1.  We have audited the attached Balance Sheet of Denso India Limited
 (the Company) as at March 31, 2012, and the related Statement of
 Profit and Loss and Cash Flow Statement for the year ended on that date
 annexed thereto, which we have signed under reference to this report.
 These financial statements are the responsibility of the Company''s
 Management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements.  An audit also includes
 assessing the accounting principles used and significant estimates made
 by Management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003, as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
 (together the Order), issued by the Central Government of India
 in terms of sub-section (4A) of Section 227 of The Companies Act,
 1956'' of India (the Act'') and on the basis of such checks of the
 books and records of the Company as we considered appropriate and
 according to the information and explanations given to us, we give in
 the Annexure a statement on the matters specified in paragraphs 4 and 5
 of the Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) We have obtained all the information and explanations which, to the
 best of our knowledge and belief, were necessary for the purpose of our
 audit;
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
 Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of Section 211 of
 the Act;
 
 (e) On the basis of written representations received from the
 directors, as on March 31, 2012 and taken on record by the Board of
 Directors, none of the directors is disqualified as on March,31, 2012
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give, in the prescribed
 manner, the information required by the Act, and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2012;
 
 (ii) in the case of the Statement of Profit and Loss, of the loss for
 the year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 1.  (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation, of fixed
 assets.
 
 (b) The fixed assets of the Company have been physically verified by
 the Management during the year and no material discrepancies between
 the book records and the physical inventory have been noticed. In our
 opinion, the frequency of verification is reasonable.
 
 (c) In our opinion, and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the Company during the year.
 
 2.  (a) The inventory (excluding stocks with third parties) has been
 physically verified by the management during the year. In respect of
 inventory lying with third parties, these have substantially been
 confirmed by them. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the Management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  (a) The Company has not granted any loans, secured or unsecured, to
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.
 
 (b) The Company has not taken any loans, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.
 
 4.  In our opinion, and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods and
 services.  Further, on the basis of our examination of the books and
 records of the Company, and according to the information and
 explanations given to us, we have neither come across, nor have been
 informed of, any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 5.  (a) According to the information and explanations given to us,
 there have been no contracts or arrangements referred to in Section 301
 of the Act during the year to be entered in the register required to be
 maintained under that section. Accordingly, the question of commenting
 on transactions made in pursuance of such contracts or arrangements
 does not arise.
 
 (b) In our opinion, and according to the information and explanations
 given to us, there are no transactions made in pursuance of such
 contracts or arrangements exceeding the value of Rupees Five Lakhs in
 respect of any party during the year.
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and the nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company in respect of products where, pursuant to the rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause (d) of sub-section (1) of Section 209 of the
 Act, and are of the opinion that, prima facie, the prescribed accounts
 and records have been made and maintained. We have not, however, made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.
 
 9.  (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, except for
 dues in respect of provident fund in respect of international workers
 related to earlier years where there have been serious delays of
 significant days, the Company is regular in depositing undisputed
 statutory dues, including investor education and protection fund,
 employees'' state insurance, sales tax, wealth tax, service tax,
 customs duty, excise duty and other material statutory dues, as
 applicable, with the appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income tax, sales tax, wealth tax, service tax, customs duty and excise
 duty as at March 31, 2012 which have not been deposited on account of a
 dispute, are as follows:
 
 Name of the Statute       Nature of dues          Amount (Rs. In
                                                   millions)
 
 Income Tax Act, 1961      Matters relating to 
                           transfer                23 [excluding Rs. 11
                           pricing issues          deposited under 
                                                   protest and Rs. 26
                                                   adjusted by Income 
                                                   Tax Authorities 
                                                   against refund]
 
 Excise & Customs Act,     Matters relating to 
                           Credit                          11
 1944                      on various Input 
                           Services
 
 Excise & Customs Act,     Matters relating to 
                           Credit                           1
 1944                      on various Input
                           Services
 
 Excise & Customs Act,     Matters relating to 
                           Credit                           6
 1944                      of IPR Services
 
 Excise & Customs Act,     Matters relating to 
                           Credit                           2
 1944                      on freight expenses.
 
 Name of the Statute       Period to which the   Forum where the 
                           amount relates        dispute is pending
 
 Income Tax Act,1961       2006-07               Income Tax Appellate
                                                 Tribunal
 
 Excise & Customs Act,1944 2004-06               Central Excise & Service
                                                 Tax Appellate Tribunal
 
 Excise & Customs Act,1944 2003-04               Central Excise & Service
                                                 Tax Appellate Tribunal
 
 Excise & Customs Act,1944 Prior to September 
                           10,                   Assistant Commissioner
                           2004                 (Remand Proceeding)
 
 Excise & Customs Act,1944 March 2005 to 
                           November              Commissioner of Customs
                           2005                  & Central Excise 
                                                (Appeals)
 
 10.  The Company has no accumulated losses as at March 31, 2012. The
 Company has incurred cash losses in the financial year ended on that
 date and has not incurred cash losses in the immediately preceding
 financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any bank as at the balance sheet date. The
 Company has neither raised funds from any financial institution nor
 issued any debentures.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of share, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit
 fund/nidhi/ mutual benefit fund/ societies are not applicable to the
 Company.
 
 14.  In our opinion, and according to the information and explanations
 given to us, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  In our opinion, and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 16.  In our opinion, and according to the information and explanations
 given to us, the term loans have been applied, on an overall basis, for
 the purposes for which they were obtained.
 
 17.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion, and according to the information and
 explanations given to us, there are no funds raised on a short term
 basis which have been used for long term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  The Company has not issued any debentures during the year.
 
 20.  The Company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of any such case by the Management.
 
 
                                                For Price Waterhouse
 
                                   Firm Registration Number: 301112E 
 
                                               Chartered Accountants
 
                                                       Abhishek Rara
 
 Place: Noida                                                Partner
 
 Date: June 4, 2012                        Membership Number: F77779