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BOARD OF DIRECTORS

MANAGING DIRECTORMr. Koji Shiga

DIRECTORS

Mr. A.C. Chakrabortti

Mr. J.S. Baijal

Mr. R.K. Bhatnagar

Mr. K. Sugita (till 04.10.2011)(Alternate Director to Mr. Koji Arima)

Mr. K. Asai

Mr. H. Wakabayashi (till 29.07.2011)

Mr. K. Arima

Mr. Minoru Ono (Alternate Director to Mr. Koji Arima) (w.e.f. 13.02.2012)

Mr. E. Seto

Mr. T. Nanko(Alternate Director to Mr. E. Seto)

Mr. T. Aoyama (till 01.07.2011)(Alternate Director to Mr. Koji Arima)

Mr. M. Adachi (w.e.f. 29.07.2011)

Mr. N. Takamura (Alternate Director to Mr. M. Adachi)(w.e.f. 29.07.2011)

CONTENTS : Page No. (s)

Board of Directors 1

Notice 2-7

Directors’ Report 8-12

Corporate Governance Report 13-22

Auditors’ Report 23-25

Balance Sheet 26

Profit & Loss Account 27

Cash Flow Statement 28-29

Notes 30-55

COMPANY SECRETARY

Mr. Alok Mathur

AUDITORSPrice WaterhouseChartered Accountants,Gurgaon

REGISTERED OFFICEB-1/D-4, Ground Floor,Mohan Co-operative Industrial EstateMathura Road,New Delhi-110044Tel. No. : 26953994, 26952308Fax : 26953993E-mail : DNIN_CS@denso.co.in

WORKS1. Noida-Dadri Road, P.O. Tilpatta, Tehsil-Dadri, District Gautam Budh Nagar, Uttar Pradesh-203 207

2. Plot No. 16, Industrial Park-II Salempur, Mehdood, Haridwar Uttrakhand - 249402

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NOTICENotice is hereby given that the Twenty Seventh Annual General Meeting of the Company is scheduled to be held on Saturday, 8th day of September, 2012 at 10.30 a.m. at Sri Sathya Sai International Centre, Pragati Vihar, Institutional Area, Lodhi Road, New Delhi-110 003 to transact the following business:

ORDINARY BUSINESS :

1. To receive and adopt the Audited Profit and Loss Account for the year ended March 31, 2012 and the Audited Balance Sheet as at that date together with the reports of the Directors’ and Auditors’ thereon.

2. To appoint a Director in place of Mr. E. Seto, who retires by rotation and being eligible offers himself for re-appointment.

3. To appoint a Director in place of Mr. R.K. Bhatnagar, who retires by rotation and being eligible offers himself for re-appointment.

4. To consider and if thought fit, to pass, with or without modification, the following resolution as an Ordinary Resolution:

“Resolved that M/s. Deloitte Haskins & Sells, Chartered Accountants, (ICAI Registration No. 015125N) be and are hereby appointed Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company at the remuneration as may be determined by the Board of Directors in consultation with the Auditors.”

SPECIAL BUSINESS:

5. To consider and if thought fit, to pass with or without modification, the following resolution as a Special Resolution.

“RESOLVED THAT Mr. Koji Shiga, be and is hereby re-appointed as Managing Director of the Company as a non rotational Director under Article 70(e) of the Articles of Association of the Company.”

“RESOLVED FURTHER THAT Subject to the provisions of Section(s) 198,269,309, 310 & 311 and any other applicable provisions of the Companies Act, 1956, if any, and such other approvals as may be required, the re-appointment of Mr. Koji Shiga as the Managing Director of the Company for a period of three years w.e.f. 28th July, 2012, be and is hereby approved on the terms and conditions as stated in the annexure to the notice and as approved by the Board vide its resolution dated 4th June 2012.”

“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to vary the remuneration of Mr. Koji Shiga, subject to the limits specified and according to the provisions of Section(s) 198,269,309,310 & 311 and Schedule XIII to the Companies Act, 1956 and variation in the applicable statutes from time to time.”

“RESOLVED FURTHER THAT in addition to the remuneration within the limits specified under Schedule XIII, Mr. Koji Shiga, be paid such perquisites and benefits as are specifically applicable to expatriate managerial personnel as specified in the Section II of Part II of Schedule XIII to the Companies Act, 1956, and as are payable to expatriate employees as per the rules of the Company, subject to overall limit as specified under Section II (1)(B), Part II of Schedule XIII to Companies Act, 1956.”

“RESOLVED FURTHER THAT the above remuneration shall constitute the minimum remuneration payable in case of absence or inadequacy of profits during the tenure of Mr. Koji Shiga, Managing Director of the Company.”

“RESOLVED FURTHER THAT Mr. M. Ono, Director and Mr. Alok Mathur, Company Secretary of the Company be and are hereby severally authorized to complete necessary formalities as may be required under the Companies Act, 1956, and to do all such acts as may be necessary for this purpose.”

6. To consider and if thought fit, to pass with or without modification, the following resolution as a Special Resolution.

“RESOLVED THAT Subject to the provisions of Section(s) 198,269,309, 310 & 311 and any other applicable provisions of the Companies Act, 1956, if any, and such other approvals as may be required, the appointment of Mr. M. Ono as Whole Time Director of the Company for a period of three years w.e.f. 13th February, 2012, be and is hereby approved on the terms and conditions as stated in the annexure to the notice and as approved by the Board vide its resolution dated 13th February 2012.”

“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to vary the remuneration of Mr. M. Ono subject to the limits specified and according to the provisions of Section(s) 198,269,309,310 & 311 and Schedule XIII to the Companies Act, 1956 and variation in the applicable statutes from time to time.”

“RESOLVED FURTHER THAT in addition to the remuneration within the limits specified under Schedule XIII, Mr. M. Ono, be paid such perquisites and benefits as are specifically applicable to expatriate managerial personnel as specified in the

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Section II of Part II of Schedule XIII to the Companies Act, 1956, and as are payable to expatriate employees as per the rules of the Company, subject to overall limit as specified under Section II (1)(B), Part II of Schedule XIII to Companies Act, 1956.”

“RESOLVED FURTHER THAT the above remuneration shall constitute the minimum remuneration payable in case of absence or inadequacy of profits during the tenure of Mr. M. Ono, Director of the Company.”

“RESOLVED FURTHER THAT Mr. K. Shiga, Managing Director and Mr. Alok Mathur, Company Secretary of the Company be and are hereby severally authorized to complete necessary formalities as may be required under the Companies Act, 1956, and to do all such acts as may be necessary for this purpose.”

7. To consider and if thought fit, to pass with or without modification, the following resolution as a Special Resolution.

“RESOLVED THAT Subject to the provisions of Section(s) 198,269,309, 310 & 311 read with Schedule XIII and any other applicable provisions of the Companies Act, 1956, if any, and such other approvals as may be required, the remuneration of Rs. 4,276,432 paid to Mr. Koji Shiga, Rs. 3,675,187 paid to Mr. K. Sugita and Rs. 2,178,810 paid to Mr. T Aoyama in the year 2011-12 including Provident Fund Contribution on their salary paid in Japan as stated in the annexure to the notice, be and are hereby ratified and confirmed.”

“RESOLVED FURTHER THAT Mr. M. Ono, Director and Mr. Alok Mathur, Company Secretary of the Company be and are hereby severally authorized to complete necessary formalities as may be required under the Companies Act, 1956, and to do all such acts as may be necessary for this purpose.”

By Order of the Board

Place: New Delhi Alok Mathur

Date : 20th July, 2012 Company Secretary

NOTES :

(A) The relative Explanatory Statement pursuant to Section 173 of the Companies Act, 1956 in respect of business under item no(s). 5, 6 and 7 above, is annexed.

(B) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND ON POLL, VOTE INSTEAD OF HIMSELF. THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXY IN ORDER TO BE EFFECTIVE MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING.

(C) The Register of Members of the Company will be closed from 1st September 2012 to 8th September 2012, both days inclusive.

(D) Pursuant to the provisions of Section 205A of the Companies Act, 1956, the amount of dividend which remains unpaid/unclaimed for a period of 7 years would be transferred to the “Investor Education and Protection Fund (IEPF)”, constituted by the Central Government and Member(s) would not be able to claim any amount of dividend so transferred to the Fund. As such, Member(s) who have not yet encashed his/their dividend warrant(s) is/are requested in his/their own interest to write to the Company immediately for claiming the outstanding dividend declared by the Company for the year ended 31.3.2005 and onwards.

(E) A brief resume, expertise, shareholding in the Company and other disclosures pursuant to Clause 49 of the Listing Agreement with respect to the Directors seeking re-appointment at the Annual General Meeting, are given in the annexure to this Notice.

(F) The Ministry of Corporate Affairs (MCA) has permitted paperless compliances by the Companies; vide its circulars No. 17/2011 and No. 18/2011 dated April 21, 2011 and April 29, 2011 respectively. MCA has clarified that service of documents on Members by e-mail will constitute sufficient compliances with Section 53 of the Companies Act, 1956, provided the Members are given an advance opportunity to register their Email address or changes, if any, therein with the Company. Members are requested to provide their email ID to our Registrar M/s MAS Services Ltd. at T- 34, Second Floor, Okhla Industrial Area, Phase-II, New Delhi- 110020 for the purpose of service of documents viz. Annual Report, Notice of General Meetings, Notice of Postal Ballot etc.

(G) Members are requested to intimate any change of registered address (including PIN code number) to the Registered Office of the Company, if they are holding shares in physical Mode only.

(H) PLEASE NOTE THAT NO SWEET COUPONS / GIFTS SHALL BE DISTRIBUTED AT THE FORTHCOMMING ANNUAL GENERAL MEETING.

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ANNEXURE TO NOTICE

SPECIAL NOTICE OF RESOLUTION UNDER SECTION 190 OF THE COMPANIES ACT, 1956 FOR APPOINTMENT OF AUDITOR

M/s. Price Waterhouse, Chartered Accountants, the Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and have expressed their unwillingness to be reappointed for a further term. The Company has received a Notice from a shareholder pursuant to Section 225, read with Section 190, of the Companies Act, 1956 proposing a resolution for approval of the members at the ensuing Annual General Meeting for appointment of M/s Deloitte Haskins & Sells, Chartered Accountants, as the Auditors of the Company. The subject Resolution is appearing as item no. 4 of the Notice convening the Annual General Meeting. A copy of the said Notice has been forwarded to the retiring Auditors as prescribed under Section 225 of the Companies Act, 1956. M/s Deloitte Haskins & Sells, Chartered Accountants, have also given their consent to act as Auditors, if appointed, and confirmed that the appointment, if made, would be in compliance with Section 224 (1B) of the Companies Act, 1956.

Your Directors recommend that the resolution for appointment of M/s Deloitte Haskins & Sells, Chartered Accountants as Auditors of the Company be approved by the Members.

None of the Directors is interested in or concerned with the said resolution.

ANNEXURE TO NOTICE

THE EXPLANATORY STATEMENT PURSUANT TO PROVISIONS OF SECTION 173 OF THE COMPANIES ACT, 1956 RELATING TO THE ITEMS AS STATED IN THE ACCOMPANYING NOTICE IS AS FOLLOWS;

Item No. 5, 6 & 7

The Board of Directors of the Company vide resolution dated 4th June, 2012 have re-appointed Mr. Koji Shiga as the Managing Director of the Company for a period of three years with effect from 28th July 2012. The terms of his appointment and the statement pursuant to clause 1 (B) (iv) of Section II, Part II of the Schedule XIII of the Companies Act, 1956 are given below.

The Board of Directors of the Company vide resolution dated 13th February 2012 have appointed Mr. M. Ono as Whole Time Director of the Company for a period of three years with effect from 13th February 2012. The terms of his appointment and the statement pursuant to clause 1 (B) (iv) of Section II, Part II of the Schedule XIII of the Companies Act, 1956 are given below.

The Ministry of Labour and Employment by way of special notification has amended the Employees Provident Fund Scheme, 1952 and Employees Pension scheme, 1995. The notification has broadened the ambit of both the schemes to include a new category of employees specified as “International Worker”. Denso India Ltd. is a subsidiary of Denso Corporation, Japan. Denso Corporation, Japan has been deputing some of its employees (the “Expatriate Employees”) from Japan to work with Denso India from time to time. Such expatriate employees work on a split payroll – receiving a part of their salary from Denso Japan in Japan and balance part from Denso India in India. In terms of the notification Japanese Expatriate Employees (including Directors) working in the Company are covered under the new category of “International Worker”. Pursuant to the FAQs issued by the Employees’ Provident Fund Organisation on May 6th 2011, the Company has accounted for social security (Provident Fund) contributions on total salary of International Workers instead of such contributions having been paid earlier only on salary paid to such Japanese Expatriate Employees in India; such payment being necessary in compliance of aforesaid notification. Accordingly a sum of Rs. 2.58 million towards Provident Fund of Mr. Koji Shiga, a sum of Rs. 2.45 million towards Provident Fund of Mr. K Sugita and a sum of Rs. 1.81 million towards Provident Fund of Mr. T. Aoyama was paid in the year 2011-12.

Consequent to payment of Provident Fund contribution as aforesaid, the remuneration paid to Mr. Koji Shiga, Mr. K Sugita and Mr. T Aoyama in the year 2011-12 requires approval of the shareholders in terms of the limits specified under Schedule XIII of the Companies Act, 1956. The requisite statement pursuant to clause 1 (B) (iv) of Section II, Part II of the Schedule XIII of the Companies Act, 1956 is given below.

I General Information

(1) Nature of Industry Manufacturing of Automotive Electrical Components

(2) Date or expected date of Commencement of commercial production 10th January, 1985

(3) Expected date of Commencement of activities for a new Company N.A

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(4) Financial Performance

For the year ended 31st Mar 2012

Rs. MillionGross Sales 11,351Sales (Net of Excise) 10,362 (Loss)/Profit (before exceptional and Extraordinary items and Tax) (691)Exceptional items 26 (Loss)/Profit for the year before Taxation (717)Tax Expenses 5(Loss)/Profit for the year (722)

(5) Export performance & foreign exchange collaboration

Rs. MillionEARNINGS [On Accrual Basis]:FOB value of Exports 90OUTGO [On Accrual Basis]:C.I.F. value of ImportsRaw Material & Component (Including Trading Goods) 3,453 Stores & Spare 35 Capital Goods 467 OUTGO [On Accrual Basis]:ExpenditureRoyalty 257 Technical Service Fees and Application Cost 179 Travelling, Training and Others 16

(6) Foreign Investment or Collaborators

Denso Corporation, Japan, Sumitomo Corporation, Japan & Asmo Co. Ltd., Japan are promoter foreign investors and collaborators.

II Information about the appointee

Name Mr. Koji Shiga Mr. M.Ono Mr. K.Sugita Mr. T.Aoyama Period Mr. Koji Shiga was

appointed w.e.f. 28-07-2009 for three year up to 27-07-2012 and has been reappointed w.e.f. 28-07-2012 for three year up to 27-07-2015.

Mr. M.Ono has been appointed w.e.f. 13-02-2012 for three years up to 12-02-2015.

Mr. K.Sugita was appointed w.e.f. 23-02-2007 and ceased to be Director from 04-10-2011.

Mr. T.Aoyama was appointed w.e.f. 29-01-2010 and ceased to be Director from 01-07-2011.

1 Back Ground details Mr. Koji Shiga joined Denso Corporation, Japan in the year 1977 in the Production Department. He has served Denso Thailand for a period of 9 years out of which for 4 years he was Dy. Managing Director. His educational qualification includes a post graduate degree in Mechanical Engineering from the Gifu University, Japan. He has experience of over 34 years in the area of Production of Auto parts.

Mr. Minoru Ono joined Denso Corporation, Japan in the year 1985 and served in the Finance & Accounting Department. He also served Denso Manufacturing Midlands Ltd for 6 years and Philippine Auto Components Ltd for 5 years in the Finance & Accounting He has over 26 years experience in the Finance & Accounting and Business Planning Area. His educational qualification includes a Bachelor of Economics degree from Yokohama National University, Japan.

Mr. K. Sugita joined Denso Corporation, Japan in the year 1987. His educational qualification includes a graduate degree in Commercial Science from the Waseda University, Japan. He has over 24 years experience in the Accounts & Finance and Business Planning Area.

Mr. T. Aoyama joined Denso Corporation, Japan in the year 1986. His educational qualification includes a graduate degree in Mechanical Engineering from the Musashi Industrial University, Japan. His total experience in the Production Engineering is over 25 years.

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2 Past Remuneration Rs.4.28 Million for the year 2011-12.

Rs. 0.58 Million for the year 2011-12.

Rs.3.67 Million for the year 2011-12.

Rs.2.18 Million for the year 2011-12.

3 Recognitions or Awards N.A N.A N.A N.A

4 Job Profile & his suitability

Managing Director having overall control of all production facilities. Mr. Koji Shiga has expertise and experience of over 34 years particularly in the field of Mechanical engineering.

Chief Financial officer and Head of Business Planning, Legal and HR functions. He has expertise and experience of over 26 years in Finance & Accounting and Business Planning Area.

Chief Financial officer and Head of Business Planning and Legal. He has expertise and experience of over 24 years in Finance & Accounting and Business Planning Area.

Head Plant Engineering. He has expertise and experience of over 25 years particularly in the field of Production Engineering.

5 Remuneration proposed

Salary In the range of Rs.70,000/- to 150,000/- per month

In the range of Rs. 65,000/- to Rs. 100,000/- per month

In the range of Rs. 65,000/- to Rs. 100,000/- per month

In the range of Rs. 65,000/- to Rs. 100,000/- per month

A. Other benefits DNIN shall provide the following for the Director and his family.

1) Accommodation

a) Provide fully furnished (including furniture, soft furnishing, electrical equipment like Air conditioner with stabilizer, UPS, transformer, refrigerator, oven and further kitchen appliances and colour T.V. and telephone connection with ISD) accommodation.

b) Repair & maintain such premises and security guard at such premises.

c) Reimburse expenses relating to electricity, gas and water.

d) Reimburse expenses of servants.

e) Provide telephone/ cellphone facilities and meet all related expenses except expenses on long distance personal calls

2) Car a) At the cost of DNIN to be provided with driver for official and private use.

b) Cost of car including expenses of maintenance and running of the vehicle will be borne by DNIN.

c) If, however, Director wishes to import his own car, he may do so at his cost. Expenses towards maintenance and running of the car, even in this case, shall be borne by DNIN.

3. Business Travel, Medical Expenses, PF Contribution, Reimbursement of Language training expenses ,Working Rules & Regulation and Return expenses

As per DNIN rules for category of Directors as per DNIN designation or equivalent subject to Government Regulation as may be applicable.

Note:- To the extent that these salaries, perquisites and facilities are taxable under the Income Tax Rules, the tax will be borne by the Directors and will be deducted at source by DNIN. All reference to DNIN in the above are to DENSO INDIA LIMITED, NEW DELHI.

6 Comparative remuneration with industry

The Company is engaged in manufacturing of automotive components with over Rs. 1100 cr. turnover. The Company has two manufacturing plants with three warehousing locations and a central spares parts division (CSPD) with over 1000 employees. The Company is a public limited company with over 14,000 shareholders and is listed on the Bombay, Delhi and Madras Stock Exchanges.

Given the size, complexity and the nature of business, the remuneration paid / proposed to be paid to above mentioned Directors is in line with other similar Companies.

7 Pecuniary relation ship Excepting the payment of remuneration for their service as Managing Director / Director, as detailed hereinabove, above mentioned appointees have no other pecuniary relationship with the Company.

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III Other Information

(1) Reason for Loss Rising Input costs, Adverse foreign exchange scenario and weakening rupee, Disturbance and labour unrest with major customers, fluctuating economic growth & fierce competition.

(2) Steps for improvement Stricter cost control measures, Setting up of new factory at Banglore and strategy to focus on core business area are the steps for improvement.

(3) Expected increase in productivity & profit in measurable terms

The Company has chalked out mid term plan up to year 2015 and has targeted Cumulative average Growth Rate of 21% in its core business areas.

In order to give effect to above, terms and conditions of the appointment of the Directors have to be approved by the members. The Board recommends the resolutions to the members for their approval.

Mr. Koji Shiga and Mr. M. Ono are interested in the resolutions for appointment as Managing Director and as Whole Time Director respectively and the resolution for ratification and approval of past remuneration including payment of provident fund contribution on salary paid in Japan to the extent of contribution on their salary. None of the other directors of the Company is concerned or interested in the resolutions.

By order of the Board

Place : New Delhi Alok Mathur

Date : 20th July, 2012 Company Secretary

ANNEXURE TO THE NOTICE DATED 20TH JULY, 2012 – ITEM NOS. 2 & 3DETAILS OF DIRECTORS SEEKING RE-APPOINTMENT

AT THE ANNUAL GENERAL MEETING

(IN PURSUANCE OF CLAUSE 49 OF THE LISTING AGREEMENT)

Name of Directors Mr. E. Seto Mr. R.K. Bhatnagar

Date of Birth 4-Jan-59 26-Jul-35

Date of Appointment 26-May-09 28-Mar-01

Expertise Legal and automotive business development

Plant operations control

Qualification Degree in Law from the Waseda University

Bachelor degree from Delhi University

Directorship held in other Companies J.J. Impex (Delhi) Pvt. Ltd., Munjal Kiriu Industries Pvt. Ltd., NKC Conveyors India Pvt. Ltd., SML Isuzu Ltd.

PF Management Consultants Pvt. Ltd.

Committee Positions Nil Member of Audit Committee, Investors Grievance Committee, Remuneration Committee of Denso India Ltd.

Shareholding in the Company as on 31-03-2012 Nil Nil

Relationship with other Directors None None

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DIRECTORS’ REPORTYour Directors present Twenty Seventh Annual Report of the Company together with the audited statement of accounts for the financial year ended 31st March 2012.

FINANCIAL RESULTS

For the year ended

For the year ended

31.03.2012 31.03.2011

Rs. Million Rs. Million

Gross Sales 11,351 10,163

Sales (Net of Excise) 10,362 9,274

(Loss)/Profit (before exceptional and Extraordinary items and Tax)

(691) 51

Exceptional items 26 -

(Loss)/Profit for the year before Taxation (717) 51

Tax Expenses 5 31

(Loss)/Profit for the year (722) 20

MANAGEMENT DISCUSSION AND ANALYSIS:

The year under review was not only a difficult year for the Company, it was a challenging year for the Indian economy as well. The Indian economy substantially slowed down during 2011-12, as compared to the previous year. Overall GDP growth rate dropped from 8.4% in 2010-11 to 6.5% for the year 2011-12. The growth rate which had dropped down to 6.7% in 2008-09 was expected to rebound and be around 9% or more during 2011-12. However, contrary to expectation, with every passing month in 2011, it became more and more evident that the rate of growth was on the decline. Index of Industrial Production (IIP) growth declined from 8.2% in 2010-11 to 2.8% in 2011-12. Growth rate of eight core industries declined from 6.6% during 2010-11 to 4.4% in 2011-12. Diverse factors lead to this unforeseen down turn. The global factors like the Euro zone crisis, recession in Europe, sluggish growth rate in industrialized nations like USA, stagnation in Japan, political crisis in the Middle East also contributed to the slowdown. Such drastic reversal from the upward swing to global melt down and consequent weakening of India economy led to a general negative outlook and depressed market sentiments.

During 2011-12 the Rupee depreciated by over 14% against the US$, 13% against the Sterling Pound, 8% against the Euro and 15% against the Japanese Yen. The cascading effect of Rupee depreciation was sorely felt on the already high imported commodity prices. The Indian markets also saw a large decline in the in-flow of funds from the Foreign Institutional Investors partly due to the concerns over the

longer term impact of higher current account deficits and partly due to risk aversion to invest in volatile markets. The flight of capital by foreign investors was also influenced by the melt down in Europe. Sovereign debt problem of euro area weighs heavily on global recovery. Concern about sustainable solution to the sovereign debt problem and vulnerability of the banking sector still persist. Heightened risk aversion and the resultant slowing of capital flows will have a significant adverse impact on emerging and developing economies including India.

Spiraling oil prices, high inflation, rising interest rates severely dampened business sentiments thereby contributed to the slowdown. The year 2011-12 started with 9.7% inflation which touched double digits in September 2011 and thereafter declined to 7.7% in March 2012. The major factors contributing to such inflation were high prices of vegetables, eggs, meat and fish due to change in dietary pattern of rural households, increasing global commodity prices leading to higher cost of production and continuous high prices of crude oil.

OPERATIONS:

The factors which led to general negative outlook and depressed market sentiments affected the Company adversely. The margins of the Company remained under severe pressure during the year due to rising input costs, adverse foreign exchange scenario and weakening rupee, disturbances and labour unrest with major customers, fluctuating economic growth and fierce competition causing a loss of Rs. 722 million after tax.

The margins and profits are under pressure not only in the Company but the situation is more or less same with competitors and other Auto components supplier as well. Same is the scene with car manufacturers. The end customers are continuously demanding better features, higher specifications at lower cost in the new cars and in new models of the present cars. The margins are therefore under pressure with car manufacturers also. The car manufacturers in turn pass on this pressure to the components suppliers.

The problem was worst confounded due to labour unrest at Manesar plat of Maruti Suzuki India Limited (MSIL), which is our biggest customer. This severely disturbed production schedule of the Company putting inventory and imports out of sync with production. The Company faced challenges of erratic demand due to fluctuating economic scenario affecting growth in automobile sector during the year. It was therefore necessary to import more material & components and carry higher inventory to ensure 100% committed supply to the customers. This was necessary to retain market share. Even though these put pressure on profit margins and enhance working capital exposure, nevertheless are imperative to retain market share and customer confidence.

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The auto components industry is facing the pressure of erratic economic growth. With the increase in competition, this pressure is likely to increase further in the coming years. The Company is therefore aiming to bring in more efficient, cost effective and newer technology products where price realization could be better.

FACTORY AT HARIDWAR

Your Company had established a factory at Haridwar in year 2009, mainly to cater to the needs of M/s Hero MotoCorp Ltd. plant at Haridwar as well as to avail tax incentives being offered by the Government of Uttarakhand. The Company’s factory at Haridwar is fully operational and performing satisfactorily. M/s Hero MotoCorp Ltd. (previously Honda Honda Motors Ltd.) is witnessing positive growth and has sold 6.2 million two wheelers in 2011-12 up from 5.4 million vehicles sold in previous year. This trend augur well for Haridwar factory of your Company.

NEW FACTORY AT BANGALORE

Your Company will set up a new factory at Bangalore during 2012-13. This proposed factory at Bangalore will cater to the requirements of two wheelers manufacturers in southern India and mainly supply to Honda Motorcycle and Scooter India Pvt. Ltd. (HMSI) which is one of the main customers for two wheelers products of the Company. HMSI plans to put two plants in South. To secure HMSI growing business in South, in the presence of strong competition, the company has decided to establish this new factory. The Company is in process of taking suitable premises on lease at Bangalore to set up the Factory.

SMALL MOTOR BUSINESS

Pursuant to the Special Resolution passed by the Shareholders of the Company in terms of the provisions of Section 293(1) (a), of the Companies Act, 1956, under postal ballot system, the Company has sold Small Motor Business i.e Front/ Rear Wiper, Power Window Motors, Blower Motors, Electric Fan Motors and Engine Cooling Modules to DENSO Haryana Private Limited, a DENSO group company, on a going concern basis, by way of slump sale. The consideration for the sale on a slump sale basis is Rs. 1,477 million, out of which 90% amount i.e. Rs. 1,329 million has been received on signing the agreement and balance 10% will be received on closing date, along with the adjustments on account of changes in working capital position and additional capital investment, relatable to Small Motor Business up to the closing date, which is scheduled to be in October 2012.

The Company’s Electrical Parts Business for four wheeler segment i.e Alternator and Starter and Electrical Parts Business for two wheeler segment i.e CDI and Magneto hold the key to growth and profitability in future. Alternator/ Starter (in case of four wheelers) and CDI/ Magneto (in case of two-wheelers) businesses constitute the core businesses of the Company since they contribute to vehicle engine performance by optimizing

fuel cost and reducing emissions. With increased fuel costs and regulatory drive towards reduction in emissions, and with the DENSO’s inherent strengths in technical innovation, these two businesses are expected to be the growth engine for Company’s success. Accordingly, the Company has decided to focus and concentrate on these two businesses (i.e. Alternator/ Starter and CDI/ Magneto businesses). From an operational perspective also, the transfer of Small Motor Business would improve capacities within the existing manufacturing facility, which would be used for expansion and growth of other two businesses.

OPPORTUNITIES AND THREATS:

Though there are projections of good growth of the Indian car and two wheelers market in the medium to long term based on growth in household income of burgeoning middleclass in India, there are challenges also for the industry. The market will be subject to economic cycles and its sensitivity to fuel prices and interest rates, can cause huge fluctuations. These growth prospects will lure more local and international players, the competition will intensify and predictability of volumes and product mix will be increasingly challenged.

The vehicle manufacturers expect component industry to improve scalability and develop a reliable and robust manufacturing foundation for growth. To deliver global levels of technology and quality products, the vehicle manufacturers require their suppliers to be able to localize the systems or components supplied by them. The balance will have to be imported and to that extent vehicle manufacturers and component suppliers will be exposed to foreign exchange movements and higher costs. The ability to localize components and systems will open up vast opportunities for component suppliers and to the extent the component suppliers depend on imports, they will be exposed to ever increasing threat of exchange rate fluctuations. The Company is making constant endeavors for localization of various parts and components and identifying cost effective ways of manufacturing them in-house or through vendors.

The other threat or growth bottleneck to which component manufacturers are exposed is in the area of human resources. Good talent is critical for technology absorption, quality manufacturing and cost management. However growth and emerging opportunities in other sectors of Indian economy is making this vital resource scarcer day by day.

The prevalent governance slowdown caused by delayed response of the Government machinery to the vital issues requiring immediate attention and quick disposal remains an area of concern. Fiscal Deficit has continued to expand and is estimated to cross 5.9% of GDP by analysts, contrary to budget estimates of 4.6%. Continually high oil prices, the possibility of having to import coal at higher-than estimated rates to meet the rising power gap and the continuing subsidy burdens do not augur well for the economy.

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SEGMENT WISE PERFORMANCE:

The Company’s operating business is organized and managed according to the nature of product, with single Primary Reportable Segment comprising of manufacturing and supply of electrical automotive components.

OUTLOOK:

Market Survey and current trends indicate strong possibilities of high growth rate in automotive market in coming years. However presently the automobile industry is faced with the challenging times with uncertainties on the demand side in coming months, which hopefully is only a short term phenomenon. The total automobile market is expected to grow by double digits annually for the next 5 years. India is emerging as a small car hub in the Asia Pacific region. This is evident from the fact that almost all the major international automobile manufacturers have registered their presence in India and have started manufacturing small cars in this country. These companies are either setting up or expanding their existing manufacturing base not only to enter the domestic market but also for exports. India is gradually becoming a major manufacturing base for export of passenger cars as well as other utility vehicles. Recession in the industrialized nations, stagnation in Japan and China and a relatively large domestic market is making India a much more attractive destination. It is forecast that by 2020 India would be one of the top five automobile manufacturing countries in the world. These positive developments in the automobile sector would augur well for the auto component industry and your company.

Customer trends indicate that the local design & development as well as expansion of production facilities is moving towards South & Mid West areas of India. It is expected that fuel price parity shall see higher growth rate in diesel based vehicles. The Competition will become intense and adopt strategy of price differentiation to gain market share. Awareness and regulation on fuel efficiency will become a big trend in India in the next few years as it helps both the economy and the environment. The Company is conscious of these developments and poised to take advantage of these trends. Setting up a factory in Bangalore and decision to focus on Alternator/ Starter (in case of four wheelers) and CDI/ Magneto (in case of two-wheelers) businesses, which contribute to vehicle engine performance by optimizing fuel cost and reducing emissions, are the steps in that direction. The Company has chalked out mid term plan up to year 2015 and has targeted CAGR of 21% in two businesses Alternator/ Starter as well as CDI/ Magneto.

INTERNAL CONTROL SYSTEMS:

The Company has an adequate system of internal controls to ensure that transaction are properly recorded, authorized and reported apart from safeguarding Company’s assets. Well-experienced Chartered Accountant firm appointed by the Company for internal audit, reviews operations at all the

establishments of the Company. All significant internal audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews the adequacy and effectiveness of the internal audit.

HUMAN RESOURCES:

Your Directors wish to place on record their appreciation for the commitment and dedication shown by the employees at all the areas of operation of the Company. Various HR initiatives are taken to align the HR policies to the growing requirements of the business. The Industrial Relations remained cordial during the year. As on 31st March 2012 your company had 1057 employees.

INSURANCE

All the assets of your Company including Plant & Machinery, Building, Equipment, and Vehicles etc. have been adequately insured.

CAUTIONARY NOTE:

Certain statements in the “Management Discussion and Analysis” section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors’ envisage in terms of the future performance and outlook.

FIXED DEPOSITS:

The Company has not invited or availed Fixed Deposits from the public during the year under review.

AUDIT COMMITTEE

During the year the Audit Committee Meetings were conducted as per the provisions of listing agreement with the stock exchange (s). The details about the functioning of the committee are being enumerated in the Corporate Governance report section, which is part of the Annual Report for the year ended March 31, 2012.

AUDITORS

M/s. Price Waterhouse, Chartered Accountants, retire at forthcoming Annual General Meeting and have requested for not to be considered for reappointed as Statutory Auditors. Observations made in the Auditors’ Report read with Notes to the Financial Statements are self explanatory and therefore, do not call for any further comments under Sec. 217 (3) of the Companies Act, 1956.

DIRECTORS:

Mr. M. Adachi was appointed as Director to fill casual vacancy created due to resignation of Mr. H. Wakabayashi on 29.07.2011.

Mr. N. Takamura was appointed as Alternate Director to Mr. M. Adachi in the Board Meeting held on 29.07.2011.

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Mr. M. Ono was appointed as Alternate Director to Mr. K. Arima in the Board Meeting held on 13.02.2012. Mr. Ono is in the whole time employment of the Company. His Appointment as Whole Time Director with effect from 13th February 2012 by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

The present tenure of Mr. Koji Shiga, Managing Director will expire on 27th July 2012. The reappointment of Managing Director with effect from 28th July 2012 by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

Mr. H. Wakabayashi, Mr. T. Aoyama and Mr. K Sugita resigned from the Board during the year under report. Your Directors take this opportunity to place on record their deep appreciation for the valuable guidance and unstinted support given by them during their association with the Company

Mr. E. Seto and Mr. R. K. Bhatnagar retire from the Board of Directors by rotation in accordance with the provisions of the Articles of Association of the Company and are eligible for reappointment.

DIVIDEND:

Considering the present financial condition and current market situation no dividend is recommended for the year ended March 31, 2012.

PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO.

The Statement pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in the Annexure forming part of this Report.

PARTICULARS OF EMPLOYEES

As per the existing salary limits of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, as on 31st March, 2012, no employee of the Company is covered.

DIRECTORS RESPONSIBILITY STATEMENT AS PER SECTION 217(2AA) OF THE COMPANIES ACT, 1956.

1. The Financial Statement for the year ended 31.03.2012 are prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

2. The Directors of Denso India Ltd. accept the responsibility for the integrity and objective of these Financial Statement as reflected through the consistent application of the Accounting Policies as well as for the estimates made and the judgment exercised relating to matters not concluded by year-end.

3. The Directors believe that the Financial Statements reflect fairly the form and substance of the transactions concluded and reasonably present the Company’s financial condition and true and fair view of the results of the operation for the year and the state of affairs of the business as at 31st March, 2012.

4. The Company has installed an accounting system and the financial statements have been prepared on a going concern basis along with a system of controls which are reviewed, evaluated and updated on an on going basis.

5. Our internal Auditors have conducted periodic audits to provide reasonable assurance that the established policies and the procedures of the Company have been followed for safeguarding the assets of the Company and for preventing any form of fraud and other irregularities subject to the inherent limitations in any system and procedure and coverage thereof that should be recognized in weighing the assurance provided by any system of internal controls. These have been reviewed periodically at Audit Committee Meetings.

6. The financial statements have been audited by M/s Price Waterhouse, Chartered Accountants, the statutory auditors.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank the customers, vendors, shareholders, the bankers, the Central and State Governments and other agencies for their continued support, co-operation and contribution during the year under review. Your Directors place on record their deep appreciation of the management of Denso Corporation, Japan, Sumitomo Corporation, Japan, ASMO Co. Ltd., Japan, Maruti Suzuki India Limited and Denso International India Pvt. Ltd for their assistance and support during the year.

For and on behalf of the Board

NOIDA Koji Shiga M. Ono4th June, 2012 Managing Director Director

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ANNEXURE TO DIRECTORS’ REPORT

INFORMATION REQUIRED UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988.

A. CONSERVATION OF ENERGY

Form A of Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 – Not Applicable.

B. TECHNOLOGY ABSORPTION

The Company has obtained technical know how for the manufacture of auto components from Denso Corporation, Japan. The process of absorption of the technology is a continuing process

No expenditure either of Capital or Revenue nature on Research & Development has been incurred during the year under review.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

Efforts made : New models are being developed to help in further localisation by vehicle makers.

Benefits derived: In-house skills are being developed in design, production engineering and endurance testing. Extensive help is also being provided to vendors to upgrade their technology to meet quality requirements.

a) Technology imported: Import of technology for the manufacture of auto electricals

b) Year of import:

Product Year

Alternators 1984

Regulators -do-

Starters -do-

Wiper Motors (with Link) -do-

AC Generators / Flywheel Magnetos 1988

Ignition coils for two/thee wheeler -do-

CDI Systems for two/three wheelers -do-

Fan Motor Assembly for Ventilation/ -do-

Engine Cooling -do-

c) Has technology been fully absorbed, areas where this has not taken place, reasons therefore and future plans of action.

Not applicable.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company is pursuing its export plans. The exports of the products of the Company have been made to affiliates of Denso Companies around the world.

Rs. MillionEARNINGS [On Accrual Basis]:FOB value of Exports 90OUTGO [On Accrual Basis]:C.I.F. value of ImportsRaw Material & Component (Including Trading Goods)

3,453

Stores & Spare 35 Capital Goods 467 OUTGO [On Accrual Basis]:ExpenditureRoyalty 257 Technical Service Fees and Application Cost

179

Travelling, Training and Others 16

We are one of the major suppliers in our range of products to Maruti Suzuki India Limited for majority of their export designated vehicles.

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Corporate Governance Report:

The Directors are pleased to present Eleventh Corporate Governance Report for the financial year 2011-12. The Securities and Exchange Board of India (SEBI) introduced the Code of Corporate Governance for implementation by the listed Companies vide an amendment to the Listing Agreement.

Corporate Governance relates to number of laws, rules, regulations and voluntary practices to enable companies to have good and efficient financial and human capital, perform to the best of the efficiency resulting in maximization of the long term value in the hands of shareholders at the same time respecting the aspect of multiple stake holders which include the society as well.

1. Company’s Philosophy on “Code of Corporate Governance”

The Company is committed to achieve highest international standards of Corporate Governance and it is a matter of integral system for our Company. We believe that Corporate Governance is dependent on transparency, maximum disclosures, un-biased monitoring, being fair to all shareholders especially minority shareholders. To ensure a good Corporate Governance, we have a good professional management team and our Board of Directors consist of Professional, Non-Executive, and Independent Directors who effectively monitor the management progress and key corporate decisions.

2. Board of Directors

As per the requirements of Corporate Governance, the composition of Board of Directors is required to have optimum combination of Non-Executive and Independent Directors along with the Executive Directors.

The Board of Directors of the Company include eminent personalities from all walks of life.

(a) Composition of Board of Directors

As of March 31, 2012, the Company’s Board of Directors consisted of eight Directors. The Board comprises of three Independent and Non-Executive Directors. As one third of the Board consists of Independent Directors, the composition of the Board is in accordance with Clause 49.

The Chairman of the Board is Mr. J.S Baijal, an Independent Non-Executive Director thereby complying with the provisions of the Code of Corporate Governance.

Details of the composition of Board and number of other Indian Public Companies in which Director is a Director or Member /Chairperson of the Committee is as hereunder:

Name of Director

Number of outside

Directorships held

Number of Committee

Memberships and

Chairmanships held (other Companies)

(excluding Indian Private Limited Companies , Foreign Companies, Section 25 Companies and Alternate Directorships)

(A) Executive and Non-Independent Directors (1) Mr. Koji Shiga* 0 0 (2) Mr. Minoru Ono

(Alternate Director to Mr. Koji Arima)

0 (w.e.f February

13,2012)

0

(B) Non- Executive and Independent Directors (1) Mr. J.S. Baijal 2 4 (2) Mr. R.K.

Bhatnagar0 0

(3) Mr. A.C. Chakrabortti

11 7(Chairman in 3)

(C) Non-Executive and Non- Independent Directors (1) Mr. Koji Arima* 0 0 (2) Mr. Michio Adachi* 0 0 (3) Mr. Keiichi Asai # 3 1 (4) Mr. Eichi Seto ## 1 0 (5) Mr. Taro Nanko

(Alternate Director to Mr. Eichi Seto)

1 0

(6) Mr. Nobuyuki Takamura (Alternate Director to Mr. M. Adachi )

1 0

* Nominee of Denso Corporation, Japan which owns 47.93% of equity in the Company.

# Nominee of the Maruti Suzuki India Limited, which owns 10.27% equity in the Company.

## Nominee of the Sumitomo Corporation, which owns 10.27% equity in the Company.

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None of the Directors on the Board holds the office of Director in more than 15 Companies nor are they members in Committee of the Board in more than 10 Committees or Chairman of more than 5 Committees. Further, there are no pecuniary relationships or transactions between the Independent Directors and the Company, except for the sitting fees drawn by the Independent Directors for attending the meetings of the Board and Committees thereof.

(b) Shareholding of Non-Executive Directors

None of the Non-Executive (Including Independent) Directors holds any shares (as own or on behalf of other persons on beneficial basis) in the Company.

(c) Board Meetings

During the financial year ended 31st March, 2012, eight meetings of Board of Directors were held. The intervening period between two Board Meetings was well within the maximum time gaps of four months as prescribed under Corporate Governance Norms. The dates on which the said meetings were held are 30th May, 2011; 19th July ,2011; 29th July, 2011; 15th September, 2011, 04th October, 2011; 12th November, 2011, 13th February, 2012 and 29th March, 2012.

(d) Procedures of Board Meetings

The Board of Directors met for eight times during the year as mentioned in the paragraph 2(c) above. The agenda papers were sent to all the Directors well in advance for each meeting and the management presented before the Board all statutory and other important items as specified in the Listing Agreement. In addition to regular business items, the following items / information are regularly placed before the Board to the extent applicable:

- Annual operating plans and budgets and any updates.

- Capital budgets and any updates.

- Quarterly results for the Company and its operating divisions or business segments.

- Minutes of meetings of audit committee and other committees of the Board.

- The information on recruitment and remuneration of senior officers just below the Board level, including appointment or removal of Chief Financial Officer and the Company Secretary.

- Show cause, demand, prosecution notices and penalty notices, which are materially important.

- Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.

- Any material default in financial obligations to and by the Company, or substantial non payment for goods sold by the Company.

- Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures

on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company.

- Details of any joint venture or collaboration agreement.

- Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property.

- Significant labour problems and their proposed solutions. Any significant development in Human Resources/ Industrial Relations front like signing of wage agreement, implementation of Voluntary Retirement Scheme etc.

- Sale of material nature, of investments, subsidiaries, assets, which is not in normal course of business.

- Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material.

- Non-compliance of any regulatory, statutory or listing requirements and shareholders service such as non-payment of dividend, delay in share transfer etc.

(e) Directors’ Attendance Record

Name of Director Number of Board Meetings held during his tenure

Number of Board Meetings attended

Attended last Annual General Meeting held on 29th August, 2011

Mr. Koji Shiga 8 8 Yes

Mr. Takashi Aoyama* (Alternate Director to Mr. K. Arima)

1 0 No

Mr. Kazuyasu Sugita**(Alternate Director to Mr. K. Arima)

5 4 Yes

Mr. Minoru Ono $ (Alternate Director to Mr. K. Arima)

2 2 NA

Mr. Nobuyuki Takamura $$ (Alternate Director to Mr. M Adachi)

6 5 No

Mr. J.S. Baijal 8 8 Yes

Mr. R.K. Bhatnagar 8 8 Yes

Mr. A.C. Chakrabortti 8 8 Yes

Mr. Koji Arima 8 1 No

Mr. Michio Adachi @ 6 0 No

Mr. Taro Nanko (Alternate Director to Mr. E. Seto)

8 6 Yes

Mr. Eichi Seto 8 0 No

Mr. Hiroyuki Wakabayashi#

2 0 NA

Mr. Keiichi Asai 8 3 Yes

* Mr. Takashi Aoyama resigned as Alternate Director to Mr. Koji Arima w.e.f.1st July,2011.

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** Mr. Kazuyasu Sugita resigned as Alternate Director to Mr. Koji Arima w.e.f. 4th Oct, 2011

$ Mr. Minoru Ono was appointed as Alternate Director to Mr. Koji Arima on 13th Feb, 2012.

$$ Mr. Nobuyuki Takamura was appointed as Alternate Director to Mr M.Adachi w.e.f 29th July, 2011.

# Mr. Hiroyuki Wakabayashi resigned as Director w.e.f 29th July, 2011.

@ Mr. Michio Adachi was appointed as Director on 29th July, 2011.

(f) Details of Directors Appointed (Brief Resume)

A brief resume of the Directors appointed during the year is as under:

Mr. Michio Adachi

Mr. Michio Adachi joined Denso Corporation in the year 1977 in the system control components Engineering Department. During his tenure, he also served Powertrain control Systems business group.

His educational qualification includes a post graduate degree in Mechanical Engineering from the Osaka University, Department of Mechanical Engineering, one of the leading and eminent institutions for Mechanical Engineering studies in Japan.

His total experience in the Mechanical Engineering area is 34 years. The expertise and vast experience of Mr. Michio Adachi particularly in the field of Mechanical Engineering shall be of immense help to enhance the value of our products to our customers as well as to the ultimate consumer of the vehicle.

Mr. Nobuyuki Takamura

Mr. Nobuyuki Takamura joined Denso Corporation, Japan in the year 1979 and served up to 1984 in the Finance & Accounting Department having charge of management accounting, reporting to top management on production division business results, Inventory and Fixed Assets control and development of cost accounting system. Mr. Takamura became in charge of Corporate Planning Department in 1984 and was instrumental in long term business planning, making Company Operation Policy and implementation of consolidated management system. From 1992 to 1995 he was in control of Global Business Planning Department, thereafter from 1995 to 1999 he served Denso Barcelona as Head of Corporate Services. He joined Denso Europe regional head quarter and served various divisions of business planning till 2002. In 2002 he became incharge of Finance & Accounting and Global Business Planning Department.

His educational qualification includes a post graduate degree in Business Administration from the Kobe University, Japan.

His total experience in the area of Business Planning and Finance & Accounting is 32 years. His vast and varied experience of corporate planning and overseas subsidiary

management will be of immense help to the national management in developing and implementing a suitable management system in line with global practices of DENSO Group.

Mr. Minoru Ono

Mr. Minoru Ono joined Denso Corporation, Japan in the year 1985 and served in the Finance & Accounting Department. He also served Denso Manufacturing Midlands Ltd for 6 years and Philippine Auto Components Ltd for 5 years in the Finance & Accounting and Business Planning Department.

His educational qualification includes a Bachelor of Economics degree from Yokohama National University, one of the leading and eminent institutions in Japan.

His total experience in the Finance & Accounting and Business Planning Area is 26 years. His expertise and rich experience in Finance & Accounting and Business Planning Area shall be of immense help to the Company in developing and implementing effective management system and leading the Company on the path of growth & progress.

3. Committees of the Board

(A) Audit Committee

The Audit Committee has been constituted as per Section 292A of the Companies Act, 1956 and the guidelines set out in the Clause No. 49 of the Listing Agreement with Stock Exchanges. As on March 31, 2012, the Audit Committee comprises of Mr. A.C.Chakrabortti, Non-Executive and Independent Director who is the Chairman of the Audit Committee, Mr. R. K.Bhatnagar, Non-Executive and Independent Director and Mr. J.S.Baijal, Non-Executive and Independent Director as members. Mr A.C.Chakrabortti was present in the previous AGM held on August 29, 2011. The members of the Committee have adequate knowledge in the field of finance and accounting. The role and “terms of reference” of the Audit Committee are enumerated below, which are as per the guidelines given in the Code of Corporate Governance.

Brief Role and Terms of Reference of the Audit Committee:

i) The Audit Committee shall meet atleast four times in a year with the gap between two meetings of not more than four months.

ii) The Audit Committee shall meet compulsory before the finalization of Annual Accounts.

iii) The Audit Committee shall have the power to seek any clarification regarding any financial matter relating to the Books of Accounts of the Company.

iv) The Audit Committee shall be empowered to review with the management the annual financial statements before submission to the Board.

v) The Audit Committee can summon any Officer of the Company and seek clarification from him and obtain outside legal or professional advice.

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vi) The Audit Committee shall have the power to summon the Internal and Statutory Auditors of the Company.

vii) The Audit Committee shall appoint any of their members to be the Chairman of the meeting and in the event of any difference, the decision of the Chairman shall be final.

viii) It shall be within the ambit of the Audit Committee to give any proposal, suggestion, directive on any matter relating to the financial and accounting practices or any other matter of material nature effecting the business of the Company, including the going concern assumption, and the advice tendered shall be binding on the Company.

The Internal Auditors and Statutory Auditors attend the meetings of the committee on the invitation of the Chairman. The Company Secretary of the Company acts as the Secretary of the Committee.

Number of Audit Committee Meetings held during 2011-12 and Member’s Attendance Report:

During the year 2011-12, total four meetings of Audit Committee were held on 30th May, 2011; 29th July, 2011; 12th November, 2011, and 13th February, 2012. The attendance record of members of the Audit Committee is given below:

Name of Audit Committee Member

Position held Number of the Meetings held during his tenure

Number of meetings attended

Mr. A.C. Chakrabortti Chairman 4 4

Mr. J.S. Baijal Member 4 4

Mr. R.K. Bhatnagar Member 4 4

(B) Remuneration Committee

During the year 2011-12, one meeting of Remuneration Committee was held on 13th February, 2012.The attendance record of members of the Remuneration Committee is given below:

Name of Remuneration Committee Member

Position held Number of the Meetings held during his tenure

Number of meetings attended

Mr. A.C. Chakrabortti Chairman 1 1

Mr. J.S. Baijal Member 1 1

Mr. R.K. Bhatnagar Member 1 1

(C) Shareholders / Investors Grievance Committee

The Company has a Committee to look into issues relating to shareholders and focus primarily on share transfers, redressals of shareholders/investor complaints and matters relating thereto. Mr. J.S. Baijal, the Chairman of the Committee is a Non-Executive Independent Director.

S. No. Name of Member of Committee Position Held

1. Mr. J.S. Baijal Chairman

2. Mr. Minoru Ono Member

3. Mr. Koji Shiga Member

The meeting of this committee is held once in a month and sometimes fortnightly. The minutes of each Shareholders/Investors Grievance Committee Meeting are placed at the Board Meeting held immediately after the meeting of the Committee.

Mr. Alok Mathur ,Company Secretary of the Company being the Compliance Officer is the Secretary of the Committee. The Company has an efficient system of dealing with investors grievances. The Company Secretary being the compliance officer carefully looks into each issue and reports the same to the Investors Grievance Committee.

A total of 48 complaints were received during the year under review, and all of them are replied till 31st March, 2012 to the satisfaction of shareholders. No shares were pending for registration for transfer as on 31st March, 2012.

4. CEO/CFO Certification

The Company is fully cognizant of, and committed to, adhering to the statutory requirements for internal controls as set out by the Securities and Exchange Board of India. Accordingly, the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) have duly verified and certified to the Board for Company’s procedure and internal controls of the reporting as fully compliant with SEBI guidelines.

The CEO and the CFO have certified to the Board by placing a certificate thereof on the Financials of the Company that:

(a) They have reviewed financial statements, cash flow statement and Directors’ report for the year ended 31st March, 2012, and to the best of their knowledge and belief;

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; and

(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

(b) There are, to the best of their knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company’s Code of Conduct.

(c) They have ensured that all the members of the Board of Directors and Senior Management Personnel have confirmed compliance with the Code of Conduct adopted by the Company.

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(d) They accept responsibility for establishing and maintaining internal controls for financial reporting and that they have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and they have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify these deficiencies.

(e) They have indicated to the Auditors and the Audit Committee :

(i) significant changes in internal control over financial reporting during the year ;

(ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

(iii) instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control system over financial reporting.

5. Code of Conduct

The Company has also laid down a Code of Conduct for Board Members and Senior Management Personnel of the Company. The Company is committed to conducting its business in accordance with applicable laws, rules and regulations, and the highest standard of business ethics, and to full and accurate disclosure in compliance with applicable laws, rules and regulations. The purpose of this code is to deter wrongdoing and promote ethical conduct. All the Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for the current year.

6. Risk Management

The Company has laid down procedures to inform Board members about the risk assessment and minimisation procedures. These procedures are periodically reviewed to ensure that executive management control risk through means of a properly defined framework.

7. Remuneration to Directors

The Company does not have any policy to pay commission on profits to any Non-Executive or Executive Directors. The remuneration paid to Executive Directors is approved by the Board of Directors in the Board Meeting, Remuneration Committee Meeting subject to the subsequent approval by the shareholder at the General Meeting and such other authorities, as the case may be. The remuneration is fixed considering various factors such as qualification, experience, expertise, prevailing remuneration in the corporate world and the financial position of the Company. The remuneration structure comprises of basic salary, perquisites and allowances. The Non-Executive Directors do not draw any remuneration from the Company except sitting fees of Rs. 20,000 for each meeting of the Board and Audit

Committee, and Remuneration Committee and Rs.7500 for each quarter of the Investor Grievances Committee attended by them. During the year ended 31st March, 2012, the Company has paid fixed remuneration and sitting fees to the following Directors:

(In Rupees)

Name of the Director Sitting Fee

Salary and Perquisites

[Refer Note-1]

Total

Non Executive and Independent Directors

Mr. J.S. Baijal 2,90,000 - 2,90,000

Mr. R.K. Bhatnagar 2,60,000 - 2,60,000

Mr. A.C. Chakrabortti 2,60,000 - 2,60,000

Executive Directors

Mr. Koji Shiga * - 4,276,432 4,276,432

Mr. Kazuyasu Sugita (Alternate Director to Mr. Koji Arima )

- 3,675,187 3,675,187

Mr Takashi Aoyama - 2,178,810 2,178,810

Mr. Minoru Ono **(Alternate Director to Mr. Koji Arima)

580,646 580,646

* The Managing Director of the Company is eligible to participate in the Employee Stock Option Plans (ESOPs) of Denso Corporation, Japan; the parent company ‘for which no cost has been charged to the Company. Accordingly, the managerial remuneration does not include any cost towards aforesaid ESOPs.

** The appointment of Mr. Minoru Ono as a Director with effect from February 13, 2012 and his remuneration as a Whole Time Director, is subject to the approval of the shareholders in ensuing Annual General Meeting and approval of the Central Government in this regard. The Company has filed an application with the Central Government on 12th May, 2012 to seek aforesaid approval, in accordance with the applicable provisions of the Companies Act, 1956.

Note 1:

Pursuant to the FAQs issued by Employees’ Provident Fund Organization on May 06, 2011, during the current year, the Company has accounted for social security contributions on total salary of international workers, as defined in the notification issued by the prescribed authorities in this regard, instead of such contributions having been paid earlier only on salary paid to such employees in India. Accordingly, employees’ benefit expenses during the current year include such expense of Rs.26 million (Previous Year Nil) relating to earlier years (November 1, 2008- March 31, 2011). This amount has been shown as an exceptional item in the Statement of Profit and Loss for the year ended March 31,2012. Consequent to accruals/payouts, as mentioned in point no 29 of the notes forming part of the financial statements, the remuneration computed in accordance

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with the provisions of the Companies Act, 1956 (“Act”) for following directors exceeded the limits as specified in Part-II of Schedule XIII of the Act, which is subject to ‘shareholders’ approval via a Special Resolution in the ensuing Annual General Meeting.:

Name of Director Excess Remuneration subject to shareholders’

approval (Rs.)

Mr. Kazuyasu Sugita 2,449,381

Mr. Koji Shiga 1,876,432

Mr. Takashi Aoyama 1,578,810

Mr. Minoru Ono 263,405

Total 6,168,028

8. Details of Annual General Meetings [AGMs]

AGM Year Location Date Time Whether Special

Resolution passed

24th 2008-09 FICCI Auditorium, New Delhi

23-09-2009 10.30 AM

Yes

25th 2009-10 FICCI Auditorium, New Delhi

31-08-2010 10.30 AM

No

26th 2010-11 Shri Sathya Sai Internation

Center, Lodhi Road, New Delhi

29-08-2011 10.30 AM

No

All the resolutions set out in the respective notices, were passed by the Shareholders. Pursuant to the provision of Section 192A of the Companies Act, 1956, a Special Resolution pursuant to Section 293(1)(a) of the Companies Act, 1956, for permitting to sell the small motors business of the Company to M/s Denso Haryana Private Limited, a related party, in terms of the Notice dated 14th November 2011 has been passed with the requisite majority through the Postal Ballot system under Section 192 A of the Companies Act, 1956 as Special Resolution.

9. Means of Communication

a) Results published in the Newspapers:

Quarterly/Half-Yearly Results

Quarterly/Half-Yearly Results were published in “Financial Express” and / or Business Standard and “Jan Satta” and were also informed to all the Stock Exchanges where the share are listed, through fax / couriers.

Appointment of Directors

Individual letters were sent to all the shareholders for the appointment or re-appointment of a new director.

b) Official News release Not Issued

c) Presentation to Not Issued

Institutional Investor

d) Financial Results/ Information on website. The Company’s Website is operational and the quarterly, annual financial results are available on the website of the Stock Exchange, Mumbai i.e. www.bseindia.com

e) Management Discussion Analysis Report forms part of the Annual Report.

10. Disclosures

a) Related Party Transactions:

The Company follows the policy of placing annually before the Audit Committee a statement in summary form of transaction with related parties in the ordinary course of business carried out during the year.

In terms of the Accounting Standard-18 on “Related Party Disclosures”, the Company has identified the related parties covered therein and details of transactions with such related parties have been disclosed in the Note 48 in the Annual Accounts. The Company has not had any transaction of material nature with the Directors and /or their relatives, promoters, management during the year under review that may have conflicts with the interest of the Company.

b) Accounting Treatment in Preparation of Financial Statement

The financial statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards notified under section 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

c) Compliance by the Company

There has neither been any non-compliance of any legal provisions of applicable law, nor any penalty, stricture was imposed by SEBI or Stock Exchanges or any other statutory authority(ies), on any matters related to Capital Market during the last three years.

d) Whistle Blower Policy

The Company is in process of formulating a whistle blower policy. No personnel of the Company has been denied access to the Audit Committee.

19

11. General Shareholder’s Information:

(a) Date of Book Closure: 1st September, 2012 to 8th September, 2012 (Both days inclusive)(b) Date of AGM 8th September, 2012

Day of AGM SaturdayTime of AGM 10.30 A.M.Venue of AGM Shri Sathya Sai International Centre, Lodhi Road, New Delhi

(c) Listing of Stock Exchange(s) As on March 31st, 2012, the shares of Company are listed on the following Stock Exchange(s):

1. Delhi Stock Exchange Association Ltd.2. Bombay Stock Exchange 3. Madras Stock Exchange Ltd.

Listing Fee for the financial year 2011-12 has been paid to the stock exchanges with in the stipulated time.(d) Stock Code – Physical 520022

Demat ISIN Number for NSDL & CDSL INE502A01017(e) Registrar and Share Transfer Agent MAS Services Limited

T-34, 2nd Floor, Okhla Industrial Area, Phase-II, New Delhi-110020 Contact person: Mr. Sarvan Mangala Ph.: 011-26387281-83, Fax: 011-26387386

(f) Stock Market Data

The month wise high and low quotations of the shares traded during April 1, 2011 to March 31, 2012 at BSE and BSE sensex high are given below:

Month Open Price (Rs.)

HighPrice(Rs.)

Low Price (Rs.)

Close Price (Rs.)

No.of Shares

No. of Trades

Apr-11 68.05 78.50 67.00 71.55 227,556 1,469

May-11 70.50 78.00 63.90 70.10 117,344 1,010

Jun-11 71.00 74.80 63.00 65.75 58,397 949

July-11 65.80 75.25 64.10 66.75 76,392 1,486

Aug-11 66.00 69.45 51.95 56.95 50,881 1,305

Sep-11 56.50 64.95 50.25 52.30 48,630 980

Oct-11 53.35 57.80 48.15 53.25 54,918 1,072

Nov-11 55.00 58.75 46.80 49.45 47,038 1,051

Dec-11 51.00 56.00 45.00 47.10 45,962 1,070

Jan-12 48.95 57.85 46.60 51.85 40,694 2,472

Feb-12 51.95 62.45 50.50 55.10 444,543 11,754

Mar-12 54.50 63.25 51.30 54.90 697,583 7,690

* Sources : www.bseindia.com

(g) Stock Performance of the Company in comparison to BSE Sensex (High)

* Source: www.bseindia.com

20

(h) Share Transfer System

Share transfers are registered and returned within a period of thirty (30) days from the date of receipt, if the documents are in order in all respects. The Share Transfer Committee meets fortnightly depending upon the number of transfers received.

(i) Shareholding Pattern of the Company as on March 31st, 2012 :

Category Number of shares held % Shareholding

A. Promoter’s holding

Promoters

- Indian Promoters 28,62,758 10.27

- Foreign Promoters 1,76,18,867 63.20

Person acting in concert

Sub-Total (A) 2,04,81,625 73.47

B. Non-Promoter’s holding

Institutional Investors

Mutual Fund and UTI 4,500 0.02

Banks ,Financial Institutions, Insurance Companies, Central / State Government Institutions/Non-Government Institutions 46,064 0.16

FIIs 19,97,222 7.16

Sub-Total (B) 20,47,786 7.34

Others:-

Private Corporate bodies 9,57,940 3.44

Indian Public 41,94,148 15.04

NRIs/OCBs 1,37,183 0.49

Clearing member 56,698 0.20

Any other (Trust) 4,264 0.02

Sub-Total (C) 53,50,233 19.19

Grand Total (A+B+C) 2,78,79,644 100.00

Distribution of Shareholding as on 31st March, 2012

Shareholding of nominal value of Rs.10/- each

Shareholders Folios Number of Shares

Numbers % to Total Numbers % to Total

Up to - 5000 12,307 92.52 14,80,766 5.31

5001 – 10000 497 3.74 4,12,436 1.48

10001 – 20000 233 1.75 3,55,694 1.28

20001 – 30000 77 0.58 1,99,422 0.72

30001 - 40000 36 0.27 1,31,503 0.47

40001 - 50000 37 0.28 1,76,664 0.63

50001 - 100000 51 0.38 3,56,599 1.28

100000 and above 64 0.48 2,47,66,560 88.83

Total 13,302 100.00 2,78,79,644 100.00

21

(j) Outstanding ADR/GDR’s : Not Issued

(k) Plant Location

Unit – I : Noida Dadri Road, P.O. Tilpatta, Tehsil – Dadri, District Gautam Budh Nagar, Uttar Pradesh – 203 207.

Unit - II : Plot No. 16, Industrial Park–II, Salempur Mehdood, Haridwar, Uttrakhand-249 402.

(l) Dematerialisation of Shares

The Company has an agreement with Central Depository Services (India) Limited (CDSL) and National Securities Depository Services Limited (NSDL) so that shareholders of the Company could avail the benefits of the multi-depository system. Upto March 31, 2012, 82,45,648 shares representing 29.57% of the total share capital are under demat which has resulted in reducing the physical delivery related problem to a large extent.

(m) Financial Calendar (tentative and subject to change)

Financial reporting for the first quarter ending, June 30, 2012 August,2012

Financial reporting for the second quarter ending, September 30, 2012 November,2012

Financial reporting for the third quarter ending, December 31, 2012 Febuary,2013

Financial results for the year ending March 31, 2013 May,2013

Annual General Meeting for the year ending March, 31, 2013 August, 2013

(n) Investors correspondence may be addressed to

MAS Services Limited T-34, 2nd Floor, Okhla Industrial Area, Phase-II, New Delhi-110020 Ph.: 011-26387281-83, Fax: 011-26387384

Or to

Mr. Alok Mathur (Company Secretary), Denso India Limited B-1 / D-4, Ground Floor, Mohan Co-operative Industrial Estate, Mathura Road, New Delhi –110044 Tel: 26952308, 26953994, Fax : 26953993

Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participants.

12. Non-Mandatory Requirements:

The Company has not adopted the non mandatory requirements as specified in Annexure-1 D of the Listing Agreement to the extent applicable.

22

Auditors’ Certificate regarding compliance of conditions of Corporate Governance

To the Members of Denso India Limited

We have examined the compliance of conditions of Corporate Governance by Denso India Limited, for the year ended March 31, 2012, as stipulated in Clause 49 of the Listing Agreements of the said Company with stock exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the Company’s management. Our examination was carried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 of the Listing Agreement), issued by the Institute of Chartered Accountants of India and was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreements.

We 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.

Price WaterhouseFirm Registration Number: 301112E

Chartered AccountantsBuilding 8,7th &8th Floor

Tower –B, DLF Cyber CityGurgaon -122 002, Haryana

Abhishek RaraPlace: Gurgaon PartnerDate: June 6, 2012 Membership Number: F77779

23

Auditors’ Report

To the Members of Denso India Limited

1. We have audited the attached Balance Sheet of Denso India Limited (“the Company”) as at March 31, 2012, and the related Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed 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 the 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. As required by the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (together the “Order”), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956’ of India (the ‘Act’) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose 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 Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on March 31, 2012 and taken on record by the Board of Directors, none of the directors is disqualified as on March,31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, 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 loss 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.

For Price WaterhouseFirm Registration Number: 301112E

Chartered Accountants

Abhishek RaraPlace: Noida PartnerDate: June 4, 2012 Membership Number: F77779

24

Annexure to Auditors’ ReportReferred to in paragraph 3 of the Auditors’ Report of even date to the members of Denso India Limited on the financial statements as of and for the year ended March 31, 2012

5. (a) According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year to be entered in the register required to be maintained under that secton. Accordingly, the question of commenting on transactions made in pursuance of such contracts or arrangements does not arise.

(b) In our opinion, and according to the information and explanations given to us, there are no transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees Five Lakhs in respect of any party during the year.

6. The Company has not accepted any deposits from the pubilc within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for dues in respect of provident fund in respect of international workers related to earlier years where there have been serious delays of significant days, the Company is regular in depositing undisputed statutory dues, including investor education and protection fund, employees’ state insurance, sales tax, wealth tax, service tax, customs duty, excise duty and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, wealth tax, service tax, customs duty and excise duty as at March 31, 2012 which have not been deposited on account of a dispute, are as follows:

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

25

Name of the Statute Nature of dues Amount (Rs. In millions)

Period to which the amount relates

Forum where the dispute is pending

Income Tax Act, 1961 Matters relating to transfer pricing issues

23 [excluding Rs. 11 deposited under protest and Rs. 26 adjusted by Income Tax Authorities against refund]

2006-07 Income Tax Appellate Tribunal

Excise & Customs Act, 1944

Matters relating to Credit on various Input Services

11 2004-06 Central Excise & Service Tax Appellate Tribunal

Excise & Customs Act, 1944

Matters relating to Credit on various Input Services

1 2003-04 Central Excise & Service Tax Appellate Tribunal

Excise & Customs Act, 1944

Matters relating to Credit of IPR Services

6 Prior to September 10, 2004

Assistant Commissioner (Remand Proceeding)

Excise & Customs Act, 1944

Matters relating to Credit on freight expenses.

2 March 2005 to November 2005

Commissioner of Customs & Central Excise (Appeals)

10. The Company has no accumulated losses as at March 31, 2012. The Company has incurred cash losses in the financial year ended on that date and has not incurred cash losses in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any bank as at the balance sheet date. The Company has neither raised funds from any financial institution nor issued any debentures.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of share, debentures and other securities.

13. The provisions of any special statute applicable to chit fund/nidhi/ mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion, and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. In our opinion, and according to the information and explanations given to us, the term loans have been applied, on an overall basis, for the purposes for which they were obtained.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion, and according to the information and explanations given to us, there are no funds raised on a short term basis which have been used for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For Price WaterhouseFirm Registration Number: 301112E

Chartered Accountants

Abhishek RaraPlace: Noida PartnerDate: June 4, 2012 Membership Number: F77779

26

BALANCE SHEET AS AT MARCH 31, 2012 Particulars Note

No.As at

March 31, 2012 (` in Million)

As at March 31, 2011

(` in Million)I. Equity and Liabilities

(1) Shareholders’ Funds(a) Share Capital 3 279 279 (b) Reserves and Surplus 4 1,092 1,814

Sub Total (A) 1,371 2,093 (2) Non-Current Liabilities(a) Long-term borrowings 5 732 –(b) Long-term provisions 6 83 82

Sub Total (B) 815 82 (3) Current Liabilities(a) Short-term borrowings 7 562 697 (b) Trade payables 8 1,721 1,546 (c) Other current liabilities 9 1,645 227 (d) Short-term provisions 10 29 27

Sub Total (C) 3,957 2,497 Total (A+B+C) 6,143 4,672

II. Assets(1) Non-current assets(a) Fixed assets

(i) Tangible assets 11 1,508 1,427 (ii) Capital work-in-progress 11 48 185

(b) Deferred tax assets (net) 12 24 30 (c) Long term loans and advances 13 240 169 (d) Other non-current assets 14 – 25

Sub Total (D) 1,820 1,836 (2) Current assets(a) Inventories 15 1,606 1,574 (b) Trade receivables 16 1,126 750 (c) Cash and Bank Balances 17 796 218 (d) Short-term loans and advances 18 353 290 (e) Other current assets 19 442 4

Sub Total (E) 4,323 2,836 Total (D+E) 6,143 4,672

Notes to Financial Statements and Significant Accounting Policies 1 to 49

This is the Balance Sheet referred to in our report of even date.

The accompanying notes form an integral part of these financial statements.

For Price Waterhouse For and on behalf of the Board of DirectorsFirm Registration Number 301112E KOJI SHIGA MINORU ONOChartered Accountants Managing Director Director

ABHISHEK RARA ARUN GANGWANI ALOK MATHURPartner Deputy General Manager Company SecretaryMembership No. F77779

Place : Noida Place : Noida Date : 4th June, 2012 Date : 4th June, 2012

27

STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED MARCH 31, 2012Particulars Note

No.For the Year ended

March 31, 2012 (` in Million)

For the Year ended March 31, 2011

(` in Million)I. Revenue from Operations

Gross Sales 11,351 10,163 Less : Excise duty on Sales 22 989 10,362 889 9,274

II. Other Income 23 85 43 III. Total Revenue 10,447 9,317 IV. Expenses:

(1) Cost of material consumed 24 8,029 6,914 (2) Purchase of stock in trade 325 225 (3) Changes in inventory of finished goods,

work in progress and Traded Goods25 (209) (34)

(4) Employee Benefits Expense 26 1,096 901 (5) Finance Costs 27 117 19 (6) Depreciation and Amortization Expenses 11 375 229 (7) Administration and Other expenses 28 1,405 1,012 Total Expenses 11,138 9,266

V. (Loss)/ Profit before exceptional and extraordinary items and tax (III - IV) (691) 51

VI. Exceptional Items 29 26 – VII. (Loss)/ Profit before tax (V - VI) (717) 51 VIII. (Loss)/ Profit before tax from continuing

operations(544) (19)

Tax Expense from continuing operations (Refer Note 2.10, 12, 40 and 47)(1) Current tax – 9 (2) Earlier tax Adjustment (1) 6 (3) Deferred tax 12 5 11

IX. Profit/(Loss) for the period from continu-ing operations (VII-VIII)

(548) (45)

X. (Loss)/ Profit before tax from Discontinu-ing operations

40 (173) 70

XI. Tax expense of discontinuing operations 40 1 5 XII. (Loss)/Profit from Discontinuing

operations (X - XI)40 (174) 65

XIII. (Loss)/Profit for the year (722) 20 XIV. Earning per equity share of face value of

Rs. 10 each (Refer Note 2.12 and 37):37

Basic and Diluted (`) (25.89) 0.71

Notes to Financial Statements and Significant Accounting Policies 1 to 49

This is the Statement of Profit and Loss referred to in our report of even date.

The accompanying notes form an integral part of these financial statements.

For Price Waterhouse For and on behalf of the Board of DirectorsFirm Registration Number 301112E KOJI SHIGA MINORU ONOChartered Accountants Managing Director Director

ABHISHEK RARA ARUN GANGWANI ALOK MATHURPartner Deputy General Manager Company SecretaryMembership No. F77779

Place : Noida Place : Noida Date : 4th June, 2012 Date : 4th June, 2012

28

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2012For the Year Ended

March 31, 2012(` in Million)

For the Year EndedMarch 31, 2011

(` in Million)

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Tax (717) 51

Adjustment for:

Depreciation 375 229

Interest Income (37) (29)

Interest Expenses 101 17

Loss on Sale/ Discarding of tangible assets (Net) 1 1

Provision for Employee Benefits–Long Term 1 0**

Provision for Employee Benefits–Short Term 2 0**

Provision for Warranty (Net) 0** 0**

Unrealized Foreign Exchange (Gain) – Net (2) 8

Provision/Liabilities no Longer Required Written Back (0)** (1)

Operating Profit Before Working Capital Changes (276) 276

Adjustments for Changes in Working Capital:

(Increase)/Decrease in Trade Receivables (376) (191)

(Increase)/Decrease in Short Term Loans and Advances 365 (128)

(Increase)/Decrease in Long Term Loans and Advances (5) 2

(Increase)/Decrease in Other Non–Current Assets 25 (25)

(Increase)/Decrease in Other Current Assets (589) (173)

(Increase)/Decrease in Inventories (32) (497)

Increase/(Decrease) in Trade Payable 199 382

Increase/(Decrease) in Other Current Liabilities 88 44

Cash Generated from Operations (601) (310)

Income Tax paid (Net)

– Current Tax (24) (17)

Net Cash from Operating Activities (a) (625) (327)

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Tangible/ Intangible Assets (883) (830)

Proceeds from Sale of Tangible Assets 4 2

Interest Received (Gross) 28 41

Advance against sale of Small Motor Business 1,329 –

Net Cash used in Investing Activities (b) 478 (787)

29

For the Year EndedMarch 31, 2012

(` in Million)

For the Year EndedMarch 31, 2011

(` in Million)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Long Term & Short Term Borrowings 665 597

Interest Paid (100) (17)

Dividend Paid (0)** (55)

Dividend Tax Paid – (9)

Net Cash used in Financing Activities (c) 565 516

Net Increase/(Decrease) in Cash and Cash Equivalents (a+b+c) 418 (598)

Cash and Cash Equivalents the Beginning of the Year 43 641

Cash and Cash Equivalents at the End of the Year 461 43

418 (598)

Cash and Cash Equivalents [Refer Note 17] at year-end comprise of:

Cash-in-Hand [Includes Cheques-in-Hand of ` 1 Million (Previous year ` 12 Million)]

3 13

Bank Balances

– On Current Accounts 18 25

– On Deposits (less than 3 month maturity from the date of preparation) 440 458 5 30

461 43

** Amount below the norm of rounding off adopted by the Company.

Notes :1. The above cash flow statement has been prepared under the indirect method as set out in Accounting Standard – 3 on cash

flow statement, prescribed under Companies (Accounting Standards) Rules, 2006 as notified by the Central Government vide its notification dated December 07, 2006.

2. Previous year figures have been regrouped and recasted wherever considered necessary to conform to the current year’s classification.

3. The Notes 1 to 49 form an integral part of the Cash Flow Statement.

This is the Cash Flow Statement referred to in our report of even date.

For Price Waterhouse For and on behalf of the Board of DirectorsFirm Registration Number 301112E KOJI SHIGA MINORU ONOChartered Accountants Managing Director Director

ABHISHEK RARA ARUN GANGWANI ALOK MATHURPartner Deputy General Manager Company SecretaryMembership No. F77779

Place : Noida Place : Noida Date : 4th June, 2012 Date : 4th June, 2012

30

NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2012

1. GENERAL INFORMATION:

Denso India Limited (the “Company”) was incorporated on November 22, 1984. The Company is engaged in manufacturing of automotive components and primarily sells to Original Equipment Manufacturers (OEMs) in India. The Company has two manufacturing plants with three warehousing locations and a central spares parts division (CSPD). The Company is also engaged in small motors business in India which the Company is in process of discontinuing (Refer Note 40). The Company is a public limited company and is listed on the Bombay Stock Exchange (BSE), Delhi Stock Exchange Association Ltd. and the Madras Stock Exchange (MSE).

2. SIGNIFICANT ACCOUNTING POLICIES:

1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current – non-current classification of assets and liabilities.

2) TANGIBLE ASSETS:

Fixed assets are stated at cost of acquisition less accumulated depreciation. Acquisition cost includes taxes, duties, freight, insurance and other incidental expenses related to acquisition and installation and are net of CENVAT credits, where applicable. Revenue expenses incidental and related to projects are capitalised along with the related fixed assets, where appropriate.

3) DEPRECIATION:

Depreciation on fixed assets is provided using the straight-line method based on useful lives of assets as estimated by the management. Depreciation is charged on a pro-rata basis for assets purchased / sold during the year. The management’s estimate of useful lives for the various fixed assets is given below, which is higher than the rates prescribed under Schedule XIV of Companies Act, 1956:

Buildings 20 years

Plant and Machinery

- Jigs and Tools 5 years

- Others 7 years

Computers 3 years

Furniture and Fixtures 5 years

Vehicles 5 years

Leasehold land is amortised over the period of lease.

Individual assets costing less than ` 5,000 are depreciated in full in the year of purchase.

4) REVENUE RECOGNITION:

Revenue from the sale of products is recognised upon transfer of substantial risk and rewards of ownership to the customers, and is net of sales tax, where applicable, but inclusive of excise duty. Interest income on fixed deposits is recognized on a time proportion basis.

5) FOREIGN CURRENCY TRANSACTIONS:

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transactions.

Exchange differences arising on foreign currency transactions settled during the year are recognised in the statement of profit and loss for the year. All monetary items denominated in foreign currency are translated at exchange rates prevailing on the balance sheet date. The resultant exchange differences are recognised in the statement of profit and loss for the year.

The premium or discount arising at the inception of forward exchange contracts, entered into to hedge the foreign currency risk of existing assets and liabilities, is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

31

6) WARRANTY:

Product warranty costs are determined and provided for in the year, in which the revenues are recognised, based on past experience.

7) INVENTORIES:

Inventories are stated at the lower of cost and net realisable value. ‘Cost’ is arrived at using First-In-First-Out (FIFO)/ Weighted Average method and includes appropriate overheads in case of work-in-progress and finished goods. Finished goods are stated inclusive of excise duty.

Provision for obsolescence is made, wherever necessary.

8) EMPLOYEES’ BENEFITS:

Benefits to employees comprise of provident fund, gratuity, leave encashment / compensated absences, superannuation and long service award.

Defined Contribution Plans:

• TheCompanyhasaseparateSuperannuationSchemeforitsofficersundertheaegisoftheLifeInsuranceCorporationofIndia. Contributions made in accordance with the scheme of the Life Insurance Corporation of India are charged to the Statement of profit and loss.

• Contributionstotheemployees’stateinsurancefund,administeredbytheprescribedgovernmentauthorities,aremadeinaccordance with the Employees’ State Insurance Act, 1948 and are recognized as an expense on an accrual basis.

Defined Benefit Plans:

• Contributions towardsCompany’s gratuity liabilitymade to Life InsuranceCorporation of India are adjusted against thegratuity liability determined by an independent actuary as at year-end on the basis of “Projected Unit Credit Method” and the short fall, if any, is charged to the statement of profit and loss. In case fair value of plan assets is in excess of the present value of the defined benefit obligations, the resultant asset is recognized as at balance sheet date.

• Actuarial gains and losses comprise experience adjustments and the effects of change in actuarial assumptions and arerecognised immediately in the statement of profit and loss as income or expense.

Multi Employer Benefit:

• Contributiontotheprovidentfundandfamilypensionfund,administeredthroughaprivatetrust,ismadeinaccordancewiththe provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and is recognised as an expense on an accrual basis. Further, the Company gets an actuarial valuation done as at year-end to determine liability towards guaranteed interest rates, if any, and the same is also recognised as an expense on an accrual basis.

Other Employee Benefits:

• Theliabilityforlongtermcompensatedabsenceandlong-termserviceawardisrecognisedinaccordancewiththerulesofthe Company, based on actuarial valuation by an independent actuary carried out at the balance sheet date on the basis of “Projected Unit Credit Method”.

• Theliabilitiesforemployeebenefit informofshort-termcompensatedabsence(vestingaswellasnon-vesting)havebeenrecognised at undiscounted amount, in accordance with the rules of the Company.

• Actuarial gains and losses comprise experience adjustments and the effects of change in actuarial assumptions and arerecognised immediately in the statement of profit and loss as income or expense.

9) RESEARCH AND DEVELOPMENT EXPENDITURE:

All revenue expenses pertaining to research and development are charged to the statement of profit or loss in the year in which these are incurred and expenditure of capital nature is capitalised as fixed assets.

10) TAX EXPENSE:

Tax expense comprises current and deferred tax. The provision for income tax is determined in accordance with the provisions of the Income Tax Act, 1961.

The Company provides for deferred tax based on the tax effect of timing differences resulting from the recognition of items in the financial statements and in estimating its current income tax provision. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the statement of profit and loss using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets on unabsorbed depreciation or carry forward losses, if any, are recognised only if there is virtual certainty that such deferred tax assets can be realized against future taxable profits. In all other cases, deferred tax assets are recognised only to the extent there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

32

Minimum alternative tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay income tax higher than that computed under MAT, during the period that MAT is permitted to be set off under the Income Tax Act, 1961 (specified period). In the year, in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India (ICAI), the said asset is created by way of a credit to the statement of profit and loss and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay income tax higher than MAT during the specified period.

11) BORROWING COSTS:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying asset are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

12) EARNINGS PER SHARE (EPS):

In determining earnings per share, the Company considers the net profit after tax and includes the post tax effect of extra ordinary/exceptional item, if any. Basic earning per share is computed by dividing the net profit for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year and dilutive equity equivalent shares outstanding at the year end, except where the results would be anti dilutive.

13) INTANGIBLE ASSETS:

Intangible assets are recognised if it is probable that the future economic benefits attributable to the asset will flow to the enterprise and cost of the asset can be measured reliably in accordance with Accounting Standard – 26, on ‘Intangible Assets’.

Intangible assets, if any, are amortised on straight-line basis over their useful lives determined on the basis of expected future economic benefits. The amortization period and method is reviewed at the end of each financial year.

14) IMPAIRMENT OF ASSETS:

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds the recoverable amount, an impairment loss is recognised in the statement of profit and loss to the extent the carrying amount exceeds the recoverable amount.

15) LEASES:

For operating leases, rental income and expense is recognised on a straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of the Company’s benefit.

16) PROVISIONS AND CONTINGENCIES:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions required to settle are reviewed regularly and are adjusted where necessary to reflect the current best estimates of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of obligation cannot be made.

17) DERIVATIVE INSTRUMENTS:

The Company use derivative financial instruments such as forward exchange contracts and swap arrangements to hedge its risks associated with foreign currency fluctuations. The foreign exchange contracts, if any, other than those covered under AS 11, entered for non speculative purposes, including the underlying hedged items, are valued on the basis of a fair value on marked to market basis and any loss on valuation is recognized in the statement of profit and loss, on a portfolio basis. Any gain arising on this valuation is not recognized by the Company in line with the principle of prudence.

18) CASH AND CASH EQUIVALENTS:

In the cash flow statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.

33

3. Share Capital

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Authorised 30,000,000 (Previous Year: 30,000,000) Equity Shares of ` 10/- each 300 300 Issued28,062,000 (Previous Year 28,062,000) Equity Shares of ` 10/- each 281 281 Subscribed and Paid-up27,879,644 (Previous Year 27,879,644) Equity Shares of ` 10/- each fully paid-up 279 279

279 279

a. Reconciliation of the number of the shares

Particulars As at March 31, 2012

(Number of Shares)

As at March 31, 2011

(Number of Shares)

Equity SharesBalance at the beginning of the year 27,879,644 27,879,644 Add: Issued during the year – –Balance at the end of the year 27,879,644 27,879,644

b. Rights, preferences and restrictions attached to shares

Equity Shares: The Company has one class of equity shares having a face value of ` 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are entitled to receive remaining assets of the Company after distribution of all preferential amount in proportion to their shareholding.

c. Shares held by holding company and subsidiary of holding company.

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Equity Shares13,362,091 (Previous year 13,362,091) Equity Shares of ` 10/- each held by Denso Corporation, Japan, the Holding Company

134 134

1,393,982 (Previous Year 1,393,982) Equity Shares of ` 10/- each held by ASMO Co. Ltd., Japan, subsidiary of the Holding Company

14 14

Balance at the end of the year 148 148

d. Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company

Particulars As at March 31, 2012

(Number of Shares & Percentage

Shareholding)

As at March 31, 2011

(Number of Shares & Percentage

Shareholding) Equity SharesDenso Corporation, Japan, the Holding Company 13,362,091 13,362,091

(48%) (48%)ASMO Co. Ltd., Japan, subsidiary of the Holding Company 1,393,982 1,393,982

(5%) (5%)Sumitomo Corporation, Japan 2,862,794 2,862,794

(10%) (10%)Maruti Suzuki India Ltd, India 2,862,758 2,862,758

(10%) (10%)

34

4. Reserves And Surplus

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Capital Reserve [As per last Balance Sheet] A 0** 0** Share Premium [As per last Balance Sheet] B 498 498 General Reserve [As per last Balance Sheet] C 44 44 Statement of Profit and Loss :Balance as at the beginning of the year 1,272 1,252 Add: Transferred from (Loss)/ Profit in Statement of Profit and Loss during the year

(722) 20

D 550 1,272 A+B+C+D 1,092 1,814

** Amount below the norm of rounding off adopted by the Company.

5. Long Term Borrowing (Refer Note 2.5 and 38)

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Unsecured Loan :External Commercial Borrowings (ECB) from Denso Corporation, Japan, the Holding Company

732 –

732 –

6. Long Term Provisions (Refer Note 2.8 and 44)

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Provision for Employee Benefits:Provision for Gratuity 45 44 Provision for Leave Encashment/ Compensated absences 30 30 Provision for Long Service Award 8 8

83 82

7. Short Term Borrowings (Refer Note 39)

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Unsecured:From Banks- Cash Credit 49 49 - Demand Loans 513 648

562 697

8. Trade Payables

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Acceptances 254 217 Trade Payables (Refer Note 38 and 46)- Total outstanding dues of Micro and Small Enterprises 56 32 - Total outstanding dues other than Micro and Small Enterprises 1,411 1,297

1,721 1,546

35

9. Other Current Liabilities

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Advances from Customers 1 3 Interest accrued but not due on Long Term Borrowing (ECB) (Refer Note 38) 2 0 Security Deposits 3 3 Unclaimed Dividend [Refer Note 1(a) below] 3 3 Employee Benefits payable 71 54 Statutory Dues including Provident fund and Tax deducted at source 139 156 Others 5 7 Provision for mark to market losses on derivatives (Refer Note 2.17 and 38) 68 – Book Overdraft 10 1 Provision for premium on swap arrangement 14 – Advance against Sale of Small Motor Business (Refer Note 40) 1,329 –

1,645 227 Note 1(a) There are no amounts due for payment to Investor Education and Protection fund under section 205C of the Companies Act, 1956.

10. Short Term Provisions

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Provision for Employee Benefits (Refer Note 2.8 and 44):Provision for Gratuity 2 2 Provision for Compensated Absences/Leave Encashment 22 20 Other Provisions:Provision for Warranty (Refer Note 2.6 and 45) 5 5

29 27

Note 11 - Tangible & Intangible Assets (Refer Notes 2.2, 2.3, 2.5, 2.9, 2.11, 2.13, 2.14, 19 and 40)

(` in Million)

Particulars GROSS BLOCK DEPRECIATION NET BLOCK

As at April

1, 2011

Additions during the

year

Deletions / Adjustments

during the year

Assets held

for Sale

As at March

31, 2012

Upto April

1, 2011

For the Year

Deletions/ Adjustments

during the year

On Assets held

for Sale

Upto March

31, 2012

As at March

31, 2012

As at March

31, 2011

Tangible Assets

Leasehold Land 4 – – – 4 1 0** – – 1 3 3

Freehold Land 80 – – – 80 – – – – – 80 80

Buildings 204 30 – – 234 105 28 – – 133 101 99

Plant and Machinery 2,751 822 65 870 2,638 1,543 331 60 451 1,363 1,275 1,208

Computers 42 9 4 – 47 36 4 4 – 36 11 6

Furniture and Fixtures 70 7 3 – 74 58 4 3 – 59 15 12

Vehicles 49 12 1 – 60 30 8 1 – 37 23 19

Intangible Assets [Acquired]

Technical Know-how 28 – – – 28 28 – – – 28 – –

Total 3,228 880 73 870 3,165 1,801 375 68 451 1,657 1,508 1,427

Previous Year 2,590 678 40 – 3,228 1,610 229 38 – 1,801 1,427 –

Capital Work-in-Progress [Including machinery in transit of ` 4 Million (Previous year ` 98 million)] 48 185

Assets related to Small Motor Business held for sale amounting to ` 429 Million (including ` 10 Million related to capital work in progress) have been shown under “Other Current Assets” in accordance with AS-10 “Accounting for Fixed Assets”. (Also, refer Note 40)

** Amount below the norm of rounding off adopted by the Company.

36

12. Deferred Tax (Assets)/Liability-Net: (Refer Note 2.10)

Particulars As at April 1,2011

(` in Million)

Movement during the year

(` in Million)

As at March 31, 2012

(` in Million)Timing Difference on account of:Deferred Tax Liabilities:-Difference between book depreciation and depreciation under Income Tax Act, 1961

8 7 15

Total (a) 8 7 15 Deferred Tax Assets:-Disallowance of expenses in accordance with provisions (Section 43B, 40a etc) of Income Tax Act,1961

38 1 39

Total (b) 38 1 39 Total (a-b) (30) 6 (24)

During the current year, the Deferred Tax Assets on unabsorbed depreciation and business loss has not been created in absence of virtual certainty of its realization.

13. Long Term Loans and Advances

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Unsecured, Considered good (unless otherwise stated):Capital Advances 83 43 Security Deposits 18 12 Other loans and advances- Balance with Excise and Custom Authorities 5 5 Advance Income Tax [Net of provision for Tax of ` 223 Million (Previous year ` 223 Million)]

134 109

Advance Tax - Fringe Benefits [Net of provision for Tax of ` 8 Million (Previous year ` 8 Million)]

0** 0**

240 169

** Amount below the norm of rounding off adopted by the Company.

14. Other Non Current Assets

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Long term deposits with banks – 25

– 2515. Inventories (Refer Note 2.7)

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Raw Materials and Components [Refer Note (a) below] 1,040 1,230 [Includes Goods-in-Transit ` 277 Million (Previous year ` 451 Million)]Stores, Spares and Consumables [Refer Note (b) below] 94 81 Finished Goods- Manufactured [Includes Goods-in-Transit ` 18 Million (Previous year ` 6 Million)] 219 105 - Traded Goods 100 66 [Includes Goods-in-Transit ` 43 Million (Previous year ` 28 Million)]Work-in-Progress 153 92

1,606 1,574 (a) Net of provision for slow moving inventories of ` 19 Million (Previous Year ` 12 Million) (b) Net of provision for slow moving inventories of ` Nil (Previous Year ` 1 Million)

37

(A). Details of Inventory

(I) Goods Manufactured-Finished Goods:

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Alternators 42 13 Starter Motors 32 13 Wiper Motors 19 15 Fan Motors 7 7 Blower Motors 6 3 CDI 25 13 Magneto 33 19 Print Motor 0** 0** Window Washer 0** 1 Power Window 36 17 Spares 19 4

219 105

** Amount below the norm of rounding off adopted by the Company.

(II) Details of Traded Goods

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Alternators 11 3 Starter Motors 43 18 Power Windows – – Fan 3 1 EPS Motor 43 41 Others – 3

100 66

(III) Details of Work in Progress

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Alternators 65 33 Starter Motors 19 7 Wiper Motors 15 7 Fan Motors 8 3 Blower Motors 5 2 CDI 17 14 Magneto 16 22 Window Washer 0** 0** Power Window 8 4

153 92

** Amount below the norm of rounding off adopted by the Company.

38

16. Trade Receivables (Refer Note 2.5,38 and 48)

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Unsecured, considered goodOutstanding for a period exceeding 6 months from the date they are due for payment 6 –Others 1,120 750

1,126 750

17. Cash and Bank Balances (Refer Note 2.18)

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Cash and Cash EquivalentsCash on hand 2 1 Cheques on hand 1 12 Bank balances– In current accounts 18 25 – In deposits (less than 3 months maturity from date of preparation) 440 5 Total (a) 461 43 Other bank balancesLong term deposits with maturity more than 3 months but less than 12 months* 332 172 Unpaid dividend account 3 3 Total (b) 335 175 Total (a+b) 796 218

* Includes ` 7 million (Previous Year ` 7 million) under lien with banks against guarantees issued.

18. Short Term Loans and Advances

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Unsecured considered good, unless otherwise stated:Prepaid Expenses 30 32 Other Loans and Advances– Balance with Excise and Custom Authorities 202 161 – Advance Income Tax [Net of provision for Tax of ` 229 Million (Previous year ` 390 Million)]

20 38

– Others 101 59 353 290

19. Other Current Assets

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)Unsecured, considered good:– Interest accrued on bank deposits 13 4 – Assets held for Sale related to Small Motors Business (Refer Note 11 and 40) 429 –

442 4

39

20. Contingent Liabilities

The following are the details of the Contingent Liabilities , the outflow of which is uncertain at this stage.

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)

a) Income tax matters: 23 23

(i) In respect of Income tax demands pending disposal of appeals ` 60 Million (Previous year ` 130 Million. Against this, the Company has deposited a sum of ` 11 Million (Previous year ̀ 41 Million) under protest and ̀ 26 Million (Previous Year ` 68 Million) has been adjusted by income tax authorities against refund.

(ii) The Assessing Officer has filed an appeal to Income Tax Appellate Tribunal, against the favourable orders of Commissioner of Income Tax (Appeal) for the Assessment Years 2002-03,2003-04 and 2004-05.

(iii) During the year, the Company has received a favourable order for AY 2005-06 from CIT (A) and the Company is unaware of any appeal filed against said order and the resultant liability, if any, is not currently ascertainable.

b) Guarantees issued to sales tax authorities and others, outstanding at year-end. 6 6

c) In respect of transfer levy demanded by Uttar Pradesh State Industrial Development Corporation (UPSIDC) for allowing change of name of the Company in their records (excluding interest). The Company has obtained a stay order from the Hon’ble Allahabad High Court

7 7

d) In respect of labour cases (excluding claims where amount is not ascertainable at this stage).

4 4

e) In respect of allowability of cenvat credit of service tax paid on various input services and demand of service tax in respect of freight outward.

7 7

f) In respect of allowability of cenvat credit of Excise duty on certain items. The Company has received unconditional stay from Central Excise and Service Tax Appellate Tribunal (CESTAT).

11 11

g) In respect of demand raised by Tehsildar, Dadri for reclamation of Tilpatta, Dadri land. The Company has obtained a stay order from the Hon’ble Allahabad High Court.

38 38

h) In respect of demand raised by Tehsildar, Dadri for reclamation of Tilpatta, Dadri land for Parking. The Hon’ble Allahabad High Court has put order passed by the authority in abeyance.

70 70

i) Excise & Custom- matter related to trading activities as manufacturing activities 208 –

374 166

21. Capital Commitments

Particulars As at March 31, 2012

(` in Million)

As at March 31, 2011

(` in Million)

Estimated amount of contracts remaining to be executed on capital account net of advances of ` 83 Million (Previous year ` 43 Million) not provided for

297 245

297 245

40

22. Revenue from Operations (Refer Note 2.4, 33 and 40)

Particulars For the Year ended

March 31, 2012(` in Million)

For the Year ended

March 31, 2011(` in Million)

Sale of Products– Finished goods 10,953 9,915 – Traded goods 364 225 Other Operating Revenue– Scrap Sales 34 23 Total (a) 11,351 10,163 Less: Excise Duty 989 889 Total (b) 989 889 Total (a-b) 10,362 9,274

a. Details of Sales (Finished goods):

Particulars For the Year ended

March 31, 2012(` in Million)

For the Year ended

March 31, 2011(` in Million)

Alternators 2,402 2,305 Starter Motors 1,141 1,119 Wiper Motors 1,298 1,275 Fan Motors 875 836 Blower Motors 353 375 CDI 1,473 1,184 Magneto 2,237 1,774 Print Motor 5 7 Window Washer 39 38 Power Window 1,039 948 Flywheel – 4 Spares 91 50

10,953 9,915 b. Details of Sales (Traded goods):

Particulars For the Year ended

March 31, 2012(` in Million)

For the Year ended

March 31, 2011(` in Million)

Alternators 9 106 Starter Motors 208 86 Fan Motors 3 14 EPS Motors 141 19 Wiper Motors 3 0**

364 225 ** Amount below the norm of rounding off adopted by the Company.

23. Other Income

Particulars For the Year ended

March 31, 2012(` in Million)

For the Year ended

March 31, 2011(` in Million)

Interest Income (Refer Note 2.4) 37 29 Liabilities written back to the extent no longer required 0** 1 Sale of utensils, empties and bins 18 11 Miscellaneous Income 2 2 Net gain on foreign currency transactions (Refer note 2.5 and 42) 28 –

85 43 ** Amount below the norm of rounding off adopted by the Company.

41

24. Cost of Materials Consumed (Refer Note 31, 32 and 42)

Particulars For the Year ended

March 31, 2012(` in Million)

For the Year ended

March 31, 2011(` in Million)

Opening stocks (a) 779 477 Add: Purchases * (b) 8,013 7,216 Less: Closing Stocks (c) 763 779 Raw material consumed (a+b-c) 8,029 6,914

* Includes shortages, write-offs and other adjustments

25. Changes in inventory of finished goods and work in progress

Particulars For the Year ended

March 31, 2012(` in Million)

For the Year ended

March 31, 2011(` in Million)

Stock at the end of the year:– Finished Goods (Manufacturing) 219 105 – Work in progress 153 92 – Traded Goods 100 66 Total (A) 472 263 Less: Stock at the beginning of the year:– Finished Goods (Manufacturing) 105 127 – Work in progress 92 65 – Traded Goods 66 37 Total (B) 263 229 (Increase)/Decrease in Stocks (A-B) (209) (34)

26. Employee Benefits Expense (Refer Note 30)

Particulars For the Year ended

March 31, 2012(` in Million)

For the Year ended

March 31, 2011(` in Million)

Salaries, Wages and Bonus (Refer Note 44) 852 709 Contribution to Provident and other Funds (Refer Note 2.8, 29 and 44) 68 50 Gratuity (Refer Note 2.8 and 44) 15 6 Staff Welfare Expenses 141 124 Group Insurance 20 12

1,096 901

27. Finance Costs (Refer Note 2.11, 34 and 38)

Particulars For the Year ended

March 31, 2012(` in Million)

For the Year ended

March 31, 2011(` in Million)

Interest on Long Term borrowing (ECB ) 2 – Premium on swap arrangement 14 – Other borrowing costs 99 18 Bank and Other Charges 2 1

117 19

42

28. Administration and Other expenses (Refer Note 2.5, 2.17, 31, 32, 34, 35, 38, 42, 43 and 45)

Particulars For the Year ended

March 31, 2012(` in Million)

For the Year ended

March 31, 2011(` in Million)

Consumption of stores and spare parts 111 78 Excise Duty [Refer Note (a) below] 14 (3)Power and fuel 91 74 Rent 60 12 Repairs to buildings 27 20 Repairs to machinery 52 63 Insurance 6 5 Rates and taxes 40 23 Travelling Expenses 28 17 Vehicle Running and Hire Charges 38 33 Freight Outward 29 17 Discount on Sales 61 56 Commission to Sole Selling Agent 162 145 Warranty 2 2 Royalty 257 199 Application Cost and Services Fees 168 169 Legal, Professional and Consultancy 100 47 Communication Expenses 10 8 Advertisement and Publicity Expenses 1 1 Provision for mark to market losses on derivatives 68 0** Net loss on foreign currency transaction (other than considered as 0** 10 finance cost)Loss on Sale / Discarding of Assets (Net) 1 1 Miscellaneous Expenses 79 35

1,405 1,012 (a) Represents excise duty related to the difference between the closing stock and opening stock.

** Amount below the norm of rounding off adopted by the Company.

29. PROVIDENT FUND ON INTERNATIONAL WORKERS: Pursuant to the FAQs issued by Employees’ Provident Fund Organization on May 06,2011, during the current year, the Company

has accounted for social security contributions on total salary of international workers, as defined in the notification issued by the prescribed authorities in this regard, instead of such contributions having been paid earlier only on salary paid to such employees in India. Accordingly, employees’ benefit expenses during the current year include such expense of ` 26 million (Previous Year Nil) relating to earlier years (November 1, 2008- March 31,2011). This amount has been shown as an exceptional item in the Statement of Profit and Loss for the year ended March 31,2012.

30. MANAGERIAL REMUNERATION: (a) Consequent to accruals/payouts, as mentioned in point no. 29 above, the remuneration computed in accordance with the

provisions of the Companies Act, 1956 (“Act”) for following directors exceeded the limits as specified in part-II of schedule XIII of the Act:

(` in Million)

Name of Director Excess Remuneration subject to shareholders’ approval*

Mr. Kazuyasu Sugita 2Mr. Koji Shiga 2Mr. Takashi Aoyama 2Mr. Minoru Ono 0 **Total 6

* This excess payment is subject to shareholders’ approval via a special resolution in the ensuing annual general meeting. **Amount below the norm of rounding off adopted by the Company.

43

b) The appointment of Mr. Minoru Ono as an alternate director on a full time basis with effect from February 13, 2012 and his remuneration of ` 1 Million as a director, is subject to the approval of the shareholders in the ensuing annual general meeting and approval of the Central Government in this regard. The Company is currently in process of filing an application with the Central Government to seek aforesaid approval, in accordance with the applicable provisions of the Companies Act, 1956.

c) The managing director of the Company is eligible to participate in the Employee Stock Option Plans (ESOPs) of Denso Corporation, Japan; the parent company for which no cost has been charged to the Company. Accordingly, the managerial remuneration does not include any cost towards aforesaid ESOPs.

31. VALUE OF IMPORTED AND INDIGENOUS RAW MATERIALS, COMPONENTS, STORES AND SPARES CONSUMED :

For the year ended March 31, 2012

For the year ended March 31, 2011

% (` in Million) % (` in Million)a) Raw Materials and Components

i) Imported 41.11 3,301 45.08 3117 ii) Indigenous 58.89 4,728 54.92 3797

100.00 8,029 100.00 6,914 b) Stores and Spares

i) Imported 24.64 27 37.50 29 ii) Indigenous 75.36 84 62.50 49

100.00 111 100.00 78

32. CIF VALUE OF IMPORTS (ON ACCRUAL BASIS) :

a) Raw Materials and Components 3,157 3,440 b) Traded Goods 296 206 c) Stores and Spares * 35 49 d) Capital Goods 467 485

3,955 4,180

* Including ` 15 Million (Previous year ` 24 Million) charged to Repairs and Maintenance.

33. EARNING IN FOREIGN CURRENCY (ON ACCRUAL BASIS) :

FOB Value of Exports 90 50 90 50

34. EXPENDITURE IN FOREIGN CURRENCY (ON ACCRUAL BASIS):

a) Royalty 257 199 b) Technical Service Fees / Application Cost# 179 147 c) Traveling and Training 4 7 d) Interest on External Commercial Borrowing 2 –e) Others 10 3

452 356 # Including ` 25 Million (Previous year ` 57 Million) paid for Technical Service Fees, which has been capitalised to fixed assets.

35. LEGAL AND PROFESSIONAL EXPENSES INCLUDE AUDITORS’ REMUNERATION * AS FOLLOWS :

a) Audit Fee 4 4 b) Tax Audit 0 ** 0c) Fee for Other Services (Certification) 1 0d) Out of Pocket Expenses 0 ** 0

5 4 * Excludes Service Tax and Cess.

**Amount below the norm of rounding off adopted by the Company.

44

For the Year ended March 31, 2012

(` in Million)

For the Year ended

March 31, 2011(` in Million)

36. DIVIDEND REMITTED IN FOREIGN CURRENCY IN CURRENT YEAR FOR FINANCIAL YEAR 2010-11 (PREVIOUS YEAR FOR FINANCIAL YEAR 2009-10) :

a) Denso Corporation, Japan on Nil (Previous year - 1,33,62,091) shares – 27 b) Sumitomo Corporation, Japan on Nil (Previous year - 28,62,794) shares – 6 c) Asmo Co. Ltd., Japan on Nil (Previous year - 13,93,982) shares – 3

– 36

37. EARNINGS PER SHARE (EPS) :

For the Year ended

March 31, 2012

For the Year ended

March 31, 2011The numerator and denominator used to calculate Basic / Diluted EPS :(Loss)/Profit attributable to Equity Shareholders (` in Million) (722) 20 Basic weighted average number of Equity Shares outstanding during the year (` in Million)

28 28

Nominal value of Shares (`) 10 10 Basic and Diluted (Loss)/Earning Per Equity Share of ` 10 each (25.89) 0.71

The Company has not issued any potential equity shares, and accordingly, the basic Earning per Share and Diluted Earning per Shares are same.

38. The category-wise Derivative Instrument outstanding as at March 31,2012 are as under : Foreign Currency Forward Contract :

(in Million)

Purpose As At March 31, 2012 As At March 31, 2011Foreign

CurrencyCurrency

Bought amount

Currency Sold

amount

Foreign Currency

Currency Bought amount

Currency Sold

amountHedging– Payable USD – – USD 0** 4 – Payable JPY 15 9 JPY – – – External Commercial Borrowings (ECB)* JPY 1,172 732 JPY – –

*Net of foreign exchange gain of ` 68 Million at the end of the year accounted for in accordance with AS-11 “The Effects of Changes in Foreign Exchange Rates”

** Amount below the norm of rounding off adopted by the Company.

The Company executed a loan agreement dated November 11, 2011 with Denso Corporation, Japan, the parent company and in accordance with the terms of agreement, the Company has taken loan in Japanese Yen 1,172 million equivalent to ` 800 million, which is repayable on November 25, 2014.

The interest rate applicable for loan is 6 months JPY LIBOR+0.25%, payable in half yearly installments starting from May 25, 2012. The Company has entered into a swap arrangement to hedge the foreign currency risks for both principal and interest with J. P. Morgan Bank. Since the Company has not adopted AS-30 “Financial Instruments : Recognition and Measurement”, keeping in view the principle of prudence, the Company has provided for losses of ` 68 million in respect of aforesaid outstanding swap contract at the balance sheet date by marking the same to market. This accounting treatment is in accordance with the ICAI announcement on “Accounting for derivatives” dated March 29, 2008. Further, ECB has been reinstated at the year end exchange rate in accordance with AS-11“The Effects of changes in Foreign Exchange Rates” and the resultant gain of ` 68 Million (Previous Year Nil) has been recognized in Statement of Profit and Loss for the year ended March 31,2012.

45

Unhedged foreign currency exposures as at March 31, 2012 are as under :(` in Million)

Purpose As At March 31, 2012 As At March 31, 2011Foreign

CurrencyAmount

in Foreign Currency

Amount Foreign Currency

Amount in Foreign Currency

Amount

Receivables JPY 0** 0** JPY 2 1 USD 1 50 USD 0** 5 THB – – THB 0** 0**

Payables JPY 440 288 JPY 766 416 USD 4 201 USD 3 118 THB 16 27 THB 10 14

EURO 0** 3 EURO 0** 0** SGD – – SGD 0** 1

** Amount below the norm of rounding off adopted by the Company.

39. SECURITY FOR SHORT TERM BORROWINGS :

As at March 31, 2011 cash credit facilities and demand loans from the bank aggregating ` 697 Million were secured by the hypothecation of the stocks and book debts of the Company. The Company has got the charge created earlier, in respect of stocks and debts of the Company, released on August 9, 2011 and accordingly, filed necessary forms with the Registrar of Companies. Consequently, with effect from August 9, 2011 the short term borrowings got converted into unsecured loans.

40. DISCONTINUING OPERATIONS:

On October 04, 2011, to re-align/restructure the business segment to address operational and economic constraints and to focus on areas of future growth the Board of Directors of the Company had decided to exit from the small motor business (SMB) and intimated the same to the stock exchanges on the same date.The Board of Directors and the shareholders at their meeting held on November 12, 2011 and December 21,2011, respectively, have granted their approval to the Company to sell its small motor business to Denso Haryana Private Limited (DNHA), a related party, for a lump sum consideration of ` 1,487 million on a going concern basis by way of slump sale. The sale will involve transfer of all assets (tangible & intangible), employees, etc of small motor business.

The Company has signed a binding business transfer agreement with Denso Haryana Private Limited on February 15, 2012 and the legal transfer of small motor business is likely to get completed by October 1, 2012 (completion date). The shifting of plant and machinery of small motor business from the Company to DNHA will happen in the phased manner and is expected to be completed by July, 2015. During the shifting period, the Company would carry out the manufacturing of products of small motor business on behalf of DNHA under a sub-contract manufacturing, which is currently in process of being finalized.

As per the binding business transfer agreement lump sum (consideration) shall be an amount of ` 1,487 million which shall be subject to following adjustments:

a) Adjustment in respect of changes in the working capital of the small motor business as set out in the reference balance sheet date (March 31,2011) and completion date (October 1, 2012).

b) Cash transferred, if any.

c) Debt transferred, if any.

d) Capital investments made by the seller for the small motor business between April 1, 2011 and the completion date (October 1, 2012).

As per terms of aforesaid business transfer agreement, the consideration is required to be paid in two installments and the Company has received ` 1,329 million, being 90% of lump sum consideration, as an advance during the year ended March 31, 2012.

The small motor business is part of the automotive components business which is the only business segment in term of AS-17 “Segment Reporting”(Refer Note 41)

46

The carrying amounts of the total assets and liabilities to be disposed of at March 31, 2012 are as follows:(` in Million)

Particulars For the year ended

March 31, 2012

For the year ended

March 31, 2011Total assets 1,228 1,177 Total liabilities 397 465 Net Assets 831 712

Assets held for disposal as at March 31, 2012, included in Note 19 on “Other Current Assets” : ` 429 million (including ` 10 million related to capital work in progress). Refer Note 11 to the financial statements.

The revenue and expenses in respect of ordinary activities attributable to the discontinuing operations are as follows :(` in Million)

Particulars For the year ended

March 31, 2012

For the year ended

March 31, 2011Revenues 3,423 3,213 Costs and expenses 3,596 3,143 Operating income (loss) before taxes from discontinued operations (173) 70 Expense /(Tax Benefit) 1 5 Operating income (loss) from discontinued operations (174) 65 Gain (loss) from dispositions, net of tax – – Income (loss) from discontinued operations, net of tax (174) 65

The net cash flows attributable to the Small Motor Business are as follows:(` in Million)

Particulars For the year ended

March 31, 2012

For the year ended

March 31, 2011Operating activities (199) 121Investing activities (77) (290)Financing activities – –Net cash inflows/(outflows) (276) (169)

41. SEGMENT REPORTING :

The Company is operating in a single business/ geographical segment and therefore as per the requirements of Accounting Standard-17 on “Segment Reporting”, no additional disclosures are required. Also refer note 40 on discontinuing operations related to small motor business.

42. Revenue Loss (Net) on account of foreign exchange currency fluctuation during the year amounting to ` 68 Million [Previous year-Loss (Net) ` 19 Million] has been debited/credited to the respective heads in the Statement of Profit and Loss.

43. LEASES

The Company has entered into operating lease transaction for office premises for periods ranging between 1-3 years. Terms of the lease include term for renewal, increase in rents in future periods and terms of cancellation. Lease rental amounting to ` 60 Million (Previous year ` 12 Million) have been charged to Statement of Profit and Loss during the year. Future minimum lease payments of non-cancelable operating leases are as follows:

(` in Million)

Particulars As at March 31, 2012

As at March 31, 2011

Not later than 1 year 15 6 Later than 1 year but not later than 5 years 2 2

The total rent received on sub-leases during the year is ` 1 million (Previous year ` 1 million)

47

44. The disclosures of Employee’s benefits as defined in the Accounting Standard -15 (Revised) on “Employees’ Benefits” are as follows:

A. Defined Contribution Plan :

a). Superannuation Fund

During the year, the Company has recognized the following amount in the Statement of Profit and Loss :

(` in Million)

Particulars For the year ended

March 31, 2012

For the year ended

March 31, 2011

Employers Contribution to Superannuation Fund* 14 10

B. State Plan :

a). Employers contribution to Employee State Insurance Fund

During the year, the Company has recognized the following amount in the Statement of Profit and Loss :

(` in Million)

Particulars For the year ended

March 31, 2012

For the year ended

March 31, 2011

Employers contribution to Employee State Insurance Fund.* 7 8

* Included in Contribution to Provident and Other Funds under the head “Employee Benefit Expense”. (Refer Note-26 to the financial statements)

C. Defined Benefit Plan :

a). Contribution to Gratuity Funds - Employee’s Gratuity Fund

(I) Actuarial Assumptions :

In accordance with Accounting Standard 15 (revised 2005), an actuarial valuation was carried out on the basis of “Projected unit credit method” in respect of the aforesaid defined benefit plan based on the following assumptions :

Employees Gratuity Fund (Funded)

Particulars For the year ended

March 31, 2012

For the year ended

March 31, 2011

For the year ended

March 31, 2010

For the year ended

March 31, 2009

For the year ended

March 31, 2008

Discount Rate (per annum) 8.75% 8.00% 7.00% 7.00% 8.00%

Rate of increase in compensation levels (per annum)

5.50% 5.00% 5.00% 5.00% 5.50%

Rate of return on plan assets (per annum)

9.40% 9.00% 9.00% 9.00% 9.00%

Expected average remaining working lives of employees (years)

22.47 22.30 21.51 21.62 21.87

Mortality Table LIC (1994-96)

The estimated rate of escalation in salary considered in an actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets.

48

(II) Change in Present Value of the Defined Benefit Obligation :

(` in Million)

Employees Gratuity Fund (Funded)Particulars For the

year ended March 31, 2012

For the year ended

March 31, 2011

For the year ended

March 31, 2010

For the year ended

March 31, 2009

For the year ended

March 31, 2008Present value of obligation beginning of the year

146 135 109 87 59

Impact of Transition provision of AS-15 (Revised)

– – – – 6

Interest cost 14 11 9 6 5 Past Service cost – – – – – Current service cost 11 5 9 7 6 Curtailment cost – – – – – Settlement cost – – – – – Benefits Paid (5) (3) (2) (1) (2)Actuarial (gain)/ loss on Obligations (1) (2) 10 10 13 Present value of obligation as at year end

165 146 135 109 87

(III) Changes in the Fair value of Plan Assets :

(` in Million)

Employees Gratuity Fund (Funded)Particulars For the

year ended March 31, 2012

For the year ended

March 31, 2011

For the year ended

March 31, 2010

For the year ended

March 31, 2009

For the year ended

March 31, 2008Fair value of Plan Assets as at beginning of the year

100 83 63 50 40

Expected return on Plan Assets 9 7 6 5 4 Contributions 15 12 15 9 8 Benefits Paid (6) (3) (2) (1) (2)Actuarial gain/ (loss) on Plan Assets 0** 1 1 0** 0** Fair value of Plan Assets as at year end

118 100 83 63 50

(IV) Reconciliation of Present value of Defined Benefit Obligation and Fair value of Funded Assets :(` in Million)

Employees Gratuity Fund (Funded)Particulars For the

year ended March 31, 2012

For the year ended

March 31, 2011

For the year ended

March 31, 2010

For the year ended

March 31, 2009

For the year ended

March 31, 2008Present value obligation as at year end

165 146 135 109 87

Fair value of Plan Assets as at year end

118 100 83 63 50

Funded Status – – – – – Present value of unfunded obligation as at the year end

47 46 52 46 37

Unfunded Actuarial (gains)/ losses – – – – – Unfunded Net (Asset)/Liability recognized in Balance Sheet.

47 46 52 46 37

49

(V) Expenses recognized during the year in Statement of Profit and Loss :(` in Million)

Employees Gratuity Fund (Funded)Particulars For the

year ended March 31, 2012

For the year ended

March 31, 2011

For the year ended

March 31, 2010

For the year ended

March 31, 2009

For the year ended

March 31, 2008Current service cost 11 5 9 7 7 Past Service cost – – – – – Interest cost 14 11 9 6 5 Expected return on Plan Assets (9) (7) (6) (5) (4)Curtailment cost – – – – – Settlement cost – – – – – Net Actuarial (gain)/ loss recognized during the year

(1) (3) 9 10 12

Total Expense recognized in Profit & Loss Account *

15 6 21 18 20

* Included in Salaries, Wages and Bonus under the head “Employee Benefit Expense”. (Refer Note-26 to the financial statements).

(VI) Major Category of Plan Assets as a % of the Total plan assets as at March 31,2012 : The Company is not investing on its own and has taken insurance policy administrated by the Life Insurance Corporation of

India. Thus plan assets constitute of Fund lying with the Life Insurance Corporation of India and the information in respect of underlying investments done by the insurer is not available with the Company.

(VII) Enterprise best estimate of contribution during next year is as under :(` in Million)

Particulars For the year ended

March 31, 2012

For the year ended

March 31, 2011 Enterprise best estimate of contribution during next year-Gratuity Fund 15 13

D. Multi Employer Defined Benefit Plan :

a). Provident Fund

The Company contributes to the employee provident fund trust “Denso Employees Provident Fund Trust” which is managed by the Company. The Company’s Provident Fund Trust is exempted under Section 17 of Employees’ Provident Fund Act, 1952. Conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the trust vis-à-vis statutory rate. As per guidance note on AS – 15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan.

The Trust includes employees of the Company as well as of Denso International India Private Limited, a related party. In view of the same, it is a multi employer defined benefit plan.

The Trust has been investing the Provident fund contributions of the employees of both the companies in a composite manner and the same cannot be separately identified entity wise.

In view of the same an actuarial valuation, in accordance with the AS-15 (Revised), was carried out at composite level and as per actuarial certificate, the trust has surplus of ` 43 million as at March 31,2012. As per actuarial certificate there is no shortfall in the earning of fund against statutorily required “interest rate guarantee” and accordingly, the “liability on account of interest rate guarantee” is nil.

During the year, the Company has recognized the following amounts in the Statement of Profit and Loss :(` in Million)

Particulars For the year ended

March 31, 2012

For the year ended

March 31, 2011Employers Contribution to Provident Fund* 27 18 Employers Contribution to Pension Fund* 20 14

* Included in Contribution to Provident and other Funds under head “Employee Benefit Expense”. (Refer Note-26 to the financial statements).

50

E. Other Employees Benefit Plans :

a). Leave Encashment/ Compensated Absence

b). Long Service Award

(I) Actuarial Assumptions :

In accordance with Accounting Standard 15 (revised 2005), an actuarial valuation was carried out on the basis of “Projected unit credit method” in respect of the aforesaid defined benefit plans based on the following assumptions :

Particulars For the year ended March 31, 2012

For the year ended March 31, 2011

For the year ended March 31, 2010

For the year ended March 31, 2009

For the year ended March 31, 2008

Leave En-cashment/

Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/ Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/ Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/ Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/ Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Discount Rate (per annum)

8.75% 8.75% 8.00% 8.00% 7.00% 7.00% 7.00% 7.00% 8.00% 8.00%

Rate of increase in compensation levels (per annum)

5.50% 5.50% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.50% 5.50%

Rate of return on plan assets (per annum)

Not applicable

Expected average remaining working lives of employees (years)

22.47 22.47 22.30 22.30 21.51 21.51 21.62 21.62 21.87 21.87

Mortality Table LIC (1994-96)

The estimated rate of escalation in salary considered in an actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets.

(II) Change in the Other Benefit Obligation :(` in Million)

Particulars For the year ended March 31, 2012

For the year ended March 31, 2011

For the year ended March 31, 2010

For the year ended March 31, 2009

For the year ended March 31, 2008

Leave En-cashment/

Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/ Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/ Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/ Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/ Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Present value of obligation beginning of the year

30 8 30 6 26 8 16 8 13 –

Impact of Transition provision of AS-15 (Revised)

– – – – – – – – (4) 7

Interest cost 3 – 2 – 2 – 1 – 1 –

Past Service cost – – – – – – – – – –

Current service cost 5 1 3 4 4 (1) 5 1 2 1

Curtailment cost – – – – – – – – – –

Settlement cost – – – – – – – – – –

Benefits Paid (2) (1) (19) (2) (17) (1) (10) (1) (6) (0)**

Actuarial (gain)/ loss on Obligations

(6) – 14 – 15 – 14 – 10 –

Present value of obligation as at year end

30 8 30 8 30 6 26 8 16 8

51

(III) Reconciliation of Present value of Other Benefit Obligation and Fair value of Funded Assets : (` in Million)

Particulars For the year ended March 31, 2012

For the year ended March 31, 2011

For the year ended March 31, 2010

For the year ended March 31, 2009

For the year ended March 31, 2008

Leave En-cashment/

Compensat-ed Absence (Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/

Compensated Absence

(Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/

Compensated Absence

(Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/

Compensated Absence

(Unfunded)

Long Service Award

(Unfunded)

Leave Encashment/

Compensated Absence

(Unfunded)

Long Service Award

(Unfunded)

Present value obligation as at year end

30 8 30 8 30 6 26 8 16 8

Fair value of Plan Assets as at year end

– – – – – – – – – –

Funded Status – – – – – – – – – –

Present value of unfunded obligation as at the year end

30 8 30 8 30 6 26 8 16 8

Unfunded Actuarial (gains)/ losses

– – – – – – – – – –

Unfunded Net (Asset)/Liability recognized in Balance Sheet.

30 8 30 8 30 6 26 8 16 8

Provision for Short Term Leave Encashment/ Compensated Absences

22 – 20 – 19 – 18 – 15 –

(IV) Expenses recognized during the year in Statement of Profit and Loss :(` in Million)

Particulars For the year ended March 31, 2012

For the year ended March 31, 2011

For the year ended March 31, 2010

For the year ended March 31, 2009

For the year ended March 31, 2008

Leave En-cashment/

Compensat-ed Absence

Long Service Award

Leave Encashment/

Compensated Absence

Long Service Award

Leave Encashment/

Compensated Absence

Long Service Award

Leave Encashment/

Compensated Absence

Long Service Award

Leave Encashment/

Compensated Absence

Long Service Award

Current service cost 5 1 3 4 4 (1) 5 1 2 1

Past Service cost – – – – – – – – – –

Interest cost 3 – 2 – 2 – 1 – 1 –

Expected return on Plan Assets

– – – – – – – – – –

Curtailment cost – – – – – – – – – –

Settlement cost – – – – – – – – – –

Net Actuarial (gain)/ loss recognized during the year

(6) – 14 – 15 – 14 – 10 –

Total Expense recognized in Profit & Loss Account *

2 1 19 4 21 (1) 20 1 13 1

* Included in Salaries, Wages and Bonus under the head “Employee Benefit Expense”. (Refer Note-26 to the financial statements).

45. Detail of Provisions:

Warranty provision relates to the estimated outflow in respect of guarantee for products sold. Due to the very nature of such costs, it is not possible to estimate the timing/ uncertainties relating to the outflow from such estimates. The detail of warranty provision is given below:

(` in Million)

Particulars For the year ended March 31,2012

For the year ended March 31,2011

Balance as at the beginning of the year 5 5 Additions 2 2 Amount used 2 2 Unused amount reversed – – Balance as at the end of the year 5 5

52

46. The information regarding amounts unpaid as at year end to Micro and Small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 has been disclosed in Note 8 “Trade Payables” to the extent, such parties have been identified on the basis of information available with the Company. Based on information available with the Company, the interest due on amount remaining unpaid as at year end and on the amount which has been paid beyond appointed day during year ended March 31, 2012 is as under :

(` in Million)

Particulars As at March 31, 2012

As at March 31, 2011

Delayed payments due as at the end of each accounting year on account of :– Principal – 1 – Interest due thereon – 0 **Total interest paid on all delayed payments during the year under the provisions of the Act – – Interest due on principal amounts paid beyond the due date during the year but without the interest amounts under this Act

1 1

Interest accrued but not due 1 – Total Interest due but not paid 2 1

**Amount below the norm of rounding off adopted by the Company.

47. The Company has not recognized Minimum Alternate Tax Credit of ` 8 million (Previous Year ` 8 million) as an asset as there is no convincing evidence that the Company will pay income tax higher than that computed under MAT, during the period MAT is permitted to be set off under the Income Tax Act, 1961.

48. RELATED PARTY DISCLOSURES :

In accordance with the requirements of Accounting Standard (AS)-18 on ‘Related Party Disclosures’, the names of the related parties where control exists/able to exercise significant influence alongwith the aggregate transactions/year end balances with them as identified and certified by the management are given below:

(a) List of Related Parties

Parties where control exists:-Holding Companies: Denso Corporation, Japan Asmo Co. Ltd., JapanOther related parties with whom transactions have taken place during the year :Fellow subsidiaries : Denso Tool & Die (Thailand) Co. Ltd.,

ThailandDenso International India Private Ltd., India

Denso Manufacturing Italia S.p.A., Italia Denso Thermal Systems Pune Pvt. Ltd., IndiaDenso International Asia PTE Ltd., Singapore

Denso Kirloskar Industries (Pvt.) Ltd., India

Denso (Thailand) Co. Ltd., Thailand PT. ASMO Indonesia , IndonesiaChongqing Denso Co. Ltd., China Nippon Wiper Blade(M) SDN.BHD, MalaysiaGuangzhou Denso Co. Ltd., China Denso Trim Co. Ltd, JapanDenso Haryana Private Ltd., India Denso International Asia Co. LtdPT. Denso Indonesia, Indonesia Denso Unity Service Corporation, JapanDenso Manufacturing Tennessee INC Denso Industrial Da Amazonia Ltda.Denso Subros Thermal Engineering Centre India Ltd,India

PT. Denso Sales Indonesia, Indonesia

Companies having Significant Influence :

Maruti Suzuki India Limited ,India

Key Management Personnel : Koji Shiga, Managing Director Kazuyasu Sugita, Director (Resigned from Directorship w.e.f. 04/10/2011)Takashi Aoyama, Director (Resigned from Directorship w.e.f. 01/07/2011)Minoru Ono, Director (Joined as a Director w.e.f. 13/02/2012)

53

(b) Transactions with Related Parties in the ordinary course of business and related parties with whom transactions, the amount of which is in excess of 10% of the total related party transactions of the same type :

(` in Million)Nature of Transaction Holding

Companies Fellow

Subsidiaries Significant

Influence Key

Management Personnel

Sale of Goods :– Denso Corporation, Japan 0**

(1) –

(–) –

(–) –

(–) – Maruti Suzuki India Limited, India –

(–) –

(–) 4,063 (4,425)

– (–)

– Others 0** (–)

84 (37)

– (–)

– (–)

Purchases of Materials and Traded Goods:– Denso Kirloskar Industries (Pvt.) Ltd., India –

(–) 367

(300) –

(–) –

(–) – Denso Corporation, Japan 30

(–) –

(–) –

(–) –

(–) – Denso International Asia Pte Ltd., Singapore –

(–) 109

(–) –

(–) –

(–) – Denso Manufacturing Italia S.p.A., Italia –

(–) 3

(61) –

(–) –

(–) – Others 0**

(–) 45

(83) –

(–) –

(–) Expenditure on Royalty, Application Cost, Technical Fee (Short Stay), Cash Discount, Warranty, Training Expenses and Stationery– Denso Corporation, Japan 398

(355) –

(–) –

(–) –

(–) – Denso International India Private Ltd., India –

(–) 76

(32) –

(–) –

(–) – Others 5

(0)** 15

(10) 34

(35) –

(–) Commission on Sale:– Denso International India Private Ltd., India –

(–) 162

(145) –

(–) –

(–)

Communication Expenses :– Denso Corporation, Japan 3

(2) –

(–) –

(–) –

(–) Purchase of Capital Equipments :– Denso Corporation, Japan 11

(83) –

(–) –

(–) –

(–) – Denso Tool & Die (Thailand) Co. Ltd., Thailand –

(–) 6

(8) –

(–) –

(–) – Denso (Thailand) Co. Limited. , Thailand –

(–) 118 (37)

– (–)

– (–)

– Others – (–)

3 (–)

– (–)

– (–)

Advance against Sale of Small Motors Business:– Denso Haryana Private Limited –

(–) 1,329

(–) –

(–) –

(–)

54

(` in Million)Nature of Transaction Holding

Companies Fellow

Subsidiaries Significant

Influence Key

Management Personnel

Reimbursements paid by :– Denso Corporation, Japan 62

(38) –

(–) –

(–) –

(–) – Denso International Asia Co. Ltd –

(–)

0**

(0)**

–

(–)

–

(–) – Denso Haryana Private Limited –

(–)

0**

(0)**

–

(–)

–

(–) – Denso International India Pvt. Ltd. , India –

(–) 3

(3) –

(–) –

(–) – Others –

(–) 0**

(0)** –

(–) –

(–) Reimbursements paid to :– Denso International India Pvt. Ltd., India –

(–) 1

(2) –

(–) –

(–) – Others –

(–) –

(0)** –

(–) –

(–) Remuneration to Directors (Refer Note 29 and 30) : – Koji Shiga –

(–) –

(–) –

(–) 4

(3) – Kazuyasu Sugita –

(–) –

(–) –

(–) 4

(4) – Takashi Aoyama –

(–) –

(–) –

(–) 2

(3) – Minoru Ono –

(–) –

(–) –

(–) 1

(–) Dividend paid during the year :– Denso Corporation, Japan –

(27) –

(–) –

(–) –

(–) – Maruti Suzuki India Limited, India –

(–) –

(–) –

(6) –

(–) – Asmo Co. Ltd., Japan –

(3) –

(–) –

(–) –

(–) External Commercial Borrowings received during the year :– Denso Corporation, Japan 800

(–) –

(–) –

(–) –

(–) Interest on External Commercial Borrowings:– Denso Corporation, Japan 2

(–) –

(–) –

(–) –

(–)

* In accordance with terms of an arrangement between the Company and holding company, the holding company on a monthly basis repatriates the fund equivalent to withholding tax related to foreign income of expatriate staff serving in India, in an escrow account with the authorized bank. During the year, holding company remitted aggregate of ` 61 million (Previous year ` 36 million) which has been deposited by the authorized bank to revenue authorities in the name of the Company.

** Amount is below the rounding off norm adopted by the Company

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(c) Outstanding Balances at Year-end:(` in Million)

Nature of Transaction Holding Companies

Fellow Subsidiaries

Significant Influence

Key Management

PersonnelSundry Debtors 0**

(0) 50 (5)

217 (126)

– (–)

Sundry Creditors 79 (218)

201 (128)

– (–)

0** (0)**

Advances Recoverable 4 (3)

2 (1)

– (–)

– (–)

Loans Payable [Refer Note 38] 732 (–)

– (–)

– (–)

– (–)

Note :1. Figures in brackets represent ‘Previous Year’.

** Amount is below the rounding off norm adopted by the Company

49. The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31,2012 are prepared as per Revised Schedule VI.

Accordingly, the previous year figures have also been reclassified to conform to this year’s classification. The adoption of’ Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

For Price Waterhouse For and on behalf of the Board of DirectorsFirm Registration Number 301112E KOJI SHIGA MINORU ONOChartered Accountants Managing Director Director

ABHISHEK RARA ARUN GANGWANI ALOK MATHURPartner Deputy General Manager Company SecretaryMembership No. F77779

Place : Noida Place : Noida Date : 4th June, 2012 Date : 4th June, 2012

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