1. The reports, which have appeared in today''s Indian newspapers, refer to a purported ''sting'' operation in May 2005, regarding a proposal to supply 20 Stallion 4x4 trucks to a humanitarian aid agency working in Sudan. . The "sting" operation, alleged to have been carried out by the BBC''s News night programme, claims that certain directors of Ashok Leyland breached the UK''s "The Trade in Controlled Goods (Embargoed Destinations) Order 2004". This is not the case. The vehicles mentioned in both the GIAD co-operation agreement (see below) and the "sting" operation were meant for humanitarian use and so are not covered by the Controlled Goods Order. As such, we have been legally advised that no UK law has been infringed.

2. By way of further clarification, it may be noted that the 4x4 logistics trucks are designed for passenger and goods transportation in off-road situations and are not designed for combat applications.

3. On February 12^th, 2005, Ashok Leyland (AL) signed a Co-operation Agreement with GIAD FOR AUTOMOTIVE INDUSTRY CO., (GIAD) a Company registered under the Sudanese Companies Act, 1925 outlining the terms under which GIAD would import AL vehicles in SKD condition for assembly in Sudan. The vehicles covered by the Agreement are Falcon large buses, Eagle mini buses and Stallion 4x4 trucks.

4. The Agreement refers to GIAD assembling the vehicles for sales to the public and private sectors and neighboring countries. GIAD has confirmed that these are intended for civilian passenger transport and humanitarian purposes and that under no circumstances, any vehicle will be used for anything other than the above-mentioned purposes.

5. GIAD have not opened a Letter of Credit within stipulated time and therefore the agreement has not become operational and no transactions have been made.

6. This Co-operation Agreement was entered into in the normal course of business, as part of AL''s export development thrust in several countries including South Asian, Middle East and African countries. Such agreements are not, and in particular, this Agreement with GIAD was not informed to the company''s Board of Directors because AL Board processes do not deal with specific country-wise operational details of the company''s export function. The company can also confirm that the Hinduja Brothers, who are not on the board of the company, have had no role in securing this agreement either directly or indirectly.

7. Ashok Leyland is registered under the Indian Companies Act, 1956 and is governed by Indian Laws. We have been legally advised that the said agreement is not in violation of any Indian law.