Bosch

1.  We have audited the attached Balance Sheet of Bosch Limited, as at
 December 31, 2008, and the related Profit and Loss Account and Cash
 Flow Statement for the year ended on that date annexed thereto, which
 we have signed under reference to this report. These financial
 statements are the responsibility of the Companys management. Our
 responsibility is to express an opinion on these financial statements
 based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India.  Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (together the Order) issued by the Central Government of India in
 terms of sub-section (4A) of section 227 of the Companies Act, 1956
 of India (the Act) and on the basis of such checks of the books and
 records of the Company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4.  Without qualifying our opinion, we draw attention to,
 
 4.1 Note 21(b) of Schedule 19 regarding the Companys application to
 the Central Government seeking approval for appointment of a whole time
 director with effect from February 1, 2008 and remuneration
 paid/payable to him amounting to Rs 25,368 thousands for the period
 February 1, 2008 to December 31, 2008, which is awaiting approval.
 
 4.2 Note 30 of Schedule 19 regarding sale of goods and supply of
 services aggregating to Rs 70,370 thousands to private limited
 companies in which a director of the Company is also a director. The
 Company is of the view that having regard to their nature, these
 transactions are at prevailing market prices. Although the Company is
 of the opinion that these transactions may not be attracted by the
 provisions of section 297 of the Act, as a matter of abundant caution
 the Company proposes to make an application to the Central Government
 under the Act.
 
 5.  Further to our comments in Annexure referred to in paragraph 3
 above, we report that:
 
 a) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b) In our opinion, proper books of account as required by law have been
 kept by the Company so far as appears from our examination of those
 books;
 
 c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of section 211 of the Act;
 
 e) On the basis of written representations received from the directors,
 as on December 31, 2008, and taken on record by the Board of Directors
 of the Company, none of the directors is disqualified as on December
 31, 2008 from being appointed as a director in terms of clause (g) of
 sub-section (1) of section 274 of the Act;
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give in the prescribed
 manner the information required by the Act and give a true and fair
 view in conformity with the accounting principles.generally accepted in
 India:
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at December 31, 2008;
 
 ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Annexure to Auditors Report
 
 Referred to in paragraph 3 of the Auditors Report of even date to the
 members of Bosch Limited on the financial statements for the year ended
 December 31, 2008.
 
 (i) (a) The Company is maintaining proper records to show full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets of the Company are physically verified by the
 management according to a phased programme designed to cover all the
 items over a period of three years, which in our opinion, is reasonable
 having regard to the size of the Company and the nature of its assets.
 Pursuant to such programme, a physical verification was carried out
 during the year and this revealed no material discrepancies. Assets
 lying with third parties have been confirmed by them, and no material
 discrepancies have been noticed between the book records and the
 physical inventory/ confirmations obtained.
 
 (c) In our opinion, and according to the information and explanation
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 (ii) (a) The inventory of the Company has been physically verified by
 the management during the year. In the case of inventory lying with
 third parties, certificates confirming stocks have been received or
 physically verified by Companys representative in respect of a
 substantial portion of the stocks held during the year or at the
 year-end. In our opinion, the frequency of verification is reasonable.
 
 (b) In our opinion and according to the information and explanation
 given, the procedures of physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) On the basis of our examination of the records of inventory, in our
 opinion, the Company is maintaining proper records of inventory and the
 discrepancies noticed on physical verification between the physical
 stocks and the book records were not material.
 
 (iii) (a) The Company has granted unsecured loan to a Company covered
 in the register maintained under Section 301 of the Act. The maximum
 amount involved during the year is Rs 400,000,000 and the year-end
 balance of the aforesaid loan amounts to Rs. 400,000,000.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 of the aforesaid loan is not prima facie prejudicial to the interest of
 the Company.
 
 (c) In respect of the aforesaid loan, the party is repaying the
 principal amounts as stipulated and is also regular in payment of
 interest, where applicable.
 
 (d) In respect of the aforesaid loan, there is no overdue amount.
 
 (e) The Company has not taken any loans, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act, and accordingly sub clauses (f) and (g)
 of clause (iii) of Paragraph 4 of the Order, are not applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased/sold are of special nature for which suitable alternative
 sources do not exist for obtaining comparative quotations/prices, there
 are adequate internal control procedures commensurate with the size of
 the Company and the nature of its business for the purchase of
 inventory, fixed assets and for the sale of goods and services.
 Further, on the basis of our examination of the books and records of
 the Company, and according to the information and explanations given to
 us, we have neither come across nor have been informed of any
 continuing failure to correct major weaknesses in the aforesaid
 internal control system.
 
 (v) (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 referred to in Section 301 of the Act have been entered in the register
 required to be maintained under that section, except in respect of sale
 of goods and services to parties as explained in paragraph 4.2 of our
 report (also refer Note 30 of Schedule 19).
 
 (b) In our opinion and according to the information and explanations
 given to us and having regard to our comments in paragraph (iv) above,
 the transactions made in pursuance of such contracts or arrangements
 and exceeding the value of Rupees Five Lakhs in respect of any party
 during the year, have been made at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 Company in respect of products where, pursuant to the Rules made by the
 Central Government, the maintenance of cost records has been prescribed
 under clause (d) of sub-section (1) of Section 209 of the Act. We are
 of the opinion, that prima facie the prescribed accounts , and records
 have been made and maintained. We have not, however, made a detailed
 examination of the records with a view to determining whether they are
 accurate or complete.
 
 (ix) (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is regular in depositing the undisputed statutory dues including
 provident fund, investor education and protection fund, employees
 state insurance, income-tax, sales-tax, wealth tax, service tax,
 customs duty, excise duty, cess and other material statutory dues as
 applicable with the appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 sales- tax, income-tax, customs duty, wealth tax, service tax, excise
 duty and cess as at December 31, 2008 which have not been deposited on
 account of a dispute, are as follows -
 
 Name of the                     Amount
 statute                          (Rs.)
 
 Central Excise               11,932377
 Act, 1944
 
                             49,578,528
 
 Sales Tax Acts              20,564,127
 
                             25,751,060
 
 Customs Act                  3,060,656
 
 Income Tax Act                 941,023
 
                             38,497,911
 
 Period to           Forum where
 which the           the dispute is
 amount              pending
 relates
 
 1989-90 to          Up to
 1992-93,            Commissioners
 1996-97,            Level
 1998-01,
 2002-03
 
 1994-00,            Tribunal
 2004
 
 1986-87,            Upto
 1993,               Commissioners
 2006-08             Level
 
 1989-90,            Tribunal
 1992-93,
 1996-97,
 2000-01
 
 1991-92             Upto
                     Commissioners
                     Level
 
 1979-80,            Upto
 1983-84             Commissioners
                     Level
 
 1990-91 to
 1996-97             High Court
 
 - Net of payments made in the normal course of appeal proceedings.
 
 x) The Company has neither accumulated losses as at December 31, 2008
 nor it has incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 (xi) According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 (xii) The Company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) In our opinion, and according to the information and
 explanations given to us, the Company has not given any guarantee for
 loans taken by others from banks or financial institutions during the
 year.
 
 (xiv) The Company has not obtained any term loans.
 
 (xv) On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis, which have been used for long-term investment.
 
 (xvi) During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management except for an
 instance of fraud by an officer involving misappropriation of funds
 through falsification of records amounting to approximately
 Rs.2,500,000, which has since been substantially recovered. The said
 officer has been dismissed and the enquiry on this matter is still in
 progress.
 
 (xvii) The other clauses, of paragraph 4 of the Order namely clauses
 (xiii), (xiv), (xviii), (xix) and (xx) are not applicable in the case
 of the Company for the current year, since in our opinion there is no
 matter which arises to be reported in the aforesaid order.
 
                                                    Radhakrishnan B
                                                            Partner
                                          Membership Number F 25516
 
                                               For and on behalf of
 Place : Bangalore                            Price Waterhouse & Co.
 Date  : March 04, 2009                       Chartered Accountants