Bosch Ltd

The Directors have pleasure in presenting their FIFTY-NINTH Annual Report together withthe Audited Statement of Accounts for the year ended 31^st December 2010.

Financial Results

The following are the financial results:

Net sales for the year 2010 grew by 39.6%. The Profit Before Tax (PBT) in 2010 as apercentage of net sales was at 18.1% as compared to 16.7% in 2009. The Profit After Tax(PAT) as a percentage of net sales was 13.0% in 2010 as against 12.4% in 2009.

Material costs as a percentage to sales increased to 54.3% in 2010 as compared to 53.7%in 2009.

Overall, the Profit Before Interest, Depreciation and Taxes, for the year shows anincrease of 38.9% over the previous year. Investments Capital investment during 2010 washigher than previous year, at Rs.3,021 mio. as against Rs. 1,446 mio. in 2009.

Dividend

The Board of Directors recommend a dividend of Rs.40 per equity share for 2010 asagainst a dividend of Rs.30 per equity share in 2009.

Business Situation

The upswing in the Indian automotive industry which began in the second half of theyear 2009 continued in 2010 as well. India's fast growing middle class segment coupledwith soaring demand from rural areas created a very buoyant market in 2010, resulting inall business units attaining an all-time high production and sales volumes. New modellaunches and easy financing options were the other key drivers that helped to achieve ahigher growth trajectory in 2010.

All segments, be it commercial vehicles, passenger cars or tractors, posted strongdouble digit growth levels. Leading the pack, was the Medium and Heavy Commercial Vehiclesegment which recorded a growth of 70% over 2009. Light Commercial Vehicle and PassengerCar segments which were the first to recover post the stimulus packages announced by theGovernment of India in 2009, continued their robust performance in 2010 with 44% and 30%growth respectively. The tractor segment crossed the half a million production mark. Thissegment registered a growth of 29% over the year 2009.

As a result, our Company performed exceedingly well with sales from the automotivesegment growing by 41.5% and Exports recording the best ever performance at Rs.8,461million with a growth of 44.5% over 2009.

Our non-automotive businesses grew by 26.6% in 2010 compared to 2009. This can bemainly attributed to growth in the Power Tools, Security Technology and Machine Buildingdivisions.

Automotive Technology

Diesel Systems business grew by a significant 51.9% in the year 2010, recording an alltime high sales. This phenomenal growth was driven primarily by the robust demand in theMedium / Heavy Commercial Vehicle and Tractor segments.

The Bharat Stage 3 (BS3) and Bharat Stage 4 (BS4) emission norms were also introducedin 2010 and our Company was closely associated with all OEMs for effective, timely andsmooth transition.

One of the major highlights of the division was the successful introduction of inlinefuel injection pumps for Medium duty Commercial Vehicle applications meeting BS3 emissionnorms. The year also saw the introduction of 'Value-Line' Common Rail Systems for Mediumduty Commercial Vehicle applications. These unique products are a clear testimony to theCompany's strong innovative culture and its focus on providing value to the customers.

Gasoline Systems business achieved a growth of 60.9% in the year 2010. The keyhighlights of the division were the development of Engine Management Systems for twowheelers and Low Priced Vehicles. As a firm commitment to providing local development andapplication support, the division focused on heightened R&D infrastructure build up.

Starter Motors and Generators business witnessed a growth of 12.2% in the year 2010over 2009. The division was successful in acquiring many new projects. A new product HX87Starter Motor was launched for Commercial Vehicle applications.

The Automotive Aftermarket division registered an impressive growth of 24% in the year2010. This success was achieved primarily on account of expansion of product and customerportfolio, widened distribution network, effective channel management and innovativecustomer binding programmes.

The division expanded its presence pan India, taking the number of workshops to 1963outlets in 2010 as compared to 1600 workshops in 2009. Another key highlight was theintroduction of 500^th Bosch Car Service outlet. With this, Bosch Car Servicehas become one of the largest distributor and service networks in the automotive market inthe country.

Packaging Technology (Verna Plant)

The year 2010 saw many challenges in Packaging Technology business with postponedcustomer projects and increased competition in general. Despite these market dynamics, thedivision achieved a growth of 6.2% in the year 2010 over 2009.

Significant improvements in design quality and dedicated engineering efforts haveresulted in the reduction of design lead time and cost optimization. The divisionsuccessfully launched Transwrap 1650 and High speed cup doser machine in Chocolate andConfectionery segment.

The division sold a record 24 Nos. BVK 2000 candy wrappers in the year 2010, as well asbagging the first order for sale of this machine in the African market. It also executedthe first commercial order for Pharmaceutical machine for the overseas market.

Industrial Equipment

The Industrial Equipment division posted a positive growth of 6% in the year 2010 aftera de-growth in the previous year. This was mainly driven by capital investments within ourCompany and our external customers.

New product launches such as Bosch Vertical Machining Centre, BeAT 40 and assemblylines for key and core processes in the manufacture of diesel and gasoline fuel injectionsystems were the major highlights of the division.

Consumer Goods and Building Technology Power tools

The Power Tools business recorded a strong growth of 28.3% in the year 2010 andmaintained a robust pace of growth higher than that of construction and infrastructuresectors in India.

The division launched the full range of Lawn and Garden Tools including the HedgeCutter and Lithium Ion Lawn Mower. To capitalise on the potential in the infrastructuresegment, the division also launched the I&I (Industrial & Institutional) conceptwhich caters to the needs of these segments along with the FATS(Fischer-Accessories-Tools-Spares) concept to provide comprehensive construction solutionsto the thriving infrastructure sector.

Localization was one of the core focus areas of the division. Production of 2kg Hammerwas started in 2010 at the Bosch Power Tools Plant in Bangalore. This is the 3^rdPlant in the Bosch Power Tool World to manufacture these kinds of hammers. The divisionlaunched the first Fischer Exclusive Store at Hyderabad to provide anchoring solutions.

The division also supplied tightening system solutions to the major automotive OEMs inIndia and specialized power tools and anchoring solutions for a major metro rail projects.

Security Technology

The Security Technology business achieved a 19.8% growth in the year 2010 compared to2009. The division was successful in implementing the Professional Sound System at theJawaharlal Nehru Stadium for the Common Wealth Games held in New Delhi. The Company isalso successfully implementing the Video Surveillance System for a major Metro Railproject.

Another key highlight of the division was the launch of Bosch Security TrainingAcademy. The state-of the-art demo and training center was set up at Bangalore. Thistraining academy aims to bring the highest level of manufacturer training to the industry,to improve product knowledge, its application and awareness.

Competition and challenges in our business sectors Our Company will continue to expandits product portfolio, deploy its resources towards developing innovative technologies andmarket relevant products with a view to take on the challenges arising from competitionboth locally and globally.

Focus on increasing productivity, achieving cost competitiveness in all areas,efficient utilization of resources and customer centric initiatives will be accordedparamount importance.

While the year 2010 saw an exhilarating pace in our operations, 2011 will see moredynamic activity across business spheres. With innovative and market relevant products, weshall strive to be successful in converting business potential into profitable growth andsecure the leadership position of our Company.

Plants Bangalore

Bangalore Plant attained the highest production levels in all its value streams viz.,Inline Pumps, Elements, Delivery Valves and Glow Plugs, in the year 2010.

The Plant added new generation products with the start of production of the Rail whichis part of the Common Rail system. A-Pump (Inline Pump) which has been the main lineproduct for the Plant since its inception in 1951, has extended the life of the productfurther with the launch of A4000 variant which conforms to BS3 norms.

Nashik

Nashik Plant has achieved the highest production levels of Nozzle Holder assembly, DSLANozzle and Common Rail Injector.

The Plant was honored with CII-EXIM Bank's 'Commendation for significant achievementsin Business Excellence' for the year 2010.

Jaipur

Jaipur Plant rolled out its 3 millionth VE Pump in the year 2010 alongside achievinghighest production levels since its inception in 1999. With focused effort, the Plant wasable to ensure seamless transition from BS2 to BS3 norms by supporting OE customersefficiently with respect to product mix and call-off schedules.

The Plant won the first prize from Rajasthan Government for Energy Conversation in theautomotive segment.

Naganathapura

In the year 2010, the Plant has expanded its product portfolio by setting up a newhangar for the manufacture of Gasoline Systems.

The Plant has obtained BS OHSAS18001 certification from TUV-Nord for having implementedthe new Occupational Safety and Management System keeping in mind the safety ofassociates.

Information Technology (IT)

The Company's IT systems and processes are periodically audited to ensure adequacy ofInformation Security and controls for Authorizations.

The Automotive Aftermarket division of the Company migrated its business operations toan SAP system to meet the increasing and varying needs of its business for optimizedsupport of the retail business.

Continuous Improvement Program (CIP)

In 2010, a more methodical approach of CIP was adopted through involvement of leaders,known as LeaderCIP. It is a structured improvement process that works with the goal ofexcellence in controlling everyday work, thereby increasing the value contribution. Theprogram attained a multifold growth in support functions in 2010 and provided a platformfor leaders and associates to address issues through many CIP workshops, laying thefoundation for sustainable development. Along with this, a new approach called VSDiA -Value Stream Design in Indirect Areas, applying Lean (waste elimination) philosophy inindirect processes has immensely helped in identifying and eliminating "Non-valueadding activities".

While indirect functions benefitted from LeaderCIP and VSDiA, CIP for direct functionsresulted in many problems being solved through the Shop Floor CIP drive. In the year 2010,associate involvement in improvements also increased through Team Oriented Production(TOP) and Voluntary Lernstatt teams. Our associates participated in regional, national& international competitions and won accolades for the Company.

Bosch Production System (BPS)

BPS, a time tested and proven model at Bosch, can be successfully implemented throughcontinuous improvements. The BPS has 8 guiding principles and supporting implementabletools called 'elements'. The main focus in 2010 was to align the BPS principles and itselements with the business objectives. The measurement of overall effectiveness of BPSimplementation was improved from audit orientation to system maturity and businesspenetration. The two supportive strategies viz., 'BPS leadership trainings' and 'New BPSAssessment model' helped align value stream culture with business Key PerformanceIndicators (KPIs).

The BPS focus is now being extended to our business partners with an aim toholistically improve the entire "value chain". 'Project Transform' has beenlaunched with our key component suppliers to improve their operational efficienciesthrough training and implementing lean concepts.

Deployment of Business Excellence (DBE)

Deployment of Business Excellence (DBE) in our Diesel Systems business led toimprovements in leadership aspects, strategy management, people engagement, processorientation, resource management and eventually business results. DBE is facilitating theorganization to align all its functions towards the Company's vision and mission. Thismanagement concept places a strong emphasis on meeting all stakeholders' expectations.

While the Bangalore Plant (Diesel Systems) was awarded the CII-EXIM Bank award forbusiness excellence based on the European Foundation for Quality Management (EFQM) modelin 2009, the Company's Nashik Plant has been honored with Cn -EXIM Bank Commendation forsignificant achievements in Business Excellence' for the year 2010.

Bosch Vocational Centre

The Company has always emphasized on skills development and has believed in keeping inpace with the latest technological advancements. The focus on overall development of skillsets has resulted into a comprehensive and an intensive training programme under the aegisof the Bosch Vocational Centre (BVC). The training is designed in accordance with theBosch guidelines to develop the skills and technical knowledge of the employees. With themulticraft approach, the emphasis is on practical hands on training.

BVC crossed a milestone by winning 7 Gold Medals at the 83rd All India Competition forApprentices. The present medal tally is at 182 gold medals. BVC received the BestEstablishment Award for the 40th time. BVC also continuously invests in upgradingfacilities and infrastructure to maintain high standards of training.

Awards and Recognition

The Company received several awards and recognitions for its achievements:

• Mahindra & Mahindra Best Performance Award 2009-10 for product development.

• Overall Excellence Award conferred by Maruti Suzuki India Limited for VendorPerformance.

• Par Excellence Trophy Award from Quality Circle Forum of India for Naganathapuraand Jaipur Plants.

• Gold Award from M/s Bajaj Auto for meeting the quality and delivery targets.

• Award from M/s Volvo Eicher for outstanding contribution to Supply ChainManagement.

• Excellence in Technology Award from Tata Motors at National Vendor Meet.

Dematerialization of shares

Of the 28.82% shares held by the public, 27.74% shares have been dematerialized as on31.01.2011.

Members holding shares in physical form are advised to dematerialize their shares toavoid the risks associated with the physical holding of such share certificates.

Bosch India Foundation

Bosch India Foundation, in its continued effort to serve the underprivileged sectionsof the society, initiated over 15 different projects in the fields of vocational trainingand health program during the year 2010. The programs were conducted with active

participation of Bosch Associates across four cities viz., Bangalore, Pune, Ahmedabadand Coimbatore. One of the new projects introduced was the training for Fitter,Electrician, CNC mechanics and Mobile set repairers. Around 1200 underprivileged youthshave benefitted from the program so far. Also conducted was the Health awareness for womenand children in slums through radio communication.

Industrial Relations

Industrial relations at all Plants and other establishments continued to be cordial.Long term productivity linked wages settlement for a four year period (2009 - 2012) wassigned at 4 Plants of the Company. The Directors place on record their deep appreciationof the sincere and dedicated teamwork by employees at all levels to meet the quality, costand delivery expectations of our customers in a growing market.

Subsidiary Companies

As the aggregate assets and income of MICO Trading Pvt. Ltd., as on 31^stDecember 2010 is not material, no consolidated financial statements under AccountingStandard 21 "Consolidated Financial Statements" as notified under section211(3C) of the Companies Act,1956, has been prepared.

As required under Section 212 of the Companies Act, 1956, annexed hereto are theAudited Statement of Accounts, the Report of the Board of Directors and Auditors' Reportfor the year ended 31^st December 2010 of MICO Trading Pvt. Ltd.

Directors

Names of companies/firms in which Directors of the Company hold/held office asDirector/Partner are given below:

- MindTree Ltd.

- Bosch Rexroth AG (Member of the Board) (from 01.01.2011)

- Robert Bosch GmbH, Germany. (Member of the Board)

- ZF Lenksysteme GmbH (Member of Supervisory Board)

- Indo German Chamber of Commerce. (Director General)

- FAG Bearings India Ltd.

- Zodiac Clothing Company Ltd.

- HDFC ERGO General Insurance Company Ltd.

- Apollo Munich Health Insurance Company Ltd.

- Tata Steel Ltd. (Vice Chairman)

- Tata International Ltd.( Chairman)

- Tata Incorporated, New York.

- Tata Industries Ltd.

- Tata Steel Global Minerals Holdings Pte. Ltd.

- Tata Steel Europe Ltd.

- Tulip UK Holdings No.2 Ltd.

- Tulip UK Holdings No.3 Ltd.

- National Institute of Technology, Jamshedpur (Chairman)

- Xavier Labour Relations Institute, Jamshedpur (Chairman, Board of Governors)

- Indian Institute of Technology, Khargpur (Chairman, Board of Governors)

- Strategic Energy Technology Systems Pvt Ltd.

- Tata Africa Holdings (SA) (Pty) Ltd.

- Housing Development Finance Corporation Ltd. (Managing Director)

- Credit Information Bureau (India) Ltd.

- GRUH Finance Ltd.

- HDFC Asset Management Co. Ltd.

- HDFC ERGO General Insurance Co. Ltd.

- HDFC Property Ventures Ltd. (Chairperson)

- HDFC Standard Life Insurance Co. Ltd.

- HDFC Venture Capital Ltd.

- Indraprastha Medical Corporation Ltd.

- Sparsh BPO Services Ltd.

- HDFC Sales Pvt. Ltd. (Chairperson)

- Feedback Ventures Pvt Ltd.

- G4S Corporate Services (India) Pvt. Ltd.

- Transunion LLC, Chicago.

- HDFC PLC, Maldives.

- Value and Budget Housing Corporation (India) Pvt. Ltd.

- Credila Financial Services Private Limited. (Chairperson)

- HDFC Bank Ltd. (from 27.01.2011).

- AKZO Nobel India Limited.

- BASF India Ltd. (Chairman and Managing Director)

- BASF Polyurethanes India Ltd. (Chairman and Managing Director)

- BASF Construction Chemicals (India) Pvt. Ltd. (Chairman)

- BASF Coatings (India) Pvt. Ltd.(Chairman)

- BASF Asia Pacific (India) Pvt. Ltd. (Chairman)

- BASF Catalysts (India) Pvt. Ltd.

- BASF Lanka (Private) Limited, Sri Lanka.

- BASF Pakistan (Private) Ltd.

- BASF Bangladesh Ltd.

- BASF Grameen Ltd.

- Styrolution India Private Ltd. (Chairman)

- Indo German Chamber of Commerce. (Committee Member)

- Federation of Indian Chamber of Commerce. (Executive Committee Member)

- Bombay Chamber of Commerce and Industry. (Managing Committee Member)

- The Energy and Resource Institute (TERI). (Committee Member)

- Robert Bosch Engineering and Business Solutions Ltd. (Chairman)

- Bosch Chassis Systems India Ltd.

- MICO Trading Pvt. Ltd.

- Bosch Rexroth (India) Ltd. (Chairman)

- Bosch Electrical Drives India Pvt. Ltd.

- Bosch Automotive Electronics India Pvt. Ltd. (Chairman)

- BSH Home Appliances Pvt. Ltd.

- Hagglunds Drives (India) Pvt. Ltd.

- Indo German Chamber of Commerce. (Committee Member)

- MICO Trading Pvt. Ltd.

Mr. B. Steinruecke, Dr. B. Bohr, and Mr. B. Muthuraman are liable to retire by rotationand offer themselves for re-election.

Mr. B. Steinruecke, 55, studied Law and Economics in Vienna, Bonn, Geneva andHeidelberg. He has a Law degree from the University of Heidelberg and passed the BarExamination of the High Court of Hamburg. He worked with Coopers and Lybrand, Hamburgbefore joining Deutsche Bank in 1984 and rose to become General Manager of the MumbaiBranch and Joint Chief Executive Officer of Bank's operations in India. Later, he becamethe Managing Partner and Speaker of the Board of the ABC Privatkunden-Bank, Berlin. InJuly 2003, he became the Director General of Indo-German Chamber of Commerce. Mr.Steinruecke is an Independent Director of the Company, Chairman ofShareholders'/Investors' Grievance Committee, member of Audit Committee, RemunerationCommittee and the Share Transfer Committee of the Board.

Dr. B. Bohr, 54, holds a Diploma in Production Engineering and a Doctorate inEngineering from the University of Aachen, Germany. He joined Robert Bosch, GmbH,Reutlingen, in Production Engineering in 1983 and held several positions such as Manager(Production Engineering): Manager (Product Planning): Managing Director (Manufacturing),Nippon ABS Ltd., Japan: Executive Vice President (Manufacturing), Semiconductors andElectronic Control Unit Division; Executive Vice President (Development worldwide), ABSand Braking Systems Division. In 1999, he became a Deputy Member of the Board ofManagement of Robert Bosch GmbH and a Member of the Board of Management of Robert BoschGmbH in 2001. He has corporate responsibilities for Automotive Group, Automotive SystemsIntegration and Quality Management, divisional responsibility for Gasoline, DieselSystems, Chassis Systems, Brakes and Control and Steering Systems with regionalresponsibility for India.

Mr. Muthuraman, 66, holds degree in Metallurgical Engineering from Indian Institute ofTechnology (IIT), Madras and Masters Degree in Business Administration from Xavier LabourRelations Institute (XLRI), Jamshedpur. Mr. Muthuraman joined Tata Steel as a GraduateTrainee in 1966 and worked in the areas of Iron-making and Engineering Development for 10years. Thereafter he moved to Marketing and Sales Division and rose to the position ofVice President. He was appointed Executive Director (Special Projects) in August 2000 andcontributed as change Manager for the major diversification projects of Tata Steel. He wasappointed Managing Director of Tata Steel in July 2001. He is currently the Vice Chairmanof Tata Steel Ltd. Mr. Muthuraman is an Independent Director of the Company, member ofAudit Committee, Remuneration Committee, Investment Committee and the Share TransferCommittee 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 partof 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 excludingthe Statement of Particulars of Employees under Section 217(2 A) of the Companies Act,1956. Any Shareholder interested in obtaining a copy of the said Statement may write tothe Company Secretary at the Registered Office of the Company and the same will be sent bypost.

Corporate Governance

A Report on Corporate Governance approved by the Board of Directors of the Company anda Certificate from the Practicing Company Secretary is set out in the Annexure to theDirectors' Report. The Company has fully complied with the Corporate Governance practicesspecified under the Companies Act, 1956, and the Listing Agreement with the StockExchanges.

A Code of Conduct for Directors and Senior Management, Code of Conduct for Preventionof Insider Trading, Whisde Blower Policy, Rules & Regulations of Service Conduct forManagerial & Superintending Staff, Code of Business Conduct etc., effectively supportthe 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, foreignexchange earnings and outgo, as required under Section 217(l)(e) read with The Company's(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is set out inthe Annexure to the Directors' Report.

Auditors

M/s. Price Waterhouse & Co., Chartered Accountants, the retiring auditors areeligible for re-appointment.

Pursuant to Section 217(2 AA) of the Companies Act, 1956, the Board of Directors reportthat:

• In the preparation of the annual accounts, the applicable accounting standardshave been followed along with proper explanation relating to material departures, if any.

• Accounting policies have been selected and applied consistently and thejudgments and estimates made are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitor loss of the Company for that period.

• Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

• The annual accounts have been prepared on a going concern basis.

Acknowledgements

The Directors express their gratitude to the Central Government and the StateGovernments of Karnataka, Maharashtra, Rajasthan and Goa for the support given to theCompany. The Directors also thank all customers, dealers, suppliers, financialinstitutions and banks, members and others connected with the business of the Company fortheir co-operation.

Annexure to the Report of the Directors

[Particulars required under the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988]

A. Conservation of energy

The Company has been implementing various projects for conservation of resources likeenergy, water, fuel etc. Among these, projects on energy conservation have been receivinghighest priority to enable reduced carbon dioxide emissions from our locations which canreduce our carbon foot print and contribute towards reversing the trend of global warming.

a) Measures taken during the year 2010

- Introduction of energy efficient induction lamps in place of the metal halide lampsfor production hangar, LED lights for office areas and street lights.

Replacement of HPSV (High Pressure Sodium Vapour) lamps, fluorescent lamps and metalhalide lamps by T5 lamps.

- Optimize the lighting voltage at 210 V in the identified areas.

Upgradation of AMF (Automatic Start on Mains Failure) DG sets.

- Introduction of energy efficient pumps.

- Reducing heat sources in air conditioned areas.

- Compressed air pressure reduction at the generation, regulation through PID value andarresting of leakages.

Upgradation of glaze heater with ceramic heater. De-rating of negative pressure motorsfor basement area.

- Switching off roof lights on Sundays & holidays and exhaust switching off duringnon-working hours.

Energy efficient drier with scroll type compressor. Optimization of power consumptionby using VFD (Variable Frequency Drive) in blowers at heat treatment.

b) Additional proposals being implemented

Implementation of SCADA (Supervisory Control and Data Acquisition) for powermanagement.

- Harmonics analysis in power distribution system to minimise transmission losses.

- Reduction in fans power of ventilation plant by replacing heat exchanger.

- Use of energy efficient pumps. Introduction of low pressure air for buildings.

- Power factor improvement of the power system from 0.97 to 0.98.

- Use of solar energy for office lighting and security booths.

- Load optimization on 2 x 5 MVA power transformers and 3x1 MVA dry type transformers.

c) Impact of the above measures

During the last year 2010, the implementation of energy conversation measures hasresulted in net electrical energy savings of 2.63 Mio. KWh annually.

Fuel Injection Equipment: Diesel

- Having met Bharat Stage 3 with Inline pump (PE), further efforts were made to upgradePE pumps for higher injection pressure capability and refinement of mechanical governor incombination with exhaust after treatment to meet forth coming emission norms.

- Common Rail System was further developed with the focus on improvement of fuelconsumption for the Low Price Vehicle (small 3 and 4 wheeler) segment, which is used asgoods and passenger carrier in urban and rural areas of India.

- Advanced engineering department has been set up to develop and evaluate new conceptsin Diesel FIE and Diesel Powertrain.

- Looking beyond Indian emission norms, the Company has invested additionalinfrastructure to meet Bharat Stage 4 and Bharat Stage 5 customer project requirements.

Gasoline Systems:

- System engineering and component development capability with corporate support andlocal expertise for specific market requirements.

- Technical Center and Component Laboratory with state-of-the-art infrastructure andequipment.

- Development of Engine Management Systems for port fuel injection (Gasoline, CNG) andall related components: Air Management, Sensors & Ignition, Fuel Supply and FuelInjection.

Starters and Generators:

- Development of fully sealed starter to prevent water entry and to suit Indianconditions.

- Weight and performance optimized Gear reduction starters for HCV & LCV segmentapplications.

- Development of products specially for ultra Low Cost Vehicle segment.

- Intelligent safety relay for protecting starter motors against abnormal operatingconditions. Spark Plugs:

- Hybrid Spark Plugs: Combining the advantages of 'good combustion in a singleelectrode spark plug' and 'reduced fouling in a multiple electrode spark plug'.

- Cold Spark Plugs: Design of spark plugs which dissipates heat faster than usual ones,used in high temperature engines.

- Twin electrode design extension to M18 spark plugs, presently used in stationaryengines.

Glow Plug & Glow Control Units:

- Development of new platform Glow Plugs with reduced diameter at tip.

- Development of Glow Control Units for BS3 and BS4 engine applications.

2. Benefits derived

The initiatives have resulted in benefiting our customers and the end users by:Complying with the latest emission and legislative regulations. Supporting OEmanufacturers to enter into vehicle segments unique to the Indian market. Providing OEmanufacturers a product that suits the Indian requirements in order to reduce fuelconsumption.

High performance segment spark plugs. Design solutions for customer specificrequirement for spark plugs and improvement in the business thereby.

3. Future plan of action

Extending the product portfolio relevant to the low price vehicle segment.

- Increase the depth of localisation.

- Increase in competencies across business sectors to take advantage of the potentialin the Indian market. E.g., supporting customers in exhaust after treatment calibration.

- Improve performance levels of spark plugs in terms of acceleration/drivability.

- Work for low priced markets for doing away with the spurious spark plugs.

4. Expenditure on R&D

1. Efforts made

As done in the past, during the year 2010, the Company intensified its efforts for thecontinuous exchange of information with member companies of the Bosch Group worldwide.This has enabled the Company to keep abreast with the latest developments in producttechnology, manufacturing process and methods, quality assurance and improvement,marketing, management systems and benefit out of mutual experience.

The Company has, over the years built the requisite infrastructure and technicallycompetent engineers to translate the latest technical know-how into products that meet therequirements of local and international customers and will continue to do this in future.

2. Benefits derived

The benefits are the same as enumerated in B (a) 2 above.

3. Technology imported during the last 5 years In addition to the existingtechnical collaborations for products in the field of Fuel Injection Equipment, SparkPlugs, Auto Electrical, Power Tools, Compact Alternators, etc., the Company has enteredinto technical collaborations for the following products:

4. Technology absorption

The Company's membership in the Bosch Group gives it access to the future technologies.The Company is, as a result, able to offer at any point of time state-of-the-arttechnology to meet the requirements of its national and international customers.

C. Foreign exchange earnings and outgo