and Analysis Report attached as Annexure-D to this Report. 

Corporate Governance

The Company has consistently adopted high standards of Corporate Governance even before the SEBI Guidelines on this subject. were mandated in the year 2000. 

The revised and more stringent Guidelines stipulated by SEBI through the Listing Agreements with Stock Exchanges became effective from January 1, 2006. The Code of Conduct for the Board and the Senior Management was adopted by the Company in March 2005. Board has implemented the necessary actions, and Company is fully compliant with the revised Guidelines from April 1, 2005. All the Directors (and also the members of the Senior Management - of the rank of General Managers and above) have confirmed in writing about their compliance and adherence with the Code of Conduct. The details are furnished in Annexure-B to this Report. 

Downstream Business Support Activities

Ashley Transport Services Limited

The activity in this Company had to be curtailed during the year in order to revamp and strengthen some of the controls and operating procedures required for this pioneering business venture. 

Gulf Ashley Motor Limited 

This Company was formed primarily to strengthen the dealer network and customer servicing in the Eastern parts of the country. The initiative has started yielding good results as reflected by the increased sales and market share for this Company in these regions. 

FOREIGN CURRENCY CONVERTIBLE NOTES (FCCNS)

The Foreign Currency Convertible Notes (FCCNs) for USD 100 mn. issued in April 2004 are convertible into shares of the Company (Fixed Exchange Rate USD 1 = Rs.44.10); Conversion Price (reset in 2005) of Rs.31/- per share of face value Re.1/- each. The market price of the Company's equity shares in the Indian Stock Market has improved considerably in the Last few months. Starting from February 2006, the Company has received 9 requests upto March 31, 2006 for conversion of 22700 FCCNs into 32292576 equity shares. From April 1, 2006 upto April 29, 2006, the Company has received 3 more requests for conversion of 8050 FCCNs into 11451773 equity shares. These requests have been approved and conversions have taken place. All the procedures consequent to the conversion are being completed on time and these shares, which rank pari passu with the earlier shares in all respects, are tradable in the Indian Stock Exchanges. The details of the enhanced share capital as on March 31, 2006 and the corresponding revised shareholding pattern are given, as part of the Corporate Governance Report (Annexure-B) to this Report. 

 Subdivision Of Shares

During the year 2004-05, Company's shares were subdivided (from a face value of Rs.10/- each to a face value of Re.1/- each) w.e.f. July 7, 2004. Such action has resulted in substantially increasing the shareholders base of the Company; the number of shareholders as on March 31, 2006 has increased to 137244 (from about 72000 before subdivision). 

The company imports raw materials and components

The company’s fixed assets of important value include Freehold & Leasehold Land, Buildings, Plant & Machinery, Furniture, Computer, Fittings & Equipments and Vehicles.

As Per Web

Profile

Eight out of ten metro state transport buses in India are from Ashok Leyland. At 70 million passengers a day, Ashok Leyland buses carry more people than the entire Indian rail network.

From 18 seater to 82 seater double decker buses, from 7.5 tonne to 49 tonne in haulage vehicles, from numerous special application vehicles to diesel engines for industrial, marine and genset applications, Ashok Leyland offers a wide range of products.

For over five decades, Ashok Leyland has been the technology leader in India's commercial vehicle industry, moulding the country's commercial vehicle profile by introducing technologies and product ideas that have gone on to become industry norms.

"We consider our employees as our most valuable asset and are committed to provide full encouragement and support to them, to enhance their potential and contribution to the Company's business" - From Ashok Leyland's value statement..

They are close to 12,000 people, moulding and managing technology. And reaching the  benefits of technology to our customers. Offering transport solutions and after-market support  wherever our products operate - which is almost everywhere.

They are spread throughout India, and even outside India. Tasks vary, so do our skills. But  they are bound together by a healthy chain of interdependence, to deliver value to the  customer.

They are committed to maintaining our technological leadership. They manage this through continuous learning. So that they can master ever-evolving technologies. And meet changing customer needs.

Understandably, a career with Ashok Leyland offers a lifetime of learning.

Structured training programmes address the needs of workmen, apprentices, graduate engineering trainees, executives in the managerial levels for knowledge and skills upgradation, computerization, attitudinal changes, self-development, supervisory and managerial skills orientation to new technologies as also requirements specific to various functional areas. This breadth is reflected in the comprehensive annual training calendar.

Annually, five executive days are invested in training.

Besides nominations to external training programmes in IIMs, ASCI Hyderabad and other Indian and international institutions of repute, Ashok Leyland also has arrangements for ongoing distant learning and residential programmes with management institutes. An instance is the modular programme for marketing executives developed in collaboration with TA Pai Management Institute, Manipal.

Ashok Leyland has a tie-up with BITS, Pilani for a custom-designed, off-campus 2-year MS course in Engineering Management. Aimed at making Managers out of Engineers, assignments and projects are central to the learning process thus bridging the classroom with the engineers' workplace. From 2000, a BS programme in Industrial Engineering and Technology, is offered for diploma holders, again in collaboration with BITS. Apart from updating their knowledge base, the programme empowers engineers to acquire multiple skills.

Ashok Leyland is one of the moving forces behind an M.Tech course in Automobile Engine Technology jointly managed by the automobile industry (Indian Society for Automotive Technology, made up of auto manufacturers), IIT, Madras and Institut Francais du Petrole, the French institute for IC engines.

Employee Motivation

Ashok Leyland targets 100% of its employees to be involved in its continuous improvement activities. Breaking Thresholds by Involving Total Employees (BITES) is an integrated approach that brings under one umbrella all Total Employees Initiatives. These initiatives or platforms are available for employees to team up or to individually champion any improvement project.

The platforms comprise Cross Functional Teams, Quality Circles, Small Group Activities, Suggestions Schemes, Individual Improvement Projects, Company / Family interfaces and many more.

Reward systems abound and include "RISE" (Reward for Individual Search for Excellence), "Improve" (Annual company-wide contest) for rewarding the best team projects, BITES (Shield for the best unit in total employee involvement), 100% club (apex company reward for exemplary individual or team performance), Green Shield (best unit for environmental sustenance), etc.

Integration and participation is also an outcome of investment in IT that offers space on the intranet / Internet to interact for collaborative learning, sharing and communicating.

The open culture in Ashok Leyland has arrived and this is well timed when there is large-scale entry of young men and women into the 2000 plus strong executive workforce.

In the Media

Ties-up Technology for Hydrogen - Natural Gas mix engines
"Hythane" engines will meet BS4 emission norms and beyond

Date : December 18, 2006 Published from : Corporate Office

Ashok Leyland, the Hinduja Group flagship in India, has signed an agreement with Brehon Energy PLC, Australia, for technology for the use of ecologically superior Hythane gas in CNG engines. Brehon Energy PLC has acquired and developed patents, technology and know-how for the production, storage, dispensing and use of Hythane.

This agreement with Brehon would enable Ashok Leyland to offer its 6-cylinder ‘H’ series engines to operate on Hythane. Use of Hythane, which is a prepared blend of hydrogen and natural gas, dramatically reduces gaseous emissions compared to CNG, which is by itself a ‘clean’ fuel.

Currently, Ashok Leyland produces BS3 compliant diesel and CNG engines. The re-engineered engines using Hythane will meet the more stringent, future emission norms starting with BS4. The use of CNG in vehicular applications is expected to grow in line with the Indian Government’s plans to make available CNG in more parts of the country. The Government is also actively encouraging R&D on Hydrogen – natural gas mix as an alternate fuel for automobile engines.

Since rolling out India’s first CNG-powered bus in 1997 on Mumbai’s roads, Ashok Leyland spearheaded the large-scale induction of this eco-friendly technology in the bus fleet of Delhi. In 2002, the Company developed India’s first Hybrid Electric bus.

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.27
UK Pound	1	Rs.86.71
Euro	1	Rs.57.13

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		63

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions