1.  We have audited the attached Balance Sheet of ASHOK LEYLAND LIMITED
 (the Company) as at March 31, 2012, the Statement of Profit and Loss
 and the Cash Flow Statement for the year ended on that date, both
 annexed thereto, (collectively referred to as the financial
 statements), signed by us under reference to this report. These
 financial statements are the responsibility of the Company''s management.
 Our responsibility is to express an opinion on these financial
 statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing and assurance
 standards generally accepted in India.  Those standards require that we
 plan and perform the audit to obtain reasonable assurance about whether
 the financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 issued
 by the Central Government in terms of Section 227(4A) of the Companies
 Act, 1956, we enclose in the Annexure a statement on the matters
 specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report as follows:
 
 a.  we have obtained all the information and explanations, which, to
 the best of our knowledge and belief, were necessary for the purposes
 of our audit.
 
 b.  in our opinion, proper books of account, as required by law, have
 been kept by the Company so far as appears from our examination of
 those books.
 
 c.  the financial statements dealt with by this report are in agreement
 with the books of account.
 
 d.  in our opinion, the aforesaid financial statements comply in all
 material respects with the applicable Accounting Standards referred to
 in Section 211(3C) of the Companies Act, 1956 (the Act).
 
 e.  in our opinion and to the best of our information and according to
 the explanations given to us, the aforesaid financial statements read
 with the Statement on Significant Accounting Policies and Notes to the
 Financial Statements, give the information required by the Act, in the
 manner so required and give a true and fair view, in conformity with
 the accounting principles generally accepted in India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2012;
 
 (ii) in the case of the Statement of Profit and Loss, of the profit for
 the year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 5.  On the basis of written representations received from the Directors
 as on March 31, 2012, and taken on record by the Board of Directors, we
 report that none of the Directors is prima facie disqualified as on
 March 31, 2012 from being appointed as a director in terms of Section
 274(l)(g) of the Act.
 
 As required by the Companies (Auditor''s Report) Order, 2003 (CARO)
 issued by the Government of India in terms of Section 227(4A) of the
 Companies Act, 1956, and on the basis of such checks as we considered
 appropriate and according to the information and explanations given to
 us, we report that:
 
 1.  (i) the Company is maintaining proper records showing full 
 particulars including quantitative details and situation of fixed 
 assets.
 
 (ii) the fixed assets are being physically verified under a phased
 programme of verification, which, in our opinion, is reasonable having
 regard to the nature and value of its assets. However, no material
 discrepancies have been noticed on such verification.
 
 (iii) the Company has not disposed off substantial part of its fixed
 assets during the year.
 
 2.  (i) inventories have been physically verified during the year by 
 the management at reasonable intervals.
 
 (ii) the procedures of physical verification of the inventory followed
 by the management are reasonable and adequate in relation to the size
 of the Company and the nature of its business.
 
 (iii) the Company is maintaining proper records of its inventories and
 no material discrepancies were noticed on physical verification.
 
 3.  the Company has neither granted nor taken any loans, secured or
 unsecured, to / from companies, firms or other parties covered in the
 register maintained under Section 301 of the Act.
 
 4.  there is an adequate internal control system commensurate with the
 size of the Company and the nature of its business with regard to
 purchase of inventory and fixed assets and for sale of goods and
 services. Further, on the basis of our examination of the books and
 records of the Company, we have neither come across nor have been
 informed of any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 5.  a) in our opinion and to the best of our knowledge and belief, the
 particulars of contracts or arrangements referred to Section 301 that
 needed to be entered into the register, maintained under the said
 section have been so entered.
 
 b) where each of such transactions is in excess of Rs 5 lakhs in
 respect of any party, the transactions have been made at prices which
 are prima facie reasonable having regard to the prevailing market
 prices at the relevant time.
 
 6.  the Company has not accepted any deposits from the public to which
 the directives issued by the Reserve Bank of India and the provisions
 of Section 58A and 58AA or any other relevant provisions of the Act and
 the Companies (Acceptance of Deposit) Rules, 1975 apply.
 
 7.  the Company has an internal audit system commensurate with its size
 and nature of its business.
 
 8.  we have broadly reviewed the cost records maintained by the Company
 pursuant to the Companies (Cost Accounting Records) Rules, 2011
 prescribed by the Central Government under Section 209(l)(d) of the
 Companies Act, 1956 and are of the opinion that prima facie the
 prescribed cost records have been made and maintained. We have,
 however, not made a detailed examination of the cost records with a view
 to determine whether they are accurate or complete.
 
 9.  (i) the Company is generally regular in depositing undisputed 
 statutory dues including provident fund, investor education and 
 protection fund, employees'' state insurance, income tax, sales tax, wealth 
 tax, service tax, customs duty, excise duty, cess and other material 
 statutory dues as applicable with the appropriate authorities during the 
 year.
 
 (ii) no undisputed amounts payable in respect of income tax, wealth
 tax, sales tax, customs duty, excise duty and cess were in arrears, as
 at the balance sheet date for a period of more than six months from the
 date they became payable.
 
 (iii) there are no dues of income tax, wealth-tax and customs duty
 which have not been deposited on account of any dispute. Details of
 dues towards sales tax, excise duty, service tax and cess that
 have not been deposited on account of dispute are as stated below:
 
                                                          Rs.Lakhs
 
 Nature of       Dues       Period to       Forum        Amount 
 dues                       which the     where they     stayed
                            amount        dispute is     not 
                            relates 
                                          pending        included 
                                                         in dues
 
 Sales Tax      2,224.33    Various       Appellate       2,846.88 
                            periods       Deputy/ 
                            from          Additional
                            1993-2010     Commis- 
                                          sioner
 
                   35.84    Various       Tribunal          204.30
                            periods     
                            from
                            1987-2007
 
                    -       Various       High Court         49.09
                            periods
                            from
                            1986-2001
  
 Excise            26.78    Various       Commis-              -
 Duty,                      periods       sioner of
 and cess                   from          Central
 thereon                    2008-2011     Excise (Ap-
                                          peals)
 
                1,415.09                  Tribunal            4.88
                                         (CESTAT)
 
 Service tax       51.62    Various       Tribunal -
 and cess                   periods      (CESTAT)
 thereon                    from
                            2009-2011
 
                     -      Various       Tribunal          230.31 
                            periods      (CESTAT)
                            from
                            2006-2009
 
 Income             -       2005-06       Commis-         8,045.47
 Tax                        and           sionerof
                            2007-2008     Income Tax  
                                         (Appeals)
 
 10.  the Company does not have any accumulated losses as at March 31,
 2012 and has not incurred any cash losses in the financial year ended
 on that date or in the immediately preceding financial year.
 
 11.  the Company has not defaulted in repayment of dues to any
 financial institution, bank or debenture holders during the year.
 
 12.  the Company has maintained adequate documents and records where it
 has granted loans and advances on the basis of security by way of
 pledge of shares, debentures and other securities.
 
 13.  the provisions of any special statute applicable to a chit fund,
 nidhi or mutual benefit fund / societies are not applicable to the
 Company.
 
 14.  the Company is not dealing or trading in shares, securities,
 debentures and other investments.  Accordingly the provisions of Clause
 4(xiv) of the CARO are not applicable to the Company.
 
 15.  the terms and conditions of guarantees given during the year by
 the Company, for loans taken by others from banks or financial
 institutions, are not prima facie prejudicial to the interest of the
 Company.
 
 16.  the term loans availed by the Company were prima facie, applied
 for the purpose for which they were obtained.
 
 17.  on an overall examination of the financial statements of the
 Company, funds raised on short-term basis have, prima facie, not been
 used for long-term investment.
 
 18.  the Company has not made any preferential allotment of shares
 during the year to any party.
 
 19.  the Company has created securities / charges in respect
 Of debentures issued and outstanding.
 
 20.  the Company has not raised any money by public issues during the
 year.
 
 21.  considering the size and nature of the Company''s operations, no
 fraud of material significance on or by the Company has been noticed or
 reported during the year.
 
 For M.S. KRISHNASWAMI & RAJAN 
 
                                      For DELOITTE HASKINS & SELLS
 
 Chartered Accountants                Chartered Accountants
 
 Registration No. 01554S              Registration No. 117366W
 
 M.K. RAJAN                           R. LAXMINARAYAN
 
 Partner                              Partner
 
 Membership No.4059                   Membership No.33023
 
 May 14, 2012 Chennai