You will be pleased to note that 2010-11 was another successful year
 for Ashok Leyland. Taking advantage of a buoyant domestic market and
 recovering traditional export markets, your Company has set a new
 watermark by selling 94,106 commercial vehicles, the highest ever in
 its history, registering an increase of 47% over the previous year.
 
 The domestic commercial vehicle volume grew in 2010-11 by 27% within
 which Ashok Leylands present core medium and heavy segment was up by
 32%. In the medium and heavy segment, you will be happy to know that
 your Company has been able to maintain its leadership position in the
 bus segment and register share increase in every truck segment.  The
 export volume has surged by 72% over the previous year to 10,306
 vehicles with footprints in some new markets. The sales turnover has
 increased to Rs 11,117.71 Crores (+53.5% YOY) and Net Profit to Rs
 631.30 Crores (+49% YOY). There have also been significant gains in the
 Spare Parts, Defence and Power Solutions businesses. On your behalf, I
 would like to record my appreciation for the creditable performance
 from the Ashok Leyland team during the year that went by.
 
 Looking in Retrospect
 
 As you are probably aware, your Company is taking strides to realise
 the Vision of becoming global. In that journey, in addition to the
 strengthening of the position in the Indian market, last year witnessed
 some significant developments, which I would like to highlight.
 
 Your Company acquired a 26% controlling stake in Optare pic, U.K. a
 reputed bus manufacturer with a proven experience in hybrid and
 electric vehicles.  They manufacture a range of urban buses with
 integral architecture including the iconic Solo midi
 
 bus range. The acquisition will further strengthen the leadership
 position of your Company in the domestic market and is also expected to
 open up new frontiers in the developed markets.
 
 In the medium and heavy truck segment, as you are aware, your Company
 has introduced the versatile future ready - U-truck that will cover the
 16-49 Tonne GVW/GCW range and the initial feedback from the market has
 been very encouraging. Further range extension would follow
 progressively.
 
 To build on the platform as the largest supplier of logistics vehicles
 to the Indian Army and leverage on the overseas opportunities in the
 segment, your Company has promoted a new entity Ashok Leyland Defence
 Systems. To extend the product line-up to include tactical vehicles and
 develop other advanced defence systems, an MoU has been signed with the
 renowned Krauss-Maffei Wegmann (KMW) of Germany.
 
 On the export front, forays have been made into Russia, Ukraine and
 Mozambique which are new market extensions.
 
 Registering the highest ever R&D spend in a year of Rs 312.62 Crores,
 your Company has widened the fully built offerings in bus and truck and
 has undertaken focused efforts across the range to further improve
 product performance, fuel efficiency and durability, the hallmarks of
 Ashok Leyland products.
 
 I am also happy to share with you that Hinduja Leyland Finance, which
 finances vehicle purchase, has grown significantly during the year.
 Ramping up quickly, in its second year of operations it has disbursed
 over Rs 1200 Crores, Operating from 420 locations in 20 States with
 nearly 700 employees, Hinduja Leyland Finance provides solid support to
 your Companys growth in volumes.
 
 You are aware of the enlarging profile of Ashok Leyland that includes
 an equal JV with John Deere, U.S.A, for construction equipment, a
 growing Power Solutions Business, an end-to-end Engineering Services &
 Business Consultancy and a high technology emissions solutions company
 based in Germany. Some of these initiatives are aimed at de-risking
 against cyclically in the bus and truck business and some
 opportunistic.
 
 Looking into the future
 
 Building on the strengths of extending product line- up, growing sales
 volume and product engineering capability, as the next logical step,
 your Company has charted out an aggressive plan of volume growth to be
 among the Global Top 10 players in trucks in the category of 7.5 Tonne
 GVW and above and Top 5 in buses in the category of 8m and above,
 within the next 5 years. The well-developed R&D infrastructure now has
 over 1000 engineering professionals and is still growing. Apart from
 maintaining the thrust to develop and position conventional products
 and options to global standards, your Companys R&D has clear road maps
 for alternate propulsion and advanced engineering activities also.
 
 Contemporary cabins developed in-house and the globally benchmarked,
 best-in-class Neptune engines for the intermediate, medium and heavy
 truck range will enable progressive launch of a slew of products that
 can compete well in the global markets.
 
 In the growing intermediate vehicle range, action is already on hand to
 renew the current Ecomet models with a major upgrade aimed at both
 domestic and overseas markets.
 
 Market extensions are being vigorously pursued.  Breakthroughs are
 expected soon in South Africa, Middle East, Russia, CIS, Latin America
 and some growing markets in the Far East.
 
 To address the evolving trends in freight transportation in the
 country, your Companys truck range gets further reinforced with the
 LCV range (3-6 Tonne GVW) through the equal JV with Nissan Motors. I am
 happy to inform that the first of the series under this co-operation,
 unveiled as Ashok Leyland DOST is planned for launch this year in the 3
 Tonne truck category. This would be followed by the 6 Tonne range and
 subsequently by an award-winning passenger minivan.
 
 2011-12 should also see the launch of the backhoe, first of the
 construction equipment range from the JV with John Deere.
 
 In parallel to the product-market initiatives, there is emphasis on
 creating a vibrant organisation commensurate with the challenges ahead.
 To steer your Company through this crucial period, Mr R Seshasayee has
 been elevated by the Board to the position of Executive Vice Chairman
 and Mr Vinod Dasari as the Managing Director. I would like to
 congratulate them both and wish them every success.
 
 In this context, I wish to record my deepest respect and regard for the
 invaluable contribution and exemplary professionalism of Mr R J
 Shahaney who has stepped down as Chairman since the last Annual General
 Meeting. To recognise his invaluable contribution to your Company over
 the last 32 years and to continue to benefit from his extensive 
 experience and wisdom, the Board has conferred on him the status of
 Chairman Emeritus. Please join me in wishing Mr Shahaney good health
 and happiness in the future.
 
 I gratefully acknowledge the confidence and faith reposed by the
 shareholders on the Board and the Management team which has, in my
 view, spurred the Company to take on more challenges. I have great
 pleasure in announcing that taking into account the performance and
 prospects, the Board has recommended issuance of bonus shares in the
 ratio of 1:1. I am aware that you have been waiting for a bonus issue
 for some time now and I must thank you for your patience.
 
 Finally, I must applaud the tireless efforts, dedication and commitment
 of our employees who have helped us reach where we are now and look
 forward to the benefit and comfort of their association in the journey
 forward. On behalf of your Company, I sincerely appreciate the loyalty
 and support of the extended family of dealers and countless customers
 as we re-dedicate ourselves to serve them better.
 
 Looking forward to your continuing support,
 
 
 
 
 Yours sincerely,
 
 
 
 Dheeraj G Hinduja
 Chairman, Ashok Leyland Limited
 
 
 Dated: June 16, 2011