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Auditor Report of Ashok Leyland Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of Ashok Leyland Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

4. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor''s report) Order, 2015 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure

a statement on the matters specified in paragraphs 3 and 4 of the Order.

9. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has, in accordance with the generally accepted accounting practice, disclosed the impact of pending litigations on its financial position in its financial statements - Also Refer Note 3.2.7 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses under the applicable law or accounting standards.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph 8 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date on the accounts of Ashok Leyland Limited ("the Company") for the year ended March 31, 2015)

(i) In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

b) The fixed assets were physically verified during the year by the Management in accordance with a phased programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company, nature and value of its assets. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventories:

a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has generally maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013 and accordingly, the provisions of clause (iii) of paragraph 3 of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is generally an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventories and fixed assets and for the sale of goods and services, and during the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

(v) According to information and explanations given to us, the Company has not accepted any deposits and accordingly, the provisions of clause (v) of paragraph 3 of the Order are not applicable to the Company.

(vi) In our opinion and according to the information and explanations given to us, the requirement for maintenance of cost records pursuant to the Companies (Cost records and Audit) Rules, 2014 specified by the Central Government of India under Section 148 of the Companies Act, 2013 are not applicable to the Company for the year under audit.

(vii) According to the information and explanations given to us and the books of account examined by us, in respect of statutory dues:

a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities during the year. There were no undisputed amounts payable in respect of the aforesaid statutory dues outstanding as at March 31, 2015 for a period of more than six months from the date they became payable.

b) There are no dues of Wealth Tax and Customs Duty which have not been deposited on account of any dispute with the relevant authorities. Details of dues towards Income Tax, Sales Tax, Service Tax, Excise Duty, Value Added Tax and Cess that have not been deposited as at March 31, 2015 on account of disputes are as stated below:

Rs. Lakhs

Nature Disputed Period to Forum where Amount of Dues Dues which the the dispute is stayed amount pending out of relates disputed dues

Income 7,390.63 Assessment Appellate 7,390.63 Tax years 2005- authority - 06, 2006-07 Income Tax and 2008- Appellate 09 Tribunal

Sales 21,724.88 Various Appellate 6,210.84 Tax and periods authority Value from 1993 - upto Added - 2014 Commissioner Tax level

268.69 Various Appellate 232.85 periods authority - from 1987 Tribunal -2013

723.81 Various High Court 655.69 periods from 1986 -2012

Excise 62.43 Various Appellate - Duty periods authority and cess from 2008 - upto thereon - 2012 Commissioner level

1,251.75 Appellate 1,246.75 authority - Tribunal

Service 40.89 Various Appellate - Tax and periods authority cess from 2011 - upto thereon - 2014 Commissioner level

c) The amounts required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder, have been transferred to such fund within time.

(viii) The Company does not have accumulated losses at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company in earlier years, for loans taken by a subsidiary and a joint venture company from banks or financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xi) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained.

(xii) To the best of our knowledge and belief, and according to the information and explanations given to us, and considering the size and nature of the Company''s operations, no fraud of material significance on the Company or no fraud by the Company has been noticed or reported during the year.

For M. S. Krishnaswami & Rajan For Deloitte Haskins & Sells LLP

Chartered Accountants Chartered Accountants

Registration No. 01554S Firm''s Registration No. 117366W/W-100018

M. S. Murali A. Siddharth

partner partner

Membership No. 26453 Membership No. 31467

May 12, 2015 May 12, 2015

Chennai Mumbai


Mar 31, 2014

Report on the Financial Statements

1. We have audited the accompanying Financial Statements of Ashok Leyland Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profi t and Loss and the Cash Flow Statement for the year then ended and a summary of signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Company in accordance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Aff airs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these

financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the fi nancial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the eff ectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the fi nancial statements.

5. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid fi nancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of aff airs of the Company as at March 31, 2014;

(b) in the case of the Statement of Profi t and Loss, of the profi t of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fl ows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the Order.

8. As required by Section 227(3) of the Act, we report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profi t and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Statement of Profi t and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Aff airs).

(e) on the basis of written representations received from the directors as on March 31, 2014 and taken on record by the Board of Directors, none of the directors is disqualifi ed as on March 31, 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.

In our opinion and on the basis of such checks as we considered appropriate, and according to the information and explanations given to us, the nature of the Company''s business/ activities/ results during the year are such that clauses (vi), (xiii), (xiv), (xviii), and (xx) of paragraph 4 of the Order are not applicable to the Company. Further, in respect of other clauses, on the basis of such checks as we considered appropriate, we report that:

1. In respect of its fi xed assets:

(i) the Company is maintaining proper records showing full particulars including quantitative details and situation of fi xed assets.

(ii) the fi xed assets were physically verifi ed by the Management during the year under a phased programme of verifi cation, which, in our opinion, provides for physical verifi cation of all the fi xed assets at reasonable intervals having regard to the size of the Company, nature and value of its assets. According to the information and explanations given to us, no material discrepancies have been noticed during the year on such verifi cation.

(iii) the fi xed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fi xed assets of the Company and such disposal has, in our opinion, not aff ected the going concern status of the Company.

2. In respect of its inventories:

(i) the inventories have been physically verifi ed during the year by the Management at reasonable intervals.

(ii) in our opinion and according to the information and explanations given to us, the procedures of physical verifi cation of the inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(iii) in our opinion and according to the information and explanations given to us, the Company is generally maintaining proper records of its inventories and no material discrepancies were noticed on physical verifi cation.

3. On the basis of our examination of the books of account, the Company has neither granted nor taken any loans, secured or unsecured, to / from companies, fi rms or other parties covered in the register maintained under section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventories and fi xed assets, for payment of expenses and for sale of goods and services. Further, on the basis of our examination of the books and records of the Company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

a) the particulars of contracts or arrangements referred to in Section 301 of the Act that needed to be entered into the register, maintained under the said section have been so entered.

b) where each of such transactions is in excess of Rs.5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

7. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government of India under Section 209(1)(d) of the Act and are of the opinion that, prima facie, the prescribed accounts and cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

8. According to the information and explanations given to us and the books of account examined by us, in respect of statutory dues:

(i) the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues, as applicable, with the appropriate authorities during the year.

(ii) there were no undisputed amounts payable in respect of such statutory dues outstanding as at March 31, 2014 for a period of more than six months from the date they became payable.

(iii) there are no dues of wealth-tax and customs duty which have not been deposited on account of any dispute. Details of dues towards income tax, sales tax, service tax, excise duty and cess that have not been deposited as at March 31, 2014 on account of disputes are as stated below:

9. The Company does not have any accumulated losses as at March 31, 2014 and has not incurred any cash losses in the fi nancial year ended on that date or in the immediate- ly preceding fi nancial year.

10. In our opinion, the Company has not defaulted in repayment of dues to any fi nancial institutions, banks or debenture holders during the year.

11. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

12. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or fi nancial institutions, are not, prima facie, prejudicial to the interest of the Company.

13. In our opinion and according to the information and explanations given to us, the term loans availed by the Company were, prima facie, applied for the purpose for which they were obtained.

14. In our opinion and according to the information and explanations given to us, and on an overall examination of the fi nancial statements of the Company, funds raised during the year on short-term basis have, prima facie, not been used for long-term investment.

15. According to the information and explanations given to us, during the period covered by our audit report, the Company has created securities / charges in respect of debentures issued.

16. To the best of our knowledge and belief, and according to the information and explanations given to us, and considering the size and nature of the Company''s operations, no fraud of material signifi cance on or by the Company has been noticed or reported during the year.

For M.S. Krishnaswami & Rajan For Deloitte Haskins & Sells LLP

Chartered Accountants Chartered Accountants

Registration No. 01554S Firm''s Registration No. 117366W/W-100018

M.S. Murali A. Siddharth

Partner Partner

Membership No. 26453 Membership No. 31467

May 22, 2014 Chennai


Mar 31, 2012

1. We have audited the attached Balance Sheet of ASHOK LEYLAND LIMITED ("the Company") as at March 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, both annexed thereto, (collectively referred to as the financial statements), signed by us under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing and assurance standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

a. we have obtained all the information and explanations, which, to the best of our knowledge and belief, were necessary for the purposes of our audit.

b. in our opinion, proper books of account, as required by law, have been kept by the Company so far as appears from our examination of those books.

c. the financial statements dealt with by this report are in agreement with the books of account.

d. in our opinion, the aforesaid financial statements comply in all material respects with the applicable Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 (the Act).

e. in our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements read with the Statement on Significant Accounting Policies and Notes to the Financial Statements, give the information required by the Act, in the manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

5. On the basis of written representations received from the Directors as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the Directors is prima facie disqualified as on March 31, 2012 from being appointed as a director in terms of Section 274(l)(g) of the Act.

As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Government of India in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we report that:

1. (i) the Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(ii) the fixed assets are being physically verified under a phased programme of verification, which, in our opinion, is reasonable having regard to the nature and value of its assets. However, no material discrepancies have been noticed on such verification.

(iii) the Company has not disposed off substantial part of its fixed assets during the year.

2. (i) inventories have been physically verified during the year by the management at reasonable intervals.

(ii) the procedures of physical verification of the inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(iii) the Company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.

3. the Company has neither granted nor taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and services. Further, on the basis of our examination of the books and records of the Company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. a) in our opinion and to the best of our knowledge and belief, the particulars of contracts or arrangements referred to Section 301 that needed to be entered into the register, maintained under the said section have been so entered.

b) where each of such transactions is in excess of Rs 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. the Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 1975 apply.

7. the Company has an internal audit system commensurate with its size and nature of its business.

8. we have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(l)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. (i) the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities during the year.

(ii) no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at the balance sheet date for a period of more than six months from the date they became payable.

(iii) there are no dues of income tax, wealth-tax and customs duty which have not been deposited on account of any dispute. Details of dues towards sales tax, excise duty, service tax and cess that have not been deposited on account of dispute are as stated below:

Rs.Lakhs

Nature of Dues Period to Forum Amount dues which the where they stayed amount dispute is not relates pending included in dues

Sales Tax 2,224.33 Various Appellate 2,846.88 periods Deputy/ from Additional 1993-2010 Commis- sioner

35.84 Various Tribunal 204.30 periods from 1987-2007

- Various High Court 49.09 periods from 1986-2001 Excise 26.78 Various Commis- - Duty, periods sioner of and cess from Central thereon 2008-2011 Excise (Ap- peals)

1,415.09 Tribunal 4.88 (CESTAT)

Service tax 51.62 Various Tribunal - and cess periods (CESTAT) thereon from 2009-2011

- Various Tribunal 230.31 periods (CESTAT) from 2006-2009

Income - 2005-06 Commis- 8,045.47 Tax and sionerof 2007-2008 Income Tax (Appeals)

10. the Company does not have any accumulated losses as at March 31, 2012 and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. the Company has not defaulted in repayment of dues to any financial institution, bank or debenture holders during the year.

12. 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, debentures and other securities.

13. the provisions of any special statute applicable to a chit fund, nidhi or mutual benefit fund / societies are not applicable to the Company.

14. the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly the provisions of Clause 4(xiv) of the CARO are not applicable to the Company.

15. the terms and conditions of guarantees given during the year by the Company, for loans taken by others from banks or financial institutions, are not prima facie prejudicial to the interest of the Company.

16. the term loans availed by the Company were prima facie, applied for the purpose for which they were obtained.

17. on an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used for long-term investment.

18. the Company has not made any preferential allotment of shares during the year to any party.

19. the Company has created securities / charges in respect Of debentures issued and outstanding.

20. the Company has not raised any money by public issues during the year.

21. considering the size and nature of the Company's operations, no fraud of material significance on or by the Company has been noticed or reported during the year.

For M.S. KRISHNASWAMI & RAJAN

For DELOITTE HASKINS & SELLS

Chartered Accountants Chartered Accountants

Registration No. 01554S Registration No. 117366W

M.K. RAJAN R. LAXMINARAYAN

Partner Partner

Membership No.4059 Membership No.33023

May 14, 2012 Chennai


Mar 31, 2011

1. We have audited the attached Balance Sheet of ASHOK LEYLAND LIMITED (the Company") as at March 31, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, both annexed thereto, (collectively referred to as the financial statements), signed by us under reference to this report. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing and assurance standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

a. we have obtained all the information and explanations, which, to the best of our knowledge

and belief, were necessary for the purposes of our audit.

b. in our opinion, proper books of account, as required by law, have been kept by the Company so far as appears from our examination of those books.

c. the financial statements dealt with by this report are in agreement with the books of account.

d. in our opinion, the aforesaid financial statements comply in all material respects with the applicable Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 (the Act).

e. in our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements read with the Statement on Significant Accounting Policies and Notes to the Accounts, give the information required by the Act, in the manner so required and also give a true and fair view, in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

(ii) in the case of the Profit and Loss account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

5. On the basis of written representations received from the directors as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is prima facie disqualified as on March 31, 2011 from being appointed as a director in terms of Section 274 (1)(g)of the Act.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our report of even date on the accounts for the year ended March 31, 2011 of Ashok Leyland Limited).

As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Government of India in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we report that:

1. (i) the Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(ii) the fixed assets are being physically verified under a phased programme of verification, which, in our opinion, is reasonable having regard to the nature and value of its assets, and no material discrepancies have been noticed on such verification.

(iii) the Company has not disposed off substantial part of its fixed assets during the year.

2. (i) inventories have been physically verified during the year by the management at reasonable intervals.

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

(iii) the Company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.

3. the Company has neither granted nor taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and services. Further, on the basis of our examination

of the books and records of the Company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. to the best of our knowledge there are no contracts or arrangements referred to in Section 301 of the Act which need to be entered in the register maintained under the said section.

6. the Company has not accepted any deposits from the public to which the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 1975 apply.

7. the Company has an internal audit system commensurate with its size and nature of its business.

8. we have broadly reviewed the books of account and records maintained by the Company relating to the manufacture of commercial vehicles, diesel engines, gensets 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.

9. (i) the Company is regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities during the year.

(ii) there are no dues of income tax, wealth-tax and customs duty which have not been deposited on account of any dispute. Details of dues towards sales tax, excise duty, service tax and cess that

have not been deposited on account of dispute are as stated below:

Rs. Lakhs

Nature Dues Forum where Amount of dues the dispute stayed not is pending included in dues

Sales 1,284.29 Appellate 1,384.23 tax Deputy / Additional Commissioner

15.12 Tribunal 697.09

Excise 24.70 Commissioner Duty, of central and cess Excise thereon (Appeals)

1,419.66 Tribunal - (CESTAT)

Service 230.31 Tribunal - tax and (CESTAT) cess thereon

10. the Company does not have any accumulated losses as at March 31, 2011 and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. the Company has not defaulted in repayment of dues to any financial institution, bank or debenture holders during the year.

12. 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, debentures and other securities.

13. the provisions of any special statute applicable to a chit fund, nidhi, mutual benefit fund / societies are not applicable to the Company.

14. the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the CARO are not applicable to the Company.

15. the terms and conditions of guarantees given during the year by the Company, for loans taken by others from banks or financial institutions, are not prima facie prejudicial to the interest of the company.

16. the term loans availed by the Company were prima facie, applied for the purpose for which they were obtained.

17. on an overall examination of the financial statements of the Company, funds raised on short- term basis have, prima facie, not been used for long-term investment.

18. the Company has not made any preferential allotment of shares during the year to any party.

19. the Company has created securities / charges in respect of debentures issued and outstanding.

20. the Company has not raised any money by public issues during the year.

21. considering the size and nature of the Companys operations, no fraud of material significance on or by the Company has been noticed or reported during the year.

For M.S. Krishnaswami & Rajan For Deloitte Haskins & Sells Chartered Accountants Chartered Accountants Registration No. 01554S Registration No. 117366W

M.K. Rajan R. Laxminarayan Partner Partner Membership No.4059 Membership No.33023

May 19, 2011 Chennai





 
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