The Directors present Twenty Seventh Annual Report of the Company
 together with the audited statement of accounts for the financial year
 ended 31st March 2012.
 
 FINANCIAL RESULTS
 
                                        For the year   For the year 
                                        ended          ended
                                        31.03.2012     31.03.2011
                                        Rs. Million    Rs. Million
 
 Gross Sales                                11,351        10,163
 
 Sales (Net of Excise)                      10,362         9,274
 
 (Loss)/Profit (before                        (691)           51
 exceptional and Extraordinary 
 items and Tax)
 
 Exceptional items                              26             -
 
 (Loss)/Profit for the year before Taxation   (717)           51
 
 Tax Expenses                                    5            31
 
 (Loss)/Profit for the year                   (722)           20
 
 MANAGEMENT DISCUSSION AND ANALYSIS:
 
 The year under review was not only a difficult year for the Company, it
 was a challenging year for the Indian economy as well. The Indian
 economy substantially slowed down during 2011-12, as compared to the
 previous year. Overall GDP growth rate dropped from 8.4% in 2010-11 to
 6.5% for the year 2011-12. The growth rate which had dropped down to
 6.7% in 2008-09 was expected to rebound and be around 9% or more during
 2011-12. However, contrary to expectation, with every passing month in
 2011, it became more and more evident that the rate of growth was on
 the decline. Index of Industrial Production (IIP) growth declined from
 8.2% in 2010- 11 to 2.8% in 2011-12. Growth rate of eight core
 industries declined from 6.6% during 2010-11 to 4.4% in 2011-12.
 Diverse factors lead to this unforeseen down turn. The global factors
 like the Euro zone crisis, recession in Europe, sluggish growth rate in
 industrialized nations like USA, stagnation in Japan, political crisis
 in the Middle East also contributed to the slowdown. Such drastic
 reversal from the upward swing to global melt down and consequent
 weakening of India economy led to a general negative outlook and
 depressed market sentiments.
 
 During 2011-12 the Rupee depreciated by over 14% against the US$, 13%
 against the Sterling Pound, 8% against the Euro and 15% against the
 Japanese Yen. The cascading effect of Rupee depreciation was sorely
 felt on the already high imported commodity prices. The Indian markets
 also saw a large decline in the in-flow of funds from the Foreign
 Institutional Investors partly due to the concerns over the longer term
 impact of higher current account deficits and partly due to risk
 aversion to invest in volatile markets. The flight of capital by
 foreign investors was also influenced by the melt down in Europe.
 Sovereign debt problem of euro area weighs heavily on global recovery.
 Concern about sustainable solution to the sovereign debt problem and
 vulnerability of the banking sector still persist. Heightened risk
 aversion and the resultant slowing of capital flows will have a
 significant adverse impact on emerging and developing economies
 including India.
 
 Spiraling oil prices, high inflation, rising interest rates severely
 dampened business sentiments thereby contributed to the slowdown. The
 year 2011-12 started with 9.7% inflation which touched double digits in
 September 2011 and thereafter declined to 7.7% in March 2012. The major
 factors contributing to such inflation were high prices of vegetables,
 eggs, meat and fish due to change in dietary pattern of rural
 households, increasing global commodity prices leading to higher cost
 of production and continuous high prices of crude oil.
 
 OPERATIONS:
 
 The factors which led to general negative outlook and depressed market
 sentiments affected the Company adversely.  The margins of the Company
 remained under severe pressure during the year due to rising input
 costs, adverse foreign exchange scenario and weakening rupee,
 disturbances and labour unrest with major customers, fluctuating
 economic growth and fierce competition causing a loss of Rs. 722
 million after tax.
 
 The margins and profits are under pressure not only in the Company but
 the situation is more or less same with competitors and other Auto
 components supplier as well. Same is the scene with car manufacturers.
 The end customers are continuously demanding better features, higher
 specifications at lower cost in the new cars and in new models of the
 present cars. The margins are therefore under pressure with car
 manufacturers also. The car manufacturers in turn pass on this pressure
 to the components suppliers.
 
 The problem was worst confounded due to labour unrest at Manesar plat
 of Maruti Suzuki India Limited (MSIL), which is our biggest customer.
 This severely disturbed production schedule of the Company putting
 inventory and imports out of sync with production. The Company faced
 challenges of erratic demand due to fluctuating economic scenario
 affecting growth in automobile sector during the year. It was therefore
 necessary to import more material & components and carry higher
 inventory to ensure 100% committed supply to the customers. This was
 necessary to retain market share. Even though these put pressure on
 profit margins and enhance working capital exposure, nevertheless are
 imperative to retain market share and customer confidence.
 
 The auto components industry is facing the pressure of erratic economic
 growth. With the increase in competition, this pressure is likely to
 increase further in the coming years.  The Company is therefore aiming
 to bring in more efficient, cost effective and newer technology
 products where price realization could be better.
 
 FACTORY AT HARIDWAR
 
 Your Company had established a factory at Haridwar in year 2009, mainly
 to cater to the needs of M/s Hero MotoCorp Ltd.  plant at Haridwar as
 well as to avail tax incentives being offered by the Government of
 Uttarakhand. The Company''s factory at Haridwar is fully operational
 and performing satisfactorily.  M/s Hero MotoCorp Ltd. (previously
 Honda Honda Motors Ltd.) is witnessing positive growth and has sold 6.2
 million two wheelers in 2011-12 up from 5.4 million vehicles sold in
 previous year. This trend augur well for Haridwar factory of your
 Company.
 
 NEW FACTORY AT BANGALORE
 
 Your Company will set up a new factory at Bangalore during 2012-13.
 This proposed factory at Bangalore will cater to the requirements of
 two wheelers manufacturers in southern India and mainly supply to Honda
 Motorcycle and Scooter India Pvt. Ltd. (HMSI) which is one of the main
 customers for two wheelers products of the Company. HMSI plans to put
 two plants in South. To secure HMSI growing business in South, in the
 presence of strong competition, the company has decided to establish
 this new factory. The Company is in process of taking suitable premises
 on lease at Bangalore to set up the Factory.
 
 SMALL MOTOR BUSINESS
 
 Pursuant to the Special Resolution passed by the Shareholders of the
 Company in terms of the provisions of Section 293(1)
 
 (a), of the Companies Act, 1956, under postal ballot system, the
 Company has sold Small Motor Business i.e Front/ Rear Wiper, Power
 Window Motors, Blower Motors, Electric Fan Motors and Engine Cooling
 Modules to DENSO Haryana Private Limited, a DENSO group company, on a
 going concern basis, by way of slump sale. The consideration for the
 sale on a slump sale basis is Rs. 1,477 million, out of which 90%
 amount i.e. Rs. 1,329 million has been received on signing the
 agreement and balance 10% will be received on closing date, along with
 the adjustments on account of changes in working capital position and
 additional capital investment, relatable to Small Motor Business up to
 the closing date, which is scheduled to be in October 2012.
 
 The Company''s Electrical Parts Business for four wheeler segment i.e
 Alternator and Starter and Electrical Parts Business for two wheeler
 segment i.e CDI and Magneto hold the key to growth and profitability in
 future. Alternator/ Starter (in case of four wheelers) and CDI/ Magneto
 (in case of two-wheelers) businesses constitute the core businesses of
 the Company since they contribute to vehicle engine performance by
 optimizing fuel cost and reducing emissions. With increased fuel costs
 and regulatory drive towards reduction in emissions, and with the
 DENSO''s inherent strengths in technical innovation, these two
 businesses are expected to be the growth engine for Company''s
 success. Accordingly, the Company has decided to focus and concentrate
 on these two businesses (i.e. Alternator/ Starter and CDI/ Magneto
 businesses). From an operational perspective also, the transfer of
 Small Motor Business would improve capacities within the existing
 manufacturing facility, which would be used for expansion and growth of
 other two businesses.
 
 OPPORTUNITIES AND THREATS:
 
 Though there are projections of good growth of the Indian car and two
 wheelers market in the medium to long term based on growth in household
 income of burgeoning middleclass in India, there are challenges also
 for the industry. The market will be subject to economic cycles and its
 sensitivity to fuel prices and interest rates, can cause huge
 fluctuations. These growth prospects will lure more local and
 international players, the competition will intensify and
 predictability of volumes and product mix will be increasingly
 challenged.
 
 The vehicle manufacturers expect component industry to improve
 scalability and develop a reliable and robust manufacturing foundation
 for growth. To deliver global levels of technology and quality
 products, the vehicle manufacturers require their suppliers to be able
 to localize the systems or components supplied by them. The balance
 will have to be imported and to that extent vehicle manufacturers and
 component suppliers will be exposed to foreign exchange movements and
 higher costs. The ability to localize components and systems will open
 up vast opportunities for component suppliers and to the extent the
 component suppliers depend on imports, they will be exposed to ever
 increasing threat of exchange rate fluctuations. The Company is making
 constant endeavors for localization of various parts and components and
 identifying cost effective ways of manufacturing them in- house or
 through vendors.
 
 The other threat or growth bottleneck to which component manufacturers
 are exposed is in the area of human resources.  Good talent is critical
 for technology absorption, quality manufacturing and cost management.
 However growth and emerging opportunities in other sectors of Indian
 economy is making this vital resource scarcer day by day.
 
 The prevalent governance slowdown caused by delayed response of the
 Government machinery to the vital issues requiring immediate attention
 and quick disposal remains an area of concern. Fiscal Deficit has
 continued to expand and is estimated to cross 5.9% of GDP by analysts,
 contrary to budget estimates of 4.6%. Continually high oil prices, the
 possibility of having to import coal at higher-than estimated rates to
 meet the rising power gap and the continuing subsidy burdens do not
 augur well for the economy.
 
 SEGMENT WISE PERFORMANCE.
 
 The Company''s operating business is organized and managed according
 to the nature of product, with single Primary Reportable Segment
 comprising of manufacturing and supply of electrical automotive
 components.
 
 OUTLOOK:
 
 Market Survey and current trends indicate strong possibilities of high
 growth rate in automotive market in coming years.  However presently
 the automobile industry is faced with the challenging times with
 uncertainties on the demand side in coming months, which hopefully is
 only a short term phenomenon. The total automobile market is expected
 to grow by double digits annually for the next 5 years. India is
 emerging as a small car hub in the Asia Pacific region. This is evident
 from the fact that almost all the major international automobile
 manufacturers have registered their presence in India and have started
 manufacturing small cars in this country.  These companies are either
 setting up or expanding their existing manufacturing base not only to
 enter the domestic market but also for exports. India is gradually
 becoming a major manufacturing base for export of passenger cars as
 well as other utility vehicles. Recession in the industrialized
 nations, stagnation in Japan and China and a relatively large domestic
 market is making India a much more attractive destination.  It is
 forecast that by 2020 India would be one of the top five automobile
 manufacturing countries in the world. These positive developments in
 the automobile sector would augur well for the auto component industry
 and your company.
 
 Customer trends indicate that the local design & development as well as
 expansion of production facilities is moving towards South & Mid West
 areas of India. It is expected that fuel price parity shall see higher
 growth rate in diesel based vehicles. The Competition will become
 intense and adopt strategy of price differentiation to gain market
 share. Awareness and regulation on fuel efficiency will become a big
 trend in India in the next few years as it helps both the economy and
 the environment.  The Company is conscious of these developments and
 poised to take advantage of these trends. Setting up a factory in
 Bangalore and decision to focus on Alternator/ Starter (in case of four
 wheelers) and CDI/ Magneto (in case of two-wheelers) businesses, which
 contribute to vehicle engine performance by optimizing fuel cost and
 reducing emissions, are the steps in that direction. The Company has
 chalked out mid term plan up to year 2015 and has targeted CAGR of 21%
 in two businesses Alternator/ Starter as well as CDI/ Magneto.
 
 INTERNAL CONTROL SYSTEMS:
 
 The Company has an adequate system of internal controls to ensure that
 transaction are properly recorded, authorized and reported apart from
 safeguarding Company''s assets.  Well-experienced Chartered Accountant
 firm appointed by the Company for internal audit, reviews operations at
 all the establishments of the Company. All significant internal audit
 observations and follow up actions thereon are reported to the Audit
 Committee. The Audit Committee reviews the adequacy and effectiveness
 of the internal audit.
 
 HUMAN RESOURCES:
 
 Your Directors wish to place on record their appreciation for the
 commitment and dedication shown by the employees at all the areas of
 operation of the Company. Various HR initiatives are taken to align the
 HR policies to the growing requirements of the business. The Industrial
 Relations remained cordial during the year. As on 31st March 2012 your
 company had 1057 employees.
 
 INSURANCE
 
 All the assets of your Company including Plant & Machinery, Building,
 Equipment, and Vehicles etc. have been adequately insured.
 
 CAUTIONARY NOTE:
 
 Certain statements in the Management Discussion and Analysis
 section may be forward looking and are stated as required by applicable
 laws and regulations. Many factors may affect the actual results, which
 could be different from what the Directors'' envisage in terms of the
 future performance and outlook.
 
 FIXED DEPOSITS:
 
 The Company has not invited or availed Fixed Deposits from the public
 during the year under review.
 
 AUDIT COMMITTEE
 
 During the year the Audit Committee Meetings were conducted as per the
 provisions of listing agreement with the stock exchange (s). The
 details about the functioning of the committee are being enumerated in
 the Corporate Governance report section, which is part of the Annual
 Report for the year ended March 31, 2012.
 
 AUDITORS
 
 M/s. Price Waterhouse, Chartered Accountants, retire at forthcoming
 Annual General Meeting and have requested for not to be considered for
 reappointed as Statutory Auditors.  Observations made in the
 Auditors'' Report read with Notes to the Financial Statements are self
 explanatory and therefore, do not call for any further comments under
 Sec. 217 (3) of the Companies Act, 1956.
 
 DIRECTORS:
 
 Mr. M. Adachi was appointed as Director to fill casual vacancy created
 due to resignation of Mr. H. Wakabayashi on 29.07.2011.
 
 Mr. N. Takamura was appointed as Alternate Director to Mr.  M. Adachi
 in the Board Meeting held on 29.07.2011.
 
 Mr. M. Ono was appointed as Alternate Director to Mr. K. Arima in the
 Board Meeting held on 13.02.2012. Mr. Ono is in the whole time
 employment of the Company. His Appointment as Whole Time Director with
 effect from 13th February 2012 by the Board of Directors is subject to
 the approval of the shareholders at the ensuing Annual General Meeting.
 
 The present tenure of Mr. Koji Shiga, Managing Director will expire on
 27th July 2012. The reappointment of Managing Director with effect from
 28th July 2012 by the Board of Directors is subject to the approval of
 the shareholders at the ensuing Annual General Meeting.
 
 Mr. H. Wakabayashi, Mr. T. Aoyama and Mr. K Sugita resigned from the
 Board during the year under report. Your Directors take this
 opportunity to place on record their deep appreciation for the valuable
 guidance and unstinted support given by them during their association
 with the Company
 
 Mr. E. Seto and Mr. R. K. Bhatnagar retire from the Board of Directors
 by rotation in accordance with the provisions of the Articles of
 Association of the Company and are eligible for reappointment.
 
 DIVIDEND:
 
 Considering the present financial condition and current market
 situation no dividend is recommended for the year ended March 31, 2012.
 
 PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN
 EXCHANGE EARNINGS AND OUTGO.
 
 The Statement pursuant to Section 217( 1) (e) of the Companies Act,
 1956 read with the Companies (Disclosure of Particulars in the Report
 of the Board of Directors) Rules, 1988 is given in the Annexure forming
 part of this Report.
 
 PARTICULARS OF EMPLOYEES
 
 As per the existing salary limits of Section 217(2A) of the Companies
 Act, 1956 read with the Companies (Particulars of Employees) Rules,
 1975 as amended, as on 31st March, 2012, no employee of the Company is
 covered.
 
 DIRECTORS RESPONSIBILITY STATEMENT AS PER SECTION 217(2AA) OF THE
 COMPANIES ACT, 1956.
 
 1.  The Financial Statement for the year ended 31.03.2012 are prepared
 to comply in all material aspects with all the applicable accounting
 principles in India, the applicable accounting standards notified under
 Section 211(3C) of the Companies Act, 1956 and the relevant provisions
 of the Companies Act, 1956.
 
 2.  The Directors of Denso India Ltd. accept the responsibility for the
 integrity and objective of these Financial Statement as reflected
 through the consistent application of the Accounting Policies as well
 as for the estimates made and the judgment exercised relating to
 matters not concluded by year-end.
 
 3.  The Directors believe that the Financial Statements reflect fairly
 the form and substance of the transactions concluded and reasonably
 present the Company''s financial condition and true and fair view of
 the results of the operation for the year and the state of affairs of
 the business as at 31st March, 2012.
 
 4.  The Company has installed an accounting system and the financial
 statements have been prepared on a going concern basis along with a
 system of controls which are reviewed, evaluated and updated on an on
 going basis.
 
 5.  Our internal Auditors have conducted periodic audits to provide
 reasonable assurance that the established policies and the procedures
 of the Company have been followed for safeguarding the assets of the
 Company and for preventing any form of fraud and other irregularities
 subject to the inherent limitations in any system and procedure and
 coverage thereof that should be recognized in weighing the assurance
 provided by any system of internal controls. These have been reviewed
 periodically at Audit Committee Meetings.
 
 6.  The financial statements have been audited by M/s Price Waterhouse,
 Chartered Accountants, the statutory auditors.
 
 ACKNOWLEDGEMENTS
 
 Your Directors take this opportunity to thank the customers, vendors,
 shareholders, the bankers, the Central and State Governments and other
 agencies for their continued support, co-operation and contribution
 during the year under review.  Your Directors place on record their
 deep appreciation of the management of Denso Corporation, Japan,
 Sumitomo Corporation, Japan, ASMO Co. Ltd., Japan, Maruti Suzuki India
 Limited and Denso International India Pvt. Ltd for their assistance and
 support during the year.
 
                                        For and on behalf of the Board 
 
 
 NOIDA                           Koji Shiga          M. Ono 
 
 4th June, 2012               Managing Director      Director