Annual Report 2005 – 2006


Board of Directors Highlights of Performance Directors’ Report Report on Corporate Governance Auditors’ Certificate on Corporate Governance Management Discussion and Analysis Report Directors’ Responsibility Statement CEO/CFO Certification Auditors’ Report to the Members Balance Sheet Profit and Loss Account Cash Flow Statement Statement on Significant Accounting Policies Schedules to Balance Sheet Schedules to Profit and Loss Account Notes to the Accounts Balance Sheet Abstract and Company’s General Business Profile Annexure to Directors’ Report – Particulars of Employees

19 20 21 24 34 35 40 41 42 44 45 46 48 50 58 61 68 69

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Board of Directors

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

Chief Operating Officer Chief Financial Officer Executive Directors

V K Dasari K Sridharan J N Amrolia S Balasubramanian A Bhat A R Chandrasekharan R Malhan S Nagarajan M Natraj B M Udayashankar

Executive Director & Company Secretary N Sundararajan Auditors Cost Auditors Bankers 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 Registered Office Plants 19, Rajaji Salai Chennai 600 001 Ennore and Ambattur, Chennai Hosur, Tamil Nadu Bhandara, Maharashtra Alwar, Rajasthan Website



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.) Engines (nos.) Spare parts and others Sales value Profit before tax Profit after tax Assets Fixed assets Investments Net current assets 10847 3682 8239 22768 Financed by Shareholders’ funds - Capital - Reserves Loan funds Deferred tax liability (Net) 1222 12830 6919 1797 22768 Basic earnings per share (paise) (Face value Re. 1 each) Dividend (%) Employees (nos.) 120 11845 100 12178 75 12007 50 11860 45 13218 40 13489 35 14056 10 14254 10 14635 50 15274 274 1189 10296 8804 1709 21998 228 1189 9005 4990 1803 16987 163 1189 8406 7175 1685 18455 101 1189 9131 8884 1892 21096 78 1189 10496 9330 — 21015 77 1189 10145 9657 — 20991 66 1189 9852 9622 — 20663 17 1189 9763 12473 — 23425 15 1189 9704 11768 — 22661 105 9790 2292 9916 21998 9211 1466 6310 16987 9398 1576 7481 18455 10098 1173 9825 21096 9613 1179 10223 21015 9458 1204 10329 20991 9547 625 10491 20663 9026 485 13914 23425 8399 583 13679 22661 61655 7171 7838 60531 4523 3273 54740 6254 5460 48108 3550 2714 48654 5085 4468 39273 2865 1936 36444 5924 4771 30740 1701 1202 29673 5258 5492 26304 1322 923 32475 6311 5139 26067 1019 917 37859 6004 2145 25987 933 785 29741 7185 2145 20451 233 204 31547 7611 2520 20143 207 184 43352 8331 2030 24825 1570 1249

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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 Profit before tax Less: Provision for taxation Add: Transfer from/(to): Debenture redemption reserve Balance profit from last year General Reserve Profit available for appropriation Appropriation: Proposed dividend Tax on dividend Balance profit carried to Balance sheet Basic Earnings per Share (Face Value Re.1/-) DIVIDEND The Directors recommend a dividend of 120% (Rs.1.20 per equity share of Re.1/-) 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. PART – II CORPORATE MATTERS CORPORATE GOVERNANCE Your Company has consistently adopted high standards of Corporate Governance even before the SEBI Guidelines on this subject were mandated in the year 2000. Rs. Millions 4,523.00 1,249.80 3,273.20 68.33 1,784.13 (1,000.00) 4,125.66 1,597.86 224.10 2,303.70 2.74 2004-2005 Rs. Millions 3,550.10 836.00 2,714.10 89.17 1,339.24 (1,000.00) 3,142.51 1,189.29 169.09 1,784.13 2.28

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. The particulars of employees as prescribed by the Companies (Particulars of Employees) Rules, 1975 are furnished in Annexure-F to this Report. The CEO / CFO Certification as required under the SEBI Guidelines, is attached Annexure-G to this Report.


Customers.each) w. COST AUDITOR The Government has stipulated Cost Audit of the Company’s records in respect of motor vehicles as well as engines. On behalf of the Board of Directors Chennai April 29. From April 1. The necessary resolution is being placed before the shareholders for approval. 2006 for conversion of 22700 FCCNs into 32292576 equity shares. The Company has received confirmation that their appointment will be within the limits prescribed under Section 224(1B) of the Companies Act. the Company has received 9 requests upto March 31. FOREIGN CURRENCY CONVERTIBLE NOTES (FCCNs) The Foreign Currency Convertible Notes (FCCNs) for USD 100 mn. the number of shareholders as on March 31. Conversion Price (reset in 2005) of Rs. Mr H Klingele ceased to be a Director of the Board effective January 31.f. July 7. Dealers and Suppliers and also the valuable assistance and advice received from major shareholders LRLIH Ltd. issued in April 2004 are convertible into shares of the Company (Fixed Exchange Rate USD 1 = Rs. which rank pari passu with the earlier shares in all respects. strengthening marketing infrastructure. M/s Geeyes & Co.. SUBDIVISION OF SHARES During the year 2004-05. as part of the Corporate Governance Report (Annexure-B) to this Report.per share of face value Re. Mr F J Colon Martinez. breakthroughs in wage settlements. ACKNOWLEDGEMENT The Directors wish to express their appreciation of the continued co-operation of the Central and State Governments. Mr S V Young has been appointed as an Additional Director at the Board Meeting held on July 26. Secretarial Audit is being carried out at the specified periodicity by a Practising Company Secretary. Directors retire by rotation at the forthcoming Annual General Meeting and are eligible for reappointment. 2006 upto April 29. The Remuneration Committee and the Board have considered it essential to continue to retain his leadership of the Company. after serving on the Board for about 18 years. 2007.each to a face value of Re. 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. DIRECTORS The present term of Mr R Seshasayee. 2006 has increased to 137244 (from about 72000 before subdivision).44. Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment. Their findings have been very satisfactory. your Company’s shares were subdivided (from a face value of Rs. The details of the enhanced share capital as on March 31. 2006. Cost Auditors have carried out these assignments. The Audit Committee of the Board has recommended their re-appointment.e. AUDITORS M/s M S Krishnaswami & Rajan and M/s Deloitte Haskins & Sells.each.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. The Directors also wish to thank all the employees for their contribution. 2005. Bankers. SECRETARIAL AUDIT As directed by Securities and Exchange Board of India (SEBI). 2006 R J SHAHANEY Chairman 22 A N N U A L R E P O R T 2 0 0 5 . he has not only led the Company in achieving consistently good operating results. Starting from February 2006.10/.1/. Mr E A Kshirsagar. 2004.1/. 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. The initiative has started yielding good results as reflected by the increased sales and market share for this Company in these regions. support and continued co-operation through the year. All the procedures consequent to the conversion are being completed on time and these shares. 2009 with a suitable revision in the terms of remuneration. These requests have been approved and conversions have taken place. Over the past eight years. 2006. The necessary resolutions are being placed before the shareholders for approval. 2006 to May 31. 1956. The necessary resolutions relating to this re-appointment are being placed before the shareholders for approval. GULF ASHLEY MOTOR LIMITED This Company was formed primarily to strengthen the dealer network and customer servicing in the Eastern parts of the country. labour productivity etc.10). Iveco and all the shareholders.31/. and have decided. are tradable in the Indian Stock Exchanges. subject to the approval of shareholders at this General Meeting. The Board wishes to place on record its deep appreciation of Mr Klingele’s active involvement and support. Such action has resulted in substantially increasing the shareholders base of the Company. Mr S R Krishnaswamy and Mr R J Shahaney. The findings of the Secretarial Audit were entirely satisfactory. 2006 and the corresponding revised shareholding pattern are given.. The market price of the Company’s equity shares in the Indian Stock Market has improved considerably in the last few months. but has also built up the organisation in terms of technological self-reliance. Managing Director is due to expire on March 31. Hinduja Group. manpower reduction. Financial Institutions.0 6 . particularly in Technical and Exports related matters. the Company has received 3 more requests for conversion of 8050 FCCNs into 11451773 equity shares.

realignments and system improvements in major power consuming equipments to achieve reduced power consumption.9 of Notes to the Accounts. Demand and restricting the same close to minimum payable KVA demand. Value addition in terms of modifications. Expenditure on R & D Capital Revenue (excluding depreciation) Total Total R & D Expenditure as % of total turnover 1. 152 KW (207 PS) rating on ‘H’ series 6 cylinder engine at Bharat Stage . – – – – 4.40 1.II level has been extended to cover additional power ratings and commercial production will commence shortly.85 (B) TECHNOLOGY ABSORPTION Research and Development (R & D): 1. High Mobility Vehicle 6×6 has completed various user trials with the Army. skill building and addition of infrastructure. The Company continues to strive to improve its export earnings. street lighting etc. Adaptation and Innovation: 6×2 Tipper for Mining Sector.III engine with ”COMMON RAIL FUEL INJECTION SYSTEM” has been developed and durability trials have commenced.55 563. - (C) FOREIGN EXCHANGE EARNINGS AND OUTGO Details of earnings and outgo of foreign exchange are given in Schedules 1. undergoing various trials with Indian Army. 912 and 1112 have been launched in the Market. 2. Implementing various other energy saving measures in office lighting. Maintaining power factor always at ‘ideal condition’ achieved through optimum use of capacitor banks and incentives obtained from State Electricity Board. Future Plan of Action Continue improvements in processes. Benefits derived as a result of the above R & D Wider range of vehicles.Annexure A to Directors’ Report (A) CONSERVATION OF ENERGY All manufacturing plants have implemented various conservation of energy initiatives leading to significant savings in cost during 2005-2006. Two versions of the Ecomet i. Specific areas in which R&D carried out by the Company Bharat Stage . scheduled for launch shortly. Upgraded version of Stallion.e. 3. A Field Articulated Tractor 6×6 vehicle has been developed for use by the Army. Technology Absorption. Systematic monitoring of recorded KVA Max. Millions 485. ANNUAL REPORT 2005-06 23 .6 to 1. Few of such key initiatives are: – Elimination of non-productive energy consumption by continuous systematic monitoring through installation of microprocessor based digital energy meters in substations and auto controller/sensing to avoid idle running of equipment thus conserving electricity and replacement of high capacity pumps of machines/ equipments with optimum capacity pumps. enhanced value equation and greater customer satisfaction.049.7% Rs.

and is also displayed at the Company’s website www. 2006. 2006 March 29. and exceeding wherever possible.G. headed by a non-executive Chairman. 2005 July 26. 2006 • • Board Strength 11 12 12 12 12 No. 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. as on March 31. categorised as indicated: i) Non-executive Directors a) Promoter Group Mr F J Colon Martinez (Alternate : Mr G Sagone) Mr A K Das (Alternate : Mr I N Chatterjee) Mr D G Hinduja (Vice Chairman)(Alternate : Mr Y M Kale) Mr F Sahami Mr A Spare b) c) Connected with Associate Companies Independent Mr R J Shahaney (Chairman) Mr D J Balaji Rao Mr P N Ghatalia Mr S R Krishnaswamy (representing LIC as shareholder) Mr E A Kshirsagar Mr S V Young Mr R Seshasayee ii) Executive Director Managing Director Equity Shares held by Directors Name of the Director Mr R J Shahaney Mr R Seshasayee b) No.0 6 . who have all affirmed in writing their adherence to the Code. consisted of the following Directors.Annexure B to Directors’ Report . The full text of the Code is furnished at the end of this Report. 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. of equity shares 11730 11236 There are no other shares or convertible instruments held by any other Director(s) Attendance at Board Meetings and last 2) BOARD OF DIRECTORS a) Composition : The Board of Directors of the Company. The last Annual General Meeting was held on July 26. 24 A N N U A L R E P O R T 2 0 0 5 .ashokleyland. 2005 January 31. 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.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. 2005 October 22. of Directors present 11 12 12 12 7 The time gap between any two meetings did not exceed four months. 2005.M.

the secretarial and the operating practices of the Company are in line with the above Secretarial Standards. As Invitee Yes Other Boards (excluding Ashok Leyland) (Note 5) 4 (4 as Chairman) 7 1 5 7 4 Nil 1 4 1 1 1 6 (3 as Chairman) 3 3 (1 as Chairman) 1 Other Board Committees (excluding Ashok Leyland) (Note 6) 1 (1 as Chairman) 8 (4 as Chairman) Nil 1 7 (3 as Chairman) Nil Nil Nil 4 (1 as Chairman) 1 Nil Nil 1 Mr R J Shahaney Mr D J Balaji Rao Mr F J Colon Martinez Mr A K Das Mr P N Ghatalia (Note 1) Mr D G Hinduja Mr H Klingele (Note 2) Mr S R Krishnaswamy Mr E A Kshirsagar Mr F Sahami Mr S V Young Mr A Spare Mr R Seshasayee Alternate Directors : Mr I N Chatterjee Mr Y M Kale Mr G Sagone (Note 3) (Note 4) 1 Nil 4 No No Yes 3 (1 as Chairman) 2 (1 as Chairman) Nil Note 1: Appointed as a Director effective April 1. 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. 2005 Yes Yes No Yes Yes Yes Yes Yes Yes Yes Not Applicable Yes.Report on Corporate Governance MEMBERSHIPS AS ON 31/3/2006 IN Name of Director No. 1956. 3) AUDIT COMMITTEE a) Constitution The Audit Committee of the Company was constituted in July 1987 with Terms of Reference. Note 5: The above excludes Foreign companies. of Board meetings attended 5 5 1 3 5 4 4 5 5 4 3 Nil 5 Whether attended last A. held on July 26. and Shareholders/Investors Grievance Committee are reckoned for this purpose. 2005. with the current status duly updated. Private Limited Companies and Alternate Directorships. Note 6: Only Audit Committee. which covered most of the aspects stipulated by SEBI in the year 2000. The Terms of Reference also fully conform to the requirements of Section 292A of the Companies Act. These were comprehensively reviewed once again by the Company’s Board in the year 2000. 2005. Note 3: Appointed as a Director effective July 26. 2006. General Meetings. ANNUAL REPORT 2005-06 25 . Note 2: Ceased to be a Director effective January 31. Dividends etc. Note 4: Appointed as a Director effective January 31. 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. 2006. 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.G. Though these Standards are so far only recommendatory.M.Annexure B to Directors’ Report .

The Audit Committee discusses with the Statutory Auditors on the “Limited Review” of the quarterly/half-yearly accounts. the Audit Plan for the year. Mr P N Ghatalia and Mr F Sahami had been senior partners in leading firms of Chartered Accountants. 2005) All the members of the Audit Committee have expertise in Finance as well as in general management. The Committee discusses with the Cost Auditor about the Annual Cost Audit Reports. Mr Balaji Rao had been the Deputy Managing Director of the then ICICI Ltd. Mr E A Kshirsagar. and Determination and approval of the annual increments to the Managing Director . All the members were present at this meeting. his observations and allied matters. Mr K Sridharan. independent Director is the Chairman of the Committee. Company Secretary is the Secretary to this Committee. and other related matters. 2006 • Committee Strength 3 4 4 4 No. attended all the above meetings of the Committee. of Directors present 3 4 4 4 Mr N Sundararajan. 2005 October 22. • The Statutory Auditors of the Company and the Cost Auditors are invited to join the Audit Committee Meetings. the above determinations are based on the overall performance of the Company during the relevant financial year. (now ICICI Bank) and the Managing Director of Infrastructure Development Finance Company Ltd.0 6 . 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. Chief Financial Officer. matters relating to compliance with Accounting Standards.Report on Corporate Governance b) Composition.Annexure B to Directors’ Report . Company Secretary is the Secretary to the Committee. 2005. Mr R J Shahaney and Mr F Sahami are the other members. Within the overall limits approved by the shareholders. 2005 July 25. 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. b) The Committee met once during the year on April 27. Mr D J Balaji Rao.. Mr N Sundararajan. and on the Committee’s assessment of the personal contribution and achievements of the Managing Director. 2005 January 31. 4) REMUNERATION COMMITTEE a) The Remuneration Committee consists entirely of non-executive Directors. 26 A N N U A L R E P O R T 2 0 0 5 . Promoter Group Director Mr F Sahami c) Meetings and Attendance Audit Committee Meetings held during the year 2005-06 and Attendance Details Attendance : Date of Meeting April 27. the Auditors’ observations arising from the annual audit of the Company’s accounts. and has attended all the above Meetings of the Committee. He is also the Head of the Internal Audit function. names of members and Chairperson The composition of the Audit Committee : Independent Directors Mr E A Kshirsagar (Chairman) Mr D J Balaji Rao Mr P N Ghatalia (from April 28.

d) The details of remuneration paid/payable to the Directors for the year 2005-06 are : i) Non-executive Directors .022 4. Alt.000 20.000 12.000 200. Though at the Annual General Meeting held on July 24.000 4. the shareholders had approved the payment of Commission to the non-executive Directors of the Company.320. Rs. 2001. From January 31. There is also a contract corresponding to his appointment as Managing Director.000 20. At present there is no other remuneration to non-executive directors. 5) SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE a) The Shareholders/Investors Grievance Committee has been functioning since August 2000. and also all other matters relating to investor relations and grievances.320. The Company has not offered any Employee Stock Options.Sitting Fees : (excluding reimbursement of travel and other expenses incurred for the company’s business) Rs. This Committee presently deals with and approves all share transfers. ANNUAL REPORT 2005-06 27 . Director Mr A Spare 100. Managing Director is under contract of employment with the Company. Managing Director are the other members. Mr R J Shahaney is the Chairman of the Committee. Mr R J Shahaney Mr D J Balaji Rao Mr I N Chatterjee. allowances and perquisites. a) Fixed Component Salary Perquisites (**) b) Variable Component Commission Special Allowance Total (**) 2. Alt.000 160. and the Articles of Association of the Company. for attending meetings of the Board or any Committees of the Board. no such payments have been approved by the Board so far. 1956.000 Nil Certain perquisites are valued as per the Income Tax Rules. as may be decided by the Board.000 160. Mr D J Balaji Rao. Does not include contribution to Provident Fund @ 12% and Superannuation Fund @ 15% of the salary.000 60. as determined by the Remuneration Committee.000 60.847. the Committee has also been empowered to allot shares upon conversion of the Foreign Currency Convertible Notes issued in April 2004.Report on Corporate Governance c) The Remuneration Policy of the Company is summarised as follows : (i) For Managing Director The total remuneration.Annexure B to Directors’ Report . transmissions etc. Independent Director and Mr R Seshasayee. There is no severance fees payable to him. 2006. stipulating 3 months’ notice period from either side.000 Mr S R Krishnaswamy Mr E A Kshirsagar Mr F J Colon Martinez Mr F Sahami Mr S V Young Mr G Sagone.000 120.022 380. consists of • a fixed component – consisting of salary..000 1. (ii) For Non-executive Directors Sitting Fees is paid as per the Companies Act.160. subject to shareholders’ approval.000 340.000 200. the perquisites and benefits are in line with the Company’s Rules for senior managerial personnel.000 80. Directors are also reimbursed actual travel costs and incidental expenses incurred for attending such meetings or in connection with the Company’s business. Mr Seshasayee. • a variable component – linked to the performance of the Company as well as of the Managing Director – consisting of Commission and Special Allowance.647. Director Mr A K Das Mr P N Ghatalia Mr D G Hinduja Mr H Klingele ii) Managing Director (No Sitting Fee is payable) Rs.

2003 55th AGM . Directors.m. GENERAL BODY MEETINGS a) Details of location and time of holding the last three AGMs. Year 54th AGM . 2006. July 29.Annexure B to Directors’ Report . there were 4 share transfers pending. 1398 investors had responded to the Survey.2004 Location Narada Gana Sabha. 2005 10..m. 56th AGM . b) All the Special Resolutions placed before the shareholders at the above meetings were approved. 7) DISCLOSURES There have been no materially significant related party transactions with the Company’s Promoters.m. 28 A N N U A L R E P O R T 2 0 0 5 . July 26. During the year. which was mailed along with the Notice of AGM 2005. The Committee reviews the performance of the Company’s Registrar & Transfer Agent (R&TA). 2004 10. March 5.00 a. All complaint letters received from Stock Exchanges/ SEBI/ Dept. The very few letters. For the fifth year in succession. 314. Chennai – 600 006 Date & Time February 28. Company Secretary is the Secretary to this Committee and is also the Compliance Officer nominated for this purpose. 2005 10. 1190 complaint letters were received from investors. and their system of dealing with and responding to correspondence from all categories of shareholders. 314 TTK Road. the Committee also reviewed the Special Report analysing the feedback from the Investor Satisfaction Surveys. and the responses thereto are reviewed by this Committee. the Company conducted an Investor Satisfaction Survey through a questionnaire. d) 6) As on March 31. Chennai – 600 018 Date & Time July 22.00 a.Report on Corporate Governance b) c) Mr N Sundararajan. Details of EGMs held in the last three years: Year 2004 2005 Location Narada Gana Sabha. all these were dealt with satisfactorily. The Company had no subsidiary company as on March 31.2005 The Chairman of the Audit Committee was present at all the above AGMs. The necessary disclosures regarding the transactions with Related Parties are given in the Notes to the Accounts.m. 2945 letters (including 12 letters from SEBI / Stock Exchanges / DCA) were received on routine matters. There have been no instances of non-compliance by the Company on any matters related to the capital markets. There were no resolutions requiring approval through Postal Ballot. 2006. 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. Chennai – 600 018 Narada Gana Sabha. their Subsidiaries or relatives which may have potential conflict with the interests of the Company. Chennai – 600 018 Narada Gana Sabha.0 6 . A vast majority of them have expressed high degree of satisfaction about various aspects of investor servicing. 314 TTK Road. 2003 10. Anna Salai.45 a. the Management.m. TTK Road. 2004 11. these were completed within the due dates. and approved the initiatives for further improvements in investor servicing. which occasionally remained pending beyond the normal time lag were cases of inadequate documentation or clarifications being awaited.30 a. of Company Affairs etc.30 a. 314 TTK Road. At the October 2005 meeting. Chennai – 600 018 Rani Seethai Hall 603. A few issues raised by some investors were pursued and dealt with satisfactorily.

(Physical) (Demat) National Stock Exchange of India Ltd. 2006 to July 20. 314. 2006 Audited Results for the year ending March 31. to all the Stock Exchanges. c) d) 9) GENERAL SHAREHOLDER INFORMATION a.Report on Corporate Governance 8) MEANS OF COMMUNICATION a) b) The half-yearly results are being mailed to all shareholders since October 2001. 2006 (both days inclusive) [Since changed . 2006) July 20. Bombay Stock Exchange Ltd. 492. e.30 a. TTK Road. Narada Gana Sabha.600 006) Unaudited results for the quarter/half-year ending September 30. National Stock Exchange of India Ltd. 2006 (Since changed to: August 1. Chennai – 600 018 } (Since changed to: August 1. f. Anna Salai. Presentations made to institutional investors and analysts. 2006 . and several other details/information of interest to various stakeholders. 2006 .10.Commencing August 1.Annexure B to Directors’ Report . d. 2006 to August 1. A Management Discussion and Analysis Report is being presented as a part of the Annual Report from the year 1998-1999 onwards. b) Listing of Global Depository Receipts (GDRs) c) Listing of Foreign Currency Convertible Notes (FCCN) London Stock Exchange The Listing Fees has been paid uptodate. 2006 Last week of October 2006 From July 4.00 a. Bombay Stock Exchange Ltd. 57th Annual General Meeting — Date and Time — Venue b. Kamaraj Memorial Hall.m. 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. 2006 (Since changed to: July 30. Stock Code a) Trading Symbol at Madras Stock Exchange Ltd. 2007 c. 2006) Last week of January 2007 Before end of May 2007 July 20.m. Teynampet. 2006 (Since changed . Financial Calendar Annual General Meeting Unaudited results for the quarter ending June 30.ashokleyland. Book Closure Date Dividend payment date a) Listing of Equity Shares July 20.July 14. 2006) Madras Stock Exchange Ltd. Chennai . 2006 (both days inclusive)] Commencing July 20. b) Demat ISIN Numbers in NSDL & CDSL ALL 477 500477 ASHOKLEY London Stock Exchange Equity Shares INE208A01029 ANNUAL REPORT 2005-06 29 .com The Company’s website also displays official press /news releases. along with a letter to the shareholders from the Managing Director.10. 2006 Unaudited results for the quarter ending December 31.

921.00 24.95 26.45 23.769.10 3.084.80 S&P CNX Nifty High Low 6.896. Such approval is being given by the Managing Director at frequent/regular intervals (32 times during 2005-06).80 39.60 43.90 29.45 2.) 20.226.85 2. etc.42 6.649. reviewing investor grievances and to allot shares upon conversion of FCCNs. 2003..25 24.65 11. were generally approved within 12 days .945.Annexure B to Directors’ Report .80 2.332. transmissions etc.633. North Usman Road.713. requests for dematerialisation were confirmed within 10 days (as against the norm of 15 days).45 23.356.656. 2003.80 32.20 27.40 23.00 33.Nagar. Mr D J Balaji Rao.85 29.51 10. the Committee(s) met 9 times during the year 2005-06 for approving specific transfers.722.090.0 6 .70 30.140. T.98 9.90 2. j. whenever shares in physical segment are received for transfer.422. 30 A N N U A L R E P O R T 2 0 0 5 .15 7. and Mr R Seshasayee.42 6. SEBI have notified withdrawal of the transfer-cum-demat-facility.55 2.75 Low (Rs.005.35 26.25 2.80 33..85 1. Kences Towers.95 31.50 30. SEBI had directed that all Share Registry work in respect of both physical and demat segments should be handled by a single Common Agency.Report on Corporate Governance g.90 2. 2nd Floor.818.50 25. of shares.97 6.669.061.) 24.10 3.95 6. transmissions etc.35 2.35 2. Stock Market Data Bombay Stock Exchange Month Share Price High (Rs.75 35.05 2. Transfers.36 7.158. Accordingly.56 9.90 31.857.90 2.44 9.727.426.708.171.25 29. Registrar and Transfer Agents All Securities Transfer work was done in-house till March 31.55 29.40 22.17 8.20 2.099.11 7.928. 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.) April 2005 May 2005 June 2005 July 2005 Aug 2005 Sep 2005 Oct 2005 Nov 2005 Dec 2005 Jan 2006 Feb 2006 Mar 2006 25.064.05 40.50 7.821.00 h.25 29.19 10.647.70 26.033.99 9.23 8.70 High Sensex Low National Stock Exchange Share Price High (Rs.118.60 37.891. from April 1. Share Price performance in comparison to broad based indices – BSE Sensex and NSE Nifty Share Price Movement (BSE) Share Price Movement (Nifty) See chart inside back cover i.55 37.25 29.00 33.20 27. The residual matters relating to the fixed deposits are dealt with directly by the Company.65 22.21 7. In addition.123.15 2.366.382. the Board has authorised the Managing Director individually to approve all routine transfers.15 2.00 3.55 22.90 7.80 27..898.74 7.26 2.40 30.307.294.00 Low (Rs.228.65 2.70 25.30 1. 1 Ramakrishna Street. In February 2004.) 20.00 42. 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). In order to further improve and speed up investor servicing.39 8.442.537.59 7.60 30.85 29.95 2.84 9.783. the Company appointed M/s Integrated Enterprises (India) Ltd.95 29.772.55 23.344.80 33.55 25.641.25 2.30 3. transmissions.433.

1 2 3 4 5 6 7 8 9 10 Category Promoter .03 16.17 0.41 100.85 1.Annexure B to Directors’ Report . 24700 holders Shares of the Company are actively traded in the Bombay and National Stock Exchanges.89 100.48 1.01 26.27 Total No.95 1.59 50. of Shares ** 164600070 589624198 % to paid-up capital 13.82 5.64 1.00 LRLIH Limited Others *** held by approx. (i) Distribution of Shareholding as on March 31.84 14.91 2. ANNUAL REPORT 2005-06 31 . Status of Dematerialisation of Shares as on March 31.05 100.25 15.21 91.14 Demat No. 2006 Sl No. of Shares 605766750 140263936 169086840 178868949 23797280 22174100 65576156 236000 831265 14985500 1221586776 % 49.LRLIH Ltd.98 10.00 (ii) Pattern of Shareholding as on March 31. 2006 Physical Holders No.11 2.27 1.48 13.Report on Corporate Governance k. of Shares 441166680* 26195828*** % to paid-up capital 36. As stipulated by SEBI.46 0. and hence have good liquidity. Companies/UTI Foreign Institutional Investors Non-Resident Indians/ OCB / Corporate Bodies Foreign / Bank .37 0.48 48.GDR Total No.Foreign / Foreign Nationals Corporate Bodies Mutual Funds Trusts Banks Others . the shares of the Company are accepted in the Stock Exchanges for delivery only in dematerialisation form.94 6./ Govt.59 13. Dematerialisation of shares and Liquidity Shares of the Company can be held and traded in electronic form.02 0. (Includes 164600070 shares in GDR Form) Residents (Individuals / Clearing Members) Financial Institutions/Insurance Co.00 No.22 100.03 0. of Shares ** 605766750 615820026 1221586776 * held in one consolidated share certificate ** including in GDR Form % to paid-up capital 49. of Shares Number 360094 2072204 3351563 14758406 20338049 23351807 30234163 14816532 1112303958 1221586776 % 0. / State Govt.00 l. of Shares Upto 50 51-100 101-200 201-500 501-1000 1001-2000 2001–5000 5001-10000 10001 & above Total Shareholders Number 11323 21393 17852 35727 23305 15011 9408 1999 1226 137244 % 8.07 1.59 11. 2006 No.67 1.21 1. of Holders 1 133768 21 87 1375 1884 36 19 51 2 137244 No.

at a conversion price (reset in 2005) of Rs. Plant Locations Ennore Post Box No.each) per Note of USD1000.Finance Ashok Leyland Limited Ennore Chennai 600 057 Secretarial Dept. Upto 31/03/2006. Dividends. o. there has been a significant increase in the number of shareholders.Report on Corporate Governance m. Kences Towers 32 A N N U A L R E P O R T 2 0 0 5 .ale@ashokleyland.Annexure B to Directors’ Report . Nagar Chennai 600 017 Mr R Venugopalan Dy. Annual Reports M/s Integrated Enterprises (India) Ltd. Address for Correspondence To contact R&TA for all matters relating to Shares.each. 2004.1 MIDC Industrial Area Village Gadegaon Sakoli Taluk Bhandara 441 904 Maharashtra Technical Centre Vellivayal Chavadi Via Manali New Town Chennai 600 103 Tamil Nadu Hosur – Unit II 77 Electronic Complex Perandapalli Village Hosur 635 109 Tamil Nadu Alwar Plot No. Chennai 600 098 Tamil Nadu p. Bombay Stock Exchange Ltd. Area Alwar 301 030 Rajasthan For Fixed Deposits Tel : 91-44-2575 1001/2575 0233 Fax : 91-44-2575 1798 e-mail : rv. Following the subdivision.2. 2006. as of March 31. and National Stock Exchange of India Ltd. All the statutory / contractual obligations relating to such conversions have been fulfilled in time.SPL 298 Matsya Indl. 2nd Floor. 22700 Notes have been converted into 32292576 shares. the Company issued Foreign Currency Convertible Notes (FCCN) for USD100 million in April 2004 to investors in the overseas market. Ramakrishna Street North Usman Road T.581 shares (of face value Re. Chennai 3A/A&2 North Phase Sidco Industrial Estate Ambattur.per share at the option of the investors as per the terms of the issue.was subdivided into 10 equity shares of face value of Re... 2004. From February 2006.1/. Subdivision of Shares Each equity share of face value of Rs. Outstanding GDR/ Warrants and Convertible Notes.ashokleyland.0 6 . General Manager . effective from July 7. the Company has started receiving requests from the holders of FCCNs seeking to convert the Notes held by them into underlying shares. As per the terms of the For any other general matters or in case of any difficulties/ grievances : 91-44-2433 1120/2433 1128/ 2433 1129 Fax : 91-44-2433 5633 e-mail : secretarial@ashokleyland. 2004. 5th Floor Khivraj Complex II 477-482 Anna Salai Nandanam Chennai 600 035 Tel : 91-44-2814 0801/03 Fax : 91-44-2814 2479 e-mail : yesbalu@iepindia. Conversion date and likely impact on the equity No GDR is outstanding for conversion as on March 31. n. there were 137244 shareholders as compared to 71720 shareholders as on July 6. Ashok Leyland Limited Building No.3 Ennore Chennai 600 057 Tamil Nadu Hosur – Unit IIA Cab Panel Press Shop SIPCOT Industrial Complex Mornapalli Village Hosur 635 109 Tamil Nadu Tel Ashok Leyland Website address : www. 2006 and hence there is no impact on equity. After obtaining the approval of the shareholders at the Extraordinary General Meeting held on February Hosur – Unit I 175 Hosur Indl.10/. 1/.31/. and such additional shares (upon conversion) have been admitted for trading at Madras Stock Exchange Ltd. these Bonds are convertible into GDSs or convertible into the underlying shares @ 1422. Complex Hosur 635 126 Tamil Nadu Bhandara Plot No.

a revised /updated set of Guidelines relating to Corporate Governance which have been incorporated in the Company’s Listing Agreements with the Stock Exchanges. any information or development either within the Company (relating to its employees or other stakeholders) or external. and shall be accountable to the Board for their actions/violations/defaults. and which in the normal course may not have come to the knowledge of the Board/Chairman or Managing Director. Remuneration Committee The Company has constituted a Remuneration Committee. Apply themselves diligently and objectively in discharging their responsibilities and contribute to the conduct of the business and the progress of the Company. 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. Always abide by the above Code of Conduct. 2005). d) e) ii) shall disclose full details of any direct or indirect personal interests in dealings/transactions with the Company. 3. The revised Guidelines came into effect from January 1. full details are furnished under Item 4 of this Report. The compliance with the earlier Guidelines were declared adequate upto March 31. 1956 requirements regarding Postal Ballot. 2. Non executive Chairman The Company maintains the office of the Non Executive Chairman and reimburses expenses incurred in the performance of his duties. along with a letter from the Managing Director highlighting significant events. i) ANNUAL REPORT 2005-06 33 . shall a) b) c) Always act in the best interests of the Company and its stakeholders. Bring to the attention of the Board. Always adhere and conform to the various statutory and mandatory regulations/guidelines applicable to the operations of the Company avoiding violations or non-conformities. and not be associated simultaneously with competing organisations either as a Director or in any managerial or advisory capacity. which could impact the Company’s operations. 4. Postal Ballot The Company adheres to the Companies Act. Shareholder Rights The statements of quarterly and half yearly results are being published in the Press. i) shall adopt total transparency in their dealings with the Company. The Company is fully compliant with the revised SEBI Guidelines. 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.Report on Corporate Governance NON MANDATORY REQUIREMENTS 1. without the prior approval of the Board. 2004.Annexure B to Directors’ Report . The Company has been mailing half-yearly reports to shareholders from October 2001. f) g) h) Conduct themselves and their activities outside the Company in such manner as not to adversely affect the image or reputation of the Company. and for this purpose. 2006. Adopt the highest standards of personal ethics. integrity. Not derive personal benefit or undue advantages (financial or otherwise) by virtue of their position or relationship with the Company. iii) shall not be party to transactions or decisions involving conflict between their personal interest and the Company’s interest. CODE OF CONDUCT Members of the Board and the Senior Management. confidentiality and discipline in dealing with all matters relating to the Company. 2005 (since extended upto December 31. Chairman or the Managing Director as appropriate.

We have examined the compliance with the conditions of Corporate Governance by Ashok Leyland Limited (the company) for the year ended March 31. For M. RAJAN Partner Membership No. Our examination has been limited to procedures and implementation thereof. 2006 as stipulated in clause 49 of the listing agreement of the said company with the stock exchanges in India.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 Leyland Limited 1. 4.S. It is neither an audit nor an expression of opinion on the financial statements of the company. Based on the aforesaid examination and according to the information and explanations given to us. The compliance of conditions of corporate governance is the responsibility of the management. 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. 9483 34 A N N U A L R E P O R T 2 0 0 5 . 4059 April 29. 2006 Chennai For DELOITTE HASKINS & SELLS Chartered Accountants R. we certify that the company has complied with the said conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.0 6 . adopted by the company for ensuring the said compliance. RAGHAVAN Partner Membership No. KRISHNASWAMI & RAJAN Chartered Accountants M. 2. 3.K.

the required momentum has been generated for achieving higher growth rates in the future. The recent directive of the Supreme Court to strictly curb overloading of trucks is already impacting positively on the demand for commercial vehicles. Domestic demand grew by 10.Management Discussion and Analysis Report With three consecutive years of growth in GDP at over 7. the Indian commercial vehicle production in 2005-06 grew by 10.03 2001 .02 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Up to 3. largely aided by a 16.04 2002 .05 2003 . This has enabled the Company to increase its vehicle manufacturing capacity to 77. coming after three high growth years. with a mature transportation model emerging in the next few years.5%. The Company has overcome production bottlenecks to a large extent and has achieved satisfactory productivity levels in all plants. Another significant development is the demand for introduction of low floor city buses. the domestic medium and heavy commercial vehicle (M&HCV) demand was lacklustre for most part of 2005-06. The Company also secured a significant order from the Indian Army for supply of 872 units of indigenously developed Water Bowsers. Commercial Vehicle Industry Structure and Development After recording an unprecedented compounded annual growth rate (CAGR) of 29. Leadership position in M&HCV buses and in the growing > 35 ton articulated trucks have been the major achievements in 2005-06. A. The Company embarked on Mission Gemba across all manufacturing units in 2005.5 ton > 16. B. Exports accounted for 10.1% growth in Indian GDP.5 ton > 12 ton . This trend is expected to continue. Light Commercial Vehicles (LCV) segment contributed significantly to the overall commercial vehicle demand.6% between 2001-02 and 2004-05.Annexure D to Directors’ Report .3% spurt in the last quarter.5 ton . Business Review The Company registered significant market share improvements in 2005-06.2 ton (Artics) ANNUAL REPORT 2005-06 35 . following the recent wage settlements. Despite an estimated 8.500 units.5 ton > 7.200 units from 67.4% of total production.5% in 2005-06 and registered a CAGR of 36% between 2001-02 and 2005-06.6%.5 ton .683 units. There has been a significant change in the profile of commercial vehicle industry during the last few years.2 ton (Rigid) > 35.4% demand growth. A major portion of orders from the Defence. develop a culture of solving problems on the shop floor and facilitate people to work together 2005 .06 2004 . will be executed in 2006-07. reaching a record 350.35.16. With 19.12 ton > 25 ton (Rigid) > 3.5% growth was registered in 2005-06.2 ton (Artics) > 5 ton .1% in 2005-06.2 ton > 25 ton . The objectives of Mission Gemba are to empower employees. Indian commercial vehicle exports grew by 35. It will warrant significant changes in vehicle design to enhance productivity. which is expected to play a major role in defining urban transportation in India. A moderate 4.7.

The Company exported 4.837. By entering into a marketing arrangement for small and high capacity engines.000 140. the Company is aggressively progressing allied businesses. Newgen cab.261 engines for industrial and marine applications.735 135. The Company’s product strategy will be driven by these findings.419 10. 7. 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.000 13. inter-alia. Implementation of Customer Connect. demand for < 3.606 35. the Company sold 7. Product Development and IT have been completed. 260 hp rear engine InterCentury Luxura coach and > 300 hp tipper and tractor will be the major new launches in 2006-07. the Company has expanded its offering of engines for industrial and marine applications. The benefits of this approach have begun to flow in. Customer-centric products and services continue to be the Marketing Mission.000 25.5 ton GVW and > 16 ton GVW trucks is expected to increase at a M&HCV Trucks 210.000 10. quality. the Company is focusing on superior cost-value equation to retain its competitive edge.000 80. throughput and safety.8 million. The Company is tapping the vast export potential for its engines and a beginning has been made in 2005-06. up 16% over 2004-05. C. M&HCV 240.000 70.000 14.000 40.0 6 47. which need to be carefully evaluated. Dedicated organizations for components and aggregates business and engineering design services have been formed. In order to effectively manage the cyclical nature of demand. New urban transportation models are being contemplated in major cities and the Company is getting equipped to offer cost effective solutions. The Company is seeking growth in new overseas markets as well.000 – 2005-06 AL 2005-06 AL 2004-05 Others 2004-05 Others 36 A N N U A L R E P O R T 2 0 0 5 . The Company has been gradually adopting Design for Six Sigma in design process. Risk Management The commercial vehicle business has a specific set of risk characteristics.000 56. Key Account Management will be leveraged to expand the Company’s presence in each segment and customer engagement will be part of marketing business plan. a customer relationship process including Dealer Management System and Product Lifecycle Management process is in progress.169 Company is targeting to increase the contribution of exports to 10% of total sales in the coming years. capital investment.000 151. Apart from ongoing product improvements. Given the changing competitive scenario.000 200.000 175. Excluding the sales to Iraq in 2004-05 under the UN Oil for Food programme.000 120.137 5. Risk management covers the entire process of business including. Significant increase in sale of CKD kits to the Indian Army has boosted the spare parts sale value to Rs. adherence to statutory norms and customer care. the Management has adopted an internal risk management protocol.023 150. Opportunities and Threats In line with developed market practices. To de-risk against the cyclicality of the commercial vehicle business. Domain Expert Groups have been formed to understand customers’ needs and business drivers for each application. Various initiatives are being pursued in this regard.000 160.604 – 2005-06 AL 2004-05 Others – 37. In 2005-06.453 20.000 136. First level training and implementation of Knowledge Management Initiatives in certain functions in Marketing.000 15.Annexure D to Directors’ Report . export sales increased by 22% over 2004-05.469 42. up 44% over 2004-05.879 units in 2005-06. the Company is exploring expansion of its range into the growing LCV segment. managed and mitigated. With a strong presence in the HCV range.000 105.900 .Management Discussion and Analysis Report towards achieving improvements in cost.718 15.731 much rapid pace. Exports constituted 8% of total sales in 2005-06 and the M&HCV Buses 30.

coupled with cost increases arising out of improvements in product designs and upgradation to meet emission norms continue. The observations arising out of audit are periodically reviewed and compliance ensured. in certain states.306 217 4. As on date. millions 2005-06 2004-05 Inc / (Dec) % Income Sales (Net of Excise Duty) Other Income Total Expenditure Manufacturing Expenses Employee Expenses Other Expenses Depreciation Financial Expenses Total Profit Before Extraordinary items Extraordinary item . The Company is planning to expand its capacity to 100.500 4. The Committee reviews significant observations made in Internal Audit Reports along with actions initiated and reports to the Board periodically.Annexure D to Directors’ Report .) Diluted Earnings Per Share (in Rs.000 vehicles by FY08.7 52. • • • • 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.8 14. However.550 895 (59) – 2.646 (96) 3.Management Discussion and Analysis Report Continuance of the reform process and emphasis on infrastructure and agriculture augur well for the road transport sector.) 37. 81% of Bondholders have / are in the process of converting their Bonds into equity shares. During the year under review.357 25.58 3. Compliance with applicable statutes.Income / (Charge) Profit Before Tax Tax Provision .714 2. Periodic review meetings to manage effectively.3 18. all working capital elements.86 29.5) 24.9 19. taking into account market conditions and demand forecast. The Company is a net foreign exchange earner and to that extent has limited exposures if the Indian Rupee was to depreciate in future.Current . the cyclical nature of demand in the commercial vehicles industry needs to be factored in for capacity build up / manufacturing strategies.4 489. the Company suffered loss of vehicle volumes due to supply constraints in the first quarter.7 ANNUAL REPORT 2005-06 37 .1 23. The summary of the Internal Audit Reports is submitted to Audit Committee of the Board of Directors.Fringe benefit tax Profit After Tax Basic Earnings Per Share (in Rs.690 4.347 1.) Cash Earnings Per Share (in Rs.523 1. Further expansion beyond this level will depend on actual growth rate for the commercial vehicle industry.7 15. these cost increases have not been fully passed on to the customers. The Company plans to counter these developments through product offerings to specific customer requirements and by increasing its marketing foot print across the country. policies.038 5.74 2.729 3.2 25. Capacity build up plans are periodically re-assessed. The Company’s foreign exchange exposure has reduced substantially with the good level of conversion from Bonds to equity.4 26. Concerns on input cost increases due to commodity price movements.273 2.819 538 42. • • Effective use of resources and safeguarding of assets.711 3.321 1.4 222.15 26.05 3.1 326. the Company’s internal control system has been designed to provide for: • Accurate recording of transactions with internal checks and prompt reporting.5 (38.6 20.28 2. Rs.3 25. IT systems with in-built controls to facilitate all of the above.806 41. Review of capital investments and long term business plans.477 329 52.541 4. The Company’s currency exposures are mostly in USD and are actively managed through a centralized Treasury Department assisted by technical experts. 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.Deferred . Due to competitive pressures.0 – 20. listing requirements and operating guidelines of the Company.260 165 48. D.0 27. Adherence to applicable Accounting standards and policies. as a result of somewhat sudden changes made by the Government in the introduction of BS-II norms.092 28 38. Internal Control systems and their adequacy Based on the nature of business and size of operations.131 72 47 3.

847 3.Management Discussion and Analysis Report E. As of 31st March 2006. 1. 9. Revenues Net sales for the year. Costs Though steel prices softened during the year. This is excluding the 50.768 9. These FCCN funds are utilised for capital expenditure requirements. accounts for Rs. Sale of castings unit The Company sold its castings unit at Hyderabad (Ductron Castings Unit) to Ennore Foundries Limited for a consideration of Rs.260 million compared to Rs. The Company achieved 21% improvement in net profit. The overall manpower cost has increased by 14% mainly due to wage settlements in two (Ennore and Hosur II) plants. the Company could secure better productivity norms in all the plants. Resources During the year.52. 1.709 21.93% holding of the principal shareholders who have also advised the Company of their intention to convert.500 vehicles to 77. Implementation of BS-II norms and CMVR changes and difficulties in passing on the full cost increases impacted profitability marginally. 1.0 6 Financial expenses increased during the current year due to higher levels of working capital needed to support increased activity.768 .1.790 2.239 22. As of date.804 1.797 22. The gain on sale amounting to Rs. Further.477 million. mainly due to current year’s additions to facilities and increase in number of shifts of operations in some plants. income earned on funds raised through the FCCN and remaining unutilised had helped in reducing net interest burden. 1. Bonds worth USD 81 million were converted / would be converted.916 21. 855 million. 4. 302 million is shown as extraordinary income for the year 2005-06.6 million from the previous year level of Rs. the Company incurred capital expenditure of Rs.998 Sources of Funds Shareholders’ Funds Loan Funds Deferred Tax Liability-Net Total Application of Funds Fixed Assets Investments Net Current Assets Total 10. contributed mainly by volume increases in vehicles by 13%. Inventories have gone up to Rs. which are expected to yield improvements to the operating margins. Debtors level decreased to Rs. Liquidity During the fourth quarter.485 8. Depreciation for 2005-06 has increased to Rs.3 million.682 8.434 million towards investments in capacity expansion / upgradation and R & D.1. The Management had initiated many cost reduction initiatives. Net Current Assets (excluding cash / bank balances) as on 31st March 2006 stood at Rs.049 million. there were significant cost increases on account of emission and noise norms. with both reaching record levels. Other expenses have increased by 24%.681 million as at 31st March 2005 due to increase in finished inventory levels to meet sudden upsurge in market demand. Capacity increased from 67. 4. 23% of the FCCN issued were converted into Equity shares.052 6. This enabled the Company to reduce costs.588 million.998 14. at Rs.210 million as against the previous year level of Rs. there has been a reduction in income on deployment of such temporary surplus funds.026 million as on 31st March 2006 compared to Rs.949 million. the equity will increase to Rs. Thrust on Research and Development (R & D) is continuing and total R & D spend.189. 2. engines by 15% and a 44% increase in sales revenue from Spare Parts. continues to supply castings to the Company.200 vehicles by August 2005. this amounted to Rs. an increase of 14% over the previous year. 5.331. now part of Ennore Foundries Limited.292 9. FCCNs issued by the Company began to be tendered for conversion to equity and by 31st March 2006.092 million. Financial Review The year under review witnessed strong growth in sales revenue and profit.919 1. 2.Annexure D to Directors’ Report . 38 A N N U A L R E P O R T 2 0 0 5 . Rs. including capital expenditure. millions 2005-06 2004-05 11. The reduction in other income is mainly on account of the one-time gain earned from sale of shares of IndusInd Bank during 2004-05. has increased by 25% as compared to previous year. mainly due to activity expansion. during the previous financial year. On full conversion of all Bonds.243 million from Rs. 620 million. Ductron Castings Unit. The expansion of R & D facility is progressing as per plan. Hence. Through concerted efforts. The high level of cash and bank balance includes funds raised through the FCCN issue kept in bank deposits pending utilisation in capital expenditure programmes.

Overall.273 million. 59 million in the previous year). Profit before tax and extra-ordinary items improved by 18% to Rs. we expect the total demand to grow. As at 31st March 2006. Possible restrictions on ‘vehicle-age’ in some cities would further provide a fillip to demand. The Company’s principal sources of liquidity arise from a) Cash generated by operations. restrictions on overloading and possible improvement in freight rates provide optimism for growth in demand. After providing for taxes at Rs. If the debt relating to FCCN is treated as equity. The Company believes that it has sufficient liquidity to meet its working capital requirements and other anticipated cash outflows.576) (692) 2004-05 3. On commercial paper programme (short term borrowing). 4. Profit after charging the ANNUAL REPORT 2005-06 39 .521 (1. The ambitions of the Company are not only to accompany the market development. profit after tax for the current year improved by 21% to Rs. the Company will have net surplus funds. to Rs. Outlook With the fundamentals of the economy remaining strong and no adverse sentiments emerging.10 million. Fitch maintained the Company’s ratings at IND AA. After meeting working capital requirements and extraordinary item of payments for Voluntary Retirement Scheme of Rs.250 million (including deferred tax and fringe benefit tax). With diesel cost expected to increase and with the railways announcing various initiatives. F. net debt (net of cash & bank balances) to equity ratio has declined to 0. The Company manages its liquidity through rigorous monitoring of cash flows and surplus funds are invested mainly in units of Mutual Funds and in bank deposits.723 VRS expenses increased by 27%. 3.473 (1.523 Cashflow from Financing activities Net Cash Inflow / (Outflow) 4. affecting demand for new trucks.06 from 0.Annexure D to Directors’ Report .Management Discussion and Analysis Report Rs.306 million. Hardening of interest rates and the cyclical nature of the industry could also dampen the demand for new trucks.521 million cash inflow from operations. 4. b) Unutilised limits with banks. During the year. but to surpass it. The Company registered Rs. 3. deferred tax liability for the Company came down by Rs. the Company earned net cash inflow of Rs.804 5. 4. CRISIL maintained the earlier rating of Net Working Capital Net Cash Flow from operating activities (before extraordinary item) Payments under Voluntary Retirement Scheme Net cash flow from operating activities Payment for Assets acquisition .291) 3. The Company continued to improve its debt-equity structure. CRISIL maintained the Company’s ratings for long-term borrowings at “AA”. 85 million towards amortisation of VRS expenses. consequent to the reduction in tax rates announced in the Union Budget in February 2005 (with net deferred tax credit of Rs.491 (18) 4. In the previous year 2004-05.230 (10) 3.220 (2.) / Dec. c) Unutilised limits of approved borrowings.593) 620 637 (2. 1. However. 109 million.220 million. the Company charged Rs. millions 2005-06 Profit from operations (Inc. freight movement by road could become uncompetitive in some sectors.07 in March 2005. the requirement for freight movement is expected to increase in line with the last three years.561 930 4.776) – 222 Proceeds from sale of undertaking Other Investments . thereby inducing a shift in favour of the railways.

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.S. reliability of financial records and for preventing and detecting fraud and other irregularities. Internal Audit Department interacts with all levels of management and the Statutory Auditors. Directors have overall responsibility for the Company’s internal control system. The financial statements have been audited by M/s M.3. Audit Committee and Statutory Auditors have full and free access to all the information and records as considered necessary to carry out their responsibilities. Krishnaswami & Rajan and M/s Deloitte Haskins & Sells in accordance with generally accepted auditing standards.Annexure E to Directors’ Report . financial and accounting controls and financial statements. 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. Going Concern In the opinion of the Directors. 1956 Responsibility in relation to financial statements The financial statements have been prepared in conformity.2006 and of the results of operations for the year ended 31.3. 40 A N N U A L R E P O R T 2 0 0 5 . The Directors believe that the financial statements reflect true and fair view of the financial position as on 31. All the issues raised by them have been suitably acted upon and followed up. The system of internal control is monitored by the internal audit function.Directors’ Responsibility Statement Directors’ Responsibility Statement as per section 217(2AA) of the Companies Act. Internal 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. in all material respects.0 6 . which is designed to provide a reasonable assurance for safeguarding of assets.2006. 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 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. 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. Audit Committee also periodically interacts with internal and statutory auditors to ensure quality and veracity of Company’s accounts.

Managing Director and K. Internal audit works with all levels of management and statutory auditors. This is monitored by the internal audit function. R. Seshasayee Managing Director April 29. during the year there were no such changes or instances. significant changes in accounting policies during the year. illegal or violative of the company’s code of conduct. 4. R. applicable laws and regulations. The financial statements have been prepared in conformity. which encompasses the examination and evaluation of the adequacy and effectiveness. There are. The auditors and audit committee are appraised of any corrective action taken with regard to significant deficiencies and material weaknesses. no transactions entered into by the company during the year which are fraudulent. 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.Annexure G to Directors’ Report CERTIFICATION BY MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER TO THE BOARD We. We accept overall responsibility for the company’s internal control system for financial reporting. Chief Financial Officer of Ashok Leyland Limited. However. We have reviewed the financial statements for the year and that to the best of our knowledge and belief: a) b) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading. Sridharan. in all material respects. Seshasayee. Sridharan Chief Financial Officer ANNUAL REPORT 2005-06 41 . 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. and reports significant issues to the Audit Committee of the Board. We indicate to the auditors and to the audit committee: a) b) c) significant changes in internal control over financial reporting during the year. to the best of our knowledge and belief. 2006 Chennai K. certify that: 1. 2. 3. with the existing generally accepted accounting principles including Accounting Standards.

we report that none of the directors is prima facie disqualified as on March 31. the Profit and Loss Account and the Cash Flow statement for the year ended on that date (the financial statements). phased programme of verification. proper books of account. 3. 3. 3. An audit also includes assessing the accounting principles used and significant estimates made by management. An audit includes examining. evidence supporting the amounts and disclosures in the financial statements. as required by law. annexed thereto. signed by us under reference to this report. have been maintained by the company so far as appears from our examination of those books.2 (i) in our opinion.4 in our opinion.1 we have obtained all the information and explanations. is reasonable. as well as evaluating the overall financial statement presentation. in the case of the Profit and Loss Account. 2003 issued by the Government of India in terms of section 227(4A) of the Act. 3. We report that: Institute of Chartered Accountants of India referred to in section 211(3C) of the Companies Act.5 on the basis of written representations received from the directors. we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.3 the financial statements dealt with by this report are in agreement with the books of account. We have conducted our audit in accordance with auditing and assurance standards generally accepted in India. were necessary for the purposes of our audit.1 (i) 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. 3. 4. and no material discrepancies have been noticed on such verification. the aforesaid financial statements comply in all material respects with the applicable Accounting Standards issued by the 4. to the best of our knowledge and belief. secured or unsecured. inventories have been physically verified during the year by the management at reasonable intervals. which. (ii) (iii) 3. the aforesaid financial statements read with the Statement on Significant Accounting Policies and Notes to the Accounts. (ii) the fixed assets are being physically verified under a 42 A N N U A L R E P O R T 2 0 0 5 .6 in our opinion and to the best of our information and according to the explanations given to us.3 the company has neither granted nor taken any loans. and on the basis of such checks as we considered appropriate and according to the information and explanations given to us. 3. and in the case of the Cash Flow Statement. (iii) in our opinion. on the basis of our examination of the books and records of the company. 4.4 in our opinion. of the state of the affairs of the company as at March 31. to / from companies. and taken on record by the Board of Directors. (iii) the company has not disposed off substantial part of its fixed assets during the year.2 in our opinion. the company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification. we further report that: 4. 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. 1956 (the Act). As required by the Companies (Auditor’s Report) Order. give the information required by the Act. on a test basis. Our responsibility is to express an opinion on these financial statements based on our audit. 2006. in the manner so required and also give a true and fair view. firms or other parties covered in the register maintained under section 301 of the Act. in our opinion. 4. The financial statements are the responsibility of the company’s management. of the profit for the year ended on that date. in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet. 2006 from being appointed as a director in terms of section 274 (1) (g) of the Act. 2. of the cash flows for the year ended on that date. which. (ii) in our opinion.0 6 . the company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. We believe that our audit provides a reasonable basis for our opinion.Auditors’ Report to the Members 1. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Further. We have audited the attached Balance Sheet of ASHOK LEYLAND LIMITED as at March 31. 2006.

4059 April 29. For M. income tax. 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. considering the size and nature of the company’s operations.14 in our opinion. 4.11 in our opinion. 4. 4.7 in our opinion. customs duty. 4. bank or debenture holders during the year. nidhi.18 the company has not made any preferential allotment of shares during the year to any party. excise duty. 9483 ANNUAL REPORT 2005-06 43 . debentures and other securities.21 in our opinion.13 the provisions of any special statute applicable to a chit fund. are not prima facie prejudicial to the interest of the company. 2006 Chennai For DELOITTE HASKINS & SELLS Chartered Accountants R. no fraud of material significance on or by the company has been noticed or reported during the year. RAJAN Partner Membership No.6 in our opinion. Accordingly the provisions of clause 4 (xiv) of the Companies’ (Auditor’s report) Order 2003 are not applicable to the company. 4. sales tax. 4.8 we have broadly reviewed the books of account and records maintained by the company relating to the manufacture of commercial vehicles.16 in our opinion.9 (i) in our opinion. diesel engines and auto components pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Act and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. 4. 4. (ii) there are no dues of income tax / wealth-tax.17 on an overall examination of the financial statements of the company. RAGHAVAN Partner Membership No. 4. 4.19 the company has created securities / charges in respect of debentures issued and outstanding. the terms and conditions of guarantees given during the year by the company. the company is not dealing or trading in shares. however. 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. cess and other material statutory dues as applicable with the appropriate authorities during the year. service tax.K. mutual benefit fund / societies are not applicable to the company. service tax. The loan funds pending application is temporarily deployed as deposits with banks.Auditors’ Report to the Members 4.5 to the best of our knowledge there are no contracts or arrangements with any party. 4. 4. the company has an internal audit system commensurate with its size and nature of its business. for loans taken by others from banks or financial institutions. KRISHNASWAMI & RAJAN Chartered Accountants M. 2006 and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. customs duty.20 the company has not raised any money by public issues during the year. the company has not defaulted in repayment of dues to any financial institution. Details of dues towards sales tax. 4. employees’ state insurance. which need to be entered in the register maintained under section 301 of the Act.S. We have.10 the company does not have any accumulated losses as at March 31. debentures and other investments. the term loans availed by the company were prima facie. 4. not made a detailed examination of the records. not been used during the year for long-term investment. 4. securities. prima facie. wealth tax. applied for the purpose for which they were obtained. investor education and protection fund. the company has maintained adequate documents and records where it has granted loans and advances on the basis of security by way of pledge of shares.15 in our opinion. 4.12 in our opinion. which have not been deposited on account of any dispute. the company is regular in depositing undisputed statutory dues including provident fund. funds raised on short-term basis have.

66 7.48 22.902.656.044.189.06 1.028.616.587.5 21. Millions 2005 Rs.70 1.840.96 6.17 1. Millions Rs.37 6.88 3.63 Statement on significant accounting policies. SRIDHARAN Chief Financial Officer N.324.681.28 9.085.022. SESHASAYEE Managing Director 2006 Rs.708.238.680.291.952.966.90 5.53 1.796. 2006 Chennai 44 A N N U A L R E P O R T 2 0 0 5 . K.87 2.S. Millions 1.80 11.10 1.82 3.8 1.915.61 4.32 22.78 20.3 1. loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Less Current liabilities and provisions Liabilities Provisions Net current assets Miscellaneous expenditure (to the extent not written off or adjusted) Total Notes to the Accounts form part of this Balance Sheet.12 8.50 11.169.384.55 9.07 22.0 6 For DELOITTE HASKINS & SELLS Chartered Accountants R.790.94 14.71 1.1 to 1.28 1. RAGHAVAN Partner Membership No.91 5.04 8.16 1. 2006 Schedule Sources of funds Shareholders’ funds Capital Reserves and surplus Loan funds Secured loans Unsecured loans Deferred tax liability . RAJAN Partner Membership No.01 2.19 1.489.59 12. Schedules 1. KRISHNASWAMI & RAJAN Chartered Accountants M.084.97 Total Application of funds Fixed assets Gross block Less Depreciation Net block Capital work-in-progress Investments Current assets.36 11.10 8. 9483 .243.414.65 2.846.1 1.337.9 1.70 9.99 11.95 2.634.21 14.919.37 6.J.025. 4059 April 29.12 and For and on behalf of the Board R.026.840.804.19 9.7 1. SHAHANEY Chairman This is the Balance Sheet referred to in our report of even date.4 1.29 10.96 193. SUNDARARAJAN Executive Director & Company Secretary R.432.67 9.K.221.678.89 22.124.34 21.072.81 4. For M.6 1.846.938.468.Balance Sheet as at March 31.39 22.13 10.76 3.11 11.611.46 851.572.

142.818.597.13 68.054.Fringe benefit tax Profit after tax Balance profit from last year Transfer from / (to) .59 3.5 For and on behalf of the Board K.10 1.00) 4.51 52.075.339.784. RAGHAVAN Partner Membership No.273.092.70 2.Profit and Loss Account for the year ended March 31.52 37.710. amortisation and impairment Financial expenses 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 .00 3.08 8.50 72.108.13 2.06 164. For M.476.356. Millions 48.) Statement on significant accounting policies. RAJAN Partner Membership No.S.93 95.09 1.General reserve Proposed dividend Tax on dividend Balance profit carried to balance sheet Earnings per share (Face value Re.66 1.1 to 2.289. 2.189.24 89.130.00 1.000.74 52.10 895.51 (301.46 4.Deferred tax .05 2.58 2005 Rs. SESHASAYEE Managing Director R.4 2.5 and Notes to the Accounts form part of this Profit and Loss Account.98 38.806.523.83 – 3. 2006 Chennai For DELOITTE HASKINS & SELLS Chartered Accountants R. KRISHNASWAMI & RAJAN Chartered Accountants M. SRIDHARAN Chief Financial Officer N.784.645.714.33 (1.260.01 6.3 2.85 84. SHAHANEY Chairman This is the Profit and Loss account referred to in our report of even date.531.303.125.J.000.2 2.30 47.66) 4.00) 3.86 224. Millions Rs.17 (1.305.31 47. SUNDARARAJAN Executive Director & Company Secretary R.51 1.1 2006 Rs.1) – Basic (in Rs.00) – 2. 9483 ANNUAL REPORT 2005-06 45 .87 1.55 42.550.Current tax .K.57 329.14 27.) – Diluted (in Rs. 2006 Schedule Income Sales Less Excise duty Other income Expenditure Manufacturing and other expenses Depreciation.47 1. 4059 April 29.97 537. Schedules 2.29 169.Debenture redemption reserve .00 (59.04 41.500.10 2.74 2.53 48.590.28 2.20 1. Millions 60.

71) 4.32) (1. Millions Cash flow from operating activities Profit before tax Adjustments for: Depreciation Other amortisations Unrealised foreign exchange gains / losses Interest expense Interest income Income from investments (Profit) / Loss on disposal of fixed assets / long term investments Profit on sale of undertaking Operating profit before working capital changes 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 Compensation under voluntary retirement scheme Net cash flow from operating activities after extraordinary expenditure Cash flow from investing activities Payments for assets acquisition Proceeds on sale of fixed assets Proceeds on sale of undertaking Purchase of long term and other investments Sale / redemption of long term investments Income from investments Changes in advances Net cash flow used in investing activities Cash flow from financing activities Long term borrowings .55) 314.675.40) (120.71 5.656. Millions 3.95 56.135.81 3.00 (138.78 10.05 288.34 (1.72) .254.824.39) (106.194.70 (9.79) – (166.88) (76.646.16 42.47) 4.803.503.73 2.46 (693.68) 3.46 (1.162.13 (611.05 5.72) 9.Raised .82 5.35) – 4.70 106.092.554.10) (2.52 4.77 (1.96) (1.550.94 (258.94 * 8.Interest .260. Refer Note 11 to the Accounts 46 A N N U A L R E P O R T 2 0 0 5 .54) 2.66) 5.56 – (92.17 (17.220.29) 4.84 102.47) (66.576.008.10 1. 9.975.477.77 million pertaining to undertaking sold during the year.131.56) 48.34) 236.86) 54.051.87) (87.722.491.60) 154.38 (1.06 132.00 2005 Rs.93 189.Dividend (2.0 6 .90 9.204.Repaid Changes in short term borrowings Debenture / Foreign currency convertible notes issue and loan raising expenses paid Interest paid .365.81 excludes cash and cash equivalents amounting to Rs.79 (112.61) ( Dividend paid and tax thereon Net cash flow from financing activities Net cash inflow / (outflow) Opening cash and cash equivalents Closing cash and cash equivalents Net increase / (decrease) in cash and cash equivalents * 186.69 (1.66) 479.86) 4.81 (61.00) 2.481.04) (691.473.16 (1.53) 3.99) (179.78) (351.335.722.Cash Flow Statement for the year ended March 31.229.17 1.49 (1.184.07) 76.14 152.356. 2006 2006 Rs.013.67 4.34 620.85) (3.33 (193.22 (691.68 48.523.

34 (32.22 2 The conversion of Foreign currency convertible notes into equity shares has not been considered in the above statement.956.520. SUNDARARAJAN Executive Director & Company Secretary R.503.K.65) 8. SHAHANEY Chairman This is the Cash Flow Statement referred to in our report of even date. 2006 Chennai For DELOITTE HASKINS & SELLS Chartered Accountants R. Refer Note 10 to the Accounts.S.71 R.015. KRISHNASWAMI & RAJAN Chartered Accountants M. SRIDHARAN Chief Financial Officer N. RAJAN Partner Membership No. 2006 2006 Rs. Millions 7.Cash Flow Statement for the year ended March 31. 9483 ANNUAL REPORT 2005-06 47 . For M.217. Millions Notes to the cash flow statement 1 Components of cash and cash equivalents: Cash and bank balances excluding those relating to unclaimed dividend Investments in money market instruments Unrealised foreign exchange gains / losses 6.96 1.53 2.J.204. 4059 April 29. For and on behalf of the Board K.27 9. RAGHAVAN Partner Membership No.48 30. SESHASAYEE Managing Director 2005 Rs.

Stores. including intangible assets and assets given on lease. 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.2 Cost includes taxes and duties and is net of credits under Cenvat / Vat Scheme. 2. 4. Interest and other related costs. Other fixed assets. 5. is calculated on the respective revalued amounts. Inventories 4.0 6 .Work-in-progress. 100. 1956. Monetary assets and liabilities (including forward contracts) in foreign currency are translated at year end rates. raw materials and components: on monthly moving weighted average basis. 2. Current investments are valued at lower of cost and market value. on straight line basis: a) Leasehold land. 2.3 Cost of patterns and dies is amortised equally over five years.1 Inventories are valued at lower of cost and net realisable value. 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. as below. whichever is lower.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. including intangible assets and assets given on lease. including amortised costs of borrowings attributable only to major projects are capitalised as part of the cost of the respective assets. d) Assets subject to impairment. Cost of fixed assets is net of credits under Cenvat / Vat Scheme. 3. cost includes applicable production overheads. 4. consumable tools. Changes to the cost of an asset in subsequent years on account of price adjustments. on the asset’s revised carrying amount. over their estimated useful lives or lives derived from the rates specified in Schedule XIV to the Companies Act. where the cost exceeds Rs. b) Leasehold land and buildings subject to revaluation.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. cost being ascertained on the following basis: . over 40 years or the period of the lease. whichever is less. Foreign currency transactions 5. No depreciation is provided for in respect of assets disposed off during the year.Statement on Significant Accounting Policies 1.000 and below. Cost of initial spares and tools is capitalised along with the respective assets. c) Buildings and plant and machinery (except assets subject matter of impairment) and other assets. if any. Exchange differences arising on settlement of transactions and 48 A N N U A L R E P O R T 2 0 0 5 . 4.000 and the estimated useful life is two years or more. . 10. 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. spares. is capitalised. Investments Long term investments are stated at cost less provision for diminution other than temporary. Fixed assets and depreciation / amortisation 2.1 Foreign currency transactions (including booking / cancellation of forward contracts) are recorded at the rates prevailing on the date of the transaction. finished / trading goods: under absorption costing method. 4.4 Surplus / obsolete / slow moving inventories are adequately provided for. In respect of works-made components. over its remaining useful life.2 Assets are depreciated / amortised.

Revenue recognition 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.Statement on Significant Accounting Policies translation of monetary items (including forward contracts) are recognised as income or expense. 7. 9. ANNUAL REPORT 2005-06 49 . but net of incentive on sales including commission. 5. 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. 5. Deferred tax is recognised on timing differences. Deferred tax assets are recognised only to the extent there is a reasonable certainty of its realisation. Liability for leave encashment and other retirement benefits is provided on actuarial basis. Intangible items Expenditure on the design and production of prototypes is charged to revenue as incurred. Amortisation of deferred expenditure 8. Deferred tax 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. Revenue arising due to price escalation claim is recognised in the period when such claim is made in accordance with terms of sale. rebates and discounts. whichever is less. 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.2 The premium or discount arising on forward contracts is amortised over the life of the contract. 10.4 Income / expenditure of overseas branches is recognised at the average rate prevailing during the month in which transaction occurred. Employees’ retirement benefits Expenditure incurred on issue of debentures / raising loans is amortised over the period of such borrowings. 5. 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.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. Premium paid on prepayment of any borrowing is amortised over the unexpired period thereof or sixty months. 12. 6. Compensation under Voluntary retirement scheme is amortised over thirty six months.

189.776 (2005 : 1.586.51 239.000) Equity shares of Re. LRLIH Limited holds 441.1) each.000. (2005: Re. 62.1) each b) 341.240) Equity shares of Re.1 (2005: Re. Millions 2005 Rs.647.110) Equity shares were allotted as fully paid up by way of bonus shares by capitalisation out of General reserve and from Securities premium account.221. 2.1 (2005: Re.93 million.166. LRLIH Limited has advised the company about its intention to convert FCCN of US $ 50.7 (b) to the Accounts) Securities premium As per last Balance Sheet Add Premium on issue of shares upon conversion of FCCN (Refer Note 10 to the Accounts) Less Expenses relating to issue of FCCN Rs.572. upon which LRLIH Limited would again become the holding company.0 6 .16 359.00 165. 2006 consequent upon certain foreign currency convertible note holders exercising their option to convert the notes into equity shares.880) Equity shares of Re.189. Refer Note 10 to the Accounts for option on unissued shares.44 4.815 (2005: 165.486.157.500.93 million with similar option.74 323.000. However.22 2005 Rs.025.50 1.680 (2005:441.1) each e) 32.1 (2005: Re.29 1.880) Equity shares were allotted under an agreement without payment being received in cash.74 323.89 968.59 1.1) each issued by way of conversion of debentures c) 323.166.157.940) Equity shares of Re.500.669 Global depository receipts equivalent to 164. Millions 8.600.678.742.788. LRLIH Limited ceased to be the holding company effective March 20. 14.78 – 5.880 (2005: 359.33 6.500.71 4.1) each Issued a) 165.500.200) Equity shares of Re.1 CAPITAL Authorised 1.308.Schedules annexed to and forming part of the Balance Sheet as at March 31.070 (2005: 164.576 (2005: Nil) Equity shares of Re.680) equity shares of Re.89 6. Millions 8.95 245.1) each fully paid up Add Forfeited shares (Rs.789.742.308.070) Equity shares of Re. 1 (2005: Re.44 4. Millions 1.572.880 (2005: 14.1 (2005 :Re.57 32.294.03 341.000 (2005 : 1. 3.800) Of the above.189.940 (2005: 341.1) each and 5.1) each issued through Global depository receipts d) 359.57 – 1.51 50 A N N U A L R E P O R T 2 0 0 5 . Millions Rs. 1 (2005: Re.29 – 110.79 1.1 (2005: Re.29 1.600. 1.03 341.16 359.221.788. Millions 1.815) Equity shares of Re.00 165.59 1.95 245.110 (2005:62.678. 2006 Rs.292.189.2 RESERVES AND SURPLUS Capital reserve As per last Balance Sheet Revaluation reserve As per last Balance Sheet Less Transfer to Profit and Loss account (Refer Note 3.45 252.1) each issued by way of conversion of Foreign currency convertible notes (FCCN) Subscribed 1.1 (2005: Re.240 (2005: 323. LRLIH Limited holds foreign currency converible notes of US $ 50.29 1.3. 2006 2006 Rs.221.

537.Schedules annexed to and forming part of the Balance Sheet as at March 31.94 1.94 1. The company has powers to reissue debentures aggregating Rs.33 50. 1840. 2009 and 2010 d) 2.663.13 10.33 16.82 2.70 12.902. Millions Debenture redemption reserve As per last Balance Sheet Less Transfer to Profit and Loss account General reserve As per last Balance Sheet Add Transfer from Profit and Loss account Add Write back of Deferred tax liability Less Impairment of assets (Refer Note 12 to the Accounts) Profit and Loss account .00 6.91 2005 Rs.00 13.00 2005 Rs. 97.67 33.67 50. Millions – 2.17 2.81 13.00 1.00 43. as stated below: Debenture Series XXIX AL 1 AL 2 AL 3 AL 4 AL 5 AL 6 AL 7 AL 9(A) AL 10 AL 11 2006 Rs.00 500.33 33.00 6. 2.00 million) Debentures are to be redeemed at par in single / equal instalments.00 89. a) b) c) Debentures and term loans from banks aggregating Rs.356.00 250.2020.67 400.00 – – 4.surplus 1.57 121. 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. ANNUAL REPORT 2005-06 51 .356.15 million) are secured by a second charge on certain immovable properties and movable assets of the company. Millions Rs.390.05 1.6.00 166.788.33 957.390.00 450.50 415.356.00 1.33 3. Millions Rs.91 million (2005: Rs.00 500. Millions 505.3 SECURED LOANS Debentures Term loans – From banks – From financial institutions 415.46 3.846.634.96 347.33 400. 2008 and 2009 01 June 2005 15 October 2007 20 June 2006 17 September 2008.91 1.433.33 50.00 83.663.67 66.91 million (2005: Rs.05 million) due within 12 months.36 1.00 250. 2008 and 2009 15 February 2006 and 2007 15 February 2007.00 – 50. Millions 50.489.784. 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. a) b) 3.303.33 Dates of Redemption 01 August 2005 and 01 February 2006 15 June 2005 and 2006 15 October 2005 and 2006 19 December 2005 and 2006 10 January 2007. Loans include Rs 546. Debentures and term loans from financial institutions aggregating Rs.81 million) are secured by a first charge created on certain immovable properties and movable assets of the company. 2006 2006 Rs.83 68.1120.00 million (2005: Rs.83 1.05 1.00 million (2005: Rs.

483. Rs. Nil (2005: Rs.79 1.12 63.84 501.673.75 55.03 20.25 76.36 235.90 75. Cost of additions and capital work-in-progress includes exchange difference for the year Rs. fittings and equipment Vehicles Assets given on lease Plant and machinery .374.01 160.74 5.65 116.48 76. Cost / Valuation of Buildings as at March 31.15 1.01 13. 3.98 11. 5.54 1.61 77. Millions DEPRECIATION/ NET BLOCK IMPAIRMENT Upto 2006 2005 2006 – 317.69 1. Millions 0.00 – Land – Freehold – Leasehold Buildings Plant and machinery Furniture.99 142.30 126.50 1.22 6.windmills Intangible assets Computer software – Developed – Acquired Technical knowhow – acquired Previous year Capital work-in-progress 324. amount due within 12 months Loans and advances – From banks – Deferred sales tax – – 1.37 – 308.63 – 220.486.01 1.62 12.0.20 million) is on a land.49 69. 2006 includes amortisation of cost / value of leasehold land.17 72.86 287.04 1.50 6.71 8.14 315.10 76.05 2.73 103.34 337.07 146.717.51 344.35 – 106.36 22.07 36.33 2005 Rs.Schedules annexed to and forming part of the Balance Sheet as at March 31.88 324.54 million) 52 A N N U A L R E P O R T 2 0 0 5 .52 – 960. title for which is yet to be transferred to the company.44 152. 2006 includes: a) b) Rs.83 915.863. 4.11 256.0 6 .022.072.42 1.36 1.18.623.91 15.448.568.61 211.555.79 6.50 171.414. Depreciation / impairment upto March 31.084.790.78 704.93 20.05 60.24 million representing cost of residential flats including undivided interest in land.88 – 146.5 FIXED ASSETS DESCRIPTION GROSS BLOCK (COST/VALUATION) 2005 Additions Deductions 2006 Rs.756.19 77.36 154. A portion of buildings in Bhandara (estimated gross value Rs.229.28 9.07 246.67 868.12 99.27 71.33 4.451.48 9.05 2.78 49.846.35 16. 2.086.20 22.25 241.02 0.23 33.169.432.95 96.70 18.13.408.384.022.17 851.32 94. 2006 2006 Rs.79 286.402.4 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.63 3.55 10.938.548.46 11.11 – 247.952.97 317. 7.34 million being cost of shares in Housing Co-operative Society representing ownership rights in residential flats and furniture and fittings thereat.78 16.96 14. Millions 1. 1984.88 9. Certain Freehold and Leasehold land and buildings were revalued as at December 31.21 21.51 337.

03 1.10 each IndusInd Bank Limited II.332 400. partly paid-up Adyar Property Holding Co.100 each Ashley Transport Services Limited Gulf Ashley Motor Limited 3) Equity shares of Srilankan Rs.400.00 99.00 50.000 – 29. 1 million each IndusInd Bank Limited ICICI Bank Limited 4) Equity shares of Rs.03 ANNUAL REPORT 2005-06 53 .75 0. 1.00 200.dividend payout Prudential ICICI fixed maturity plan series XXVI . 10 each Lanka Ashok Leyland Limited 4) Equity shares of Rs.38 400 – 9.000 1. 100 each.quarterly plan .00 100.00 40.institutional daily income option 3) Non convertible redeemable bonds of Rs.growth Birla fixed maturity plan quarterly series 2 Plan A .dividend LIC MF FMP series 6-3 months dividend plan Chola FMP series 3 (qtly plan -1) dividend 2) Mutual Fund Units of Rs.410.881 – – – – – – 100.00 20.004 10.00 250.164. 2006 Nos. INVESTMENTS DESCRIPTION Current investments . Limited (Rs.000.00 – – – – – 200.449 1.664 3.23 23.Schedules annexed to and forming part of the Balance Sheet as at March 31.000 25.000 1.000.400.65 paid up) 400 1.institutional plus daily dividend option – 20.dividend UTI fixed maturity plan .(quarterly / 0306/ 1) dividend plan 20.000. Long term investments A) Trade 1) Equity shares of Rs.994.97 100.000 HSBC fixed term series .00 10.803 1.400 20 – 15.426.332 400 11.06 1.597 30.6 I.000 226.1000 each UTI liquid cash plan .400.02 11.series A .000 3.000.40 5.000 – – – – – 2006 Rs.dividend Birla fixed term plan.410. 2005 Rs.dividend option Kotak fixed maturity plan .000 – 400.424.000.8.000 5.00 150.000.664 1.000 9.75 0.34 HDFC FMP 3M march 2006 (1) institutional plan .000 354.00 50.00 37.00 – 165.00 6.20 14.007 9.00 – 40.51 – – – – – – UTI fixed maturity plan .00 150.000 5.series II .60 5.000 600. 10 each G101 Grindlays fixed maturity plan -10th plan .(quarterly / 0305/ 11) dividend plan Prudential ICICI liquid plan .other than trade 1) Mutual Fund Units of Rs.442 400.000. Millions Nos.000 8.008.23 143.00 1.00 22.00 35.362. 10 each Automotive Coaches and Components Limited Ennore Foundries Limited Irizar TVS Limited Arkay Energy (Rameswarm) Limited 2) Equity shares of Rs.growth Kotak FMP series 23.361.992.00 200.000 20.000 15.000 20. Millions – 200.

400 100 10 7. 1. 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: a) Automotive Coaches and Components Limited b) Ennore Foundries Limited 4. Millions 250.000 1. 900) Hinduja HCL Sing Tel Communications Private Limited (cost Rs.) 5) 6% Cumulative non-convertible redeemable preference shares of Rs. 2.82 8.03 4.000 2006 Rs.90 1.442.670. 100 each Ennore Foundries Limited 6) Units of Rs.887.500. Shares in IndusInd Bank have been classified as long term and current investments to comply with certain administrative guidelines of banking regulatory authority.000 165 250.058 24.543.Market value Unquoted Investments . Investments are fully paid-up unless otherwise stated.231 29.02 562.81 1.50 7.50 14. 2006 Nos. 10 each Ashley Holdings Limited Ashley Investments Limited Ashok Leyland Project Services Limited Chennai Willingdon Corporate Foundation (cost Rs.070.400 100 10 4.185 – 2.95 3.442.42 750.430. 10 each Ashley Holdings Limited Ashley Investments Limited Less Provision for diminution in value 1.30 86.291.70 2.058 24. 2005 Rs.000 1.185 34.57 544. 54 A N N U A L R E P O R T 2 0 0 5 .000 750.000 750.000 each Auto Ancillary Fund B) Other than trade 1) Equity shares of Rs.81 1.498. 100) Hinduja TMT Limited ICICI Bank Limited IndusInd Bank Limited 2) 2% Non-cumulative non-convertible redeemable preference shares of Rs.231 29.953.Schedules annexed to and forming part of the Balance Sheet as at March 31.000 84.05 512.000 8.000 8.30 86. 5.Cost 8.00 – 2.430.50 14.38 174.670.07 3.05 512.38 84.00 0.78 3.70 3.42 0.80 206.070.90 2.681. Millions Nos.6 INVESTMENTS (Contd.Cost .85 206.50 7.698. Quoted Investments .000 750.83 7.85 3.500.325.0 6 .

22 240.040 13.234 ANNUAL REPORT 2005-06 55 .944.982.373 313.569 933.982.504 50.668.020 5.31 840.57 868.92 713.467.504 50.637 131.606 15.59 5.939.670.668 86.58 20.969.022.750.6 5.34 1.050 535.000.935 23.017.467.000.92 713.133 56.Schedules annexed to and forming part of the Balance Sheet as at March 31.307.) Purchase and sales/redemption of investments during the year are as under: Purchases Description Nos.00 6.062 5.85 955.935 23.688 156.991.000 1.022.12 1.629 8.606 20.000 – – 121.425 82. 2006 1.03 205.700.49 90.481.05 1.000 – – – 165 – – 170.040 13.991.09 567.03 155.106.343.050 560.700.672.639 20 1.295 19.629 8.481.05 1.80 – – Sales/Redemption Nos.377.750.351.807.09 567.00 925.22 240.310 82.000.00 17.213.000 77.00 – 119.06 3.595 128.57 868.59 5. INVESTMENTS (Contd.668.976.997. Millions 1.85 135.097.847.295 24.718 4.377.313.284 74.26 50.062 5.036.86 12.351.76 5.06 3.193.02 50.02 250.34 955.284 69.31 890.670.105.213.569 933.49 90.136.672.307.668 86.373 303.64 a) Units in schemes of various funds Birla Sun Life mutual fund Canbank mutual fund Chola mutual fund Deutsche mutual fund DSP Merrill Lynch mutual fund Franklin Templeton investments HDFC mutual fund HSBC mutual fund ING Vysya mutual fund JM financial mutual fund Kotak mahindra mutual fund LIC mutual fund Principal mutual fund Prudential ICICI mutual fund Reliance mutual fund SBI mutual fund Standard Chartered mutual fund Sundaram mutual fund Tata mutual fund UTI mutual fund b) Redeemable bonds ICICI Bank Limited IndusInd Bank Limited c) Equity shares Arkay Energy (Rameswarm) Limited Auto Ancillary Fund Ennore Foundries Limited Gulf Ashley Motor Limited Hinduja TMT Limited IndusInd Bank Limited 600.688 169.976.00 775. Cost Rs.711 4.83 – – 34.502.81 1.81 1.85 135.26 50.038 71.12 1.098.40 50.76 6.58 – – – 0.038 71.105. Millions 1.133 56. Cost Rs.000.020 25.000 92.43 50.017.000 – 1.

denominated in Ghana Cedis Standard Chartered Bank .306.11 4.Ghana .denominated in Ghana Cedis Maximum balance at any time during the year – Current account ABSA Bank .42 0.680.243.966.91 4.32 1.437.Ghana . 1.587.denominated in US$ Standard Chartered Bank .62 4.42 4.29 912.19 4.587.91 13.44 4.028.Sharjah .266.00 13.06 1.25 0.8 1.4.denominated in Ghana Cedis Standard Chartered Bank .361.85 0.denominated in US$ National bank of Sharjah .51 0.794.78 46.28 40.139. Nil (2005 . 96.35 0.Rs.Ghana .Ghana .37 46.denominated in Dirham National bank of Sharjah .49 4.10 0. Unsecured 233.16 466.denominated in US$ Standard Chartered Bank .72 9.7 INVENTORIES Stores and spares Consumable tools Raw materials and components (including patterns and dies) Work-in-progress Finished/trading goods SUNDRY DEBTORS Trade Others Less Provision Of the above.57 2.denominated in Dirham National bank of Sharjah .289.Sharjah .06 2.01 13.162.12 4. 2006 2006 Rs.0 6 .62 361. 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 .092.30 4.75 5.Ghana .66 4.denominated in South African Rand Citibank New York .37 4.51 1.35 455.00 3.61 4.Sharjah .26 133.68 5.denominated in US$ National bank of Sharjah .41 2.86 1.04 7.06 2.133. Millions 227.423) – Deposit account Standard Chartered Bank .37 142.denominated in South African Rand Citibank New York .94 0. Age analysis of debts – Outstanding for more than six months (includes deferred receivables Rs.denominated in US$ – Deposit account Standard Chartered Bank .628.Schedules annexed to and forming part of the Balance Sheet as at March 31.Sharjah .61 – 7.11 5.39 2.81 4.67 9.9 – Considered good – Considered doubtful 2.26 6.025.94 million)) – Other debts 3.97 0.85 61.66 40.26 3.493.633.891.04 7.37 14.73 – – – 56 A N N U A L R E P O R T 2 0 0 5 .Ghana .denominated in US$ (Rs.82 1.26 6.84 46. Millions 1.020.denominated in Ghana Cedis 1.76 2005 Rs.South Africa .96 – – – 17.243.47 156.65 150.04 0.06 2.South Africa .728.47 4.355.

37 42.81 86.63 1. 2006 2006 Rs.65 3.87 520.65 147.53 54.86 6.01 951.26 1.16 2.86 1.39 144.26 3.23 4.65 2.616.55 30. Unsecured – Considered good – Considered doubtful 3.26 7. 1. Secured – Considered good 2.46 81. central excise etc.79 492.95 2.80 248.862.52 9.07 0.91 234. Other receivables Less Provision Of the above.31 0.13 193.539.34 2.597. Advances for capital items and investments 1.95 3.656.95 568.67 Of the above.80 2.29 11.87 259.13 58.882.26 0.32 ANNUAL REPORT 2005-06 57 .99 2.38 180.60 147.085.327.80 6.10 LOANS AND ADVANCES Advances recoverable in cash or in kind or for value to be received Balances with customs.026.399.07 23.30 166.11 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 .264.78 563.38 105.54 147.95 285. Provision made for the year – Product warranties – Retirement benefits 2.58 325.09 911.044.Schedules annexed to and forming part of the Balance Sheet as at March 31.173.21 14.09 602. Millions 2.30 244.337.611.98 1.80 11. port Proposed dividend Tax on proposed dividend Product warranties Retirement benefits 2005 Rs.34 357.82 13.26 3.484.39 147. Millions 1.10 273.00 2.72 557.69 1.01 5.362.01 1. 1. Due from Directors/Officers – At the end of the year – Maximum amount due at any time during the year 4.468.14 9.15 73.979.86 224.26 3. 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 25.

92 496.808.793.83 61.037 41.08 188.45 4.344.91 52.74 4.01 Rs.33 40.08 2005 Rs.39 3.92 65.531.837.90 Current Long term 34.51 Rs.40 306. Other expenses Power and fuel Consumption of stores and tools Repairs and maintenance – Buildings – Machinery Rent Rates and taxes Insurance Selling and administration expenses .0 6 .774.704.87 3.70 23.42 337.35 8.23 475.604.66 3. Millions 39.540.51 – 7.173. gratuity and other funds Welfare expenses C.06 342.12 1. Materials Consumption of raw materials and components-net Less Scrap sales Purchase of trading goods B.68 329.77 33.359.08 2.01 48.46 2.71 5.40 Miscellaneous income 2.23 29.15 67. wages and bonus Contribution to provident.09 197.452.460.10 47.83 301.28 120.020.86 119.12 271.2 OTHER INCOME Income from current investments Dividend Interest Nos Nos Tonnes 2006 Rs.82 537. Millions 61.01 1.645.72 30.74 414.17 on sale / redemption of investments .82 500.154.71 58 A N N U A L R E P O R T 2 0 0 5 .038.77 99.61 289.508.23 Income from long term investments Dividend – Trade – Others Profit Profit – – on sale of fixed assets .28 57.00 11.Schedules annexed to and forming part of the Profit and Loss Account as at March 31.3 MANUFACTURING AND OTHER EXPENSES A.37 36.55 40.868.98 54.171 – 52.70 118.56 87.00 60.47 43.74 293. rebate and discounts 2.71 434.12 760.08 1. Millions 54.95 43. Millions 57.23 – 73.40 212. Employees’ remuneration and benefits Salaries.254 10.740 6.28 479.1 SALES Commercial vehicles Engines Ferrous castings Spare parts and others Less Commission.17 59. 2006 Unit of Measurement 285.50 991.74 1.11 48.15 38.89 332.21 – Research and development Bad and doubtful debts/advances provided/written-off – Net of recovery/write back 78.612.357.655 7.

66 1265.006.87 * excludes work-in-progress of Rs.75 – 1.06 1.16 ANNUAL REPORT 2005-06 59 .74 41. Millions D.092.windmills Intangible assets Computer software – Developed – Acquired Technical knowhow .005.90 3.53 47.81 5.079.823.63 35.7(b) to the Accounts) Selling and administration expenses include Directors’ sitting fees DEPRECIATION.97 4.46 1.79 1. Refer Note 11 to the Accounts 1. fittings and equipment Vehicles Assets given on lease Plant and machinery . Impairment of Plant and machinery 22.20 2.83 – 39.25 88.50 20.47 3. AMORTISATION AND IMPAIRMENT Buildings Plant and machinery Furniture.4 72.10 47.97) 102.075.598.16 million pertaining to undertaking sold during the year.57 8. Less Expenses capitalised 351.04) 2.10 37.35 5.219.12 3.930.80.55 37. Millions Rs.41 31.59 38.51 930. Millions 2005 Rs.09 Rs.Schedules annexed to and forming part of the Profit and Loss Account as at March 31.97 (3. 2.14 136.Acquired Less Transfer from Revaluation reserve (Refer Note 3.260.87 2.75 121.11 75.924. 2006 2006 Rs.590.93 * 5.46 28.06 11.03 2.94 922.87 88.73 47.7(b) to the Accounts) Less Transfer from General reserve (Refer Note 12 to the Accounts) Of the above. Rent includes amortisation of cost/value of leasehold assets as reduced by transfer from Revaluation reserve (Refer Note 3. Millions (181. Movement in value of stock of finished/ trading goods and work-in-progress Opening stock Closing stock (Increase)/ Decrease Excise duty in value of finished goods (Increase)/ Decrease E.

98 Of the above. Tax deducted at source from interest earned 1.91 3.0 6 .34 219.87 25.94 67.64 276.33 95. Millions Rs. Millions 2. 2006 2006 Rs.41 383. Millions 236. 1.99 49.21 164.74 2005 Rs.01 193. Premium on prepayment of borrowings amortised 3. deposits and other accounts Cash discounts earned 288.03 27.53 258.44 43.96 29.51 60 A N N U A L R E P O R T 2 0 0 5 .07 304. Debenture issue / Loan raising expenses amortised 2. Millions Rs.83 27.Schedules annexed to and forming part of the Profit and Loss Account as at March 31.5 FINANCIAL EXPENSES Interest Others Less Premium (net)/ Interest earned on bills receivable.39 17.

393 213 1. – Engines Nos. Ferrous castings Tonnes Production Commercial vehicles Nos.16 1.937.81 912.500 24.645.47 22.200 – 65.13 1.3 Closing stock Commercial vehicles Nos.81 832.77 35.752.523.3 1.767 1.60% 39.261.40 873.40% 46 6 8.45 30.10 97.099.25* 2.48 30.780 457.660 78 Rs.085 7.00 31.91% 29.749 564.02 3. steel scrap and alloys Tonnes Forgings and castings Finished and other items Of the above – Imported items – Indigenous items Not Applicable 2005 Not Applicable 77. – Ferrous castings Tonnes Consumption of raw materials and components Plates.46 129.41 171 10 – 35.81 432.642 394 2.50 8.14 2.429.73 2.70 40.Two shifts (as certified by the Managing director) Commercial vehicles Nos.46 197.58 199. Millions 2.588. Engines Nos.147.730 18. Engines @ Nos.020.04 204. sheets and angles Tonnes Bars Tonnes Steel tubes Metres Tyres.228 – 1.30 2.000 54.09% ANNUAL REPORT 2005-06 1.1 1.400.519 6.652 222 3.11 – 4. IMPORTS AND FOREIGN CURRENCY TRANSACTIONS Unit of Measurement 1.935 351. Engines Nos.2 Licensed Capacities Installed Capacities .58 199.437.31 508. Ferrous castings Tonnes @ Engines manufactured against spare capacity of commercial vehicles Finished/trading goods and work-in-progress Opening stock Commercial vehicles Nos.Notes to the Accounts for year ended March 31.057.48 30.17 19.65 706.738 478.514.395 18.5 61 .426.532 22.64 477.4 Rs.29 5.81 432. Millions 1.429.232 2.26 97. Parts for sale – Bought out finished – Works made Work-in-progress * Refer note under schedule 2.190 – 67.02 532. Parts for sale – Bought out finished – Works made Work-in-progress Capitalised / transferred for internal and other use – Commercial vehicles Nos.83 1.81 2.19 3. 2006 2006 1 INFORMATION REGARDING GOODS MANUFACTURED.749.393 213 1.67 20. tubes and flaps Sets Pig iron.

05 0.680 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.116.8 1.166.05 5877.83 12.86 178.96 – Directors’ remuneration and amortisation of expenses Deduct – Depreciation deductible – Profit on sale of fixed assets as per books .55 – Capital profit on sale of undertaking – Others capital profits Net Profit The total remuneration as stated in 2.13 26. 2006 2006 Rs.Notes to the Accounts for year ended March 31.37 3.29 62 A N N U A L R E P O R T 2 0 0 5 . 1956 Profit before tax Add – Depreciation as per books – Profit on sale of fixed assets under section 349 .74 15.228. dividend and commission earned) Dividend remitted in foreign currency Number of non-resident shareholders 1 Number of shares on which dividend was remitted 441.20 718.11 12.82 7. Millions 1.21 125.062.i.668 441. Computation of net profits under section 198/349 of the Companies Act.92 1.513.6 Imports (c.90 41.96 103.62 4.121.44 1.48 4.98 – 312.12 210.02 80.73 5.67 1457.11 76.30 263. 679.17 2005 Rs.85 84.88 5.44 698.32 3.23 178.42 25.93 5.266.06 426.7 1.18 38. insurance.452.14 31.79 1 44.06 33.73 51.82 1.00 1260.11 4388.89 367.86 24.1 6. Millions 569.16 38.9 330.65 1244.723.26 3.89 2.08 13.0 6 .65 174.f) Raw materials Trading goods and others Spares and tools Capital goods Expenditure remitted in foreign currency Royalty Technical knowhow Interest and commitment charges Commission paid on sales Research and development Travel Other expenses Earnings in foreign currency Export .36 2. 2.48 4.2 4523.092.88 4.54 61.70 64.FOB value Interest Others (Freight.04 3.550.88 2.738.49 10.1 above is within the maximum permissible limit under the Act.75 119.39 22.10 1.

2006 2006 Rs.11 million) in respect of intangible assets) Contingent Liabilities a) Guarantees 114.326.79 456.07 0.34 For company law matters 0.957.82 4.12 For taxation matters 0.11 157.81 0.81 Expenses reimbursed 0.73 Auditors’ remuneration a) Included under Selling and administration expenses For financial audit 2.33 (105.00 Total Research and development costs charged to the Profit and Loss account (including amount shown under Schedule 2.6 3.4] 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.62 147.61 b) Fixed loans 58. 88.182.3) 627.5 3.16 a) Net exchange difference debited / (credited) to Profit and Loss account 84. 0. 5.3 and Rs.1 3.503.84) b) Of the above.37 1.89 2.78 million (2005 : Rs. 5.30 Rs.80 For cost audit 0.Notes to the Accounts for year ended March 31.56 158.70) c) Income deferred to be recognised in subsequent accounting periods in respect of forward contracts 2. 0.44 million (2005 : Rs. Millions 3. unrealised gains / loss debited/(credited) to Profit and Loss account 35. Plant and machinery Assets subjected to impairment .09 56.2 2005 Rs. Millions 3.06 For other matters 1.40 1. 161.20 0.3 3. 6.12 0.75 million) in Schedule 2. 3.acquired 5/6 b) Depreciation for the year computed on revalued assets over the balance useful life on straight line method includes a net charge of Rs.revised carrying amount over its remaining useful life Windmils 12 Furniture and fittings and equipment Furniture and fittings 8 Office equipment 8 Data processing system 5 Vehicles Cars and motorcycles 3 Trucks and buses 5 Intangible assets Computer software – Developed 5 – Acquired 5 Technical knowhow .58 b) Included under Securities premium account in connection with Foreign currency convertible notes issue – 3.75 million (2005 : Rs.01 a) In respect of the following fixed assets useful lives lower than those derived from the rates specified in Schedule XIV to the Companies Act. Useful lives Buildings Revalued buildings are depreciated over the balance useful life as determined by the valuers.92 1.69 million) in Schedule 2. 1956 have been reckoned in computing depreciation/amortisation for the year.4 3.01 c) Claims against the company not acknowledged as debts 63. ANNUAL REPORT 2005-06 63 . 6.69 million (2005 : Rs.7 OTHER FINANCIAL INFORMATION Capital commitments (net of advances) not provided for (including 2.56 (99.80 Interest charge on a) Debentures 132.50 b) Partly paid shares 0.01 0.70 d) Bills discounted 6.44 million) [Rs.

Millions 1.82) 1. 1) excluding extraordinary items net of tax (in Rs.71) (16.Notes to the Accounts for year ended March 31. 2006) Gulf Ashley Motor Limited Irizar TVS Limited Lanka Ashok Leyland Limited. Panama Key management personnel Mr.58 2.367.) Diluted earnings per share (Face value Re.796.955 2. 1) (in Rs.89 1.337 2. 2006) LRLIH Limited. RELATED PARTY DISCLOSURE a) List of parties where control exists Holding company (upto March 20.86 2.095.708.89 2. R Seshasayee.714.45 Rs. million) Weighted average number of equity shares outstanding Basic earnings per share (Face value Re.87 (22.59 3. SEGMENT INFORMATION The company is principally engaged in a single business segment viz.05 2. Sri Lanka Enterprises which have significant influence Machen Development Corporation..1) Machen-Iveco Holdings SA (Holding Company of LRLIH Limited.53) – (44. million) Add: Interest and other costs net of tax Adjusted profits (in Rs.273.774.20 1.48 (A) (B) (A/B) 5. 2006) Ennore Foundries Limited b) Other related parties with whom transactions have taken place during the year Associates Ashley Holdings Limited Ashley Investments Limited Ashok Leyland Project Services Limited Automotive Coaches and Components Limited Ennore Foundries Limited (from March 21.273.192. million) Weighted average number of equity shares Diluted earnings per share (Face value Re.732.310.74 3.858.33 2.93 1.714. 1) excluding extraordinary items net of tax (in Rs. 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.09 Rs. EARNINGS PER SHARE a) Basic earnings per share Profit after taxation as per Profit and Loss account (in Rs.57) 1.680.200 2.28 2.73 3.32 29.21) 2.890.71 (31. Millions 1.18) (14.10 (33. United Kingdom (refer note in schedule 1.820 2.294.) b) Diluted earnings per share Profit after taxation as per Profit and Loss account (in Rs.28 14.0 6 .) COMPOSITION OF NET DEFERRED TAX LIABILITY Deferred tax liabilities – Depreciation / Research and development expenditure – Other timing differences Deferred tax assets – Voluntary retirement scheme compensation – Unabsorbed capital losses – Other timing differences 2005 (A) (B) (A/B) (C) (C/B) 3.925. United Kingdom) Fellow subsidiary (upto March 20.10 1.189.20 94. 6.) Profit before extraordinary items net of tax (in Rs.302. Managing director 64 A N N U A L R E P O R T 2 0 0 5 . 2006 2006 4. 7. million) Basic earnings per share (Face value Re.294.30 2. 1) (in Rs.

00 73.54 4.82 3.99 – 51.306.86 12.36 1.647. Millions c) Transactions with related parties (i) Purchase of raw materials and components Ennore Foundries Limited Automotive Coaches and Components Limited Irizar TVS Limited (ii) Sales Lanka Ashok Leyland Limited Gulf Ashley Motor Limited (iii) Other expenditure Associate companies LRLIH Limited (iv) Interest income Associate companies (v) Dividend income Ennore Foundries Limited Lanka Ashok Leyland Limited (vi) Dividend (net) paid LRLIH Limited (vii) Remuneration to Key management personnel Refer 2.58 – 4.43 206.50 29. 2006 2006 Rs.20 17.34 2. Millions 2.47 119.198.37 441.80 – – 62.21 121.29 118.31 2.74 66.1 of Notes to the Accounts (viii)Sale of fixed assets Ennore Foundries Limited (ix) Investment / (Redemption) Ennore Foundries Limited Other associate companies (Refer Note 5 in Schedule 1.199.56 0.00 – 30.80 29.00 28.60 620.35 432.73 43.44 – 4.65 ANNUAL REPORT 2005-06 65 .Notes to the Accounts for year ended March 31.91 30.16 28.56 0.59 – – 330.90 42.17 1.51 11.50 16.00 13.39 727.54 19.37 157.38 206.11 66.04 760.65 3.04 195.6) (x) Sale of undertaking Ennore Foundries Limited (Refer 11 of Notes to the Accounts) (xi) Outstanding balances (excluding application money for investments) – Debtors Ennore Foundries Limited Other associate companies – Loans and advances Associate Companies Machen Development Corporation Key management personnel – Creditors for materials and expenses Ennore Foundries Limited Other associate companies Key management personnel – Financial Guarantees Ennore Foundries Limited Automotive Coaches and Components Limited (xii) Advances to associate companies in the nature of loan included in (xi) above Ashley Holdings Limited Ashley Investments limited – Maximum loan outstanding during the year from associate companies Ashley Holdings Limited Ashley Investments Limited 2005 Rs.88 0.16 1.66 11.00 28.55 61.36 76.

121.66 million of tax and Rs. 737.88 2) Excise Duty 0. 2004 referred to above. 301.35 million in other States.92 million in other States respectively. 21. Subsequently.94 16.11 million) on sale of chassis in other States pertaining to the assessment years 1998-99 to 2000-01.57 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. 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. The Supreme Court confirmed. On the direction of the Supreme Court.58 shares of Re.0 6 . the Supreme Court has granted interim stay on any levy of sales tax by GOR. Millions) 1) Sales Tax 23.74 million (Rs. 43. by its judgement dated January 7.31. through its wind energy division.46 million as impairment of identified Plant and machinery and consequential decrease in Deferred tax liability of Rs. the company has paid tax of Rs.33 – 10. The company has entered into operating lease arrangements with various parties during the year. by its order dated March 23. The amount involved for the years 1986-87 to 1988-89 and 1989-90 to 1991-92 are Rs. The company had recognised as at April 1. The company’s appeals are currently pending before the first appellate authority.700 FCCN aggregating to US$ 22. 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. Note holders have an option to convert each note into 1422. GOTN had also issued show cause notices for similar transactions for the years 1992-93 to 2000-01. 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 0.1 each or such number of shares of Re. Millions 65.36 285. with effect from April 1. has directed the company to take up the matter before appropriate authority. 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.70 million. 2004. The Supreme Court has not decided the issues on merits. a fellow subsidiary.20 291. 2004. at any time after June 9.1 each as per terms of issue. the assessing authority issued a fresh notice dated March 16. for leasing out windmills. The company had to represent the case before various judicial forums including the Supreme Court.5% per annum. During the year 32.46 million and Rs.23 0. if necessary. these amounts have not been considered as contingent liabilities.36 Appellate Deputy / Additional Commissioner Tribunal Commissioner of Central Excise (Appeals) 88.08 million of penalty) for which the company has paid tax of Rs. Till this process is initiated. 13. 2006 for assessment year 1986-87 to which the company has filed its replies. 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. 66 A N N U A L R E P O R T 2 0 0 5 . misrepresentation or suppression of material facts or giving or furnishing false particulars is suspected. 120. Particulars of dues (net) towards Sales Tax. will be redeemed on April 30. Ashok Leyland Project Services Limited. 2006 8. 9.292. as going concern to Ennore Foundries Limited. an associate company. The balance notes unless previously converted. GOR has levied a tax of Rs. 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. In this respect.26 million (and penalty / interest thereon Rs. redeemed or repurchased and cancelled. collusion. 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. 2006. The conversion price currently is Rs. 132. 139.35 million and Rs 120. 2005. 12.Notes to the Accounts for year ended March 31.00. Millions) (Rs. SALES TAX MATTERS In respect of branch transfer of chassis from Tamil Nadu and subsequent sale in other States. Profit on sale of undertaking represents profit on sale of Ductron Castings Unit. 2009 at 100% of their principal value. 436. the company preferred writ petition before the Madras High Court which by its order dated September 1. In view of the above. Similar demands were made by the Government of Rajasthan (GOR) in respect of branch transfer of chassis out of the State of Rajasthan. Hyderabad.14 – 11.576 Equity shares (2005: Nil) were allotted consequent to conversion of 22. The Supreme court. 57. 2004 Rs.

Figures for the previous year have been regrouped wherever necessary. 15. sold at the commencement of the current year. 16. SHAHANEY Chairman ANNUAL REPORT 2005-06 67 . The statement on significant accounting policies deals with the accounting treatment accorded to such derivatives. the note holders. Schedules and Notes to the Accounts. 2006.33 million. In terms of the FCCN issue and on the basis of the legal opinion obtained in this regard. Signatures to Statement of Significant Accounting Policies. Euro. 2006 Chennai R. However they are not comparable as the previous year figure includes operations of Ductron Castings Unit. The company has a net receivable hedged exposure of US $ 12. 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. the company has provided for the proposed dividend (including tax thereon) on the basis that all the FCCNs remaining outstanding as of March 31. denominated mostly in US dollars. 2006 would get converted into equity shares before the record date. The company actively manages its currency/ interest rate exposures through a centralized treasury setup and uses derivatives to mitigate the risk from such exposures. SRIDHARAN Chief Financial Officer N. SESHASAYEE Managing Director R.61 million through forward contracts and net payable unhedged exposure of US $ 34. For and on behalf of the Board K. Generally such contracts are taken for exposures materialising in the next six months.J. DERIVATIVES The company uses derivative financial instruments such as forward contracts to hedge certain currency exposures. present and anticipated. SUNDARARAJAN Executive Director & Company Secretary April 29.14. Accordingly. will be entitled to the said dividend. Japanese Yen and Great Britain Pounds.

Thousands) Turnover Profit/Loss Before Tax + + – 5 2 4 8 5 0 2 6 2 2 3 9 . Position of Mobilisation and Deployment of Funds (Amount in Rs. V. 2006 Chennai 68 A N N U A L R E P O R T 2 0 0 5 .J.Balance Sheet Abstract and Company’s General Business Profile I. Performance of Company (Amount in Rs. SUNDARARAJAN Executive Director & Company Secretary April 29. Expenditure 3 6 8 7 1 3 7 0 7 6 9 7 1 1 1 2 8 7 2 4 9 1 6 6 5 9 8 9 1 8 1 0 7 Reserves and Surpluses Unsecured Loans 1 2 5 9 0 0 7 2 2 9 3 3 7 5 2 3 6 9 2 5 8 5 5 Total Assets 3 6 9 2 5 8 5 5 IV. Capital Raised during the Year (Amount in Rs. Thousands) Total Liabilities Sources of Funds Paid-up Capital Secured Loans Deferred Liability Application of Funds Net Fixed Assets Net Current Assets Accumulated Losses 1 0 8 8 2 4 3 6 8 8 9 N 8 6 I 4 5 L Investments Misc. Balance Sheet Date 3 1 Date 0 0 0 1 0 5 6 State Code 1 8 0 3 2 Month 0 0 Year II. 32. Generic Names of Three Principal Products of Company Item Code No.576 equity shares on conversion of FCCNs (Refer note 11 to the Accounts).due to allotment of 32. SRIDHARAN Chief Financial Officer N. Registration Details Registration No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description 8 C 8 E 8 S 7 0 6 0 0 R 0 E 0 4 C 1 S 0 P 0 A R T S 2 I 0 A L V E H I C L E S O M M E 4 N 7 P 0 G 0 A 8 I 8 R 9 N 0 E Note : Share capital of the Company has increased during the year by Rs.292. SHAHANEY Chairman .292.576/. SESHASAYEE Managing Director R. (ITC Code) Product Description Item Code No. For and on behalf of the Board K.0 6 R. 0 9 7 7 5 4 Total Expenditure Profit/Loss After Tax Dividend Rate % + + – 3 1 2 2 0 7 3 1 9 5 4 8 2 8 3 3 1 2 Earnings per share in Rs. Thousands) (See note below) Public Issue Bonus Issue N N I I L L Rights Issue Private Placement N N I I L L III.

E.Tech.06.) MBA M.04 16.07.Information Management 01. Hindustan Motors Consultant.01.09. B.74 01.Strategic Sourcing Head .06.& L.E.E..05.) B.. Dip. M. Heavy Vehicles Factory.. PGDIT B..Maintenance.Information as per Section 217(2A)(b)(ii) read with the Companies (Particulars of Employees) Rules.09. Karachi.Market Planning.77 Services General Manager . General Manager (Engg & R&D) Trans Mobile Ltd.Advanced Engineering Executive Director .I. ACA B.. HMT Ltd Regional Service Engineer.68 01.01.05. AICWA B. 1975 and forming part of the Directors’ Report for the year ended March 31. Oman Sr.72 01.00 01.E.05. B.South Special Director . MBA B.76 14.10.Production. Voltas Ltd Engineer . B.01..79 30.75 01.Information Technology General Manager . Brooke Bond India Ltd. DMIT B. Calcutta Officer .Project Engineering General Manager .Engine R&D BA(Hons).Tech. 56 Mohanakrishnan N Murugappan N Muthusubramanian K 54 56 60 Special Director . ICWA (Inter) B. Pakistan.Corporate Quality Engineering 01. 2006 NAME AGE DESIGNATION DATE OF REMUNERATION COMMENCEMENT RECEIVED / OF EMPLOYMENT RECEIVABLE 16.W.Marketing Head SQC & OR...Sc. PGDBM B. (Mech. B.. B.D B. Jabalpur CEO.Merchant Banking Divn.E.GM-Research.77 69 ..HR Advisor Special Director .04. M.. Ph. DGM .Engg.Tech. Lakshmi Narayanan P A Dr. Kirloskar Oil Engines Ltd Group Accounts Officer.E. Esix Technologies Manager .07.97 01. Suhail Bhawan Group.Manufacturing General Manager .A.Sc.01.Product Development General Manager .Sc.80 07. MBA B. DMIT B.82 05.M.D.(P. M. B. Eastern Coal Fields Ltd.04 03. State Bank of India Divisional General Manager in Royal Enfield Motors (Eicher Group) Advisor.79 01.Tech.Com...02 7328287 6798359 4718736 4169755 6699943 6584704 902879 2588749 2795568 2646083 4614229 2527942 3765590 3768348 5983284 2553200 4237555 2550013 2797411 QUALIFICATION TOTAL EXPERIENCE (YEARS) 35 37 27 20 37 37 46 32 30 31 38 29 34 36 31 27 30 30 38 PARTICULARS OF PREVIOUS EXPERIENCE Selection & Training Manager.Com.02.Exports Special Director .E.Manufacturing General Manager . ACA. Ph. West Bengal - Annexure F to Directors’ Report Amrolia J N Anantha Narayanan T * Anup Bhat Aravind S Bharadwaj Dr Balasubramanian S Begg J R W Bhalla K K S * Chandrasekaran N Chatterjee A K Cowsik R Devarajan R Hombali V M Khaitan B Krishnamurthy K N Kumar K S * ANNUAL REPORT 2005-06 58 61 49 41 58 61 69 54 54 56 64 53 56 60 52 Executive Director .10.08.73 07.Vehicle Sales Technical Advisor to MD Executive Director .02 01.02 17..Sc.E.S.S.Project Planning Head-Vehicle Engineering Executive Director . TVS Motor Co.

82 26.78 Design Services Executive Director ..Planning and Development. Coimbatore Consultant Senior Development Engineer.Sc. Personnel Officer.Ennore 06.Projects. 1975 and forming part of the Directors’ Report for the year ended March 31.E..S.Product Development Managing Director 19.E. ACA B.74 02.10.72 2683951 7357396 2935089 7393397 6844465 3789662 2645742 3689380 2604282 2727992 2528733 1610305 13114158 3047047 7164260 2400197 2768513 2515013 2771246 2509470 4391177 3946005 B.Com.06.07. B.Finance General Manager .E.78 10.Com.93 01. PARTICULARS OF PREVIOUS EXPERIENCE 70 A N N U A L R E P O R T 2 0 0 5 . B. Hindustan Lever Ltd.01.Com. Bimetal Bearings Ltd.Internal Audit Plant Director .Business Planning General Manager ..0 6 Executive Director .E. MAC Industrial Products.02 Head .E.E.08.01.Sc.76 General Manager .Projects General Manager . B. in Industrial Admn.E..97 01.04. Engg..03. PGDBM B. CWA B.E.Finac Services Head .03.10. Eicher Group Sales Engineer. DIM B.. ACA B. MSW B..96 05. B.09. QUALIFICATION TOTAL EXPERIENCE (YEARS) 31 38 36 42 40 34 31 30 29 31 32 27 35 29 29 27 29 31 27 35 34 35 Managing Director.04.01. B. Sundaram Industries Ltd.04.International Operations 29.TELCO Sales Executive.07.73 16.07. B. B.. Greaves Cotton & Co Ltd CEO.05. MMM B. in Mech. ACA Grad. B. PG Dip.Special Projects DATE OF REMUNERATION COMMENCEMENT RECEIVED / OF EMPLOYMENT RECEIVABLE 01.) M. Mumbai Personnel Officer.82 14.Annexure F to Directors’ Report Information as per Section 217(2A)(b)(ii) read with the Companies (Particulars of Employees) Rules. Chennai Manager .05.74 02.ACCL General Manager .A.Product Development General Manager-West General Manager .78 24.) NAME Muthusubramanian C S Nagarajan S Nair M K R Natraj M Rajinder Malhan Raju S K Ramadurai S G Ramasubramanian A * Rao R N Sarathy V Sambasivam S Sam Burman * Seshasayee R Shekhar Arora Sridharan K Srikant Srinivasan Srinivasan R Soundararajan G Sundaram Parthasarathi Subramanya G Sundararajan N Udayashanker B M AGE 56 61 59 64 57 59 54 53 52 58 58 52 58 53 52 49 57 57 53 58 56 56 DESIGNATION General Manager .96 01.. ACA.81 Chief Financial Officer General Manager .Exports Executive Director . B.Manpower Planning and Recruitment General Manager .Advanced Engineering & 07.Manufacturing General Manager .E.Accounts.. ACC Ltd AGM . M. Lucas TVS Ltd President.E. Hero Honda Motors Ltd President.. Oswal Steel Sr. Sweden Manager . MA (Pers Mgt) B.Sc (Engg.05. FCS.07. Grad. DIM B. DynaMate AB.Management Development 02.82 01. Tata Consultancy Services.03. Dip in Mkg & Advg B..76 01.E.E. 2006 (Contd.07..05 30..74 01.03 21. System Analyst.74 .Sc. AICWA..Planning & Quality Company Secretary & Head .Current Vehicle Engineering General Manager-CG (MDV) Executive Director .Com.

ANNUAL REPORT 2005-06 71 . TVS Motor Co Head . B..Annexure F to Directors’ Report Information as per Section 217(2A)(b)(ii) read with the Companies (Particulars of Employees) Rules. MBA (Kellog) TOTAL EXPERIENCE (YEARS) 19 29 17 PARTICULARS OF PREVIOUS EXPERIENCE GM . M.Sales.Tech.Parts General Manager . All appointments are contractual. Allowances. None of the employees is a relative of any Director of the Company.. Commission. In addition to the above.06 01. Tata Motors JMD.04. Bonus. Cummins India Ltd *Part of the year 1.) NAME Venkat Subramaniam B Venkatesh S * Vinod K Dasari AGE 44 53 39 DESIGNATION General Manager . 1975 and forming part of the Directors’ Report for the year ended March 31.08.. 3.Tech. 2.Product Development Chief Operating Officer DATE OF REMUNERATION COMMENCEMENT RECEIVED / OF EMPLOYMENT RECEIVABLE 01.03 02. (Engg). Company’s Contribution to Provident Fund and Superannuation Fund and perquisites evaluated as per Income-Tax rules. Gross remuneration shown above is subject to tax and comprises Salaries. medical benefits.Engg. the employees are entitled to Gratuity. 4. PGDBM B. 2006 (Contd. M.E. The above list does not include employees on deputation. Leave Travel Assistance as applicable in accordance with the Company’s rules.05 2836228 617589 5621308 QUALIFICATION B.Sc.S.01.

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