Corporate Presentation

June 2014
Disclaimer
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2
 Hinduja Group – an Overview

• Promoted by the Hinduja Family

• Operations in over 35 countries
• Products and services available in
more than 100 countries
• Employs over 72,000 personnel
• Multi-billion dollar turnover Group

“My dharma (duty) is to work so that I can give”

3
 Group Business Verticals

Chemical/ Banking & Information

Automotive Power
Lubes Finance Technology

Project
Media Real Estate Healthcare Trading
Development

4
 Ashok Leyland: An Introduction

Vision:
Be in the global Top 10 in Medium & Heavy Commercial Vehicle Trucks (>7.5t GVW) and
global Top 5 in Medium & Heavy Commercial Vehicle Buses (8 m and above) in volume terms

 Over 65 years of operations with unbroken track-record of profitability

Rich history and track
 History of innovation in products - Multi-axle trucks, Articulated buses
record
 History of innovation in technology - Air brakes, CNG vehicles, Plug-in hybrids

 2nd largest medium and heavy commercial vehicle (Truck and Bus) player in India
Established presence
 Among the largest bus-makers in the World

 Exports to 34 countries
Global footprint
 Targeted expansion strategy in 5 geographic clusters

Diversified, de-risked  Presence in heavy trucks, heavy buses, light commercial vehicles, defence logistics,
portfolio power solutions, spare parts , and construction equipment

5
Profitable over Cycles …
Sales volume
(‘000 nos)

83 83 94 102 114 89
49 55 62 54 64

Sale revenue (gross)

(in Rs.mn)

121,530 137,208 132,985 105,608

83,047 89,471 78,726
48,108 60,531 66,666
39,273

Profit after tax (PAT)

(in Rs.mn)
6,313 5,660
4,413 4,693 4,237 4,337
2,714 3,273 294
1,936 1,900

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY13 FY14

Note: Figures mentioned above are standalone. Sales volume includes MHCV, LCV and defence vehicle volumes. Revenues
include aftermarket business as well
6 Source: SIAM, Company Audited Financials
…and Retaining Market share in India
Despite Entry of New Rivals
Heavy Commercial Vehicles (HCV): GVW >12T and not exceeding 49T
300 31.2 32.0 30.8 35
28.7 28.3
250 30
TIV (‘000)

25

MS (%)
200 HCV MS
20
150 HCV TIV
251 263 15
100 189 190 10
139
50 5
0 0
FY10 FY11 FY12 FY13 FY14
Medium Commercial Vehicles (MCV): GVW >7.5T and not exceeding 12T
14.8
90 82 12.7 15
80 69
70
TIV (‘000)

60 53 10 MCV MS

MS (%)
8
50 6.4 MCV TIV
40 4.9 75
30 59 5
20
10
0 0
FY10 FY11 FY12 FY13 FY14
7 Source: SIAM
 Ashok Leyland is in its Fourth phase of
Evolution

First phase Second phase Third phase Fourth phase (2014

(1967 – 1986) (1987 – 2005) (2006 – 2013) onwards)
• Ownership and • Hinduja Group and Iveco acquired • Iveco exit • Future-ready
technology Ashok Leyland • Diversification Platforms
support by British • Technology inputs from Iveco • New Engine range
Leyland • Capacity expansion
• Investment in • New Cab range
capabilities, • World-class processes
technology

8
When Market Conditions Created a Perfect
storm…

2 years of continual reduction in ..exacerbated by competition

M & HCV industry volume… and debt costs
‘000 nos
• New entrants and
incumbents driving prices
-23% down

-25% • Under-utilization of
investments
349
269 201 • Rising costs of debt

FY12 FY13 FY14

Source: SIAM

9
 …AL used this as an Opportunity to Restructure
and Grow

Restructuring Growth
• Fixed costs • New products
• Manpower • Network
• Working Capital • Processes
• Debt • Capabilities
• Non-core assets • Delivered Quality
• Defects • Exports and services

10
 Restructuring Outcomes
Rs. mn NOT TO SCALE

Admin Overheads Cost Manpower Cost

5,371 10,755

-14% -7%
9,997
4,610

FY13 FY14 FY13 FY14

Debt Operating Working Capital (1)

61,632
7,860
46,898 -24%
-69%
2,440
20 8

Aug'13 Mar'14 FY13 FY14

Note: (1)Operating working capital defined as Inventory + Debtors – Creditors for Materials
Days of sales
11 Source: Audited financials
 Restructuring: Result-oriented and
Business-focused Organization Structure
Managing Director

Global Global Power

LCV Defence Aftermarket
Trucks Buses Solutions
Business
International Sales Planning

Operations Information
Technology
Product
Development Legal &
Secretarial
Finance

Project
Human Resources Planning

Central Quality
Each business is measured on volume and market
12 share goals
 Growth: Developed Contemporary Truck
Platforms from 2.5T to 49T GVW

Dost Partner Boss Captain

 Launched Sep ‘11  Launched Jan ‘14  Launched Sep ‘13  First product launched
Jan ’14 (25T tipper)
 2.5T GVW  6-7.2T GVW  10-12T GVW
 Platform suitable for
 Featuring all-new P15  Contemporary platform  Contemporary cab with
tippers, multi-axle trucks
engine (1.5L, Common rail), developed with Nissan European features
and tractor trailers (up to
58 hp, 157 Nm torque inputs  Automated Manual 49T GVW)
 Modern cabin with power  Featuring 3L ZD30 diesel Transmission option –
 Contemporary, modular
steering, AC options engine with power output industry first
cab compliant with latest
 LCV Cargo Carrier of the of 117 hp, 420 nm torque  CV of the year 2013 – EU crash requirements
year 2012- Apollo CV  Ergonomic cabin with tilt Commercial Vehicle
 State-of-the-art features
Awards steering, AC option, cable Magazine
– hub reduction axle, V-
 Additional variants under shift and other features  Additional variants under Rod suspension, HVAC, 4
development (Rigid  Additional variants under development (Left Hand point cab suspension, air
suspension, CNG) development (Left Hand Drive, higher power nodes) suspended seats
Drive, 4 tyre variants)
13
Growth: Bus platforms from 16 to 80
seats in Capacity

Mitr Metrocity Jan Bus

 Launched Jan ‘14  Launched in Euro Bus  Innovative low floor
 16-25 seats Expo 2012 (Entry+1 step) front engine
 Urban transit midibus bus
 Derived from Partner
platform developed by Optare  Diesel and CNG, AC and
Non AC versions
 Automated Manual
Transmission option
 First set of orders received
for 1,444 buses
 4 patents applied
Metrodecker Versa EV
 Launched May ‘14  Electric vehicle developed
 Monocoque double-decker on Optare Versa platform
developed by Optare  SMMT 2012 Award for
automotive innovation
14
Growth: Critical Aggregates
Engineered to Support Future Growth

P15 H Series Neptune

 1.5L 3 cyl engine  3.8L 4 cyl and 6L 6 cyl  5.3L 4 Cyl and 8L 6 Cyl
engines engines
 58 hp, 157.5 Nm
Torque  120-230 hp range,  160-360 hp, 600 -1475
500-850 Nm torque nm, flat torque curves
 Common Rail direct
injection  Mechanical and  3rd generation common
Common Rail options rail, 4 valves/ cylinder
 Available in Euro 3,
Euro 4, CNG variants  Upgraded to Euro 3,  Available in Euro 3, Euro
Euro 4 and CNG 4, upgradable to Euro 5, 6
 Applied in Dost light
Variants
commercial vehicles  Launched in Vehicles and
 Widely used across Power Solutions
 Variants offering
most current and
higher power and
upcoming vehicle
torque under
platforms and power
development
solutions
15
Growth: Distribution Network nearly
Doubled in past 3 years
639

152 +28% • Focus on less-

500 penetrated
49
markets: North,
417
27
64 West, and East
4 9 India
358
171 159 • Increased Parts
178
155
distribution stores
• Innovation in
distribution
253 264 • Containerized
203 226 workshops
• Low cost outlets

FY11 FY12 FY13 FY14

Retail parts stores Containerized workshops Authorized Dealer outlets

service centres
16
 Contemporary, Branded Sales & Service
Outlets in Innovative and Efficient Formats

• Rebranded outlets
• Showrooms and service centres in innovative formats
• Display pavilions
• Containerized workshops

17
 Growth: New Processes Implemented
across the Value Chain
Design and Sales and
Manufacturing
Development Marketing

PRISM
Sales and Marketing Excellence

• New product development • Portfolio of shop-floor • Breakthrough process

process , benchmarked
against global best-
practices through external
consultants
• ‘Stage-gate’ process ,
enabling development first
time right
initiatives for focusing on improving
continuous workplace process efficiency in front
improvement end marketing, sales.
• Initiatives across service and spares delivery
productivity, safety,
cost, quality and other • Developed with inputs
metrics from leading consultants

SAP driven business transformation driving business process efficiency –

Implementation completed across all functions, verticals

18
 Growth: Substantial Investments in
Capabilities…

• 850 strong R&D Team

• Advanced testing facilities
• High speed, torture and ride-
and handling testing
• NABL certified 6 post chassis
dynamometer
• State-of-the-art modeling
and CAE facilities
• Advanced simulation
capabilities
• Frontal Impact
• Multidynamic modelling
• Frame and body simulation
• Noise, Vibration and
Harshness

19
 Growth: …as well as in Manufacturing
All new integrated plant at Pantnagar, with capacity of 50,000 units in 2 shifts

Press Shop Camshaft line CWP Line

Boss- Welding robots NGC Inspection Axle machining

Assembly Panorama

20
 Growth: Enhancement in Delivered Quality

Vehicle delivered factory-fresh… …with zero km on odometer

21
Efforts Evident in Improved Q4FY14
Financial Results
Revenue Cost of Goods Sold
Rs. mn Rs. mn • Despite revenue
decline, EBITDA
17.5% 18.0%
37,285 28,245 margin expanded
30,768 23,164
due to
• Favorable
revenue mix
• Manpower
Q4FY13 Q4FY14 Q4FY13 Q4FY14
rationalization
Employee & Other Operating Expenses EBITDA*/ EBITDA Margin • Overhead cost
Rs. mn Rs. mn reduction
6.0%
5.3%
4,235
3,292 1,983
2,821 2,473 1,839

Q4FY13 Q4FY14
Employee Benefit Cost Other Expenses Q4FY13 Q4FY14

Source: Audited financials

22 * EBITDA & EBITDA Margin Excludes other income
 We are Ready to Capture the Next
Wave of Growth

1. Full range of contemporary products (2.5T-49T

GVW, 16-80 seats) and Globally benchmarked
business processes
2. World-class manufacturing facilities with
capacity to volume upside (150500 vehicles p.a.)
3. Footprint in five targeted international clusters
4. Portfolio of businesses with less cyclicality
– Light Commercial Vehicles
– Defence Logistics
– Aftermarket
– Power Solutions

23
 Contemporary Products and
1 Globally benchmarked Processes
Full portfolio of contemporary products
• Trucks from 2.5T GVW to 49T GVW
• Buses from 16 to 80 seats
• Engines from 58 hp to 360 hp, 150 Nm to 1475 Nm
• Future-ready – CRS, AMT, Euro VI compatible, LH/RH
Compatible
• Contemporary, feature-rich cabs for complete range
• In-house ownership of design, manufacturing
capability for all critical aggregates– Cabs, Engines

Globally benchmarked processes

• New processes across design, manufacturing, sales

PRISM
and service
• Developed with inputs from external consultants
• Tuned over multiple cycles
Sales and Marketing Excellence
• Rolled out covering 100% of organization

24
2 World-class Manufacturing Facilities with
Capacity to Capture Demand Upside
• Seven facilities with capacity of 150500
Ashok Leyland, India
per annum
• Fully integrated plant at Pantnagar
• Fully built bus facility at Alwar
• Revamped machining and assembly
facility at Ennore
• Hosur facilities revamped for LCV
AL UAE LLC, Ras Al Khaimah, UAE manufacture

• Established as a JV with Ras Al

Khaimah Investment Authority
UK: Optare bus
manufacturing
• Well-equipped vehicle manufacturing
facility
facility
• Capacity 2000 per year, expandable
UAE: Bus
with limited investments
manufacturing in
partnership with Optare PLC, Leeds, UK
RAKIA • Modern assembly line bus body facility
India: Six • Replaces dated facilities used previously
manufacturing by Optare
facilities with total • Capable of assembling diesel, hybrid
capacity of 150500
and electric buses
25 vehicles p.a.
 Growing Footprint in Five Targeted
3 International Clusters
• Bus body building
partners in the
Ukraine

Middle-East • Avia Russia office in

Commonwealth of place, sales
• Bus assembly facility Independent States commenced
at Ras-Al-Khaimah
• Channel partners in
multiple GCC nations
• Selling substantial
number of buses

South America
• Importer company
established in Chile
• Sales commenced in
Peru
Added since 2009
Present for over 5 years
Not present
26
• Company in Nigeria,
branch in Kenya
• Local assembler in 26 ASEAN
Nigeria, Channel
• Limited direct sales
partners in Kenya
• Partners selection
• Regular sales underway-
Africa trucks and buses
underway
4 Portfolio of Businesses with Less Cyclicality

LCV(1) Defence Logistics

Aftermarket
Dost

LCV and
Defence and
Partner Construction
Aftermarket
Equipment
business
Business

MiTR
Power Solutions
Business

Note:
1.LCV business is a JV with Nissan Motor Co.
27
 LCV Business, in particular, Poised
4 to Exploit Expected Growth
‘000s
LCV total industry volume grew at 22% CAGR Products and capabilities to meet
from 2010 to 2013 upside

22%

461 525
362 432
286

FY10 FY11 FY12 FY13 FY14

Ashok Leyland’s LCVs have been well accepted
in a short time
• Network of over 300 touch
points established in the past 3
years
35
27
• Manufacturing capacity in place
8
0 0 at Hosur
FY10 FY11 FY12 FY13 FY14

28 Source: SIAM
 Platforms and Capabilities for
4 Growth in Defence Business
Products Capabilities

Stallion 4X4 Super Stallion 6X6

Stallion 6X6 Super Stallion 8X8 Prototype facility, Sengadu

Prototypes under development

Garuda 4X4 Super Stallion 6X6 10X10 Plant, Hosur

29 - New Cab
 Near-term Goals
1. Capture volume upsides from expected market recovery through
– new product platforms
– ready capacity and capabilities
2. Drive growth in non-cyclical and counter-cyclical businesses
– Light Commercial Vehicles
– Power Solutions
– Defence
– Spares
3. Increase sales in Middle East and Africa
4. Pursue debt reduction and operating leverage improvement
5. Pursue exits from non-core businesses

30
 Medium-term Strategy
1. Move from being a predominantly India-centric player to a
regional player- grow across all 5 targeted clusters
2. Deliver differentiation and increased value relative to
competition through new, contemporary platforms- Boss,
Captain, Neptune, Dost, Partner and Mitr
3. Continue driving operational excellence
4. Further de-risk against cyclicality
– Defence logistics, parts
– Adjacent services e.g. AMCs
5. Leverage other global products, such as those from Optare

31
 Summary Take-aways

• Core business transformed 

• Globally competitive, contemporary products in place 
• Own critical aggregates and technologies 
• Targeted capacity expansion completed 
• Well poised to capture expected recovery in volume 
growth in the near term
• Clear plan for de-risked growth in the medium term 
• Continued thrust on debt reduction, exit from non-core 
businesses

32
 APPENDIX

33
Summary FY14 Financials
Income Statement (Rs. mn) Standalone Standalone Consolidated
FY13 FY14 FY14
Revenue 124,812 99,434 114,867
COGS 91,231 76,026 81,385
Gross Profit 33,581 23,408 33,482
Gross Margin % 26.9% 23.5% 29.1%
Employee Benefit Expense 10,755 9,997 13,456
Other Expenses 14,061 11,746 15,806
EBITDA 8,765 1,666 4,220
EBITDA Margin % 7.0% 1.7% 3.7%
D&A 3,808 3,770 5,300
EBIT 4,957 (2,105) (1,079)
Interest 3,769 4,529 8,055
Other Income 624 665 924
Exceptional Items 2,896 5,057 5,208
PBT 4,707 (912) (3,002)
Tax Expense 370 (1,206) (685)
PAT 4,337 294 (2,317)
PAT Margin % 3.5% 0.3% (2.0%)

Select Balance Sheet Items (Rs mn)

Long Term Debt 27,378 32,965 54,912
Short Term Debt (including Current Maturities of Long Term Debt) 16,176 13,938 30,088
Total Debt 43,554 46,903 85,000
Shareholder's Equity 44,551 44,479 39,892
Minority Interest - - 6,521
Total Shareholders' Equity & Liabilities 130,967 128,080 175,343

Cash and Cash Equivalents and Short Term Investments 78 3,895 5,713
Fixed Assets 59,708 58,414 70,875
Non-current Investments 23,376 24,053 6,902
Total Assets 130,967 128,080 175,343

Key Ratios
Total Debt / Equity(1) 1.38x 1.43x 3.02x
Net Debt / Equity(1) (2) 1.37x 1.31x 2.81x
Note: (1) Equity net of Revaluation Reserves.
34 (2) Net Debt = Total Debt less Cash and Cash Equivalents and Short Term Investments
 Thank You

35