AshokLeyland AR 2006

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ANNUAL REPORT
2 0 0 5 - 06
@ Ashok Leyland
t.iir))
HINDU.i A RROUP
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The value of knowledge and self-worth

is such that the more you give,
the richer you are.
Inspired employee teams challenge
conventional wisdom and past
practices to create value.
Owning a problem is half

the battle won. Empowerment
takes care of the rest.
Focus and determination create

an unlikely entrepreneur
in one of Ashok Leyland's
promising international markets.
A little thought and innovation.

Result: a bus that leaves behind a
trail of cheer among special ones.
Speeding up business processes

through innovative thinking
Innovative and state-of-the-art practices

help enhance the Company's responsiveness.
vaLue peapeo
vaLue SOWED.
The value of know!
worth is such that th

you give, the richer you are.
But for a "never say die" attitude and

two opportune Government Gazette
notifications, Ravi Shankar would not have
become an engineering graduate in 1999.
Not stopping with that, Ravi Shankar has
been on a self-developmental trip, fully
utilizing an enabling work environment.
As a teenager, earning a technical
diploma was his big dream. But an 80%
in the tenth standard - and no means to
cough up Rs 20,GOO - was a shattering
experience. Even after enrolling for the
eleventh standard, that dream wouldn't
go away. So he passed the hat around to
raise Rs 50 and, keeping his family in the
dark, applied for admission to a Chennai
Polytechnic. A seat became tantalizingly
close when he was ranked 39th in the
ANNUAL REPORT 2005
waiting list for his community. Then luck

smiled on him, with a State Gazette
announcement sanctioning an additional
section and he was in, choosing
Electricals and Electronics stream.
He topped his class and was selected
as an apprentice in its Ennore factory by
first day recruiter Ashok Leyland in
1990. "I used to see Ashok Leyland
staff buses as a student and I would say
to myself, one day I will be travelling in
one of them", explains Ravi Shankar.
Then, in 1995, Ravi Shankar applied for
admission to a part-time BE course in
Anna University. Heartbreak time again:
though he had done well in the written
test, his limited experience had dragged
down his total score and he was first in
the waiting list. Every day, after work he
would "visit the Recruitment Officer who
kept saying he could do nothing unless
the seats were increased". By the time
the Gazette notification came and Ravi
Shankar |oined classes, one month had
elapsed. "For three-and-half years, my
routine was to catch the bus at 6.00
am for the factory, at the end of the full
day catch the staff bus to Anna
University for three-hour classes till
9.15 pm and reach home by 11 00
pm", he remembers. Studies would
keep him awake till 2 or 3 hours past
midnight. Work pressure was at its
peak with major installations as part of
capacity expansion. The day of a crucial
examination that would determine
20% of his semester marks, an urgent
work kept him late at the work place.
His manager offered to drive him to the
city. "I was literally in tears most of the
car journey", Ravi Shankar remembers.
He reached the university late, ruing
the damage to his academic career.
But a kindhearted professor fixed
a fresh date, just for him.
1998 was a turning point in his life.
First the BE results: 83% and the
University gold medal! The same year
Ravi Shankar was made an ISO internal
auditor and a facilitator for his Quality
Circle. Next summer, Diamond Quality
Circle won the state and national top
prizes and retained the honour for two

more years. Seeking a larger canvas,
Ravi Shankar chose the Cross
Functional Team (CFT) format to take up
improvement projects. In the maiden
attempt, his team 'Enercon1 won
national Improve' trophy in the Executive
League and since then has been
national finalists. Improve' is a
Company-wide contest for team-based
improvement projects which has seen
employee participation rising, to 1,093
teams on last count.
Parallely, he was back to burning the
midnight oil, pursuing an MS in
Engineering Management. This was
under a collaborative programme
between Ashok Leyland and BITS Pilani,
offering an MS through two years of
off-campus distance learning Started
in 1996, this educational programme,
entirely funded by the Company, has
enabled close to 200 engineers to
seize the second chance to win what
circumstances have denied them in
the past A feature of this programme
is the projects the engineers do, each
relating to their own work place,
facilitating implementation The
collective benefits from these projects
are in excess of Rs 1 50 million
Assignments, presentations, case
studies, regular tests and day-long
classes on Sundays - Ravi Shankar's
days were full Ravi Shankar's project
prescribed changes in the electrical
circuits to eliminate idle running of
hydraulic motor in continuous gas
carbonising furnace Implemented with
the help of the all-electricals team of
Diamond QC, the project netted a cool
Rs 600,000 per annum in energy
savings. In 2001, he won his MS
degree, making him, "at 29, the highest
qualified in my extended family" He is
quick to share credit with colleagues
who were hugely helpful, swapping night
shifts and Sunday assignments to suit
his study hours, the bosses who were
supportive and, above all, "the freedom
to choose how we work, though there
is no compromise on quality or delivery"
Applying his enriched knowledge

Ravi Shankar became facilitator for
a massive project involving 100
machines The idea originated in an
award winning project done by Diamond
Quality Circle, of eliminating idle running
of spindle motor in radial drilling
machine The energy saving from that
project was worth Rs 30,000 every
year Replicating the process on 100
selected machines should yield Rs 3
million As facilitator, it was Ravi
Shankar s responsibility to indent and
follow up for spares procurement
distribute it. and install modified circuits
in these 100 machines
He now has an even wider canvas
in the Projects function, so that "what
i have learned in the last 15 years.
I want to bring to bear on my job"
His aim is "to make sure that all the
problems we have faced in tfie
current systems should be eliminated
from day one in the new projects'
That is Ravi Shankar's way of ploughing
back value
The value of knowledge and self-worth is
such that the more you give, the richer
you are
Ril
For the inquisitive mind, the apple that

falls is a potential trigger to solve the
mystery and master the phenomenon of
gravity. In the business environment,
every spike in rejections, every production
bottleneck in meeting market demand,
is a trigger for problem solving by working
together as teams. Two Ashok Leyland
examples:
In line with shifting market demand,
production of H series engines, auxiliary
gearboxes and axles had to be stepped up
This put additional pressure on the heat
treatment line at the Hosur Plant I, to
deliver more heat treated components
How to step up output of the components
by 35 to 40 percent9 A new furnace 9
How about stretching the current
capacity9 These were the questions before
the heat treatment shop A back-of-theenvelope calculation only confirmed what
the operators instinctively guessed from
visual memory: between the loaded
components and the furnace wall, there
was a 2O cm gap - much more than
needed for safety. But extending on the
idea meant scrapping the furnace
manufacturer's loading arrangements, and
implementing changes meant discounting
the original design Does not the furnace
manufacturer know best?
With Production Engineering & Planning
giving the thumbs up to the idea, six of the
associates formed Explorer Quality Circle
to implement the plan stretch current
capacity to meet the enhanced
requirement. Led by K Balakrishna.
the team had a collective experience
of 80 years. But being new to the QC
movement, they underwent training by
Quality Circle Forum of India
Outside regular production time,
between four and five in the evening
they met every Wednesday.
vatue peoeemeo
is v a L u e c p e a r e o
\ N N U A L R E P O R T 2005 - 06
But they were far too heavy to handle.

How about plastic? The members were
in touch with Product Development who
suggested fiber reinforced plastic [FRPJ.
Samples and trials... soon Rainbow QC
achieved their zero rejection target.
While at it, how could they ignore the
minor problem of occasional water leak
through the oil cooler assembly9 Their
solution was similar: a single piece oil
cooler pipe to replsce an assembly with
multiple parts and materials. Result,
once again, was 10O%.
Each component had a unique loading

method. Explorer QC's challenge was to
visualize and create alternate loading
arrangements. There was no book to
go by For increasing the volume of
gears, the team developed a new set of
three-pronged hangers with larger
radius. It would increase batch capacity
from 1 77 to 255 gears. But the trial
didn't go well: 1 2% of the gears had an
oval profile and some of them had dents
- both unacceptable in gears. With
modifications in the hanger profile, both
problems were overcome. For smaller
components, loading trays were
redesigned with larger radius. Axle
shaft volumes could be increased by
almost 50% by redesigning the
honeycomb-shaped carrier plates The
team also noticed extra gap between
layers of loaded shafts. By optimizing
the gap, and using the new carrier
plates, the number of shafts per loading
went up from 66 to 1 84 - a whopping
1 78% increase in output! With the
metallurgical lab confirming the quality
of output, the members of Explorer QC
knew they had reached their intended
destination - within 110 days from take
off, ten days ahead of plan!
Generating temperatures in excess of
800' C, Heat Treatment is a hugely
energy intensive process. By squeezing
an average 4O% more output,
Explorer's successful experiment
has yielded a near proportionate
saving in energy cost. Total savings
are an estimated Rs 1.1 million every
year. The project also took Explorer
QC to State and National level
QC competitions where they won
Distinction Awards.
The stage was set for Rainbow QC to

get into action. Formed in 1992 when
Ashok Leyland became the first ISO
9OQ2 company in the Indian automotive
sector, Rainbow QC had built a
reputation for problem solving. Their
objective was clear: reduce rejections
from 4.2% to 0%. Nothing short.
The cowl assembly was introduced not
so long ago. to funnel the flow of cool
air from the radiator towards the
engine. 1 B components made up the
assembly. Any inaccuracy or
misalignment could lead to a foul up
"In cowled vehicles, attending to this
problem is not easy even for us. Then
think of the customer!", remembers
M Ramaraj, team leader, reflecting
the motivation of the team for whom
talking to vehicle drivers and getting
performance feedback was already
second nature
At team meetings, they asked basic
questions, undeterred by past
practices. "What is the purpose of the
assembly9 Can it be simplified9" An
immediate mfluencer was a piece of
employee communication from the top
management on value engineering and
material substitution as a means to
cost reduction. "Why not a single piece
fabrication 9 " Soon they were interacting
with the vendor who supplied five trial
pieces done in steel. They worked.
Annual savings are in the region of

Rs 1.5 million, not counting more gains
from progressive implementation in
more models. The project won Rainbow
QC the national first prize at Improve,
making it a hatrick of wins at the
Company-wide annual contest. Regulars
on the winners' podium at the Cll and
QCFI contests, the project was also
their passport to ICQCC 2005, Korea.
Back to a heroes' welcome in November
2005, Rainbow QC's eight-day long,
tn-nation sojourn was a timely spur for
quality circles, with 325 of them
registering for the next edition of
Improve Having conquered the peak.
Rainbow QC is no more in the
competitive fray at Improve But there
is no stopping them in their pursuit of
problem solving challenges. 40 projects
in 1 5 years hasn't satiated their hunger
because "when you slice through a
problem, think up a solution and when
the project gets implemented on a
vehicle, that gives us a great high",
explains Ramaraj
Every time they turned the key on a

chassis, associates of chassis assembly
Stage II at the Ennore plant had one
dread: the tell-tale knock-knock sound of
plastic on metal - the sound of radiator
fan fouling up. It meant having to
disassemble the cowl assembly and
putting it together all over again. An
obvious mood spoiler, with a 4.2%
rejection rate, the problem was costing
the Company quite a bit in the form of
new fans in place of the damaged ones.
ANNUAL Rbf
speeo OF T H O U G H T .
p o m e p O F reamiiJOPK.
R S Mishra, Deputy Manager. Casings,

was a worried man one wet August
morning last year. On his way to the
Bhandara plant, he seemed oblivious to
the lush countryside sweeping by him
and worry lines on his broad forehead
were plain to see. The cause was
simple. A buoyant market had boosted
demand for Ashok Leyland vehicles and
to meet that growing demand,
Bhandara had to produce more gearbox
assemblies.The onus was theirs and
theirs alone because only Bhandara
manufactured gearboxes. As part of the
casings team. R S Mishra's objective
was how to push the per day gear
casings throughput from 240 to 300
Even as he wrestled with his problem,

one could suddenly discern a visible
change in his demeanour. Gone was
the worry, to be replaced by steely
determination born from the realization
that this was not his problem alone,
there were 64 other owners to this
problem - his GEMBA Unit members.
It is said that minds are like parachutes
that work best when open and Mishra's
resolve stemmed from his confidence
that 65 open minds could indeed
create miracles
That's where the movement christened
Mission GEMBA has succeeded - aiming
to enhance quality, reduce cost,
improve delivery and ensure safety
across all activities. Through a process
of effective dissemination of relevant
information, enhancement of skills and
empowerment followed by prompt
recognition and rewards, the movement
has embraced everyone in its ambit and
given birth to a deeply committed,
extremely receptive and highly motivated
work force All 62 GEMBA Units across
the Company are involved in the
process of identifying and owning
problems and together seeking
solutions. For the Management, it
has become a means of listening,
understanding and, most importantly,
responding to issues arising on the
shop floor. In essence, Mission GEMBA
is the triumph of empowerment.
So, in the true spirit of Mission GEMBA.
R S Mishra [the leader of 'Casing &
OPF'. the GEMBA Unit] and his men,
with the management team,
approached the problem on hand.
For the entire Bhandara unit, reaching
300 casings per day and sustaining
it was smaller compared to the larger
challenge of not wanting to let the
Company down. It just had to be done!
First, the task was to understand their
problem. Initially, they had been making
MK1 casings but with customers
seeking a better product, they had to
upgrade the manufacturing processes
to produce the superior MK2 casings,
and of course, more of the same.
The raw material from Ennore

Foundries had also changed in
character, becoming harder, which
meant that one of the existing MMT
machines deploying HSS tools was
unsuitable. That, in turn, meant more
time in changing the fixtures in MAZAK
for MK2 and vice-versa and attending
to freguent breakdowns. Repairing
breakdowns took a minimum of 2-3
days that required building up
inventories and, with that arose delivery
issues. It was getting difficult to just
hold their own at the existing 240 level,
let alone increase it!
Many councils of war were held at the
GEMBA corner and countless hours
were spent in discussions with all who
mattered in Bhandara. nght from the
GM downwards Heads pored over
copious data in an all-out effort to
find solutions.
Of the two types of machines used to
manufacture gearbox casings viz: the
MAZAK and MMT machines, they
realized that the biggest bottleneck lay
in one of the MMT Machines that could
not be 'pushed1 to produce beyond
240 casings per day and that too
only MK1 casings. Further, the MAZAK
machines did not have the capacity to
be set up for full machining
The most obvious solution was to get
new machinery but that option was
rejected out of hand because the
outlays were far too prohibitive to be
even considered The solution had
to be found internally 1
First, they ensured mistake proofing on
MMT machines to eliminate rejections
due to wrong loading Then, certain
improvements were made in the
MAZAK machines to make the fixtures
common for both machines
Straightaway, the time lost on setting
up and changing fixtures was saved
A computer programme made changes
in set up possible by the mere punching
of a few keys'
With time saved, the numbers
increased. But not sufficiently enough
Back they went to the drawing board

Soon, it, struck them that with MK2
production underway, the erstwhile
HMC S machines had not been
upgraded. Soon, an idea began to
germinate Outrageous though it may
have sounded Was it possible to
re-tool those machines to take on the
extra load 9 Having set their collective
minds to it. they pulled up their short
sleeves and got down to the task
By November, the team had started
to roll out. casings at the rate of 280
a day Finally m March 06. with the
whole Company thirsting for more
a small, tenacious bunch of people in
Bhandara, with a never-say-die attitude
churned out 309 gear casings not
just tor one day . . but, for a stretch of
10 days. They had not let the
Company down.
Now. their target is 328 casings a day
because, as one of the associates on
the shop floor averred. "Our goai is to
be a world-class unit" echoing what,
A K Chatterjee, GM, is never tired ot
saying And it gives meaning t.o their
war chanf Aasan hogi j&ng. GEMBA
ke, sang (Easy is the battle, with GEMBA
by your side)
Dertha was born the youngest of six

children, and the only daughter of
K W Ansah, a chartered accountant
in Accra, the capital of Ghana.
Her recollections of childhood, spent
in their estate house at Kaneshie,
a suburb of Accra, centre around her
father. He was deeply religious and
a strict disciplinarian. His hobby was
farming. She was always her Daddy's
girl, reporting on her brothers who
nicknamed her "Radio". Bertha also
had to contend with her stepmother,
so school became a daytime refuge
in later years.
As she grew up, she wanted to become
a nurse because "the uniform was
attractive". Following a nursing diploma
came marriage and a shift to Canada,
to |oin her husband who was working
there as a doctor in Psychiatry. Bertha
earned a nursing degree and worked at
the Guelph General Hospital and various
other hospitals in Ontario for 15 years.
Then she decided to return to Ghana
This followed a painful chapter in her
life, which she closed conclusively with
a divorce. It wasn't easy but had to be
done She called her three children,
" -^^^s^^msBBimi^^^j^-.
nUPS me a v i s i o n ,
c c p a , GHana
a S T O P Y ppom a
ace
A N N U A L R E P O R T 2 0 0 5 - 06
sat them down and explained her

decision. They were understanding,
as she expected, given her open
relationship with them. They would
have an exposure to Ghanian culture
and she would have a chance to
contribute to her country's
development, she told them.
Now back in Ghana, Bertha, at 44,
got a job as a short-term consultant at
Korle bu Hospital. The lack of
commitment and facilities frustrated
her and "my efforts to streamline things
were road-blocked". In true
entrepreneurial style, adversity became
her lodestar. In the frequent power
failures, she found her cue and started
her own business, selling and servicing
generators. Then came an opportunity
to help out a friend: could Bertha take
care of his ten-bus operations for a
month so that he could be away to
attend to his sick brother9
She said yes.
Her experiences in the developed world
had her wondering as to when her
country would benefit from rational
systems arid management methods.
A knowledgeable well-wisher channelised
her anguish into a challenge. "Start
something of your own and
demonstrate to yourself what you
can do", he urged her. She started by
taking on the operation of a school bus,
borrowed from her friend. In 1998,
Pergah Transport was born. (Bertha
coined 'Pergah' from her nickname but
later she spotted the same name in the
Bible.) Soon she persuaded the Ghana
Commercial Bank to trust her with
running their 1 5 staff buses and a loan
for ownership transfer. Then came
contracts from Ghana Broadcasting
Corporation and Ghana Telecom.
With Ghana Telecom's country-wide
expansion, Pergah Transport now had
a wider canvas. Using Ghana Telecom's
local offices and employing local drivers,
Pergah Transport soon had a nationwide presence. When Ghana Telecom
needed to transport poles and cables
for laying the network, their first option
was Pergah Transport. Eight Nissan
trucks entered its fleet. In 20O4 came
the largest contract from the world's
largest gold producer, Newmont Mining
Corporation, requiring her entire fleet which had grown to 45 buses - to ferry
construction workers to the gold mining
and processing plant in Brong Ahafo
from nearby villages, some 40O kms
off Accra, the headquarters of
Pergah Transport.
Pergah Transport's fleet is a mix of
Nissan, Mercedes Benz, International,
Toyota - and Ashok Leyland. Ashok
Leyland vehicles entered Pergah
Transport's fleet thanks to the
enterprise and decision-making ability of
Bertha. She came across some buses
which she liked, she evaluated them and
bought them. As simple as that! The
buses had the Ashok Leyland marquee
on them. She searched on the web
and got in touch with the Company's
marketing headquarters. Soon,
Abdul Aayub, Regional Manager, UAE,
was in Accra where he stayed for a

week training Pergah's technicians.
He also invited her to Dubai where
Ram Cowsik, General Manger - Exports
and Aayub took Bertha on a visit of
Ashok Leyland's numerous customers
Bertha also visited the Sharjah
warehouse from where her spares
requirements would be serviced in
72 hours. Impressed, Bertha ordered
10 more new Falcon buses. Today,
she has 24 Ashok Leyland vehicles in
her fleet of 64.
Soon Bertha plans to have a 1OO%
Ashok Leyland fleet for Pergah
Transport. "Ashok Leyland became my
preferred choice because the vehicles
are best suited for Ghana's roads, they
are economical to maintain and I can
count on speedy response from
Nujum Riyaz, the Company's Ghana
representative", she says. No wonder,
she would like to play a part in the
technical training school that is part of
Ashok Leyland's plans for Ghana.
Bertha's business vision is to become
the number one transport service
provider in the country Very apt and
welcome in the acutely polarized society
of Ghana where people are either rich
or poor, where per capita income is
a little over one US $ a day
She relies on her assistants whom she
selects carefully, through references
by known friends. In the cultural milieu
of Ghana "where women are supposed
to be seen and not heard" it was not
easy for her in a male dominated
industry She could take that
Her trying moments were when
she had to sack some employees for
lack of commitment and integrity
In retrospect, she considers all that
a small price to pay for her big plans
especially now that second son Fule,
armed with a Marketing Management
degree, lends a helping hand in running
Pergah Transport,
Big plans she has for her country,
which is now "a dumping ground far
used international vehicles Ghana
deserves a better transport industry",
she says In her vision for Ghana, there
will be local production of vehicles with
local labour whose skills will be

enhanced. Over-aged vehicles will
be banned. Driver licenses and
renewals will not be "as easily available
as bananas". Road tax and licensing
fee collections will be foolproof and
channelised into development of the
road sector for a safe and pleasant
drive "I want Ghana's transport, sector
to be the best in the African region
and be a role model for other
developing African states"
How can the MD of a 2.5-million dollar
transport company dream so big9
The way Bertha has structured her
weekly routine holds the answer
All days start with a brisk one hour walk
- "it allows me to contemplate and think
up fresh ideas", she says This is
followed by Bible reading and a few
minutes of quietitude "I was always
religious and have my personal dialogue
with God. It is very reassuring, however
intimidating the circumstances", she
explains. 7 00 am and with ciock-wnrk
precision. Bertha s Nissan X-Trail is oft
to her office Home by 8 30 prn.
what is left of the day is earmarked tu
relax over some beer and to catch up
on the latest, from local channels
GTV and TV3
Weekend focus is on future. Thanks to
the lingering colonial legacy of five-day
weeks, she lias enough time for some
squash a'id fur her DRW found interest
politics
' I it'll ; f : politics (IS ar
intellectual engagement ; tHkf. 1 n;v :

political discussinns because i",\i ,'<<''
in lite is tu transform Ghanas tiH"&port
industry through policy changes
If it means becoming the Transport
Minister i am ready foi it", says
Bertha in a matter of-fact manner
s p p e a o m G sunsHine
arm smiL.es.
B
A little thought and ini

.
Result: a bus that leavesMDeWr

trail of cheer among special onesl
Farhida and Kavitha had decided. They

WILL have fun. Nothing will stop them.
To their mothers however, 'picnic day'
is always a nightmare. Though they are
happy to see their kids enjoy, they
constantly worry on how they would
negotiate the steps in the places they go,
how they would keep up with their kids'
demands of keeping pace with the rest of
the crowd, how they would climb on to
and alight from buses... each a challenge
in life's long list of barriers to be
overcome.
So when the inmates of the Spastic
Society of Tamil Nadu [SPASTN),
Royapuram branch, decided to pack off
for a day to MGM Dizzee World, a theme
park in the outskirts of Chennai city.
ANNUAL REPORT 2005
06
it was along with one of their parents in most oases, anxious mothers keeping a close watch on them.
Fighting cerebral palsy or neurological
or locomotive disabilities, these kids can
just about manage walking.
It was Sheela, Superintendent-in-charge

of SPASTN Royapuram branch, who
first came to know of FunBus. "My very
first thought was "What a great
concept!". And I was even more happy
to know that there is a hydraulic lift to
move children with disabilities. That's
a value add and an innovation, never
before seen in this part of the world",
she says.
Bound to their wheelchairs, some

like Farhida and Kavitha cannot even
do that.
Instead: 14-year-old Kavitha uses her
"hind limbs alone" to create works of
art. So much so that she won the
Government of India's 'best creative
disabled child' award for the year 2OO5.
13-year-old Farhida loves painting,
but studying even more. "I like all
sub|ects, particularly Maths", she
enthusiastically adds.
The result: on 'picnic day', both Kavitha

and Farhida could board the FunBus,
hassle-free and happy! "Farhida was
thrilled to use that lift. I think it is a
great idea", her mother exclaimed,
surprised at the sudden relief from
at least a couple of tense moments.
Once inside, there was not one dull
moment. Both enjoyed as their friends
danced in gay abandon, clapping their
hands to the fast numbers played on
the system by 'driver thatha' (grandpa).
For driver R T Prakasam, this special
assignment post-retirement [from a
driver's job at Ashok Leyland) "is a jolly
duty" that gives great satisfaction. "I do
not have the means to help with money.
Therefore this is a Godsend". He is all
too happy to help kids in wheelchairs
use the hydraulic lift.
Special, aren't they9
Launched by Ashok Leyland in 2O04,

FunBus is exclusively for free use round
the year by children of orphanages,
institutions for physically/mentally
challenged children and other
underprivileged groups. Apart from
a seating layout that reckons the
requirements of the physically
challenged, it comes with a custom-built
hydraulic lift for the convenience of
wheelchair-bound children.
The concept developed at interactions
with user groups who visit orphanages
and other children's institutions and
conduct entertainment programmes
for them. While such visits give some
cheer to the children, they still remain
confined to their four walls. FunBus
provides a hitherto missing facility that
stopped many Good Samaritans from
taking such children out of their
confines.
They use FunBus to transport children

from schools and institutions they are
associated with. Post December 2004,
FunBus served another purpose too.
Corporation Primary Schools could
take children, affected by the Tsunami
that hit the Chennai coastline, on
excursions. And at least temporarily
help them cast away the emotional
baggage of the tragedy.
As on March 31, 2OOB, FunBus

and Prakasam have together spread
sunshine in some 10,000 lives. In the
process, helping special children like
Farhida and Kavitha in their resolve of
having FUN.
ANNUAL R E P O R T 2005
06
The problem
The result
A dynamic understanding of customer

requirements is central to the
Company's business. In this, a snapshot
of every chassis - each a unique
configuration - is crucial to customer
support and satisfaction. A lot of
information about each vehicle
produced is sought across functions:
chassis attributes, chassis configuration
based on a particular model code,
details of the engine (off-track date, PTS
date, details of IDT transfers], free
service done, standard option items,
customer data bank data, list of
Bought Out Finished (BOF) items ... the
list was endless. Most of this
information was available but in a
fragmented and scattered manner.
This programme tracks the information

of a vehicle right from its birth to its
sale and beyond; a veritable one-stop
shop for all data pertaining to a
chassis available across functions.
Says C Sampath Kumar, Regional Parts
Manager, "The Chassis Biography made
available in our ERP profile is wonderful
and provides us excellent information. In
just a few seconds, we get the specs of
a chassis. For us, it is very useful in
identifying the customer's requirements,
especially on the Frame Side Member,
Front End Structure with the correct
applicable part number. Now, we do not
have to call for such details from our
customers through the dealer who has
ordered against VORs [Vehicle Off
Road]. It also avoids delays in
registering VOR Orders for want of
clarifications."
The need was to collate all this

information into a comprehensive, easily
digestible and easy-to-find format. The
advantages would be many: better
capitalization of Ashok Leyland's
strengths, more insights to re-engineer
products and processes, ability to
address supply chain issues...
The IT solution
To address this issue, a programme
named Chassis Biography was
designed, entirely in-house, by Ashok
Leyland Information Management
Services (ALIMS).
Chassis Biography: All that you always

wanted to know about a chassis but
did not know where to find.
s p e e o m G UP B u s i n e s s p p o c e s s e s
THPOUGH innovarive THinKinc.
ES - Annual Reports Library Services - www.sansco.net
The problem
Under the CENVAT regime, excise
duties paid on inputs can be offset
against excise duty liabilities for finished
goods. This entailed grappling with huge
quantity of data from across the
Company and the steadily increasing
volumes of the same was only further
hampering efficient availing of CENVAT.
The IT solution
The solution lay in re-engineering the
existing software, again developed
entirely in-house. It made the whole
process transparent, reduced manual
labour involved and integrated with the
Oracle-based AL-ERP application
portfolio.
The result
This software solution enabled faster
availing of credit with minimal data
inputs, reduced process time,
enhanced accuracy, made it easy to
identify and trace transactions and it
also reduced cash outflow. According to
K V Mohandoss, Deputy Commissioner
of Central Excise (Hosur II Division):
"I am pleased to state that it is an endto-end process integrated with other
processes of the Company.
It takes care of the statutory
requirements with reference to the
CENVAT Credit Rules 2004. I feel this
package is extremely useful to Ashok
Leyland, particularly as they have opted
for the scheme of 'Large Taxpayers
Units' and it is useful to the Central
Excise Department as well. The details
of suppliers who issue CENVAT invoices
can also be gathered from this package
for the purpose of central excise and
service tax."
Empowering MISSION
GEMBA with Mpower.
The problem
The IT solution
The result
With Mission GEMBA reaching the

serious stage of 'Deep Dives' in the
manufacturing units, there was
an urgent need for information
management - an IT solution to
support the core processes of the
initiative. Simply put, the issue was
to capture and ensure quick, prompt
flow of information among all the
GEMBA units - information covering the
definition of the various projects under
each production area; project-wise
definition of Key Performance
Indicators (KPI), targets, idea generation,
impact, cost estimation, evaluation,
implementation, MIS reports...
Faced with a stringent deadline of

less than a month, the ALIMS team
created Mpower - a software
programme that facilitated a
centralized data bank, common
processes and qualitatively rich
interface for all units, anywhereanytime access to all stake-holders
and a highly scalable system that
was perfectly integrated with the
existing AL-ERP. In fact, the robust
KPI tracking facility enabled every
manufacturing profit centre to
maximize their business effectiveness
in throughput, cost and quality.
S Murali, GM, Mission GEMBA:

"On an Oracle-based platform, using the
IT backbone across the manufacturing
units of Ashok Leyland, Mpower has
been a leap-frogging and facilitating step
in enhancing Performance Management
and thereby achieving a breakthrough
in Operational Efficiency Enhancement.
It is the first of its kind, installed and
customized to our requirements.
GEMBA Mpower has become the
single window on which all Capex
decisions of the Manufacturing Units
(including Project Planning) will be
taken. And the fact that the entire
programme was designed and made
operational in little less that a month
was indeed commendable."
an i n T E p n a j i o n a L c t a s s OF V E H I C L E S
D E S I G D E D arm D E V E L O P E D in moia.
novative" and stat^&f-the-art practices help

* *$&
ihance the\Con^B|ny's responsiveness.
modern, high productivity vehicles

that anticipates the evolving commercii
vehicle market. Built with world-class
and efficiency.
A milestone in the mod
the Indian commercial vehicle industry,
these international products h
designed and developed in India...
for India and the world.
Innovative and state-of-the-art
practices such as modular engineering
that go into making these products,
""'--nee the Company's customer
responsiveness.
ANNUAL REPOF

SL
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30.1
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11.5
2002-O3"
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i ,:
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20O&O6
r?f, .,-.**
5.9
5.3
1.2
2002-O3
20O3-O4
2O04-05
2O05-06
Economic v a t u e a o o e o ( E v a )
(as a % TO economic capirat
Ashok Leyland has been EVA positive for the

last four years. That means, the Company
has created shareholder value by registering
returns higher than the cost of capital.
Annual Report 2005 - 2006
Contents
Board of Directors
19
Highlights of Performance
20
Directors' Report
21
Report on Corporate Governance
24
Auditors' Certificate on Corporate Governance
34
Management Discussion and Analysis Report
35
Directors' Responsibility Statement
40
CEO/CFO Certification
41
Auditors' Report to the Members
42
Balance Sheet
44
Profit and Loss Account
45
Cash Flow Statement
46
Statement on Significant Accounting Policies
48
Schedules to Balance Sheet
50
Schedules to Profit and Loss Account
58
Notes to the Accounts
61
Balance Sheet Abstract and Company's General Business Profile
68
Annexure to Directors' Report - Particulars of Employees
69
R J Shahaney, Chairman
D G Hinduja, Vice Chairman (Alternate : YM Kale)
D J Balaji Rao
F J Colon Martinez (Alternate : G Sagone)
A K Das (Alternate : IN Chatterjee)
P N Ghatalia
S R Krishnaswamy
E A Kshirsagar
F Sahami
A Spare
S V Young
R Seshasayee, Managing Director
'
V K Dasari
K Sridharan
J N AmroLia
S Balasubramanian
A Bhat
A R Chandrasekharan
R Malhan
S Nagarajan
M Natraj
B M Udayashankar
N Sundararajan
M S Krishnaswami & Rajan
Deloitte Haskins & Sells
Geeyes & Co.
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
P-ui'tv" ' >'!"(
19, Rajaji Salai

Chennai 600 001
Plants
Ennore and Ambattur, Chennai

Hosur, Tamil Nadu
Bhandara, Maharashtra
Alwar, Rajasthan
www.ashokleyland.com
A N N U A L R E P O R T 2 0 0 5 - 0 6 IH
Highlights of Performance
Rs. Millions
2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 1999-00 1998-99 1997-98 1996-97
Sales volume
Vehicles (nos.)
61655
54740
48654
36444
29673
32475
37859
29741
31547
43352
Engines (nos.)
7171
6254
5085
5924
5258
6311
6004
7185
7611
8331
Spare parts and others
7838
5460
4468
4771
5492
5139
2145
2145
2520
2030
60531
48108
39273
30740
26304
26067
25987
20451
20143
24825
Profit before tax
4523
3550
2865
1701
1322
1019
933
233
207
1570
Profit after tax
3273
2714
1936
1202
923
917
785
204
184
1249
Fixed assets
10847
9790
9211
9398
10098
9613
9458
9547
9026
8399
Investments
3682
2292
1466
1576
1173
1179
1204
625
485
583
Net current assets
8239
9916
6310
7481
9825
10223
10329
10491
13914
13679
22768
21998
16987
18455
21096
21015
20991
20663
23425
22661
1222
1189
1189
1189
1189
1189
1189
1189
1189
1189
12830
10296
9005
8406
9131
10496
10145
9852
9763
9704
Loan funds
6919
8804
4990
7175
8884
9330
9657
9622
12473
11768
Deferred tax liability (Net)
1797
1709
1803
1685
1892
22768
21998
16987
18455
274
228
163
120
100
11845
12178
Sales value
Assets
Financed by
Shareholders' funds - Capital
- Reserves
Basic earnings per share (paise)
21096
21015
20991
20663
23425
22661
101
78
77
66
17
15
105
75
50
45
40
35
10
10
50
1200?
11860
13218
13489
14056
14254
14635
15274
(Face value Re. 1 each)

Dividend (%)
Employees (nos,)
ANNUAL REPORT 2005-06
Directors' Report
PART-I PERFORMANCE / OPERATIONS

The Directors are pleased to present
the Annual Report of the Company,
together with the audited Accounts,
for the year ended March 31, 2006.
Financial Results
2005-2006
2004-2005
Rs. Millions
Rs. Millions
Profit before tax
4,523.00
3,550.10
Less: Provision for taxation
1,249.80
836.00
3,273.20
2,714.10
Add: Transfer from/(to):

Debenture redemption reserve
89.17
68.33
Balance profit from last year

General Reserve
Profit available for appropriation
1,784.13
1,339.24
(1,000.00)
(1,000.00)
4,125.66
3,142.51
1,597.86
1,189.29
224.10
169.09
2,303.70
1,784.13
2.74
2.28
Appropriation:
Proposed dividend
Tax on dividend
Balance profit carried to Balance sheet
Basic Earnings per Share (Face Value Re.l/-)
DIVIDEND
The Directors recommend a dividend of
120% (Rs.1.20 per equity share of Re.l/-)
for the year ended March 31, 2006. This
Dividend will also be payable on the
shares arising from conversion of
Foreign Currency Convertible Notes
(FCCNs) issued in April 2004, to the
extent converted upto the Book Closure
Dates.
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.
RESEARCH AND DEVELOPMENT,
TECHNOLOGY ABSORPTION, ENERGY
CONSERVATION ETC.
The particulars prescribed by the
Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules,
1988 relating to Conservation of Energy,
Technology Absorption, Foreign Exchange
are furnished in Annexure-A to this
Report.
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. Your Board has implemented
the necessary actions, and your 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.
The Statutory Auditors of the Company
have examined the Company's
compliance, and have certified the same,
as required under SEBI Guidelines. Such
certificate is reproduced as Annexure-C
to this Report.
The Directors' Responsibility Statement
as required under Section 217(2AA) of
the Companies Act, 1956 is furnished
in Annexure-E to this Report.
CORPORATE GOVERNANCE
The particulars of employees as

prescribed by the Companies (Particulars
of Employees) Rules, 1975 are furnished
in Annexure-F to this Report.
Your Company has consistently adopted

high standards of Corporate Governance
even before the SEBI Guidelines on this
subject were mandated in the year 2000.
The CEO / CFO Certification as required

under the SEBI Guidelines, is attached Annexure-G to this Report.
PART - II CORPORATE MATTERS
Directors' 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.l/- 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 pan 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, your Company's
shares were subdivided (from a face
value of Rs.10/- each to a face value of

Re.l/- 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).
DIRECTORS
The present term of Mr R Seshasayee,
Managing Director is due to expire on
March 31, 2007. Over the past eight
years, he has not only led the Company
in achieving consistently good operating
results, but has also built up the
organisation in terms of technological
self-reliance, strengthening marketing
infrastructure, breakthroughs in wage
settlements, manpower reduction, labour
productivity etc. The Remuneration
Committee and the Board have
considered it essential to continue to
retain his leadership of the Company,
and have decided, subject to the
approval of shareholders at this General
Meeting, to foreclose/overlap the last
year of his current term and has reappointed him as Managing Director for
a period of three years from June 1,
2006 to May 31, 2009 with a suitable
revision in the terms of remuneration.
The necessary resolutions relating to this
re-appointment are being placed before
the shareholders for approval.
Mr S V Young has been appointed as an
Additional Director at the Board Meeting
held on July 26, 2005.
Mr H Klingele ceased to be a Director of
the Board effective January 31, 2006,
after serving on the Board for about 18
years. The Board wishes to place on
record its deep appreciation of
Mr Klingele's active involvement and
support, particularly in Technical and
Exports related matters.
Mr A Spare (who was hitherto Alternate
Director) was appointed as a Director in
the casual vacancy caused by the
resignation of Mr H Klingele.
Mr F J Colon Martinez, Mr E A Kshirsagar,
Mr S R Krishnaswamy and
Mr R J Shahaney, Directors retire by
rotation at the forthcoming Annual
General Meeting and are eligible for reappointment. The necessary resolutions
are being placed before the shareholders
for approval.
COST AUDITOR
The Government has stipulated Cost
Audit of the Company's records in respect
of motor vehicles as well as engines.
M/s Geeyes & Co., Cost Auditors have
carried out these assignments. Their
findings have been very satisfactory.
SECRETARIAL AUDIT
As directed by Securities and Exchange
Board of India (SEBI), Secretarial Audit
is being carried out at the specified
periodicity by a Practising Company
Secretary. The findings of the Secretarial
Audit were entirely satisfactory.
AUDITORS
M/s M S Krishnaswami & Rajan
and M/s Deloitte Haskins & Sells,
Chartered Accountants retire at the
ensuing Annual General Meeting and are
eligible for re-appointment. The
Company has received confirmation that
their appointment will be within the
limits prescribed under Section 224(1B)
of the Companies Act, 1956. The Audit
Committee of the Board has
recommended their re-appointment. The
necessary resolution is being placed
before the shareholders for approval.
ACKNOWLEDGEMENT
The Directors wish to express their
appreciation of the continued
co-operation of the Central and State
Governments, Bankers, Financial
Institutions, Customers, Dealers and
Suppliers and also the valuable
assistance and advice received from
major shareholders LRLIH Ltd., Hinduja
Group, Iveco and all the shareholders.
The Directors also wish to thank all the
employees for their contribution, support
and continued co-operation through
the year.
On behalf of the Board of Directors
Chennai
April 29, 2006
R J SHAHANEY
Chairman
Annexure A to Directors' Report
(A) CONSERVATION OF ENERGY
2. Benefits derived as a result of the above R & D

-
All manufacturing plants have implemented various
Wider range of vehicles, enhanced value equation and

greater customer satisfaction.
conservation of energy initiatives leading to significant

savings in cost during 2005-2006. Few of such key initiatives
3. Future Plan of Action
are:
Elimination of non-productive energy consumption by
Continue improvements in processes, skill building and
continuous systematic monitoring through installation
addition of infrastructure.
of microprocessor based digital energy meters in

substations and auto controller/sensing to avoid idle
running of equipment thus conserving electricity and
Technology Absorption, Adaptation and Innovation:

-
replacement of high capacity pumps of machines/
6x2 Tipper for Mining Sector, scheduled for launch

shortly.
equipments with optimum capacity pumps.

Maintaining power factor always at 'ideal condition'
Upgraded version of Stallion, undergoing various trials

with Indian Army.
achieved through optimum use of capacitor banks and

incentives obtained from State Electricity Board.
High Mobility Vehicle 6x6 has completed various user

trials with the Army.
Systematic monitoring of recorded KVA Max. Demand

and restricting the same close to minimum payable KVA
A Field Articulated Tractor 6x6 vehicle has been

developed for use by the Army.
demand.
Value addition ijn terms of modifications, realignments
and system improvements in major power consuming
Two versions of the Ecomet i.e. 912 and 1112 have

been launched in the Market.
equipments to achieve reduced power consumption.

Implementing various other energy saving measures in
4. Expenditure on R & D
office lighting, street lighting etc.
Rs. Millions
Capital
(B) TECHNOLOGY ABSORPTION

Research and Development (R & D):
1. Specific areas in which R&D carried out by the
Company
-
Bharat Stage - III
485.55
Revenue
563.85
(excluding depreciation)
Total
1,049.40
Total R & D Expenditure

engine with "COMMON RAIL
1.7%
as % of total turnover
, FUEL INJECTION SYSTEM" has been developed and

durability trials have commenced.
-
152 KW (207 PS) rating on 'H' series 6 cylinder
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
engine at Bharat Stage - II level has
Details of earnings and outgo of foreign exchange are given
been extended to cover additional power
in Schedules 1.6 to 1.9 of Notes to the Accounts. The
ratings and commercial production will commence
Company continues to strive to improve its export
shortly.
earnings.
Annexure B to Directors' Report - Report on Corporate Governance
1)
ASHOK LEYLAND PHILOSOPHY ON CORPORATE GOVERNANCE

The Board of Directors and the Management of Ashok Leyland commit themselves to:
strive towards enhancement of shareholder value through

sound business decisions
prudent financial management, and
high standards of ethics throughout the organisation
ensure transparency and professionalism in all decisions and transactions of the Company
achieve excellence in Corporate Governance by

conforming to, and exceeding wherever possible, the prevalent mandatory guidelines on Corporate Governance
regularly reviewing the Board processes and the Management systems for further improvement
The Company has adopted a Code of Conduct for members of the Board and senior management, who have all affirmed in
writing their adherence to the Code. The full text of the Code is furnished at the end of this Report, and is also displayed at
the Company's website www.ashokleyland.com
2)
BOARD OF DIRECTORS
a)
Composition : The Board of Directors of the Company, headed by a non-executive Chairman, consisted of the following
Directors, as on March 31, 2006, categorised as indicated:
Non-executpve Directors
a)
Promoter Group
Mr F J Colon Martinez (Alternate : Mr G Sagone)

Mr A K Das (Alternate: Mr IN Chatterjee)
Mr D G Hinduja (Vice Chairman) (Alternate : Mr YM Kale)
Mr FSahami
Mr A Spare
b)
Connected with Associate Companies
Mr R J Shahaney (Chairman)
c)
Independent
Mr
Mr
Mr
Mr
D J Balaji Rao
P N Ghatalia
S R Krishnaswamy (representing LIC as shareholder)
E A Kshirsagar
Mr S V Young
ii)
Executive Director
Managing Director
^
Equity Shares held by Directors
Name of the Director
Mr R J Shahaney
Mr R Seshasayee
b)
Mr R Seshasayee
No. of equity shares
There are no other shares or convertible instruments
11730
11236
held by any other Director(s)
Attendance at Board Meetings and last A.G.M. and details of memberships of Directors in other Boards and Board
Committees
Details of Board Meetings held during the year 2005-06
Date of Meeting
April 28, 2005
Board Strength
No. of Directors present
11
11
July 26, 2005
12
October 22, 2005
12
January 31, 2006
12
12
March 29, 2006
12
i
j
'
T
i
The time gap between any two meetings did not exceed four months.
The last Annual General Meeting was held on July 26, 2005.
12
12
MEMBERSHIPS AS ON 31/3/2006 IN
No. of
Board
meetings
attended
Name of Director
Whether
attended
last A.G.M.
held on
July 26, 2005
Other Boards
(excluding
Ashok leyland)
(Note 5)
4
(4 as Chairman)
7
Mr R J Shahaney
Yes
Mr D J Balaji Rao
Yes
Mr F J Colon Martinez
__.____.
No
Yes
Yes
~~M7p~lTdh7talia
Mr
Mr
Mr
Mr
Mr
Mr
Mr
Mr
(Note 1)
D G Hinduja
H Wingele
(Note 2)
S R Krishnaswamy
E A Kshirsagar
F Sahami
S V Young
A Spare
R Seshasayee
4
5
5
{Note 3)
(Note 4)
3
Nil
"
1
(1 as Chairman)
8
(4 as Chairman)
"Nil
1
7 "
(3 as Chairman)
Nil " -1
Nil
Nil
1
5
\
4
Nil
1
4
Yes
Yes
Yes
Yes
Yes
Not Applicable
Yes. As Invitee
Yes
Other Board
Committees
(excluding
Ashok Leyland)
(Note 6)
(1 as Chairman)
f~ ~ 1
1
\
1
1
6
(3 as Chairman)
Nil
Nil
1
Alternate Directors :
Mr I N Chatterjee
Mr Y M Kale
Mr G Sagone
No
3 .
(1 as Chairman)
Nil
No
!
j
3
(1 as Chairman)
|
j
2
(1 as Chairman)
Yes
Nil
Note 1: Appointed as a Director effective April 1, 2005.

Note 2: Ceased to be a Director effective January 31, 2006.
Note 3: Appointed as a Director effective July 26, 2005.
Note 4: Appointed as a Director effective January 31, 2006.
Note 5: Tê above excludes Foreign companies, Private Limited Companies and Alternate Directorships.
Note 6: Only Audit Committee, and Shareholders/Investors Grievance Committee are reckoned for this purpose.
Secretarial Standards
The Institute of Company Secretaries of India (ICSI) has laid down Standards on secretarial practices relating to meetings of the
Board and Board Committees, General Meetings, Dividends etc. Though these Standards are so far only recommendatory, the
secretarial and the operating practices of the Company are in line with the above Secretarial Standards.
All the information required under Annexure-1 to Clause-49 of the Listing Agreements with Stock Exchanges are being placed before
the Board at every meeting, with the current status duly updated.
3)
AUDIT COMMITTEE
a)
Constitution
The Audit Committee of the Company was constituted in July 1987 with Terms of Reference, which covered most of the
aspects stipulated by SEBI in the year 2000. These were comprehensively reviewed once again by the Company's Board
in the year 2000, and the Audit Committee has been mandated with the same Terms of Reference as specified in Clause
49 of the Listing Agreements with Stock Exchanges. The Terms of Reference also fully conform to the requirements of
Section 292A of the Companies Act, 1956.
b)
Composition, names of members and Chairperson

The composition of the Audit Committee :
Independent Directors
Mr E A Kshirsagar (Chairman)
Promoter Group Director

Mr F Sahami
Mr D 0 Balaji Rao
Mr P N Ghatalia (from April 28, 2005)
All the members of the Audit Committee have expertise in Finance as well as in general management.
Mr E A Kshirsagar, Mr P N Ghatalia and Mr F Sahami had been senior partners in leading firms of Chartered Accountants.
Mr Balaji Rao had been the Deputy Managing Director of the then ICICI Ltd., (now ICICI Bank) and the Managing
Director of Infrastructure Development Finance Company Ltd.
c)
Meetings and Attendance

Audit Committee Meetings held during the year 2005-06 and Attendance Details
Attendance :
Committee
Kn of 0',<"fi,->",
Strength
P'OSf/it
April 27, 2005
July 25, 2005
October 22, 2005
January 31, 2006
Date of Meeting
Mr N Sundararajan, Company Secretary is the Secretary to the Committee. He is also the Head of the Internal Audit
function, and has attended all the above Meetings of the Committee.
Mr K Sridharan, Chief Financial Officer, attended all the above meetings of the Committee.
The Statutory Auditors of the Company and the Cost Auditors are invited to join the Audit Committee Meetings. The Audit
Committee discusses with the Statutory Auditors on the "Limited Review" of the quarterly/half-yearly accounts, the Audit
Plan fof the year, matters relating to compliance with Accounting Standards, the Auditors' observations arising from the
annual audit of the Company's accounts, and other related matters. The Committee also reviews at every meeting the
significant observations arising from the reports of the Internal Audit Department and the adequacy of the follow up action
taken by the Management. The Committee discusses with the Cost Auditor about the Annual Cost Audit Reports, his
observations and allied matters.
4)
REMUNERATION COMMITTEE
a)
The Remuneration Committee consists entirely of non-executive Directors. Mr D J Balaji Rao, independent Director is the
Chairman of the Committee. Mr R J Shahaney and Mr F Sahami are the other members.
Mr N Sundararajan, Company Secretary is the Secretary to this Committee.
The Committee is mandated with the following Terms of Reference :
Determination and approval of the quantum of commission and special allowance payable
to the Managing Director; and
Determination and approval of the annual increments to the Managing Director.
Within the overall limits approved by the shareholders, the above determinations are based on the overall performance
of the Company during the relevant financial year, and on the Committee's assessment of the personal contribution and
achievements of the Managing Director.
b)
The Committee met once during the year on April 27, 2005. All the members were present at this meeting.
c)
The Remuneration Policy of the Company is summarised as follows:

(i)
For Managing Director

The total remuneration, subject to shareholders' approval, consists of
a fixed component - consisting of salary, allowances and perquisites; the perquisites and benefits are in line
with the Company's Rules for senior managerial personnel.
a variable component - linked to the performance of the Company as well as of the Managing Director consisting of Commission and Special Allowance, as determined by the Remuneration Committee.
(ii)
For Non-executive Directors

Sitting Fees is paid as per the Companies Act, 1956, and the Articles of Association of the Company, for attending
meetings of the Board or any Committees of the Board. Directors are also reimbursed actual travel costs and
incidental expenses incurred for attending such meetings or in connection with the Company's business.
At present there is no other remuneration to non-executive directors. Though at the Annual General Meeting held
on July 24, 2001, the shareholders had approved the payment of Commission to the non-executive Directors of the
Company, as may be decided by the Board, no such payments have been approved by the Board so far.
d)
The details of remuneration paid/payable to the Directors for the year 2005-06 are :
i)
ii)
Non-executive Directors - Sitting Fees: (excluding reimbursement of travel and other expenses incurred for the
company's business)
Rs.
Rs.
Mr R J Shahaney
380,000
Mr S R Krishnaswamy
100,000
Mr D J Balaji Rao
340,000
Mr E A Kshirsagar
200,000
Mr I N Chatterjee, Alt. Director
20,000
Mr F J Colon Martinez
20,000
Mr A K Das
60,000
Mr FSahami
200,000
Mr P N Ghatalia
160,000
Mr S V Young
60,000
Mr D G Hinduja
160,000
Mr G Sagone, Alt. Director
80,000
Mr H Klingele
120,000
Mr A Spare
Nil
Managing Director (No Sitting Fee is payable)

Rs.
a) Fixed Component Salary

Perquisites (**)
b) Variable Component Commission
Special Allowance
Total
(**)
2,160,000
1,847,022
4,320,000
4,320,000
12,647,022
Certain perquisites are valued as per the Income Tax Rules. Does not include contribution to Provident Fund
@ 12% and Superannuation Fund @ 15% of the salary.
Mr Seshasayee, Managing Director is under contract of employment with the Company. There is also a contract
corresponding to his appointment as Managing Director, stipulating 3 months' notice period from either side. There
is no severance fees payable to him.
The Company has not offered any Employee Stock Options.
SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE
a)
The Shareholders/Investors Grievance Committee has been functioning since August 2000. Mr R J Shahaney is the
Chairman of the Committee; Mr D J Balaji Rao, Independent Director and Mr R Seshasayee, Managing Director are the
other members. This Committee presently deals with and approves all share transfers, transmissions etc., and also all
other matters relating to investor relations and grievances. From January 31, 2006, the Committee has also been
empowered to allot shares upon conversion of the Foreign Currency Convertible Notes issued in April 2004.
b)
Mr N Sundararajan, Company Secretary is the Secretary to this Committee and is also the Compliance Officer nominated
for this purpose.
c)
The Committee reviews the performance of the Company's Registrar & Transfer Agent (R&TA), and their system of dealing
with and responding to correspondence from all categories of shareholders. All complaint letters received from Stock
Exchanges/ SEBI/ Dept. of Company Affairs etc., and the responses thereto are reviewed by this Committee.
During the year, 1190 complaint letters were received from investors; 2945 letters (including 12 letters from SEBI /
Stock Exchanges / DCA) were received on routine matters; all these were dealt with satisfactorily. The very few letters,
which occasionally remained pending beyond the normal time lag were cases of inadequate documentation or
clarifications being awaited.
For the fifth year in succession, the Company conducted an Investor Satisfaction Survey through a questionnaire, which
was mailed along with the Notice of AGM 2005.
1398 investors had responded to the Survey. A vast majority of them have expressed high degree of satisfaction about
various aspects of investor servicing. A few issues raised by some investors were pursued and dealt with satisfactorily.
At the October 2005 meeting, the Committee also reviewed the Special Report analysing the feedback from the Investor
Satisfaction Surveys, and approved the initiatives for further improvements in investor servicing.
d)
6)
As on March 31, 2006, there were 4 share transfers pending; these were completed within the due dates.
GENERAL BODY MEETINGS

a)
Details of locatior/and time of holding the last three AGMs.
Year
Location
Date & Time
54th AGM - 2003
Narada Gana Sabha,

314 TTK Road, Chennai - 600 018
July 22, 2003

10.00 a.m.
55th AGM - 2004
Narada Gana Sabha,

July 29, 2004

10.30 a.m.
56th AGM - 2005
Narada Gana Sabha,

July 26, 2005

10.30 a.m.
The Chairman of the Audit Committee was present at all the above AGMs.
t
Details of EGMs held in the last three years:
Year
2004
2005
b)
Location
Date & Time
Narada Gana Sabha,
February 28, 2004
314, TTK Road, Chennai - 600 018
11.00 a.m.
Rani Seethai Hall
March 5, 2005
603, Anna Salai, Chennai - 600 006
10.45 a.m.
All the Special Resolutions placed before the shareholders at the above meetings were approved. There were no
resolutions requiring approval through Postal Ballot.
7)
DISCLOSURES
There have been no materially significant related party transactions with the Company's Promoters, Directors, the
Management, their Subsidiaries or relatives which may have potential conflict with the interests of the Company. The
necessary disclosures regarding the transactions with Related Parties are given in the Notes to the Accounts.
There have been no instances of non-compliance by the Company on any matters related to the capital markets, nor have any
penalty/strictures been imposed on the Company by the Stock Exchanges or SEBI or any other statutory authority on such
matters during the last three years.
The Company had no subsidiary company as on March 31, 2006.
MEANS OF COMMUNICATION
The half-yearly results are being mailed to all shareholders since October 2001, along with a letter to the shareholders
from the Managing Director.
b)
The quarterly results are being published in one leading national (English) newspaper (normally Business Line/Business
Standard) and in one vernacular (Tamil) newspaper (Dinamani/Dinamalar). The quarterly results are also displayed on the
Company's website www.ashokleyland.com
c)
The Company's website also displays official press /news releases, Presentations made to institutional investors and
analysts, and several other details/information of interest to various stakeholders.
A Management Discussion and Analysis Report is being presented as a part of the Annual Report from the year
d)
1998-1999 onwards.
9)
GENERAL SHAREHOLDER INFORMATION

57th Annual General Meeting
a.
lulu "n "nr\F
^ (Since c hanged to: August 1, 2006 - 10.00 a.m.

1 Kamaraj' Memorial Hall,
f 492, An na Salai, Teynampet,
m in n m
Narada Gana Sabha,
- 600 006)
b.
Financial Calendar
-1..I.
Annual General Meeting
in
^nnc
/*
J j.
A*
Unaudited results for the quarte
c.
Unaudited results for the quarte r/half-year ending September 30, 2006
Last week of October 2006
Unaudited results for the quarte r ending December 31, 2006
Last week of January 2007
Audited Results for the year end ing March 31, 2007
Before end of May 2007
Book Closure Date

[Since changed - July 14, 2006 to August 1, 2006 (both days inclusive)]
d.
Dividend payment date
-, ,
*n*f fr-
e.
a) Listing of Equity Shares
Madras Stock Exchange Ltd.
L.
d Commencing August 1, 2006)
Bombay Stock Exchange Ltd.

National Stock Exchange of India Ltd.
b) Listing of Global Depository
T
Receipts (GDRs)
London Stock Exchange
c) Listing of Foreign Currency

Convertible Notes (FCCN)
London Stock Exchange
The Listing Fees has been paid uptodate, to all the Stock Exchanges.
f.
Stock Code
a) Trading Symbol at
ALL
Madras Stock Exchange Ltd.

Bombay Stock Exchange Ltd.
(Physical)
477
(Demat)
500477
ASHOKLEY
Equity Shares
INE208A01029
b) Demat ISIN Numbers in

NSDL & CDSL
inn*-\
g.
Stock Market Data

Bombay Stock Exchange
Month
h.
Share Price
Sensex
High
Low
(Rs.)
(Rs.)
High
Share Price
Low
High
(fh.)
low
(Ri.)
S&P CNX Nifty

High
Low
April 2005
25.25
20.55
6,649.42
6,118.42
24.00
20.40
2,084.90
1,896.30
May 2005
24.35
22.45
6,772.74
6,140.97
24.80
22.45
2,099.35
1,898.15
June 2005
26.85
23.55
7,228.21
6,647.36
27.25
23.40
2,226.15
2,061.35
July 2005
29.90
23.65
7,708.59
7,123.11
29.95
23.55
2,332.55
2,171.25
Aug 2005
31.60
22.95
7,921.39
7,537.50
31.70
25.70
2,426.65
2,294.25
Sep 2005
30.55
26.70
8,722.17
7,818.90
30.85
26.50
2,633.90
2,382.90
Oct 2005
29.80
25.20
8,821.84
7,656.15
29.75
25.20
2,669.20
2,307.45
Nov 2005
33.00
27.25
9,033.99
7,891.23
35.00
27.25
2,727.05
2,366.80
Dec 2005
33.80
29.95
9,442.98
8,769.56
33.80
29.90
2,857.00
2,641.95
Jan 2006
32^80
29.40
9,945.19
9,158.44
33.05
29.50
3,005.10
2,783.85
Feb 2006
39.60
30.55
10,422.65
9,713.51
40.00
30.60
3,090.30
2,928.10
Mar 2006
43.00
37.70
11,356.95
10,344.26
42.75
37.80
3,433.85
3,064.00
Share Price performance in comparison to broad based indices - BSE Sensex and NSE Nifty
Share Price Movement (BSE)
Share Price Movement (Nifty)
i.
National Stock Exchange
1 _
.
. .. , .
h- See chart inside back cover
-I
Registrar and Transfer Agents

All Securities Transfer work was done in-house till March 31, 2003. SEBI had directed that all Share Registry work in
respect of both physical and demat segments should be handled by a single Common Agency. Accordingly, from
April 1, 2003, the Company appointed M/s Integrated Enterprises (India) Ltd., 2"" Floor, Kences Towers, 1 Ramakrishna
Street, North Usman Road, T.Nagar, Chennai 600 017 as the Registrar and Transfer Agent (R&TA) of the Company for all
aspects of investor servicing relating to shares in both physical and demat form. The residual matters relating to the
fixed deposits are dealt with directly by the Company.
j.
Share Transfer System

The authority relating to transfer of shares and allied work relating to servicing of investors has been delegated by the
Board to the Shareholders/Investors Grievance Committee which consists of Mr R J Shahaney (Chairman), Mr D J Balaji
Rao, and Mr R Seshasayee.
In order to further improve and speed up investor servicing, the Board has authorised the Managing Director individually
to approve all routine transfers, transmissions etc. of shares. Such approval is being given by the Managing Director at
frequent/regular intervals (32 times during 2005-06). Transfers, transmissions etc., were generally approved within
12 days ; requests for dematerialisation were confirmed within 10 days (as against the norm of 15 days). In addition, the
Committee(s) met 9 times during the year 2005-06 for approving specific transfers, transmissions, etc., reviewing
investor grievances and to allot shares upon conversion of FCCNs.
In February 2004, SEBI have notified withdrawal of the transfer-cum-demat-facility, whenever shares in physical segment
are received for transfer.
k.
(i)
Distribution of Shareholding as on March 31, 2006

No. of Shares
'hjrcholderi
No, of Shares
Nur"i>"
11323
8.25
360094
0.03
51-100
21393
2072204
101-200
17852
15.59
13.01
201-500
35727
26.03
14758406
501-1000
23305
20338049
1001-2000
15011
14816532
0.17
0.27
1.21
1.67
1.91
2.48
1.21
1112303958
91.05
1221586776
100.00
2001-5000
9408
5001-10000
1999
1226
16.98
10.94
6.85
1.46
0.89
137244
100.00
10001 & above

Total
(ii)
3351563
23351807
30234163
Pattern of Shareholding as on March 31, 2006

No, of
Holders
SI No.
Category
/remoter - LRLIH Ltd.

(Includes 164600070 shares in GDR Form)
No. of
Shares
605766750
49.59
133768
140263936
11.48
Residents (Individuals / Clearing Members)
Financial Institutions/Insurance Co. / State Govt./

Govt. Companies/UTI
21
169086840
13.84
Foreign Institutional Investors
87
178868949
14.64
Non-Resident Indians/ OCB / Corporate Bodies Foreign / Bank - Foreign / Foreign Nationals
1375
23797280
1.95
Corporate Bodies
1884
22174100
1.82
Mutual Funds
36
65576156
5.37
Trusts
19
236000
0.02
Banks
51
831265
0.07
10
Others - GDR
14985500
1.22
137244
1221586776
100.00
Total
I.
Number
Upto 50
Dematerialisation of shares and Liquidity

Shares of the Company can be held and traded in electronic form. As stipulated by SEBI, the shares of the Company are
accepted in the Stock Exchanges for delivery only in dematerialisation form.
Status of Dematerialisation of Shares as on March 31, 2006
Physical
Holders
LRLIH Limited
Others
No. of
Shares
441166680*
Demat
%to
paid-up
opital
No. of
Shares
^*
Total
%to
paid-up
capital
No. of
Shares
**
%to
paid-up
capital
36.11
164600070
13.48
605766750 I
49.59
2.14
589624198
48.27
615820026
50.41
1221586776
100.00
26195828***
* held in one consolidated share certificate
** including in GDR Form
*** held by approx. 24700 holders
Shares of the Company are activet^ traded in the Bombay and National Stock Exchanges, and hence have good liquidity.
m.
Subdivision of Shares
Each equity share of face value of Rs.10/- was subdivided into 10 equity shares of face value of Re. I/- each, effective
from July 7, 2004. Following the subdivision, there has been a significant increase in the number of shareholders; as of
March 31, 2006, there were 137244 shareholders as compared to 71720 shareholders as on July 6, 2004.
n.
Outstanding GDR/ Warrants and Convertible Notes, Conversion date and likely impact on the equity
No GDR is outstanding for conversion as on March 31, 2006 and hence there is no impact on equity.
After obtaining the approval of the shareholders at the Extraordinary General Meeting held on February 28, 2004, the
Company issued Foreign Currency Convertible Notes (FCCN) for USD100 million in April 2004 to investors in the overseas
market. As per the terms of the Issue, these Bonds are convertible into GDSs or convertible into the underlying shares
@ 1422.581 shares (of face value Re. I/- each) per Note of USD1000, at a conversion price (reset in 2005) of Rs.31/- per
share at the option of the investors as per the terms of the issue.
From February 2006, the Company has started receiving requests from the holders of FCCNs seeking to convert the Notes
held by them into underlying shares. Upto 31/03/2006, 22700 Notes have been converted into 32292576 shares. All the
statutory / contractual obligations relating to such conversions have been fulfilled in time, and such additional shares
(upon conversion) have been admitted for trading at Madras Stock Exchange Ltd., Bombay Stock Exchange Ltd., and
Plant Locations
Ennore
Post Box No.3
Ennore
t
Chennai 600 057
Tamil Nadu
Hosur - Unit I
175 Hosur Indl. Complex
Hosur 635 126
Tamil Nadu
Hosur - Unit II
77 Electronic Complex
Perandapalli Village
Hosur 635 109
Tamil Nadu
Hosur - Unit IIA

Cab Panel Press Shop
SIPCOT Industrial Complex
Mornapalli Village
Hosur 635 109
Tamil Nadu
Bhandara
Plot No.l MIDC Industrial Area
Village Gadegaon
Sakoli Taluk
Bhandara 441 904
Maharashtra
Alwar
Plot No.SPL 298
Matsya Indt. Area
Alwar 301 030
Rajasthan
Ambattur, Chennai
3A/A&2 North Phase
Sidco Industrial Estate
Ambattur,
Cnennai 600 098
Tamil Nadu
Technical Centre
Vellivayal Chavadi
Via Manali New Town
Chennai 600 103
Tamil Nadu
Address for Correspondence

To*contact R&TA for all matters
relating to Shares, Dividends,
Annual Reports
M/s Integrated Enterprises (India) Ltd.

2nd Floor, Kences Towers
1, Ramakrishna Street
North Usman Road
T. Nagar
Chennai 600 017
Tel
: 91-44-28140801/03
Fax
: 91-44-2814 2479
e-mail : yesbalu@iepindia.com
For Fixed Deposits
Mr R Venugopalan
Dy. General Manager - Finance
Ashok Leyland Limited
Ennore
Chennai 600 057
Tel
: 91-44-2575 1001/2575 0233
Fax
: 91-44-2575 1798
e-mail : rv.ale@ashokleyland.com
For any other general matters

or in case of any difficulties/
grievances
Secretarial Dept.
Building No.2, 5th Floor
Khivraj Complex II
477-482 Anna Salai
Nandanam
Chennai 600 035
Tel
: 91-44-2433 1120/2433 1128/

2433 1129
Fax
: 91-44-2433 5633
e-mail : secretarial@ashokleyland.com
Ashok Leyland Website address: www.ashokleyland.com

NON MANDATORY REQUIREMENTS

1.
Non executive Chairman

The Company maintains the office of the Non Executive Chairman and reimburses expenses incurred in the performance of his
duties.
2.
Remuneration Committee
The Company has constituted a Remuneration Committee; full details are furnished under Item 4 of this Report.
3.
Shareholder Rights
The statements of quarterly and half yearly results are being published in the Press. The Company has been mailing half-yearly
reports to shareholders from October 2001, along with a letter from the Managing Director highlighting significant events.
4.
Postal Ballot
The Company adheres to the Companies Act, 1956 requirements regarding Postal Ballot. The Company has had no occasion to use
the postal ballot so far.
REVISED SEBI GUIDELINES ON CORPORATE GOVERNANCE

SEBI had notified on October 29, 2004, a revised /updated set of Guidelines relating to Corporate Governance which have been
incorporated in the Company's Listing Agreements with the Stock Exchanges. The compliance with the earlier Guidelines were
declared adequate upto Match 31, 2005 (since extended upto December 31, 2005). The revised Guidelines came into effect from
January 1, 2006.
The Company is fully compliant with the revised SEBI Guidelines.

CODE OF CONDUCT
Members of the Board and the Senior Management, shall
a)
Always act in the best interests of the Company and its stakeholders.
b)
Adopt the highest standards of personal ethics, integrity, confidentiality and discipline in dealing with all matters relating to the
Company.
c)
Apply themselves diligently and objectively in discharging their responsibilities and contribute to the conduct of the business
and the progress of the Company, and not be associated simultaneously with competing organisations either as a Director or in
any managerial or advisory capacity, without the prior approval of the Board.
d)
Always adhere and conform to the various statutory and mandatory regulations/guidelines applicable to the operations of the
Company avoiding violations or non-conformities.
e)
Not derive personal benefit or undue advantages (financial or otherwise) by virtue of their position or relationship with the
Company, and for this purpose.
i)
shall adopt total transparency in their dealings with the Company.
ii)
shall disclose full details of any direct or indirect personal interests in dealings/transactions with the Company.
in) shall not be party to transactions or decisions involving conflict between their personal interest and the Company's interest.
f)
Conduct themselves and their activities outside the Company in such manner as not to adversely affect the image or reputation
of the Company.
g)
Inform the Company immediately if there is any personal development (relating to his/her business/professional activities)
which could be incompatible with the level and stature of his position and responsibility with the Company.
h)
Bring to the attention of the Board, Chairman or the Managing Director as appropriate, any information or development either
within the Company (relating to its employees or other stakeholders) or external, which could impact the Company's operations,
and which in the normal course may not have come to the knowledge of the Board/Chairman or Managing Director.
i)
Always abide by the above Code of Conduct, and shall be accountable to the Board for their actions/violations/defaults.
*~? <"?
'
Annexure C to Directors' Report
AUDITORS' CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE

UNDER CLAUSE 49 OF THE LISTING AGREEMENTS
To the Members of
Ashok Leytand Limited
1.
We have examined the compliance with the conditions of Corporate Governance by Ashok Leyland Limited (the company)
for the year ended March 31, 2006 as stipulated in clause 49 of the listing agreement of the said company with the stock
exchanges in India, with the relevant records and documents maintained by the company and furnished to us and the report
on Corporate Governance as approved by the Board of Directors.
2.
The compliance of conditions of corporate governance is the responsibility of the management. Our examination has been
limited to procedures and implementation thereof, adopted by the company for ensuring the said compliance. It is neither
an audit nor an expression of opinion on the financial statements of the company.
3.
Based on the aforesaid examination and according to the information and explanations given to us, we certify that the
company has complied with the said conditions of Corporate Governance as stipulated in the above mentioned Listing
Agreement.
4.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency
or effectiveness with vyhich the management has conducted the affairs of the Company.
For M.S. KRISHNASWAMI & RAJAN
For DELOJ.TTE HASKINS & SELLS
Chartered Accountants
M.K. RAJAN
R. RAGHAVAN
Partner
Partner
Membership No. 4059
Membership No. 9483
April 29, 2006

Chennai
'
Annexure D to Directors' Report - Management Discussion and Analysis Report
With three consecutive years of growth

in GDP at over 7.5%, the required
momentum has been generated for
achieving higher growth rates in the
future.
A, Commercial Vehicle Industry
trucks is already impacting positively on
Structure and Development
the demand for commercial vehicles. It
After recording an unprecedented

compounded annual growth rate (CAGR)
of 29.6% between 2001-02 and 2004-05,
the Indian commercial vehicle
production in 2005-06 grew by 10.6%.
will warrant significant changes in

vehicle design to enhance productivity.
Another significant development is the
demand for introduction of low floor city
buses, which is expected to play a major
role in defining urban transportation in
Domestic demand grew by 10.1% in

2005-06, reaching a record 350,683
India.
units, coming after three high growth

B. Business Review
years.
Despite an estimated 8.1% growth in
Indian GDP, the domestic medium and
heavy commercial vehicle (M&HCV)
demand was lacklustre for most part of
2005-06. A moderate 4.5% growth was
registered in 2005-06, largely aided by a
The Company registered significant

market share improvements in 2005-06.
Leadership position in M&HCV buses and
in the growing > 35 ton articulated
trucks have been the major achievements
in 2005-06. The Company also secured a
significant order from the Indian Army
16.3% spurt in the last quarter.
for supply of 872 units of indigenously

With 19.4% demand growth, Light
developed Water Bowsers. A major
Commercial Vehicles (LCV) segment
portion of orders from the Defence, will
contributed significantly to the overall
be executed in 2006-07.
commercial vehicle demand.

The Company has overcome production
Indian commercial vehicle exports grew
by 35.5% in 2005-06 and registered a
CAGR of 36% between 2001-02 and
bottlenecks to a large extent and has

achieved satisfactory productivity levels
in all plants, following the recent wage
2005-06. Exports accounted for 10.4%

of total production.
settlements. This has enabled the

Company to increase its vehicle
There has been a significant change in
manufacturing capacity to 77,200 units
the profile of commercial vehicle
from 67,500 units. The Company
industry during the last few years. This
embarked on Mission Gemba across all
trend is expected to continue, with a
manufacturing units in 2005. The
mature transportation model emerging in
objectives of Mission Gemba are to
the next few years.
empower employees, develop a culture of
The recent directive of the Supreme
solving problems on the shop floor and
Court to strictly curb overloading of
facilitate people to work together
2005-06
2001-02
0%
10%
20%
30%
40%
50%
60%
I Up to 5 ton
I > 5 ton - 7.5 ton
l> 12 ton - 16.2 ton
I > 16.2 ton (Rigid)
'S
70%
80%
90% 100%
> 7.5 ton - 12 ton

> 25 ton (Arties)
towards achieving improvements in cost,

quality, throughput and safety.
Company is targeting to increase the
much rapid pace. With a strong presence
contribution of exports to 10% of total
in the HCV range, the Company is
sales in the coming years.
exploring expansion of its range into the
The Company has been gradually

adopting Design for Six Sigma in design
By entering into a marketing
process. The benefits of this approach
arrangement for small and high capacity
have begun to flow in.
engines, the Company has expanded its

offering of engines for industrial and
Customer-centric products and services

continue to be the Marketing Mission.
Domain Expert Groups have been formed
to understand customers' needs and
business drivers for each application.
The Company's product strategy will be
driven by these findings. Key Account
marine applications. In 2005-06, the

Company sold 7,261 engines for
industrial and marine applications, up
16% over 2004-05. The Company is
tapping the vast export potential for its
engines and a beginning has been made in
2005-06.
Management will be leveraged to expand
growing LCV segment. Various initiatives

are being pursued in this regard.
To de-risk against the cyclically of the
commercial vehicle business, the
Company is aggressively progressing
allied businesses. Dedicated
organizations for components and
aggregates business and engineering
design services have been formed. The
Company is seeking growth in new
overseas markets as well.
New urban transportation models are
the Company's presence in each segment
Significant increase in sale of CKD kits to
and customer engagement will be part of
the Indian Army has boosted the spare
marketing business plan.
parts sale value to Rs. 7,837.8 million,
being contemplated in major cities and

the Company is getting equipped to offer
cost effective solutions.
up 44% over 2004-05.
Given the changing competitive
First level training and implementation
scenario, the Company is focusing on

superior cost-value equation to retain its
competitive edge.
Implementation of Customer Connect, a

customer relationship process including
Dealer Management System and Product
Lifecycle Management process is in
progress.
Apart from ongoing product
improvements, Newgen cab, 260 hp rear
engine InterCentury Luxura coach and
> 300 hp tipper and tractor will be the
major new launches in 2006-07.
The Company exported 4,879 units in
2005-06. Excluding the sales to Iraq in
of Knowledge Management Initiatives in

certain functions in Marketing, Product
Development and IT have been
completed.
C. Risk Management
The Company has taken up a major

initiative for developing young
executives by systematically engaging
them in critical projects and capability
building and by infusing a culture of
innovation and speed.
The commercial vehicle business has a

specific set of risk characteristics, which
need to be carefully evaluated, managed
and mitigated. In order to effectively
manage the cyclical nature of demand,
the Management has adopted an internal
risk management protocol. Risk
management covers the entire process of
business including, inter-alia, capital
investment, adherence to statutory
norms and customer care.
2004-05 under the UN Oil for Food
Opportunities and Threats
programme, export sales increased by
In line with developed market practices,
22% over 2004-05. Exports constituted
demand for < 3.5 ton GVW and > 16 ton
8% of total sales in 2005-06 and the
GVW trucks is expected to increase at a
M&HCV Buses
2005-06
M&HCV Trucks
2004-05
IAL BOthers
2005-06
M&HCV
2004-05
IAL QOthers I
2005-06
IAL
2004-05
BOthers
x.
Continuance of the reform process and

emphasis on infrastructure and
agriculture augur well for the road
transport sector. However, the cyclical
nature of demand in the commercial
vehicles industry needs to be factored in
for capacity build up / manufacturing
strategies. Capacity build up plans are
periodically re-assessed, taking into
account market conditions and demand
forecast.
D. Internal Control systems and their

adequacy
Effective use of resources and

safeguarding of assets.
Based on the nature of business and size

of operations, the Company's internal
control system has been designed to
provide for:
IT systems with in-built controls to

facilitate all of the above.
Accurate recording of transactions

with internal checks and prompt
reporting.
Adherence to applicable Accounting

standards and policies.
The Company is planning to expand its

capacity to 100,000 vehicles by FY08.
Further expansion beyond this level will
depend on actual growth rate for the
commercial vehicle industry.
Review of capital investments and

long term business plans.
Periodic review meetings to manage

effectively, all working capital
elements.
Concerns on input cost increases due to

commodity price movements, coupled
with cost increases arising out of
improvements in product designs and
upgradation to meet emission norms
continue. Due to competitive pressures,
these cost increases have not been fully
passed on to the customers. The
commercial vehicle industry in India will
witness a higher level of competition
following the proposed plans announced
by automotive companies both Indian
and foreign. The Company plans to
counter these developments through
product offerings to specific customer
requirements and by increasing its
marketing foot print across the country.
Compliance with applicable statutes,

policies, listing requirements and
operating guidelines of the Company.
During the year under review, the

Company suffered loss of vehicle volumes
due to supply constraints in the first
quarter, as a rlsult of somewhat sudden
changes made by the Government in the
introduction of BS-II norms, in certain
states.
The Company's foreign exchange
exposure has reduced substantially with
the good level of conversion from Bonds
to equity. As on date, 81% of
Bondholders have / are in the process of
converting their Bonds into equity
shares. The Company is a net foreign
exchange earner and to that extent has
limited exposures if the Indian Rupee
was to depreciate in future. The
Company's currency exposures are mostly
in USD and are actively managed through
a centralized Treasury Department
assisted by technical experts.
The Company has its own Corporate

Internal Audit set up which carries out
periodic audits at all locations and of all
functions and brings out deviations to
internal control procedures. The
observations arising out of audit are
periodically reviewed and compliance
ensured. The summary of the Internal
Audit Reports is submitted to Audit
Committee of the Board of Directors. The
Committee reviews significant
observations made in Internal Audit
Reports along with actions initiated and
reports to the Board periodically.
Rs. millions
Inc/(Dec)
2005-06
2004-05
52,477
41,819
25.5
329
538
(38.5)
52,806
42,357
24.7
37,690
29,729
26.8
Employee Expenses
4,038
3,541
14.1
Other Expenses
5,347
4,321
23.7
Depreciation
1,260
1,092
15.4
165
28
489.3
48,500
38,711
25.3
4,306
3,646
18.1
217
(96)
326.0
Profit Before Tax
4,523
3,550
27.4
Tax Provision - Current
1,131
895
26.4
- Deferred
72
(59)
222.0
- Fringe benefit tax
47
3,273
2,714
20.6
Basic Earnings Per Share (in Rs.)
2.74
2.28
20.2
Diluted Earnings Per Share (in Rs.)
2.58
2.05
25.9
Cash Earnings Per Share (in Rs.)
3.86
3.15
19.7
Income
Sales (Net of Excise Duty)
Other Income
Total
Expenditure
Manufacturing Expenses
Financial Expenses
Total
Profit Before Extraordinary items
Extraordinary item - Income / (Charge)
Profit After Tax
E. Financial Review
Financial expenses increased during the
Net Current Assets (excluding cash /
The year under review witnessed strong
current year due to higher levels of
bank balances) as on 31st March 2006
growth in sales revenue and profit, with
working capital needed to support
stood at Rs. 2,210 million as against the
both reaching record levels.
increased activity. Further, during the
previous year level of Rs. 1,949 million.
Implementation of BS-II norms and
previous financial year, income earned on
Inventories have gone up to Rs. 9,026
CMVR changes and difficulties in passing
funds raised through the FCCN and
million as on 31st March 2006 compared
on the full cost increases impacted
remaining unutilised had helped in
to Rs. 5,681 million as at 31st March
profitability marginally. The Management
reducing net interest burden. These
2005 due to increase in finished
had initiated many cost reduction
FCCN funds are utilised for capital
inventory levels to meet sudden upsurge
initiatives, which are expected to yield
expenditure requirements. Hence, there
in market demand. Debtors level

decreased to Rs. 4,243 million from
improvements to the operating margins.
has been a reduction in income on
The Company achieved 21% improvement
deployment of such temporary surplus
Rs. 4,588 million. The high level of cash
in net profit.
funds.
and bank balance includes funds raised
Revenues
Sale of castings unit
deposits pending utilisation in capital
Net sales for the year, at Rs.52,477
The Company sold its castings unit at
expenditure programmes. As of
million, has increased by 25% as
Hyderabad (Ductron Castings Unit) to
31st March 2006, this amounted to
Ennore Foundries Limited for a
Rs. 855 million.
through the FCCN issue kept in bank
compared to previous year, contributed

mainly by volume increases in vehicles
by 13%, engines by 15% and a 44%
increase in sales revenue from Spare
Parts.
consideration of Rs. 620 million. The

gain on sale amounting to Rs. 302
million is shown as extraordinary income
Liquidity
for the year 2005-06. Ductron Castings
During the fourth quarter, FCCNs issued
Unit, now part of Ennore Foundries
by the Company began to be tendered
The reduction in other income is mainly
Limited, continues to supply castings to
for conversion to equity and by 31st
on account of the one-time gain earned
the Company.
from sale of shares of Induslnd Bank

during 2004-05.
Costs
Though steel prices softened during the
year, there were significant cost
increases on account of emission and
noise norms. Through concerted efforts,
the Company could secure better
productivity norms in all the plants. This
enabled thetompany to reduce costs.
The overall manpower cost has increased
by 14% mainly due to wage settlements
in two (Ennore and Hosur II) plants.
Other expenses have increased by 24%,
mainly due to activity expansion. Thrust
on Research and Development (R & D) is
continuing and total R & D spend,
including capital expenditure, accounts
for Rs. 1,049 million, an increase of 14%
over the previous year.
March 2006, 23% of the FCCN issued

were converted into Equity shares. This
Resources
is excluding the 50.93% holding of the
During the year, the Company incurred
principal shareholders who have also
capital expenditure of Rs. 2,434 million
advised the Company of their intention
towards investments in capacity
to convert. As of date, Bonds worth USD
expansion / upgradation and R & D.
81 million were converted / would be
Capacity increased from 67,500 vehicles
converted. On full conversion of all
to 77,200 vehicles by August 2005. The
Bonds, the equity will increase to
expansion of R & D facility is progressing
Rs.1,331.6 million from the previous year
as per plan.
level of Rs.1,189.3 million.
Rs. millions
2005-OC
2004-05
14,052
11,485
Loan Funds
6,919
8,804
Deferred Tax Liability-Net
1,797
1,709
22,768
21,998
9,790
Sources of Funds
Shareholders' Funds
Total
Application of Funds
Depreciation for 2005-06 has increased
Fixed Assets
10,847
to Rs. 1,260 million compared to

Rs. 1,092 million, mainly due to current
Investments
3,682
2,292
8,239
9,916
22,768
21,998
year's additions to facilities and increase
Net Current Assets
in number of shifts of operations in some

plants.
Total
2005-06
Rs. millions
2004-05
4,521
Profit from operations
3,561
(1,291)
(Inc.) / Dec.in Net Working Capital
930
4,491
3,230
Net Cash Flow from operating activities

(before extraordinary item)
VRS expenses increased by 27%, to

Rs. 4,523 million. After providing for
taxes at Rs. 1,250 million (including
deferred tax and fringe benefit tax),
profit after tax for the current year
improved by 21% to Rs. 3,273 million. In
the previous year 2004-05, deferred tax
(10)
(18)
3,220
4,473
(2,593)
(1,776)
Proceeds from sale of undertaking
620
Other Investments - net
637
222
(2,576)
2,804
(692)
5,723
Payments under Voluntary Retirement Scheme

Net cash flow from operating activities
Payment for Assets acquisition - net
Cashflow from Financing activities

Net Cash Inflow / (Outflow)
liability for the Company came down by

Rs. 109 million, consequent to the
reduction in tax rates announced in the
Union Budget in February 2005 (with net
deferred tax credit of Rs. 59 million in
the previous year).
F. Outlook
The Company continued to improve its
maintained the Company's ratings at IND
With the fundamentals of the economy

remaining strong and no adverse
sentiments emerging, the requirement
for freight movement is expected to
debt-equity structure. A$ at 31st
AA.
increase in line with the last three years.
March 2006, net debt (net of cash &
(short term borrowing), CRISIL
bank balances) to equity ratio has
maintained the earlier rating of P1+.
declined to 0.06 from 0.07 in
The Company believes that it has
March 2005. If the debt relating to FCCN
sufficient liquidity to meet its working
is treated as equity, the Company will
capital requirements and other
have net surplus funds. The Company
anticipated cash outflows.
On commercial paper programme
manages its liquidity through rigorous

monitoring of cash flows and surplus
The Company registered Rs. 4,521 million
funds are invested mainly in units of
cash inflow from operations. After
Mutual Funds and in bank deposits.

The Compapy's principal sources of
liquidity arise from
a) Cash generated by operations.
meeting working capital requirements

and extraordinary item of payments for
Voluntary Retirement Scheme of Rs.10
million, the Company earned net cash
inflow of Rs. 3,220 million.
b) Unutilisf d limits with banks.

c)
With diesel cost expected to increase and

with the railways announcing various
initiatives, freight movement by road
could become uncompetitive in some
sectors, thereby inducing a shift in-favour
of the railways, affecting demand for new
trucks. Hardening of interest rates and
the cyclical nature of the industry could
also dampen the demand for new trucks.
Unutilised limits of approved
Profit before tax and extra-ordinary items
borrowings.
improved by 18% to Rs. 4,306 million.

During the year, the Company charged
CRISIL maintained the Company's ratings
Rs. 85 million towards amortisation of
for long-term borrowings at "AA". Fitch
VRS expenses. Profit after charging the
However, restrictions on overloading and

possible improvement in freight rates
provide optimism for growth in demand.
Possible restrictions on 'vehicle-age' in
some cities would further provide a fillip
to demand.
Overall, we expect the total demand to
grow. The ambitions of the Company are
not only to accompany the market
development, but to surpass it.
Annexure E to Directors' Report - Directors' Responsibility Statement
Directors' Responsibility Statement as

per section 217(2AA) of the
Companies Act, 1956
Responsibility in relation to financial

statements
The financial statements have been
prepared in conformity, in all material
respects, with the generally accepted
accounting principles in India and the
Accounting Standards prescribed by the
Institute of Chartered Accountants of
India in a consistent manner and
supported by reasonable and prudent
judgements and estimates. The Directors
believe that the financial statements
reflect true and fair view of the financial
position as on 31.3.2006 and of the
results of operations for the year ended
31.3.2006.
The financial statements have been
audited by M/s M.S. Krishnaswami &
Rajan and M/s Deloitte Haskins & Sells
in accordance with generally accepted
auditing standards, which include an
assessment of the systems of internal
controls and tests of transactions to the
extent considered necessary by them to
support their opinion.
Going Concern
In the opinion of the Directors, the
Company will be in a position to carry on
its existing commercial vehicles /
engines business and accordingly it is
considered appropriate to prepare the
financial statements on the basis of
going concern.
Maintenance of accounting records &
Internal controls
The Company has taken proper and
sufficient care for the maintenance of
adequate accounting records as required
by various Statutes.
Directors have overall responsibility for
the Company's internal control system,
which is designed to provide a
reasonable assurance for safeguarding of
assets, reliability of financial records and
for preventing and detecting fraud and
other irregularities.
The system of internal control is

monitored by the internal audit function,
which encompasses the examination and
evaluation of the adequacy and
effectiveness of the system of internal
control and quality of performance in
carrying out assigned responsibilities.
Internal Audit Department interacts with
all levels of management and the
Statutory Auditors, and reports
significant issues to the Audit Committee
of the Board.
Audit Committee supervises the financial
reporting process through review of
accounting and reporting practices,
financial and accounting controls and
financial statements. Audit Committee
also periodically interacts with internal
and statutory auditors to ensure quality
and veracity of Company's accounts.
Internal Auditors, Audit Committee and
'Statutory Auditors have full and free
access to all the information and records
as considered necessary to carry out
their responsibilities. All the issues '
raised by them have been suitably acted
upon and followed up.

Annexure G to Directors' Report
CERTIFICATION BY MANAGING DIRECTOR AND

CHIEF FINANCIAL OFFICER TO THE BOARD
We, R. Seshasayee, Managing Director and K. Sridharan, Chief Financial Officer of Ashok Leyland Limited, certify that:
1.
We have reviewed the financial statements for the year and that to the best of our knowledge and belief:
a)
these statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading;
b)
these statements give a true and fair view of the state of affairs of the company and of the results of operations and
cash flows. The financial statements have been prepared in conformity, in all material respects, with the existing
generally accepted accounting principles including Accounting Standards, applicable laws and regulations.
2.
There are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are
fraudulent, illegal or violative of the company's code of conduct.
3.
We accept overall responsibility for the company's internal control system for financial reporting. This is monitored by the
internal audit function, which encompasses the examination and evaluation of the adequacy and effectiveness. Internal audit
works with all levels of management and statutory auditors, and reports significant issues to the Audit Committee of the
Board. The auditors and audit committee are appraised of any corrective action taken with regard to significant deficiencies
4.
and material weaknesses,

y
We indicate to the auditors and to the audit committee:
a)
significant changes in internal control over financial reporting during the year;
b)
significant changes in accounting policies during the year;
c)
instances of significant fraud of which we have become aware of and which involve management or
other employees who have significant role in the company's internal control system over financial reporting.
However, during the year there were no such changes or instances.
R. Seshasayee
Managing Director
K. Sridharan
Chief Financial Officer
April 29, 2006

Chennai
1.
We have audited the attached
Balance Sheet of ASHOK LEYLAND
LIMITED as at March 31, 2006, the Profit
and Loss Account and the Cash Flow
statement for the year ended on that
date (the financial statements), annexed
thereto, signed by us under reference to
this report. The financial statements are
the responsibility of the company's
management. Our responsibility is to
express an opinion on these financial
statements based on our audit.
2.
We have conducted our audit in
accordance with auditing and assurance
standards generally accepted in India.
Those standards require that we plan and
perform the audit to obtain reasonable
assurance about whether the financial
statements are free of material
misstatement. An audit includes
examining, on a test basisêvidence
supporting the amounts and disclosures
in the financial statements. An audit
also includes assessing the accounting
principles used and significant estimates
made by management, as well as
evaluating the overall financial
statement presentation. We believe that
our audit provides a reasonable basis for
our opinion.
3.
We report that:
3.1
we have obtained all the
information and explanations, which, to
the best of our knowledge and belief,
were necessary for the purposes of our
audit.
3.2
in our opinion, proper books of
account, as required by law, have been
maintained by the company so far as
appears from our examination of those
books.
Institute of Chartered Accountants of

India referred to in section 211(3C) of
the Companies Act, 1956 (the Act).
3.5
on the basis of written
representations received from the
directors, and taken on record by the
Board of Directors, we report that none
of the directors is prima facie
disqualified as on March 31, 2006 from
being appointed as a director in terms of
section 274 (1) (g) of the Act.
3.6
in our opinion and to the best of
our information and according to the
explanations given to us, the aforesaid
financial statements read with the
Statement on Significant Accounting
Policies and Notes to the Accounts, give
the information required by the Act, in
the manner so required and also give a
true and fair view, in conformity with the
accounting principles generally accepted
in India:
(i)
in the case of the Balance Sheet,

of the state of the affairs of the
company as at March 31, 2006;
(ii)
in the case of the Profit and Loss

Account, of the profit for the
year ended on that date; and
(iii)
in the case of the Cash Flow

Statement, of the cash flows for
the year ended on that date.
4.
As required by the Companies
(Auditor's Report) Order, 2003 issued by
the Government of India in terms of
section 227(4A) of the Act, and on the
basis of such checks as we considered
appropriate and according to the
information and explanations given to
us, we further report that:
4.1
(i)
in our opinion, the

company is maintaining
proper records showing full
particulars including
quantitative details and
situation of fixed assets.
(ii)
the fixed assets are being

physically verified under a
3.3
the financial statements dealt
with by this report are in agreement with
the books of account.
3.4
in our opinion, the aforesaid
financial statements comply in all
material respects with the applicable
Accounting Standards issued by the
phased programme of
verification, which, in our
opinion, is reasonable, and
no material discrepancies
have been noticed on such
verification.
4.2
(iii)
the company has not

disposed off substantial
part of its fixed assets
during the year.
(i)
in our opinion, inventories

have been physically
verified during the year by
the management at
reasonable intervals.
(ii)
in our opinion, the

procedures of physical
verification of the inventory
followed by the
management are reasonable
and adequate in relation to
the size of the company
and the nature of its
business.
(iii)
in our opinion, the

company is maintaining
proper records of its
inventories and no material
discrepancies were noticed
on physical verification.
4.3
the company has neither granted
nor taken any loans, secured or
unsecured, to / from companies, firms or
other parties covered in the register
maintained under section 301 of the Act.
4.4
in our opinion, there is an
adequate internal control system
commensurate with the size of the
company and the nature of its business
with regard to purchase of inventory and
fixed assets and for sale of goods and
services. Further, on the basis of our
examination of the books and records of
the company, we have neither come
across nor have been informed of any
continuing failure to correct major
weaknesses in the aforesaid internal
control system.
4.5
to the best of our knowledge
there are no contracts or arrangements
with any party, which need to be entered
in the register maintained under section
301 of the Act.
4.6
in our opinion, the company has
complied with the provisions of section
58A and 58AA or any other relevant
provisions of the Act and the Companies
(Acceptance of Deposit) Rules, 1975 with
regard to deposits accepted from public.
4.7
an internal audit system commensurate
with its size and nature of its business.
4.8
we have broadly reviewed the
books of account and records maintained
by the company relating to the
manufacture of commercial vehicles,
diesel engines and auto components
pursuant to the order made by the
Central Government for the maintenance
of cost records under section 209(l)(d)
of the Act and are of the opinion that
prima facie the prescribed accounts and
records have been made and maintained.
We have, however, not made a detailed
examination of the records.
4.9
(i)
in our opinion, the

company is regular in
depositing undisputed
statutory dues including
provident fund, investor
education and protection
fund, employees' state
* insurance, income tax, sales
tax, wealth tax, service tax,
customs duty, excise duty,
cess and other material
statutory dues as applicable
with the appropriate

authorities during the year.
(ii) there are no dues of income
tax / wealth-tax, service
tax, customs duty, which
have not been deposited on
account of any dispute.
Details of dues towards
sales tax, excise duty and
cess that have not been
deposited on account of
dispute are as stated in
note 9 of Notes to the
Accounts forming part of
the financial statements.
4.10
the company does not have any
accumulated losses as at March 31, 2006
and has not incurred any cash losses in
the financial year ended on that date or
in the immediately preceding financial
year.
4.11 in our opinion, the company has
not defaulted in repayment of dues to
any financial institution, bank or
debenture holders during the year.
4.12
maintained adequate documents and
records where it has granted loans and
advances on the basis of security by way
of pledge of shares, debentures and
other securities.
4.13
the provisions of any special
statute applicable to a chit fund, nidhi,
mutual benefit fund / societies are not
applicable to the company.
4.14
in our opinion, the company is
not dealing or trading in shares,
securities, debentures and other
investments. Accordingly the provisions

of clause 4 (xiv) of the Companies'
(Auditor's report) Order 2003 are not
applicable to the company.
4.15
in our opinion, the terms and
conditions of guarantees given during
the year by the company, for loans taken
by others from banks or financial
institutions, are not prima facie
prejudicial to the interest of the
company.
4.16
in our opinion, the term loans
availed by the company were prima facie,
applied for the purpose for which they
were obtained. The loan funds pending
application is temporarily deployed as
deposits with banks.
4.17
on an overall examination of the
financial statements of the company,
funds raised on short-term basis have,
prima facie, not been used during the
year for long-term investment.
4.18
the company has not made any
preferential allotment of shares during
the year to any party.
4.19
the company has created
securities / charges in respect of
debentures issued and outstanding.
4.20 the company has not raised
any money by public issues during
the year.
4.21
in our opinion, considering
the size and nature of the company's
operations, no fraud of material
significance on or by the company
has been noticed or reported
during the year.

For DELOITTE HASKINS & SELLS

M.K. RAJAN
Partner
Membership No. 4059
R. RAGHAVAN
Partner
Membership No. 9483
April 29, 2006

Chennai
Balance Sheet as at March 31, 2006
2006
Schedule
Rs. Millions
1.1
1.2
1,221.59
12,902.94
Rs. Millions
2005
Rs. Millions
14,124.53
1,189.29
10,489.36
11,678.65
6,919.28
1,796.89
22,840.70
2,634.96
6,169.10
8,804.06
1,708.48
22,191.19
Sources of funds
Shareholders' funds
Capital
Reserves and surplus
Loan funds
Secured loans
1,846.91
5,072.37
1.3
1.4
Unsecured loans
Deferred tax liability - net

Total
Application of funds
1.5
Fixed assets
21,384.99
J.1,952.28^
9,432.7?
1,414.17
Gross block
Less Depreciation
Net block
Capital work-in-progress
Investments
20,022.50
11,084.04
8^938^46'
851.55
10,846.88
3,681.78
1.6
ijiaol
2,291.90
Current assets, loans and advances
Loans and advances
1.7
1.8
1.9
1.10
Less Current liabilities and provisions
1.11
Inventories
Sundry debtors
Cash and bank balances
Liabilities
Provisions
9,025.61
4,24337
6,028.76
3,026.39
22,324.13
5,680.81
4,587.66
7,966.82
3,337.34
~~2 1,5 7 2'. 63
11,468.95
2,616.21
14.085^
9,611.87
2,044.80
Net current assets
Misceltaneous'expenditure
(to the extent not written off or adjusted)
Total
1.12
8,238.97
73.07
9,915.96
193.32
22,840.70
22,191.19
Statement on significant accounting policies, Schedules 1.1 to 1.12 and

Notes to the Accounts form part of this Balance Sheet.
For and on behalf of the Board
K. SRIDHARAN
N. SUNDARARAJAN
Executive Director & Company Secretary
R. SESHASAYEE
Managing Director
This is the Balance Sheet referred to in our report of even date.


M.K. RAJAN
Partner
Membership No. 4059
R. RAGHAVAN
Partner
Membership No. 9483
April 29, 2006

Chennai
R.J. SHAHANEY
Chairman
Profit and Loss Account for the year ended March 31, 2006
2006
Rs. Millions
Rs. Millions
Schedule
Income
Sales
Less Excise duty
2.1
Other income
Expenditure
Manufacturing and other expenses
Depreciation, amortisation and impairment
Financial expenses
52,476.57
329.74
52,806.31
48,108.01
6,289.04
41,818.97
537.55
42,356.52
J;8,500.46
4,305.85
37,590.47
1,092.14
27.98
38,710.59
3,645.93
84.51
(301.66)
4,523.00
1,130.50
72.30
47.00
3,273.20
1,784.13
68.33
(1,000.00)
4,125.66
1,597.86
224.10
2,303.70
2.74
2.58
95.83
3,550.10
895.00
(59.00)
2,714.10
1,339.24
89.17
(1,000.00)
3,142.51
1,189.29
169.09
1,784.13
2.28
2.05
60,531.08
8,054.51
2.2
47,075.87
1,260.06
164.53
2.3
2.4
2.5
Profit before extraordinary items

Extraordinary items
Voluntary retirement scheme compensation amortised
Profit on sale of undertaking (refer note 11)
Profit before tax
Provision for taxation - Current tax
- Deferred tax
- Fringe benefit tax
Profit after tax
y
Balance profit from last year
Transfer from / (to) - Debenture redemption reserve
- General reserve
Proposed dividend
Tax on dividend
Balance profit carried to balance sheet
Earnings per share (Face value Re.l) - Basic (in Rs.)
- Diluted (in Rs.)
2005
Rs. Millions
Statement pn significant accounting policies, Schedules 2.1 to 2.5 and

Notes to the Accounts form part of this Profit and Loss Account.

K. SRIDHARAN
N. SUNDARARAJAN
R. SESHASAYEE
Managing Director
R.J. SHAHANEY
Chairman
This is the Profit and Loss account referred to in our report of even date.

M.K. RAJAN
Partner
Membership No. 4059
R. RAGHAVAN
Partner
Membership No. 9483
April 29, 2006

Chennai
Cash Flow Statement for the year ended March 31, 2006
2006
Rs. Millions
2005
Rs. Millions
4,523.00
3,550.10
1,260.06
1,092.14
Cash flow from operating activities

Profit before tax
Adjustments for:
Depreciation
Other amortisations
132.84
152.81
Unrealised foreign exchange gains / losses
102.05
(61,34)
Interest expense
Interest income
288.33
236.94
(193.87)
(258.39)
Income from investments
(87.47)
(106.78)
(Profit) / Loss on disposal of fixed assets / long term investments
(66.61)
(351.35)
Profit on sale of undertaking

Operating profit before working capital changes
(301.66)
5,656.67
4,254.13
Adjustments for changes in:

Inventories
Debtors
Advances
Current liabilities and provisions
Cash generated from operations
Income tax including Fringe benefit tax paid
Net cash flow from operating activities before extraordinary expenditure
(3,477.99)
(611.40)
(179.55)
(120.32)
314.73
(1,013.00)
2,051.52
2,675.05
4,365.38
5,184.46
(1,135.68)
(693.29)
3,229.70
4,491.17
Compensation under voluntary retirement scheme
(9.53)
(17.71)
3,220.17
4,473.46
Payments for assets acquisition
(2,646.86)
(1,824,56)
Proceeds on sale of fixed assets
54.34
48.56
Net cash flow from operating activities after extraordinary expenditure

Cash flow from investing activities
Proceeds on sale of undertaking

Purchase of long term and other investments
Sale / redemption of long term investments
Income from investments
620.00
(138.66)
(92.60)
479.68
154.16
- Interest
- Dividend
Changes in advances
Net cash flow used in investing activities
48.95
42.70
56.93
189.77
106 78
10.49
(1,335.85)
(1,554.47)
- Raised
186.69
4,975.34
- Repaid
(1,162.88)
(1,131.07)
Cash flow from financing activities

Long term borrowings
Changes in short term borrowings
(76.79)
76.79
(112.86)
Debenture / Foreign currency convertible notes issue and loan raising expenses paid
Interest paid - net
(166.96)
4.16
Dividend paid and tax thereon
(1,356.10)
(1,008.54)
Net cash flow from financing activities
(2,576.04)
2,803.82
Net cash inflow / (outflow)
(691.72)
5,722.81
Opening cash and cash equivalents
9,194.94 *
3,481.90
Closing cash and cash equivalents
8,503.22
9,204.71
Net increase / (decrease) in cash and cash equivalents
(691.72)
5,722.81
excludes cash and cash equivalents amounting to Rs. 9.77 million pertaining to undertaking sold during the year.
Refer Note 11 to the Accounts
A N N U A L REPORT 2005-06
Cash Flow Statement for the year ended March 31, 2006
2006
Rs. Millions
2005
Rs. Millions
Cash and bank balances excluding those relating to unclaimed dividend
6,015.53
7,956.96
Investments in money market instruments
2,520.34
1,217.48
Notes to the cash flow statement

1 Components of cash and cash equivalents:
Unrealised foreign exchange gains / losses
(32.65)
30.27
8,503.22
9,204.71
2 The conversion of Foreign currency convertible notes into equity shares has not been considered
in the above statement. Refer Note 10 to the Accounts.
K. SRIDHARAN
N. SUNDARARAJAN
R. SESHASAYEE
Managing Director
R.J. SHAHANEY
Chairman
This is the Cash Flow Statement referred to in our report of even date.

M.K. RAJAN
Partner
Membership No. 4059
R. RAGHAVAN
Partner
Membership No. 9483
April 29, 2006

Chennai
1,
Accounting convention
Financial statements are prepared in

accordance with the generally accepted
accounting principles including
accounting standards in India under
historical cost convention except so far
as they relate to revaluation of certain
land and buildings.
2.
Fixed assets and depreciation /

amortisation
2.1 Cost of all civil works (including

electrification and fittings) is capitalised
with the exception of alterations and
modifications of a capital nature to
existing structures where the cost of
such alteration or modification is
Rs. 100,000 and below. Other fixed
assets, including intangible assets and
assets given on lease, where the cost
exceeds Rs. 10,000 and the estimated
useful life is two years or more, is
capitalised. Cost of initial spares and
tools is capitalised along with the
respective assets. Cost of fixed assets is
net of credits under Cenvat / Vat
Scheme. Interest and other related costs,
including amortised costs of borrowings
attributable only to major projects are
capitalised as part of the cost of the
respective assets.
2.2 Assets are depreciated / amortised,
as below, on straight line basis:
a)
Leasehold land, over 40 years or
the period of the lease, whichever is
less;
b)
Leasehold land and buildings
subject to revaluation, is calculated on
the respective revalued amounts, over
the balance useful life as determined by
the valuers in the case of buildings and
as per (a) above in the case of land;
c)
Buildings and plant and machinery
(except assets subject matter of
impairment) and other assets, including
intangible assets and assets given on
Lease, over their estimated useful lives or
lives derived from the rates specified in
Schedule XIV to the Companies Act,
1956, whichever is lower;
d)
Assets subject to impairment, on
the asset's revised carrying amount, over
its remaining useful life.
2.3 Depreciation/amortisation is
charged for the full year on the additions
made during the first half of the year
and for six months on the additions
made during the second half of the year.
Changes to the cost of an asset in
subsequent years on account of price
adjustments, changes in duties or similar
factors are depreciated / amortised in
the same way as done in the case of the
original cost of the asset. No
depreciation is provided for in respect of
assets disposed off during the year.
3.
Investments
Long term investments are stated at cost

less provision for diminution other than
temporary, if any. Current investments
are valued at lower of cost and market
value.
4.
Inventories
4.1 Inventories are valued at Lower of

cost and net realisable value; cost being
ascertained on the following basis:
- Stores, spares, consumable tools,
raw materials and components: on
monthly moving weighted average basis.
In respect of works-made components,
cost includes applicable production
overheads.
- Work-in-progress, finished /
trading goods: under absorption costing
method.
4.2 Cost includes taxes and duties and
is net of credits under Cenvat / Vat
Scheme.
4.3 Cost of patterns and dies is
amortised equally over five years.
4.4 Surplus / obsolete / slow moving
inventories are adequately provided for.
5.
Foreign currency transactions
5.1 Foreign currency transactions

(including booking / cancellation of
forward contracts) are recorded at the
rates prevailing on the date of the
transaction. Monetary assets and
liabilities (including forward contracts)
in foreign currency are translated at year
end rates. Exchange differences arising
on settlement of transactions and
translation of monetary items (including

forward contracts) are recognised as
income or expense.
5.2 The premium or discount arising
on forward contracts is amortised over
the life of the contract.
5.3 Investments in equity capital of
companies registered outside India are
carried in the Balance Sheet at the rates
prevailing on the date of the transaction.
5.4 Income / expenditure of overseas
branches is recognised at the average
rate prevailing during the month in
which transaction occurred.
6.
Amortisation of deferred
expenditure
Expenditure incurred on issue of

debentures / raising loans is amortised
over the period of such borrowings.
Premium paid on prepayment of any
borrowing is amortised over the
unexpired period thereof or sixty months,
whichever is less. Compensation under
Voluntary retirement scheme is amortised
over thirty six months.
7.
Revenue recognition
Revenue from sale of products is

recognised on despatch or appropriation
of goods in accordance with the terms of
sale and is inclusive of excise duty and
export incentives, but net of incentive
on sales including commission, rebates
and discounts. Revenue arising due to
price escalation claim is recognised in
the period when such claim is made in
accordance with terms of sale.
8.
Government grants
Grants in the form of capital/investment

subsidy are treated as Capital reserve.
Incentives in the nature of subsidies
given by the Government are reckoned in
revenue in the year of eligibility.
9.
Intangible items
Expenditure on the design and

production of prototypes is charged to
revenue as incurred.
10.
Employees' retirement benefits
Liabilities for gratuity to all employees

and for superannuation to the eligible
employees are determined in accordance
with the schemes administered by Life
Insurance Corporation of India and
contributions payable under the said
schemes are charged to revenue. Liability
for leave encashment and other
retirement benefits is provided on
actuarial basis.
11.
Product warranties
Provisions for product warranties are

made for contractual obligations in
accordance with the policy in force and
estimated for the unexpired period'.
12.
Deferred tax
Deferred tax is recognised on timing

differences, being the difference
between taxable income and accounting
income that originate in one period and
are capable of reversing in one or more
subsequent periods.
Deferred tax assets are recognised only
to the extent there is a reasonable
certainty of its realisation.
Schedules annexed to and forming part of the Balance Sheet as at March 31, 2006
2006
Rs. Millions
1.1
2005
Rs. Millions
CAPITAL
Authorised
1,500,000,000 (2005 : 1,500,000,000) Equity shares
of Re.l (2005 :Re.l) each
Issued
a)
165,025,815 (2005: 165,025,815) Equity shares of Re.l (2005: Re.l) each
b)
341,742,940 (2005: 341,742,940) Equity shares of Re.l (2005: Re.l)
each issued by way of conversion of debentures
c)
323,157,240 (2005: 323,157,240) Equity shares of Re.l (2005: Re.l)
each issued through Global depository receipts
d)
359,572,880 (2005: 359,572,880) Equity shares of Re.l (2005: Re.l) each
e)
32,292,576 (2005: Nil) Equity shares of Re.l (2005: Re.l) each
issued by way of conversion of Foreign currency convertible notes (FCCN)
1,500.00
165.03
165.03
341.74
341.74
323.16
359.57
323.16
359.57
32.29
1,189.50
Subscribed
1,221,586,776 (2005 : 1,189,294,200) Equity shares of Re. 1 (2005: Re.l)

each fully paid up
Add
Forfeited shares (Rs.3,800)
1,221.59
1,189.29
1,221.59
1,189.29
Of the above,
1.
14,788,880 (2005: 14,788,880) Equity shares were allotted under an

agreement without payment being received in cash.
2.
62,308,110 (2005:62,308,110) Equity shares were allotted as fully paid up

by way of bonus shares by capitalisation out of General reserve and from
Securities premium account.
3.
LRLIH Limited holds 441,166,680 (2005:441,166,680) equity shares of Re.l

(2005: Re.l) each and 5,486,669 Global depository receipts equivalent to
164,600,070 (2005: 164,600,070) Equity shares of Re. 1 (2005: Re.l) each.
LRLIH Limited ceased to be the holding company effective March 20, 2006
consequent upon certain foreign currency convertible note holders
exercising their option to convert the notes into equity shares. However,
LRLIH Limited holds foreign currency converible notes of US $ 50.93 million
with similar option. LRLIH Limited has advised the company about its
intention to convert FCCN of US $ 50.93 million, upon which LRLIH Limited
Would again become the holding company.
Refer Note 10 to the Accounts for option on unissued shares.
4.
1.2
RESERVES AND SURPLUS
Rs. Millions
Capital reserve
As per last Balance Sheet
Revaluation reserve
Less Transfer to Profit and Loss account
(Refer Note 3.7 (b) to the Accounts)
Securities premium
Add Premium on issue of shares upon
conversion of FCCN (Refer Note 10 to
the Accounts)
Less Expenses relating to issue of FCCN
2006
Rs. Millions
8.95
245.89
6.44
8.95
252.33
239.45
4,678.51
6.44
245.89
4,789.22
968.78
110.71
5,647.29
2005
Rs. Millions
Rs. Millions
4,678.51
2006
Rs. Millions
Rs. Millions
Debenture redemption reserve
Less Transfer to Profit and Loss account
General reserve
Add Transfer from Profit and Loss account
Add Write back of Deferred tax liability
Less Impairment of assets
(Refer Note 12 to the Accounts)
415.83
68.33
505.00
89,17
..
3,356.05
1,000.00
-
Profit and Loss account - surplus
1.3
7/7 en
200f5
Rs, Millions
Rs, Millions
A 1 C, O"2
2,433,94
1,000.00
43,57
121,46
4,356.05
2,303.70
12,902.94
3,356,05
1,784.13
10,489.36
1,390.00
1,663,33
SECURED LOANS
Debentures
Term loans
450.00
- From banks
- From financial institutions
1,846.91
1.
2.
a)
Debentures and term loans from banks aggregating Rs. 1840.00 million (2005: Rs. 2,537.81 million) are secured by
a first charge created on certain immovable properties and movable assets of the company.
b)
Debentures und term loans from financial institutions aggregating Rs.6.91 million (2005: Rs. 97.15 million) are
secured by a second charge on certain immovable properties and movable assets of the company.
c)
Cash credit facility is secured by a first charge on certain movable assets and goods-in-transit and book debts
(excluding deferred receivables) and also by a charge on the immovable properties subordinate to the existing
charge created in favour of the lenders.
d)
Post shipment credit is secured by deposit of bills of exchange accepted by the customers and in certain cases is
also guaranteed by the concerned governments and/or customers' bankers.
a)
The company has powers to reissue debentures aggregatin
b)
Debentures are to be redeemed at par in single

Debenture
Series
2005
Rs . Millions
Dates of Redemption
XXIX
50.00
AL1
83.33
166.67
AL2
33.33
66.67
15 October 2005 and 2006
AL3
16.67
33.33
19 December 2005 and 2006
AL4
400.00
400.00
AL5
6.67
AL6
50.00
50.00
15 February 2007, 2008 and 2009
AL7
83.33
01 June 2005
50.00
50.00
15 October 2007
AL10
250.00
250.00
20 June 2006
ALII
500.00
500.00
17 September 2008, 2009 and 2010
1,390.00
1,663.33
AL 9(A)
3.
2006
Rs. Millions
/ equal i
13.33
01 August 2005 and 01 February 2006

15 June 2005 and 2006
10 January 2007, 2008 and 2009

15 February 2006 and 2007
Loans include Rs 546.91 million (2005: Rs.788.05 million) due within 12 months.
1.4
2006
Rs. Millions
2005
Rs. Millions
1,623.63
3,448.74
"5,072.37
0.48
76.79
1,717.33
4,374.50
6,169.10
308.33
76.79
286.54
UNSECURED LOANS
Fixed deposits
Loans and advances - From banks
- Deferred sales tax
Foreign currency convertible notes (refer Note 10 to the Accounts)
Of the above, amount due within 12 months
Loans and advances - From banks
- Deferred sales tax
1.5
FIXED ASSETS
Rs. Millions
DESCRIPTION
CROSS BLOCK ,COSr/VALU,

2005
Land
- Freehold
- Leasehold
Buildings
I
Plant and machinery
Furniture, fittings and
106.75 ;
868.07
246. 35| 55.51
Vehicles
1
;
Assets given on lease

Plant and machinery - windmills
Intangible assets
337.36
2006
22.97!
317.88
146.07
36.05 2,483.51
344. 35: 16,229 .01
13.96
14.52
Upto
2006
2006
235.62|
12.01
160.05
60.44
71.93
152.27:
20,022.50 1,863.70!
\18,756.42\ 1,408.11\
i
Technical knowhow - acquired I
- Acquired
Previous year
Capital work-in-progress
2005
317.88: 324.78!
99.83
96 .12
49 .95
915.36 1,568 .15 1,548.48
9,673.22 6,555.791 6,451. 78 I
960.86
287.34
704.61
211.20
256.25
76.14
337.36
22.11
315.25
241.12
63.00
247.63
220.491
69.36
154.84
501.21 21,384.99
142,03 20,022.50
103.30
171.90
75.73
72.19
126.32:
94.17
33.98!
77.61
77.23!
11,952.28 9,432.71: 8,938.46:
11,084.04
I
1,414.17! 851.55
10,846.88 9,790.01!
1.
Certain Freehold and Leasehold land and buildings were revalued as at December 31, 1984.
2.
A portion of buildings in Bhandara (estimated gross value Rs. 7.20 million) is on a land, title for which is yet to be
transferred to the company.
3.
Computer software
- Developed
Deductions
16.07!
324.78!
146.02
0.05
2,402.65
116.91
;15 ,486.69 1,086.67
equipment
Additions
NET BLOCK
Cost / Valuation of Buildings as at March 31, 2006 includes:

a)
Rs.0.34 million being cost of shares in Housing Co-operative Society representing ownership rights in residential flats
and furniture and fittings thereat.
b)
Rs.13.24 million representing cost of residential flats including undivided interest in land.
4.
Depreciation / impairment upto March 31, 2006 includes amortisation of cost / value of leasehold land.
5.
Cost of additions and capital work-in-progress includes exchange difference for the year Rs. Nil (2005: Rs.18.54 million)
Nos.
1.6
2006
Rs. Millions
Nos.
2005
Rs. Millions
INVESTMENTS
DESCRIPTION
I.
Current investments - other than trade

1) Mutual Fund Units of Rs. 10 each
G101 Grindlays fixed maturity plan -10th
plan - dividend
10,000,000
100.00
20,000,000
200.00
9,992,007
99.97
Prudential ICICI fixed maturity plan series XXVI - quarterly plan - dividend option
9,994,004
100.00
Kotak fixed maturity plan - series II - dividend
10,000,000
100.00
UTI fixed maturity plan - (quarterly / 0305/ 11) dividend plan
15,000,000
150.00
3,164,881
37.51
Birla fixed term plan- series A - growth
20,000,000
200.00
Birla fixed maturity plan quarterly series 2

Plan A - dividend payout
Prudential ICICI liquid plan - institutional plus daily dividend option

UTI fixed maturity plan - (quarterly / 0306/ 1) dividend plan
20,000,000
200.00
HSBC fixed term series - 8- growth
15,000,000
150.00
Kotak FMP series 23- dividend
5,000,000
50.00
HDFC FMP 3M march 2006 (1)

institutional plan - dividend
20,000,000
200.00
LIC MF FMP series 6-3 months dividend plan
25,000,000
250.00
Chola FMP series 3 (qtly plan -1) dividend
5,000,000
50.00
2) Mutual Fund Units of Rs.1000 each

UTI liquid cash plan - institutional daily income option
29,597
30.00
400
400.00
9,362,442
165.02
3) Non convertible redeemable bonds of

Rs. 1 million each
Induslnd Bank Limited
'ICICI Bank Limited
1,400
20
1,400.00
8,361,803
147.38
20.34
4) Equity shares of Rs.10 each

II.
Long term investments

A) Trade
1) Equity shares of Rs. 10 each
Automotive Coaches and Components Limited
1,410,664
11.23
1,410,664
11.23
Ennore Foundries Limited
3,424,449
143.06
1,426,854
23.20
Irizar TVS Limited
1,400,000
14.00
1,400,000
14.00
600,000
6.00
Ashley Transport Services Limited
400,000
40.00
400,000
40.00
Gulf Ashley Motor Limited
354,000
35.40
226,000
22.60
Arkay Energy (Rameswarm) Limited

2) Equity shares of Rs.100 each
3) Equity shares of Srilankan Rs. 10 each

Lanka Ashok Leyland Limited
1,008,332
5.75
1,008,332
5.75
400
0.03
400
0.03
4) Equity shares of Rs. 100 each, partly paid-up

Adyar Property Holding Co. Limited (Rs.65 paid up)
2006
Rs. Millions
Nos.
1.6
Nos.
2005
Rs. Millions
INVESTMENTS (Contd.)
5) 6% Cumulative non-convertible redeemable

preference shares of Rs, 100 each
2,500,000
250.00
2,500,000
250,00
165
0,83
6) Units of Rs. 5,000 each

Auto Ancillary Fund
B)
Other than trade

1) Equity shares of Rs. 10 each
Ashley Holdings Limited
750,000
7,50
750,000
7.50
Ashley Investments Limited
750,000
7.50
750,000
7.50
1,442,400
14.42
1,442,400
14.42
Ashok Leyland Project Services Limited

Chennai Willingdon Corporate Foundation
(cost Rs. 900)
100
100
Hinduja HCL Sing Tel Communications

Private Limited (cost Rs. 100)
10
Hinduja TMT Limited
4,058
ICICI Bank Limited
0.81
24,231
1.05
29,070,185
512.38
8,430,000
84.30
8,430,000
84.30
8,670,000
86.70
8,670,000
86,70
__,_-._
2) 2% Non-cumulative non-convertible
redeemable preference shares of Rs. 10 each
Less Provision for diminution in value
_____
206.07
?06,90
"~3,681.78
".TgljO
- Cost
3,325.03
1,953,95
-Market value
4,698.02
3.543,57
562.82
5<U,85
1. Investments are fully paid-up unless otherwise stated.

2. Quoted Investments
Unquoted Investments - Cost
3. The shares in the following companies can be disposed of/encumbered only with the consent of Banks / Financial
Institutions who have given loans to / subscribed to the Debentures of those companies:
aj Automotive Coaches and Components Limited
b) Ennore Foundries Limited
4. Shares in Induslnd Bank have been classified as long term and current investments to comply with certain
administrative guidelines of banking regulatory authority.
1.6
INVESTMENTS (Corttd.)
5.
Purchase and sales/redemption of investments during the year are as under:
Sales/Redemption
Purchases
Description
Nos.
Cost
Nos.
Rs. Millions
1,213.43
Cost
Rs. Millions
a) Units in schemes of various funds

Birla Sun Life mutual fund
121,106,711
Canbank mutual fund

Chola mutual fund
|
Deutsche mutual
fund
.
DSP Merrill Lynch mutual fund

Franklin Templeton investments
1,313.40
155.09
50.03
4,982,606
50.03
4,982,606
20,481,133
205.09
15,481,133
56,670,062
567.81 i
56,670,062
567.81
5,351,504
1,022.26 i
5,351,504
1,022.26
50.02
50,020
HDFC mutual fund
131,098,718
50.02
50,020 \
250.00
92,467,668
925.57
77,467,668
775.57
ING Vysya mutual fund
86,750,935
868.22
86,750,935 j
868.22
240.31 ,
23,991,284 i
240.31
JM financial mutual fund
23,991,284
Kotak mahindra mutual fund

LIC mutual fund
Principal mutual fund
Prudential ICIC^ mutual fund
Reliance mutual fund
Standard Chartered mutual fund
Sundaram mutual fund
Tata mutual fund
5,000,000 ;
69,668,050
840.76
'
74,668,050 1
890.76
560,105,038
6,097.92 i
535,105,038 :
5,847.92
71,307,688
713.12
156,343,425
1,807.34
82,700,629
SBI mutual fund
50.00
25,000,000
HSBC mutual fund
955.49 !
71,307,688
713.12
169,502,310
1,944.85
82,700,629
955.49
8,976,373
90.06
3,136.85
8,976,373
90.06
303,672,040
3,036.85
313,672,040
13,377,569
135.05
13,377,569
135.05 i
933,295 1
1,017.59
19,969,234 !
5,193.58
933,295
1,017.59
24,939,637
5,213.58
20
20.34
- '
1,000
1,000.00
UTI mutual fund

b) Redeemable bonds
ICICI Bank Limited
'.
c) Equity shares
Arkay Energy (Rameswarm) Limited
6.00 |
600,000
Auto Ancillary Fund

-.

_.
. . . .
..
1,997,595
128,000
. : ..
119.86
12.80
Hinduja TMT Limited
165
- ;
0.83
- 1
170,000
34.00 :
1,000,639
17.64
1.7
2005
Rs. Millions
233.26
133.06
2,72832
1,437.30
4,493.67
9,025.61
227.37
142.06
2,306.29
912.41
2,092.68
5,680.81
4,139.65
150.19
4,289.84
46.47
4,243.37
4,162.16
466.12
4,628.28
40.62
4,587.66
4,243.37
46.47
4,587.66
40.62
156.49
361.42
4,133.35
455.06
4,266.86
1,794.39
2.37
14.06
2.78
46.57
1,633.44
4,355.72
2,020.75
5,891.11
9.91
13.26
5.61
6,028.76
7,966.82
1.35
0.04
7.85
0.42
0.25
3.10
0.04
6.51
1.96
INVENTORIES
Stores and spares
Consumable tools
Raw materials and components (including patterns and dies)
Work-in-progress
Finished/trading goods
1.8
2006
Rs. Millions
SUNDRY DEBTORS
Trade
Others
Less Provision
Of the above,
1.
Unsecured
- Considered good
- Considered doubtful
2.
Age analysis of debts

- Outstanding for more than six months (includes deferred
receivables Rs. Nil (2005 - Rs. 96.94 million))
- Other debts
3.
1.9
Debtors include Bills receivable
CASH AND BANK BALANCES

Cash and stamps on hand
Cheques on hand and remittances in transit
Balances with scheduled banks
Current account
Deposit account
Balances with other banks
Current account
Deposit account
Balances with other banks

Current account
ABSA Bank - South Africa - denominated in South African Rand
Citibank New York - denominated in US$
National bank of Sharjah - Sharjah - denominated in Dirham
National bank of Sharjah - Sharjah - denominated in US$
Standard Chartered Bank - Ghana - denominated in Ghana Cedis
Standard Chartered Bank - Ghana - denominated in US$ (Rs.4,423)
Deposit account
13.26
Maximum balance at any time during the year

Current account
ABSA Bank - South Africa - denominated in South African Rand
Citibank New York - denominated in US$
National bank of Sharjah - Sharjah - denominated in Dirham
National bank of Sharjah - Sharjah - denominated in US$
Standard Chartered Bank - Ghana - denominated in US$
17.51
6.04
7.85
61.97
0.94
0.01
Deposit account
13.26
6.91
4,361.00
3.11
4.73
2006
Rs. Millions
2005
Rs. Millions
Other receivables
2,327.30
244.09
602.26
Less Provision
3,173.65
147.26
2,399.78
563.87
520.95
3,484.60
147.26
3,337.34
1.10 LOANS AND ADVANCES

Advances recoverable in cash or in kind
or for value to be received
Balances with customs, port trust, central excise etc.
Of the above,
1. Secured
- Considered good
144.00
357.80
2. Unsecured
- Considered good
2,882.39
147.26
2,979.54
147.26
- Considered doubtful
3. Due from Directors/Officers
- At the end of the year
- Maximum amount due at any time during the year
4. Advances for capital items and investments
1.95
2.58
0.63
1.95
568.99
325.65
3,539.72
2,264.79
557.80
6,362.01
951.13
58.29
11,468.95
492.01
5,862.09
911.46
81.52
9,6-11.87
285.69
1,597.86
224.10
273.91
234.65
2,616.21
14,085.16
259.98
1,189.30
166.80
248.38
180.34
2,044.80
11,656.67
25.53
54.31
23.26
7.86
0.82
13.23
4.07
1.14
9.86
6.01
1.11 CURRENT LIABILITIES AND PROVISIONS

Liabilities
Acceptances
Creditors for materials and expenses
-
Small scale industrial undertakings
- Others
Other liabilities
Interest accrued but not due on loans
Provisions
Provision for current taxation - net
Proposed dividend
Tax on proposed dividend
Product warranties
Retirement benefits
Of the* above,
1. Provision made for the year
-
Product warranties
Retirement benefits
2. Other liabilities include

-
Unclaimed matured fixed deposit and interest accrued thereon
Unclaimed dividends
Unclaimed debenture interest
1.12 MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted)
Debenture issue / Loan raising expenses
Premium on prepayment of borrowings
Compensation under voluntary retirement scheme
0.37
42.55
30.15
73.07
1.81
86.38
105.13
193.32
Schedules annexed to and forming part of the Profit and Loss Account as at March 31, 2006
2.1 SALES
Commercial vehicles
Engines
Ferrous castings
Spare parts and others
Nos
Nos
Rs. Millions
61,655
7,171
52,508.74
1,357.51
Tonnes
OTHER INCOME
Rs. Millions
54,740
6,254
10,03?
41,774.12
1,154,28
479.71
_J[,837.83
____
48,868.12
_____760.11
1,173.00
Less Commission, rebate and discounts
2,2
2005
2006
Unit of
Measurement
Rs. Millions
Rs, Millions
39.77
33.51
57.23
Income from current investments

Dividend
Interest
57.23
73.28
Income from long term investments

Dividend - Trade
- Others
34.91
52.56
Profit on sale of fixed assets - net
87.47
43.21
67,15
67.15
38.98
Profit on sale / redemption of investments - net
Current
Long term
54.70
23.40
293.95
43.42
40,645.83
301.33
30,020.40
212.23
Miscellaneous income
2.3
A.
MANUFACTURING AND OTHER EXPENSES

Materials
Consumption of raw materials
and components-net
Less Scrap sales
Purchase of trading goods
B.
C.
33737
36.82
537.55
40,344.50
991.72
Employees' remuneration and benefits

*
Salaries, wages and bonus

Contribution to provident, gratuity
and other funds
Welfare expenses
Other expenses
Power and fuel
Consumption of stores and tools
Repairs and maintenance
- Buildings
- Machinery
Rent
Rates and taxes
Insurance
Selling and administration expenses - net
Research and development
Bad and doubtful debts/advances provided/written-off
- Net of recovery/write back
3,088.90
2,604.82
474.23
475.74
500.71
434.92
4,038.87
414.06
342.28
496.61
289.77
120.89
332.86
119.40
306.92
65.46
2,452.09
197.35
99.51
285.70
118.12
8.08
29,808.17
716.66
3,540.45
271.17
59.01
1,793.08
188.00
4,359.39
3,612.71
2006
Rs. Millions
2005
Rs. Millions
Rs. Millions
8s. Millions
Movement in value of stock of finished/

trading goods and work-in-progress
Opening stock
Closing stock
(Increase)/ Decrease
2,823,12
3,005.09
2,924.93 *
5,930.97
(3,006.04)
(181.97)
351.53
47,079.97
102,55
37,598.57
4.10
8,10
47,075.87
3? 590,47
Excise duty in value of finished goods

(Increase)/ Decrease
Less Expenses capitalised
excludes work-in-progress of Rs.80.16 million pertaining to undertaking sold during the year.
Refer Note 11 to the Accounts
1.
Rent includes amortisation of cost/value of leasehold

assets as reduced by transfer from Revaluation
reserve (Refer Note 3.7(b) to the Accounts)
2.
3.03
1.90
2,20
Selling and administration expenses include

Directors' sitting fees
2,4
3.06
DEPRECIATION, AMORTISATION tWO lf?PA!RMENT

Buildings
Plant and machinery
Furniture, fittings and equipment
Vehicles
72.94
922.25
88.63
35.83
75.51
930.87
88.74
41.87
Assets given on lease

Plant and machinery - windmills
22.11
Intangible assets
Computer software
- Developed
- Acquired
Technical knowhow - Acquired
39.59
38.46
47.41
31.50
J28J56
20.79
1,219.35
5.75
1265.81
Less Transfer from Revaluation reserve
5.75
(Refer Note 3.7(b) to the Accounts)
121.46
Less Transfer from General reserve

(Refer Note 12 to the Accounts)
1,260.06
1,092.14
11.73
136.16
Of the above, Impairment of Plant

and machinery
2006
Rs. Millions
2.5
Rs. Millions
2005
Rs. Millions
Rs. Millions
FINANCIAL EXPENSES
Interest
288.33
236.94
Others
95.41
67.07
383.74
304.01
Less
Premium (net)/ Interest earned

on bills receivable, deposits and
other accounts
Cash discounts earned
193.87
25.34
258.39
219 21
17.64
276 03
164.53
27.98
1.44
3.99
2. Premium on prepayment of
borrowings amortised
43.83
49.96
3. Tax deducted at source from interest earned
27.91
29.51
Of the above,
1. Debenture issue / Loan raising
expenses amortised
Notes to the Accounts for year ended March 31, 2006
2006
2005
Not
Applicable
Not
Applicable
INFORMATION REGARDING GOODS

MANUFACTURED, IMPORTS AND
FOREIGN CURRENCY TRANSACTIONS
Unit of
Measurement
1.1
Licensed Capacities
1.2
Installed Capacities - Two shifts

(as certified by the Managing director)
1.3
Commercial vehicles
Nos.
Ferrous castings
Tonnes
77,200
67,500
24,000
Nos.
65,085
54,519
Engines @
Nos.
7,190
6,395
Ferrous castings
Tonnes
18,767
Rs. Millions
Rs. Millions
Production
Commercial vehicles
@ Engines manufactured against spare

capacity of commercial vehicles
1.4
Finished/trading goods and work-in-progress

Opening stock
Commercial vehicles
Engines
Nos.
Nos.
2,393
213
1,429.48
30.81
2,660
78
1,426.50
8.64
Parts for sale

- Bought out finished
432.58
- Works made
199.81
477.04
204.65
Work-in-progress
832.25*
706.29
- Refer note under schedule 2.3

Closing stock
Commercial vehicles
Nos.
5,652
3,752.77
2,393
1,429.48
Engines
Nos.
222
35.31
213
30.81
Parts for sale

- Bought out finished
508.46
- Works made
Work-in-progress
432.58
197.13
199.81
1,437.30
912.41
Capitalised / transferred for internal and other use
1.5
- Commercial vehicles
Nos.
171
46
- Engines
Nos.
10
- Ferrous castings
Tonnes
8,730
Consumption of raw materials and components

Plates, sheets and angles
Tonnes
Bars
Steel tubes
Tonnes
Metres
Tyres, tubes and flaps
Sets
Pig iron, steel scrap and alloys
35,642
394
2,749
564,228
Tonnes
Forgings and castings

Finished and other items
Of the above
- Imported items
- Indigenous items
., .
1,099.67
20 16
1.19
3,261.11
-
18,232
478.46
2 935
'
351,780
129.17
19.81
457,532
2,400.02
22,738
532.02
4,749.00
3,523.47
31,514.70
22,937.45
40,645.83
30,020.40
1,057.73
2.60%
39,588.10
97.40%
873.14
2.91%
29,147.26
97.09%
A N N U A L R E P O R T 2 0 0 5 - 0 6 Hi
2005
Rs, Millions
2006
Rs. Millions
1.6
Imports (c.i.f)
569.86
24.90
41.06
426.92
Raw materials
Trading goods and others
Spares and tools
Capital goods
1.7
Expenditure remitted in foreign currency

Royalty
15,86
178.83
12,30
263.16
38.11
12.23
Technical knowhow
Interest and commitment charges
Commission paid on sales
Research and development
Travel
Other expenses
1.8
Earnings in foreign currency

Export - FOB value
Interest
Others (Freight, insurance, dividend and commission earned)
7
1.9
2.
2.1
2.2
4,513.05
0.12
_
210.62
___,
5,228.75
119.96
JH1
5,452.44
Dividend remitted in foreign currency

Number of non-resident shareholders
1
Number of shares on which
dividend was remitted
441,166,680
Dividend remitted during the year relating
to previous year
INFORMATION REGARDING MANAGERIAL REMUNERATION
Remuneration to Managing director
Salary
Commission
Perquisites
Perquisites include amounts evaluated as per Income tax Rules
in respect of certain items.
Computation of net profits under section 198/349
of the Companies Act, 1956
Profit before tax
Add
- Depreciation as per books
- Profit on sale of fixed assets under section 349 - net
- Directors' remuneration and amortisation of expenses
Deduct
- Depreciation deductible
- Profit on sale of fixed assets as per books - net
- Capital profit on sale of undertaking
- Others capital profits
Net Profit
The total remuneration as stated in 2.1 above is within
the maximum permissible limit under the Act.
44,116,668
441.17
330.88
6.48
4.32
5,04
3.36
2.49
10.89
4523.00
3,550.10
1260.06
33.54
61.05
5877.65
1,092.14
31,70
1244.96
43.21
125.11
76.11
4388.26
__J54:88
4,738.82
1,121.18
38.98
3.
OTHER FINANCIAL INFORMATION
3.1
Capital commitments (net of advances) not provided for (including

Rs. 161.78 million (2005 : Rs. 88.11 million) in respect of intangible assets)
3.2
Contingent Liabilities
a)
Guarantees
b)
c)
Partly paid shares

Claims against the company not acknowledged as debts
d)
Bills discounted
Interest charge on
3.3
a)
b)
3.4
Debentures
Fixed loans
2006
Rs. Millions
2005
Rs. Millions
2,326.89
2,503.30
114.62
147.50
0.01
63.56
0.01
158.70
6,957.82
4,182.80
132.11
58.09
157,61
56.73
Auditors' remuneration
a)
Included under Selling and administration expenses

For financial audit
For cost audit
b)
1.80
0.12
For taxation matters

For company law matters
0.81
0.07
For other matters

Expenses reimbursed
1.92
0.20
1.81
0.58
0.34
0.06
3-00
Included under Securities premium account in connection with Foreign
3.5
currency convertible notes issue

Total Research and development costs charged to the Profit
and Loss account (including amount shown under Schedule 2.3)
3.6
a)
3.7
2.40
0.12
627.79
456.16
Net exchange difference debited / (credited) to Profit and Loss account
84.56
(99.84)
b)
Of the above, unrealised gains / loss debited/(credited) to Profit and Loss account
35.33
(105.70)
c)
Income deferred to be recognised in subsequent

accounting periods in respect of forward contracts
2.37
1.01
In respect of the following fixed assets useful lives lower than those derived from the rates specified in Schedule
XIV to the Companies Act, 1956 have been reckoned in computing depreciation/amortisation for the year.
a)
'
'
'
Buildings
Revalued buildings are depreciated over the balance useful life as determined by the valuers.
Plant and machinery
Assets subjected to impairment - revised carrying amount over its remaining useful life
Windmils
Furniture and fittings and equipment
Furniture and fittings
Office equipment
Data processing system
Vehicles
Cars and motorcycles
Trucks and buses
Intangible assets
Computer software
- Developed
- Acquired
Technical knowhow - acquired
b)
12
8
8
5
3
5
5
5
5/6
Depredation for the year computed on revalued assets over the balance useful life on straight line method includes
a net charge of Rs. 6.44 million (2005 : Rs. 6.44 million) [Rs. 0.69 million (2005 : Rs. 0.69 million) in Schedule 2.3
and Rs. 5.75 million (2005 : Rs. 5.75 million) in Schedule 2.4] being the excess over the depreciation computed by
the method followed by the Company prior to revaluation and the same has been transferred from Revaluation
reserve to the Profit and Loss Account.
4.
a)
Profit after taxation as per Profit and Loss account (in Rs. million)
Basic earnings per share (Face value Re. 1) (in Rs.)
Profit before extraordinary items net of tax (in Rs. million)
b)
Basic earnings per share (Face value Re. 1) excluding

extraordinary items net of tax (in Rs.)
Diluted earnings per share
(A)
(B)
(A/B)
(C)
(C/B)
Profit after taxation as per Profit and Loss account (in Rs. million)
Add: Interest and other costs net of tax
Adjusted profits (in Rs. million)
Weighted average number of equity shares
Diluted earnings per share (Face value Re. 1) (in Rs.)
Diluted earnings per share (Face value Re. 1) excluding
extraordinary items net of tax (in Rs.)
COMPOSITION OF NET DEFERRED TAX LIABILITY
(A)
(B)
(A/B)
Deferred tax liabilities

Depreciation / Research and development expenditure
Other timing differences
Deferred tax assets
Voluntary retirement scheme compensation
Unabsorbed capital losses
Other timing differences
6.
2005
3,273.20
1,192,925,337
2,714.10
1,189,294,200
2.74
3,095.30
2.28
2,774.86
2.59
2.33
3,273.20
94.73
2,714.10
3,367^93
2,680.89
1,302,890,820
1,310,294,955
2.58
2.05
2.45
Rs. Millions
Rs. Millions
Basic earnings per share

Weighted average number of equity shares outstanding
5.
2006
EARNINGS PER SHARE
(33.21)
2.09
1,858.28
14.71
1,732.32
(31.53)
-
(22.71)
29.87
(44.57)
(16.18)
(14.82)
1,796.89
1,708.48
SEGMENT INFORMATION
The company is principally engaged in a single business segment viz., Commercial vehicles and related components and
operates in one geographical segment as per Accounting standard 17 on 'Segment Reporting' issued by the Institute 'of
Chartered Accountants of India.
RELATED PARTY DISCLOSURE
a)
List of parties where control exists

Holding company (upto March 20, 2006)
LRLIH Limited, United Kingdom (refer note in schedule 1.1)
' Machen-Iveco Holdings SA
(Holding Company of LRLIH Limited, United Kingdom)
Fellow subsidiary (upto March 20, 2006)
vEnnore
b)
Foundries Limited
Other related parties with whom transactions have taken place during the year
Associates
Ennore Foundries Limited (from March 21, 2006)

Irizar TVS Limited
Lanka Ashok Leyland Limited, Sri Lanka
Enterprises which have significant influence
Machen Development Corporation, Panama
Key management personnel
Mr. R Seshasayee, Managing director
c)
2006
Rs. Millions
2005
Rs. Millions
2,199.35
1,647.39
432.16
727.29
28.36
118.16
1,306.04
1,198.99
Transactions with related parties

(i)
Purchase of raw materials and components

Irizar TVS Limited
(ii) Sales
760.90
(iii) Other expenditure

Associate companies
LRUH Limited
42.51
51.34
11.31
2.82
2.91
3.59
(iv) Interest income

Associate companies
(v) Dividend income
30.54
4.37
(vi) Dividend (net) paid

441 17
LRUH Limited
(vii) Remuneration to Key management personnel
330.88
Refer $.1 of Notes to the Accounts

(viii)Sale of fixed assets
0.47
(ix) Investment/ (Redemption)

119.86
Other associate companies

(Refer Note 5 in Schedule 1.6)
(x) Sale of undertaking
12.80

(Refer 11 of Notes to the Accounts)
62.60
620.00
(xi) Outstanding balances (excluding application money for investments)
*- -- Debtors - --- -

--
13.66
11.04
Loans and advances

121.43
195.38
Machen Development Corporation
206.56
206.56
0.37
0.44
Creditors for materials and expenses

30.54
19.21
Associate Companies
-
157.58
4.73
4.65
3.36
Financial Guarantees
43.11
76.74
66.50
66.50
(xii) Advances to associate companies in the nature of loan included in (xi) above
16.20
29.00
Ashley Investments limited
17.80
28.00
Maximum loan outstanding during the year from associate companies

29.00
73.55
28.00
61.65
8.
SALES TAX MATTERS

In respect of branch transfer of chassis from Tamil Nadu and subsequent sale in other States, Government of Tamil Nadu [GOTN]
had demanded sales tax on such branch transfers even though these chassis sales have suffered sales tax in other States.
The amount involved for the years 1986-87 to 1988-89 and 1989-90 to 1991-92 are Rs. 132.46 million and Rs. 737.74
million (Rs. 301.66 million of tax and Rs. 436.08 million of penalty) for which the company has paid tax of Rs. 120.35
million and Rs 120.92 million in other States respectively.
GOTN had also issued show cause notices for similar transactions for the years 1992-93 to 2000-01. The company had to
represent the case before various judicial forums including the Supreme Court. The Supreme Court confirmed, by its
judgement dated January 7, 2004, that an order accepting Form-F is conclusive and cannot be reopened by revisional
powers of the assessing authority except when there is commission of fraud, collusion, misrepresentation or suppression
of material facts or giving or furnishing false particulars is suspected. The Supreme Court has not decided the issues on
merits, but directed the Company to file a writ petition before the Madras High Court or Central State Tax Appellate
Authority (CSTAA) and also implead other States, if necessary.
On the direction of the Supreme Court, the company preferred writ petition before the Madras High Court which by its
order dated September 1, 2005 set aside the assessment order and order of the Sales Tax Appellate Tribunal for the
years 1986-87 to 1988-89 and remitted the matter back to the assessing officer to re-do the assessment in line with the
guidelines prescribed by the Supreme Court vide its order dated January 7, 2004 referred to above. Subsequently, the
assessing authority issued a fresh notice dated March 16, 2006 for assessment year 1986-87 to which the company has
filed its replies.
Similar demands were made by the Government of Rajasthan (GOR) in respect of branch transfer of chassis out of the
State of Rajasthan. GOR has levied a tax of Rs. 21.26 million (and penalty / interest thereon Rs. 57.11 million) on sale of
chassis in other States pertaining to the assessment years 1998-99 to 2000-01. In this respect, the company has paid tax
of Rs. 139.35 million in other States. The Supreme court, by its order dated March 23, 2006, has directed the company to
take up the matter before appropriate authority. Till this process is initiated, the Supreme Court has granted interim stay on
any levy of sales tax.xby GOR. The company's appeals are currently pending before the first appellate authority.
In view of the above, these amounts have not been considered as contingent liabilities.
9.
Particulars of dues (net) towards Sales Tax, Excise Duty and Cess that were not deposited during the year on account of
dispute are given below :
Nature of Dues
Dues
Forum where dispute is pending
Amount stayed not
included in dues
(Rs. Millions)
1)
2)
Sales Tax
23.23
Excise Duty
(Rs. Millions)
Appellate Deputy / Additional Commissioner
0.88
Tribunal
0.36
Commissioner of Central Excise (Appeals)
88.94
16.33
10.
The company raised US$ 100 million (notes of US $ 1000 each) during April 2004 by way of Foreign currency convertible
notes (FCCN) bearing interest rate of 0.5% per annum. Note holders have an option to convert each note into 1422.58
shares of Re.l each or such number of shares of Re.l each as per terms of issue, at any time after June 9, 2004. The
conversion price currently is Rs.31.00. During the year 32,292,576 Equity shares (2005: Nil) were allotted consequent
to conversion of 22,700 FCCN aggregating to US$ 22.70 million. The balance notes unless previously converted,
redeemed or repurchased and cancelled, will be redeemed on April 30, 2009 at 100% of their principal value.
11.
Profit on sale of undertaking represents profit on sale of Ductron Castings Unit, Hyderabad, as going concern to Ennore
Foundries Limited, a fellow subsidiary, with effect from April 1, 2005.
12.
The company had recognised as at April 1, 2004 Rs.121.46 million as impairment of identified Plant and machinery and
consequential decrease in Deferred tax liability of Rs. 43.57 million by adjustment to General reserve in confirmity with
the transitional provisions of accounting standard 28 (Impairment of assets) issued by the Institute of Chartered
Accountants of India.
13.
The company has entered into operating lease arrangements with various parties during the year, for leasing out
windmills. Ashok Leyland Project Services Limited, an associate company, through its wind energy division, operates and
maintains these assets and has guaranteed the following minimum lease rentals:
(a)
(b)
(c)
(d)
Receivable
Receivable
Receivable
Receivable
within one year

between one year and five years
after five years
during the year
Rs. Millions
65.36
285.20
291.14
14.
15.
In terms of the FCCN issue and on the basis of the legal opinion obtained in this regard, the note holders, who have
exercised the option to convert the notes upto the record date for the dividend that may be declared for the year ended
March 31, 2006, will be entitled to the said dividend. Accordingly, the company has provided for the proposed dividend
(including tax thereon) on the basis that all the FCCNs remaining outstanding as of March 31, 2006 would get converted
into equity shares before the record date.
DERIVATIVES
The company uses derivative financial instruments such as forward contracts to hedge certain currency exposures, present
and anticipated, denominated mostly in US dollars, Euro, Japanese Yen and Great Britain Pounds. Generally such
contracts are taken for exposures materialising in the next six months. The company actively manages its currency/
interest rate exposures through a centralized treasury setup and uses derivatives to mitigate the risk from such
exposures.
The company has a net receivable hedged exposure of US $ 12.61 million through forward contracts and net payable
unhedged exposure of US $ 34.33 million. The statement on significant accounting policies deals with the accounting
treatment accorded to such derivatives.
16.
Figures for the previous year have been regrouped wherever necessary. However they are not comparable as the previous
year figure includes operations of Ductron Castings Unit, sold at the commencement of the current year.
Signatures to Statement of Significant Accounting Policies, Schedules and Notes to the Accounts.
K. SRIDHARAN
N. SUNDARARAJAN
R. SESHASAYEE
Managing Director
R.J. SHAHANEY
Chairman
April 29, 2006

Chennai
Balance Sheet Abstract and Company's General Business Profile
Registration Details
Registration No.
0 0 0 1 0 5
Balance Sheet Date
ii.
3 1
Date
0 3 2
Month
0 0
Year
State Code
Capital Raised during the Year (Amount in Rs. Thousands) (See note below)
m.
Public Issue
N II I L
Rights Issue
N I L
Bonus Issue
Private Placement
N I L
II L
Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities
3 | 6 | 9
2 I 5 I 8 I 5 I 5
Total Assets
8 l 5
Reserves and Surpluses
1 2 9 0 2 9 1 3
2 5
Sources of Funds
Paid-up Capital
|l|2|2|l|5|9|l|
Secured Loans
Deferred Liability
1 I8
,
4 I6 I9 I1 I0
1 7 9
Unsecured Loans
5 I 0 I 7 I 2 I 3 I 7 I 2
Investments
3|6|8|1|7|7|9
Application of Funds
1J O
Net Fixed Assets

Net Current Assets
41 6
Accumulated Losses
IV.
8 1 8 4
9
N
Misc. Expenditure
6 I 310
Total Expenditure
5 I 2 I 2 I 9 I 9 |5
3 I 0 I 6 I7
Performance of Company (Amount in Rs. Thousands)

Turnover
Profit/Loss Before Tax
+
|+[
5 | 2
4
8 I 0
Earni/igs per share in Rs.
v.
Profit/Loss After Tax
Dividend Rate %
1 2 0
Generic Names of Three Principal Products of Company

Item Code No. (ITC Code)
Product Description
C O M M E R C I A L
8 4 0 8 1 9 0 1 0
Product Description
E I N GI I I N
E IS
Product Description
S I PI A J R I E
P A I R
Note : Share capital of the Company has increased during the year by Rs. 32,292,576/- due to allotment of
32,292,576 equity shares on conversion of FCCNs (Refer note 11 to the Accounts).
K. SRIDHARAN
N. SUNDARARAJAN
April 29, 2006
Chennai
Hi A N N U A L R E P O R T 2 0 0 5 - 0 6
R. SESHASAYEE
Managing Director
RJ. SHAHANEY
Chairman
Information
nation as per Section 217(2A)(b)(ii) read with the Companies (Particulars of Employees) Rules, 1975 and forming part of
the Directors
irectors' Report for the year ended March 31, 2006
NAME
AGE
Amrolia J N
58
DESIGNATION
.DATE OF
REMUNERATION
COMMENCEMENT
RECEIVED /
OF EMPLOYMENT RECEIVABLE
Executive Director - HR
16.05.80
7328287
QUALIFICATION
TOTAL
EXPERIENCE
(YEARS)
PARTICULARS
OF PREVIOUS
EXPERIENCE
35
Selection & Training Manager, Brooke Bond

India Ltd., Calcutta
37
Officer - Merchant Banking Divn., State
BA(Hons), M.A.(P.M.& L.W.)

V
Anantha Narayanan T *
61
07.09.76
Advisor
6798359
B.Com., ACA., AICWA
to
X
Bank of India
Anup Bhat
49
Special Director - Strategic Sourcing
14.06.00
4718736
B.Tech.
27
Divisional General Manager in Royal Enfield

Motors (Eicher Group)
Aravind S Bharadwaj Or
41
Head - Advanced Engineering
01.10.02
4169755
B.E. M.S. Ph.D; MBA
Balasubramanian S
58
Executive Director - Project Planning
01.01.73
6699943
B.E., Dip.in SQC & OR, ICWA (Inter)
Begg J R W
61
Head-Vehicle Engineering
07.01.02
6584704
B.Sc. (Mech.Engg.) MBA
20
Advisor, TVS Motor Co.
37
37
General Manager (Engg & R&D)

Trans Mobile Ltd., Karachi, Pakistan.
Bhalla K K S
69
Executive Director - Project Engineering
17.01.79
902879
M.I.E.
46
DGM - Production, Heavy Vehicles Factory,

Jabalpur
Chandrasekaran N
54
General Manager - Information Technology
30.06.04
2588749
B.Sc., DMIT
Chatterjee A K
54
General Manager - Manufacturing
03.02.97
2795568
Cowsik R
56
General Manager - Exports
01.01.74
Devarajan R
64
Special Director - Product Development
Hombali V M
53
Khaitan B
32
CEO, Esix Technologies
B.E.
30
Manager - Maintenance, Voltas Ltd
2646083
BJech. PGDIT
31
01.10.68
4614229
B.Sc., DMIT
38
General Manager - South
01.09.82
2527942
BJech., MBA
29
Engineer - Market Planning, HMT Ltd
56
Special Director - Vehicle Sales
05.08.79
3765590
B.E.
34
Regional Service Engineer, Hindustan Motors
Krishnamurthy K N
60
Technical Advisor to MD
01.10.72
3768348
B.E.
36
Kumar K S *
52
Executive Director - Marketing
01.04.04
5983284
B.Com., PGDBM
31
Consultant, Suhail Bhawan Group, Oman
Lakshmi Narayanan P A Dr. 56
Head - Engine R&D
16.05.02
2553200
BJech., M.S., Ph.D
27
Sr.GM-Research, Kirloskar Oil Engines Ltd
Mohanakrishnan N
Special Director - Information Management
01.07.77
4237555
B.Sc., ACA
30
Group Accounts Officer, Eastern Coal
54
Services
Fields Ltd., West Bengal
Murugappan N
56
01.05.75
2550013
B.E.
30
Muthusubramanian K
60
General Manager - Corporate

Quality Engineering
01.07.77
2797411
B.E.
38
yo
n
a
o
inTormaiion as per aeiuun e.it\cnj \uj\itj icai.i WILII me lumpdinea

the Directors' Report for the year ended March 31, 2006 (Contd.)
NAME
AGE
DESIGNATION
^raiuiuiai^ ui Linpiuyccs/ ii\uie, j.9/3 dim lumimy pan ui

X
QUALIFICATION
TOTAL
EXPERIENCE
(YEARS)
Muthusubramanian C S
56
General Manager - Exports
01.07.74
2683951
B.E.
31
Nagarajan S
61
Executive Director - Projects
02.04.97
7357396
B.E., PG Dip in Industrial Admn.
38
PARTICULARS
OF PREVIOUS
EXPERIENCE
Managing Director, MAC Industrial

Products, Chennai
Nair M K R
Natraj M
59
64
General Manager - Special Projects
01.10.72
Executive Director - Advanced Engineering & 07.04.78
2935089
7393397
B.Sc., DIM
B.E.
73
42
TJ
Manager - Planning and Development,

Bimetal Bearings Ltd., Coimbatore
Rajinder Malhan
57
Executive Director - International Operations 29.05.02
6844465
B.Sc (Engg.)
40
Consultant
Raju S K
59
Head - Current Vehicle Engineering
19.04.78
3789662
M.E.
34
Senior Development EngineerJELCO
Ramadurai S G
54
General Manager-CG (MDV)
10.05.82
2645742
B.E.
31
Sales Executive, Greaves Cotton & Co Ltd
Ramasubramanian A *
53
Executive Director - Product Development
14.07.05
3689380
B.E.
30
CEO, Eicher Group
Rao R N
52
General Manager-West
30.09.93
2604282
B.E., MMM
29
Sales Engineer, Lucas TVS Ltd
Sarathy V
58
General Manager - ACCL
01.07.74
2727992
B.E.
31
Sambasivam S
58
General Manager - Finac Services
02.05.73
2528733
B.Sc., ACA
32
Sam Burman *
52
Head - Product Development
16.01.03
1610305
Grad. in Mech. Engg.
27
President, DynaMate AB, Sweden
Seshasayee R
58
Managing Director
21.01.76
13114158
B.Com., ACA
35
Manager - Accounts, Hindustan Lever Ltd.,
Shekhar Arora
53
General Manager - Management Development 02.01.81
3047047
B.A., MSW
Sridharan K
52
06.03.82
7164260
B.Com., ACA, Grad. CWA
.29
29
Personnel Officer, Oswal Steel

Sr. System Analyst, Tata Consultancy
Services,
49
General Manager - Manpower Planning and
Mumbai
26.03.82
2400197
B.Com., MA (Pers Mgt)
27
Personnel Officer, ACC Ltd
Recruitment
Srinivasan R
57
General Manager - Finance
01.08.76
2768513
B.Sc., ACA
29
Soundararajan G
57
01.03.74
2515013
B.E., DIM
31
Sundaram Parthasarathi
53
General Manager - Business Planning
01.10.78
2771246
B.E., M.S.
27
Subramanya G
58
General Manager - Planning & Quality
24.07.96
2509470
B.E., Dip in Mkg & Advg
35
AGM - Projects, Hero Honda Motors Ltd
Sundararajan N
56
Company Secretary & Head - Internal Audit
05.06.96
4391177
B.Com., AICWA, FCS, PGDBM
34
President, Sundaram Industries Ltd.
35
Udayashanker B M
56
Plant Director - Ennore
01.07.74
3946005
B.E.
-n
36
Design Services
Srikant Srinivasan
to Directors
DATE OF
REMUNERATION
COMMENCEMENT RECEIVED /
n
o
a.
Information as per Section 217(2A)(b)(ii) read with the Companies (Particulars of Employees) Rules, 1975 and forming part of
the Directors' Report for the year ended March 31, 2006 (Contd.)
NAME
Venkat Subramaniam B
AGE
44
DESIGNATION
General Manager - Parts
REMUNERATION
flATE
OF
COMMENCEMENT RECEIVED /
01.08.03
2836228
QUALIFICATION
B.Tech., PGDBM
TOTAL
EXPERIENCE
(YEARS)
PARTICULARS
OF PREVIOUS
EXPERIENCE
19
GM - Sales, TVS Motor Co
29
Head - Engg, Tata Motors
B.Sc. (Engg), M.S., MBA (Kellog)
17
JMD, Cummins India Ltd
Venkatesh S *
53
General Manager - Product Development
02.01.06
617589
Vinod K Dasari
39
Chief Operating Officer
01.04.05
5621308
B.E., M.Tech.
'Part of the year

1. Gross remuneration shown above is subject to tax and comprises Salaries, Bonus, Allowances, medical benefits, Leave Travel Assistance as applicable in accordance with the Company's rules, Commission, Company's
Contribution to Provident Fund and Superannuation Fund and perquisites evaluated as per Income-Tax rules. In addition to the above, the employees are entitled to Gratuity.
2. All appointments are contractual.
3. None of the employees is a relative of any Director of the Company.
4. The above list does not include employees on deputation.
ft)
X
i
o
2
n>
a
o

Registered Office: 19, Rajaji Salai, Chennai 600 001
NOTICE TO SHAREHOLDERS
Notice is hereby given that the Fifty Seventh Annual General Meeting of Ashok Leyland Limited will be held at
Kamaraj Memorial Hall, 492, Anna Salai, Teynampet, Chennai 600 006 at 10.00 a.m., on Tuesday, August 1, 2006
to transact the following business:
ORDINARY BUSINESS
1.
To receive, consider and adopt the Profit and Loss Account for the year ended March 31, 2006, the Balance
Sheet as at that date and the Reports of Directors and Auditors attached thereto.
2.
To declare a dividend.
3.
To appoint a Director in the place of Mr F J Colon Martinez, who retires by rotation under Article 106 of the
Articles of Association of the Company and is eligible for re-apporntment.
4.
To appoint a Director in the place of Mr E A Kshirsagar, who retires by rotation under Article 106 of the Articles
of Association of the Company, is not seeking re-appointment due to personal reasons.
The Company has received a Notice from a member under Section 257 of the Companies Act, 1956 proposing
to appoint Mr Shardul S Shroff as a Director of the Company in this vacancy.
5.
To appoint a Director in the place of Mr S R Krishnaswamy, who retires by rotation under Article 106 of the
Articles of Association of the Company and who, being eligible, offers himself for re-appointment.
6.
To appoint a Director in the place of Mr R J Shahaney, who retires by rotation under Article 106 of the Articles
of Associa'tion of the Company and who, being eligible, offers himself for re-appointment.
7.
To appoint Auditors and fix their remuneration. The retiring Auditors Messrs M S Krishnaswami & Rajan,
Chartered Accountants, Chennai and Messrs Deloitte Raskins & Sells, Chartered Accountants are eligible for
re-appointment.
To consider and if thought fit, to pass with or without modification(s), the following as a Special Resolution:
"RESOLVED THAT Messrs M S Krishnaswami & Rajan, Chartered Accountants, Chennai and Messrg Deloitte
Haskins & Sells, Chartered Accountants be and are hereby appointed as Auditors of the Company to hold
office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General
Meeting on a remuneration of Rs.12 lakhs (Rupees twelve lakhs only) each, in addition to reimbursement of
out-of-pocket expenses."
SPECIAL BUSINESS
8i
To appoint Mr Stephen Victor Young as a Director.
>
9.
To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary
Resolution:
"RESOLVED THAT Mr Stephen Victor Young be and is hereby appointed as a Director of the Company."
To approve re-appointment of Mr R Seshasayee as Managing Director.
To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary
Resolution:
"RESOLVED THAT subject to the provisions of Sections 198, 269, 309, 310 & 311, Schedule XIII, and other
applicable provisions, if any, of the Companies Act, 1956, and subject to such other approvals if and as may be
required, including from Central Government, Mr R Seshasayee be and is hereby re-appointed as Managing
Director with effect from 1/6/2006 for a period of three years upto 31/5/2009, on the following terms and
conditions, including revision in the benefits, perquisites, and allowances from April 1, 2006.
A.
REMUNERATION FROM JUNE 1, 2006

I.
Salary Rs.220,000/- per month in the grade of Rs.220,000/- to Rs.300,000/-
The annual increments will be effective 1st June every year, and will be decided by the Committee
of Directors constituted for this purpose, based on his performance.
B.
II.
Special Allowance per month - Amount equal to two months' salary.
III.
Commission - As may be approved by the Committee of Directors constituted for the purpose,
based on the performance of the Company, and his contribution.
PERQUISITES FROM APRIL 1, 2006

I.
In addition to the Salary, Special Allowance, and Commission payable, Mr R Seshasayee shall
also be entitled to perquisites like free furnished accommodation or house rent allowance including
furnishings, gas, electricity and water, medical reimbursement, leave travel concessions for self
and family, club fees, medical and term insurance, etc., as per Company Policy applicable to the
senior management personnel of the Company or as may be agreed to by the Board of Directors
and Mr R Seshasayee. Such perquisites and allowances will be subject to such ceiling limit as
may be fixed by the Committee of Directors from time to time.
II.
For the purpose of calculating the above ceiling, perquisites and allowances shall be evaluated
as per Income Tax Rules, wherever applicable. In the absence of any such Rule, perquisites and
allowances shall be evaluated at actual cost incurred by the Company in providing such perquisites
and allowances. Use of Company cars for official duties and adequate communication facilities at
residence shall not be included in the computation of perquisites for the purpose of calculating the
said ceiling.
III.
Company's contribution to Provident Fund and Superannuation Fund not exceeding 27% of the
remuneration, Gratuity as per rules of the Company, and availment or encashment of leave at the
end of the tenure, as per Company Policy. These, however, shall not be included in the computation
of limits on perquisites as aforesaid.
The total remuneration to Mr R Seshasayee as per "A" and "B" above, inclusive of the value of perquisites will
however be limited to rules /regulation/ceiling prescribed under the Companies Act, 1956.
RESOLVEp FURTHER THAT in the event of loss or inadequacy of profits in any of the financial years during
the tenure of Mr R Seshasayee as Managing Director of the Company, he shall be entitled to receive and be
paid the substantive remuneration mentioned in "A" and "B" above, including Special Allowance, but excluding
Commission, as minimum remuneration, subject to the approval of the Central Government, if and as may be
required."
10.
To increase in the percentage limit of investments by Foreign Institutional Investors (Flls) under Portfolio
Investment Scheme (PIS).
To consider and if thought fit, to pass with or without modification(s), the following resolution as a
Special Resolution:
"RESOLVED THAT subject to such approvals, permissions and sanctions as may be required of the appropriate
authorities including RBI, SEBI and Govt. of India and subject to the relevant regulatory requirements, the
consent of the Company be and is hereby accorded for investments in the equity shares of the Company by
' and/or on behalf of Foreign Institutional Investors (Flls), under the Portfolio Investment Scheme / any other
scheme, through either the primary or secondary markets in India, notwithstanding that such investments
together with the existing holdings of such Flls may exceed in the aggregate, 24% of the paid-up equity capital
of the Company but not exceeding 40% of the extant paid up equity capital of the Company at any point of
time or such other ceiling as may be imposed by the said appropriate authorities from time to time whichever
is lower.
RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all
such acts, deeds, things and to take all necessary steps as are required for giving effect to the foregoing
resolution."
11.
To raise additional long term resources.

To consider and if thought fit, to pass with or without modification(s) the following as a Special Resolution:
"RESOLVED THAT in accordance with the provisions of Section 81 and other applicable provisions, if any, of
the Companies Act, 1956, in terms of the provisions of SEBI Act, FEMA and Rules and Regulations made
thereunder, and any other laws for the time being in force, and subject to such consents and approvals as may
be necessary, and subject to such conditions and modifications as may be considered necessary by the
Board of Directors (hereinafter referred to as the "Board", which term shall be deemed to include any Committee
thereof constituted for this purpose, to exercise the powers conferred on the Board by this resolution) or as
may be prescribed or made, in granting such consents and approvals agreed to by the Board, the consent of
the Company be and is hereby accorded to the Board to offer, issue and allot in one or more tranches, in the
course of international offerings to Foreign Institutions, foreign investors/collaborators, Non-Resident Indians,
corporate bodies, mutual funds, banks, insurance companies, pension funds or others, whether shareholders
of the Company or not, through a public issue and/or on a private placement basis, equity shares and/or equity
shares in the form of Global Depository Receipts(GDRs), and/or securities convertible into equity shares
and /or securities linked to equity shares and/or securities with or without detachable share warrants, and/or
Foreign Currency Convertible Notes (FCCNs) and/or Bonds with Share Warrants attached (hereinafter
collectively referred to as "Securities"), secured or unsecured so however, that the total amount raised through
the aforesaid Securities should not exceed USD150 Million, or its equivalent in any currency, of incremental
funds for the Company.
RESOLVED FURTHER THAT the consent of the Company be and is hereby accorded, in terms of Section
293(1 )(a) and other applicable provisions, if any, of the Companies Act, 1956 and subject to all other necessary
approvals, to the Board to secure, if necessary, all or any of the above mentioned Securities to be issued, by
the creation of a mortgage and/or charge on all or any of the Company's immovable and/or movable assets,
both present and future in such form and manner and on such terms as may be deemed fit and appropriate by
the Board.
RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds, matters and
changes as it may at its discretion deem necessary or desirable for such purpose including, if necessary,
creation of such mortgages and/or charges in respect of the securities on the whole or in part of the undertaking
of the Company under Section 293(1 )(a) of the Companies Act, 1956 and to execute such documents or
writing as may be considered necessary or proper and incidental to this resolution.
RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby
authorised to determine the form and terms of the Issue(s), including the class of investors to whom the
Securities are to be allotted, number of Securities to be allotted in each tranche, issue price, face value,
premium amount on issue/conversion of Securities/exercise of warrants/ redemption of Securities, rate of
interest, redemption period, listing on one or more stock exchanges in India and/or abroad, including, without
limitation,/marketing, custodian, depository arrangements etc., as the Board in its absolute discretion deems
fit, and te make and accept any modifications in the proposal as may be required by the authorities involved in
such issues in India and/or abroad and to settle any questions or difficulties that may arise in regard to the
Issue(s).
RESOLVED FURTHER THAT the Board be and is hereby authorised to issue and allot such number of
additional equity shares as may be required in pursuance of the above issue of Securities and that the additional
equity shares so allotted shall rank in all respects, including the right/entitlement to dividend, pari passu with
the existing Equity shares of the Company."
Registered Office:
19, RajajiSalai, Chennai 600 001
June 8, 2006
By Order of the Board

N. SUNDARARAJAN
NOTES:
1.
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ABOVE MEETING IS ENTITLED TO APPOINT
ONE OR MORE PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT
BE A MEMBER OF THE COMPANY. PROXY SHOULD BE LODGED WITH THE COMPANY AT LEAST
48 HOURS BEFORE THE SCHEDULED COMMENCEMENT OF THE MEETING.
Revenue Stamp for 15 paise should be affixed on the Proxy Form. Forms which are not stamped or
inadequately stamped are liable to be considered invalid. Further, for identification purposes etc., it is
advisable that the Proxyholder's signature may also be furnished in the Proxy Form.
2.
The Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956, setting out all material
facts in respect of Item Nos. 8 to 11 of the Notice, is attached.
3.
Members may please bring the Admission Slip duly filled in and may hand over the same at the entrance to the
Meeting Hall.
4.
Members who hold shares in dematerialised form, are requested to bring their depository account number
(Client ID No.) for easier identification and recording of attendance at the meeting.
5.
The Register of Members and Share Transfer Books of the Company will remain closed from July 14, 2006 to
August 1, 2006 both days inclusive.
6.
After declaration of the dividend at the Annual General Meeting, the Dividend Warrants are scheduled to be
posted on or after August 1, 2006. In respect of shares held in electronic form, the dividend will be paid on the
basis of beneficial ownership, as per details to be furnished for this purpose by National Securities Depository
Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
7.
Members who desire to have their Bank Account details incorporated in their dividend warrants may please
furnish the (i) Share Folio No(s). (ii) Name and Address of Sole/First Shareholder (iii) Bank Account No. (with
prefix SB/CA etc.) (iv) Name of the Bank and Branch (v) Full address of the Branch with Pin Code. These
details may be sent to the Company's Registrar and Transfer Agent, M/s Integrated Enterprises (India) Limited,
2nd Floor, Kences Towers, 1, Ramakrishna Street, North Usman Road, T. Nagar, Chennai 600 017.
For members holding shares in demat form, the Bank A/c details furnished for their demat Account will be
incorporated in the dividend warrants.
8.
Out of the dividends declared for all the financial years including and upto the financial year ended
March 31, 1995, the amount which remained unclaimed has been transferred to the General Revenue Account
of the Central Government as per the provisions of Section 205A of the Companies Act, 1956.
Members who have not encashed the dividend warrants for the above year and any earlier years are requested
to claim from the Registrar of Companies (Tamil Nadu), Shastri Bhavan, No. 26, Haddows Road,
Chennai 600 006.
Consequent to the amendment to Section 205A of the Companies Act, 1956 and introduction of Section 205C
by the Companies (Amendment) Act, 1999, the amounts of dividends remaining unclaimed for a period of
seven years is to be transferred to the Investor Education and Protection Fund. Accordingly, the dividend
declared for the financial year ended March 31,1998 has been transferred to Investor Education and Protection
Fund. The amount so transferred cannot be claimed either from the Company or from the Fund.
Details of dividend declared for the financial years from 1998-99 onwards are given below:
Declared on
Financial Year
Dividend %
Amount of dividend '

per share
' .
RfcP.
199-1999
16.09.1999
10%
1.00
1999-2000
30.05.2000
35%
3.50
2000-2001
24.07.2001
40%
4.00
2001-2002
26.07.2002
45%
4.50
2002-2003
22.07.2003
50%
5.00
2003-2004
29.07.2004
75%
7.50
2004-2005
26.07.2005
100%
1.00(**)
(**) face value: Re.1/- per share.

Members who have not encashed the dividend warrants for the financial year ended 1998-99 and/or any
subsequent dividends are requested to write to the Company giving the necessary details.
9.
Brief notes on the background and the functional expertise of the Directors proposed for re-appointment are
furnished below, along with details of companies in which they are Directors and the Board Committees of
which they are members:
(i)
Mr F J Colon Martinez, aged about 56 years, is a Mechanical Engineer, and has wide experience in the
automotive industry. He held various positions in IVECO S.p.A. and is currently the Senior Vice President
of Global Manufacturing & Product. He has been a Director of the Company from January 2005.
Details of Directorships/Committee Memberships held by him in other companies:
Directorship
DIRECTOR
Iveco Latin America Ltd
Iveco Pegaso S.L.
Otoyol Sanayi, A.S.
Mr Shardul S Shroff, B.Com (Hons.), LLB, Advocate on Record with Supreme Court, aged about 50 years,
has been a practising lawyer from 1980 with Amarchand & Mangaldas & Suresh A Shroff, one of the
leading and largest multidisciplinary Law Firms in the country. He has vast experience in the areas
of Corporate Advisory, Joint Ventures, Project Finance, Corporate and Structured Finance, Insurance,
Telecom, Mergers & Acquisitions, Disinvestments and a large body of corporate advisory work
across sectors. He has worked very closely on important economic legislations as a member of several
high-powered committees appointed by the Government of India.
Directorship
DIRECTOR
Infrastructure Development Finance Co. Ltd.
Audit Committee
Apollo Tyres
Share Grievance Committee
NUT Limited
Audit Committee
Remuneration / Compensation
Committee (Chairman)
BILT Limited
Share Transfer cum Shareholders
Grievance Committee
CMC Limited
Amarchand Towers Property Holdings
Private Limited
Amarchand Mangaldas Properties
Private Limited
PSNSS Properties Pvt. Ltd.
Baghbaan Properties (P) Ltd.
MpS R Krishnaswamy, aged about 61 years, is a Post-Graduate in Electronics, and takes active interest
in the academic fields of Insurance and related subjects. He has served LIC of India for the last 36 years
in different capacities and retired as Executive Director (Pension & Group Schemes) and Head of the
PR & Publicity Dept., He has been nominated by LIC on the Company's Board as a Director to represent
LIC of India as shareholders.
' i ,
> . t 'i
,,
,, / i/irecTorsnip
'.'''''.
t^lf fr^*'*lh-ll Mfrfrt'*%
DIRECTOR
Uttam Galva Steels Ltd.
iv
Mr R J Shahaney, B.Sc.(Engg.), ACGI(London), Chairman, aged about 75 years, was the Managing
Director of the Company since July, 1978 upto May, 1998 and has successfully led the company through
to its present stature and eminence. He is also the Chairman of the Shareholders/Investors Grievance
Committee of the Company.
'..,: . ' ',. ,;..:,.,v> >M*tfMtlfe .
. .
^jiLMimamtjlMiaafc 'B>Ma^>l*aâtltih '''

wommmee
MeRiDarsnip , .
EXECUTIVE CHAIRMAN
CHAIRMAN ( NON-EXECUTIVE)
Shareholders/Investors Grievance Committee (Chairman)

Remuneration Committee
Hinduja National Power Corporation Limited

DIRECTOR
Lanka Ashok Leyland Limited (Sri Lanka)
Mr Shahaney holds 11730 shares in the Company, as per details furnished by him.
EXPLANATORY STATEMENT
Item No. 8
Mr Stephen Victor Young, aged about 50 years, is a Graduate in Production Engineering and also holds Post-Graduate
Diploma in Management Studies. He served M/s AT. Kearney, one of the leading Global Management Consultants,
as a Vice President till 2004. He has a wide experience with the automotive industry as well as exposure to
consumer products, engineering, high technology and logistic sectors. Presently, he is a Director of Indego Consulting,
which takes up the activity to develop and implement a "next generation car company".
The Company has received a notice under Section 257 of the Companies Act, 1956 from a member together with
necessary fee informing his intention to propose the appointment of Mr Stephen Victor Young as a Director of the
Company at this meeting.
Mr Stephen Victor Young does not hold any shares in the Company, as per details furnished by him.
None of the Directors is concerned or interested in this resolution except Mr Stephen Victor Young.
Details of other Directorships/Committee Memberships held by him in other companies:
Directorship
Committee Membership
DIRECTOR
INDEGO Consulting Ltd. (U.K.)
Item No. 9
The present term of office of Mr R Seshasayee as Managing Director, as approved by the shareholders, is due to
expire on 31/3/2007. During the last over 8 years as Managing Director, Mr Seshasayee has managed and steered
the Company extremely successfully through the turbulence faced by the Commercial Vehicle industry. He has been
the spearhead of the Company's achievements of consistently good financial results year after year.
In recognition of his excellent performance and to enable the Company to continue to benefit from his stewardship,
the Board have approved the re-appointment of Mr Seshasayee as Managing Director for a period of three years
commencing frorr> 1/6/2006 to 31/5/2009 on the terms given in the resolution.
Mr Seshasayee, aged 58 years, is a Chartered Accountant. Having served as Manager-Accounts in Hindustan
Lever, he joined Ashok Leyland in January 1976 in the Internal Audit Department. Over the years, he handled the
Corporate Planning/Corporate Finance functions before becoming the Deputy Managing Director in 1993. He was
appointed as Managing Director from April 1998.
Mr Seshasayee has been an active member of the Central Council of the Confederation of Indian Industry(CII), the
premier Industry Association in India and is the President of CM this year. He has represented the CM at WTO,
Davos. He was also the President of the Society of Indian Automobile Manufacturers. He served as Member/
Chairman of various trade and professional committees both at national and international levels.
Details of other Directorships/Committee Membership held by him in other companies :
Directorship
CHAIRMAN
Ashley Transport Services Limited
Irizar TVS Limited
DIRECTOR
Committee Membership
Shareholders & Investors Grievance Committee
The above resolution is recommended for approval by the Members.

Draft of the Agreement between the Company and Mr Seshasayee is available at the Registered Office of the
Company and is open for inspection by members during office hours.
Mr Seshasayee holds 11236 shares in the Company, as per details furnished by him.
The above may also be treated as an Abstract under Section 302 of the Companies Act, 1956.
None of the Directors is concerned or interested in this resolution except Mr Seshasayee.
Item No. 10
As per the current industrial policy of the Govt of India, 100% Foreign Direct Investment (FDI) is permitted in the
Automobile industry, in which your Company operates. As per the guidelines of the RBI for the Portfolio Investment
Scheme, Foreign Institutional Investors (Flls) are not permitted to invest in the equity shares of the Company, either
through primary or secondary markets, in the aggregate, beyond 24% of the total equity capital at any time, unless
the shareholders of the Company have resolved to relax this limit through a Special Resolution.
The Company has substantial expansion, technology upgradation and overseas acquisition plans which will involve
considerable additional investments in the coming years. In view of the liberalised Reserve Bank of India guidelines
regarding raising of funds from overseas markets, the Company would like to take advantage of further investments
from overseas investors through issue of various securities that may be offered to them from time to time. Relaxation
of the 24% limit would enhance the Company's ability to raise funds in international market through equity linked
issues. This would, in turn, enable the Company to raise resources on terms more advantageous to the Company
and hence to all its existing shareholders.
The proposed resolution seeks to obtain shareholders' approval in order to derive this advantage to the Company.
There are no disadvantages to the existing shareholders and/or investors, by this relaxation. The Board recommends
the proposed resolution for approval by the shareholders as a Special Resolution.
None of the Directors is interested or concerned in this resolution.
Item No. 11
1.
2.
The present installed capacity of the Company is 77,200 vehicles. The Company has embarked on large
investment plans to expand production capacity to 1,00,000 vehicles by March 2008. Total capital expenditure
to be incurred for such capacity expansion and for upgrading product range, including expenditure on Research
and Development replacement programmes in the next few years would be around Rs.1500 crores. The
Company is also pursuing various inorganic growth opportunities through acquisitions (in India and abroad)
as part of globalisation initiatives.
t
In order to partially fund the above expansion/capital expenditure, it is proposed to raise upto USD 150 Million
(denominated in whatever currency) through issue of appropriate equity / equity linked securities, in one or
more tranches and at such time as may be considered appropriate by the Board, to various categories of
investors in the international market as set out in the Special Resolution.
3.
The Board has constituted a Special Purpose Committee for dealing with all matters relating to this proposal
and to do all such acts as are necessary to conclude raising the funds as mentioned above.
4.
To the extent that any part of the above mentioned funding plan includes issue of securities linked to or
convertible into Equity shares of the Company, members' approval is being sought. Section 81 of the Companies
Act provides, interalia, that whenever it is proposed to increase the Issued/Subscribed Capital of a Company
by allotment of further shares, such further shares shall be offered to the persons who, on the date of the offer,
are holders of the equity shares of the Company in proportion to the capital paid up on that date, unless the
shareholders in a General Meeting decide otherwise. The listing agreements executed by the Company with
the various Stock Exchanges also provide that the Company shall, in the first instance, offer all securities for
subscription prorata to the existing equity shareholders unless the shareholders in a General Meeting decide
otherwise. Hence, consent of the shareholders is sought to authorise the Board of Directors, as set out in the
Resolution at Item No.11, to issue in one or more tranches the securities referred to therein in the international
market to Foreign Institutions, foreign investors/collaborators, Non-Resident Indians, corporate bodies, mutual
funds, banks, insurance companies, pension funds or others, whether shareholders of the Company or not,
through a public issue and/or on a private placement basis.
Shareholders consent is sought pursuant to Section 81 of the Companies Act, 1956 and in terms of the listing
agreement with Stock Exchanges to the issue of the above Securities.
While no specific instrument has been identified at this stage, in the event the Company issues any equity
linked instruments, the equity shares on issue, conversion of securities into equity shares or exercise of
warrants and consequent issue of equity shares, shall all rank, in all respects including the right / entitlement
to dividend, pari passu with the existing equity shares of the Company.
5.
The shareholding pattern of the Company as on March 31, 2006 was as follows :
SI
No.
1
Category
Promoter - LRLIH Limited
(Includes 164600070 shares in GDR Form)
No. of
Holders
No. of
Shares
605766750
49.59
133768
140263936
11.48
Residents (Individuals / Clearing Members)
Financial Institutions / Insurance Co. / State Govt./

Govt. Companies / UTI
21
169086840
13.84
Foreign Institutional Investors
87
178868949
14.64
Non-Resident Indians / OCB / Corporate Bodies

- Foreign / Bank - Foreign / Foreign Nationals
1375
23797280
1.95
Corporate Bodies
1884
22174100
1.82
Mutual Funds
36
65576156
5.37
Trusts
19
236000
0.02
Banks
51
831265
0.07
10
Others - GDR
14985500
1.22
137244
1221586776
100.00
Total
As per current guidelines of GOI, these foreign currency denominated bonds can be subscribed by
Non-Residents only. Foreign Institutional Investors, LRLIH Limited and other Non-resident Shareholders can
participate. However Indian Shareholders (including Mutual Funds, Banks / Insurance Companies Resident in
India) cannot participate in the Bond issue; hence the proposed Bond issue could dilute their shareholding if
Bonds get converted. Since the Issue is offered to Foreign investors, the Company will not be able to determine
at this stage/the revised shareholding pattern after the completion of allotment of the proposed securities.
6.
LRLIH Limited has advised the Company of its intention to convert the Bonds issued in April 2004 into Equity
Shares. Upon exercising right of conversion by all remaining holders of the Bonds issued in April 2004, the
holdings of LRLIH Limited will get restored to 50.93%, as was held earlier. LRLIH Limited being a Company
registered in UK, has the option to participate in the issue of securities being proposed under this resolution.
7.
The issue is likely to be completed and shares/Bonds/GDRs/FCCNs, expected to be allotted before the end
of December 2006.
8.
The said Securities (till they remain as Loan / Bond ) may be secured by way of first mortgage/hypothecation
of the Company's fixed assets in favour of the security holders. As the documents to be executed between the
security holders and the Company may contain, as per normal practice, the power to take over the management
of the Company in certain events of default, it is necessary for the Company to obtain shareholders' approval
through a resolution under Section 293 (1) (a) of the Companies Act, 1956 before creation of the said mortgage
or charge.
9.
The proposed issue is in the interests of the Company and your directors recommend the resolution for
approval.
Registered Office:
19, Rajaji Salai, Chennai 600 001
June 8, 2006
By Order of the Board

N. SUNDARARAJAN
FOREWORD
In recent times, every year has brought with it unprecedented

climate disruptions - distress calls from planet Earth. These
are warning signals for humanity that we can ignore only at
our peril. Economic growth has been accelerating, bringing
closer the ecological disasters these signals portend. The only
way ahead is to find new growth models and technologies that
promote resource conservation, re-use and energy efficiency.
At Ashok Leyland, we believe the scope for action is vast,
matched by the potential ecological benefits as also unit-level
economic benefits. This is borne out by our efforts to reduce
*the environmental footprint of our activities, be it reduction in
energy consumption per truck or waste generation or rainwater
harvesting or afforestation.
We have also been steadily raising the bar, setting higher goals
for environmental performance and enlarging the scope of
initiatives. This stems from the realisation that our
environmental responsibility does not end with product
delivery. Going beyond development work on alternate fuels
and employment of ecologically responsible manufacturing
processes, our revenue-neutral driver training centres, in-situ
mechanic training and awareness/emission campaigns are some
of the post-sale activities that have been on for over a decade.
This report represents some of the activities taken up in 20052006. One of them is a lifecycle assessment of our products.
This first ever study of its kind in the country, is sure to broaden
our understanding of the environmental footprint of our vehicles
and drive us onto greater environmental responsibility.
RSeshasayee
Managing Director
NVIRONMENT
Raising the environmental performance bar
In 2003-2004, the Green Shield award was

introduced to supplement the ISO 14001
Management System implemented in all the
manufacturing units to help achieve better
environmental performance.
While the Alwar unit won the award the first
two times, it was third time lucky for Ennore.
Appreciating the Unit's initiatives in reducing
the usage of wood and the contribution
of Quality Circles in energy consumption
reduction, Mr Sinha Roy, the auditor for the
awards said, "The go-getter attitude of the
Ennore personnel has to be appreciated. It
shows in their penchant for winning outside
competitions on energy and environment".
f M Udayashankar,
ED-Manufaqturing,
(right) receives the
Green Shield Award
(2005-06) ftom
R Seshasayee, MD.
The performance criterion for winning the

Green Shield award has been broadened and
raised to include new areas for assessment.
Areas such as 'reduction in use of toxic
material', 'participative environmental
management', 'joint efforts with neighbouring
communities' have been added to make the
standards more expansive. The parameters for
performance have also been made steeper: in
areas like 'recycling/reusing' and 'hazardous
waste generation', the units need to achieve
at least a 25% reduction to be eligible for
even the minimum points. While in areas
like 'reportable accidents' it is even steeper,
requiring at least a 50% reduction from the
previous year's figures.
The performance criterion

for winning the Green Shield
award has been broadened and
raised to include new areas for
assessment.
Power consumption
Lube oilconsumption
8
7.5
_oj
u
I5-65
I
J
5.5
5
03_04
04_05
05_06
03_04
04_05
05_06
SANSCO SERVICES - Annual Reports Library Services - www.sar
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CORPORATE SOCIAL RESPONSIBILITY REPORT 2005-06
NVIRONMENT
Innovation in Safety, Health and Environment
Ashok Leyland's Hosur II unit recently won

COD values
the 'CII - Leadership and Excellence Award for

Innovation in SHE Performance 2005' for two
- V,- ff
'
s* ,*
^ '$
m
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$* +
300
innovative projects:
"u
150
rainwater harvesting ponds

a
,s*i;
WA'
permissible level
200
(i) protecting flora and fauna in
100
X
As a practice, rainwater-harvesting projects
SO
0
have been implemented extensively to
03_04' 04_05
'eS_0
improve the ground water table and the

saved water used during summer to prevent
TDS values
f- depletion of ground water. Over the years,

two artificial ponds with 40,000 KL and
rAS
10,000 KL capacities and a check dam of
2580
30,000 KL capacity have been created at the
^^^
permissible level
unit.
As water is available round the year in these
500
water bodies, a rich variety of flora and fauna
03_04'
flourish around these ponds.
04_05
'fl5_06
During the heavy downpours in end-2005,

the ponds filled up and overflowed. After
BOO values
the rains, the living organisms in the ponds,

including the fish, were found to be dying
in large numbers. Extensive analysis of the
reasons was carried out in coordination with
a few Governmental agencies. The root cause
was found to be an increase in the 'Biological
Oxygen' demand due to sudden changes in
atmospheric conditions accompanying the
120
permissible level
80
60
40
20
03_04' 04_05
downpours - a serious threat to the living

organisms in the water.
TSS values
As a solution, a chemical called Nualgi was
?#:
sffe;
used to increase the Oxygen content in the

water and the problem was solved.
120
100
permissible level
, 80
; 60
' 40
fe
#?
20
0
03_04'04_OS
'05_06
SERVICES - Annual Reports Library Services - www.sansco.net
NVIRONMENT
(ii) reducing usage of ozone
SPM levels
depleting substances
600
The Electro Deposition Paint Bath used at
500
Hosur II holds about 65,000 litres of waterbased paint and has to be maintained at
permissible level
S 400
OJ
350
26C to 29C at all times. Any increase in

temperature beyond these values will disrupt
;100
the properties of the paint, which could

03JJ4
lead to coagulation. So, to maintain the
04_05
05JB6
recommended temperature, two chiller units

yare used. And as all conventional chillers
SOx emissions
go, these units run on R22 gas, an Ozone

Depleting Substance, some of which enters
the atmosphere.
The unit environment cell took it upon
themselves to find a way to reduce use of R22
gas. That led to a group of minds questioning
the very idea of the constant running of
140
120
|j 100
I 80
permissible level
60
.3 40
$ 20
0
03_04
04_05
OSJJ6
these units.
The temperature requirement of the ED
NOx emissions
paint bath is around 26C to 29C. And in

Hosur, the temperature for most days in a
140
120
year is below 22C. "Why not use the natural

temperature to cool down the ED paint
bath?" they thought and implemented the
idea, thus eliminating the load on the chiller
" fifl
j3
OU
during non-production hours. This has not
"5;
only reduced the utilization of R22 but has

also resulted in large power savings.
permissible level
Rn
u An
0
03_04
04_05
05_06
Proof, if at all needed, that ecology and good

business can go hand in hand.
Utilizing the natural temperature to cool down the Electro

Deposition paint bath has reduced operation of the chillers - and
the usage of the Ozone depleting R22gas.
SANSCO SERVICES - Annual Reports Library Services - www.s

ESOURCES
A responsible neighbour at Bhandara
In an acutely water-starved region, Ashok

Leyland's Bhandara plant is a celebrated
success story. Active implementation of water
conservation and ground water recharging
practices have helped the Unit "keep head
above water".
In 2005-2006 alone, two additional ponds
have been developed to collect rainwater.
The terrain of the factory has been
considered in developing these ponds that
jcharge the underground aquifers during the
rainy season so that the monsoon replenishes
the water table every year.
The first pond uses the natural terrain of the
area to collect rainwater from the nearby
catchment areas to store a maximum of 2,700
cubic meters of water. The second pond
can hold 900 cubic meters of water. Fed by
storm water drains from across the Unit, any
overflowing water from the pond is diverted
into the 1,80,000-tree-strong plantation in

the Unit. Further, the percolation of water
from the pond into the ground ensures a
higher water table in the area, which
irrigates the trees.
Efforts are also underway to build a lake
for storing roof water run-off near the
administrative block. When completed,
this will enable meeting the total Unit
requirement of water within the premises
itself, thereby eliminating the need for
drawing water from the nearby Wainganga
river. The farmers and residents nearby would
thank Ashok Leyland, Bhandara for that.
The percolation of water from

the pond into the ground ensures
a stable water table in the area,
positively impacting the growth
of trees.
ESOURCES
Using Reverse Osmosis for reduction

of coolant consumption
Coolant oil used in machining operations
generate effluents. Over the years, we have
sought to reduce effluents at the machining
stage itself.
The problem with coolants is that they have
to be replaced periodically. Otherwise, due
to the growth of microorganisms, a bad
odour emanates. For health and comfort
reasons, such coolants have to be discarded
frequently.
/his is where the concept of Reverse Osmosis
(RO) came in handy. RO is a process by which
water is forced through a semi-permeable
membrane to remove dissolved solids.
Applying the same principle, the dissolved
solids in the water were removed, thereby
increasing the useful life of the coolant.
A RO unit has been set up which feeds the

coolant mixing areas with treated water and
thereby reduces the need for frequent coolant
replacement. Further, the washing machines
that are used to clean the components also
consume less water, as the amount of water
required for effectively removing the dirt
is lesser.
RESULT: The change-over time for the
coolant has reduced from 15 to 45 days,
saving 655.17 litres per month.
Not stopping with that, plans are afoot
to use.the RO reject water in secondary
applications like toilet flushing and floor
washing thereby further reducing effective
water consumption.
A Reverse Osmosis unit has been set up and feeds the coolant mixing
areas with treated water, thereby reducing coolant consumption.
RO plant at shops
Water consumption
40-
35J> 301.25-
I20E 15u
25 10-
03JM
04 05
05_06

ESOURCES
No more wood in stillages
At Ashok Leyland Hosur I, total wood
into account while designing the stillages.
consumption during 2005-2006 was more
Further, it was also found that two-tier steel
than 100,000 cubic feet. Out of this total
stillages helped more in effectively utilizing
consumption, close to 20% was used in
the vertical space in a truck.
making wooden 'stillages' used for packing

engines to be transferred to other units.
Cutting down this consumption became
Carried out with an investment of about

rupees four million the project involved
the goal.
extensive field trials and some changes in

the stillage design before it could be made
After analyzing various options, reusable
fully operational. Today, usage of wood for
and returnable steel stillages were decided
transfer of engines to other units has been
bn. Factors like optimizing the size of the
fully eliminated, saving wood to the tune of
stillages, improving the engine loading
43,610 cubic feet. That's like planting more
layout in the truck and effective use of
than 1,200 trees!
vertical space in a truck were also taken
,t
Today, usage of wood for transfer of engines to other units has been
fully eliminated, saving wood roughly equivalent to some 1246 trees.
'SANSCO SERVICES - Annual Reports Library Services - www.sansco.net
ASTES
Coming Up: an exclusive hazardous waste landfill
Dangers posed by hazardous waste to the
Storage areas with proper ventilation, bunded
environment and the importance of handling
and cemented flooring, fire hydrants and
such waste with utmost care can never
appropriate fire extinguishers are available to
be overstressed. At Ashok Leyland, we are
store these wastes - safe and away from the
totally sensitive to this issue and hence leave
environment. But then, we realize that this
nothing to chance, especially when it comes
is not a permanent solution. A scientifically
to safe handling and storage of the two types
designed secured landfill complete with
of wastes that are classified 'hazardous' - oily
leachate liners and monitoring facilities
and paint waste.
would be an alternative. But such a solution

is not available anywhere in Tamilnadu.
Ashok Leyland has taken upon itself the task
of constructing a secured landfill site within
MODERN LANDFILL
its own premises at Hosur, at a cost of

Rs five million in an area of 3,000 sq m. This
iMOMI
landfill is being designed and commissioned

by an expert who was previously associated
with the National Environmental Engineering
Research Institute (NEERI). Preliminary tests
like waste compatibility tests, soil suitability
and resistivity tests have been completed and
construction is scheduled to start very soon.
This landfill will cater to the accumulated
wastes and also provide enough capacity for
the next five years.
Waste oil values
Hazardous waste
14
14
12
10
12
10
!
"Si5.4-
6
4
2
0
03_04
04_05
05_06
03JJ4
04_05
05 06
Ashok Leyland
has taken upon
itself the task of
constructing a
secured landfill
site within its
own premises at
Hosur, at a cost
of Rs five million
in a 3,000 sqm
area.
*&,.

ETYAND HEALTH
Greater emphasis on Safety and Health
To ensure that safety does not get

subordinated to production and to keep
safety on the top management radar, an
apex level 'Safety Council', headed by the
Chief Operating Officer of the Company has
been formed. To supplement the efforts
taken at the central level, plant Safety
Councils have been formed at all the Units,
with representation from executives and
associates from each department. The EHS
reporting format has been changed to include
greater emphasis on safety reporting, with
mandatory safety targets every month.
Further, a centralized audit team has
been formed that undertakes an objective
audit every three months and submits the
findings to the Safety Council. The results
of the audits are discussed and targets for
improvement set.
Accident statistics
As the old adage goes "what is not identified

is not controlled" and to ensure that as many
unsafe conditions are identified, an extensive
'hazard mapping' exercise has been taken up
and is nearing completion. The results of the
mapping are being used to improve safety at
all locations. As far as improving contractor
safety is concerned, many new initiatives
like auditing the usage of Personal Protective
Equipments among the contract workmen,
having a Safety Officer for large contractors
and extensive training for all contract
workmen have been put in place.
To improve access to safety information and
training, an IT portal on safety is under
construction. This portal, to be accessible
to all employees, will have modules for
reporting of incidents and accidents, training
modules and general information on
safety issues.
While isolated efforts to improve safety
are effective in the short term, accident
03_04
04_05
05_06
prevention demands a comprehensive system.

Towards this, the implementation of an
Occupational Health and Safety Management
System on lines of the OHSAS 18001, is being
accelerated and given impetus. Training
programmes to all executives and associates
have begun in right earnest and are nearing
completion.
To ensure that as many unsafe conditions are identified, an

extensive chazard mapping' exercise has been taken up and is soon
nearing completion.
;SA1VSCO SERVICES - Annual Reports Library Services - www.sansco.net
IFE CYCLE ASSESSMENT
Life Cycle Assessment at Ashok Leyland
In 2005-2006, Ashok Leyland and the

University of Colorado Denver and Health
Sciences Center (UCDHSC), USA, initiated
a joint effort to explore the use of
environmental life cycle assessment (LCA)
to facilitate green engineering in India.
UCDHSC' s Urban Sustainable Infrastructure
Engineering Project (USIEP) seeks to
expand the use of environmental life cycle
assessment tools in South Asia, consistent
with Ashok Leyland's corporate objectives
y
that support environmentally-conscious
engineering.
Environmental LCA is an analysis
methodology that strives to capture the
cradle-to-grave impacts of a product or
process. The idea is to expand the boundary
of the system being studied to include
processes that occur both upstream and
downstream of the process of interest. Thus,
for a car or a bus, the boundary is expanded
Upstream technical systems

perfbrmin g causal
activities
from vehicle operation to include fuel

production, vehicle manufacture and final
disposal (end-of-life). A life cycle approach
is particularly important in comparing
various fuel-propulsion systems in vehicles.
For example, one can compare the lifetime
energy use in a conventional diesel bus,
a bio-diesel powered bus, a natural gas
powered bus versus hydrogen-powered fuel
cell buses and can examine the energy
needed for fuel production and delivery (wells
to pump analysis) as well as operation of the
propulsion system (pump to wheels analysis).
This way, LCA makes transparent the total
impact to the environment associated with
the entire life cycle of a product.
LCAs can also help an organization identify
the quantum of material present in their
supply chain and assess its supply chain
vulnerability. Additionally, LCAs can help
an organization analyze and improve its
Technical
system
performing
activities
Down stream technical systems

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Natural Environmental System
Causal
waste generation
and emissions
SANSCO SERVICES - Annual Reports Library Services - www.sa

IFE CYCLE ASSESSMENT
resource-use efficiency. Higher levels

of pollution are often associated with
inefficiencies in production, which can be
identified and minimized through an LCA.
Lastly, information gathered from an LCA
can help in reporting and marketing resource
efficiency and environmental improvements
of a product.
and consumers in India to determine what

environmental impacts are of highest
priority for stakeholders in Asia. To use
LCA effectively, it is important to determine
priorities for the region - whether it is global
climate change, local environmental impact,
local ecosystem impact or aggregate resource
efficiency.
Between November '05, and January '06, Mike

Whitaker, a PhD student from USIEP, worked
with Ashok Leyland in Chennai to begin the
process of life cycle assessment of a Viking
222 bus. Data on bus operations and end-oflife were gathered from both Ashok Leyland
as well as the Chennai Metropolitan Transport
Corporation. For future data management,
recommendations were made on areas like
data organization, downstream performance
and maintenance data, upstream supply chain
data and on the possibility of setting up an
industry-wide LCA database.
As an environmentally progressive company,

Ashok Leyland is attempting to incorporate
LCA for environmental impact assessment.
The first step is to improve data gathering,
management and reporting within the
Company. Simultaneously, Ashok Leyland
will also work beyond the boundaries of
its factories - with upstream supply crrain
producers and downstream bus operators
- to analyze the total impact. Through these
efforts and ongoing collaboration with the
USIEP program in USA, Ashok Leyland hopes
to lead the way for environmental Life Cycle
Assessments in India.
Ashok Leyland is also working with UCDHSC

to conduct a large survey of producers
(If interested, please take the following short survey to convey your priorities in an
anonymous survey format: http://www.surveymonkey. com/s.asp ?tt=49771905688
The survey will take approximately 15 minutes to complete, no prior knowledge is
needed to take this survey and your time will help to begin implementing LCA in
India)
For more information about LCA in India, please contact:
Balachander G (bala.alc@ashokleyland.com) or Naveen Kumar (naveen.alc@ashokleyland.
com) at Ashok Leyland and Mike Whitaker (whitakmb@colorado.edu) or Professor Anu
Ramaswami (anu.ramaswami@cudcnver.edu) at the University of Colorado.
IOCIETY
Driver Training Centre, Burari
Following the success story of its Driver
driving track with various road configurations
Training Centre in Namakkal and furthering
complete with electronic signals,
its commitment to safer roads and better
signboards, road markings and streetlights
drivers, Ashok Leyland has commissioned the
for night driving. Trained instructors
Driver Training Institute (DTI), Burari,
impart theoretical and practical training
in partnership with the Government of
to the drivers. In line with the driving
National Capital Territory of Delhi.
environment and current needs of drivers,
"To ready a commercial vehicle driver for

life on the road - and off the road" is the
mission of this first ever such public private
practical training and tips on fuel efficiency

and handling of hazardous goods are also
provided.
partnership in North India. Operating on
Yoga and AIDS awareness are also part of
a revenue-neutral basis, the Institute runs
the exhaustive curriculum. To start with,
under an apex governing body called FAITH
the institute provides a two-day refresher
(Foundation to Assist Inculcating Traffic
course for heavy vehicle drivers, evaluation
Habits), constituted by the Government of
of heavy vehicle drivers, PSV badge training
Delhi.
programme and a programme on defensive
The DTI is built on 12 acres of land that

houses classrooms, an auditorium, a library
and a trainees' hostel. It has a 2.2 km
By partnering
the Government
of Delhi, Ashok
Leyland hopes
to replicate
its Namakkal
success at the
Burari Driver
Training
Institute.
driving and fuel saving. It hopes to add more

courses in the future.

Registered Office : 19, Rajaji Salai, Chennai 600 001
INVESTOR UPDATE
No. 10 (May 2006)
CONTENTS
Page No.
Feedback on Shareholders' Satisfaction Survey 2005

Part I - GENERAL
3
3
3
3
4
4
4
4
Unique Identification Number (UIN)

Permanent Account Number (PAN)
Dematerialisation Charges
Share Split
Unclaimed Dividend
Payment of Dividend through Electronic Clearing Service (ECS)
Printing of Bank Account details in the Dividend Warrant
Shareholders' Satisfaction Survey
Part II - SHARES HELD IN PHYSICAL FORM
5
5
5&6
6
6
Issue of Share Certificate of the face value of Re. 1/- each

Nomination Facility
Dematerialisation of Shares
Procedure for opening a Demat Account
Procedure for Dematerialisation of Shares
Part III - SHARES HELD IN ELECTRONIC FORM
6&7
General information
Care to be taken about Demat Account

ADDRESS FOR CORRESPONDENCE
Registrar & Transfer Agent (R&TA)
M/s. Integrated Enterprises (India) Limited
(Unit: Ashok Leyland Limited)
2nd Floor, "Kences Towers",
No. 1, Ramakrishna Street,
North Usman Road, T Nagar,
Chennai -600 017.
Tel.: 91-44-28140801-03
Fax : 91-44-28142479, 28143378
E-mail: yesbalu@iepindia.com
Company - Secretarial Department

M/s. Ashok Leyland Limited
Secretarial Department,
5th Floor, Khivraj Complex II,
477-482 Anna Salai, Nandanam,
Chennai - 600 035.
Tel. : 91-44-24331120
Fax : 91-44-24335633
E-mail: secretarial@ashokleyland.com
ns@ashokleyland.com
Feedback on Shareholders' Satisfaction Survey 2005

.nd
At the meeting held on 22
October 2005, the Shareholders /
Investors Grievance Committee of the Board reviewed the detailed

analysis of the responses received from the shareholders for the
Shareholders' Satisfaction Survey 2005.
A large number of respondents had expressed concern about
the slow movement in the share price of the Company,
expectation of Bonus Shares and also a higher quantum of
dividend.
Overall, the Committee expressed appreciation about the
survey having been done continuously for 5 years and also
about the positive feedback from the shareholders. It was
observed that AL was one of the few Corporates who have
sustained this initiative. The Committee also emphasised the
need to continue to maintain the high image of investor
servicing in future also.
Various points raised by the individual shareholders have
been analysed, reviewed and necessary actions were
initiated, wherever required.
The shareholders' feedback was also shared with the R&TA,
M/s Integrated Enterprises (India) Limited, in order to identify
areas of improvement and take further action.
Parti
GENERAL
Unique Identification Number (UIN)
SEBI had suspended all fresh registrations for obtaining UIN and the requirement to obtain/quote UIN under
the MAPIN Regulations/Circulars with effect from July 01, 2005.
However, as per the press release dated December 30,2005 SEBI is planning to resume fresh registrations
for obtaining Unique Identification Number (UIN) under SEBI (Central Database of Market Participants)
Regulations, 2003 (MAPIN), after considering the recommendations of the Committee set up by SEBI interalia to examine the issues related to MAPIN. SEBI is yet to issue detailed guidelines.
Permanent Account Number (PAN) - Mandatory
As per the recent amendment in the Income Tax Act, quoting the PAN is mandatory in respect of any
investment of Rs. 50,0007- or more in any equity IPOs or debentures of any Company, Government of India
Bonds and any Mutual Fund.
In case the PAN is not allotted, a declaration in Form 60 will have to be furnished.
Permanent Account Number (PAN) is compulsory for all categories of demat account holders including
minor, trust, foreign corporate body, banks, corporates, Flls and NRIs.This comes into effect in respect of all
demat accounts that are opened on or after April 1, 2006. Further, from October 1, 2006 onwards, the
existing account holders would not be able to operate the accounts till they produce the PAN details.
In case of demat accounts held jointly, all account holders need to provide their PAN Cards. Original PAN
Card needs to be produced to the DP for verifying the photocopy.
Dematerialisation Charges
Holding the investments in dematerialised form has several advantages as has been highlighted in our
earlier Investor Updates. For the benefit of investors, some of'these are highlighted in Part II. SEBI has
rationalised the charges for the demat segment as under:
a) No investor shall be required to pay any charge towards opening of a Beneficiary Owner (BO) Account
except for statutory charges as may be applicable;
b) No investor shall be required to pay any charge for credit of securities into his/her BO account;
c) No custody charges shall be levied on any investor, with effect from April 1, 2005; and
d) With effect from January 09,2006, no charges shall be levied on Beneficiary Owner (BO) for transfers of
all the securities lying in his/her account to another branch of the same DP or to another DP of the same
depository or another depository, provided the BO Account(s) at transferee DP and at transferor DP are
one and the same, i.e. identical in all respects. In case the BO Account at transferor DP is a joint account,
the BO Account at transferee DP should also be a joint account in the same sequence of ownership
(SEBI Circular no. MRD/DoP/Dep/Cir-22 /05 dated November 09, 2005).
Shareholders may please note the above and dematerialise all their securities and reap the benefits of
holding the securities in dematerialised form.
Share Split
The paid-up capital of the Company which consisted of equity shares of face value of Rs.10/- each upto
July 6, 2004, was sub-divided (split) on July 7, 2004, to equity shares of face value of Re.1/- each, i.e. each
equity share of Rs.10/- was sub-divided (split) into 10 equity shares of Re.1/- each. Sub-divided (split)
shares of Re.1/- face value continue to be listed on the Madras Stock Exchange Ltd., Bombay Stock Exchange
Ltd., and National Stock Exchange of India Limited without any discontinuity.
Unclaimed Dividend
The Dividend Warrants for the financial year ended 31st March 2005 had been mailed to shareholders
immediately after the AGM on 26th July 2005. If the dividend warrant is not encashed, please write to the
R&TA immediately along with the dividend warrant, if available.
Dividend that remains unpaid or unclaimed for a period of seven years will be transferred to the Investor
Education and Protection Fund of the Govt. of India. Unpaid amounts of interest and redemption amount on
debentures are to be transferred to the Investor Education and Protection Fund.Thereafter no claim can be
made against either the Company or the Fund and no payment shall be available in respect of such claims.
Given below are the details of dividend payments, and the due dates when the unpaid amounts are to be
transferred to the Investor Education and Protection Fund:
Financial Year
Dividend Payment
date
Proposed Date for

transfer to IEPF *
1998-99
16.09.1999
01.11.2006
1999-00
30.05.2000
18.07.2007
2000-01
24.07.2001
24.08.2008
2001-02
26.07.2002
26.08.2009
2002-03
22.07.2003
22.08.2010
2003-04
29.07.2004
29.08.201 1
2004-05 ,
26.07.2005
27.08.2012
* indicative date's, actual dates may vary.

Payment of dividend through Electronic Clearing Service (ECS)
By opting to receive the dividend amount through ECS, the shareholders will receive immediate credit of the
dividend, at no additional cost, into the designated bank account. This avoids delay/loss/damage in postal
transit, fraudulent encashment and also reduces correspondence on revalidation and issue of duplicate
warrant.
Considering the advantages, a large number of shareholders have opted for the ECS facility so far. Because
of the very good response this facility has been extended to more cities.
Printing of Bank Account details in the dividend warrant
To avoid the risk of fraudulent encashment of dividend warrants, shareholders are requested to
provide details of their Bank account such as Name of the Bank, Branch address, type of account
and the account number so that these can be printed in the warrant and mailed to shareholder's
address.
For the shares held in physical form, the details may be advised to the R&TA.
For the shares held in demat form, the details as received in the Beneficiary Position are being used. Hence
shareholders are requested to immediately check the details available with their Depository Participant and
advise them immediately of the changes, if any, so that correct details are issued by the Company at the
time of dividend payment.
Shareholders' Satisfaction Survey
We will be thankful if shareholders spare their valuable time to fill up and return the enclosed Shareholders'
Satisfaction Survey Form, which also covers the services provided by the R&TA. Postage Stamps need not
be affixed, if posted in India; this will be borne by the Company.
Part II
SHARES HELD IN PHYSICAL FORM

Issue of Share Certificate of the face value of Re. 1/- each
The equity shares of the face value of Rs.10/- has been sub-divided (split) into equity shares of Re.1/- each
viz., each equity share of Rs.10/- has been sub-divided into 10 equity shares of Re.1/- each. The Share
Certificate for the equity shares of Re.1/- face value was forwarded to the shareholders holding shares in
physical form along with the dividend warrant without insisting on surrender of the old share certificate of
Rs.10/- each. The Share Certificate of the face value of Rs.10/- ceased to be valid on and from July 7, 2004
and hence shareholders, still holding the old certificates are requested to cancel / destroy them at their end
itself.
Nomination Facility
Individual investors whose shares are not in joint names are requested to utilise the nomination facility.
Please note that Nomination once recorded is valid till the shares are transferred out and it is not necessary
to give the nomination every year. Nomination Form can be downloaded from our website
www.ashokleyland.com or obtained from the R&TA.
Dematerialisation of Shares
As explained under Part I - General - there is considerable reduction in the charges for holding the securities
in dematerialised form and hence it is all the more recommended that the investors hold their securities in
dematerialised form.
j
'
Besides the/recently introduced cost savings, holding the securities in demat form has certain distinct
advantages as under:
It helps to effect transfer of shares immediately.
It helps avoid postal delays, loss of certificates in postal transit.
It avoids bad deliveries caused by signature mismatch.
It makes pledging/hypothecation of shares easier.
It helps easy receipt/credit of public issue allotments, and quick receipt of benefits such as stock
splits, bonus shares etc.
'
>
It eliminates the need to handle large volume of physical certificates.

No stamp duty is payable for transfer of shares.
"Market lot" stipulation is not applicable for demat shares.
In case of change of address or transmission of demat shares, investors are saved from undergoing
the entire change procedure with each company or registrar.
Ease in portfolio monitoring since statement of account gives a consolidated position of all investments.
The shareholders are aware that the Company's shares are being traded only in dematerialised form from
July 1998 onwards. SEBI have notified the shares of our Company for compulsory delivery in demateriallzed.
form only, by all investors from November 29, 1999.
It is quite difficult, if not impossible to sell the shares held in physical form, in the share market.
Hence dematerialisation is strongly recommended.
Shareholders are free to open the Demat Account with any of the Depository Participants (DPs). For a list of
DPs, the Depositories may be contacted either at their websites or at the addresses given below:
National Securities Depository Ltd.,
Trade World, 4th Floor,
Kamala Mills Compound,
Senapati Bapat Marg, Lower Parel,
Mumbai-400013.
Central Depository Services (India) Ltd.,

Phiroze Jeejeebhoy Towers 16th- 17th Floor,
Dalai Street,
Mumbai - 400 023.
Phone : 022-24972964, 24972970

Fax : 022-24976351
E-mail: relationsnsdl.co.in
Website: www.nsdl.co.in
Phone: 022-22723333
Fax:022-22723199
E-mail: investors@cdslindia.com
Website: www.cdslindia.com
Procedure for opening a Demat Account
Investor has to choose a DP (some Banks also offer DP services) for the purposes of opening beneficiary
account. The choice of the investor may be based on convenience, comfort, services offered, cost or
any other reason.
The investor has to obtain the relevant account opening form from the chosen DP.
Investor has to inter-alia submit the following documents along with the prescribed account opening
form.
DP-Client agreement as provided by the DP.
Passport-size photograph
For the purpose of verification:
Proof of Identity viz., Passport, Voter ID Card, Driving License, PAN Card with photograph, MAPIN
Card or any other documents as may be required by the QP.
Proof of Address viz., Ration Card, Passport, Voter ID Card, Driving License, Bank Passbook or
any other documents as may be required by the DP.
On successful opening of the account, the DP will give:

o
Client Id - the assigned number to be used along with DP Id for any future transactions,
Delivery Instruction slip book.
A copy of the report listing the client details captured in the DPM (software provided by NSDL/CDSL
f to the DP) database to the client. The report will be generated by the DPM.
Procedure for Dematerialisation of Shares

Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent
number*of securities in electronic form and credited in the investor's account with the DP. Dematerialisation
will normally take about 30 days.
For dematerialisation of shares, the DBF (Dematerialisation Request Form), available with your DP has to
be filled and submitted along with the physical certificates. It should be ensured that the certificates handed
over for demat are defaced by marking "Surrendered for Dematerialisation" on the face of the certificates.
Part Ml
SHARES HELD IN ELECTRONIC FORM
General Information
Details as received in the download of the Beneficiary Position from NSDL/CDSL are being used for printing
and mailing of dividend warrants etc. Hence, please check all the details relating to the Demat account and

. advise your Depository Participant (DP) with whom your demat account is maintained, of any changes so
that the Company gets the correct details.
For the shares held in electronic form, only the DP with whom demat account is maintained should be
contacted and not the Company / R&TA for effecting change in the bank account details, address for
correspondence, nomination details etc., (including transmission, transposition etc.). These get updated in
the Depository master and the R&TA gets the correct details whenever required. We reiterate that,
shareholders should contact only the Depository Participant with whom they have the Demat Account
and they need not communicate such changes to all the Companies / R&TAs individually.
CARE TO BE TAKEN ABOUT DEMAT ACCOUNT

a) Check the Transaction Statement for debits/credits (It is mandatory for a DP to provide the
Transaction Statement on regular basis).
b) Appoint a Nominee for a demat account.
c) Promptly inform DP in writing about the change in address or bank details.
d) Delivery Instruction Slip booklet should be kept in safe custody like a cheque book.
e) Do not give duly signed blank Delivery Instructions to any person.
f)
When writing a Delivery Instruction strike-out the empty spaces.
g) Change your password frequently if you are using internet facility for your Demat Account.
h) Before giving Power of Attorney (POA) to any person for operating your Demat Account,
understand the contents and implications of such POA.
i)
Check for direct credit of securities through corporate actions say bonus, rights, mergers etc.,
into the account.
j)
In case you are not transacting frequently make use of the freezing facility provided for demat
account.
SEBI INVESTOR AWARENESS WEBSITE

SEBI has launched a website 'http://investor.sebi.gov.in/1, exclusively for Investor Assistance, Awareness
and Education. SEBI has displayed inter-alia the following brochures:
MESSAGE FOR INVESTORS relating to Issue of Securities, Investing in Derivatives, Collective

Investment Scheme (CIS), Dealing with Brokers & Sub-Brokers, Investing in Mutual Funds, Buyback
of Securities, Open Offer Under Takeover Regulations and Dealing In Securities.
A Reference Guide for Investors on their Rights and Responsibilities.
A Reference Guide for Investors - It is your hard earned money! Be Inquisitive and Choosy before
You Invest It!
A Reference Guide for Investors - on Substantial Acquisition of Shares and Takeovers.
Apart from the above, SEBI has also displayed a lot of information on the awareness campaigns conducted
by it, FAQs on various issues and has also given provision for lodging investor grievances. Shareholders are
advised to visit the above website.
For any assistance or grievance investors can also contact at:
Office of Investor Assistance and Education,
Exchange Plaza, Wing II, 4th Floor,
Bandra Kurla Complex, Bandra (E), Mumbai - 400 051.
Tel.: 022 26598509

Fax: 022 26598514/18
E-mail: iggc@sebi.gov.in
E N V I R O N M E N T A L POLICY
We, at Ashok Leyland, are committed to

preserving the environment and will
Commit to comply with all relevant legal and
other requirements.
Adopt pollution preventive techniques in
design & manufacture of our products.
Conserve all resources such as power, water,
oil, gas, compressed air, etc., and optimize
their usage through scientific methods.
Continuously strive to minimize waste
generation by all possible ways and to Reduce,
Reuse & Recycle the same through a timebound action plan.
Provide a clean working environment to our
employees, contractors and neighbours.
Set and review objectives and targets for
continually improving the Environment.
Towards fulfilling the above, we propagate our
environmental policy and our commitment
to continual improvement to all employees,
suppliers, customers and neighbours. We will
strive towards maintaining harmony between
society and environment towards achieving our
environmental goal.
"
' " "
Utt Uyiud
19, Rajaji Salai, Chemwi 600 001
www.ashokleyland.com

AshokLeyland AR 2006

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SANSCO SERVICES - Annual Reports Library Services - www.sansco.

SANSCO SERVICES - Annual Reports Library Services - www.sansco.net

SANSCO SERVICES - Annual Reports Library Services - www.sansco.net

The value of knowledge and self-worth

Owning a problem is half

Focus and determination create

A little thought and innovation.

Speeding up business processes

Innovative and state-of-the-art practices

The value of know!

worth is such that th

But for a "never say die" attitude and

ANNUAL REPORT 2005

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waiting list for his community. Then luck

prizes and retained the honour for two

Applying his enriched knowledge

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For the inquisitive mind, the apple that

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But they were far too heavy to handle.

Each component had a unique loading

The stage was set for Rainbow QC to

Annual savings are in the region of

Every time they turned the key on a

R S Mishra, Deputy Manager. Casings,

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Even as he wrestled with his problem,

The raw material from Ennore

Back they went to the drawing board

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Dertha was born the youngest of six

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sat them down and explained her

was in Accra where he stayed for a

local labour whose skills will be

' I it'll ; f : politics (IS ar

intellectual engagement ; tHkf. 1 n;v :

A little thought and ini

Result: a bus that leavesMDeWr

Farhida and Kavitha had decided. They

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It was Sheela, Superintendent-in-charge

Bound to their wheelchairs, some

The result: on 'picnic day', both Kavitha

Special, aren't they9

Launched by Ashok Leyland in 2O04,

They use FunBus to transport children

As on March 31, 2OOB, FunBus

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A dynamic understanding of customer

This programme tracks the information

The need was to collate all this

Chassis Biography: All that you always

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With Mission GEMBA reaching the

Faced with a stringent deadline of

S Murali, GM, Mission GEMBA:

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novative" and stat^&f-the-art practices help

ihance the\Con^B|ny's responsiveness.

modern, high productivity vehicles

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"s., JtO&Oto,,. 1300435