TWENTY SIXTHANNUAL REPORT

2010-2011

DENSO INDIA LIMITED

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DENSO INDIA PLANT(S)

AT TILPATTA

AT HARIDWAR

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DIRECTORS’ REPORTYour Directors are pleased to present their TwentySixth Annual Report together with the auditedstatement of accounts for the financial year ended31st March, 2011.FINANCIAL RESULTS

For the For theYear Year

Ended Ended31.03.11 31.03.10

Rs. 000 Rs. 000

Gross Sales 1013,94,76 797,87,98Sales (Net of Excise) 925,07,69 736,32,56Gross Profit (before 28,03,26 44,10,51depreciation andmiscellaneous expenditurewrite-off)Depreciation & Miscellaneous 22,93,43 15,92,57Expenditure written offProfit for the year before 5,09,83 28,17,94TaxationTax Provision 1,62,74 7,98,86Deferred Tax 1,43,24 1,30,36Profit after Tax 2,03,85 18,88,72

MANAGEMENT DISCUSSION AND ANALYSIS :OPERATIONS :The year ended 31 March, 2011 witnessed a stablegrowth in the Auto Industry with an average growthof 33% in the Four wheeler and 27% in two wheelersegment. In conformity with this growth trajectory,the gross sales of the Company grew by 27% ascompared to previous year. Despite this increase insales, the Compnay’s profit showed a sharp declinedue to rising raw material cost & expenses, which wasfurther aggravated by price reduction pressure onsales. To add to the problem, the company had to resortto importation of raw materials and components athigh cost to meet the upsurge in demand which hadan adverse impact on profitability. The Company alsohad to resort to use funds raised on short term basisfor long term investment purpose of quickly upgradingthe machines to meet the upsurge in demand.In order to meet the challenges, the management hasinitiated various steps, as outlined hereunder, forbringing improvement during the current year.1. Enhancement of capacity.2. Indigenization of productions.3. Cost reduction process.4. Reducing the level of inventory5. Meet the customer requirements to boost the

Company Growth.It is expected that once the above measures have beenimplemented, the Company, barring unforeseen

circumstances, will return back to its position of higherprofitablity in line with that of the earlier years.FACTORY AT HARIDWARThe Company’s factory at Haridwar catering to thetwo wheeler major – Hero Honda Motors Limited hasbeen completed and is fully operational and hasreached to break even. The Company is supplying tothe requirements of its major customer – Hero Hondawhich is witnessing positive growth and also to availtax incentives being offered by the government ofUttarakhand.DIVIDEND :Due to inadequacy of profit, no dividend isrecommended for the year ended 31st March, 2011.FUTURE OUTLOOK :Opportunities and Threats:The last quarter of the financial year ended 31 March,2011 saw robust sales of the OEMs. The market leaderMaruti Suzuki in the Four Wheeler segment and HeroHonda in the Two Wheeler segment recordedimpressive growth and the Indian economy is on therebound with the auto industry leading the way. Thedemand for the Two wheelers and the Four Wheelersis expected to grow significantly as compared toprevious year.In order to cater to enhanced demand,the Company is in the process of enhancing itsproduction capacities.All the major international auto players have alreadyestablished their production factilities in the countryand are looking at the Indian auto industry to propelthem to grow by introduction of new models whichare being introduced into the market. All the automaunfacturers are emphasizing on the low costproduction facilities for survival in the highlycompetitive and complex Indian auto market. YourCompany is also developing its strategies to cater tothe needs of the original equipments manufacturerswho are introducing new models every year.As all the major auto players are looking at the Indianauto market, the competition among the OEMs shallintensify which shall also put the prices of the productsof the Company under pressure. In order to off set this,the Company is pursuing active plans for costreduction, higher productivity, lower rejection, qualityimprovement etc. so that the company continues tooperate on a viable and profitable lines in the long term.Any adverse change in the Government policy is likelyto have its own effect.Cautionary Note :Certain statements in the “Management Discussionand Analysis” section may be forward looking andare stated as required by applicable laws andregulations. Many factors may affect the actual results,which could be different from what the Directors’

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envisage in terms of the future performance andoutlook.Segment wise Performance:The Company’s operating business is organized andmanaged according to the nature of product, withsingle Primary Reportable Segment comprising ofmanufacturing and supply of electrical automotivecomponents.Internal Control Systems:The Company maintains a system of internal control,including suitable monitoring procedures. TheInternal Auditors regularly conducts a review of thefinancial and operating controls.Human Resources:The Company continued to have cordial andharmonious relations with its employees.FIXED DEPOSITS:The Company has not invited or availed Fixed Depositsfrom the public during the year under review.AUDIT COMMITTEE :During the year the Audit Committee Meetings wereconducted as per the provisions of listing agreementwith the Stock Exchange(s). The details about thefunctioning of the committee are being enumerated inthe Corporate Governance report section which is partof the Annual Report for the year ending March 31, 2011.AUDITORS:M/s Price Waterhouse, Chartered Accountants retireas Auditors at forthcoming Annual General Meetingand are eligible to be reappointed as Auditors.Observations made in the Auditors’ Report read withNotes to Accounts and Directors’ Report are selfexplanatory and therefore, do not call for any furthercomments under Section 217(3) of the Companies Act,1956.DIRECTORS:The were no changes in the composition of the Boardof Directors of the Company during the financial year2010-11.PARTICULARS OF CONSERVATION OF ENERGYTECHNOLOGY ABSORPTION & FOREIGNEXCHANGE EARNINGS AND OUTGO.The Statement pursuant to Section 217(1)(e) of theCompanies Act, 1956 read with the Companies(Disclosure of Particulars in the Report of the Board ofDirectors) Rules, 1988 is given in the Annexure formingpart of this Report.

PERSONNELNone of the employees of the Company are coveredunder Section 217(2-A) of the Companies Act, 1956 readwith the Companies (Particulars of Employees) Rules,1975 as amended to date.Directors Responsibility Statement as per Section217(2AA) of the Companies Act, 1956.

1. The Financial Statement for the year ended31.03.2011 are prepared to comply in all materialaspects with all the applicable accountingprinciples in India, the applicable accountingstandards notified under section 211(3C) of theCompanies Act, 1956 and the relevant provisionsof the Companies Act, 1956.

2. The Directors of Denso India Ltd. accept theresponsibility for the integrity and objective ofthese Financial Statement as reflected through theconsistent application of the Accounting Policiesas well as for the estimates made and the judgmentexercised relating to matters not concluded byyear-end.

3. The Directors believe that the Financial Statementsreflect fairly the form and substance of thetransactions concluded and reasonably present theCompany’s financial condition and true and fairview of the results of the operation for the yearand the state of affairs of the business as at 31 st

March, 2011.4. The Company has installed an accounting system

and the financial statements have been preparedon a going concern basis along with a system ofcontrols which are reviewed, evaluated andupdated on an on going basis.

5. Our internal Auditors have conducted periodicaudits to provide reasonable assurance that theestablished policies and the procedures of theCompany have been followed for safeguarding theassets of the Company and for preventing anyform of fraud and other irregularities subject tothe inherent limitations in any system andprocedure and coverage thereof that should berecognized in weighing the assurance provided byany system of internal controls. These have beenreviewed periodically at Audit CommitteeMeetings.

6. The financial statements have been audited byM/s Price Waterhouse, Chartered Accountants, thestatutory auditors.

ACKNOWLEDGEMENTSYour Directors take this opportunity to thank thecustomers, vendors, shareholders, the bankers, theCentral and State Governments and other agencies fortheir continued support, co-operation and contributionduring the year under review. Your Directors place onrecord their deep appreciation of the management ofDenso Corporation, Japan, Sumitomo Corporation,Japan and ASMO Co. Ltd., Japan and Maruti SuzukiIndia Limited, Denso International India Pvt Ltd fortheir assistance and support during the year. YourDirectors wish to place on record their appreciation ofthe contribution made by the employees at all levels.

For and on behalf of the Board

Place : New Delhi K. Sugita Koji ShigaDate : May 30, 2011 Director Managing Director

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ANNEXURE TO DIRECTORS’ REPORT

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

A. CONSERVATION OF ENERGY

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

B. TECHNOLOGY ABSORPTION

The Company has obtained technical know howfor the manufacture of auto components fromDenso Corporation, Japan. The process ofabsorption of the technology is a continuing process.No expenditure either of Capital or Revenue natureon Research & Development has been incurredduring the year under review.

TECHNOLOGY ABSORPTION, ADAPTATIONAND INNOVATION:Efforts made : New models are being

developed to help in furtherlocalisation by vehiclemakers.

Benefits derived: In-house skills are beingdeveloped in design,production engineering andendurance testing. Extensivehelp is also being provided tovendors to upgrade theirtechnology to meet qualityrequirements.

a) Technology imported: Import of technology for themanufacture of auto electricals

b) Year of import:Product YearAlternators 1984Regulators -do-Starters -do-Wiper Motors (with Link) -do-AC Generators / Flywheel Magnetos 1988Ignition coils for two/three wheelers -do-CDI Systems for two/three wheelers -do-Fan Motor Assembly for Ventilation/ -do-Engine Cooling -do-

The technologies imported as above are also upgradedby regular updation based on the new technology andrequirement of the customers by its suppliers as ondate on regular basis.

c) Has technology been fully absorbed, areas wherethis has not taken place, reasons therefore andfuture plans of action.

Wherever practicable technology absorbed to themaximum, however for new products the newtechnology is being used and absorbed on acontinuous basis by localization process.

C. FOREIGN EXCHANGE EARNINGS ANDOUTGO:The Company is pursuing its export plans. Theexports of the products of the Company have beenmade to affiliates of Denso Companies around theworld.

The Company has identified exports as one of themajor areas of growth. However, the globalrecession has effected the export plans of theCompany. However, in the near future, theCompany expects to re-focus on this area as andwhen global demand picks up.

Rs. LacsEARNINGS [On exports of Goods] 501OUTGO [(F.O.B.) On Accrual Basis]:- Raw Materials & components 34357

(including Trading Goods)- Stores & Spares 495- Capital Goods 4062- OUTGO [On Cash Basis, Net of Taxes]:- Royalty 1541- Technical Service Fees

and Application cost 1466- Travelling, Training & Others 103

Total 42024

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

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Corporate Governance Report :

The Directors are pleased to present Tenth CorporateGovernance Report for the financial year 2010-2011.The Securities and Exchange Board of India (SEBI)introduced the Code of Corporate Governance forimplementation by the listed Companies vide anamendment to the Listing Agreement.Corporate Governance relates to number of laws, rules,regulations and voluntary practices to enablecompanies to have good and efficient financial andhuman capital, perform to the best of the efficiencyresulting in maximization of the long term value inthe hands of shareholders at the same time respectingthe aspect of multiple stake holders which include thesociety as well.

1. Company’s Philosophy on “Code of CorporateGovernance”

The Company is committed to achieve highestinternational standards of Corporate Governance andit is a matter of integral system for our Company. Webelieve that Corporate Governance is dependent ontransparency, maximum disclosures, un-biasedmonitoring, being fair to all shareholders especiallyminority shareholders. To ensure a good CorporateGovernance, we have a good professional managementteam and our Board of Directors consist of Professional,Non-Executive, and Independent Directors whoeffectively monitor the management progress and keycorporate decisions.

2. Board of DirectorsAs per the requirements of Corporate Governance, thecomposition of Board of Directors is required to haveoptimum combination of Non-Executive andIndependent Directors along with the ExecutiveDirectors.

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

(a) Composition of Board of Directors

As of March 31, 2011, the Company’s Board of Directorsconsisted of eight Directors. The Board comprised of oneExecutive Director, four Non-Executive Directors, andthree Independent and Non- Executive Directors. As onethird of the Board consists of Independent Directors, thecomposition of the Board is in accordance withClause 49.

The Chairman of the Board is Mr. J.S Baijal, anIndependent Non-Executive Director therebycomplying with the provisions of the Code ofCorporate Governance.Details of the composition of Board and number ofother companies in which Director is a Director orMember /Chairperson of the Committee is ashereunder:

* Nominee of Denso Corporation, Japan which owns47.93% of equity in the Company.# Nominee of the Maruti Suzuki India Limited, whichowns 10.27% equity of the Company.## Nominee of the Sumitomo Corporation, which owns10.27% equity in the Company.

Name of Director Number of Number ofoutside Committee

Directorships Membershipsheld and

Chairmanshipsheld (other

Companies)

(excluding Indian Private LimitedCompanies, Foreign Companies, section25 Companies and AlternateDirectorships)

(A) Executive and Non-Independent Directors:

(1) Mr. Koji Shiga* 0 0

(2) Mr. K. Sugita(Alternate Director to 0 0Mr. H. Wakabayashi)

(3) Mr. Takashi Aoyama 0 0(Alternate Director toMr. Koji Arima)

(B) Non-Executive and Independent Directors

(1) Mr. J.S. Baijal 2 4

(2) Mr. R.K. Bhatnagar 0 0

(3) Mr. A.C. Chakrabortti 1 2 7(Chairman in 3)

(C) Non-Executive and Non-Independent Directors

(1) Mr. Koji Arima* 0 0

(2) Mr. Hiroyuki 0 0Wakabayashi*

(3) Mr. Keiichi Asai# 2 0

(4) Mr. Eichi Seto ## 1 0

(5) Mr. Taro Nanko 1 0(Alternate Directorto Mr. Eichi Seto)

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None of the Directors on the Board holds the office ofDirector in more than 15 Companies nor are theymembers in Committee of the Board in more than 10Committees or Chairman of more than 5 Committees.Further, there are no pecuniary relationships ortransactions between the Independent Directors andthe Company, except for the sitting fees drawn by theIndependent Directors for attending the meetings ofthe 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 ofother persons on beneficial basis) in the Company.

(c) Board Meetings

During the financial year ended 31st March, 2011,Seven meetings of Board of Directors were held.The intervening period between two BoardMeetings was well within the maximum time gapsof four months as prescribed under CorporateGovernance Norms. The dates on which the saidmeetings were held are 28th May, 2010; 30th July,2010; 31 st August, 2010; 28 th October, 2010;17 th January, 2011, 31st January, 2011 and(adjourned to 10th February, 2011), and 28thMarch, 2011.

(d) Procedures of Board Meetings

The Board of Directors met for seven times duringthe year as mentioned in the paragraph 2(c) above.The agenda papers were sent to all the Directorswell in advance for each meeting and themanagement presented before the Board allstatutory and other important items asrecommended by the SEBI Committee. In additionto regular business items, the following items /information are regularly placed before the Boardto the extent applicable:

- Annual operational plans and budgets- Minutes of meetings of the Audit Committee

and other Committee’s meetings of Board- Materially important show cause, demands

and notices- Details of quarterly foreign exchange

exposures and steps taken by themanagement to limit the risk of adverseexchange rate movement

- Quarterly Statutory Compliance Report

- Matters related to work force- Worker productivity report- Quarterly and Half yearly results of the

Company- Share prices and shareholding pattern of the

Company- Current operation(s) of the Company- Significant developments in Human

Resources/Industrial Relations front likesigning of wage agreement.

(e) Directors’ Attendance Record

Name of Director Number of Number of AttendedBoard Board last AGMMeetings Meetings held onheld during attended 31st August,his tenure 2010

Mr. Koji Shiga 7 7 Yes

Mr. Takashi Aoyama 7 1 No(Alernate Directorto Mr. K. Arima)

Mr. Kazuyasu Sugita 7 7 Yes(AlternateDirector toMr. H. Wakabayashi)

Mr. J.S. Baijal 7 7 Yes

Mr. R.K. Bhatnagar 7 7 Yes

Mr. A.C. Chakrabortti 7 7 Yes

Mr. Koji Arima 7 0 No

Mr. Taro Nanko 7 6 Yes(Alternate Directorto Mr. E. Seto)

Mr. Eichi Seto 7 0 No

Mr. Hiroyuki 7 0 N oWakabayashi

Mr. Keiichi Asai 7 0 Yes

3. Committees of the Board

(A) Audit Committee

The Audit Committee has been constituted as perSection 292A of the Companies Act, 1956 and theguidelines set out in the Listing Agreement withStock Exchanges. As on March 31, 2011, the AuditCommittee comprises of Mr. A.C.Chakrabortti,Non-Executive and Independent Director who isthe Chairman of the Audit Committee,Mr. R.K. Bhatnagar, Non-Executive and IndependentDirector and Mr. J.S.Baijal, Non-Executive andIndependent Director. Mr A.C.Chakrabortti was

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present in the previous AGM held on August 31,2010. The members of the Committee have adequateknowledge in the field of finance and accounting.The role and “terms of reference” of the AuditCommittee are enumerated below, which are asper the guidelines given in the code of CorporateGovernance.

Brief Role and Terms of Reference of the AuditCommittee:

i) The Audit Committee shall meet atleast threetimes in a year with the gap between twomeetings of not more than 6 months.

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

iii) The Audit Committee shall have the power toseek any clarification regarding any financialmatter relating to the Books of Accounts ofthe Company.

iv) The Audit Committee shall be empowered toreview with the management the annualfinancial statements before submission to theBoard.

v) The Audit Committee can summon anyOfficer of the Company and seek clarificationfrom him and obtain outside legal orprofessional advice.

vi) The Audit Committee shall have the power tosummon the Internal and Statutory Auditorsof the Company.

vii) The Audit Committee shall appoint any oftheir members to be the Chairman of themeeting and in the event of any difference, thedecision of the Chairman shall be final.

viii) It shall be within the ambit of the AuditCommittee to give any proposal, suggestion,directive on any matter relating to thefinancial and accounting practices or anyother matter of material nature effecting thebusiness of the Company, including the goingconcern assumption , and the advice tenderedshall be binding on the Company.

The internal auditors and statutory auditorsattend the meetings of the committee on theinvitation of the Chairman. The CompanySecretary of the Company acts as the Secretary ofthe Committee.

Number of Audit Committee Meetings held during2010-2011 and Directors’ Attendance Report:During the year 2010-2011, total seven meetings ofAudit Committee were held on 28th May, 2010; 30th

July, 2010; 28th October, 2010 and 17th December, 2010,21st December, 2010, 31st January, 2011, 10th February,2011. The attendance record of members of the AuditCommittee is given below:Name of Audit Position held Number of the Number ofCommittee meeting held meetingsMember during his tenure attendedMr. A.C. Chairman 7 7ChakraborttiMr. J.S. Baijal Member 7 7Mr. R.K. Bhatnagar Member 7 7

(B) Remuneration Committee

A Committee of Directors (RemunerationCommittee) of the Company has been constitutedfor the purpose of appointment / remunerationpayable to executive / non-executive directors ofthe Company and Senior Management personnelof the Company.

Terms of Reference:The Broad terms of reference of RemunerationCommittee of the Company are as follows:To determine the appointment and remunerationpackages of Executive directors / non-ExecutiveDirectors, Chief executive officer and SeniorManagement Personnel including remunerationpolicy, pension rights and any compensationpayments.The remuneration policy of the Company is aimedat rewarding performance, based on review ofachievements on a regular basis.

Composition :The Remuneration Committee of the Companyconsists of three non executive independent Directors.

Mr. A.C. Chakrabortti - Independent Director(Chairman of Committee)

Mr. J.S. Baijal - Independent Director

Mr. R.K. Bhatnagar - Independent Director

Meeting details :

During the year 2010-11, no Remuneration Committeemeeting was held.

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(C) Shareholders / Investors Grievance CommitteeThe Company has a Committee to look into issuesrelating to shareholders and focus primarily onshare transfers, redressals of shareholders,investor complaints and matters relating thereto.Mr. J.S. Baijal, the Chairman of the Committee is aNon-Executive Independent Director.

S. No. Name of Member Position heldof Committee

1 Mr. J.S. Baijal Chairman2 Mr. K. Sugita Member

3 Mr. Koji Shiga Member

The meeting of this committee is held once in amonth and sometimes fortnightly. The minutes ofeach Investors Grievance Committee Meeting areplaced at the Board Meeting held immediately afterthe meeting of Investors Grievance Committee.The Company Secretary being the ComplianceOfficer is the secretary of the Committee. TheCompany has an efficient system of dealing withinvestors grievances. The Company Secretarybeing the compliance officer carefully looks intoeach issue and reports the same to the Shareholder’sGrievances Committee.

A total of 43 complaints were received during theyear under review, and all of them were repliedtill 31st March, 2011 to the satisfaction ofshareholders. No shares were pending forregistration for transfer as on 31st March, 2011.

4. CEO/CFO Certification

The Company is fully congnizant of, andcommitted to, adhering to the statutoryrequirements for internal controls as set out bythe Securities and Exchange Board of India.Accordingly, the Chief Executive Officer (CEO) andthe Chief Financial Officer (CFO) have duly verifiedand certified to the Board for Company’s procedureand internal controls of the reporting as fullycompliant with SEBI guidelines.The CEO and the CFO have certified to the Boardby placing a certificate thereof on the financials ofthe Company that:(a) They have reviewed financial statements,

cash flow statement and directors’ report forthe year ended 31st March, 2011, and to thebest of their knowledge and belief;

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

(ii) these statements together present a true andfair view of the Company’s affairs and are incompliance with existing accountingstandards, applicable laws and regulations.

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

(c) They have ensured that all the members ofthe Board of Directors and Seniormanagement personnel have confirmedcompliance with the Code of Conduct adoptedby the Company.

(d) They accept responsibility for establishing andmaintaining internal controls for financialreporting and that they have evaluated theeffectiveness of internal control systems of theCompany pertaining to financial reportingand they have disclosed to the Auditors andthe Audit Committee, deficiencies in thedesign or operation of such internal controls,if any, of which they are aware and the stepsthey have taken or propose to take to rectifythese deficiencies.

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

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

(ii) significant changes in accounting policiesduring the year and that the same have beendisclosed in the notes to the financialstatements; and

(iii) instances of significant fraud of which theyhave become aware and the involvementtherein, if any, of the management or anemployee having a significant role in theCompany’s internal control system overfinancial reporting.

5 Code of ConductThe Company has also laid down a Code of Conductfor Board Members and Senior Managementpersonnel of the Company. The Company iscommitted to conducting its business inaccordance with applicable laws, rules andregulations, and the highest standard of businessethics, and to full and accurate disclosure in

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compliance with applicable laws, rules andregulations. The purpose of this code is to deterwrongdoing and promote ethical conduct. All theBoard Members and Senior Management personnelhave affirmed compliance with the Code ofConduct for the current year.

6. Risk ManagementThe Company has laid down procedures to informBoard members about the risk assessment andminimisation procedures. These procedures areperiodically reviewed to ensure that executivemanagement control risk through means of aproperly defined framework.

7. Remuneration to DirectorsThe Company does not have any policy to paycommission on profits to any Non-Executive orExecutive Directors. The remuneration paid toExecutive Directors is approved by the Board ofDirectors in the Board Meeting, subject to thesubsequent approval by the shareholder at theGeneral Meeting and such other authorities, as thecase may be. The remuneration is fixed consideringvarious factors such as qualification, experience,expertise, prevailing remuneration in the corporateworld and the financial position of the Company.The remuneration structure comprises of basicsalary, perquisites and allowances. The Non-Executive Directors do not draw any remunerationfrom the Company except sitting fees of Rs.20,000for each meeting of the Board and AuditCommittee, and Rs 7,500 for each quarter of theShareholder Grievances Committee attended bythem. During the year ended 31st March, 2011, theCompany has paid fixed remuneration and sittingfees to the following Directors:

(Amount in Rupees)

Name of Director Sitting Salary and TotalFees Perquisites

Non–Executive andIndependent Directors

Mr. J.S. Baijal 3,10,000 - 3,10,000

Mr. R.K. Bhatnagar 2,80,000 - 2,80,000

Mr. A.C. Chakrabortti 2,80,000 - 2,80,000

Executive Director

Mr. Koji Shiga - 25,29,478 25,29,478

Mr. Kazuyasu Sugita - 38,98,869 38,98,869(Alternate Director toMr. HiroyukiWakabayashi)

Mr. Takashi Aoyama - 25,46,895 25,46,895

8. Details of Annual General Meetings [AGMs]

AGM Year Location Date Time WhetherSpecial

Resolutionpassed

23rd 2007-2008 FICCI Auditorium, 03-09-2008 11.30 NoNew Delhi AM

24th 2008-2009 FICCI Auditorium, 23-09-2009 10.30 YesNew Delhi AM

25th 2009-2010 FICCI Auditorium, 31-08-2010 10.30 NoNew Delhi AM

All the resolutions set out in the respective notices,were passed by the Shareholders. Pursuant to theprovision of section 192A of the Companies Act, 1956,there was no matter as required to be dealt by theCompany to be passed through postal ballot.

9. Means of Communication

a) Results published in the Newspapers:

Quarterly/ Quarterly/Half-Yearly ResultsHalf-Yearly were published in “FinancialResult Express” and/ or Business

Standard and “Jan Satta” andwere also informed to all the StockExchanges where the share arelisted, through fax/couriers.

Appointment Individual letters were sent to allof Directors the shareholders for the

appointment or re-appointmentof a new director.

b) Official Not IssuedNews release

c) Presentation to Not IssuedInstitutionalInvestor

d) Financial Results/ Information on website: Thework on Company’s Website is in progress andthe Company will place it once it is operational.However, the quarterly and Annual FinancialResults are available on the website of the StockExchange, Mumbai i.e. www.bseindia.com

e) Management Discussion Analysis Report formspart of the Annual Report.

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10. Disclosuresa) Related Party Transactions:

The Company follows the policy of placing annually before the Audit Committee a statement in summary formof 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 therelated parties covered therein and details of transactions with such related parties have been disclosed in theNote 20 of Schedule 18(B) in the Annual Accounts. The Company has not had any transaction of materialnature with the Directors and/or their relatives, promoters, management during the year under review thatmay have conflict 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 accountingprinciples 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, stricturewas imposed by SEBI or Stock Exchanges or any other statutory authority(ies), on any matters related toCapital 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 beendenied access to the Audit Committee.

11. General Shareholder’s Information:

(a) Date of Book Closure: 25th August, 2011 to 29th August, 2011 (Both days inclusive)

(b) Date of AGM 29th August, 2011

Day of AGM Monday

Time of AGM 10.30 A.M.

Venue of AGM Sri Sathya Sai International Centre, Pragati Vihar, Institutional Area, LodhiRoad, New Delhi - 110003

(c) Listing of Stock Exchange(s) As on March 31st, 2011, the shares of Company are listed on the following StockExchange(s):1. Delhi Stock Exchange Association Ltd.

2. Mumbai Stock Exchange

3. Madras Stock Exchange Ltd.

Listing Fee for the financial year 2010-2011 has been paid to the stock exchanges with in the stipulated time.

(d) Stock Code – Physical 520022

Demat ISIN Number for INE502A01017NSDL & CDSL

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(e) Registrar and Share MAS Services LimitedTransfer Agent T-34, 2nd Floor, Okhla Industrial Area, Phase-II, New Delhi-110020

Contact person: Mr. Sarvan MangalaPh.: 011-26387281-83, Fax: 011-26387386

(f) Stock Market Data

The month wise high and low quotations of the shares traded during April 1, 2010 to March 31, 2011 at BSEand BSE sensex high are given below:

MONTH OPEN(Rs.) HIGH(Rs.) LOW(Rs.) CLOSE(Rs.) No. of Shares No. ofTraded Trades

April, 2010 98.00 106.75 87.25 104.65 447912 4080

May, 2010 102.00 109.00 86.95 87.55 307013 2493

June, 2010 89.45 102.00 85.05 92.30 275477 2877

July, 2010 91.95 102.50 89.00 93.20 424609 3552

August, 2010 90.20 100.00 87.10 89.00 452259 4079

September, 2010 89.00 116.90 88.80 105.20 2139169 17999

October, 2010 106.50 110.00 93.25 93.75 351007 3592

November, 2010 96.50 107.70 80.65 88.80 321141 4071

December, 2010 92.80 98.85 78.00 85.35 133271 2042

January, 2011 86.85 87.00 72.90 74.20 92711 1273

February, 2011 73.00 82.00 61.00 67.95 59094 951

March, 2011 71.70 72.00 64.00 68.65 97224 1049

* Source: www.bseindia.com

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

* Source: www.bseindia.com

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

(i) Shareholding Pattern of the Company as on March 31st, 2011

Category Number of Shares held % ShareholdingA. Promoter’s holding

Promoters - Indian Promoters 28,62,758 10.27 - Foreign Promoters 1,76,18,867 63.20Person acting in concert

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

B. Non-Promoter’s holdingInstitutional InvestorsMutual Fund and UTI 5,500 0.02Banks ,Financial Institutions, Insurance Companies,Central / State Government Institutions/Non-Government Institutions 46,064 0.17FIIs 19,92,829 7.14

Sub-Total (B) 20,44,393 7.33

Others:-Private Corporate bodies 12,83,104 4.60Indian Public 37,78,796 13.55NRIs/OCBs 78,565 0.28Clearing member 2,08,897 0.75Any other (Trust) 4,264 0.02

Sub-Total (C) 5,353,626 19.20Grand Total (A+B+C) 2,78,79,644 100.00

(ii) Distribution of Shareholding as on 31st March, 2011

Shareholding Shareholders Folios Number of Shares

Numbers % to Total Numbers % to Total

Upto - 5000 12822 92.76 1538239 5.52

5001 – 10000 496 3.59 417400 1.5010001 – 20000 236 1.71 372406 1.34

20001 – 30000 83 0.60 215245 0.77

30001 - 40000 36 0.26 128225 0.46

40001 - 50000 51 0.37 242399 0.87

50001 - 100000 38 0.28 276956 0.99100000 and above 60 0.43 24688774 88.55

Total 13822 100.00 27879644 100.00

13

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

(k) Plant Location

Unit - I : Noida Dadri Road, P.O. Tilpatta, Tehsil - Dadri, Distr ict Gautam Budh Nagar,Uttar Pradesh - 203 207.

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

(l) Dematerialisation of Shares

The Company has an agreement with Central Depository Services (India) Limited (CDSL) and NationalSecurities Depository Services Limited (NSDL) so that shareholders of the Company could avail the benefits ofthe multi-depository system. Upto March 31, 2011, 67,31,153 shares representing 24.14% of the total sharecapital are under demat which has resulted in reducing the physical delivery related problem to a largeextent.

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

Financial reporting for the first quarter ending, June 30, 2011 July, 2011

Financial reporting for the second quarter ending, September 30, 2011 October, 2011

Financial reporting for the third quarter ending, December 31, 2011 January, 2012

Financial results for the year ending March 31, 2012 May, 2012

Annual General Meeting for the year ending March 31, 2012 August, 2012

(n) Investors correspondence may be addressed to

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

Or to

The Company Secretary, Denso India LimitedB-1/D-4, Ground Floor, Mohan Co-operative, Industrial EstateMathura Road, New Delhi-110044Tel. : 26953994, 26952308, Fax : 26953993

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

12. Non-Mandatory Requirements:

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

14

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 yearended March 31, 2011, as stipulated in Clause 49 of the Listing Agreements of the said Company with stockexchanges in India.

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

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

We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the management has conducted the affairs of the Company.

For Price WaterhouseFirm Registration Number : 301112EChartered AccountsBuilding 8, 7th & 8th FloorTower-B, DLF Cyber CityGurgaon-122 002, Haryana

Place : Gurgaon V. NijhawanDate : May 30, 2011 Partner

Membership Number : F 87228

15

Auditors’ Report

To the members of Denso India Limited

1. We have audited the attached Balance Sheet ofDenso India Limited (the “Company”) as atMarch 31, 2011, and the related Profit and LossAccount and Cash Flow Statement for the yearended on that date annexed thereto, which we havesigned under reference to this report. Thesefinancial statements are the responsibility of theCompany’s Management. Our responsibility is toexpress an opinion on these financial statementsbased on our audit.

2. We conducted our audit in accordance with theauditing standards generally accepted in India.Those Standards require that we plan and performthe audit to obtain reasonable assurance aboutwhether the financial statements are free ofmaterial misstatement. An audit includesexamining, on a test basis, evidence supporting theamounts and disclosures in the financialstatements. An audit also includes assessing theaccounting principles used and significantestimates made by Management, as well asevaluating the overall financial statementpresentation. We believe that our audit provides areasonable 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 CentralGovernment 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 thebooks and records of the Company as weconsidered appropriate and according to theinformation and explanations given to us, we givein the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the Order.

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

(a) We have obtained all the information andexplanations which, to the best of ourknowledge and belief, were necessary for thepurposes of our audit;

(b) In our opinion, proper books of account asrequired by law have been kept by theCompany so far as appears from ourexamination of those books;

(c) The Balance Sheet, Profit and Loss Accountand Cash Flow Statement dealt with by thisreport are in agreement with the books ofaccount;

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

(e) On the basis of written representationsreceived from the directors, as on March 31,2011 and taken on record by the Board ofDirectors, none of the directors is disqualifiedas on March 31, 2011 from being appointed asa 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 ourinformation and according to the explanationsgiven to us, the said financial statementstogether with the notes thereon and attachedthereto give, in the prescribed manner, theinformation required by the Act, and give atrue and fair view in conformity with theaccounting principles generally accepted inIndia:

(i) in the case of the Balance Sheet, of the state ofaffairs of the Company as at March 31, 2011;

(ii) in the case of the Profit and Loss Account, ofthe profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of thecash flows for the year ended on that date.

For Price Waterhouse Firm Registration Number : 301112E

Chartered Accountants

V. NijhawanPlace : Gurgaon PartnerDate : May 30, 2011 Membership Number : F87228

16

ANNEXURE TO AUDITORS’ REPORT(Referred to in paragraph 3 of the Auditors’ Report ofeven date to the members of Denso India Limited onthe financial statements for the year endedMarch 31, 2011)1. (a) The Company is maintaining proper

records showing full particulars,including quantitative details andsituation, of fixed assets.

(b) The fixed assets of the Company havebeen physically verified by theManagement during the year and nomaterial discrepancies between the bookrecords and the physical inventory havebeen noticed. In our opinion, the frequencyof verification is reasonable.

(c) In our opinion and according to theinformation and explanations given to us,a substantial part of fixed assets has notbeen disposed off by the Company duringthe year.

2. (a) The inventory (excluding stocks lyingwith third parites) has been physicallyverified by the Management during theyear / year end. In respect of inventorylying with third parties, these havesubstantially been confirmed by them. Inour opinion, the frequency of verificationis reasonable.

(b) In our opinion, the procedures of physicalverification of inventory followed by theManagement are reasonable and adequatein relation to the size of the Company andthe nature of its business.

(c) On the basis of our examination of theinventory records, in our opinion, theCompany is maintaining proper recordsof inventory. The discrepancies noticed onphysical verification of inventory ascompared to book records were notmaterial.

3. (a) The Company has not granted any loans,secured or unsecured, to companies, firmsor other parties covered in the registermaintained under Section 301 of the Act.Accordingly, clauses (iii)(b), (iii)(c) and(iii)(d) of the paragraph 4 of the Companies(Auditors’ Report) Order, 2003, asamended by the Companies (Auditors’

Report) (Amendment) Order, 2004 are notapplicable to the Company for the currentyear.

(b) The Company has not taken any loans,secured or unsecured, from companies,firms or other parties covered in theregister maintained under Section 301 ofthe Act. Accordingly, clauses (iii)(f) and(iii)(g) of the paragraph 4 of the Companies(Auditors’ Report) Order, 2003, asamended by the Companies (Auditors’Report) (Amendment) Order, 2004 are notapplicable to the Company for the currentyear.

4. In our opinion and according to the informationand explanations given to us, there is anadequate internal control system commensuratewith the size of the Company and the nature ofits business for the purchase of inventory, fixedassets and for the sale of goods and services.Further, on the basis of our examination of thebooks and records of the Company, andaccording to the information and explanationsgiven to us, we have neither come across norhave been informed of any continuing failure tocorrect major weaknesses in the aforesaidinternal control system.

5. (a) According to the information andexplanations given to us, there have beenno contracts or arrangements referred toin Section 301 of the Act during the yearto be entered in the register required to bemaintained under that Section.Accordingly, the question of commentingon transactions made in pursuance ofsuch contracts or arrangements does notarise.

6. The Company has not accepted any depositsfrom the public within the meaning of Sections58A and 58AA of the Act and the rules framedthere under.

7. In our opinion, the Company has an internalaudit system commensurate with its size andnature of its business.

8. We have broadly reviewed the books of accountmaintained by the Company in respect ofproducts where, pursuant to the Rules made bythe Central Government of India, themaintenance of cost records has been prescribedunder clause (d) of sub-section (1) of Section 209

17

of the Act, and are of the opinion that prima facie,the prescribed accounts and records have beenmade and maintained. We have not, however,made a detailed examination of the records witha view to determine whether they are accurateor complete.

9. (a) According to the information andexplanations given to us and the recordsof the Company examined by us, in ouropinion, the Company is regular indepositing the undisputed statutory duesincluding provident fund, investoreducation and protection fund, employees’state insurance, income-tax, sales-tax,wealth tax, customs duty, excise duty,cess, service tax and other materialstatutory dues as applicable with theappropriate authorities.

(b) According to the information andexplanations given to us and the recordsof the Company examined by us, theparticulars of dues of income-tax, sales-tax, wealth-tax, service tax, customs duty,excise duty and cess as at March 31, 2011,which have not been deposited on accountof a dispute, are included as Note 1(b) onSchedule 18B.

10. The Company has no accumulated losses as atMarch 31, 2011 and it has not incurred any cashlosses in the financial year ended on that date orin the immediately preceding financial year.

11. According to the records of the Companyexamined by us and the information andexplanation given to us, the Company has notdefaulted in repayment of dues to any bank asat the balance sheet date. The Company hasneither raised any funds from any financialinstitution nor issued any debentures.

12. The Company has not granted any loans andadvances on the basis of security by way ofpledge of shares, debentures and other securities.

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

14. In our opinion, and according to the informationand 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 informationand explanations given to us, the Company hasnot given any guarantee for loans taken byothers from banks or financial institutionsduring the year.

16. The Company has not taken any term loansduring the year.

17. On the basis of an overall examination of thebalance sheet of the Company, in our opinionand according to the information andexplanations given to us, there are no fundsraised on a short-term basis which have beenused for long-term investment exceptRs. 42,93,89 thousand which have been used forpurchase of fixed assets.

18. The Company has not made any preferentialallotment of shares to parties and companiescovered in the register maintained under Section301 of the Act during the year.

19. The Company has not issued any debentureduring the year.

20. The Company has not raised any money bypublic issue during the year.

21. During the course of our examination of the booksand records of the Company, carried out inaccordance with the generally accepted auditingpractices in India, and according to theinformation and explanations given to us, wehave neither come across any instance of fraudon or by the Company, noticed or reportedduring the year, nor have we been informed ofsuch case by the Management.

For Price Waterhouse Firm Registration No. 301112E

Chartered Accountants

V. NijhawanPlace : Gurgaon PartnerDate : May 30, 2011 Membership No. F87228

18

BALANCE SHEET As at As atAs at 31st March, 2011 March 31, 2011 March 31, 2010

Schedule Rs.’000 Rs.’000SOURCES OF FUNDS

Shareholders’ FundsCapital 1 27,87,96 27,87,96Reserves and Surplus 2 181,45,30 209,33,26 179,41,45 207,29,41Loan FundsLoan Funds-Secured Loans 3 69,65,93 9,93,30TOTAL 278,99,19 217,22,71

APPLICATION OF FUNDS

Fixed Assets 4Gross Block 322,82,89 259,05,76Less: Depreciation 180,11,13 161,00,30Net Block 142,71,76 98,05,46Capital Work-in-Progress 22,79,44 4,57,66

165,51,20 102,63,12

Deferred Tax Asset (Net) 2,94,74 4,37,98(Refer Note 10 on Schedule 18A and Note 16 on Schedule 18B)

Current Assets, Loans and AdvancesInventories 5 157,36,40 107,75,46Sundry Debtors 6 75,01,34 55,93,86Cash and Bank Balances 7 24,29,65 64,14,02Other Current Assets 8 39,57 1,59,30Loans and Advances 9 41,68,84 29,00,23

298,75,80 258,42,87Current Liabilities and ProvisionsCurrent Liabilities 10 177,26,17 130,82,87Provisions 11 10,96,38 17,38,39

188,22,55 148,21,26Net Current Assets 110,53,25 110,21,61

TOTAL 278,99,19 217,22,71Significant Accounting Policies 18and Notes to Accounts

The Schedules referred to above form an integral part of the Balance Sheet.This is the Balance Sheet referred to in our report of even date.

For and on behalf of the Board of DirectorsFor and on behalf ofPrice WaterhouseFirm Registration Number : 301112E KOJI SHIGA KAZUYASU SUGITAChartered Accountants Managing Director Director

V. NIJHAWAN ARUN GANGWANIPartner Deputy General ManagerMembership No. F87228Place : Gurgaon Place : NoidaDated : May 30, 2011 Dated: May 30, 2011

19

PROFIT AND LOSS ACCOUNT For the Year Ended For the Year EndedFOR THE YEAR ENDED March, 31, 2011 March 31, 2011 March 31, 2010

Schedule Rs.’000 Rs.’000

INCOME(Refer Note 4 on Schedule 18A andNotes 8,11 and 18 on Schedule 18B)Gross Sales 10,13,94,76 797,87,98Less: Excise Duty on Sales 88,87,07 925,07,69 61,55,42 736,32,56Other Income 12 6,61,59 8,75,57

931,69,28 745,08,13EXPENDITUREMaterials Consumed 13 710,06,46 558,63,40Manufacturing Expenses 14 23,49,71 16,54,75Personnel Expenses 15 90,11,81 69,07,06Selling, Administration and Other Expenses 16 78,11,38 56,49,84Finance Charges 17 1,86,66 22,57Depreciation 4 22,93,43 15,92,57

926,59,45 716,90,19

Profit before Tax for the year 5,09,83 28,17,94Tax Expenses(Refer Note 10 on Schedule 18A and Note 16 on Schedule 18B)- Current Tax 1,02,00 7,93,06- Earlier Year’s Tax Adjustments (Net) 60,74 5,80- Deferred Tax 1,43,24 3,05,98 1,30,36 9,29,22

Profit after Tax for the Year 2,03,85 18,88,72Opening Balance in Profit and Loss Account 125,20,84 114,23,97Amount Available for Appropriation 127,24,69 133,12,69AppropriationsProposed Dividend - 5,57,59Distribution Tax on Proposed Dividend - 92,61Transfer to General Reserve - 1,41,65Balance carried forward to Balance Sheet 127,24,69 125,20,84Basic and Diluted Earnings Per Equity Share (Rs.) 0.73 6.77(Refer Note 12 on Schedule 18A and Note 17 on Schedule 18B)Significant Accounting Policies and Notes to Accounts 18

The Schedules referred to above form an integral part of the Profit and Loss Account.

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

For and on behalf of the Board of DirectorsFor and on behalf ofPrice WaterhouseFirm Registration Number : 301112E KOJI SHIGA KAZUYASU SUGITAChartered Accountants Managing Director Director

V. NIJHAWAN ARUN GANGWANIPartner Deputy General ManagerMembership No. F87228Place : Gurgaon Place : NoidaDated : May 30, 2011 Dated: May 30, 2011

20

CASH FLOW STATEMENT For the Year Ended For the Year Ended

FOR THE YEAR ENDED March 31, 2011 March 31, 2010

MARCH 31, 2011 Rs.’000 Rs.’000

A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit Before Tax 5,09,83 28,17,94Adjustment for:Depreciation 22,93,43 15,92,57Interest Income (2,86,60) (5,89,33)Interest Expenses 1,73,99 11,80Loss/(Profit) on Sale/ Discarding of Fixed Assets (Net) [Includesasset written-off from Capital Work-in-Progress amounting toRs. 5,33 thousand (Previous year Rs. Nil)] 8,74 40,45Provision for Doubtful Advances - -Provision for Employee benefits 4,87 69,06Provision for Warranty (Net) 3,32 -Unrealized Foreign Exchange (Gain) - Net 83,20 (1,08,45)Provision /liabilities no Longer Required Written Back (14,72) (19,56)

Operating Profit Before Working Capital Changes 27,76,06 38,14,48

Adjustments for Changes in Working Capital:(Increase) / Decrease in Sundry Debtors (19,07,48) 11,37,76(Increase) / Decrease in Loans and Advances (12,58,26) (9,28,35)(Increase) / Decrease in Inventories (49,60,94) (8,99,51)Increase/ (Decrease) in Trade Payable and Other Liabilities 42,62,45 22,56,08Cash Generated from Operations (10,88,17) 53,80,46Income Tax paid (Net)- Current Tax (1,73,09) (12,28,86)- Fringe Benefit Tax - (4,08)

Net Cash from Operating Activities (a) (12,61,26) 41,47,52

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets/Capital Work-in-Progress (83,00,21) (40,63,05)Proceeds from Sale of Fixed Assets 17,45 8,89Interest Received (Gross) 4,06,33 6,37,41

Net Cash used in Investing Activities (b) (78,76,43) (34,16,75)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Short Term Loans (Net) 59,72,63 6,30,37Interest Paid (1,72,19) (11,70)Dividend Paid (5,54,51) (4,16,86)Dividend Tax Paid (92,61) (71,07)

Net Cash used in Financing Activities (c) 51,53,32 1,30,74

Net Increase in Cash and Cash Equivalents (a+b+c) (39,84,37) 8,61,51

21

Notes :

1. The above Cash Flow Statement has been prepared under the indirect method as set out in AccountingStandard- 3 on Cash Flow Statements, prescribed under Companies (Accounting Standards) Rules, 2006as 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 thecurrent year’s classification.

3. The Schedules 1 to 18 form an integral part of the Cash Flow Statement.

Cash and Bank Balances at the Beginning of the Year 64,14,02 55,52,51

Cash and Bank Balances at the End of the Year 24,29,65 64,14,02 (39,84,37) 8,61,51

Cash and Cash Equivalents [Refer Schedule 7] at year-end comprise ofCash-in-Hand [Including Cheques-in-Hand of Rs. 1,21,65 thousand(Previous Year Rs. 1,04,57 thousand)]. 1,36,20 1,13,68Balance with Scheduled Banks- On Current Accounts 2,51,45 1,80,28- On Fixed Deposits** 20,12,86 60,94,00- On Dividend Accounts* 29,14 22,93,45 26,06 63,00,34

24,29,65 64,14,02

* Not available for use by the Company** Includes Rs. 69,83 thousand (Previous year Rs. Nil) under lien with banks against guarantee issued

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

For and on behalf of the Board of Directors

For and on behalf ofPrice WaterhouseFirm Registration Number : 301112E KOJI SHIGA KAZUYASU SUGITAChartered Accountants Managing Director Director

V. NIJHAWAN ARUN GANGWANIPartner Deputy General ManagerMembership No. F87228Place : Gurgaon Place : NoidaDated : May 30, 2011 Dated: May 30, 2011

22

SCHEDULES FORMING PARTOF BALANCE SHEET As at As at

March 31, 2011 March 31, 2010 Rs.’000 Rs.’000

SCHEDULE 1 - SHARE CAPITAL

AUTHORISED CAPITAL

3,00,00 thousand (Previous year 3,00,00 thousand) Equity Shares 30,00,00 30,00,00of Rs. 10 each

ISSUED CAPITAL

2,80,62 thousand (Previous year 2,80,62 thousand) Equity Shares 28,06,25 28,06,25of Rs. 10 each

SUBSCRIBED AND PAID UP CAPITAL

2,78,80 thousand (Previous year 2,78,80 thousand) Equity Shares 27,87,96 27,87,96of Rs. 10 each, fully paid-up*

27,87,96 27,87,96

*Of the above Shares :

1,47,56 thousand (Previous year 1,47,56 thousand) Equity Shares are heldby Denso Corporation, Japan, the Holding Company [including13,94 thousand (Previous year 13,94 thousand) Equity Shares held byits Subsidiary, Asmo Co. Ltd., Japan]

SCHEDULE 2 - RESERVES AND SURPLUS

Capital Reserve [As per last Balance Sheet] 7 7Share Premium [As per last Balance Sheet] 49,80,00 49,80,00General ReserveAs per last Balance Sheet 4,40,54 2,98,89Add: Transferred during the Year - 4,40,54 1,41,65 4,40,54Profit and Loss Account [Brought forward from Profit and Loss 127,24,69 125,20,84Account]

181,45,30 179,41,45

SCHEDULE 3 - SECURED LOANS[Refer Note 3 on Schedule 18B ]

Short Term Loans - From BanksCash Credit* 4,85,93 1,43,30Demand Loan* 64,80,00 8,50,00

69,65,93 9,93,30*Repayable within a year Rs. 69,65,93 thousand (Previous year - Rs. 9,93,30 thousand)

23

SCHEDULE 4 -FIXED ASSETS[Refer Notes 2,3,5,11,13 & 14 on Schedule 18A and Notes 4,10 and 18 on Schedule 18B]

Rs.’000Particulars G R O S S B L O C K D E P R E C I A T I O N N E T B L O C K

As at Additions Deletions/ As at Upto For the Deletions/ Upto As at As at01.04.2010 during the Adjustments 31.03.2011 31.03.10 Year Adjustments 31.03.11 31.03.11 31.03.10

year during the during theyear year

Tangible Assets

Leasehold Land 44,37 - - 44,37 8,37 49 - 8,86 35,51 36,00

Freehold Land 8,00,04 - - 8,00,04 - - - - 8,00,04 8,00,04

Buildings 20,42,58 3,64 - 20,46,22 9,65,65 91,04 - 10,56,69 9,89,53 10,76,93

Plant and Machinery 2,12,88,49 65,62,50 3,40,10 275,10,89 136,81,02 20,63,35 3,15,00 154,29,37 120,81,52 76,07,47

Computers 3,68,14 58,12 5,08 4,21,18 3,28,37 34,74 5,08 3,58,03 63,15 39,77

Furniture and Fixtures 7,586,55,13 49,16 8,06 6,96,23 5,47,55 38,67 7,44 5,78,78 1,17,45 1,07,58

Vehicles 4,31,87 1,12,50 55,55 4,88,82 2,94,20 65,14 55,08 3,04,26 1,84,56 1,37,67

Intangible Assets[Acquired]

Technical Know-how 2,75,14 - - 2,75,14 2,75,14 - - 2,75,14 - -

Total 259,05,76 67,85,92 4,08,79 322,82,89 161,00,30 22,93,43 3,82,60 180,11,13 142,71,76 98,05,46

Previous Year 205,57,58 58,36,62 4,88,44 259,05,76 149,46,83 15,92,57 4,39,10 161,00,30 98,05,46 -

Capital Work-in-Progress [Including Capital Advances of Rs. 4,52,59 thousand (Previous year Rs. 2,32,18 thousand),and Machinery in Transit amounting to Rs. 9,77,17 thousand (Previous year Rs. 1,86,31 thousand)] 22,79,44 4,57,66

SCHEDULE 5 - INVENTORIES As at As at(Refer Note 7 on Schedule 18A and Note 8 on Schedule 18B) March 31, 2011 March 31, 2010

Rs.’000 Rs.’000Raw Materials and Components[Includes Goods-in-Transit Rs. 45,06,35 thousand 122,97,44 81,40,89(Previous year - Rs. 33,69,20 thousand)]Stores, Spares and Consumables[Includes Spares-in-Transit Rs. Nil(Previous year - Rs. 16,21 thousand)] 7,99,77 3,43,63Finished Goods- Manufactured ‘[Includes Goods-in-Transit Rs. 59,25 thousand(Previous year - Rs. Nil)] 10,54,32 12,74,11- Traded[Includes Goods-in-Transit Rs. 2,81,10 thousand(Previous year - Rs. 1,49,32 thousand) ] 6,59,98 17,14,30 3,65,02 16,39,13Work-in-Progress 9,24,89 6,51,81

157,36,40 107,75,46

SCHEDULES FORMING PARTOF BALANCE SHEET

24

SCHEDULE 6 - SUNDRY DEBTORS As at As at(Unsecured, Considered Good unless otherwise stated) March 31, 2011 March 31, 2010(Refer Note 5 on Schedule 18A and Note 18, 19 and 21 on Schedule 18B) Rs.’000 Rs.’000Debts outstanding for a period exceeding six months 8,79 1,23

Others Debts 74,92,55 55,92,63

75,01,34 55,93,86

SCHEDULE 7 - CASH AND BANK BALANCESCash in Hand [Including cheques in hand 1,36,20 1,13,68Rs. 1,21,65 thousand(Previous year Rs. 1,04,57 thousand)]Balances with Scheduled Banks- On Current Accounts 2,51,45 1,80,28- On Fixed Deposits* 20,12,86 60,94,00- On Dividend Accounts (Unclaimed) 29,14 22,93,45 26,06 63,00,34

24,29,65 64,14,02* Includes Rs. 69,83 thousand (Previous year Rs. Nil) under lien with banks against gurarntee issued

SCHEDULE 8 - OTHER CURRENT ASSETSInterest accrued but not due on Fixed Deposits 39,57 1,59,30

39,57 1,59,30

SCHEDULE 9 - LOANS AND ADVANCES(Unsecured , Considered good unless otherwise stated)(Refer Note 10 on Schedule 18A and Note 21 on Schedule 18B)Loans to Employees- Considered Good - -- Considered Doubtful 1,39 1,39Less: Provision for doubtful advances 1,39 - 1,39 -Advance recoverable in cash or in kindor for value to be received- Considered Good 21,83,21 16,84,92- Considered Doubtful 7,98 7,98Less: Provision for doubtful advances 7,98 - 7,98 -Advance Income Tax [Net of provision for tax ofRs. 61,21,84 thousand(Previous year Rs. 105,36,35 thousand)] 3,77,09 3,66,74Advance Fringe Benefit Tax [Net of provision for tax ofRs. 78,27 thousand(Previous year Rs. 78,27 thousand)] 1,39 1,39Balance with Excise and Custom Authorities 16,07,15 8,47,18

41,68,84 29,00,23

25

SCHEDULE 10 - CURRENT LIABILITIES(Refer Note 5 on Schedule 18A andNotes 5, 19 and 20 on Schedule 18B)

Acceptances 21,73,08 46,66,62Sundry Creditors- Total outstanding dues of Micro Enterprises and Small Enterprises 3,23,31 2,58,44- Total outstanding dues of Creditors other thanMicro Enterprises and Small Enterprises* 136,01,03 139,24,34 70,37,56 72,96,00Advances from Customers 2,69 4,39Security Deposits 31,08 29,29Unclaimed Dividends** 29,14 26,06Other Liabilities 15,63,89 10,60,36Interest Accrued but not due on Short Term Loans (From Banks) 1,95 15

177,26,17 130,82,87

* Includes amount due to Directors Rs. 1,13 thousand (Previous year Rs. 1,51 thousand)** Not due to be credited to the Investor Education and Protection Fund.

SCHEDULE 11 - PROVISIONS(Refer Notes 6, 8 and 16 on Schedule 18A and Notes2 and 20 on Schedule 18B)

Proposed Dividend - 5,57,59

Distribution Tax on Proposed Dividend - 92,61

Provision for Gratuity 4,63,72 5,26,74

Provision for Leave Encashment/Compensated Absences (Long Term) 3,04,78 3,02,96

Provision for Leave Encashment/Compensated Absences (Short Term) 1,94,22 1,50,43

Provision for Long Service Award 81,27 58,99

Provision for Warranty 52,39 49,07

10,96,38 17,38,39

As at As atMarch 31, 2011 March 31, 2010

Rs.’000 Rs.’000

26

For the Year ended For the Year endedMarch 31, 2011 March 31, 2010

Rs.’000 Rs.’000SCHEDULE 12 - OTHER INCOME(Refer Note 4 on Schedule 18A )Interest on :- Fixed Deposits from Banks[Gross, Tax Deducted at Source Rs. 25,63 thousand 2,30,54 5,05,71(Previous year Rs. 76,11 thousand)] - Refund from Income Tax Authorities 46,04 73,19 - Others[Gross, Tax Deducted at Source Rs. 38 thousand(Previous year Rs. 41 thousand)] 10,02 2,86,60 10,43 5,89,33Scrap Sales 3,45,68 2,60,70Provisions / Liabilities no Longer Required Written Back 14,72 19,56Miscellaneous Income 14,59 5,98

6,61,59 8,75,57

SCHEDULE 13 - MATERIALS CONSUMED(Refer Note 5 and 7 on Schedule 18A and Notes 8, 7, 9, 1018, 23 and 24 on Schedule 18B)Raw Materials and Components Consumed 691,39,16 500,51,86Purchases for Re-sale [Net of excise duty recovered on Salesamounting to Rs. Nil(Previous year - Rs. 5,81,37 thousand)] 22,49,32 37,26,08(Increase)/Decrease in Stock of Finished Goods andWork-in-ProgressOpening Stocks- Finished Goods (Manufactured and Traded) 16,39,13 38,19,26- Work-in-Progress 6,51,81 4,88,40

22,90,94 43,07,66Less :Closing Stocks- Finished Goods (Manufactured and Traded) 17,14,30 16,39,13- Work-in-Progress 9,24,89 65181

26,39,19 22,90,94Excise Duty on (Decrease) / Increase in Stocks ofFinished Goods (Manufactured) (33,77) 68,74

(3,82,02) 20,85,46710,06,46 558,63,40

SCHEDULE 14 - MANUFACTURING EXPENSES(Refer Note 5 on Schedule 18A and Notes 9, 10 and 23 on Schedule 18B)

Stores and Spares Consumed 7,82,38 6,20,93Power and Fuel 7,36,79 5,72,28Repairs and Maintenance- Buildings 1,96,52 1,06,00- Plant and Machinery 6,34,01 8,30,54 3,55,54 4,61,54

23,49,71 16,54,75

SCHEDULS FORMING PART OFPROFIT AND LOSS ACCOUNT

27

SCHEDULE 15 - PERSONNEL EXPENSES(Refer Note 8 on Schedule 18A and Notes 14 and 20 on Schedule 18B)Salaries,Wages and Bonus 71,43,37 55,38,70Contribution to Provident and Other Funds 5,03,95 3,55,72Staff Welfare 12,42,98 9,05,06Group Insurance 1,21,51 1,07,58

90,11,81 69,07,06

SCHEDULE 16 - SELLING, ADMINISTRATION AND OTHER EXPENSES(Refer Notes 5, 6 and 15 on Schedule 18A and Notes 2, 12, 13 and 23 on Schedule 18B)Insurance 50,91 46,98Rent [Net of recoveries of Rs. 8,15 thousand(Previous year Rs. 7,60 Thousand)] 98,30 1,04,57Rates and Taxes [Includes Wealth Tax Rs. 2,53 thousand(Previous year Rs.2,14 thousand)] 2,27,47 1,58,06Vehicle Running and Hire Charges 3,33,06 2,70,43Travelling and Conveyance 1,66,14 1,50,41Communication 79,16 79,11Legal, Professional and Consultancy 4,69,97 1,60,72Freight Outward 1,68,16 66,72Royalty 19,85,33 15,18,28Application Cost and Service Fees 16,87,44 10,84,69Loss / (Profit) on Sale / Discarding of Assets (Net) [Includes assetwritten-off from Capital Work-in-Progress amounting to Rs. 5,33thousand (Previous year Rs. Nil) 8,74 40,45Discount on Sales 5,58,68 4,47,75Commission to Sole Selling Agent 14,52,13 11,68,80Warranty 19,53 10,61Advertisement and Sales Promotion 6,96 8,29Miscellaneous Expenses 4,99,40 3,33,97

78,11,38 56,49,84

SCHEDULE 17 - FINANCE CHARGES(Refer Note 11 on Schedule 18A)Interest on :- Cash Credit from Banks 2,63 3,60- Demand Loans from Banks 1,63,95 6,32- Security Deposits 7,41 1,73,99 1,88 11,80Bank and Other Charges 12,67 10,77

1,86,66 22,57

For the Year ended For the Year endedMarch 31, 2011 March 31, 2010

Rs.’000 Rs.’000

28

SCHEDULE - 18SIGNIFICANT ACCOUNTING POLICIES ANDNOTES TO ACCOUNTSA. SIGNIFICANT ACCOUNTING POLICIES:1) BASIS OF PREPARATION OF FINANCIAL

STATEMENTS:The financial statements are prepared to complyin all material aspects with all the applicableaccounting principles in India, the applicableaccounting standards notified under section211(3C) of the Companies Act, 1956 and the relevantprovisions of the Companies Act, 1956.

2) FIXED ASSETS:Fixed assets are stated at cost of acquisition lessaccumulated depreciation. Acquisition costincludes taxes, duties, freight, insurance andother incidental expenses related to acquisitionand installation and are net of CENVAT credits,where applicable. Revenue expenses incidental andrelated to projects are capitalised along with therelated fixed assets, where appropriate.

3) DEPRECIATION:Depreciation on fixed assets is provided using thestraight-line method based on useful lives of assetsas estimated by the management. Depreciation ischarged on a pro-rata basis for assets purchased /sold during the year. The management’s estimate ofuseful lives for the various fixed assets is givenbelow, which is higher than the rates prescribedunder Schedule XIV of Companies Act, 1956 :Building 20 yearsPlant and Machinery- Jigs and Tools 5 years- Others 7 yearsComputers 3 yearsFurniture and Fixtures 5 yearsVehicles 5 yearsLeasehold land is amortised over the period oflease.Individual assets costing less than Rs.5,000 aredepreciated in full in the year of purchase.

4) REVENUE RECOGNITION:Revenue from the sale of products is recognisedupon transfer of ownership to the customers, andis net of sales tax, where applicable, but inclusiveof excise duty.Interest income on fixed deposits is recognised ontime proportion basis.

5) FOREIGN CURRENCY TRANSACTIONS:Transactions in foreign currency are accounted forat the exchange rates prevailing on the date oftransactions.

Exchange differences arising on foreign currencytransactions settled during the year are recognisedin the Profit and Loss Account for the year. Allmonetary items denominated in foreign currencyare translated at exchange rates prevailing on theBalance Sheet date. The resultant exchangedifferences are recognised in the Profit and LossAccount for the year.The premium or discount arising at the inceptionof forward exchange contracts, entered into tohedge the foreign currency risk of existing assetsand liabilities, is amortized as expense or incomeover the life of the contract. Exchange differenceson such contracts are recognized in the statementof profit and loss in the year in which the exchangerates change. Any profit or loss arising oncancellation or renewal of forward exchangecontract is recognized as income or as expected forthe year.

6) WARRANTY:Product warranty costs are determined andprovided for in the year, in which the revenues arerecognised, based on past experience.

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

Provision for obsolescence is made, wherevernecessary.

8) EMPLOYEES’ BENEFITS:Benefits to employees comprise provident fund,gratuity, leave encashment/compensatedabsences, superannuation and long service award.Defined Contribution Plan:

The Company has a separate SuperannuationScheme for its officers under the aegis of the LifeInsurance Corporation of India. Contributionsmade in accordance with the scheme of the LifeInsurance Corporation of India are charged tothe Profit and Loss Account.Contributions to the employees’ stateinsurance fund, administered by theprescribed government authorities, are madein accordance with the Employees’ StateInsurance Act, 1948 and are recognized as anexpense on an accrual basis.

Defined Benefit Plans:Contributions towards Company’s gratuityliability made to Life Insurance Corporation

29

of India are adjusted against the gratuityliability determined by an independentactuary as at year end on the basis of“Projected Unit Credit Method” and the shortfall, if any, is charged to the Profit and LossAccount. In case fair value of plan assets is inexcess of the present value of the definedbenefit obligations, the resultant asset isrecognized as at balance sheet date.Actuarial gains and losses compriseexperience adjustments and the effects ofchange in actuarial assumptions and arerecognised immediately in the profit and lossaccount as income and expense.

Other Long Term Employee Benefit :Contribution to the provident fund and familypension fund, administered through a privatetrust, is made in accordance with theprovisions of the Employees Provident Fundand Miscellaneous Provisions Act, 1952 andis recognised as an expense on an accrualbasis. Further, the Company gets an actuarialvaluation carried out as at year end todetermine liability towards guaranteedinterest rates, if any, and the same is alsorecognised as an expense on an accrual basis.

Other Employee Benefits :The liability for long term compensatedabsence and long-term service award isrecognised in accordance with rules of theCompany, based on actuarial valuation by anindependent actuary carried out at thebalance sheet date on the basis of “ProjectedUnit Credit Method”.

The liabilities for employee benefit in form ofshort-term compensated absence (vesting aswell as non-vesting) have been recognised atundiscounted amount, in accordance with therules of the Company.

Actuarial gains and losses compriseexperience adjustments and the effects ofchange in actuarial assumptions and arerecognised immediately in the profit and lossaccount as income and expense.

9) RESEARCH AND DEVELOPMENT EXPENDITURE :All revenue expenses pertaining to research anddevelopment are charged to the Profit and LossAccount in the year in which these are incurredand expenditure of capital nature is capitalised asfixed assets.

10) TAX EXPENSE :Tax expense comprises current and deferred tax.The provision for income tax is determined inaccordance with the provisions of the Income-taxAct, 1961.The Company provides for deferred tax based onthe tax effect of timing differences resulting fromthe recognition of items in the financial statementsand in estimating its current income tax provision.The effect on deferred tax assets and liabilities of achange in tax rates is recognised in the statementof profit and loss using the tax rates and tax lawsthat have been enacted or substantively enactedby the balance sheet date. Deferred tax assets onunabsorbed depreciation or carry forward losses,if any, are recognised only if there is virtualcertainty that such deferred tax assets can berealized against future taxable profits. In all othercases, deferred tax assets are recognised only tothe extent there is a reasonable certainty thatsufficient future taxable income will be availableagainst which such deferred tax asset can berealised.Minimum alternative tax (MAT) credit isrecognised as an asset only when and to the extentthere is convincing evidence that the Company willpay income tax higher than that computed underMAT, during the period that MAT is permitted tobe set off under the Income Tax Act, 1961 (specifiedperiod). In the year, in which the MAT creditbecomes eligible to be recognised as an asset inaccordance with the recommendations containedin the Guidance Note issued by the Institute ofChartered Accountants of India (ICAI), the saidasset is created by way of a credit to the profit andloss account and shown as MAT credit entitlement.The Company reviews the same at each balancesheet date and writes down the carrying amountof MAT credit entitlement to the extent there is nolonger convincing evidence to the effect that theCompany will pay income tax higher than MATduring the specified period.

11) BORROWING COSTS :Borrowing costs that are directly attributable tothe acquisition, construction or production ofqualifying asset are capitalised as part of the costof that asset. Other borrowing costs are recognisedas an expense in the period in which they areincurred.

30

12) EARNINGS PER SHARE(EPS) :In determining earnings per share, the Companyconsiders the net profit after tax and includes thepost tax effect of extra ordinary/exceptional item,if any. Basic earning per share is computed bydividing the net profit for the year attributable tothe equity shareholders by the weighted averagenumber of equity shares outstanding during theyear and dilutive equity equivalent sharesoutstanding at the year end, except where theresults would be anti dilutive.

13) INTANGIBLE ASSETS :Intangible assets are recognised if it is probablethat the future economic benefits attributable tothe asset will flow to the enterprise and cost of theasset can be measured reliably in accordance withAccounting Standard – 26, on ‘Intangibles Assets’.Intangible assets, if any, are amortised onstraight-line basis over their useful livesdetermined on the basis of expected futureeconomic benefits. The amortization period andmethod is reviewed at the end of each financial year.

14) IMPAIRMENT OF ASSETS :At each Balance Sheet date, the Company assesseswhether there is any indication that an asset maybe impaired. If any such indication exists, theCompany estimates the recoverable amount. If thecarrying amount of the asset exceeds therecoverable amount, an impairment loss isrecognised in the Profit and Loss account to theextent the carrying amount exceeds the recoverableamount.

15) LEASES:For operating leases, rental income and expense isrecognised on a straight-line basis over the leaseterm unless another systematic basis is morerepresentative of the time pattern of the Company’sbenefit.

16) PROVISIONS AND CONTINGENCIES:Provisions are recognised when the Company hasa present obligation as a result of past events, forwhich it is probable that an outflow of resourceswill be required to settle the obligation, and areliable estimate of the amount can be made.Provisions required to settle are reviewedregularly and are adjusted where necessary toreflect the current best estimates of the obligation.

A disclosure for a contingent liability is madewhen there is a possible obligation or a presentobligation that probably will not require anoutflow of resources or where a reliable estimateof obligation cannot be made.

17) DERIVATIVE INSTRUMENTS:The Company use derivative financialinstruments such as forward exchange contractsto hedge its risks associated with foreign currencyfluctuations. The foreign exchange contracts, if any,other than those covered under AS 11, entered fornon speculative purposes, including theunderlying hedged items, are valued on the basisof a fair value on marked to market basis and anyloss on valuation is recognized in the profit andloss account, on a portfolio basis. Any gain arisingon this valuation is not recognized by the Companyin line with the principle of prudence.

B. NOTES TO ACCOUNTS:1(a) Contingent Liabilities:The following are the details of Contingent Liabilities,the outflow of which is uncertain at this stage:i) Guarantees issued to sales tax authorities and

others, outstanding at year-end Rs. 56,23 thousand(Previous year Rs. 37,38 thousand).

ii) In respect of Income tax demands pending disposalof appeals Rs.13,03,70 thousand (Previous yearRs.10,15,31 thousand). Against this, the Companyhas deposited a sum of Rs. 4,10,00 thousand(Previous year Rs. 3,41,50 thousand) under protestand Rs. 6,80,66 thousand (Previous Year Rs. 5,93,12thousand) has been adjusted by income taxauthorities against refund. The Assessing Office hasfiled an appeal to Income Tax Appellate Tribunal,against the favorable orders of Commissioner ofIncome Tax (Appeal) for the Assessment Years2002-03, 2003-04 and 2004-05 and the resultantliability, if any, is not currently ascertainable.

iii) In respect of transfer levy demanded by UPSIDCfor allowing change of name of the Company intheir records - Rs.71,86 thousand (Previous year -Rs.71,86 thousand), excluding interest, if any. TheCompany has obtained a stay order from theHon’ble Allahabad High Court.

iv) In respect of labour cases [excluding claims whereamount is not ascertainable at this stage] – Rs.40,00 thousand (Previous year Rs.40,00thousand).

31

v) In respect of allowability of cenvat credit of servicetax paid on various input services and demand ofservice tax in respect of freight outward - Rs. 65,90thousand (Previous year Rs. 21,53 thousand).

vi) In respect of allowability of cenvat credit of Exciseduty on certain items - Rs. 1,12,86 thousand(Previous year Rs. Nil). The Company has receivedunconditional stay from Central Excise & ServiceTax Appellate Tribunal (CESTAT).

vii) In respect of demand raised by Tehsildar, Dadrifor reclamation of Tilpatta, Dadri land - Rs.3,75,00thousand (Previous year Rs. 3,75,00 thousand).The Company has obtained a stay order from theHon’ble Allahabad High Court.

viii) In respect of demand raised by Tehsildar, Dadrifor reclamation of Tilpatta, Dadri land for Parking- Rs. 7,00,00 thousand (Previous year Rs. Nil). TheHon’ble Allahabad High Court has put orderpassed by the authority in abeyance.

1(b)The particulars of dues of sales-tax, income-tax,customs duty, wealth tax, excise duty, service taxand cess as at March 31, 2011 which have not beendeposited on account of a dispute, are included asunder :

2. Detail of Provisions:Warranty provision relates to the estimatedoutflow in respect of guarantee for products sold.Due to the very nature of such costs, it is notpossible to estimate the timing/ uncertaintiesrelating to the outflow from such estimates. Thedetail of warranty provision is given below:

3. Cash credit facilities and Demand Loans from thebanks, aggregating Rs. 69,65,93 thousand (Previousyear Rs. 9,93,30 thousand) and bank guaranteesaggregating Rs. 7,90 thousand (Previous year Rs.37,38 thousand) as at the year end, are secured byhypothecation on the stocks and book debts of theCompany. (Previous year-secured by hypthecationof whole of tangible movable assets including inparticular inventories which situated and/or intransit.)

4. Capital Commitments:Estimated amount of contracts remaining to beexecuted on capital account and not provided for[Net of capital advances of Rs. 4,52,59 thousand(Previous year Rs.2,32,18 thousand)] Rs. 24,53,41thousand (Previous year Rs. 21,08,84 thousand).

5. The information regarding amounts unpaid as atyear end to Micro and Small enterprises, as definedunder Micro, Small and Medium EnterprisesDevelopment Act, 2006, has been disclosed inSchedule 10 “Current Liabilities” to the extent,such parties have been identified on the basis ofinformation available with the Company. Basedon information available with the Company, theinterest due on amount remaining unpaid as atyear end and on the amount which has been paidbeyond appointed day during year ended March31, 2011 is as under :-

Name of Nature of Dues Period to Amount Forum whereStatute which the (Rs. in 000’) dispute is

amount pendingrelates

Income Tax Matters relating to 2 00 6 -0 7 2,32,60 [Excluding Income TaxAct, 1961 transfer pricing issue. Rs. 1,10,00 Appellate

deposited under Tribunalprotest andRs. 2,61,50adjusted by IncomeTax authoritiesagainst refund]

Excise & Matter relating March, 21,53 CommissionerCustoms to Service Tax on 2005 to of customs &Act, 1944 freight expense November, Central Excise

2005 (Appeals)Excise & Matters relating to 2003-04 2,72 Commissioner ofCustoms Credit on various Customs &Act, 1944 Input Services Central Excise

(Appeals)Excise & Matters relating to Prior to 10 28,11 ADC (RemandCustoms Credit on IPR September, Proceedings)Act, 1944 Services 2004Excise & Matters relating to 2005-08 13,54 JointCustoms Credit on various Commissioner ofAct, 1944 Input Services Customs &

Cenral Excise(Appeals)

Excise & Matters relating to 2004-06 1,12,86 Commissioner ofCustoms Credit on various Customs &Act, 1944 Input Services Central Excise

(Appeals)

(Rs. in ‘000)As at Amount Amount Unused amount As at

April 1, 2010 provided utilised during reversed during March 31, 2011during the year the year the year

49.07 19,53 16,21 - 52,39(49,07) (10,61) (10,61) - (49,07)

Note: Figures in brackets represents ‘Previous Year’.

For the For the Particulars year ended year ended

March 31, 2011 March 31, 2010Delayed payment due as at theend of each accounting year onaccount of- Principal 689 -- Interest due thereon 61 -Total interest paid on all delayedpayments during the year under the - -provisions of the ActInterest due on principal amounts paidbeyond the due date during the year butwithout the interest amounts under this Act 562 -Interest accrued but not due - -Total Interest due but not paid 623 -

(Rs. in ‘000)

32

6. LICENSED AND INSTALLED CAPACITIES :Class of Goods Licensed Capacity Installed Capacity #

per annum per annumCurrent Year Previous Year

Nos. Nos.Alternators/Generators with or without vacuum pump

complete with regulator Delicensed 830000 620000

Starter Motors ,, 800000 731000

Wiper Motors ,, 1500000 1207000

Auto electricals like Distributors, Voltage Regulators,

Flywheel, Magnetos, Condensors, Electronic Ignition

System, Head Lamps, Fractional Horse Power Motors

such as Fan Motors, Blower Motors, Washer Motor, Auto Bulbs ,, 11600000 11600000

# Installed Capacity is on the basis of three shift working , as certified by the management and relied upon by the auditors,being a technical matter.

7. RAW MATERIALS AND COMPONENTS CONSUMED DURING PRODUCTION :CURRENT YEAR PREVIOUS YEAR

DescriptionUnit (Qty) Rs. in ’000 (Qty) Rs.in ’000

Wire Enamelled Copper (Kgs.) 1510160 75,14,40 1263690 49,21,38Radiator (Nos.) 253930 30,54,75 181074 23,18,44Integrated Circuit Device (Nos.) 5133033 29,09,56 3517481 21,84,00Core Sub Assy Stator (Nos.) 5407727 28,67,28 4266306 20,07,67Armature (Nos.) 3150301 25,25,10 2997646 17,75,67Shaft (Nos.) 9973242 23,71,75 7801610 18,05,89Aluminum Die Casting (Nos.) 3752669 23,45,47 3669261 17,39,59Boss Rotor (Nos.) 3583298 22,85,30 2768503 16,04,38Pulley (Nos.) 815727 21,56,53 56,16,74 9,49,81Magnets (Nos.) 25561175 18,69,47 24554103 18,68,16Rotor (Nos.) 3541650 15,92,52 3364973 15,32,63Bearing (Nos.) 24455118 19,44,88 18285934 15,21,06Wire Assy (Nos.) 3551904 10,93,93 2619802 8,08,88Rotor Sub Assy (Nos.) 154816 10,65,28 2803 37,32Condenser (Nos.) 45599890 10,18,47 30654679 6,45,53Holder Sub Assy Rectifier (Nos.) 629334 10,09,20 501602 4,03,15Rectifier 5050800 8,55,88 4750700 7,49,36Core Pole 3391087 6,45,46 3307148 7,70,71Others * 300,13,93 224,08,23Total 691,39,16 500,51,86

* In view of the large numbers of others items which differ in size and nature and each being less than ten percent value of the total value,it is not practicable to furnish quantitative information of such Raw Materials and Components consumed.

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8. PARTICULARS IN RESPECT OF OPENING STOCKS, PRODUCTION/PURCHASES, SALES AND CLOSINGSTOCKS FOR EACH CLASS OF GOODS DEALT WITH BY THE COMPANY

a) ManufacturingOpening Stock Production Gross Sales Closing Stock

during the year* during the year

Qty. (Nos.) Value Qty. (Nos.) Qty. (Nos.) Value Qty. (Nos.) Value

Alternators 10466 2,76,82 799 050 804 890 230,50,77 4626 1,28,10(4064) (86,29) (553248) (546846) (130,33,80) (1,04,66) (2,76,82)

Starter Motors 10686 1,30,03 751 016 751 733 111,87,05 9969 1,34,66(6434) (76,95) (664664) (660412) (82,64,63) (10686) (1,30,03)

Wiper Motors 20298 1,59,74 1392332 1 391754 127,48,60 20876 1,54,50(7625) (63,00) (1147705) (1135032) (98,13,37) (20298) (1,59,74)

Fan Motors 8421 1,11,87 469 455 472 584 83,62,72 5292 68,37(3761) (29,80) (585544) (580884) (80,22,41) (8421) (1,11,87)

Blower Motors 10376 46,29 704 988 708 680 37,51,39 6684 29,84(7661) (33,36) (674202) (671487) (30,43,13) (10376) (46,29)

CDI 22708 90,96 2244336 2 238314 118,35,74 28730 1,28,81(31759) (1,12,44) (1681343) (1690394) (82,48,24) (22708) (90,96)

Magneto 42294 2,03,12 3490869 3 495350 177,35,99 37813 1,86,77(26384) (1,32,48) (2720490) (2704580) (127,27,57) (42294) (2,03,12)

Print Motor 43 5 2,88 6015 5920 69,59 530 1,15(153) (86) (6006) (5724) (63,88) (435) (2,88)

Window Washer 2299 5,62 13,85,16 13,83,77 3,84,36 24,38 6,70(1430) (2,72) (109861) (10,89,92) (2,85,75) (22,99) (5,62)

Power Window 46492 1,98,94 1955442 1958705 94,83,28 43229 1,73,30(7210) (33,82) (1338780) (1299498) (62,06,00) (46492) (1,98,94)

Flywheel 1338 5,17 7712 9050 37,42 - -(1452) (5,41) (89025) (89139) (3,72,62) (1338) (5,17)

Spares** - 42,67 - - 5,00,95 - 42,12(25,56) (20,00,10) - (42,67)

Total (a) 12,74,11 991,47,86 10,54,32(6,02,69) (720,81,50) (12,74,11)

b) TradingOpening Stock Purchases Excise Duty Gross Sales Closing Stock

during the year* Recovered during the yearon Sales

Quantity Value Quantity Value Value Quantity Value Quantity Value(Nos.) (Rs. in ‘000) (Nos.) (Rs. in ‘000) (Rs. in ‘000) (Nos.) (Rs. in ‘000) (Nos.) (Rs. in ‘000)

Alternators 6326 2,60,66 18892 6,65,09 - 24296 10,58,16 922 32,79(62051) (27,67,07) (94069) (39,15,28) (5,41,58) (149794) (69,73,82) (6326) (2,60,66)

Starter Motors 3434 1,01,86 30189 8,20,62 - 26124 8,53,95 7499 1,82,27(12589) (3,69,16) (9577) (3,26,19) (32,91) (18732) (6,00,65) (3434) (1,01,86)

Power Windows - - - - - - - - -(-) (-) (12000) (65,98) (-) (12000) (53,61) - -

Ventilator 232 2,50 5744 1,28,17 - 4448 1,41,79 1528 14,44 (7193) (80,34) (-) (-) (6,88) (6961) (78,40) (232) (2,50)

EPS Motor - - 42084 6,11,58 - 14195 1,92,40 27889 4,07,33(-) (-) (-) (-) (-) (-) (-) (-) (-)

Others - - 4857 23,86 - 121 6 0 4736 23,15(-) (-) (-) (-) (-) (-) (-) (-) (-)

Total (b) 3,65,02 22,49,32 - 22,46,90 6,59,98 (32,16,57) (43,07,45) (5,81,37) (77,06,48) (3,65,02)

c) Total (a) + (b) 16,39,13 10,13,94,76 17,14,30 (38,19,26) (797,87,98) (16,39,13)

Notes:* Net of rejection, warranty and samples* * In view of large number of items, it is not practicable to furnish quantitative information. Figures in brackets represents ‘Previous Year’.

(Value Rs. in ‘000)

34

9. VALUE OF IMPORTED AND INDIGENOUS RAW MATERIALS, COMPONENTS, STORES AND SPARESCONSUMED:

a) Raw Materials and Componentsi) Imported 45.08 311,71,31 44.37 222,07,74ii) Indigenous 54.92 379,67,85 55.63 278,44,12

100.00 691,39,16 100.00 500,51,86b) Stores and Spares

i) Imported 37.50 2,93,41 18.40 1,14,22ii) Indigenous 62.50 4,88,97 81.60 5,06,71

100.00 7,82,38 100.00 6,20,93

10. CIF VALUE OF IMPORTS (ON ACCRUAL BASIS):a) Raw Materials and Components 343,96,05 233,33,18b) Traded Goods 20,59,92 36,69,94c) Stores and Spares * 4,94,30 1,75,89d) Capital Goods 48,49,83 25,86,11

418,00,10 297,65,12* Including Rs. 2,42,88 thousand (Previous year Rs. 74,80 thousand) charged to Repairs and Maintenance.11. EARNING IN FOREIGN CURRENCY (ON ACCRUAL BASIS):

FOB Value of Exports 5,00,93 4,25,835,00,93 4,25,83

12. EXPENDITURE IN FOREIGN CURRENCY* ( CASH BASIS-NET OF TDS):

a) Royalty 15,41,50 11,46,22b) Technical Service Fees/Application Cost# 14,66,42 7,48,56c) Travelling and Training 72,98 50,55d) Others 30,47 16,53

31,11,37 19,61,86* Excludes impact of exchange fluctuation.# Including Rs. 5,68,12 thousand (Previous year - Nil) paid for Technical Service Fees capitalised.

13. LEGAL AND PROFESSIONAL EXPENSES INCLUDEAUDITORS’ REMUNERATION* AS FOLLOWS :a) Audit Fee 37,05 35,35b) Tax Audit 3,50 3,50c) Fee for Other Services (Certification) 1,64 3,83d) Out of Pocket Expenses 3,28 1,40

45,47 44,08* Excludes Service Tax and Cess.

For the Year ended For the Year endedMarch 31, 2011 March 31, 2010

Rs.’000 Rs.’000% %

35

16. DEFERRED TAX (ASSET)/LIABILITY-NET:

The break-up of deferred tax assets and liabilities as at March 31, 2011 is as under:(Rs. ‘000)

Opening Movement ClosingBalance During the Balance

As at April 1, 2010 Year As at March 31, 2011Timing differences on account of :-Deferred Tax Liabilities:-Difference between book depreciation and depreciationunder Income Tax Act, 1961* (83,71) 1,65,07 81,36Others 1,72 (1,72) 0Total (a) (81,99) 1,63,35 81,36

Deferred Tax Assets :-Disallowance of expenses in accordance with provisions(Section 43B, 40a etc) of Income Tax Act, 1961 3,16,80 59,30 3,76,10Technical Know how 39,19 (39,19) 0Total (b) 3,55,99 20,11 3,76,10

Net Deferred Tax (Asset) - (a - b) (4,37,98) 1,43,24 (2,94,74)

Previous year (5,68,34) 1,30,36 (4,37,98)

* Including adjustments towards reversal of deferred tax libaility amounting to Rs. 15,96 thousand, created in theprevious year, in respect of Unit-II, eligible to claim exemption under section 801C of the Income Tax Act, 1961.During the current year, the deferred tax assets on unabsorbed depreciation and business loss is not created due tolack of virtual certainty of its realization.

14.DIRECTORS’ REMUNERATION*a) Salary and Allowances 28,16 23,72b) Perquisites** 61,59 52,25

89,75 75,97Director’s Sitting fee 8,70 5,38

* The appointment of Mr. Koji Shiga as Managing Director w.e.f. July 28, 2009 has been approved by the Central Government,Ministry of Corporate Affairs vide its letter dated June 18, 2010 for a period of three years starting from July 28, 2009.

** The Managnig Director of the Company is eligible to participate in the Employee Stock Option Plan of Denso Corporation, Japan,the parent company for which no cost has been charged to the Company.

15. DIVIDEND REMITTED IN FOREIGN CURRENCY FOR FINANCIAL YEAR 2009-2010 :

a) Denso Corporation, Japan on 1,33,62,091 (Previous year 1,33,62,091) shares 2,67,24 2,00,43b) Sumitomo Corporation, Japan on 28,62,794 (Previous year 28,62,794) shares 57,26 42,94c) Asmo Co. Ltd., Japan on 13,93,982 (Previous year 13,93,982) shares 27,88 20,91

3,52,38 2,64,28

For the Year ended For the Year endedMarch 31, 2011 March 31, 2010

Rs.’000 Rs.’000

For the FinancialYear 2009-10

For the FinancialYear 2008-09

36

17. EARNINGS PER SHARE (EPS):

For the year ended For the year ended March 31, 2011 March 31, 2010

The numerator and denominator used to calculate Basic/Diluted EPS:Profit attributable to Equity Shareholders (Rs. in ’000) 2,03,85 18,88,72Basic weighted average number of Equity Sharesoutstanding during the year (Rs. in ‘000) 2,78,80 2,78,80Nominal value of Shares (Rs.) 10 10Basic and Diluted Earnings Per Equity Share of Rs. 10 each 0.73 6.77

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

18. RELATED PARTY DISCLOSURES:

In accordance with the requirements of Accounting Standard (AS) –18 on ‘Related Party Disclosures’, the names ofthe 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 PartiesParties where control exists:-Holding Companies: Denso Corporation, Japan

Asmo Co. Ltd., Japan

Other related parties withwhom transactions havetaken place during the year :

Fellow subsidiaries : Denso Tool & Die (Thailand) Co. Ltd., Thailand Denso International India (Pvt.) Ltd. IndiaDenso Manufacturing Italia S.p.A. Italia (Formerly konwn as Denso Sales India Pvt. Ltd.)Denso E&TS Training Centre Corporation, Japan Denso Thermal Systems Pune Pvt. Ltd. IndiaDenso International Asia PTE Ltd., Singapore (Formerly known as Denso Faridabad Pvt. Ltd.)Denso (Thailand) Co. Ltd., Thailand Denso Kirloshar Industries (Pvt.) Ltd., IndiaChongqing Denso Co. Ltd., China P.T. ASMO Indonesia, IndonesiaGuangzhou Denso Co. Ltd., China Nippon Wiper Blade(M) SDN, BHD, MalaysiaDenso Sales (Thailand) Co. Ltd., Thailand Denso Trim Co. Ltd., JapanDenso Manufacturing Vietnam Co. Ltd., Vietnam Denso International Asia Co. Ltd.Denso Haryana (Pvt.) Ltd., India Denso Unity Service Corporation, JapanPT. Denso Indonesia, Indonesia Denso Automotive System Australia PTY. Ltd., AustraliaDenso Yusen Travel Corporation, Japan Siam Denso Manufacturing Co. Ltd., Thailand

Companies having Significant Influence :Subros Limited, India (till January 29, 2010)Maruti Suzuki India Limited, India

Key Management Personnel :Koji Shiga, Managing DirectorKazuyasu Sugita, DirectorTakashi Aoyama, DirectorTatsumi Ishiguro, Managing Director (Till October 31, 2009)

37

(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 :

Nature of Transaction Holding Fellow Significant Key ManagementCompany Subsidiaries Influence Personnel

Sale of Goods :- Denso Corporation, Japan 6,15 - - -

(7,11) (-) (-) (-)- Maruti Suzuki India Limited, India - - 442,49,28 -

(-) (-) (351,90,12) (-)- Others 1,45 3,72,74 - -

(21) (2,31,85) (20,09,39)Other Income :- Denso Corporation, Japan - - - -

(42) (-) (-) (-)- Denso International Asia Co. Ltd., Thailand - - - -

(-) (6,10) (-) (-)Purchases of Raw Materials, Components and Traded Goods :- Denso Kirloskar Industries (Pvt.) Ltd., India - 29,98,72 - -

(-) (25,65,72) (-) (-)- Denso Manufacturing Italia S.p.A., Italia - 6,11,58 - -

(-) (35,85,29) (-) (-)

- Others - 8,34,96 - -(-) (3,42,99) (-) (-)

Expenditure on Royalty, Application Cost, Technical Fee (Short Stay),Cash Discount, Warranty, Training Expenses and Stationery etc.- Denso Corporation, Japan 35,46,34 - - -

(24,57,84) (-) (-) (-)

- Denso International India Pvt. Ltd. India (-) 3,23,44 - -(-) (-) (-) (-)

-Others 45 97,30 3,47,82 -(3,07) (1,34,54) (2,69,02) (-)

Commission on Sale : - 14,52,13 - -- Denso International India Pvt. Ltd. India (-) (11,68,80) (-) (-)

Communication Expenses :- Denso Corporation, Japan 15,82 - - -

(16,50) (-) (-) (-)

- Others - - - -(-) (18) (-) (-)

Purchase of Fixed Assets :- Denso Tool & Die (Thailand) Co. Ltd., Thailand - 81,65 - -

(-) (1,01,82) (-) (-)

- Denso Corporation, Japan 8,28,43 - - -[Represents technical fee capitalized during the year] (-) (-) (-) (-)

- Denso (Thailand) Co. Limited, Thailand - 3,72,31 - -(-) (3,10,62) (-) (-)

Reimbursements paid by :- Denso Corporation, Japan’ [Includes reimbursement of INR 36,377 3,78,14 - - -thousand (Previous year Rs. 35,282 thousand) toward expat taxation*] (3,63,59) (-) (-) (-)

- Denso International India Pvt. Ltd., India - 25,68 - -(-) (16,38) (-) (-)

- Others - 7,42 - -(-) (-) (-) (-)

‘

38

Reimbursements paid to :- Denso International Pvt. Ltd., India - 22,23 - -

(-) (31,15) (-) (-)- Other - 3,79 - -

(-) (73) (-) (-)Remuneration to Wholetime Directors :

(Refer Note 14 on Schedule 18B)

-Koji Shiga - - - 25,29(-) (-) (-) (13,01)

-Tatsumi Ishiguro - - - -(-) (-) (-) (24,61)

- Kazuyasu Sugita - - - 38,99(-) (-) (-) (35,00)

- Takashi Aoyama - - - 25,47

(-) (-) (-) (3,35)

Dividend paid during the year :

- Denso Corporation, Japan 2,67,24 - - -

(2,03,43) (-) (-) (-)

- Maruti Suzuki India Limited, India - - 57,26 -

(-) (-) (42,94) (-)

- Asmo Co. Ltd., Japan 27,88 - - -

(20,91) (-) (-) (-)

c) Outstanding balances at Year-end:

Nature of Transaction Holding Fellow Significant KeyCompanies Subsidiaries Influence Management

PersonnelSundry Debtors 1,27 52,62 12,57,80 -

(3,63) (32,90) (10,78,74) (-)Sundry Creditors 21,81,43 12,84,94 - 1,13

(13,02,64) (11,85,22) (-) (1,51)Advances Recoverable 27,56 6,64 - -

(41) (6,14) (-) (-)Note : Figures in brackets represents ‘Previous Year’19. The category-wise Derivative Instrument outstanding as at March 31, 2011 are as under :Foreign Currency Forward Contract :

( Rs. in ‘000)Purpose As At March 31, 2011 As At March 31, 2010

Foreign Currency Currency Foreign Currency CurrencyCurrency Bought Sold Currency Bought Sold

amount amount amount amountHedging

USD 84 38,34 USD 86 38,91

JPY - - JPY 7,12,86 3,51,23

‘

* In accordance with terms of an arrangement between the Company and holding company, the holding company on a monthly basis repatriates the fund equivalent towithholding tax related to foreign income of expatriate staff serving in India, in an escrow account with the authorized bank. During the year, holding companies remittedaggregate of Rs. 3,63,77 thousand (Previous year - Rs. 3,52,82 thousand) which was deposited by the authorized bank to the revenue authorities in the name of the Company.

Nature of Transaction Holding Fellow Significant Key ManagementCompany Subsidiaries Influence Personnel

39

Unhedged foreign currency exposures as at March 31, 2011 are as under :(Rs. in ‘000)

Purpose As At March 31, 2011 As At March 31, 2010

Foreign Amount in Amount in Foreign Amount in Amount inCurrency Foreign Rupees Currency Forigen Rupees

Currency Currency

Receivables JPY 24,26 13,14 JPY 8,60 4,14

USD 1,18 52,61 USD 63 28,30THB 11 16 THB 2,10 2,95

Payables JPY 76,56,46 41,55,30 JPY 113,84,36 55,90,62USD 26,19 11,76,08 USD 14,71 6,66,49

THB 95,91 1,42,98 THB 2,76,32 3,88,97EURO 3 1,78 EURO 1,96 1,19,60

SGD 31 11,11 SGD 39 12,82

20. The disclosures of Employees’ benefits as defined in the Accounting Standard -15(Revised) on “Employees’Benefits” are given below :

A. Defined Contribution Plans :(a) Superannuation Fund

During the year, the Company has recognised the following amount in the Profit and Loss account :(Rs. in ‘000)

Particulars For the year ended For the year endedMarch 31, 2011 March 31, 2010

Employers Contribution to Superannuation Fund* 1,02,03 71,01

B. State Plan :

(a) Employers contribution to Employee State Insurance Fund*

During the year, the Company has recognised the following amount in the Profit and Loss account:

(Rs. in ‘000)Particulars For the year ended For the year ended

March 31, 2011 March 31, 2010

Employers Contribution to Employee State Insurance Fund* 84,50 44,78

* Included in Contribution to Provident and Other Funds under the head “Personnel Expenses” (Refer Shedule-15to the financial statements)

C. Defined Benefit Plans :

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

40

(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:

Employees Gratuity Fund (Funded)

Particulars For the year ended For the year ended For the year ended For the year endedMarch 31, 2011 March 31, 2010 March, 31, 2009 March 31, 2008

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

Rate of increase in compensation levels (per annum 5.00% 5.00% 5.00% 5.50%

Rate of return on plan assets (per annum) 9.00% 9.00% 9.00% 9.00%Expected average remaining working lives ofemployees (years) 22.30 21.51 21.62 21.87

Mortality Table LIC (1994-96) Duly Modified

The estimated rate of escalation in salary considered in an actuarial valuation, takes into account inflation, seniority, promotion and otherrelevant 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 Present Value of the Defined Benefit Obligation :

Employees Gratuity Fund (Funded)

Particulars For the year ended For the year ended For the year ended For the year endedMarch 31, 2011 March 31, 2010 March, 31, 2009 March 31, 2008

Present value of obligation beginning of the year 13,51,77 10,85,63 8,63,38 5,82,52

Impact of Transition provision of AS-15 (Revised) - - - 64,90

Interest cost 1,08,14 75,99 60,44 51,79

Past Service cost - - - -Current Service cost 9439 8983 7244 5925

Curtailment cost - - - -

Settlement cost - - - -

Benefits Paid (3404) (15,78) (12,22) (20,46)

Actuarial (gain)/loss on Obligations (61,13) 1,16,10 1,01,59 1,25,38

Present value of obligation as at year end 14,59,13 13,51,77 10,85,63 8,63,38

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

Employees Gratuity Fund (Funded)

Particulars For the year ended For the year ended For the year ended For the year endedMarch 31, 2011 March 31, 2010 March, 31, 2009 March 31, 2008

Fair value of Plan Assets as at beginning of the year 8,25,03 6,28,88 4,97,48 3,94,10

Expected return on Plan Assets 74,70 56,48 47,51 35,47

Contributions 1,18,66 1,48,43 92,16 84,46

Benefits Paid (34,04) (15,78) (12,22) (20,46)

Actuarial gian/(loss) on Plan Assets 11,06 7,02 3,95 3,91

Fair value of Plan Assets as at year end 9,95,41 8,25,03 6,28,88 4,97,48

(Rs. in ‘000)

(Rs. in ‘000)

41

(IV) Reconciliation of Present value of Defined Benefit Obligation and Fair vlaue of Funded Assets :

Employees Gratuity Fund (Funded)

Particulars For the year ended For the year ended For the year ended For the year endedMarch 31, 2011 March 31, 2010 March, 31, 2009 March 31, 2008

Present value obligation as at year end 14,59,13 13,51,77 10,85,63 8,63,38Fair value of Plan Assets as at year end 9,95,41 8,25,03 6,28,88 4,97,48Funded Status - - - -Present value of unfunded obligation as at the year end 4,63,72 5,26,74 4,56,75 3,65,90Unfunded Actuarial (gains)/losses - - - -Unfunded Net (Asset)/Liability recognized in Balance Sheet 4,63,72 5,26,74 4,56,75 3,65,90

(V) Expenses recognized during the year in Profit and Loss Account :

Employees Gratuity Fund (Funded)

Particulars For the year ended For the year ended For the year ended For the year endedMarch 31, 2011 March 31, 2010 March, 31, 2009 March 31, 2008

Current service cost 94,39 89,83 72,44 59,25Past Service cost - - - -Interest cost 1,08,14 75,99 60,44 51,79Expected return on Plan Assets (74,70) (56,48) (47,51) (35,47)Curtailment cost - - - -Settlement cost - - - -Net Actuarial (gain)/loss recognized during the year (72,19) 1,09,08 97,64 1,21,47Total Expense recognized in Profit & Loss Account* 55,64 2,18,42 1,83,01 1,97,04

* Includes in Salaries, Wages and Bonus under the head “Personnel Expenes” (Refer Schedule - 15 to the financial statements).

(VI) Major Category of Plan Assets as a % of the Total plan assets as at March 31, 2011 :The Company is not investing on its own and has taken insurance policy administrated by the Life InsuranceCorporation of India. Thus plan assets constitute of Fund lying with the Life Insurance Corporation of India andthe 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 :

Particulars For the year ended For the year ended For the year endedMarch 31, 2011 March 31, 2010 March, 31, 2009

Enterprise best estimate of contribution during next year 1,34,07 1,18,66 1,70,44

D. Other Long term Employee Benefits :(a) Provident FundThe Company’s Provident Fund is exempted under section 17 of Employees’ Provident Fund Act, 1952. Conditionsfor grant of exemptions stipulates that the employer shall make good deficiency, if any, in the interest rate declaredby the trust vis-a-vis statutory rate.In accordance with Accounting Standard-15 (Revised 2005) an actuarial valuation was carried out in respect ofabove mentioned plan. As per actuarial certificate there is no shortfall in the earning of fund against statutorilyrequired earning for last five years and hence the ‘liability on account of interest rate guarantee is nil. During theyear, the Company has recognized the following amounts in the Profit and Loss account.

Particulars For the year ended For the year endedMarch 31, 2011 March 31, 2010

Employers Contribution to Provident Fund* 1,76,83 1,35,38

Employers Contribution to Pension Fund* 1,40,59 1,04,55

* Inculded in Contribution to Provident and other Funds under head “Personnel Expenes” (Refer Schedule - 15 to the financial statements)(b) Leave Encashment / Compensated Absence(c) Long Service Award

(Rs. in ‘000)

(Rs. in ‘000)

(Rs. in ‘000)

(Rs. in ‘000)

42

(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 :

For the year ended For the year ended For the year ended For the year ended

March 31, 2011 March 31, 2010 March 31, 2009 March 31, 2008Leave Long Service Leave Long Service Leave Long Service Leave Long Service

Particulars Encashment/ Award Encashment/ Award Encashment/ Award Encashment/ AwardCompensated (Unfunded) Compensated (Unfunded) Compensated (Unfunded) Compensated (Unfunded)

Absence Absence Absence Absence(Unfunded) (Unfunded) (Unfunded) (Unfunded)

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

Rate of increase in compensation levels(per annum) 5.00% 5.00% 5.00% 5.00% 5.00 5.00% 5.50% 5.50%

Rate of return on plan assets(per annum) Not applicate

Expected average remaining workinglives of employees (years) 22.30 22.30 21.51 21.51 21.62 21.62 21.87 21.87

Mortality Table LIC (1994-96) Duly Modified

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 aboveinformation is certified by the actuary.The expected rate of return on plan assets is determined considering several applicable factors, mainly thecomposition of plan assets held, assessed risks, historical results of return on plan assets.

(II). Change in the Other Benfit Obligation :For the year ended For the year ended For the year ended For the year ended

March 31, 2011 March 31, 2010 March 31, 2009 March 31, 2008Particulars Leave Long Service Leave Long Service Leave Long Service Leave Long Service

Encashment/ Award Encashment/ Award Encashment/ Award Encashment/ AwardCompensated (Unfunded) Compensated (Unfunded) Compensated (Unfunded) Compensated (Unfunded)

Absence Absence Absence Absence(Unfunded) (Unfunded) (Unfunded) (Unfunded)

Present value obligation as at year end 3,02,96 58,99 2,55,75 79,62 1,59,48 75,16 1,36,29 -

Impact of Transition provision ofAS-15 (Revised) - - - - - - (40,48) 71,57

Interest Cost 24,24 - 17,90 - 11,16 - 7,66 -

Past Service cost - - - - - - - -

Current service cost 34,14 40,00 37,08 (905) 46,16 11,96 18,39 6,54

Curtailment cost - - - - - - - -Settlement cost - - - - - - - -

Benefits Paid (1,96,57) (17,72) (1,58,55) (11,58) (1,03,41) (7,50) (62,70) (2,95)

Actuarial (gain)/loss on Obligation 1,40,01 - 1,50,78 - 1,42,36 - 1,00,32 -

Present value of obligation as at year end 3,04,78 81,27 3,02,96 58,99 2,55,75 79,62 1,59,48 75,16

(III). Changes in the Fair Value of Plan Assets: Not Applicable(IV). Reconciliation of Present value of Other Benefit Obligation and Fair value of Funded Assets :

For the year ended For the year ended For the year ended For the year ended

March 31, 2011 March 31, 2010 March 31, 2009 March 31, 2008

Particulars Leave Long Service Leave Long Service Leave Long Service Leave Long ServiceEncashment/ Award Encashment/ Award Encashment/ Award Encashment/ AwardCompensated (Unfunded) Compensated (Unfunded) Compensated (Unfunded) Compensated (Unfunded)

Absence Absence Absence Absence(Unfunded) (Unfunded) (Unfunded) (Unfunded)

Present value obligation as at year end 3,04,78 81,27 3,02,96 58,99 2,55,75 79,62 1,59,48 75,16

Fair value of Plan Assets as at year end - - - - - - - -

Funded Status - - - - - - - -

Present value of unfunded obligationas at the year end 3,04,78 81,27 3,02,96 58,99 2,55,75 79,62 1,59,48 75,16

Unfunded Actuarial (gains)/losses - - - - - - - -

Unfunded Net (Asset)/Liability recognizedin Balance Sheet 3,04,78 81,27 3,02,96 58,99 2,55,75 79,62 1,59,48 75,16

(Rs. in ‘000)

(Rs. in ‘000)

(Rs. in ‘000)

43

(V). Expenses recognized during the year in Profit and Loss Account :For the year ended For the year ended For the year ended For the year ended

March 31, 2011 March 31, 2010 March 31, 2009 March 31, 2008

Particulars Leave Long Service Leave Long Service Leave Long Service Leave Long ServiceEncashment/ Award Encashment/ Award Encashment/ Award Encashment/ AwardCompensated (Unfunded) Compensated (Unfunded) Compensated (Unfunded) Compensated (Unfunded)

Absence Absence Absence Absence(Unfunded) (Unfunded) (Unfunded) (Unfunded)

Current service cost 34,14 40,00 37,08 (9,05) 46,16 11,96 18,39 6,54

Past Service cost - - - - - - - -

Interest cost 24,24 - 17,90 - 11,16 - 7,66 -

Expected return on Plan Assets - - - - - - - -

Curtailment cost - - - - - - - -

Settlement cost - - - - - - - -

Net Actuarial (gain)/loss recognizedduring the year 1,40,01 - 1,50,78 - 1,42,36 - 1,00,32 -

Total Expense recognized in

Profit & Loss Account* 1,98,39 40,00 2,05,76 (905) 1,99,68 11,96 1,26,37 6,54

* Included in Salaries, Wages and Bonus under the head “Personnel Expenses”. (Refer Schedule-15 to the financialstatements).

21. AMOUNTS DUE FROM COMPANIES UNDER SAME MANAGEMENT :A. Sundry Debtors :

Name of the Debtors As at March 31, 2011 As at March 31, 2010

Denso China - DMGZ Plant 52,52 28,30

Denso Sales (Thailand) Co. Ltd. 4 -

Chongqing Denso Co. Ltd. - China 5 -

Denso Faridabad Limited 1 4,19

Denso Kirloskar Industries (P) Ltd. - 41

B. Advances Recoverable

Name of the Parties As at March As at March Maximum Maximum31, 2011 31, 2010 Balance during Balance during

the year ended the year endedMarch 31, 2011 March 31, 2010

Denso International India (P) Ltd. 4,69 6,14 7,91 8,47

Denso International Asia Co. Ltd. Thailand 41 - 98 2,95

Denso Haryana (P) Ltd. 79 - 1,05 -

Denso Corporation, Japan - - 7,24 4,98

Denso Kirlosakar - - 1,18 -

Denso Manufacturing Vietnam Co. Ltd. - - 29 -

PT Denso Indonesia - - 29 -

Denso Thailand Co. Ltd. 16 - 16 -

Denso Automotive Systems Australia 59 - 59 -

22. SEGMENT REPORTING :The Company is operating in a single business/ geographical segment and therefore as per the requirements ofAccounting Standard-17 on “Segment Reporting” , no additional disclosures are required.

(Rs. in ‘000)

(Rs. in ‘000)

(Rs. in ‘000)

44

23. Revenue Loss (Net) on account of foreign exchange currency fluctuation during the year amounting toRs. 1,88,53 thousands [Previous year - Gain (Net) Rs. 1,70,23 thousands] has been debited / credited to the respectiveheads in the Profit and Loss Account.

24. LEASES :

The Company has entered into operating lease transactions for office premises for periods ranging between 1-3years. Terms of the lease include term for renewal, increase in rents in future periods and terms of cancellation.Lease rental amounting to Rs. 98,30 thousands (Previous year Rs. 1,04,57 thousands) have been charged to Profitand Loss Account during the year Future minimum lease payments of non-cancelable operating leases are asfollows:

Particulars For the Year ended For the Year endedMarch 31, 2011 March 31, 2010

Not later than 1 year 59,87 22,65

Later than 1 year but not later than 5 years 16,10 -

25. COMPANY SECRETARY :

The Company Secretary resigned from the Company w.e.f. May 9, 2011. Currently the Company is in the process ofidentifying a suitable candidate for appointment as full time Company Secretary, as per the provisions of Section383A of the Companies Act, 1956. In the absence of the Company Secretary, these financial statements have not beenauthenticated by the Company Secretary under Section 215 of the Companies Act, 1956.

26. PRIOR YEAR’S COMPARATIVES :

Previous year figures have been regrouped/recasted wherever considered necessary to conform to the currentyear’s classification.

For and on behalf of the Board of Directors

For and on behalf ofPrice WaterhouseFirm Registration Number : 301112E KOJI SHIGA KAZUYASU SUGITAChartered Accountants Managing Director Director

V. NIJHAWAN ARUN GANGWANIPartner Deputy General ManagerMembership No. F87228Place : Gurgaon Place : NoidaDated : May 30, 2011 Dated: May 30, 2011

(Rs. in ‘000)

45

’