Bosch

The Directors present their FIFTY-SIXTH Annual Report together with the
 Audited Statement of Accounts for the year ended 31st December 2007.
 
 Financial Results
 
 The following are the working results:
 
                                                      (Rs. Million)
                                                  2007         2006
 Net Sales (excluding recovery
 of duties and taxes)                          42,796.3     37,836.8
 Of which Export Sales                          6,729.5      6,269.6
 Profit Before Tax & Other items                8,559.6      6,515.4
 Add/(Less): Other items                           -         1,467.7
 Profit Before Tax for the year                 8,559.6      7,983.1
 Less: Provision for tax                        2,552.2      2,688.9
 Add: Deferred tax credit and tax
 adjustments relating to earlier years             84.7        185.7
 Profit after tax                               6,092.1      5,479.9
 Appropriations:
 Dividend:
 Interim Dividend at Rs.
 Nil per share (previous
 year: Rs.12 per share)                            -           384.6
 Final Dividend recommended
 at Rs. 25 per share
 (previous year: Rs. 4 per share)                801.3         128.2
 Tax on Interim Dividend                           -            53.9
 Tax on Final Dividend                           136.2          21.8
 General Reserve                               4,800.0       4,500.0
 Balance carried forward                         354.6         391.4
 Total                                         6,092.1       5,479.9
 
 Net sales for the year 2007 grew by 13%. The Profit Before Tax (PBT)
 for the year as percentage of net sales was at 20% in 2007 as compared
 to 21.1% in 2006. The Profit After Tax as percentage of net sales was
 14.2% in 2007 as against 14.5% in 2006.
 
 In addition to the sales, interest income and other income contributed
 significantly to the overall income growth of 16.5%.
 
 Material costs as a percentage to sales increased to 52.1% as compared
 to 50.9% in 2006. The staff costs grew to 11.2% of sales as compared to
 10.4% in 2006.  Operating expenses (excluding staff costs) decreased to
 19.6% from 20.6% of sales in 2006. The depreciation for the year
 decreased to 5.9% from 6.5% of sales in 2006.
 
 Overall, in terms of Profit before Interest, Depreciation and Taxes,
 the result for the year shows an increase of 4% over the previous year.
 
 Investments
 
 Capital investment during the year was Rs. 3,600 mio.  Of this,
 investment for the manufacture of Common Rail Systems and its
 components was Rs. 1,021 mio.
 
 Dividend
 
 Considering the growth and profitability of our business and with the
 intention to boost the pay-out ratio, the Board of Directors recommend
 a dividend of Rs. 25 per equity share as against a dividend of Rs. 16
 per equity share (including interim dividend of Rs.12 per share) in
 2006.
 
 Business Situation
 
 The year 2007 saw a stabilization of the buoyancy in the Indian economy
 experienced in 2005 and 2006. In the second half of 2007 the overall
 economic upbeat declined indicating possible oncoming structural
 adjustments in the economy.
 
 The Indian automotive market had a mixed performance in 2007. The high
 growth seen in the later half of 2006 was not sustained in 2007.
 Interest rates hikes to contain inflationary pressure contributed to
 the decline in growth rates, especially in the commercial vehicles and
 two wheeler markets, which are sensitive to interest rates.
 
 Sales of Medium and Heavy Commercial Vehicles were mainly affected and
 the year ended with only a marginal growth of 4% compared to 2006. The
 increasing spread of the hub and spoke model for logistics in the big
 cities and the retail boom resulted in double digit growth for the
 Light Commercial Vehicle (LCV) segment.
 
 The sale of passenger vehicles continued to grow impressively despite
 the interest rate hike, aided by increasing disposable incomes of
 households and new model launches. Increasing awareness of the benefits
 of the clean, quiet and economical Common Rail System amongst the
 Indian consumers continue to drive the trend for diesel cars.
 
 The tractor market saw flat sales during 2007 due to reduced finance
 availability and the hike in interest rates. The 3-wheeler segment saw
 negative growth as more and more goods carriers moved from 3-wheelers
 to 4-wheeler LCVs. The 2-wheeler segment too saw negative growth,
 caused by the interest rate hikes.
 
 Strong investment in infrastructure, construction and the retail sector
 contributed to a robust growth of our Industrial and Consumer goods
 businesses.
 
 Automotive Technology
 
 In view of these mixed market developments we could still achieve an
 overall good growth in our Automotive OE business. Our diesel business
 grew by 11%, the Starter and Generator business grew by 24%. New
 products as well as capturing of additional market share contributed to
 this growth.
 
 Our Automotive Aftermarket business grew by more than 11 % supported by
 double digit growth in the Inland Aftermarket. Focus was given to
 strengthening of the distribution channels by increasing the number of
 product stockists as well as Auto Electrical workshops. Apart from
 achieving growth in the traditional business areas, our focus on new
 growth products like Batteries, Wiper blades, Diagnostics paid off as
 these products saw high sales growth.
 
 Blaupunkt witnessed a sales growth of 26%.  The year 2007 saw an
 expansion of Brand shops and the Premium Dealer concept as well as
 acquisitions of OE businesses.
 
 Consumer Goods and Building Technology Power tools
 
 Our Power Tools business grew by 25% and saw the introduction of 25 new
 tools covering all the important segments of the market. After the
 success of the Bosch Vahaan last year in South India, the initiative
 was expanded to North India. Through this initiative we have been able
 to enhance the skills and livelihood of self-employed rural artisans in
 India.  This vehicle covered 11,000 Kms, 4 States in 6 months.
 
 A Bosch Power Tool Center was inaugurated at the National Institute of
 Technology Karnataka (NITK) Campus. This Center was funded by the
 Technical Education Quality Improvement Programme (TEQIP) and
 established by our Power Tool Division. The center is equipped with the
 latest tools that suit all kind of industrial needs. We entered into a
 MoU with NIT Surathkal for imparting education on Power Tools to
 students.
 
 To support our business we tied-up with seven nationalised banks in
 order to extend financial support to the needy artisans. This tie-up
 has resulted in extending financial support to 2650 artisans in 2007.
 
 With the productionization of a Motor line, we increased the depth of
 our manufacturing and thus increased our competitiveness. The new
 product Blower was entirely designed and developed in India for the
 world market.
 
 Security Systems
 
 Our Security Systems business grew by 34% thereby increasing the market
 share in the security, safety & communication segments.
 
 The new businesses of Intrusion Alarm, Access Control & Building
 Integration System and Fire Systems introduced during the last few
 years were well established and widely accepted by the market.  The
 traditional businesses of CCTV & Communication grew further and
 established Bosch as the undisputed leader in the Indian market for
 security products and solutions.
 
 Bosch also has started offering integrated security, safety &
 communication solutions for large projects like Airports, Metro
 Railways, Common Wealth Games, Bangalore Traffic Surveillance, etc.
 
 Telex (USA) was acquired globally in 2006, its Indian business
 subsequently integrated into our division in India from April 1, 2007.
 With the acquisition, world renowned professional sound products like
 Electro Voice, Dynacord, Midas, Klark Technic & Telex were integrated
 in our product range.
 
 Industrial Technology Packaging Technology
 
 Our Packaging Technology business grew by 17%.  The packaging machinery
 division saw the establishment of a new facility at Verna, Goa. This
 will support the expansion and growth of our packaging machinery
 division, especially in the pharmaceutical segment. The division also
 introduced Knowledge on Wheels and Bosch Mobile Agro Pack through a
 Bosch packaging mobile van to overcome the knowledge deficit in rural
 India.
 
 Industrial Equipment
 
 Sales of this division grew by 42%. The Industrial Equipment division
 continued to support the growing requirements for Special Purpose
 Machines and diagnostic equipment, both for captive consumption and
 external sales. The division possesses rich and varied experience in
 assembly, testing, process and machining technology.
 
 Competition and Challenges in our business sectors
 
 The companys businesses face severe competition both from local and
 global manufacturers. The growth potential seen in the Indian auto
 market is attracting most of the global OEMs to set up operations in
 India. Sourcing strategies practiced by these OEMs are a challenge for
 acquisition of new projects.
 
 Increased global sourcing coupled with reduction in custom duties and
 free trade agreements are expected to further intensify competition in
 the Indian market. The changes in the emission norms have necessitated
 a change in the technology and consequently in our product mix.
 
 Our success in the Low Price Vehicle segment depends on our ability to
 innovate and manage our costs to stay ahead of the competition.
 Maintaining growth with profitability in such a scenario will be a
 challenge for the years ahead.
 
 Some of the key challenges facing the company in the increasingly
 competitive market are:
 
 - To enhance local competencies in R&D, manufacturing and service in
 line with the change of technology and with market requirements
 
 - To ensure quick and cost-effective adaptation of Bosch products to
 suit the Indian scenario
 
 - To increase local content in our product to be cost competitive
 
 - To maximize utilization of our resources in spite of the delays in
 realization of customer projects
 
 - To continuously improve our quality and delivery standards and
 services
 
 - To attract, retain and motivate talent
 
 With a strong local presence, a commitment to the Indian market through
 substantial investments and with a dedicated and motivated staff, the
 company is confident in meeting these challenges and retaining its
 leadership position in the market.
 
 Plants
 
 Bangalore
 
 The Plant reached record production volumes of the Single Cylinder
 Pumps, Elements and Feed Pumps. The Plant received for its Diesel
 business the Significant Achievement distinction in the assessment by
 The Confederation of Indian Industry for the Exim Bank award under the
 European Foundation for Quality Management (EFQM) model of excellence.
 
 Nashik
 
 The Nashik Plant achieved many milestones in 2007.  After the start of
 production of components of Common Rail Injectors (CRI) in 2006, the
 Plant commenced assembly of the same. The first CRI assembly and
 testing line was successfully installed.
 
 With the sample passing the quality requirements, validated by the
 Research and Development of the parent Company, the Plant qualified for
 the manufacture of Common Rail Nozzles. Exports reached new heights.
 
 Naganathapura
 
 Starter Motors and Generators registered good growth in volumes owing
 to increased inland sales.  The year 2007 saw the launch of Compact
 Drive Starters and a capacity increase in Gear Reduction Starters.
 Increases in material costs and increase in competition pose new
 challenges for our business.
 
 While the manufacture of Glow Plugs registered a significant growth,
 Spark Plugs grew only marginally.  The Plant introduced several new
 variants for different OE customers.
 
 Jaipur
 
 The Plant achieved an overall increase in production and sales volumes.
 The Jaipur Plant assumed the lead plant status within the Bosch Group
 for Distributor (VE) Pumps and also commenced export of VE Pump
 components to Bosch locations worldwide. The Lead plant is responsible
 for the manufacturing technology of the product across the
 International Production Network. The Plant received the Best Employer
 of the Year award-2007 from The Employers Association of Rajasthan.
 
 Information Technology (IT)
 
 2007 was a year of stabilization for the SAP implementation with the up
 gradation to the latest version of the Global Reference Model (UBK-RM
 version 1.12). Currently in progress is the IT implementation of the
 International Financial Reporting Standards (IFRS).
 
 Our SAP servers have been migrated to the Central Computer Center of
 the Bosch Group in Singapore which caters to all the Bosch locations
 within the Asia-Pacific region, assuring a high level of availability
 with adequate disaster recovery and business continuity measures.
 
 The Companys IT systems are periodically audited to ensure the
 adequacy of Information Systems controls, Information Security and
 privacy aspects.
 
 Change Initiatives
 
 Continuous Improvement Process (CIP)
 
 CIP continued to remain the area of focus in 2007.  The companys CIP
 workshops saw active involvement of people at all levels, both
 managerial and non-managerial. The Company is also driving such
 workshops very strongly with its customers and business partners.
 
 Bosch Production System (BPS)
 
 A BPS vision was unveiled during the year with focus on aligning to
 customer expectations with a lean and flexible supply chain, value
 addition to customers and business partners, processes orientation,
 CIP, people involvement and development.
 
 The BPS implementation drive intensified in 2007 across all plants.
 Major projects for the year included, space optimization through
 implementation of flow oriented layouts, investments integrated with
 the value stream, quick change over, ship to line, milk run and total
 productive maintenance.
 
 Deployment of Business Excellence (DBE)
 
 Deployment of Business Excellence (DBE) in our Diesel business enabled
 a culture to further improve on leadership aspects, policy and strategy
 management, people focus, processes orientation and resource
 management. DBE is facilitating the organization to align all its
 functions towards the Companys vision and mission. This management
 concept places a strong emphasis on meeting all stakeholders
 expectations. The year witnessed all the plants in diesel business
 reaching a higher maturity level.
 
 Employee Development and Training
 
 The Company has been providing opportunities for focused learning
 experiences to employees to stimulate support and develop their
 potential into work - related competencies. Lead Programs for
 Managers are conducted not only for the Company but for the entire Asia
 region. Competency Management has also been rolled out to enhance the
 skills of the employees.
 
 Our Mico Vocational Centre (MVC) conducted various programs for the
 Companys executives to sustain excellence in the areas of skill
 enhancement, quality and safety, on the job training etc.
 
 A company wide Associate Survey was undertaken to obtain feedback on
 various aspects, covering all employees. Action plans for addressing
 key points of feedback have been drawn up and are under implementation.
 The Company intensified its communication with all levels and
 categories of employees by way of different internal forums.
 
 Our MVC also led the countrys first ever representation at the World
 Skills Competition held at Japan. It continued its excellent
 performance with apprentices so far securing 148 gold medals. The
 centre received the All India Best Establishment Award for 35 times
 since its inception.
 
 Industrial Relations
 
 Industrial relations at all plants and other establishments continued
 to be cordial. The Directors place on record their deep appreciation of
 the sincere and dedicated teamwork by employees at all levels to meet
 the quality, cost and delivery expectations of our customers in a
 growing market.
 
 Rewards and Recognition
 
 The Company during the year 2007 received several rewards and
 recognitions for its achievements:
 
 -  The Automotive Component Manufacturers Association of India (ACMA)
 Gold Award for Overall Excellence in Manufacturing.
 
 -  The CII-Exim Bank Commendation for Significant Achievement on the
 journey towards Business Excellence.
 
 -  The Best Safe Industry Award from the Government of Karnataka.
 
 - The Employer of the year Award from The Employers association of
 Rajasthan.
 
 - The Excellent water efficient unit Award from CII for water
 conservation measures implemented in Jaipur plant.
 
 - The Quality Convention Award for systematic application of the Six
 Sigma approach.
 
 Open Offer by Parent Company
 
 Robert Bosch GmbH, our Parent Company, made a public announcement on
 the 27.04.07 to acquire up to 6,410,292 equity shares of the Company at
 Rs.4,000 per share and filed a letter of offer with the Securities and
 Exchange Board of India (SEBI) on the 11.05.07.  The offer price was
 revised to Rs. 4,600 per share as per revised public announcement made
 on the 31.05.07. Consequent to the public offer dated 09.06.07, Robert
 Bosch GmbH acquired 2,943,160 equity shares of Rs.10 each (9.18%) and
 increased the shareholding in our company from 60.55% (19,406,260
 equity shares of Rs.10 each) to 69.73% (22,349,420 equity shares of
 Rs.10 each).
 
 Dematerialization of shares
 
 Of the 30.27% shares held by the public, 28.86 % shares have been
 dematerialized.
 
 Members holding shares in physical form are once again advised to
 dematerialize their shares to avoid the risks associated with the
 physical holding of such share certificates.
 
 Name Change
 
 Our Company is the flagship company of the Bosch Group in India.
 Established in 1951, over the years, the company consistently increased
 its offerings of a wide range of products and services and
 state-of-the- art technology to the Indian Automotive Industry, with
 active support and participation by Robert Bosch GmbH. During these
 years, Robert Bosch GmbH enlarged its technology support for various
 products, viz:
 
 - Fuel Injection Equipment, Spark Plugs (1951)
 
 - Auto Electrical comprising of Starter Motors and Alternators (1989)
 
 - Bosch Electric Power Tools (1993)
 
 - Packaging Machines (1994)
 
 - Blaupunkt Car Audio Systems (1996)
 
 - Security Technology Products (2003)
 
 - Common Rail Systems (2006)
 
 Commensurate with the increased participation by Bosch in the Equity
 Capital of the Company, its Brand, Management and Technology support,
 the Directors recommended at their meeting held on the 06.12.07 a
 change in the Company name to Bosch Limited. The Shareholders of the
 Company approved the change of name at their Extraordinary General
 Meeting held on the 07.01.08. The Registrar of Companies, Karnataka,
 issued on the 18.01.08 a fresh certificate of Incorporation signifying
 the Central Governments approval of change of name of the Company
 under section 21 of the Companies Act, 1956.
 
 The change of name is a forerunner to an even stronger support from the
 parent company.  It signifies commitment of Robert Bosch GmbH to the
 Indian Industry and its faith and confidence in the capabilities of the
 Company, particularly its employees and Managers. The change of name
 will enable greater acceptability for the Company and for its products
 and services within the Bosch Group and above all lend an
 internationally well known image and recognition of quality products
 for the growing number of our automotive customers.
 
 Subsidiary Companies
 
 The aggregate assets and income of MICO Trading Pvt. Ltd., as at 31st
 December 2007 at Rs.40, 972 and Rs. 7,769 respectively, being not
 material, have not been prepared in accordance with the provisions of
 the Accounting Standard 21 Consolidated Financial Statements issued
 by the Institute of Chartered Accountants of India.
 
 As required under Section 212 of the Companies Act, 1956, annexed
 hereto are the Audited Statement of Accounts, the Report of the Board
 of Directors and Auditors Report for the year ended 31st December 2007
 of MICO Trading Pvt. Ltd.
 
 Directors
 
 In January 2001, Mr. V. K. Viswanathan joined the Board as Additional
 Director and Joint Managing Director, responsible for Finance,
 Administration and IT Co-ordination. Upon assuming new responsibilities
 in Robert Bosch Corporation, Farmington Hills, USA (Robert Bosch North
 America), Mr. Viswanathan ceased to be a Director and Joint Managing
 Director of the Company from 28.02.06.
 
 After completing his assignment with Robert Bosch Corporation,
 Farmington Hills, USA (Robert Bosch North America), he was appointed as
 Additional Director and Joint Managing Director with effect from
 01.11.07 and from 01.02.08 as Managing Director responsible for
 Automotive Aftermarket, Starters and Generators, Packaging Machine,
 Power Tools and Security Technology. He is also the spokesman for the
 Managing Directors.
 
 Mr. Viswanathan, 57, is a Bachelor of Commerce from the Madras
 University and a Chartered Accountant.  Prior to joining the Company,
 he was Group Treasurer & Head (Mergers and Acquisitions) with Hindustan
 Unilever Ltd (formerly Hindustan Lever Ltd) with which group he was
 associated in various capacities for 17 years.
 
 Dr. Manfred Duernholz joined the Executive Management of the Company on
 01.02.08 as Joint Managing Director responsible for the Power Train
 business.
 
 Dr. Manfred Duernholz, 53, holds a diploma in Engineering and a
 graduate degree in Machine building from the Technical University of
 Aachen, Germany. He is also a doctorate in Engineering.
 
 He held varied technical positions from 1974 to 1999 before joining the
 Bosch Group in April 1999. In the Bosch Group he held important
 positions including in Engine laboratory at the Feuerbach plant
 (1999-2001), as Senior Vice President Development (2001-2007) and as
 Senior Vice President Engineering (2007).
 
 Dr. A. Hieronimus ceased to be the Managing Director of the Company
 from 01.02.08 consequent to assuming new responsibility as Chairman of
 the Board of Directors of Bosch Rexroth AG. However he continues as
 Director of the Company. The Board of Directors appointed Dr. A.
 Hieronimus as Chairman from 01.02.08.
 
 The Board of Directors place on record their deep appreciation of the
 significant contribution made by Dr. A. Hieronimus to the growth and
 profitability of the Company and particularly for introduction of the
 Common Rail business.
 
 The Board of Directors welcome
 
 Mr. V. K. Viswanathan and Dr. Manfred Duernholz.
 
 Names of companies/firms in which Directors of the Company hold/held
 office as Director/Partner are given below-.
 
 Nil
 
 - Robert Bosch GmbH, Germany (Member of the Board)
 
 - Robert Bosch India Ltd.  (Chairman) (up to 31.01.08)
 
 - Bosch Chassis Systems India Ltd. (up to 31.01.08)
 
 - MICO Trading Pvt. Ltd. (up to 31.01.08)
 
 - MindTree Consulting Ltd.
 
 - Bosch Rexroth (India) Ltd. (up to 31.01.08)
 
 - Bosch Rexroth AG (Chairman of the Management Board) (from 01.02.08)
 
 - MICO Trading Pvt. Ltd.
 
 - Pricol Ltd.
 
 - Confederation of Indian Industry (Member-Southern Region)
 
 - Indian Machine Tool Manufacturers Association (Member-Executive
 Committee)
 
 - Robert Bosch India Ltd.
 
 - Bosch Chassis Systems India Ltd.
 
 - KBX Motorbike Products Pvt. Ltd.
 
 - Automotive Component Manufacturers Association of India
 (Member-Executive Committee)
 
 - Indo German Chamber of Commerce (Director General)
 
 - FAG Bearings India Ltd.
 
 - Zodiac Clothing Company Ltd.
 
 - Tata Steel Ltd. (Managing Director)
 
 - Natsteel Asia Pte Ltd., Singapore (Chairman)
 
 - Tata Steel (Thailand) Public Co. Ltd., Bangkok (Chairman)
 
 - TM International Logistics Ltd. (Chairman)
 
 - The Tinplate Company of India Ltd. (Chairman)
 
 - Tata Incorporated, New York
 
 - Corus Group Plc
 
 - Tata Steel UK Ltd.
 
 - Tulip UK Holdings No.l Ltd.
 
 - Tulip UK Holdings No.2 Ltd.
 
 - Tulip UK Holdings No.3 Ltd.
 
 - Tata International Ltd.
 
 - Tata Industries Ltd., Mumbai
 
 - International Iron & Steel Institute, Brussels, (Director)
 
 - CEDEP (European Centre of Executive Development), France (Director)
 
 - UN Global Compact Board (Member)
 
 - National Institute of Technology, Jamshedpur (Chairman)
 
 - Xavier Labour Relations Institute, Jamshedpur (Chairman, Board of
 Governors)
 
 - Indian Institute of Technology, Kharagpur, (Member, Board of
 Governors)
 
 - Credit Information Bureau (India) Ltd.
 
 - GRUH Finance Ltd.
 
 - Housing Development Finance Corporation Ltd.
 
 - HDFC Asset Management Co. Ltd.
 
 - HDFC Bank Ltd.
 
 - HDFC Chubb General Insurance Co. Ltd.
 
 - HDFC Property Ventures Ltd.
 
 - HDFC Realty Ltd.
 
 - HDFC Standard Life Insurance Co. Ltd.
 
 - HDFC Venture Capital Ltd. (Chairperson)
 
 - ICI India Ltd.
 
 - Indraprastha Medical Corporation Ltd.
 
 - Sparsh BPO Services Ltd.
 
 - Home Loan Services India Pvt. Ltd.
 
 - Feedback Ventures Pvt. Ltd.
 
 - Mother Dairy Fruit and Vegetables Pvt. Ltd.
 
 - Ascendas Pte Ltd., Singapore
 
 - Egyptian Housing Finance Company, S.A.E.
 
 - Robert Bosch India Ltd. (from 01.02.08)
 
 - Bosch Chassis Systems India Ltd. (from 01.02.08)
 
 - MICO Trading Pvt. Ltd. (from 07.01.08)
 
 - Bosch Rexroth (India) Ltd. (from 01.02.08)
 
 - Nil
 
 Dr. A. Hieronimus, Dr. F. Allerkamp and
 
 Mr. B. Steinruecke are liable to retire by rotation and offer
 themselves for re-election.
 
 Dr. A. Hieronimus, 60, holds a Diploma in Mathematics from the
 University of Cologne. He received a Doctorate in Business
 Administration also from the same University.
 
 Dr. Hieronimus started his career as an Academic Assistant in the
 University of Cologne, Germany.  He joined Mannesmann AG in 1979 and
 held senior positions responsible for materials management, sales and
 operation planning, head of department of sales and marketing, head of
 the department of corporate planning in the Mannesmann group companies
 in Germany. In 1990, he became a Member of the Management Board of
 Mannesmann Demag Baumaschinen GmbH and later of the Board of Management
 in Mannesmann Rexroth GmbH.
 
 From 1997 to April 2001, he was Member of Executive Board of Mannesmann
 Rexroth AG, Germany and continued in that position till August 2003, up
 on the takeover of Rexroth AG by Robert Bosch GmbH.
 
 Dr. F. Allerkamp, 54, holds a degree in Business Administration from
 Westfalische Wilhelms- Universitat, Munster and a Doctorate in
 Political Science. In 1978, he started his career as a teaching
 assistant in Westfalische Wilhelms-Universitat, Munster. In 1983, he
 joined the controlling division of Blaupunkt-Werke GmbH, Hildesheim. In
 1989, he moved to Head the Department of Accounting and Finance in
 Robert Bosch Sdn. Bhd., Malaysia and then became the Managing Director
 Commercial, responsible for Finance, Administration, Purchasing and
 Logistics. In 1993, he became the Senior Administrative Officer in the
 Corporate Administration and Finance Department of Robert Bosch GmbH,
 Stuttgart with management responsibility for Gasoline Systems and
 Diesel Systems divisions. He then moved over to Robert Bosch GmbH,
 Blaichach, Germany as Plant Manager Controlling.
 
 From 2002, he was Senior Vice President, Project Management SAP,
 responsible for the introduction of new standardized SAP software at
 all sites belonging to the Automotive Equipment Division of Robert
 Bosch GmbH throughout Europe.
 
 Mr. B. Steinruecke, 52, studied Law and Economics in Vienna, Bonn,
 Geneva and Heidelberg. He has a law degree from the University of
 Heidelberg and passed the Bar Examination of the High Court of Hamburg.
 He worked with Coopers and Lybrand, Hamburg before joining Deutsche
 Bank in 1984 and rose to become General Manager of the Mumbai Branch
 and Joint Chief Executive Officer of Banks operations in India. Later,
 he became the Managing Partner and Speaker of the Board of the ABC
 Privatkunden-Bank,
 
 Berlin. In July 2003, he became the Director General of Indo-German
 Chamber of Commerce.
 
 Mr. Steinruecke is an Independent Director of the Company, Chairman of
 Shareholders/Investors Grievance Committee, member of Audit
 Committee, Remuneration Committee and the Share Transfer Committee of
 the Board.
 
 Particulars of Employees
 
 Information in accordance with the provisions of Section 217(2A) of the
 Companies Act, 1956 read with Companies (Particulars of Employees)
 Rules, 1975, as amended, forms part of this Report.  However, as per
 provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, this
 Report and Accounts are being sent to the Shareholders of the Company
 excluding the Statement of Particulars of Employees under Section
 217(2A) of the Companies Act, 1956.  Any Shareholder interested in
 obtaining a copy of the said Statement may write to the Company
 Secretary at the Registered Office of the Company and the same will be
 sent by post.
 
 Corporate Governance
 
 A Report on Corporate Governance approved by the Board of Directors of
 the Company and a Certificate from the Auditors of the Company is set
 out in the Annexure to the Directors Report. The Company has fully
 complied with the Corporate Governance practices specified under the
 Companies Act, 1956 and the Listing Agreement with the Stock Exchanges.
 
 A Code of Conduct for Directors and Senior Management, a Code of
 Conduct for Prevention of Insider Trading, a Whistle Blower Policy,
 Rules & Regulations of Service Conduct for Managerial & Superintending
 Staff etc., effectively support the Corporate Governance processes.
 
 A Management Discussion and Analysis Report also accompany this report.
 
 Energy, Technology, Foreign Exchange, etc.
 
 The report in respect of conservation of energy, technology absorption,
 foreign exchange earnings and outgo, as required under Section
 217(l)(e) read with The Companys (Disclosure of Particulars in the
 Report of Board of Directors) Rules, 1988, is set out in the Annexure
 to the Directors Report.
 
 Auditors
 
 M/s. Price Waterhouse & Co., Chartered Accountants, the retiring
 auditors are eligible for re-appointment.
 
 Directors Responsibility Statement
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of
 Directors report that:
 
 -  In the preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures, if any.
 
 -  Accounting policies have been selected and applied consistently and
 the judgments and estimates made are reasonable and prudent so as to
 give a true and fair view of the state of affairs of the Company at the
 end of the financial year and of the profit or loss of the Company for
 that period.
 
 -  Proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities.
 
 - The annual accounts have been prepared on a going concern basis.
 
 Acknowledgments
 
 The Directors express their gratitude to the Central Government and the
 State Governments of, Karnataka, Maharashtra, Rajasthan, Uttaranchal
 and Goa for the support given to the Company.  The Directors also thank
 all customers, dealers, suppliers, financial institutions and banks,
 members and others connected with the business of the Company for their
 co-operation.
 
                            For and on behalf of the Board of Directors
 
 Bangalore                                Albert Hieronimus
 6th March 2008                               Chairman