Annual Report 0102

Contents
Board of Directors Highlights of Performance Directors Report Report on Corporate Governance Management Discussion and Analysis Report Directors Responsibility Statement Auditors Report to the Members Balance Sheet Profit and Loss Account Statement on Significant Accounting Policies Schedules to Balance Sheet Schedules to Profit and Loss Account Notes to the Accounts Cash Flow Statement Balance Sheet Abstract and Companys General Business Profile
1 2 5 8 18 23 24 26 27 28 30 36 39 45 47
Board of Directors
R J Shahaney, Chairman D J Balaji Rao P A Balasubramanian (Nominee of LIC) P K Choksey A K Das D G Hinduja H Klingele E A Kshirsagar F Sahami (Alternate : B D Punjabi) R Sorce R Seshasayee, Managing Director R Jagannath, Deputy Managing Director
Executive Directors
J N Amrolia T Anantha Narayanan K K S Bhalla A S Mundkur S Nagarajan M Natraj
Secretary Auditors
N Sundararajan M S Krishnaswami & Rajan Price Waterhouse
Cost Auditor Bankers
Geeyes & Co. Bank of America Bank of Baroda Bank of India Canara Bank Central Bank of India Citibank N.A. ICICI Bank Limited Punjab National Bank Standard Chartered Bank Standard Chartered Grindlays Bank State Bank of India The Hongkong and Shanghai Banking Corporation Limited
Registered Office
19, Rajaji Salai, Chennai 600 001
Plants
Chennai Hosur, Tamil Nadu Bhandara, Maharashtra Alwar, Rajasthan Hyderabad
Highlights of Performance
Vehicle Sales (Nos.)

45 000
37 859
Engine Sales
12 000
(Nos.)
37 500
31 547 29 741 32 475 29 673
10 000
30 000
8 000
7 611 7 185 6 004 6 311 5 258
22 500
6 000
15 000
4 000
7 500
2 000
97-98
98-99
99-2000 2000-01 2001-02
97-98
98-99
99-2000 2000-01 2001-02
Spare Parts & Others
(Rs. million) 6 000 2 400
Foreign Exchange Earnings

5 492
(Rs. million)
5 139
5 000
2 000
1 786 1 657 1 717 1 613 1 657
4 000
1 600
2 520
3 000
1 200
2 145
2 145
2 000
800
1 000
400
97-98
98-99
99-2000 2000-01 2001-02
97-98
98-99
99-2000 2000-01 2001-02
Sales Value
(Rs. million) 30 000

25 987 26 067 26 304
Profit
1 800
(Rs. million)
Profit before Tax
25 000
20 143 20 451
1 500
Profit after Tax 1 322
20 000
1 200
933 1 019 923 917 785
15 000
900
10 000
600
5 000
300
233 207 184 204
97-98
98-99
99-2000 2000-01 2001-02
97-98
98-99
99-2000 2000-01 2001-02
Highlights of Performance
Assets
(Rs. million) 30 000 30 000
Financed by
Net Current Assets
(Rs. million)
Fixed Assets 23 425 20 663
Investments
Reserves & Surplus
Share Capital
Loan Funds
25 000
20 991 21 015 21 096
25 000
Deferred Tax 23 425 20 663 20 991 21 015 21 096
20 000
20 000
15 000
15 000
10 000
10 000
5 000
5 000
97-98
98-99
99-2000 2000-01 2001-02
97-98
98-99
99-2000 2000-01 2001-02
Earnings Per Share (Rupees)

12 60
Dividend
(%)
10
50
45
7.76 7.71 6.60
40
35
40
30
20
1.54
1.71
10
10
10
97-98
98-99
99-2000 2000-01 2001-02
97-98
98-99
99-2000 2000-01 2001-02
Directors Report
Part - I Performance/Operations The Directors are happy to present the Annual Report of the Company together with the audited Accounts for the year ended March 31, 2002. Financial Results 2001-2002 (Rs. Million) 1,322.06 399.50 922.56 (24.59) 736.44 (300.00) 1,334.41 535.18 799.23 2000-2001 (Rs. Million) 1,019.41 102.60 916.81 53.40 (52.30) 642.77 (300.00) 1,260.68 475.72 48.52 736.44
of Value Added Tax across the country, and the establishment of an independent Dispute Resolution Authority at all India level have both been delayed, but are expected to resolve this issue permanently in the long run. Industrial Relations Industrial relations during the year were good, barring a 29 day strike by the workmen at Hosur. Long term wage settlements have been concluded peacefully in all the manufacturing units. Cooperation between Management and the Unions continued, resulting in further operational improvements, and better productivity in several areas. Greater degree of flexibility in manpower deployment has been achieved. Research and Development, Technology Absorption, Energy Conservation etc. The progress made on other aspects of R&D, Technology, Energy etc., are furnished in Annexure - A to this Report. CNG Buses Following the Supreme Court directive in using CNG (Compressed Natural Gas) for vehicles in Delhi, your Company has supplied a large number of buses during last year. Additional orders are expected to be received in the new financial year. Part - II Corporate Matters Corporate Governance Your Directors are happy to report that your Company has been fully compliant from March 31, 2001 with the SEBI Guidelines on Corporate Governance, which have been incorporated in Clause 49 of the Listing Agreement with the Stock Exchanges. In many areas, our operating practices exceed the SEBI stipulations also.
Profit Before Tax Less : Provision for Taxation Add : Transfer from/(to): Investment Allowance Reserve Debenture Redemption Reserve Balance in Profit and Loss Account Brought forward from previous year General Reserve Profit available for appropriation Appropriation : Proposed Dividend Tax on Dividend Surplus - Balance in Profit and Loss Account Carried forward to next year..... Dividend The Directors recommend a dividend of 45% (Rs.4.50/- per equity share of Rs.10/-) subject to deduction of tax as applicable for the year ended March 31, 2002. Sales The general economic slowdown which continued during the year adversely affected the Commercial vehicle industry. There was a significant drop in demand for buses and a slowdown in demand in the Western and Southern markets. These segments/areas have traditionally been strong for your companys products. This led to a drop in your Companys market share in medium and heavy duty vehicles segment. The total industry domestic sales of civilian medium and heavy duty commercial vehicles is estimated to have grown by 1.7% in this year over the previous year. However, your Company registered a negative growth of 9.6%.
Exports Your Companys exports during 20012002 were 2,170 vehicles, compared to 2,411 in the previous year. Production During the year, production was better aligned to meet market requirements. There was improvement in quality as well as productivity in several areas. Profitability The continued focus on inventory reduction, process improvements and control over raw material and manufacturing costs helped the Company, in addition to the improved price realisation, to achieve improved net profit for the year. Dispute Regarding Central Sales Tax The Companys appeal against the disputed levy of Central Sales Tax by the Government of Tamilnadu is pending before the Supreme Court. Meanwhile, the Stay granted by it continues to be in force. The adoption
Directors Report
A detailed report on this subject forms Annexure-B to this Report. The Statutory Auditors of the Company have examined the Companys compliance, and have certified the same, as required under the SEBI Guidelines. Such certificate is reproduced as Annexure - C to this Report. A separate Management Discussion and Analysis Report covering a wide range of issues relating to performance, outlook etc., is given as Annexure - D to this Report. The Directors Responsibility Statement as required under Section 217 (2AA) is furnished as Annexure - E to this Report. Directors The present term of Mr R Seshasayee, Managing Director is due to expire on March 31,2003. However, considering the sustained good performance of the Company during difficult times under his stewardship, the Board of Directors has decided, subject to the approval of the shareholders at this General Meeting, to foreclose/overlap the last year of his current term and has re-appointed him as Managing Director for a period of five years from April 1, 2002 to March 31, 2007 with a suitable revision in the terms of remuneration. The necessary resolutions relating to this re-appointment are being placed before the shareholders for approval. Mr R Jagannath who was a Wholetime Director on the Board from April 1,1999 was redesignated as Deputy Managing Director in July 2001, consequent to increase in his responsibilities. His earlier approved term expired on March 31,2002. The Board has re-appointed him as a Deputy Managing Director for a period of one year from April 1, 2002 to
March 31, 2003. The necessary resolutions relating to his re-appointment are being placed before the shareholders for approval. Mr G Boschetti, who was a Director on the Board resigned in March 2002, consequent to his taking over as CEO of FIAT Auto, Italy. Your Directors wish to thank Mr G Boschetti for his valuable guidance and leadership during his association with the Company. Mr R Sorce who was a Director on your Companys Board till March 2001 has been re-appointed by the Board as a Director in place of Mr G Boschetti. Mr D J Balaji Rao, who was a Nominee Director of ICICI Limited, ceased to be a Director from March 18, 2002 consequent to withdrawal of his nomination by ICICI Limited. In order to continue to have the benefit of Mr Balaji Raos experience and advice, your Board has re-appointed Mr Balaji Rao as an Independent Director liable to retire by rotation and also as member of the Audit Committee with effect from March 27, 2002. Mr Balaji Rao retires at this Annual General Meeting. A Notice under Section 257 of the Companies Act,1956 has been received from a member proposing his re-appointment. The necessary resolution for his re-appointment is being placed before the members for approval. Mr A K Das, Mr F Sahami and Mr H Klingele retire by rotation at the forthcoming Annual General Meeting, and are eligible for re-appointment. The necessary resolutions are being placed before the members for approval. Cost Auditor The Government has stipulated Cost Audit of the Companys records in
respect of commercial vehicles as well as engines. M/s GEEYES & Co., Cost Auditors have carried out this assignments and their findings are satisfactory. Auditors M/s M S Krishnaswami & Rajan and M/s Price Waterhouse retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Audit Committee of the Board has recommended their re-appointment. The necessary resolution is being placed before the Board for approval. The Company has received confirmation that their appointment will be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. Other Information The particulars of employees as prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are furnished in the Annexure - F to this Report. Acknowledgement The Directors wish to express their appreciation of the continued co-operation of the Central and State Governments, Bankers, Financial Institutions, Customers, Dealers and Suppliers and also the valuable assistance and advice received from major shareholders LRLIH Ltd., Hinduja Group and IVECO. The Directors also wish to thank all the employees for their contribution, support and continued co-operation through the year.
On behalf of the Board of Directors Chennai May 7, 2002 R J SHAHANEY Chairman
Annexure A to Directors Report
(A) Conservation of Energy The Companys thrust on energy conservation measures continues, and utilisation of energy continues to be optimised at all Plants through continuous monitoring of processes. The Company continues to take advice from experts on energy conservation. (B) Technology Absorption Research and Development (R&D) 1. Specific areas in which R & D carried out by the Company : Buses fitted with Bharat Stage-II emission norms of the 5.7 litre engine have been developed and productionised. The performance of these vehicles has been good. Optimisation and type approval tests on 5.7 litre engine at higher power ratings to meet Bharat Stage-II emission norms completed. Optimisation work on the 6.5 litre engine to meet Bharat Stage-II norms is in progress. Design work of the 5.7 litre engine to meet Euro-III norms has been completed. Optimisation work expected to be completed by early 2003. Optimisation work on 3.9 litre 4 cylinder engine to meet Bharat Stage-II norm is nearing completion. 2. Benefits derived as a result of the above R & D : Compliance with statutory norms and increased customer acceptance. 3. Future Plan of Action : To proactively work towards cleaner engines and safer vehicles. To strive to improve value to customers.
4. Expenditure on R & D : (Rs. Million) (a) (b) Capital Revenue (excluding depreciation) Total Total R & D Expenditure as % of total turnover 0.96 252.68 111.85 140.83
Technology Absorption, Adaptation and Innovation Low floor city bus is being evaluated in Bangalore. 16 M long vestibule buses with new coupling and bellows has been developed. Heavy duty vehicles with 680 TCAC engine meeting India 2000 norms have been productionised. Upgraded version of the 6 speed synchro gear box has been produced as a pilot batch for large scale validation before bulk production introduction. (C) Foreign Exchange Earnings and Outgo The details of earnings and outgo of foreign exchange is given in Schedules 1.6 to 1.9 of Notes to the Accounts. The Company continues to strive to improve its export earnings.
Annexure B to Directors Report Report on Corporate Governance
1)
ASHOK LEYLAND PHILOSOPHY ON CORPORATE GOVERNANCE The Board of Directors and the Management of Ashok Leyland commit themselves to : strive towards enhancement of shareholder value through sound business decisions prudent financial management, and high standards of ethics throughout the organisation.
ensure transparency and professionalism in all decisions and transactions of the Company. achieve excellence in Corporate Governance by conforming to, and exceeding wherever possible, the prevalent mandatory guidelines on Corporate Governance. regularly reviewing the Board processes and the Management systems for further improvement.
2)
BOARD OF DIRECTORS a) Composition : The Board of Directors of the Company, headed by a Non-executive Chairman, consisted of the following Directors, as on March 31, 2002 categorised as indicated: i) Non-executive Directors a) Promoter Group Mr A K Das Mr D G Hinduja Mr H Klingele Mr F Sahami (Alternate : Mr B D Punjabi) Mr R Sorce b) Connected with Associate Companies c) Independent Mr R J Shahaney (Chairman) Mr P A Balasubramanian (representing LIC as Shareholder) Mr D J Balaji Rao Mr P K Choksey Mr E A Kshirsagar ii) Managing Director Mr R Seshasayee Mr R Jagannath
iii) Deputy Managing Director b)
Attendance at Board Meetings and last A.G.M. and details of memberships of Directors in other Boards and Board Committees Details of Board Meetings held during the year 2001-02 Date of Meeting April 24, 2001 July 24, 2001 Oct. 23, 2001 Jan. 25, 2002 March 6, 2002 March 27, 2002 Board Strength 12 12 12 12 11 12 No. of Directors Present 10 10 11 10 9 4
The time gap between any two meetings did not exceed four months. The last Annual General Meeting was held on July 24, 2001.
MEMBERSHIPS AS ON 31/3/2002 IN Name of the Director No. of Board meetings attended 5 Whether attended last A.G.M. Other Boards (excluding Ashok Leyland) (Note 1) 5 (of which 4 as Chairman) 5 Other Board Committees (excluding Ashok Leyland) (Note 2) 2 (of which 1 as Chairman) 7 (of which 3 as Chairman) 1 6 (of which 3 as Chairman) 4 NIL NIL 2 (of which 1 as Chairman) 1 NIL 4 (of which 1 as Chairman) NIL 2
Mr R J Shahaney
Yes
Mr D J Balaji Rao
(Note 3)
Yes
Mr P A Balasubramanian Mr P K Choksey
4 5
No Yes
1 5 (of which 1 as Chairman) 9 4 1 1
Mr A K Das Mr D G Hinduja Mr H Klingele Mr E A Kshirsagar
3 5 4 6
Yes Yes Yes Yes
Mr F Sahami Mr R Sorce Mr R Seshasayee (Note 4)
5 6
Yes Not Applicable Yes
2 NIL 7
Mr R Jagannath Alternate Director : Mr B D Punjabi
5 1
Yes Not Applicable
2 4
Note 1 : Excludes Foreign Companies, Private Limited Companies and Alternate Directorships. Note 2 : Only Remuneration Committee, Audit Committee, Shareholders/Investors Grievance Committee are reckoned for this purpose. Note 3 : Ceased to be a Nominee Director of ICICI on March 18, 2002 and appointed as an Independent Director effective March 27, 2002. Note 4 : Appointed as Director effective March 6, 2002.
Secretarial Standards relating to Board Meetings The Institute of Company Secretaries of India (ICSI) have established Secretarial Standards (SS-1) relating to meetings of the Board and Board Committees. At this stage, these Standards are only recommendatory, and are likely to be mandated in due course. The secretarial and the operating practices of the Company are in full conformity with the above Secretarial Standards.
3)
AUDIT COMMITTEE a) Constitution The Audit Committee of the Company was constituted in July 1987. The Terms of Reference since 1987 had already covered most of the aspects stipulated by the SEBI Guidelines. These were comprehensively reviewed once again in the year 2000, and the Audit Committee has been mandated with the same Terms of Reference as specified in Clause 49 of the Listing Agreements with Stock Exchanges. The current Terms of Reference also fully conform to the requirements of Section 292A of the Companies Act, 1956. b) Composition, names of members and Chairperson The composition of the Audit Committee is as follows : Chairman Members Mr P K Choksey Mr D J Balaji Rao (Ceased to be a Member w.e.f. 18/3/2002) (Appointed as a Member w.e.f. 27/3/2002) Mr D G Hinduja Mr E A Kshirsagar Mr F Sahami (Alternate: Mr B D Punjabi) c) Meetings and Attendance Audit Committee Meetings held during the year 2001-02 and Attendance Details. Attendance : Date of the Meeting April 24, 2001 Oct. 22, 2001 Jan. 24, 2002 (*) Mr D G Hinduja did not attend Mr N Sundararajan, Company Secretary is the Secretary to the Committee. Mr T Anantha Narayanan, Executive Director - Finance and Mr N Mohanakrishnan, General Manager Management Services and Internal Audit attended all the meetings of the Committee as Invitees. Committee Strength 5 5 5 No. of Directors present 5 5 4(*)
The Statutory Auditors of the Company are invited to join the Audit Committee Meetings. The Audit Committee held discussions with the Statutory Auditors on the Limited Review of the half-yearly accounts, the yearly Audit Plan, matters relating to compliance of accounting standards, their observations arising from the annual audit of the Companys accounts and other related matters. 4) REMUNERATION COMMITTEE a) The Remuneration Committee consists of Mr R J Shahaney (Chairman), Mr P K Choksey and Mr F Sahami. The Committee is mandated with the following Terms of Reference : Determination of the quantum of commission and special allowance payable to the Managing/ Deputy Managing Director(s); and Finalisation of the annual increments payable to the Managing/Deputy Managing Director(s).
10
Within the limits approved by the shareholders, the above decisions are based on the overall performance and financial results of the Company during the relevant financial year, and also based on the assessment of the personal contribution and achievements of the concerned director(s). b) c) The Committee met twice during the year (on April 24, 2001 and on Jan. 25, 2002) and all the members were present at both meetings. The Remuneration Policy of the Company is : (i) For Managing / Deputy Managing Directors The total remuneration, subject to shareholders approval, consists of a fixed component consisting of salary, allowances and perquisites; the perquisites and benefits are in line with the Company rules for senior managerial personnel. a variable component linked to the performance of Company as well as of the individual Director consisting of Commission and Special Allowance, as may be determined by the Remuneration Committee, within the limits approved by the shareholders.
(ii) For Non-executive Directors Sitting Fees as permitted under the Companies Act, 1956 (Rs.5000/- per meeting of the Board or any Statutory Committee) plus reimbursement of actual travel and incidental expenses incurred for attending such meetings. There is at present no other component of remuneration to Non-executive directors. Though the shareholders, at the Annual General Meeting held on July 24, 2001, have approved the payment of Commission to the Non-executive Directors of the Company, this has not been given effect to, in the financial year 2001-02. d) The details of remuneration paid/payable to all the Directors for the year 2001-2002 are : i) Non-executive Director(s) (Sitting Fees only for meetings of Board and Board Committees) Rs. Mr R J Shahaney 85,000 Mr H Klingele Mr D J Balaji Rao Mr P A Balasubramanian(*) Mr P K Choksey Mr A K Das Mr D G Hinduja 40,000 20,000 55,000 15,000 35,000 Mr E A Kshirsagar Mr F Sahami Mr R Sorce Mr B D Punjabi (Alt. Director) Rs. 20,000 45,000 50,000 NIL 5,000
(*) Amount paid directly to the Life Insurance Corporation of India, whom he represents. ii) Managing / Deputy Managing Director(s) (No Sitting Fees) Managing Director (Rs.) a) Fixed Component Salary Perquisites (**) b) Variable Component Commission Special Allowance Total 12,00,000 17,67,199 24,00,000 23,00,000 76,67,199 Deputy Managing Director (Rs.) 8,40,000 11,14,702 8,40,000 12,65,000 40,59,702
(**) valued as per the Income Tax Rules. Does not include contribution to Provident Fund @ 12% and Superannuation Fund @ 15% of the salary. Both Mr Seshasayee and Mr Jagannath are under contract of employment with the Company. There are also contracts corresponding to their appointment as Managing Director and Wholetime Director (and subsequently as Deputy Managing Director) respectively, with 3 months' notice period from either side. There is no severance fees payable to either of them. The Company does not have any Stock Option scheme.
11
5)
SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE a) The Shareholders/Investors Grievance Committee has been functioning since August, 2000. Mr R J Shahaney is the Chairman of the Committee; Mr R Seshasayee, Managing Director and Mr R Jagannath, Dy. Managing Director are the other members. Mr N Sundararajan, Company Secretary is the Compliance Officer nominated for this purpose. The Committee reviews the system of dealing with and responding to correspondence from all categories of investors viz., shareholders, debentureholders and fixed deposit holders. The details of complaint letters received from Stock Exchanges, SEBI, Dept. of Company Affairs and responses thereto are reviewed by this Committee. The Committee also reviews/approves initiatives for further improvements in investor servicing. During the year 7 complaint letters were received from the above authorities, and 8562 letters were received from investors; all these were dealt with satisfactorily. d) Detailed internal norms have been laid down as a Charter of Investor Services, specifying time-limits for responding to investor correspondence, and these norms have been adhered to and are being further improved. The only few letters which occasionally remain pending beyond the norms are due to inadequate documentation or clarifications being awaited. As on March 31, 2002, there were no requests pending/overdue beyond the due dates.
b) c)
e) 6)
GENERAL BODY MEETINGS a) Details of location and time of holding the last three AGMs. Year 50th AGM - 1999 Location Narada Gana Sabha, 254 TTK Road, Chennai 18 Narada Gana Sabha, 254 TTK Road, Chennai 18 Rani Seethai Hall, 603 Anna Salai, Chennai 6 Date & Time September 16, 1999 11.00 a.m. May 30, 2000 11.00 a.m. July 24, 2001 10.45 a.m.
51st AGM - 2000
52 nd AGM - 2001
b) 7)
Some special resolutions were approved at the above meetings. There has been no use of Postal Ballot so far.
DISCLOSURES There have been no materially significant related party transactions with the Companys Promoters, Directors, the Management, the Subsidiaries or relatives which may have potential conflict with the interests of the Company at large. There have been no instances of non-compliance by the Company on any matters related to the capital markets, nor have any penalty/strictures been imposed on the Company by the Stock Exchanges or SEBI or any other statutory authority on such matters.
12
8)
MEANS OF COMMUNICATION a) The Company commenced mailing of half-yearly reports to all shareholders from the half-year ending September 30, 2001. The quarterly results are being published in leading national English newspapers and in the vernacular (Tamil) newspapers. The quarterly results are also displayed on the Companys website www.ashokleyland.com The Companys website also displays official press/news releases. Presentations made to institutional investors and to analysts are also displayed. A Management Discussion and Analysis Report has been part of the Annual Report from the year 1998-1999 onwards.
b)
c)
d)
9)
GENERAL SHAREHOLDER INFORMATION a. 53rd Annual General Meeting Date and Time Venue b. Financial Calendar Annual General Meeting Unaudited results for the quarter ending June 30, 2002 Unaudited results for the quarter/half-year ending September 30, 2002 Unaudited results for the quarter ending December 31, 2002 Audited Results for the year ending March 31, 2003 c. d. e. Book Closure Date Dividend payment date a) Listing of Equity Shares b) Listing of Global Depository Receipts (GDRs) From July 9, 2002 to July 26, 2002 From July 26, 2002 onwards Madras, Mumbai, Ahmedabad, Kolkata, New Delhi and National Stock Exchanges. London Stock Exchange July 26, 2002 July 26, 2002 Last week of Oct. 2002 Last week of Jan. 2003 April / May 2003 July 26, 2002 - 10.15 a.m. Narada Gana Sabha, 314 TTK Road, Chennai - 600 018.
The Listing Fee has been paid uptodate, to all the Stock Exchanges. f. Stock Code a) Trading Symbol at Madras Stock Exchange Bombay Stock Exchange (Physical) (Demat) National Stock Exchange Ahmedabad Stock Exchange Calcutta Stock Exchange (Physical) (Demat) Delhi Stock Exchange b) Demat ISIN Numbers in NSDL & CDSL Equity Shares ALL 477 500477 ASHOKLEY 05550 ASHOKLEYL 11477 10011477 001159 INE 208A01011
13
g.
Stock Market Data The Stock Exchange, Mumbai Share Price Sensex High 3676.82 3759.96 3651.32 3513.79 3359.07 3267.93 3083.65 3377.81 3500.20 3466.73 3758.11 3758.27 Low 3096.51 3420.14 3287.94 3241.66 3241.12 2594.87 2718.41 3003.95 3100.57 3236.76 3290.00 3506.55 National Stock Exchange Share Price High (Rs.) 64.50 72.40 68.95 64.50 67.50 66.50 64.00 95.00 88.45 79.20 95.50 93.95 Low (Rs.) 40.75 57.00 53.20 50.20 57.60 52.00 52.10 63.05 65.50 64.10 67.00 77.00 1171.85 1207.00 1175.80 1127.15 1084.00 1059.90 1000.95 1097.60 1132.65 1121.75 1205.95 1201.10 1000.10 1096.25 1060.05 1046.90 1051.75 849.95 884.65 973.55 1010.45 1052.05 1069.40 1117.85 S&P CNX Nifty High Low
Month April May June July Aug Sep Oct Nov Dec Jan Feb Mar h. i. 2001 2001 2001 2001 2001 2001 2001 2001 2001 2002 2002 2002
High (Rs.) 65.00 72.60 68.65 60.00 67.50 67.00 64.25 92.00 88.75 79.25 95.45 94.25
Low (Rs.) 40.70 57.00 53.00 50.00 55.70 52.20 52.00 62.50 66.50 64.10 67.10 76.00
Registrar and Transfer Agents All Securities Transfer work is done In-house. Share Transfer System The authority relating to share transfer has been delegated to the Share Transfer Committee which consists of Mr R J Shahaney (Chairman), Mr P K Choksey, Mr R Seshasayee and Mr R Jagannath. The Committee met 7 times during the year for approving transfers, transmissions etc. In addition, in order to further speed up transfers, the Board has authorised the Managing Director to approve all routine transfers and transmissions of shares. Such approval is being given by the Managing Director at fortnightly intervals (26 times during the year). Presently, transfers, transmissions etc., are approved within 15 days (as against the Stock Exchange norm of 30 days); requests for dematerialisation are confirmed within 10 days (as against the norm of 15 days). Letters are sent to the shareholders after transfer of shares in their names giving an option for dematerialisation of the physical shares. Physical shares are dematerialised and electronic credit is given to those shareholders who opt for dematerialisation and in respect of other shareholders who have not opted for dematerialisation, share certificates are despatched by Registered Post. (i) Distribution of Shareholding as on March 31, 2002 No. of Shares Number Upto 50 51-100 101-200 201-500 501-1000 1001-2000 2001-5000 5001-10000 10001 & above TOTAL 29181 21270 16737 10116 1694 476 188 57 85 79804 Shareholders % 36.57 26.65 20.97 12.68 2.12 0.59 0.24 0.07 0.11 100.00 No. of Shares Number 991077 1856533 2568845 3184042 1230253 681903 571853 412248 107432666 118929420 % 0.83 1.56 2.16 2.68 1.04 0.57 0.48 0.35 90.33 100.00
j.
14
(ii) Pattern of Shareholding as on March 31, 2002 Sl.No 1 2 3 4 5 6 7 8 9 10 Category Promoter LRLIH Ltd (includes 16460007 shares in GDR form) Resident Individuals Financial Institutions Foreign Institutional Investors Non-Resident Indians Corporate Bodies Mutual Funds Trusts Banks Others - GDR TOTAL No. of Holders 1 78539 14 20 220 921 31 7 50 1 79804 No. of Shares 60576675 12709373 26974164 7726018 88941 1345773 3338452 2332 322729 5844963 118929420 % 50.93 10.69 22.68 6.50 0.07 1.13 2.81 0.00 0.27 4.91 100.00
k.
Dematerialisation of shares and liquidity Shares of the Company can be held and traded in Electronic form. SEBI has stipulated the shares of the Company for compulsory delivery in dematerialisation form only, by all investors from November 29, 1999. As on March 31, 2002, 69301650 shares representing 58.27% of the shareholdings have been dematerialised. Shares of the Company are actively traded in Mumbai and National Stock Exchanges, and hence have good liquidity.
l.
Outstanding GDR/ Warrants and Convertible Bonds, Conversion date and likely impact on the Equity No GDR/Warrant is outstanding for conversion, and hence there is no impact on equity.
m.
Plant Locations Ennore Post Box No.3 Ennore Chennai 600 057 Bhandara Plot No.1 MIDC Industrial Area, Village Gadegaon, Sakoli Taluk Bhandara 441 904 AL Ambattur 3A/A&2 North Phase Sidco Industrial Estate Ambattur Chennai 600 098
Hosur Unit I 175 Hosur Indl. Complex Hosur 635 126
Hosur Unit II 77 Electronic Complex, Perandapalli Village Hosur 635 109 Hyderabad Ductron Castings B-15, IDA-Uppal Hyderabad 500 039
Alwar Plot No.SPL 298, Matsya Indl. Area Alwar 301 030 Rajasthan
15
n.
Address for Correspondence For all matters relating to Shares, Debentures, Annual Reports Dy. Manager - Secretarial Ashok Leyland Limited Building No.2, 7th Floor Khivraj Complex II 477-482 Anna Salai Nandanam Chennai 600 035 Manager Treasury Ashok Leyland Limited Ennore Chennai 600 057 Tel : 91-44-433 1120/ 433 1128/1129 Fax : 91-44-433 8344 e-mail : ns@alc2.global.net.in jsr@alc2.global.net.in
For Fixed Deposits
Tel : 91-44-573 3001/ 574 3233/573 3030 Fax : 91-44-573 3798 e-mail : rv@ale.global.net.in ramesh@ale.global.net.in
NON MANDATORY REQUIREMENTS 1. Non-executive Chairman The Company maintains the office of the Non-executive Chairman and reimburses expenses incurred in the performance of his duties. 2. Remuneration Committee The Company has constituted a Remuneration Committee; full details are furnished under Item 4 above. 3. Shareholder Rights The statement of half yearly results is being published in the Press. The Company has commenced mailing half-yearly reports to shareholders starting from the half-year ending September 30, 2001. 4. Postal Ballot The Company has had no occasion to use the postal ballot so far.
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Annexure C to Directors Report
CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT(S) To the Members of Ashok Leyland Limited 1. We have reviewed the compliance of conditions of Corporate Governance by Ashok Leyland Limited (the Company) during the year ended March 31, 2002 with the relevant records and documents maintained by the Company, furnished to us for our review and the report on Corporate Governance as approved by the Board of Directors. 2. The compliance of conditions of corporate governance is the responsibility of the management. Our review was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. 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. 3. On the basis of our review and according to the information and explanations given to us, the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement(s) with the Stock Exchange(s) have been complied with in all material respects by the Company.
For M.S. KRISHNASWAMI & RAJAN M.K. RAJAN Partner Chartered Accountants
7 May, 2002 Chennai
S. DATTA Partner For and on behalf of PRICE WATERHOUSE Chartered Accountants
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Annexure D to Directors Report - Management Discussion and Analysis Report
Globally an eventful year, 2001-02 was a testing time for the economies of the world. Indian GDP growth for the year has been estimated at 5.2%. Though lower than provided in the ninth 5-year plan (1997-2002), given the global context, this is no mean achievement. Stacked against the previous years growth rate of 4%, this also cues a recovery. The growth in GDP for 2001-02 stems from estimates of a 5.7% growth rate in agriculture and allied sectors and 6.5% growth in services. Sluggishness in core industry and manufacturing sectors continues to be a matter of concern. Manufacturing growth fell from 6.7% in 2000-01 to estimated 3.3% in 2001-02. Similar downward trends have been estimated in construction (from 6.8% to 2.9%) and in mining & quarrying (from 3.7% to 1.4%). Despite the welcome drop in interest rates, industrial production suffered from infrastructure constraints in power and transport, lack of a clear policy framework for private participation in key infrastructure sectors and, of immediate consequence, lack of consumer demand, which in turn inhibited investments. A welcome development has been the increasing focus on road development, particularly the Golden Quadrilateral programme, which is expected to provide considerable impetus for economic growth. A. Commercial Vehicle Industry: Trends and Developments The growth in Commercial Vehicle (CV) industry bears a direct relationship to agriculture and industrial production. The combined impact of growth trends in various sectors resulted in a mere 2.5% increase in overall demand for Medium and Heavy duty CVs (M&HCVs) which comprise the principal market for the Companys products. However, goods segment registered an
impressive 19% growth year-on-year, buoyed essentially by demand from construction industry. Predictably, there was a clear shift in favour of multi-axled vehicles due to reasons of improved load availability and viability. Conversely, market demand for the classical 16 T GVW vehicle (4 x 2) declined dramatically. The demand for goods vehicles was also marked by unprecedented geographical skew. Whilst the southern and western markets declined considerably, the northern market grew significantly, coming out, as it did, from a prolonged recession in the past years. Poor financial health of State Transport Undertakings (STUs) prevented most of them from placing orders for buses though, given the age and condition of the transport fleet, this is becoming overdue. Although the Honourable Supreme Court has ordered that bus operators in the National Capital Region should operate only Compressed Natural Gas (CNG) powered buses, orders for CNG chassis from bus operators were delayed pending Honourable Supreme Courts judgement on their appeals for operating buses with diesel fuel as well. Since the passenger segment and the southern market have been the traditional strongholds of the Company, the adverse market movement posed a major challenge to the management. B. Business Review: Domestic Market To mitigate to some extent the adverse market movement, the Company focussed on expanding its market reach in northern and eastern regions. This, coupled with new product offerings, has enabled the Company to register increased market share in goods and passenger segments in the northern region. During the year, the Company achieved a market share of about 32.4% in the
M&HCV category, implying a drop of 3.8% over 2000-01. While the Company retained the market share of 51% in the passenger segment, in the goods segment the market share dropped to 29% from 33%, primarily because of adverse market shifts. The STU segment, in which Ashok Leyland has a dominant presence, continued to reel under financial stress and postponed purchases. Despite a significant drop of 33% in the overall passenger vehicle volumes, the Company was able to retain its market share largely due to a vastly improved performance in the private passenger market. Defence Supplies Defence continues to be a major market segment, which to some extent mitigates the problems from the cyclical nature of the commercial vehicle business. CKD sales to Defence recorded a 27% increase in terms of value. Supply of Truck Fire Fighting (TFF) vehicles have commenced, apart from continued supplies of Light Recovery Vehicles and Stallion 4x4 vehicles. Water Bowser is being developed to meet Defence requirements. Exports Exports continue to be predominantly to SAARC countries and, traditionally, a large portion of these sales has been to Sri Lanka. The ethnic problems in Sri Lanka continue to be an impediment to sales. This has been offset to some extent by higher sales to Bangladesh and the Middle East. Low growth prevalent in neighbouring countries has resulted in lower off-take of vehicles. The export market continues to be price sensitive, especially in the Middle East, where fierce competition is experienced from Korean manufacturers. Parts warehouse in Sharjah and the South Africa branch are fully operational. Spare parts exports in 2001-02 have increased by 22% over
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that of 2000-01. Reflecting the overall global slowdown, the Companys vehicle exports dropped by 10% compared to 2000-01. Engines Shrinkage in the overall market for industrial engines was experienced in 2001-02. Total sales declined in line with the market drop of 17%. The Company could increase its market share marginally in the generator set segment in which it participates, and maintained its dominant presence in the marine engine segment. The Company is fully prepared to meet the higher standards for emission norms expected to be legislated for Industrial Engines in the country from January 2003. Spare parts Auto ancillaries increased their focus on the spare parts market in order to fill the unused capacities resulting from lower off-take from OEMs. Competition from auto ancillaries has put greater pressure on parts sales, which is already facing difficult times because of the stagnant market conditions. Spare parts sales dropped by 17% over 2000-01 to Rs. 1,966 million (excluding sales by way of CKD packs). Technology Up-gradation All the three engine platforms used by the Company have been upgraded to meet Bharat Stage-2 emission norms already enforced for passenger vehicles in the four metros since October 2001. It is proposed to progress towards a market-driven single engine platform, which would facilitate standardisation and cost-effective manufacture. As mentioned last year, the Company obtained contemporary rear axles technology support from Dana Corporation and ArvinMeritor, both of USA. Technology for the upgraded version of 5/6 speed synchromesh gearboxes has been obtained from ZF Friedrichshafen and development work has been
almost completed. These gearboxes will be introduced during 2002-03. Work has also been initiated to develop engines to meet emission standards beyond Bharat Stage-2. Having assessed market requirements for higher powered engines, the Company has commenced development action and will be able to offer suitable options shortly. A centralised R&D facility near Chennai will be commissioned shortly. All chassis engineering activities will be carried out from this centre. During the year 2001-02, the Company spent 1% of its turnover on R&D. The Company is adopting contemporary technology to improve driver and passenger safety. The Companys commitment to environment management is evident from the fact that all the five vehicle manufacturing units have been ISO 14001 certified. The Company is fully conscious of various challenges and is confident of fulfilling expectations of the society, Government and its customers. Information Technology The Company has upgraded IT infrastructure at its manufacturing units and marketing division, creating a knowledge management focus among employees. The Company is facilitating its customer focus with IT for enhanced communication and uniform data sharing. The capital expenditure planned has been estimated at Rs.521 million. All manufacturing units and the marketing division will be interconnected and linked to the newly developed Ennore Data Centre (for centralised data processing) through leased lines and radio frequency. Customised software has been developed for various transactions. Development of e-Commerce with dealers and suppliers has been completed and will be ready during
2002-03. The Company is also focusing on the development of Customer Relationship Management (CRM) systems for enhancing its value addition to customers. Human Resources Human capital management at Ashok Leyland focuses equally on business strategy and operations, through people development and building a positive work ethos closely aligned with the business objectives. The HR strategy, processes and systems have been increasingly focusing on change management on the shop floor, improving competitiveness, driving a performance culture and continuously enhancing the human capital through training and development. Central to change management has been total employee involvement, achieved through Cross-Functional Teams (CFTs) and small group activities promoted through a comprehensive and continuous Company-wide communication programme. 800 CFTs were at work last year. They brought in substantial economic gains and, more importantly, proved the potential of team format for purposeful innovation and employee motivation. The performance management system, a vital tool in enhancing competitiveness, establishes a clear linkage of individual and business goals with qualitative and quantitative indices. One of the attitudinal gains is the internalisation of the internal customer concept, which ultimately enables the Company to deliver ultimate customer satisfaction. Heightened employee involvement has been a major determinant of the Companys business success by mining more value. Wage settlements were finalised for unionised employees at Ennore and Hosur II plants. New levels of productivity, flexibility and multi-tasking are built into them together with
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substantial hikes in employee pay packets. Some ground was covered in making the Company a thinner organisation, with a Voluntary Retirement Scheme (VRS) announced towards the end of the year, which resulted in the separation of about 645 employees from the Ennore plant. C. Management of Risks The Company is exposed to Business, Asset and Financial risks: Business risks include cyclical nature of demand for CVs due to economic slowdown, need for continuous technological up-gradation to meet emission standards / safety requirements, usage of alternate fuels, customers higher expectations for better value and more intense competition. All these risks are continuously addressed in the business plans, functional strategies and management reviews acted upon. Asset risks include threat to physical assets through accidents, natural calamities, obsolescence, riots, terrorism etc. The Company has an internal system to assess these risks, define the limits of exposure for operation and take appropriate insurance cover. The Company has taken loss of profit insurance cover, to mitigate potential losses due to interruption in operation due to accidents / floods, etc. Foreign exchange risks are inherent in exports of products, import of materials, capital equipment and technology, etc., and loans in foreign currency. The Company has a welldefined exposure management system to review its exchange exposure and to act to mitigate losses. D. Internal Control Systems and their Adequacy The Management Committee consisting of senior management meets every month to discuss various issues that directly influence the business and
to take strategic decisions to ensure that the Companys financial health and shareholders interests are protected. The Companys systems and internal controls address the following: Operational efficiency Protection and conservation of resources Accuracy and promptness in financial reporting Compliance with laws and regulations
E. Financial Performance Revenues Turnover for the year at Rs.26,304 million increased by 0.9% compared to previous year, inspite of decrease in sale of commercial vehicles by 8.6%. This was achieved mainly through better mix of vehicles sold and higher sale of components / CKD packs. Costs Cost management continued to be one of the major focus areas. The thrust was on consolidating the gains achieved so far, prioritising resource allocations, improving productivity and extracting more value from every resource used. During the year, the Company reduced material costs by about 1.3%. While normal operating expenses have remained fairly under control, highest priority was accorded to Research & Development. Manpower cost went up during the year due to wage settlements at Hosur II, Ennore and Hyderabad units, besides incremental impact of the wage settlements concluded at other units Rs. Million 2001-02 2000-01 Inc / (Dec) %
The Company has a well-defined organisational structure, clearly defined authority levels and well-documented policy and guidelines facilitated by an IT infrastructure at the manufacturing units and marketing offices to ensure process efficiencies. The Internal Audit department of the Company carries out pre-audit and post-audit checks, reviews and ensures that audit observations are acted upon. The Audit Committee of the Board of Directors reviews the internal audit reports and the adequacy of internal controls.
Income Sales Other Income Total Expenditure Manufacturing Expenses Employee Expenses Other Expenses Depreciation Financial Expenses Total Profit Before Tax Tax Provision - Current - Deferred Profit After Tax Earnings Per Share (in Rs.) Cash Earnings Per Share (in Rs.) 26,304 180 26,484 26,067 105 26,172 0.9 70.5 1.2
18,594 2,600 2,189 954 825 25,162 1,322 307 92 923 7.76 16.55
18,628 2,531 2,090 884 1,020 25,153 1,019 102 917 7.71 15.14
(0.2) 2.7 4.7 7.9 (19.1) 29.7 200.1 100.0 1.0 0.6 9.6
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during the previous year. Manpower cost includes charge of Rs.29.68 million towards VRS. This does not, however, include impact of VRS implemented for unionised staff at Ennore unit in April 2002. Depreciation increased from Rs.884 million in the previous year to Rs.954 million due to full year impact of last years additions as well as the charge on additions during the year amounting to Rs.1,613 million. The financial expenses registered a decrease of over 19% compared to previous year due to improved asset management, reduced credit periods for customers, better funding mix and decline in interest rates. Resources During the year, the Company incurred capital expenditure of Rs. 1,453 million mainly towards investments in Cab Panel Press Shop for upgraded aggregates, R&D and Information Technology. Net Current Assets as on 31.3.2002 stood at Rs. 9,825 million as against the previous year level of Rs.10,223 million. Debtors have come down substantially to Rs.4,928 million compared to Rs.6,680 million as at March 2001, due to tighter credit policy and lower sales to STUs. Increase
in inventory level is mainly due to higher level of finished vehicles carried due to impasse in introduction of CNG vehicles in National Capital Region (NCR) and poor offtake of vehicles by STUs. The high level of cash and bank balance is due to substantial collections from Debtors / Bill Discounting during the last days of the financial year. Liquidity The Company enjoys AA- rating for its long term borrowings and P1+ rating for its Commercial Paper programme. The Company believes that it has sufficient liquidity to meet its working capital requirements and other anticipated cash outflows. The Company has considerably reduced its foreign exchange exposure through minimising imports and hedging
foreign currency loans. The Company has been actively monitoring its currency / interest rate exposures through a centralised Treasury Department. The Company registered a cash inflow of Rs.2,507 million from operations. Net of working capital requirements, the Company earned a cash inflow of Rs.3,700 million. After meeting capital expenditure and other investment outlays, the net cash inflow for the year was Rs.1,196 million. During the year, the Company improved its PBT significantly by 30% over previous year from Rs.1,019.41 million (3.9% of turnover) to Rs.1,322.06 million (5.0% of turnover) for a marginal 0.9% increase in turnover. Provision for current taxation has increased to Rs. 307 million for the Rs. Million 2001-02 2000-01 2,489 1,058 3,547 (1,130) (342) (467) 1,608
Profit from operations (Inc.) / Dec.in Net Working Capital Net cash flow from operating activities Payment for Assets acquisition - net Other Investing activities Cashflow from Financing activities Net Cash inflow / (Outflow)
2,507 1,193 3,700 (1,171) 260 (1,593) 1,196
Rs. Million 2001-02 Sources of Funds Shareholders Funds Loan Funds Deferred Tax Liability-Net Total Application of Funds Fixed Assets Investments Net current Assets Total 2000-01 current year as against Rs.102.60 million in the previous year mainly due to non-availability of carry forward losses. However, in conformity with Accounting Standard No.22 issued by the Institute of Chartered Accountants of India on Accounting for Deferred Taxes on Income, provision of Rs.92.5 million has been made during the year towards deferred tax liability. Profit after tax, for the year after adjusting for deferred taxation liability, works out to Rs.922.56 million as against Rs.916.81 million for the previous year.
10,320 8,884 1,892 21,096
11,685 9,330 21,015
10,098 1,173 9,825 21,096
9,613 1,179 10,223 21,015
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F. Outlook Six consecutive years of below 7% GDP growth would seem to belie the promise of the mid-1990s. At the same time, the Indian economy has shown great resilience in absorbing a series of internal and external shocks: the East Asian crisis of 1997-98, the triple blows of oil price increase, the Orissa cyclone and the Gujarat earthquake during 2000-01 and two consecutive years of negative growth in agricultural production. This inherent strength of the economy and the latest signals from some of the core sectors give rise to a cautious optimism about the current year.
Prospects of sustained GDP growth over 7% can be realised only if fuelled by accelerated growth in agriculture and infrastructure sectors. The Governments initiatives to increase credit flow, promotion of agricultural product processing export zones, increased allocation for irrigation projects, the national highway development, etc., should provide the necessary impetus for sustained growth in years to follow and may be expected to fuel commercial vehicle industry demand growth. The Honourable Supreme Court recently reaffirmed that operators in
the NCR should ply only CNG fuelled buses and this is expected to generate fresh orders for the Company from the Delhi Transport Corporation as well as from private operators. Another favourable augury is the resumption of purchases by some of the STUs. Having consolidated its presence in the growth sectors of the commercial vehicle industry, the Company is in a position to derive benefits from the market revival in the offing.
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Annexure E to Directors Report Directors Responsibility Statement
Directors Responsibility Statement as per section 217(2AA) of the Companies Act, 1956
Responsibility in relation to financial statements The financial statements have been prepared in conformity, in all material respects, with the generally accepted accounting principles in India and the accounting standards prescribed by ICAI in a consistent manner and supported by reasonable and prudent judgements and estimates. The Directors believe that the financial statements reflect true and fair view of the financial position as on 31.3.2002 and of the results of operations for the year ended 31.3.2002. The financial statements have been audited by M/s M S Krishnaswami & Rajan and Price Waterhouse in accordance with generally accepted auditing standards which include an assessment of the systems of internal controls and tests of transactions to the extent considered necessary by them to support their opinion. Going Concern In the opinion of the Directors, the Company will be in a position to carry on its existing commercial vehicles / engines business and accordingly it is considered appropriate to prepare the financial statements on the basis of going concern. Maintenance of accounting records & Internal controls The company has taken proper and sufficient care for the maintenance of adequate accounting records as required by the Statute.
Directors have overall responsibility for the Companys internal control system, which is designed to provide a reasonable assurance for safeguarding of assets, reliability of financial records and for preventing and detecting fraud and other irregularities. The system of internal control is monitored by internal audit function, which encompasses the examination and evaluation of the adequacy and effectiveness of the system of internal control and quality of performance in carrying out assigned responsibilities. Internal Audit Department interacts with all levels of management and the Statutory Auditors, and reports significant issues to the Audit Committee of the Board. Audit Committee supervises financial reporting process through review of accounting and reporting practices, financial and accounting controls and financial statements. Audit Committee also periodically interacts with internal and statutory auditors to ensure quality and veracity of Companys accounts. Internal Auditors, Audit Committee and Statutory Auditors have full and free access to all the information and records as considered necessary to carry out their responsibilities. All the issues raised by them have been suitably acted upon and followed up.
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Auditors Report to the Members
1. We have audited the attached Balance Sheet of ASHOK LEYLAND LIMITED as at March 31, 2002 and the relative Profit and Loss Account for the year ended that date, both 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 have conducted our audit in accordance with auditing 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. 3.1 In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Balance Sheet and Profit and Loss Account read with the Statement on Significant Accounting Policies and Notes to the Accounts, give the information required by the Companies Act, 1956, (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: a) in the case of the Balance Sheet, of the state of the affairs of the Company as at March 31, 2002 ; and b) in the case of the Profit and Loss Account, of the profit for the year ended that date.
3.2 We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. 3.3 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. 3.4 The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account. 3.5 In our opinion, the aforesaid Balance Sheet and Profit and Loss Account comply in all material respects with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India referred to in sub-section (3C) of Section 211 of the Act. 3.6 On the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is prima facie disqualified as on March 31, 2002 from being appointed as a Director in terms of Section 274 (1) (g) of the Act. 4. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by the Government of India and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that: 4.1 In our opinion, the Company is maintaining proper records to show full particulars including quantitative details and situation of fixed assets except in the case of furniture, fittings and equipment acquired before 1.10.1973 where the records maintained show quantitative details with their situation
and values based on valuation by an approved valuer without mentioning their age. The fixed assets are being physically verified under a phased programme of verification which, in our opinion, is reasonable and no material discrepancies have been noticed on such verification. 4.2 The fixed assets have not been revalued during the year. 4.3 Finished goods, stores, spare parts and raw materials including components of the Company at all its locations have been physically verified by the Management at reasonable intervals. 4.4 In our opinion, the procedures of physical verification of the aforesaid stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. 4.5 The discrepancies noticed on physical verification of such stocks were not material as compared to book records. 4.6 In our opinion, the valuation of the aforesaid stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year. 4.7 The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 of the Act. 4.8 The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Act.
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Auditors Report to the Members
4.9 The parties to whom loans or advances in the nature of loans have been given by the Company are repaying the principal amounts as stipulated and are also regular in payment of interest in most cases. In those cases where principal amounts and/or interest are not being paid as stipulated, reasonable steps have been taken by the Company for recovery of the principal and/or interest. 4.10 In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of stores, raw materials including components, plant and machinery, equipment and other assets, and for the sale of goods. 4.11 There were no transactions of purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating during the year to Rs.50,000 or more in respect of each party.
4.12 The Company has a system of determining unserviceable or damaged stores, raw materials and finished / trading goods on the basis of technical evaluation and on the aforesaid basis, in our opinion, adequate amounts have been written off such stocks in the Accounts. 4.13 In the case of public deposits received by the Company, the provisions of Section 58A of the Act and the rules framed thereunder, have been complied with. 4.14 In our opinion, the Company is maintaining reasonable records for the sale and disposal of significant realisable scrap. The Company does not have any by-products. 4.15 In our opinion, the Company has an internal audit system commensurate with its size and nature of its business. 4.16 On the basis of the records produced, we are of the opinion that prima facie, the cost records and accounts prescribed by the Government of India under Section 209 (1) (d) of the Act have been maintained by the
Company. However, we are not required to carry out and have not carried out any detailed examination of such records and accounts. 4.17 The Company is regular in depositing Provident Fund and Employees State Insurance dues with the appropriate authorities. 4.18 At the last day of the year, there were no material amounts outstanding in respect of undisputed income tax, wealth tax, sales tax, customs duty and excise duty which were due for more than six months from the date they became payable. 4.19 During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have not come across any personal expenses which have been charged to Profit and Loss Account. 4.20 The Company is not a sick industrial company within the meaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985.
7 May, 2002 Chennai
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Balance Sheet as at 31 March, 2002
Schedules SOURCES OF FUNDS Shareholders Funds Capital Reserves and Surplus Loan Funds Secured Loans Unsecured Loans Deferred Tax Liability - Net Total APPLICATION OF FUNDS Fixed Assets Gross Block Less Depreciation Net Block Capital Work-in-Progress Investments Current Assets, 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 Total
Rs. Million
Rs. Million
31 March, 2001 Rs. Million
1.1 1.2
1,189.29 9,180.24 10,369.53
1,189.29 10,598.31 11,787.60 6,388.69 2,941.39 9,330.08 21,117.68
1.3 1.4
5,919.93 2,964.56 8,884.49 1,891.50 21,145.52
1.5 16,904.31 7,343.32 9,560.99 537.35 1.6 1.7 1.8 1.9 1.10 1.11 4,938.81 788.20 5,727.01 1.12 9,824.75 49.05 21,145.52 4,670.80 740.35 5,411.15 10,222.85 102.24 21,117.68 5,953.40 4,928.46 2,748.94 1,920.96 15,551.76 10,098.34 1,173.38 15,493.71 6,578.30 8,915.41 697.54 9,612.95 1,179.64 5,176.74 6,679.52 1,649.20 2,128.54 15,634.00
Statement on Significant Accounting Policies, Schedules 1.1 to 1.12 and Notes to the Accounts form part of this Balance Sheet.
N. SUNDARARAJAN Company Secretary T. ANANTHA NARAYANAN Executive Director - Finance
For and on behalf of the Board R. SESHASAYEE Managing Director R.J. SHAHANEY Chairman
This is the Balance Sheet referred to in our report of even date. For M.S. KRISHNASWAMI & RAJAN M.K. RAJAN Partner Chartered Accountants 7 May, 2002 Chennai S. DATTA Partner For and on behalf of PRICE WATERHOUSE Chartered Accountants
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Profit and Loss Account For the Year Ended 31 March, 2002
Schedules INCOME Sales Other Income EXPENDITURE Manufacturing and Other Expenses Depreciation Financial Expenses Profit Before Tax Provision for Taxation Current Deferred Profit After Tax Balance Profit from last year Transfer from / (to) - Investment Allowance Reserve - Debenture Redemption Reserve - General Reserve Proposed Dividend [Subject to Tax - for 2001-02] Tax on Proposed Dividend Balance Profit carried to Balance Sheet Earnings Per Share (Face value Rs. 10) Statement on Significant Accounting Policies, Schedules 2.1 to 2.7 and Notes to the Accounts form part of this Profit and Loss Account. 2.1 2.2
Rs. Million 26,304.48 179.43
Rs. Million
31 March, 2001 Rs. Million 26,066.63 105.64 26,172.27
26,483.91 2.3 2.4 2.5 2.6 2.7
23,383.18 953.55 825.12 25,161.85 1,322.06 307.00 92.50 922.56 736.44 (613.34) 588.75 (300.00) 1,334.41 535.18 799.23 Rs. 7.76
23,249.05 883.50 1,020.31 25,152.86 1,019.41 102.60 916.81 642.77 53.40 (526.25) 473.95 (300.00) 1,260.68 475.72 48.52 736.44 Rs. 7.71
N. SUNDARARAJAN Company Secretary T. ANANTHA NARAYANAN Executive Director - Finance
For and on behalf of the Board R. SESHASAYEE Managing Director R.J. SHAHANEY Chairman
This is the Profit and Loss Account referred to in our report of even date. For M.S. KRISHNASWAMI & RAJAN M.K. RAJAN Partner Chartered Accountants 7 May, 2002 Chennai S. DATTA Partner For and on behalf of PRICE WATERHOUSE Chartered Accountants
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Statement on Significant Accounting Policies
1.
Accounting Convention
Financial statements are prepared in accordance with the generally accepted accounting principles in India under historical cost convention except so far as they relate to revaluation of certain land and buildings. Customs duty is accounted as and when the liability for payment arises. 2. Fixed Assets and Depreciation/ Amortisation
31 December, 1984, depreciation/ amortisation is calculated on the respective revalued amounts, over the balance useful life as determined by the valuers in the case of buildings and as per (a) above in the case of land. 2.3 Depreciation/Amortisation is charged for the full year on the additions made during the first half of the year and for six months on the additions made during the second half of the year. Changes to the cost of an asset in subsequent years are depreciated/amortised in the same way as done in the case of the original cost of the asset. No depreciation is provided for in respect of assets disposed of during the year. 3. Investments
2.1 Cost of all civil works (including electrification and fittings) is capitalised with the exception of alterations and modifications of a capital nature to existing structures where the cost of such alteration or modification is Rs. 1 Lakh and below. Cost of other fixed assets, where it exceeds Rs. 10,000 and the estimated useful life is two years or more, is capitalised. Cost of initial spares and tools is capitalised along with the respective assets. Cost of fixed assets is net of credits under Cenvat Scheme. Interest and other related costs, including amortised costs of borrowings attributable to major projects are capitalised as part of the cost of the respective assets. 2.2 Assets are depreciated/amortised (100% or 95% of the cost as the case may be) on straight line basis: a) in respect of Leasehold Land, over 40 years or the period of the lease, whichever is less; b) in respect of Buildings and Plant and Machinery (except technical knowhow fees) at the rates specified in Schedule XIV to the Companies Act, 1956; and c) in respect of other assets (including technical know-how fees), over their estimated useful lives, subject to statutory requirements. In respect of Leasehold Land and Buildings subject to revaluation as at
Current Investments are valued at cost or market value whichever is lower. Long Term Investments are stated at cost less provision for diminution other than temporary, if any, in value of such investments. 4. Inventories
4.1 Inventories are valued at cost or net realisable value whichever is lower; cost is ascertained on the following basis: Stores, Spares, Consumable tools, Raw materials and components: on monthly moving weighted average basis. In respect of works-made components, cost includes applicable production overheads. Work-in-Progress, Finished / Trading goods: under absorption costing method. 4.2 Cost includes taxes and duties and is net of credits under Cenvat Scheme. 4.3 Cost of patterns and dies is amortised equally over five years. 4.4 Surplus / Obsolete / Slow moving inventories are adequately provided for.
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Statement on Significant Accounting Policies
5.
Foreign Currency Transaction
5.1 All foreign currency transactions are recorded at the rates prevailing on the date of the transaction. 5.2 All foreign currency assets and liabilities, other than investments and those covered by forward contracts, are restated at the exchange rate prevailing at year end. 5.3 Investments outside India are carried in the Balance Sheet at the rates prevailing on the date of the transaction. Foreign currency assets and liabilities covered by forward contracts are stated at the contracted rates. 5.4 Income / Expenditure of Overseas Branches are recognised at the average rate prevailing during the month in which transaction occurred. 5.5 Exchange differences arising on booking of forward contracts are recognised as income or expense over the life of the contract, except in respect of liabilities incurred for acquiring fixed assets, in which case such differences are adjusted to the cost of the fixed assets. 5.6 All other exchange differences arising out of actual purchase/sale of foreign currencies (including substitution of one foreign currency loan by another) and those arising out of restatement mentioned in 5.2 above are: (a) adjusted to the cost of fixed assets, if the foreign currency liability concerned is contracted for acquisition of fixed assets, and (b) recognised as income/expense for the period, in all other cases. 6. Amortisation of Deferred Expenditure
over the period of such borrowings. Premium paid on prepayment of any borrowing is amortised over the unexpired period thereof or sixty months, whichever is less. Compensation under Voluntary Retirement Scheme is amortised over thirty six months. 7. Revenue Recognition
Revenue from sale of products is recognised on despatch or appropriation of goods in accordance with the terms of sale and is inclusive of excise duty and export incentives, but net of commission and rebate. Revenue arising due to price escalation claim is recognised in the period when such claim is made in accordance with terms of sale. 8. Government Grants
Grants in the form of Capital/ Investment subsidy are treated as Capital Reserve. Incentives in the nature of subsidies given by the Government are reckoned in revenue in the year of eligibility. 9. Research and Development
Expenditure on the design and production of prototypes is charged to revenue as incurred. 10. Retirement Benefits Liabilities for gratuity to all employees and for superannuation to the eligible employees are determined in accordance with the schemes administered by Life Insurance Corporation of India and contributions payable under the said schemes are charged to revenue. Liability for leave encashment is provided on actuarial basis.
Expenditure incurred on issue of debentures / raising loans is amortised
29
Schedules to Balance Sheet
31 March, 2002 Rs. Million 1.1 CAPITAL Authorised 150,000,000 Equity Shares of Rs. 10 each Subscribed 118,929,420 Equity Shares of Rs. 10 each fully paid up Add Forfeited Shares (Rs. 3,800) 1. Issued Capital a) 33,005,163 Shares of Rs. 5 each, issued earlier, consolidated and divided into Shares of Rs. 10 each b) 34,174,294 Shares of Rs. 10 each issued by way of conversion of Debentures c) 32,315,724 Shares of Rs. 10 each issued through Global Depository Receipts d) 35,957,288 Shares of Rs. 10 each
1,500.00 1,189.29 1,189.29
1,500.00 1,189.29 1,189.29
165.03 341.74 323.16 359.57 1,189.50 1,478,888 6,230,811
165.03 341.74 323.16 359.57 1,189.50 1,478,888 6,230,811
2.
1.2
Shares allotted under an agreement without payment being received in cash 3. Shares allotted as fully paid up by way of Bonus Shares by capitalisation out of General Reserve and from Share Premium account 4. LRLIH Ltd., the holding Company, holds 44,116,668 Equity Shares of Rs. 10 each and 5,486,669 Global Depository Receipts equivalent to 16,460,007 Equity Shares of Rs. 10 each 31 March, 2001 RESERVES AND SURPLUS Rs. Million Capital Reserve 8.95 Revaluation Reserve 271.66 Share Premium 6,388.36 Debenture Redemption Reserve General Reserve Surplus - Balance in Profit and Loss Account 1,059.58 2,133.32 736.44 10,598.31
Additions/ (Deductions) Rs. Million (6.45)* 613.34 (588.75) 300.00 (1,799.00)**
31 March, 2002 Rs. Million 8.95 265.21 6,388.36 1,084.17 634.32 799.23 9,180.24
* Refer Note 3.7 (b) to the Accounts. ** Refer Note 5 (a) to the Accounts.
30
Schedules to Balance Sheet (Continued)
31 March, 2002 Rs. Million 1.3 SECURED LOANS Debentures Term Loans From Banks From Financial Institutions Post Shipment Credit 4,336.70 1,430.00 34.55 118.68 5,919.93
31 March, 2001 Rs. Million 5,116.68 400.00 691.46 180.55 6,388.69
1.
a)
Debentures and Term Loans from Financial Institutions and Banks aggregating Rs. 5,766.70 Million (2000-01: Rs. 5,666.68 Million) are secured by a first charge created on certain immovable properties and movable assets of the Company. Debentures and Term Loans from Financial Institutions aggregating Rs. 34.55 Million (2000-01: Rs.541.46 Million) are secured by a second charge on certain immovable properties and movable assets of the Company. In respect of Debenture series AL3 to AL6, issued during the year, formalities regarding creation of security are in progress. 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. 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. The Company has powers to reissue Debentures aggregating Rs. 6,867.12 Million (2000-01: Rs.6,117.12 Million). Debentures as at March 31, 2002 are to be redeemed at par in equal annual instalments, as stated below: Debenture Series XIV XIX XX XXI XXII XXIII XXV XXVIII(A) XXVIII(B) XXVIII(C) XXVIII(D) XXIX XXX XXXI XXXII AL 1 AL 2 AL 3 AL 4 AL 5 AL 6 Balance as at 31 March, 2002 Rs. Million 33.33 500.00 300.00 166.67 133.36 333.34 250.00 100.00 100.00 100.00 100.00 250.00 500.00 100.00 100.00 500.00 250.00 50.00 400.00 20.00 50.00 4,336.70 Dates of Redemption
b) c) d)
e) 2. a) b)
24 October 2002 08 August 2002 01 October 2002 01 October 2002 01 December 2002 01 July 2002 and 2003 01 November 2002, 2003 and 01 May 2003 02 July 2004 02 January 2005 02 July 2005 02 January 2006 01 August 2004, 2005 and 01 February 2005, 2006 01 August 2004, 2005 and 01 February 2005, 2006 01 February 2003, 2004 and 01 August 2003 01 August 2004, 2005 and 01 February 2005, 2006 15 June 2004, 2005 and 2006 15 October 2004, 2005 and 2006 19 December 2004, 2005 and 2006 10 January 2007, 2008 and 2009 15 February 2005, 2006 and 2007 15 February 2007, 2008 and 2009
c) 3.
Debenture Series XXVIII (A to D) can be redeemed on 02 January, 2003, if put / call option is exercised.
Loans include Rs.1,642.29 Million (2000-01: Rs. 2,526.15 Million) repayable within 12 months.
31
31 March, 2002 Rs. Million 1.4 UNSECURED LOANS Fixed Deposits Loans and Advances From Banks From Others 1. Of the above, repayable within 12 months Fixed Deposits Loans and Advances From Banks From Others 2. Commercial Paper Outstanding at the end of the year Maximum amount raised at any time during the year 823.78 2,140.78 2,964.56 823.78 89.31 800.00 1,250.00
31 March, 2001 Rs. Million 52.27 839.25 2,049.87 2,941.39 52.27 839.25 72.13 750.00 1,000.00
1.5
FIXED ASSETS
GROSS BLOCK (COST / VALUATION) 31 March, 2001 Additions 10.54 4.75 251.94 1,259.89 Deductions 2.16 58.71 31 March, 2002 251.35 146.02 2,246.68 13,336.40 DEPRECIATION Upto 31 March, 2002 35.04 637.35 6,076.77
(Rs. Million) NET BLOCK 31 March, 2002 251.35 110.98 1,609.33 7,259.63 31 March, 2001 240.81 110.25 1,428.64 6,798.08
DESCRIPTION
Land
Freehold Leasehold
240.81 141.27 1,996.90 12,135.22
Buildings Plant and Machinery Furniture, Fittings and Equipment Vehicles Vehicles given on Lease
682.61 169.45 127.45 15,493.71
71.71 14.33 1,613.16
4.20 11.37 126.12 202.56
750.12 172.41 1.33 16,904.31
445.84 146.99 1.33 7,343.32
304.28 25.42 9,560.99 537.35 10,098.34
311.24 26.39 8,915.41 697.54 9,612.95
Capital Work-in-Progress
1. 2. 3.
Deeds of acquisition in respect of lands at Alwar on leasehold basis costing Rs. 0.61 Million are under execution and registration. A portion of buildings in Bhandara (estimated gross value Rs. 7.20 Million) is on a land, title for which is yet to be transferred to the Company. Cost / Valuation of Buildings as at March 31, 2002 includes: a) b) Rs. 0.34 Million being cost of shares in Housing Co-operative Society representing ownership rights in residential flats and furniture and fittings thereat. Rs. 12.76 Million representing cost of residential flats including undivided interest in land.
4.
Cost of additions and Capital Work-in-Progress includes a) Exchange difference for the year Rs. 7.27 Million (2000-01: Rs. 7.95 Million)
b) Expenditure incidental to the construction / acquisition of fixed assets Rs. 2.64 Million (2000-01: Rs. 1.64 Million) 5. Depreciation upto March 31, 2002 includes amortisation of cost / value of leasehold assets.
32
31 March, 2002 Nos. Rs. Million 1.6 I INVESTMENTS DESCRIPTION Current Investments - other than trade Mutual Fund Units of Rs. 10 each Standard Chartered Grindlays Cash fund Long term Investments Trade 1) Equity Shares of Rs. 10 each Ashok Leyland Finance Ltd. Automotive Coaches and Components Ltd. Ennore Foundries Ltd. Shriram Transport Finance Ltd. 2) Equity Shares of Srilankan Rs. 10 each Lanka Ashok Leyland Ltd. 3) Equity Shares of Rs. 100 each, partly paid-up Adyar Property Holding Co. Ltd. (Rs. 65 paid up) 4) 9% Cumulative Convertible Preference Shares of Rs. 50 each Ashok Leyland Finance Ltd. 5) 10% Cumulative Non-Convertible Redeemable Preference Shares of Rs. 100 each Ennore Foundries Ltd. 6) Non-Convertible Debentures of Rs. 70 each (Rs. 14 redeemed each year from 1998-99) Ennore Foundries Ltd. 7) Units of Rs. 5,000 each Auto Ancillary Fund Other than trade 1) Equity Shares of Rs. 10 each Ashley Holdings Ltd. Ashley Investments Ltd. Ashok Leyland Project Services Ltd. Ashok Leyland Investment Services Ltd. Chennai Willington Corporate Foundation (cost Rs. 900) HDFC Bank Ltd. HDFC Ltd. Hinduja HCL Sing Tel Communications Private Ltd. (cost Rs. 100) Hinduja TMT Ltd. ICICI Ltd. Industrial Development Bank of India Ltd. Lufthansa Cargo India Ltd. 2) Mutual Fund Units of Rs. 10 each LIC Mutual Fund (Dhanvarsha VIII) Scheme Unit Trust of India Less Provision for diminution in value
Nos.
10,000,000
100.00
II A)
9,231,562 1,410,664 1,426,854 18,901 1,008,332 400
239.02 11.23 23.20 0.19 5.75 0.03
9,231,562 1,410,664 1,426,854 324,900 1,008,332 400
239.02 11.23 23.20 3.25 5.75 0.03
9,900,087
495.00
9,900,087
495.00
1,500,000
150.00
1,500,000
150.00
267,809 425
3.75 2.13
267,809 500
7.50 2.50
B)
750,000 750,000 1,442,400 720,000 100 500 26,425 10 569,058 88,463 2,000,000
7.50 7.50 14.42 7.20 0.01 0.70
750,000 750,000 1,442,400 720,000 100 500 49,370 10 785,828 91,963 381,100 1,071,593 260,000 2,000,000
7.50 7.50 14.42 7.20 0.01 1.32
113.81 1.92 26.37 1,209.73 36.35 1,173.38
157.17 1.99 30.96 10.72 2.60 26.37 1,205.24 25.60 1,179.64
33
31 March, 2002 Rs. Million 1.6 INVESTMENTS (Contd.) 1. Investments are fully paid-up unless otherwise stated. 2. a) Quoted Investments Cost Market value Unquoted Investments Cost b) In the absence of quotations for 267,809 Non-convertible Debentures in Ennore Foundries Ltd., and 9,900,087 Preference shares in Ashok Leyland Finance Limited their face value has been stated as their market value.
903.98 1,015.96 305.75
985.79 909.88 219.45
3. The shares in the following companies can be disposed of/encumbered only with the consent of Banks / Financial Institutions who have given loans to/subscribed to the Debentures of those companies : a) Ashok Leyland Finance Ltd. b) Automotive Coaches and Components Ltd. c) Ennore Foundries Ltd. 4. Units of various mutual funds (costs aggregating Rs. 966.17 Million) have been bought and sold/redeemed during the year. 1.7 INVENTORIES Stores and Spares Consumable tools Raw materials and Components (including patterns and dies) Work-in-Progress Finished/Trading goods SUNDRY DEBTORS Trade Others (including Export incentives) Less Provision 1. Of the above, Unsecured Considered good Considered doubtful 2. Age analysis of Debts Outstanding for more than six months (includes deferred receivables Rs. 1,553.99 Million (2000-01:Rs. 1,022.60 Million)) Other debts (includes deferred receivables Rs. Nil (2000-01:Rs. 1,031.34 Million)) 3. Debtors include Bills receivable
190.98 118.57 1,745.21 571.28 3,327.36 5,953.40 4,850.69 98.02 4,948.71 20.25 4,928.46 4,928.46 20.25 2,022.92
173.63 160.43 1,989.95 816.72 2,036.01 5,176.74 6,649.89 118.74 6,768.63 89.11 6,679.52 6,679.52 89.11 1,372.23
1.8
2,925.79
5,396.40
26.20
126.67
34
31 March, 2002 Rs. Million 1.9 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 National bank of Sharjah - Sharjah - US$ account (Maximum balance at any time during the year Rs. 3.06 Million) National bank of Sharjah - Sharjah - Dirham account (Maximum balance at any time during the year Rs. 2.58 Million) ABSA Bank - South Africa (Maximum balance at any time during the year Rs. 1.16 Million) 3.04 9.80 1,672.51 1,062.50
31 March, 2001 Rs. Million 4.15 2.80 1,150.25 492.00
0.45 0.11 0.53 2,748.94
1,649.20
1.10 LOANS AND ADVANCES Loans and Advances recoverable in cash or in kind or for value to be received Balances with Customs, Port Trust, Central Excise etc. Less Provision Of the above, 1. Unsecured
1,943.77 162.96 2,106.73 185.77 1,920.96 1,920.96 185.77 2.04 2.44 366.64
2,101.05 187.92 2,288.97 160.43 2,128.54 2,128.54 160.43 2.25 2.66 448.67
Considered good Considered doubtful 2. Due from Directors/Officers At the end of the year Maximum amount due at any time during the year 3. Loans and Advances include advances for Capital items and Investments 1.11 CURRENT LIABILITIES AND PROVISIONS Liabilities Acceptances Creditors for materials and expenses Small Scale Industrial undertakings Others Unclaimed Dividends Interest accrued but not due on loans Other Liabilities Provisions Proposed Dividend Tax on Proposed Dividend Others
939.73 176.43 3,160.77 6.64 165.86 489.38 4,938.81 535.18 253.02 788.20 5,727.01 5.31 13.00 30.74 49.05
907.34 158.26 2,784.31 5.34 189.24 626.31 4,670.80 475.72 48.52 216.11 740.35 5,411.15 8.65 35.43 58.16 102.24
1.12 MISCELLANEOUS EXPENDITURE Debenture issue/Loan raising expenses Premium on prepayment of borrowings Compensation under Voluntary Retirement Scheme
35
Schedules to Profit and Loss Account
Unit of Measurement 2.1 SALES Commercial Vehicles Engines Ferrous Castings Spare Parts and Others Less Commission and Rebate 2.2 OTHER INCOME Income from current investments Dividend Income from long term investments Dividend Trade Others Interest Trade Rent Profit on sale of fixed assets Net Profit on sale of investments Net Current Long term Miscellaneous income Tax deducted at source on income from long term investments MANUFACTURING AND OTHER EXPENSES Consumption of Raw materials and Components Less Scrap sales Purchase of Trading goods Employee expenses Other expenses Excise duty Movement in value of Stock of Finished/ Trading goods and Work-in-Progress Opening Stock Closing Stock (Increase)/Decrease Less Expenses capitalised Nos Nos Tonnes
31 March, 2002 Volume Rs. Million 29,673 5,258 5,795 20,370.80 892.51 211.14 5,491.61 26,966.06 661.58 26,304.48
31 March, 2001 Volume Rs. Million 32,475 6,311 7,570 20,113.18 1,166.53 277.65 5,138.94 26,696.30 629.67 26,066.63
Rs. Million 1.45 124.12 10.00
Rs. Million 42.30 6.21
134.12 0.62 136.19 1.87 17.38
48.51 1.18 49.69 1.25 7.66
(0.27) (0.74)
(1.01) 25.00 179.43 0.13
2.48 0.14
2.62 44.42 105.64 0.37
2.3
Schedules
15,515.89 151.96
2.4 2.5
15,363.93 587.04 2,600.36 2,188.66 3,692.00
15,327.97 147.38
15,180.59 699.39 2,531.30 2,089.97 3,546.51
2,852.73 3,898.64 (1,045.91) 23,386.08 2.90 23,383.18
2,057.58 2,852.73 (795.15) 23,252.61 3.56 23,249.05
36
Schedules to Profit and Loss Account (Continued)
31 March, 2002 Rs. Million 2.4 EMPLOYEE EXPENSES Salaries, Wages and Bonus Contribution to Provident, Gratuity and other Funds Welfare expenses Salaries, Wages and Bonus include amortisation of compensation under Voluntary Retirement Scheme. OTHER EXPENSES Power and Fuel Consumption of Stores and Tools Repairs and Maintenance Buildings Machinery Rent Rates and Taxes Insurance Selling and Administration expenses Net Research and Development Provision for diminution in value of Investments Bad and Doubtful Debts/Advances provided/written-off Net of recovery/write back 1. Rent includes amortisation of cost/value of leasehold assets as reduced by transfer from Revaluation Reserve (Refer Note 3.7 (b) to the Accounts) 2. Selling and Administration expenses include Directors Sitting fees DEPRECIATION Buildings Plant and Machinery Furniture, Fittings and Equipment Vehicles Less Transferred from Revaluation Reserve* * Refer note 3.7 (b) to the Accounts 1,996.82 300.33 303.21 2,600.36 29.68 397.64 240.11 61.87 180.68 85.02 118.11 74.94 899.85 74.23 10.75 45.46 2,188.66
31 March, 2001 Rs. Million 1,925.42 318.66 287.22 2,531.30 29.08 405.55 228.13 52.74 174.31 78.95 136.85 76.90 795.39 66.77 25.60 48.78 2,089.97
2.5
3.33
2.92
0.37 71.25 795.22 77.74 15.09 959.30 5.75 953.55
0.41 63.20 725.78 79.58 20.69 889.25 5.75 883.50
2.6
37
Schedules to Profit and Loss Account (Continued)
31 March, 2002 Rs. Million Rs. Million 2.7 FINANCIAL EXPENSES Interest Others Less Interest earned on Bills receivable, Deposits and other Accounts Cash discounts earned 890.47 280.02 1,170.49 324.70 2.71
31 March, 2001 Rs. Million Rs. Million 962.12 389.75 1,351.87 323.79 5.27
Less
Expenses capitalised
327.41 843.08 17.96 825.12
329.06 1,022.81 2.50 1,020.31
Of the above, 1. Debenture issue / Loan raising expenses written off 2. Premium on prepayment of borrowings amortised 3. Tax deducted at source from interest earned
5.24 22.43 60.19
4.58 23.19 63.18
38
Notes to the Accounts
Unit of Measurement 1. 1.1 1.2 INFORMATION REGARDING GOODS MANUFACTURED, IMPORTS AND FOREIGN CURRENCY TRANSACTIONS Licensed Capacities : Installed Capacities: Two Shifts (as certified by the Managing Director) Commercial Vehicles Ferrous Castings Production : Commercial Vehicles Engines@ Ferrous Castings
@ Engines manufactured against spare capacity of Commercial vehicles
31 March, 2002
31 March, 2001
Not Applicable
Not Applicable
Nos. Tonnes Nos. Nos. Tonnes
50000 16500 31824 5201 10849
50000 16500 33778 6407 12785
1.3
1.4
Finished/Trading goods and Work-In-Progress Opening Stock : Commercial Vehicles Nos. Engines Nos. Parts for sale Bought out Finished Works made Work-in-Progress Closing Stock : Commercial Vehicles Nos. Engines Nos. Parts for sale Bought out Finished Works made Work-in-Progress Given on lease/taken for own use/dismantled, net of leased vehicles repossessed Commercial Vehicles Nos. Engines Nos. Ferrous Castings Tonnes
Rs. Million 2830 412 1,459.96 52.25 334.88 188.92 816.72 4976 337 2,687.20 52.15 381.71 206.30 571.28 2830 412 1539 322
Rs. Million 715.18 35.72 392.08 200.12 714.48 1,459.96 52.25 334.88 188.92 816.72
5 18 5054
12 6 5215
39
Unit of Measurement 1.5 Consumption of Raw Materials and Components Plates, Sheets and Angles Bars Steel Tubes Tyres, Tubes and Flaps Pig Iron, Steel Scrap and Alloys Forgings and Castings Finished and Other items Of the above Imported items Indigenous items 1.6 Imports (c.i.f.) : Raw materials Trading goods and others Spares and Tools Capital goods (Including Technical Know-how fees capitalised) Expenditure in Foreign Currency : Research and Development Royalty Commission paid on Sales Travel Interest and Commitment charges Other expenses Earnings in Foreign Exchange : a) Export FOB value b) Interest c) Others (Freight, Insurance and Commission earned) Dividend Remitted in Foreign Currency : No. of Non-Resident Shareholders No. of Shares on which dividend was remitted Dividend remitted during the year relating to previous year
Tonnes Tonnes Metres Sets Tonnes
39927 4746 1297380 250093 12521
824.22 131.81 34.81 1,266.64 92.90 2,183.23 10,982.28 15,515.89 1,219.39 7.86% 14,296.50 92.14% 779.17 4.59 37.18 216.01 1,036.95 13.95 16.61 157.26 12.85 13.21 35.42 249.30 1,591.32 4.02 61.52 1,656.86
45254 7993 1817290 249801 13645
875.11 211.51 46.17 1,283.92 102.69 2,545.27 10,263.30 15,327.97 1,374.36 8.97% 13,953.61 91.03% 846.12 4.96 19.62 281.22 1,151.92 21.22 29.16 192.18 11.07 44.51 40.06 338.20 1,631.16 11.28 74.77 1,717.21
1.7
1.8
1.9
1 44,116,668 176.47
1 44,116,668 154.41
40
31 March, 2002 Rs. Million 2. 2.1 INFORMATION REGARDING MANAGERIAL REMUNERATION Remuneration to Managing and Deputy Managing Director Salary Commission Perquisites Perquisites include amounts evaluated as per Income Tax Rules in respect of certain items. Computation of net profits Under Section 198/349 of the Companies Act, 1956 Profit before Taxation Add Profit on sale of fixed assets Under Section 349 - Net Others including Directors remuneration Deduct Profit on sale of fixed assets as per books Net Others Net Profit The total remuneration as stated in 2.1 above is within the maximum permissible limit under the Act. OTHER FINANCIAL INFORMATION Capital Commitments (net of advances) not provided for Contingent Liabilities a) Guarantees given by Companys Bankers b) Partly paid Shares c) Claims against the Company not acknowledged as debts d) Bills discounted e) Others f) Refer note 8 on Sales tax matters Interest paid / payable on a) Debentures b) Fixed Loans Auditors Remuneration For Financial audit For Cost audit For Taxation matters For Company Law matters For Other matters Expenses reimbursed Total Research and Development costs charged to the Profit and Loss Account (including amount shown under Schedule 2.5) (a) Net exchange difference debited to Profit and Loss Account (b) Charge/(income) deferred to be recognised in subsequent accounting periods in respect of forward contracts
5.60 3.24 2.89 11.73
3.48 2.76 3.00 9.24
2.2
1,322.06 17.03 93.02 1,432.11 17.38 2.46 1,412.27
1,019.41 6.33 37.58 1,063.32 7.66 4.81 1,050.85
3. 3.1 3.2
237.28 76.31 0.01 78.90 3,490.34 59.97
196.52 57.52 0.01 14.95 3,657.47 34.70
3.3
571.79 179.75 1.50 0.07 0.14 0.07 1.14 0.09
541.75 156.87 1.20 0.07 0.17 0.07 1.15 0.07
3.4
3.5 3.6
163.38 12.06 (2.32)
147.27 0.76 1.40
41
3.7
(a)
In respect of following assets useful lives different from those derived from the rates specified in the Schedule XIV to the Companies Act, 1956 have been reckoned in computing depreciation for the year. Asset Category YEARS Buildings Revalued Buildings are depreciated over the balance useful life as determined by the valuers. Plant and Machinery Technical Know-how Fees 6 Furniture and Fittings and Office Equipment Furniture and Fittings 8 Office Equipment 8 Data Processing System 5 Vehicles Given on lease 3-5 Cars and Motorcycles 3 Trucks and Buses 5
4.
5.
6.
Depreciation for the year computed on revalued assets over the balance useful life on straight line method includes a net charge of Rs. 6.45 Million (2000-01: Rs. 6.44 Million) [Rs. 0.70 Million (2000-01: Rs. 0.69 Million) in Schedule 2.5 and Rs. 5.75 Million (2000-01:Rs. 5.75 Million) in Schedule 2.6] 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 and shown as deduction from Depreciation. 31 March, 31 March, 2002 2001 Rs. Million Rs. Million EARNINGS PER SHARE Profit after taxation as per Profit and Loss account (A) 922.56 916.81 Number of equity shares outstanding (B) 118,929,420 118,929,420 Earnings per share (in Rupees) (A/B) 7.76 7.71 DEFERRED TAXATION a) In conformity with Accounting Standard No. 22 issued by The Institute of Chartered Accountants of India on Accounting for Taxes on Income, provision for deferred tax liability of Rs.1,799.00 Million upto March 31, 2001 has been charged to the General Reserve. b) The composition of Deferred Tax Liability as at March 31, 2002 : On account of timing differences relating to depreciation 1,926.50 Others (35.00) 1,891.50 SEGMENT INFORMATION The Company is principally engaged in the business of Commercial vehicles and related components. Accordingly there are no reportable segments as per Accounting Standard No. 17 issued by The Institute of Chartered Accountants of India on Segment Reporting.
(b)
42
31 March, 2002 Rs. Million 7. RELATED PARTY DISCLOSURES a) List of parties where control exists Holding company LRLIH Limited, United Kingdom Machen-Iveco Holdings SA (Holding Company of LRLIH Limited, United Kingdom) Fellow subsidiary 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 Finance Limited Ashok Leyland Project Services Limited Automotive Coaches and Components Limited Lanka Ashok Leyland Limited, Sri Lanka Enterprises which have significant influence Machen Development Corporation, United Kingdom Gulf Oil India Limited Key Management Personnel Mr R Seshasayee, Managing Director Mr R Jagannath, Deputy Managing Director c) Transactions with related parties (i) Purchase of Raw materials and Components Fellow subsidiary Associates (ii) Sales and Other income (including Sales under the Hire Purchase Scheme of Associates) Associates (iii) Other expenditure Associates Enterprise which have significant influence (iv) Interest and other charges Associates (v) Interest income Fellow subsidiary Associates (vi) Dividend income Associates (vii) Dividend paid Holding company (viii) Remuneration to Key Management Personnel Refer 2.1 of Notes to the Accounts (ix) Redemption of debentures (Investment) Fellow subsidiary
899.30 82.79
2,490.03 47.08 66.64 17.97 0.62 232.37 124.12 176.47
3.75
43
31 March, 2002 Rs. Million (x) Outstanding balances (excluding application money for investments) Debtors Associates Loans and advances Associates Enterprises which have significant influence Key Management Personnel Creditors for materials and expenses Fellow subsidiary Enterprises which have significant influence Key Management Personnel
1,549.63
199.38 213.52 0.65
40.29 9.87 3.24
(xi)
Financial Guarantees Associates
59.19
8.
In respect of levy of Sales Tax of Rs. 149.17 Million and penalty thereon by Government of Tamil Nadu (GOTN) relating to the assessment years 1986-1987 to 1988-1989 on sale of chassis in other States, (on which the Company has paid tax of Rs. 120.35 Million in other States) Supreme Court has observed that a single sale transaction shall not suffer Sales Tax twice. The Sales Tax Appellate Tribunal (STAT), which heard the appeals as per the direction of the Supreme Court, modified the tax liability to Rs. 134.67 Million and cancelled the penalty. The Supreme Court stayed the collection of tax for the above years and also for subsequent years for which pre-assessment notices have been served. GOTN has filed petitions for restoration of penalty and withdrawal of other tax reliefs granted by STAT. Government of Rajasthan has levied tax of Rs. 19.53 Million (and penalty/interest thereon) on sale of chassis in other States pertaining to assessment years from 1998-1999 to 2000-2001, the recovery of which has also been stayed by the Supreme Court. All the above issues are now pending before the Supreme Court.
9.
In pursuance of a Voluntary Retirement Scheme applicable to employees in the unionised category at Ennore Plant, 645 employees had opted and were relieved on April 2, 2002 involving a compensation of Rs. 343.07 Million which will be accounted in the financial year 2002-03. Figures for the previous year have been regrouped/amended wherever necessary.
10.
Signatures to Statement on Significant Accounting Policies, Schedules and Notes to the Accounts.
N. SUNDARARAJAN Company Secretary T. ANANTHA NARAYANAN Executive Director - Finance 7 May, 2002 Chennai R. SESHASAYEE Managing Director
For and on behalf of the Board
R.J. SHAHANEY Chairman
44
Cash Flow Statement for the Year Ended 31 March, 2002
Rs. Million CASH FLOWS FROM OPERATING ACTIVITIES PROFIT BEFORE TAX ADJUSTMENTS FOR: Depreciation Other Amortisations Unrealised foreign exchange gains / losses Interest expense Interest income Income from Investments Provision for diminution in value of Investments / Advances (Profit)/Loss on disposal of Fixed Assets / Long Term Investments OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES ADJUSTMENTS FOR CHANGES IN: Inventories Debtors Advances Current Liabilities and Provisions CASH GENERATED FROM OPERATIONS Income Tax (Paid) / Refund Payments under Voluntary Retirement Scheme NET CASHFLOW FROM OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Payments for assets acquisition Proceeds on sale of Fixed Assets Purchase of Long Term Investments Sale/Redemption of Long Term Investments Income from Investments - Interest - Dividend Changes in Advances NET CASHFLOW FROM INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Long term Borrowings - Raised - Repaid Changes in Short term borrowings Debenture issue and Loan raising expenses paid Interest paid - net 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 IN CASH AND CASH EQUIVALENTS 1,322.06 953.55 60.68 7.75 872.66 (324.70) (134.74) 52.37 (16.64) 2,792.99 (776.66) 1,739.82 (30.09) 260.48 3,986.54 (283.99) (2.26) 3,700.29 (1,192.67) 21.64 94.77 27.44 134.12 3.31 (911.39) 2,046.33 (2,409.61) (77.34) (2.05) (626.47) (524.24) (1,593.38) 1,195.52 1,647.46 2,842.98 1,195.52
31 March, 2001 Rs. Million 1,019.41 883.50 59.77 14.04 959.78 (323.79) (49.69) 25.60 (7.80) 2,580.82 (598.80) 870.30 (136.82) 923.67 3,639.17 (5.33) (87.24) 3,546.60 (1,140.36) 10.32 (602.17) 18.02 46.51 48.51 146.95 (1,472.22) 3,531.48 (2,455.47) (434.24) (5.23) (641.27) (462.04) (466.77) 1,607.61 39.85 1,647.46 1,607.61
(A)
(B)
(C) (A+B+C) (D) (E) (E-D)
45
Cash Flow Statement for the Year Ended 31 March, 2002
Rs. Million NOTES TO THE CASH FLOW STATEMENT 1. Components of Cash and Cash equivalents: Cash and Bank balances excluding those relating to Unpaid Dividend Investments in money market instruments or deposits which have a tenor of three months or less Unrealised foreign exchange gains / losses 2. Figures for the previous year have been regrouped/amended wherever necessary. For and on behalf of the Board R. SESHASAYEE Managing Director
2,742.79 100.00 0.19 2,842.98
1,647.41 0.05 1,647.46
N. SUNDARARAJAN Company Secretary T. ANANTHA NARAYANAN Executive Director - Finance 7 May, 2002 Chennai
R.J. SHAHANEY Chairman
AUDITORS CERTIFICATE We have examined the above Cash Flow Statement of Ashok Leyland Limited for the year ended 31 March, 2002 which is based on and in agreement with the audited accounts for the relevant financial years. According to the information and explanations given to us, the aforesaid Cash Flow Statement, prepared by the company, is in accordance with the requirements of Clause 32 of the Listing Agreement with the Stock Exchanges.
7 May, 2002 Chennai
46
Balance Sheet Abstract and Companys General Business Profile
I.
Registration Details Registration No. Balance Sheet Date 3 1 Date 0 0 0 0 1 0 0 5 State Code 1 8
3 2 Month
0 2 Year
II.
Capital Raised during the year (Amount in Rs. Thousands) Public Issue Bonus Issue N N I I L L Rights Issue Private Placement N N I I L L
III. Position of Mobilisation and Deployment of Funds (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 IV. Performance of Company (Amount in Rs. Thousands) Turnover Profit/Loss Before Tax Earning per share in Rs. V. Generic Names of Three Principal Products of Company Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description E 7 F N 3 E C 8 7 0 E 0 N 9 O 6 R 8 E 9 U 0 C 9 S 0 S 9 9 C 0 A S T I N G S 0 I 0 0 A 8 9 L 9 V E H I C L E S + + 2 6 1 4 3 8 2 3 2 7 9 0 . 1 6 7 1 7 6 Total Expenditure Profit/Loss After Tax Dividend Rate% + + 4 5 2 5 1 9 6 2 1 2 8 5 4 6 4 7 1 0 9 0 8 9 2 8 4 3 7 N 3 4 I 4 9 L Investments Misc. Expenditure 1 1 7 4 3 9 3 0 8 5 2 6 1 5 1 1 9 8 8 1 9 9 9 1 2 9 5 9 2 0 8 9 0 Reserves and Surpluses Unsecured Loans 9 2 1 9 8 6 0 4 2 5 3 5 9 5 2 1 1 4 5 5 2 1 Total Assets 2 1 1 4 5 5 2 1
O M M 8 G 2 R 4 I 5 R
N. SUNDARARAJAN Company Secretary T. ANANTHA NARAYANAN Executive Director - Finance 7 May, 2002 Chennai R. SESHASAYEE Managing Director
For and on behalf of the Board R.J. SHAHANEY Chairman
47
Shareholding Pattern
Foreign Institutional Investors 6.50 % Nationalised Banks & Mutual Funds 3.08 % Bodies Corporate 1.13 % Non Resident Indians 0.07 %
Financial Institutions (LIC, UTI, GIC etc) 22.68 %
Public 15.61 %
LRLIH Ltd., UK 50.93 %
Share Price Movement

Rs. 135 120 105
3519.16 3631.91 3456.78 92 2811.60 72.60 65 57 68.65 60 67.50 67 2989.35 64.25 62.50 52.20 52 66.50 64.10 67.10 3287.56 3311.03 79.25 76 95.45 3562.31 94.25 3469.35
Sensex 5000 4500 4000

3329.28 3244.95 88.75 3262.33
90 75
3500 3000 2500 2000 1500 1000 500 0 CNX Nifty 2000 1800 1600
BSE
60 45 30 15 0 Rs. 135 120 105 90 75

1125.25 64.50 1167.90 72.40 57 1107.90 68.95 53.20 64.50 1072.85 67.50 1053.75 57.60 66.50 913.85 52.20 64.00 971.90 52.10 40.70 53 55.70 50
95.00 88.45 1067.15 63.05 1059.05 65.50 79.20 1075.40 64.10
95.50
93.95 1129.55 77.00
1400 1200 1000 800 600 400 200 0
NSE
60 45 30 15 0
40.75 50.20
1142.05 67.00
Apr 2001
May 2001
Dec 2001
Oct 2001
Feb 2002
Jan 2002
June 2001
Aug 2001
Mar 2002
Sep 2001
Nov 2001
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Annual Report 0102

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Contents

J N Amrolia T Anantha Narayanan K K S Bhalla A S Mundkur S Nagarajan M Natraj

N Sundararajan M S Krishnaswami & Rajan Price Waterhouse

Cost Auditor Bankers

19, Rajaji Salai, Chennai 600 001

Chennai Hosur, Tamil Nadu Bhandara, Maharashtra Alwar, Rajasthan Hyderabad

Vehicle Sales (Nos.)

99-2000 2000-01 2001-02

99-2000 2000-01 2001-02

Spare Parts & Others

(Rs. million) 6 000 2 400

Foreign Exchange Earnings

99-2000 2000-01 2001-02

99-2000 2000-01 2001-02

(Rs. million) 30 000

Profit before Tax

Profit after Tax 1 322

233 207 184 204

99-2000 2000-01 2001-02

99-2000 2000-01 2001-02

(Rs. million) 30 000 30 000

Fixed Assets 23 425 20 663

Reserves & Surplus

Deferred Tax 23 425 20 663 20 991 21 015 21 096

99-2000 2000-01 2001-02

99-2000 2000-01 2001-02

Earnings Per Share (Rupees)

7.76 7.71 6.60

99-2000 2000-01 2001-02

99-2000 2000-01 2001-02

On behalf of the Board of Directors Chennai May 7, 2002 R J SHAHANEY Chairman

Annexure A to Directors Report

Annexure B to Directors Report Report on Corporate Governance

iii) Deputy Managing Director b)

Annexure B to Directors Report Report on Corporate Governance

1 5 (of which 1 as Chairman) 9 4 1 1

Mr A K Das Mr D G Hinduja Mr H Klingele Mr E A Kshirsagar

Yes Yes Yes Yes

Mr F Sahami Mr R Sorce Mr R Seshasayee (Note 4)

Yes Not Applicable Yes

Mr R Jagannath Alternate Director : Mr B D Punjabi

Yes Not Applicable

Annexure B to Directors Report Report on Corporate Governance

Annexure B to Directors Report Report on Corporate Governance

Annexure B to Directors Report Report on Corporate Governance

51st AGM - 2000

Annexure B to Directors Report Report on Corporate Governance

Annexure B to Directors Report Report on Corporate Governance

Annexure B to Directors Report Report on Corporate Governance

Hosur Unit I 175 Hosur Indl. Complex Hosur 635 126

Annexure B to Directors Report Report on Corporate Governance

For Fixed Deposits

Annexure C to Directors Report

7 May, 2002 Chennai

S. DATTA Partner For and on behalf of PRICE WATERHOUSE Chartered Accountants

Annexure D to Directors Report - Management Discussion and Analysis Report

Annexure D to Directors Report - Management Discussion and Analysis Report

Annexure D to Directors Report - Management Discussion and Analysis Report

Annexure D to Directors Report - Management Discussion and Analysis Report

2,507 1,193 3,700 (1,171) 260 (1,593) 1,196

10,320 8,884 1,892 21,096

11,685 9,330 21,015

10,098 1,173 9,825 21,096