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annual investor meet 25th may 2006

The Hinduja Group. . The Hinduja Group Profile. The Group was established in 1914 in Mumbai Entered Middle East in 1919 to grow trading initiativesPrivately owned by the Hinduja FamilyPresence in more than 25 countries and operates across the globeEntered India for major activities in 1987Employs over 30,000 personnel worldwide.

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annual investor meet 25th may 2006

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    1. Annual Investor Meet 25th May 2006

    3. The Hinduja Group Profile The Group was established in 1914 in Mumbai Entered Middle East in 1919 to grow trading initiatives Privately owned by the Hinduja Family Presence in more than 25 countries and operates across the globe Entered India for major activities in 1987 Employs over 30,000 personnel worldwide

    4. Hinduja Group : Business Activities

    5. Presentation Outline Indian CV Industry Outlook Ashok Leyland Performance and Plans

    6. Indian CV Industry Outlook

    7. CV Demand Drivers Economy – Growth in FY06 Industrial Production : 8.2 % Agriculture Growth : 2.5% Imports / Exports : 31.7% / 25%

    8. CV Demand Drivers (Contd..)

    9. CV Demand Drivers (Contd..) Infrastructure Road construction projects - NHAI launched in 1999 Total coverage increased to 18,372 Kms - pan India 35% completed by 31.03.06 40% under implementation 25% to be implemented

    10. M&HCV TIV Volumes

    11. M&HCV TIV Growth Trends

    12. CV Demand Drivers (Contd…) Legislation Recent Supreme Court decision on overloading to trigger demand. “Growth in MHCVs partially on account of positive impact of the supreme court’s order, accompanied by strong freight availability ,allowing operators to increase freight rates “ – CRIS INFAC. “One time demand upto 28,000 vehicles”

    13. Freight Rate Movement

    14. Freight Rate Buoyancy and Operators’ Cost Structure

    15. Railways Efficiency Improvement - Not a concern Proposed dedicated Freight Corridor – looking to build partnerships with road transporters to move to interior areas - will boost demand for CVs Investment Rs.650 Billion: Phase I Rs.224 Billion Time frame : 10 years – Phase I completion by 2011 Coverage – 9000 kms – Phase I - 2900 kms Similarity with Chinese market – Massive expansion in Railway network in China during 1992 to 2002, accompanied by CV growth rate of 8.9%. Similar trend expected in Indian market. Structural change in industry with higher sales of HCVs for highway transport and LCVs for last mile transport

    16. Outlook for FY07 “Growth up to 9-10%“ – CRIS INFAC. Industry Analysts’ projection – Average growth >10%

    17. Ashok Leyland’s Performance

    18. Composition of Sales Q4FY06

    19. Composition of Sales FY06

    20. M&HCV: AL’s Market Share

    21. Financial Results FY06

    22. Operations Highlights in FY06 Capacity enhanced to 77,200 vehicles p.a. Introduction of BS3 variants Volume growth at 17.6%, outperformed industry growth of 4.5% Market share improvement by 300 bp - Improvement across all regions / segments Turnover Rs.52 Bn. (US $ 1.1 Bn.) No borrowal during 2005-06 Asset base Rs.23 Bn. Market capitalization :Rs.55 Bn. (US$ 1.2 Bn.)

    23. Operations Highlights FY 06 (Contd…) Loan funds excluding FCCN - Rs 3.5 Bn. Net interest bearing loans - Rs 1.8 Bn. Capital expenditure - Rs 2.4 Bn. Net Working capital - Rs 4.2 Bn.

    24. Performance Highlights – 5 yrs

    25. Other Business Initiatives Component / aggregates business including exports to US / European countries – turnover target at US$ 100 million in the next three years Engine business expansion - volume increase by 100% in FY 07. Potential for further growth.

    26. Plans

    27. Plans Capacity expansion Product launches Performance improvement through Focus on non-cyclical portfolios Efficiency improvements

    28. Capacity Expansion Vehicle assembly capacity to be augmented to 100,000 in next 2 years Production / sales target FY07 - 75,000 vehicles Cabin facility to 40,000 Indigenisation of “J “ series engines R&D facilities to reduce time-to-market

    29. New Product Launches ICV - 1512 with H Series engine Semi Forward Control in Tipper and Haulage segments Tractor range - 6x2 / 6x4 with 210-350 hp engine and GTW up to 49T Tipper 8x4 with 350 hp engine InterCentury Luxura bus Branded Buses Defence sector - HMV and other logistics vehicles

    30. Non-Cyclical Business

    31. Efficiency Improvements Material cost reduction Emphasis on e-sourcing and global sourcing to play a beneficial role Continued focus on value engineering initiatives to improve margins in all existing / new products Mission Gemba Shop floor-led team initiative with focus on creating value through empowerment and improving resource utilisation

    32. Ashok Leyland Stock Performance

    33. Shareholding Pattern

    34. Thank you

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