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Directors Report of ABB India Ltd.

Dec 31, 2015

The Directors have pleasure in presenting their Sixty Sixth Annual Report and Audited Accounts for the year ended December 31, 2015.

1. Financial Results

(Rs, in Crores)

Particulars For the year ended

December 31, 2015 December 31, 2014

Profit Before Taxation 474.59 355.21

Less: Provision for Tax

– Current Tax 203.71 114.00

– Deferred Tax (29.00) 12.70

Profit after Tax 299.88 228.51

Balance Brought Forward from last year 103.90 89.48

Amount available for Appropriation 403.78 317.99

Appropriations:

General Reserve 150.00 120.00

Debenture Redemption Reserve 50.00 -

Proposed Dividend 78.41 78.41

Corporate Dividend Tax 15.96 15.68

Balance Carried Forward 109.41 103.90

403.78 317.99

2. Dividend:

Your Directors recommend payment of a dividend at the rate of Rs, 3.70 (Rupees three and paise seventy only) per share for the year ended December 31, 2015 on 211,908,375 equity shares of Rs, 2/- each.

3. Performance Review:

The Company secured orders valued Rs, 8,100 crore in 2015 as against Rs, 7,908 crore in the previous year. Base orders from wider spectrum of customers formed a large portion with few large projects. Service led sales resulted in more comprehensive customer engagement. The order backlog at the end of the year stood at Rs, 7,946 crore providing visibility to the future revenue streams. The revenue from operations for the Company for the year 2015 stood at Rs, 8,140 crore as against Rs, 7,733 crore in the previous year, reflecting stability of operations in an uncertain market. Profit before tax was up by 34% at Rs, 475 crore in 2015 as compared to Rs, 355 crore in the previous year mainly due to efforts towards internal operational excellence, entering new market, lower material cost and extensively participating in the shift to renewable energy. Net profit after tax was up by 31% at Rs, 300 crore for the current year as compared to Rs, 229 crore in the previous year. Consequently the earnings per share for the year 2015 stood at Rs, 14.15 per share as compared to Rs, 10.78 per share in the year 2014.

For detailed analysis of the performance, please refer to the Management's Discussion and Analysis given in Annexure – A, forming part of this Report.

4. Extract of Annual Return:

As per provisions of Section 92 (3) of the Companies Act, 2013 (the Act) read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in the Form MGT-9 is given in Annexure – B, forming part of this report.

5. Board Meetings held during the year:

During the year, 8 meetings of the Board of Directors were held, which includes a meeting of Independent Directors as required under the Act and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations). The details of the meetings are furnished in the Corporate Governance Report.

6. Issue of Debentures:

As approved by the Members through Postal Ballot during August 2015, the Company has issued 600 unsecured, rated, listed, redeemable, non-convertible debentures having face value of Rs, 1,00,00,000/- (Rupees One Crore only) aggregating to Rs, 600 Crore on private placement basis under Foreign Portfolio Investment route to an identified investor, which are listed with BSE Limited. The proceeds of these debentures were used for refinancing the Company's debt.

7. Compliance on criteria of Independence by the Independent Directors:

All Independent Directors of the Company have given declarations to the Company under Section 149 (7) of the Act that, they meet the criteria of independence as provided in Sub-Section 6 of Section 149 of the Act and also under the Listing Regulations.

8. Remuneration Policy of the Company:

The Remuneration Policy of the Company for appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company along with other related matters have been provided in the Corporate Governance Report.

As and when need arises to appoint Director, the Nomination and Remuneration Committee (NRC) of the Company will determine the criteria based on the specific requirements. NRC while recommending candidature to the Board, will take into consideration the qualification, attributes, experience and Independence of the Candidate. Director(s) appointment and remuneration will be as per NRC Policy of the Company.

A Statement of Disclosure of Remuneration pursuant to Section 197 of the Act read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in Annexure – C, forming part of this report.

9. Particulars of loans, guarantees or investments under Section 186 of the Act:

During the year under review, your Company has not granted any Loan, Guarantees or made Investments within the meaning of Section 186 of the Act.

10. Amount, if any, proposed to be transferred to Reserves:

The Company transferred a sum of Rs, 150 Crore towards General Reserve and Rs, 50 Crore towards Debenture Redemption Reserve during the Financial Year 2015.

11. Material changes and commitment, if any, affecting financial position of the Company from the end of Financial Year and till the date of this Report

There has been no material change and commitment, affecting the financial performance of the Company occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this Report.

12. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The particulars as prescribed under Section 134 of the Act read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are given in Annexure – D, forming part of this report.

13. Listing Agreements:

Your Company has entered into new Listing Agreements with BSE Limited and National Stock Exchange of India Limited, in compliance with Regulation 109 of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended by SEBI.

14. Risk Management Policy:

The Board of Directors has adopted a Risk Management Policy and constituted a Risk Management Committee. The Committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. The purpose of the Committee is to assist the Board of Directors in fulfilling its oversight responsibilities with regard to enterprise risk management.

The details and the process of Risk Management as implemented in the Company are provided as part of Management's Discussion and Analysis which forms part of this Report.

15. Corporate Social Responsibility (CSR) initiatives:

In accordance with the provisions of Section 135 of the Act and Rules framed there under your Company has adopted a policy for CSR and the Board has constituted a Committee for implementing the CSR activities. Composition of the Committee and other details are provided in Corporate Governance Report. Education, Access to Electricity, Health Care, Environment, skills enhancement for creating employable opportunities for the differently baled personnel, etc., are the focal area under the CSR Policy.

The Company has implemented various CSR projects directly and / or through implementing partners and the projects undertaken by the Company are in accordance with Schedule VII of the Act. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure – E, forming part of this report.

16. Annual evaluation of Board, its Committees and Individual Directors:

The Board of Directors has carried out an annual evaluation of its own performance, its Committees and individual Directors pursuant to the requirements of the Act and the Listing Regulations.

Further, the Independent Directors, at their exclusive meeting held during the year reviewed the performance of the Board, its Chairman and Non-Executive Directors and other items as stipulated under the Listing Regulations.

17. Audit Committee:

The details pertaining to composition of the Audit Committee and terms of reference are included in the Corporate Governance Report, which forms part of this Report.

18. Related Party Transactions:

The Board of Directors has adopted a policy on Related Party Transactions. The objective is to ensure proper approval, disclosure and reporting of transactions as applicable, between the Company and any of its related parties. All contracts or arrangements with related parties, entered into or modified during the financial year were at arm's length basis and in the ordinary course of the Company's business. All such contracts or arrangements were entered into only with prior approval of the Audit Committee, except transactions which qualified under Omnibus approval as permitted under law. No material contract or arrangement with related parties were entered into during the year under review. Therefore, there is no requirement to report any transaction in Form No. AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. Transactions with related parties, as per requirements of Accounting Standard 18 are disclosed in the notes to accounts annexed to the financial statements. Your Company's Policy on Related Party Transactions, as adopted by your Board, can be accessed on the Company's website at www.abb.co.in.

19. Reporting of frauds:

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and /or Board under Section 143(12) of the Act and Rules framed there under.

20. Transfer to Investor Education and Protection Fund:

As required under Section 205C of the Companies Act, 1956, the unclaimed dividend amount aggregating to Rs, 18.09 lakh lying with the Company for a period of seven years pertaining to year ended on December 31, 2007, was transferred during the year 2015, to the Investor Education and Protection Fund established by the Central Government.

21. Particulars of Employees:

The statement under Rule 5 (2) and Rule 5 (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and particulars required under Section 197 (12) of the Act are given in Annexure – F, forming part of this report.

The said Annexure shall be provided to Members on a specific request made in writing to the Company. The said information is available for inspection by the Members at the Registered Office of the Company on any working day of the Company up to the date of the 66th Annual General Meeting.

22. Directors' Responsibility Statement:

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3) (c) and 134 (5) of the Act, that:

a) in the preparation of the annual financial statements for the year ended December 31, 2015, the applicable Accounting Standards have been followed along with proper explanation relating to material departures if applicable;

b) for the financial year ended December 31, 2015, such accounting policies as mentioned in the Notes to the financial statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the Profit and Loss of the Company for the year ended December 31, 2015;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual financial statements have been prepared on a going concern basis;

e) proper internal financial controls are in place and such internal financial controls are adequate and were operating effectively;

f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and are adequate and operating effectively.

23. Corporate Governance Report and Certificate:

As required under Regulation 34 (3) read with Schedule V (C) of the Listing Regulations a report on Corporate Governance and the certificate as required under Schedule V (E) of the Listing Regulations from Messrs V. Sreedharan & Associates, Practicing Company Secretaries, regarding compliance of conditions of Corporate Governance are given in Annexure – G and Annexure – H respectively, forming part of this report.

24. Secretarial Audit:

Pursuant to provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendments thereto, your Company engaged the services of Messrs HBP & Co., Company Secretaries, Bengaluru, to conduct the Secretarial Audit of the Company for the financial year ended December 31, 2015. The Secretarial Audit Report in Form MR-3 is given in Annexure – I, forming part of this report.

25. Business Responsibility Report:

As required under Regulation 34 of the Listing Regulations, the Business Responsibility Report forms part of the Annual Report.

26. Whistle Blower Policy:

The Company has a Vigil Mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of conduct. The mechanism provides for adequate safeguards against victimization of Director(s) and Employee(s) who avail of the mechanism.

The Whistle Blower Policy is available on Company's website.

27. Directors and Key Managerial Personnel:

Mr. Bazmi R. Husain (DIN: 00965992) resigned as Director and the Managing Director of the Company on September 2, 2015 and as per the Company's policy, he has been relieved from the services of the Company effective close of office hours on December 31, 2015. Your Directors place on record their appreciation of the valuable service rendered by Mr. Husain during his tenure as the Managing Director of the Company.

Further your Directors at their meeting held on December 11, 2015, appointed, Mr. Sanjeev Sharma (DIN: 07362344) as Director and Managing Director of the Company effective January 1, 2016.

The Board at its meeting held on October 28, 2014 appointed Mr. Frank Duggan (DIN: 02937233) as a Director in the casual vacancy caused due to the resignation of Mr. Gary Steel (DIN: 02500073). Since Mr. Gary Steel was to retire by rotation at the ensuing Annual General Meeting, Mr. Frank Duggan would also cease to hold the office of Director at ensuing Annual General Meeting, pursuant to Section 161(4) of the Act, and is eligible for reappointment as Director.

Pursuant to the Act, and Regulation 25 of the Listing Regulations, all the three Independent Directors, viz., Mr. Nasser Munjee, Mr. Darius E Udwadia and Mrs. Renu Sud Karnad were appointed at the 65th Annual General Meeting held on May 6, 2015 for a period of 5 years effective conclusion of the said meeting. Hence none of the Independent Directors is liable to retire by rotation.

Necessary resolutions relating to Directors who are seeking appointment / reappointment are included in the Notice of Annual General Meeting. The relevant details of the said Directors are given in the annexure to the Notice of the Annual General Meeting.

During the year, Mr. Amlan Datta Majumdar resigned as Chief Financial Officer of the Company and was relieved from the services effective close of office hours on March 10, 2015. Mr. T. K. Sridhar, was appointed as Chief Financial Officer of the Company effective July 23, 2015.

As on date, Mr. Sanjeev Sharma, Managing Director, Mr. B. Gururaj, Company Secretary and Mr. T.K. Sridhar, Chief Financial Officer, are the Key Managerial Personnel of the Company.

28. Deposits:

During the year under review, your Company did not accept any deposit within the meaning of the provisions of Chapter V – Acceptance of Deposits by Companies read with the Companies (Acceptance of Deposits) Rules, 2014.

29. Financial Year:

The Act requires every company to have the period April to March as its Financial Year mandatorily. Exception is however permitted to have a different period as financial year provided the Company obtains permission from the Ministry of Corporate Affairs.

Your Company is one of the key subsidiaries of ABB Group, which follows calendar year as its financial year. To support consolidation of group financial statements and audit thereof as per overall group process and timeline, it was necessary for the Company to follow the financial year as January – December. Therefore your Company intended to continue the calendar year i.e., January – December as its financial year and made an application to the Hon'ble Company Law Board, Southern Region Bench, Chennai, to retain its current financial year period instead of changing it to April – March period. The Hon'ble Company Law Board allowed the Company's application and permitted the Company to continue to have calendar year, i.e., January – December as its financial year.

30. Significant and Material Orders Passed by the Regulators or Courts or Tribunals impacting the Going Concern status of the Company:

There has been no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations. All orders received by the Company during the year are of routine in nature which have no significant / material impact.

31. Internal Control Systems and their adequacy:

The details on Internal Control Systems and their adequacy are provided in the Management's Discussion and Analysis which forms part of this Report.

32. Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. As required under law, an Internal Compliance Committee has been constituted for reporting and conducting inquiry in to the complaints made by the victim on the harassments at the work place. During the year 2015, the Company has received one complaint of sexual harassment, and the same has been duly inquired and concluded by taking appropriate action.

33. Statutory Auditors:

Pursuant to provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, Messrs S R BATLIBOI & ASSOCIATES LLP, Chartered Accountants (Firm Registration No. 101049W), were appointed as Statutory Auditors of the Company for a term of 2 years, to hold office from the conclusion of 65th Annual General Meeting held on May 6, 2015 until the conclusion of 67th Annual General Meeting, subject to ratification of their appointment at every subsequent Annual General Meeting.

Consent and certificate from them has been received to the effect that their appointment as Statutory Auditors of the Company, if ratified at ensuing Annual General Meeting, would be according to the terms and conditions prescribed under Section 139 of the Act and Rules framed there under.

A resolution seeking ratification of their appointment forms part of the notice convening the 66th Annual General Meeting and the same is recommended for your consideration and approval.

34. Cost Auditor:

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors, on the recommendation of the Audit Committee, have appointed Messrs Ashwin Solanki & Associates, Cost Accountant (Registration No: 100392) as Cost Auditor of the Company, for the financial year ending December 31, 2016, on a remuneration as mentioned in the Notice convening the 66th Annual General Meeting for conducting the audit of the cost records maintained by the Company.

A Certificate from Messrs Ashwin Solanki & Associates, Cost Accountant has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed there under.

A resolution seeking Member's ratification for the remuneration payable to Cost Auditor forms part of the Notice of the 66th Annual General Meeting of the Company and same is recommended for your consideration and approval.

Cost Audit and Compliance report for the year 2014 were filed on May 27, 2015, which is within the time limit as prescribed in Companies (Cost Audit Report) Rules, 2011.

35. Acknowledgements:

The Board of Directors take this opportunity to thank the Company's parent company, customers, members, suppliers, bankers, associates, Central and State Governments and employees at all levels for their support and co-operation extended to the Company during the year.

For and on behalf of the Board

Frank Duggan

Chairman

DIN: 02937233

Place : Bengaluru

Date : February 4, 2016


Dec 31, 2014

Dear Members,

The Directors have pleasure in presenting their Sixty Fifth Annual Report and Audited Accounts for the year ended December 31, 2014.

Company''s financial year under reference has commenced from January 1, 2014. The financial statements, auditors'' report and Board''s report for the year is prepared as per relevant provisions, schedules and rules of the Companies Act, 1956 as per clarification provided by the Ministry of Corporate Affairs vide their circular No 8/2014 dated April 4, 2014.

Financial Results

(Rs. in Crores)

For the year ended For the year ended December 31, 2014 December 31, 2013

Profit Before Taxation 355.21 272.47

Less: Provision for Tax

- Current Tax 114.00 108.48

- Deferred Tax 12.70 (12.90)

Profit After Tax 228.51 176.89

Profit of Baldor Electric India Private Limited for the period April 1, 2012 to December 31, 2012 - 2.42 of the previous year on amalgamation

Profit for the year after giving impact of amalgamation 228.51 179.31

Balance Brought Forward from last year 89.48 85.04

Amount available for Appropriation 317.99 264.35

Appropriations

General Reserve 120.00 100.00

Proposed Dividend 78.41 63.57

Corporate Dividend Tax 15.68 10.81

Corporate Dividend Tax (previous years) - 0.49

Balance Carried Forward 103.90 89.48

317.99 264.35

Dividend

Your Directors recommend payment of a dividend at the rate of Rs. 3.70/- (Rupees three and paise seventy only) per share for the year ended December 31,2014 on 21,19,08,375 equity shares of Rs. 2/- each.

Performance Review

The Company secured orders valued Rs. 7,908 crores in 2014 as against Rs. 6,717 crores in the previous year. Base orders from wider spectrum of customers was also complimented by quite a few large projects. Exports witnessed a healthy growth through enhanced focus on sub-continent markets. The order backlog at the end of the year stood at Rs. 7,926 crores which continued to give more visibility to the future revenue streams. The revenue from operations for the Company for the year 2014 stood at Rs. 7,733 crores as against Rs. 7,722 crores in the previous year, reflecting stability of operations in an uncertain market situation. Profit before tax was up by 30% at Rs. 355 crores in 2014 on flat sales as compared to Rs. 272 crores in the previous year mainly due to operational excellence initiatives, supply chain efficiencies, focus on project management and localization of the products inspite of higher interest costs. Net profit after tax was up by 27% at Rs. 229 crores for the current year as compared to Rs. 179 crores in the previous year. Consequently the earnings per share for 2014 stood at Rs. 10.78 per share as compared to Rs. 8.46 in 2013.

For detailed analysis of the performance, please refer to the Management''s Discussion and Analysis Section of the Annual Report.

Transfer to Investor Education and Protection Fund

In terms of Section 205C of the Companies Act, 1956 (which is still applicable as the relevant Section under the Companies Act, 2013 is yet to be notified), the unclaimed dividend amount aggregating to Rs. 18.89 lakh pertaining to the year ended on December 31 , 2006, was transferred during the year 2014, to the Investor Education and Protection Fund established by the Central Government.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure - A, forming part of this Report.

Particulars of Employees

The statement under sub-section (2A) of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of this report is given in Annexure - B. The said Annexure - B shall, however, be provided to the Members on request made in writing to the Company Secretary.

Directors'' Responsibility Statement

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

i. in the preparation of the annual accounts, the applicable accounting standards have been followed by the Company;

ii. appropriate accounting policies have been selected and applied consistently and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at December 31,2014 and of the profit of the Company for the year ended on that date;

iii. 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; and

iv. the annual accounts have been prepared on a going concern basis.

Corporate Governance

The Company is committed to adhere the highest standards of corporate governance in all areas of its functioning. As required under Clause 49 of the Listing Agreement with Stock Exchanges, a report on Corporate Governance and a Certificate from M/s. V. Sreedharan & Associates, Practicing Company Secretaries, confirming compliance with the requirements of Corporate Governance are given in Annexure - C and Annexure - D respectively, which form part of this Report.

Business Responsibility Report

As required under Clause 55 of the Listing Agreement with the Stock Exchanges, the Business Responsibility Report forms part of the Annual Report.

Whistle Blower Policy

The Company has a vigil mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the company''s code of conduct. The mechanism provides for adequate safeguards against victimization of Director(s) and Employee(s) who avail of the mechanism. In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee.

The Whistle Blower Policy is available on Company''s website.

Directors

Mr. Gary Steel, Chairman and Mr. Peter Leupp, Director resigned from Board of Directors of the Company effective October 28, 2014. Your Directors place on record their appreciation of the valuable services rendered by the aforesaid Directors during their tenure as Directors of the Company.

Mr. Frank Duggan and Mr. Tarak Mehta have been appointed as Directors in the casual vacancies caused due to the resignations of Mr. Gary Steel and Mr. Peter Leupp respectively, with effect from October 28, 2014. Since Mr. Peter Leupp was to retire by rotation in this Annual General Meeting, Mr. Tarak Mehta would also cease to hold the office of Director at ensuing Annual General Meeting, pursuant to Section 161 (4) of the Companies Act, 2013 and is eligible for re- appointment as Director.

Mr. Frank Duggan has been appointed as Chairman of the Company effective October 28, 2014.

Pursuant to Companies Act, 2013 and Clause 49 of the Listing Agreement, Mr. Nasser Munjee, Mr. Darius E Udwadia and Mrs Renu Sud Karnad are proposed to be appointed as Independent Directors for a period of 5 years from the date of the Annual General Meeting and shall not be liable to retire by rotation.

As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, the relevant details of Directors retiring by rotation and seeking re-appointment at the ensuing Annual General Meeting are given in the annexure to the Notice of the Annual General Meeting.

Necessary resolutions relating to Directors who are seeking appointment / re-appointment are included in the Notice of Annual General Meeting.

Fixed deposits

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Shifting of Registered Office

Your Company has shifted its Registered Office to the new premises at 21st Floor, World Trade Center, Brigade Gateway, No.26/1, Dr. Rajkumar Road, Malleshwaram West, Bengaluru - 560 055 effective May 19, 2014.

Auditors

The Company''s Auditors, M/s. S R BATLIBOI & ASSOCIATES LLP, Chartered Accountants (Firm Registration No. 101049W) hold office upto the conclusion of the ensuing Annual General Meeting. M/s. S R BATLIBOI & ASSOCIATES LLP, Chartered Accountants, will be the Statutory Auditors of the Company from the conclusion of 65th Annual General Meeting until the conclusion of 67th Annual General Meeting of the Company (subject to ratification for such appointment by Members at the subsequent Annual General Meeting). The Company has received the requisite certificate from them pursuant to Section 139 and 141 of the Companies Act, 2013 and rules framed there under, confirming their eligibility for re-appointment as Auditors of the Company.

Cost Auditors

The Board of Directors of the Company has appointed M/s. Ashwin Solanki & Associates, Cost Accountants, for conducting the Cost Audit for the year 2014. Cost Audit reports for the year 2013 was filed on June 24, 2014, which is within the time limit as prescribed in the Companies (Cost Audit Report) Rules, 2011.

Acknowledgements

The Board of Directors take this opportunity to thank the Company''s parent company, customers, members, suppliers, bankers, associates, Central and State Governments and employees at all levels for their support and co-operation extended to the Company during the year.

For and on behalf of the Board

Frank Duggan Chairman

Mumbai, February 10, 2015


Dec 31, 2013

The Directors have pleasure in presenting their Sixty Fourth Annual Report and Audited Accounts for the year ended December 31, 2013.

Financial Results

(Rs in Crores)

For the year ended For the year ended December 31, 2013 December 31, 2012

Profit Before Taxation 272.47 206.21

Less: Provision for Tax

- Current Tax 108.48 61.20

- Deferred Tax (12.90) 7.60

Profit After Tax 176.89 137.41

Profit of Baldor Electric India Private Limited for the period April 1, 2012 to December 31, 2012 2.42 - of the previous year on amalgamation

Profit for the year after giving impact of amalgamation 179.31 137.41

Balance Brought Forward from last year 85.04 85.51

Amount available for Appropriation 264.35 222.92

Appropriations

General Reserve 100.00 64.00

Proposed Dividend 63.57 63.57

Corporate Dividend Tax 10.81 10.31

Corporate Dividend Tax (previous years) 0.49 -

Balance Carried Forward 89.48 85.04

264.35 222.92

Dividend

Your Directors recommend payment of a dividend at the rate of Rs 3/- (Rupees Three only) per share for the year ended December 31, 2013 on 21,19,08,375 equity shares of Rs 2/- each.

Performance Review

The Company secured orders valued Rs 6,717 crores in 2013 as against Rs 6,966 crores in the previous year. Base orders from wider spectrum of customers helped offset the paucity of large projects in the market. Exports grew annulling the effect of a contraction in domestic market opportunities. The company continued to tap sectors like Renewable energy, Data center, Railways, Grid stability, Mining that look increasingly promising now and for the future. The order backlog at the end of the year stood at Rs 7,709 crores which continued to give more visibility to the future revenue streams. The revenues for the Company for the year 2013 stood at Rs 7,632 crores as against Rs 7,565 crores in the previous year, reflecting stability of operations in an uncertain market situation. Profit before tax was at Rs 272 crores in 2013 improved as compared to Rs 206 crores in the previous year mainly due to operational excellence initiatives, supply chain efficiencies, focus on project management and localization of the products inspite of higher interest costs. Net profit after tax stood at Rs 179 crores for the current year as compared to Rs 137 crores in the previous year. Consequently the earnings per share for 2013 stood at Rs 8.46 per share as compared to Rs 6.48 in 2012.

For detailed analysis of the performance, please refer to the Management''s Discussion and Analysis Section of the Annual Report.

Amalgamation of Subsidiary Company

The Hon''ble High Court of Bombay vide its Order dated September 27, 2013 has sanctioned the Scheme of Amalgamation of Baldor Electric India Private Limited (Baldor) with your Company. The Scheme has become effective on November 1, 2013 with appointed date being April 1, 2012. Baldor was a wholly owned subsidiary of the Company.

Members'' attention is drawn to Point No.27 (b) in Notes to Accounts, on Scheme of Amalgamation and treatment of accounts.

In this regard, it is to be noted that the adoption of the Audited Balance Sheet as at December 31, 2013 and the Audited Statement of Profit and Loss as mentioned in item No.1 of the Notice will also cover the approval of this accounting treatment.

Transfer to Investor Education and Protection Fund

In terms of Section 205C of the Companies Act, 1956, the unclaimed dividend amount aggregating to Rs 14.16 lakhs lying with the Company for a period of seven years pertaining to year ended on December 31, 2005, was transferred during the year 2013, to the Investor Education and Protection Fund established by the Central Government.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure - A, forming part of this Report.

Health, Safety and Environment

Firmly rooted in the ABB Group''s sustainability strategy that underscores the knowledge that health, safety and environment is good for your Company''s business and its customers. Your Company has integrated health, safety and environment into all its business activities which drive a strong and sound commitment within the Company and contribute to its stakeholders. Health, safety and environment, continues to be one of the Company''s focus areas. Your Company''s commitment to ensure the health, safety and security of employees, contractors and others affected by business operations has been implemented through certifications of its facilities along with strict adherence to its Supplier Code of Conduct. The Company continues its commitment to avoid and/or minimize the impact of its business activities on the environment.

All the major facilities of the Company are certified under the ISO 14001 and OHSAS 18001 standards.

Particulars of Employees

The statement under sub-section (2A) of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of this report is given in Annexure - B. The said Annexure - B shall, however, be provided to the Members on request made in writing to the Company Secretary.

Directors'' Responsibility Statement

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

i. in the preparation of the annual accounts, the applicable accounting standards have been followed by the Company;

ii. appropriate accounting policies have been selected and applied consistently and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at December 31, 2013 and of the profit of the Company for the year ended on that date;

iii. 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; and

iv. the annual accounts have been prepared on a going concern basis.

Corporate Governance

As required under Clause 49 of the Listing Agreement with Stock Exchanges, a report on Corporate Governance and a Certificate from M/s. D. R. Shressha & Associates, Practicing Company Secretaries, confirming compliance with the requirements of Corporate Governance are given in Annexure - C and Annexure - D respectively, which form part of this Report.

Business Responsibility Report

As required under Clause 55 of the Listing Agreement with the Stock Exchanges, Business Responsibility Report is provided in the Annual Report.

Directors

Mr. Francis Duggan resigned as a Director of the Company effective May 7, 2013. Mr. Arun Kanti Dasgupta resigned as a Director of the Company effective May 8, 2013 and Mr. N S Raghavan, resigned as Director of the Company effective August 20, 2013. Your Directors place on record their appreciation of the valuable services rendered by the aforesaid Directors during their tenure as Directors of the Company.

Mrs. Renu Sud Karnad has been appointed as an Additional Director on the Board of the Company on August 9, 2013 and holds office upto the date of the forthcoming Annual General Meeting and is eligible for appointment.

Mr. Gary Steel, Director of the Company is due to retire by rotation at this Annual General Meeting and is eligible for re-appointment.

As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, the relevant details of Directors retiring by rotation and seeking re-appointment at the ensuing Annual General Meeting are given in the annexure to the notice of the Annual General Meeting.

Necessary resolution relating to Directors who are seeking appointment / re-appointment is included in the Notice of Annual General Meeting.

Change of Name

Consequent to the approval of members in the last annual general meeting and subsequent approval from the Central Government, the name of your Company has been changed from "ABB Limited" to "ABB India Limited" effective June 14, 2013.

Fixed Deposits

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Auditors

M/s. S.R. BATLIBOI & CO. LLP, Chartered Accountants (ICAI Firm Registration No 301003E), the retiring Auditors of the Company, have conveyed their inability to seek re-appointment as the statutory auditors of the Company at the ensuing Annual General Meeting.

Based on the recommendation of the Audit Committee, the Board of Directors at its meeting held on February 18, 2014 appointed, subject to the approval of the members at the forthcoming Annual General Meeting, M/s. S.R. BATLIBOI & ASSOCIATES LLP, Chartered Accountants, having ICAI Firm registration number 101049W, an affiliate of the retiring auditors, as the statutory auditors of the Company from the conclusion of the ensuing Annual General Meeting. M/s. S.R. BATLIBOI & ASSOCIATES LLP, Chartered Accountants, have conveyed their willingness to be appointed as the statutory auditors of the Company and confirm that their appointment, if made, would be within the limits prescribed in Section 224(1B) of the Companies Act, 1956.

The subject of appointment of M/s. S.R. BATLIBOI & ASSOCIATES LLP, Chartered Accountants, in place of existing statutory auditors M/s. S.R. BATLIBOI & CO. LLP, Chartered Accountants, is being placed before the members for approval at the ensuing Annual General Meeting.

Cost Auditors

The Board of Directors of the Company has appointed M/s. Ashwin Solanki & Associates, Cost Accountants, for conducting the Cost Audit for the year 2013. Cost Audit reports for the year 2012 filed on June 28, 2013, which is within the time limit as prescribed in the Companies (Cost Audit Report) Rules, 2011.

Acknowledgements

The Board of Directors take this opportunity to thank its parent company, customers, members, suppliers, bankers, associates, Central and State Governments and employees at all levels for their support and co-operation extended to the Company during the year.

For and on behalf of the Board

Gary Steel

Chairman

Vadadora, February 18, 2014


Dec 31, 2012

The Directors have pleasure in presenting their Sixty Third Annual Report and Audited Accounts for the year ended December 31, 2012.

Financial Results

(Rs in Crores)

For the year ended For the year ended December 31, 2012 December 31, 2011

Profit before taxation 206.21 267.74

Less: Provision for tax

- Current tax 61.20 104.80

- Deferred tax 7.60 (17.80)

- Fringe benefit tax - (3.80)

Profit after tax 137.41 184.54

Balance brought forward from last year 85.51 54.69

Amount available for appropriation 222.92 239.23

Appropriations

General reserve 64.00 80.00

Proposed dividend 63.57 63.57

Corporate dividend tax 10.31 10.31

Corporate dividend tax (previous years) - (0.16)

Balance carried forward 85.04 85.51

222.92 239.23

Dividend

Your Directors recommend payment of a dividend at the rate of Rs 3/- (Rupees Three only) per share for the year ended December 31, 2012 on 211,908,375 equity shares of Rs 2/- each.

Performance Review

The Company secured orders valued Rs 6,966 crore in 2012 as against Rs 8,189 crore in the previous year. The decline in orders in the current year was mainly attributable to delayed decisions on a few large projects unlike in the last year wherein the Company had secured couple of landmark large orders like HVDC project from Power Grid Corporation of India Limited for nearly Rs 600 crore and 765 kV substation order from Isolux for nearly Rs 800 crore. The base orders continued to be stable in a challenging market environment. The order backlog at the end of the year stood at Rs 8,672 crore which continued to give more visibility to the future revenue streams. The revenues for the Company for the year 2012 stood at Rs 7,565 crore as against Rs 7,449 crore in the previous year, refecting stability of operations in an uncertain market situation. Proft before tax was at Rs 206 crore in 2012 as compared to Rs 268 crore in the previous year. Additional costs required executing the orders due to inordinate time delays in the infrastructure projects, unfavorable foreign exchange impact due to rupee volatility and higher interest costs resulted in lower proftability for the Company. Net proft after tax stood at Rs 137 crore for the current year as compared to Rs 185 crore in the previous year. Consequently the earnings per share for 2012 stood at Rs 6.48 per share as compared to Rs 8.71 in 2011.

For detailed analysis of the performance, please refer to the Management-s Discussion and Analysis Section of the Annual Report.

Subsidiary Company

During the year under review, your Company acquired 18,45,763 Non- Participating Redeemable Preference Shares of Rs 10/- each of Baldor Electric India Private Limited, for a consideration of Rs 1.85 crore.

The Consolidated Accounts have been prepared in accordance with the prescribed Accounting Standards and in line with the general exemption granted by Ministry of Corporate Affairs.

As prescribed in the Circular issued by Ministry of Corporate Affairs, the Board of Directors has, at its meeting held on February 21, 2013, passed a resolution giving consent for not attaching the Balance Sheet of the Subsidiary Company. The Audited consolidated Accounts, Auditors- Report thereon and Cash Flow Statement, comprising your Company and its Subsidiary Company, form part of this Annual Report. Shareholders who wish to have a copy of the annual report and accounts of the Subsidiary will be provided on receipt of a written request from them. The above documents will also be available for inspection by any share holder at the registered offce of the Company as well as registered offce of the Subsidiary Company, on any working day during the business hours.

Amalgamation of Subsidiary Company

The Board at its meeting held on September 26, 2012, approved the proposal of amalgamation of Baldor Electric India Private Limited with your Company. Accordingly, Scheme of Amalgamation has been fled before the Hon-ble High Court of Bombay which is pending for approval of the Court.

Transfer to Investor Education and Protection Fund

In terms of Section 205C of the Companies Act, 1956, the unclaimed dividend amount aggregating to Rs 11,29,485/- lying with the Company for a period of seven years pertaining to year ended on December 31, 2004, was transferred during the year 2012, to the Investor Education and Protection Fund established by the Central Government.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars as prescribed under sub-section (1) (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure – A, forming part of this Report.

Environment, Health and Safety

The Company stays committed to the principles of Environmental stewardship & Safety in every aspect of its business. This is achieved by embedding the practices for environmental sustainability and safety in the way of doing its daily businesses. Efforts are made to create consistent awareness and training on relevant issues in that regard. In this direction, the Company has identifed projects ranging from energy effciency, waste management and disposal, looking for alternative chemicals to reduce negative impacts on the environment. Most of the locations of the Company are ISO 14001 & OHSAS 18001 certifed and few locations are in the process of getting certifed.

Particulars of Employees

The statement under sub-section (2A) of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of this report is given in Annexure - B. The said Annexure - B shall, however, be provided to the Members on request made in writing to the Company Secretary.

Directors- Responsibility Statement

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

i. in the preparation of the annual accounts, the applicable accounting standards have been followed by the Company;

ii. appropriate accounting policies have been selected and applied consistently and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at December 31, 2012 and of the proft of the Company for the year ended on that date;

iii. proper and suffcient 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; and

iv. the annual accounts have been prepared on a going concern basis.

Corporate Governance

As required under Clause 49 of the Listing Agreement of Stock Exchanges, a report on Corporate Governance and a Certifcate from M/s. D. R. Shressha & Associates , Practicing Company Secretaries, confrming compliance with the requirements of Corporate Governance are given in Annexure – C and Annexure – D respectively, which form part of this Report.

Business Responsibility Report

As required under Clause 55 of the Listing Agreement of Stock Exchanges Business Responsibility Report is provided in the Annual Report.

Board of Directors

Mr. Darius E. Udwadia and Mr. N. S. Raghavan, Directors of the Company are due to retire by rotation at this Annual General Meeting and are eligible for re-appointment.

As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, brief profle of the Directors proposed to be re-appointed, nature of their expertise in specifc functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board Committees and shareholding are provided in the Report on Corporate Governance forming part of the Annual Report.

Change of Name

The Board at its meeting held on February 21, 2013, accorded its approval to change the name of the Company from the existing -ABB Limited- to -ABB India Limited-. However the said change is subject to the approval of shareholders, Registrar of Companies, Karnataka, and any other concerned authorities.

Auditors

The Company-s Auditors, M/s. S.R. BATLIBOI & CO., Chartered Accountants (Firm Registration No 301003E), hold offce upto the conclusion of the ensuing Annual General Meeting. The Company has received the requisite certifcate from them pursuant to Section 224(1B) of the Companies Act, 1956, confrming their eligibility for re-appointment as Auditors of the Company.

Cost Auditors

The Board of Directors of the Company has appointed M/s. Ashwin Solanki & Associates, Cost Accountants, for conducting the Cost Audit in respect of Electric Motors and Mr. T. L. Sangameswaran, Cost Accountant for Cost Audit of Electrical Grade Insulation Paper and Paper Boards for the year 2012. Cost Audit reports for Electric Motors and Electrical Grade Insulation Paper and Paper Boards for the year 2011 were fled on March 16, 2012 and March 28, 2012 respectively, within the time limit as prescribed in the Cost Audit Report Rules, 2001.

Acknowledgements

The Board of Directors take this opportunity to thank its parent company, customers, members, suppliers, bankers, associates, Central and State Governments and employees for their support and co-operation extended to the Company during the year.

For and on behalf of the Board

Gary Steel

Chairman

Place : Bengaluru

Date : February 21, 2013


Dec 31, 2011

The Directors have pleasure in presenting their Sixty Second Annual Report and Audited Accounts for the year ended December 31, 2011.

Financial Results (Rs in Thousands) For the year ended For the year ended December 31, 2011 December 31, 2010

Profit Before Taxation 2,677,391 1,002,303 Less: Provision for Tax

- Current Tax 1,048,000 415,000

- Deferred Tax (178,000) (45,000)

- Fringe Benefit Tax (37,960) -

Profit After Tax 1,845,351 632,303

Balance Brought Forward from last year 546,910 607,178

Amount available for Appropriation 2,392,261 1,239,481

Appropriations

General Reserve 800,000 200,000

Proposed Dividend 635,725 423,817

Corporate Dividend Tax 103,131 70,391

Corporate Dividend Tax (previous years) (1,637) (1,637)

Balance Carried Forward 855,042 546,910

2,392,261 1,239,481

Dividend

Your Directors recommend payment of a dividend at the rate of Rs 3/- (Rupees Three only) per share for the year ended December 31, 2011 on 211,908,375 equity shares of Rs 2/- each.

Performance Review

Orders received during the year at Rs 81,888 million were 29% higher as against Rs 63,496 million in the previous year. The year 2011 witnessed strong growth in both large and base orders. Order backlog at the end of 2011 was at Rs 91,288 million as compared to Rs 84,362 million providing significant revenue visibility for the coming year.

Sales and other income for the year was higher by 17% at Rs 74,651 million compared to Rs 63,726 million in the previous year. Revenues of all the segments were higher than the previous year.

Profit before tax for the year was higher at Rs 2,677 million compared to Rs 1,002 million in the previous year, mainly on account of business growth, improved operational efficiencies and favourable foreign exchange impact.

Profit after tax was significantly higher at Rs 1,845 million for the year as compared to Rs 632 million in the previous year. Earnings per equity share of face value of Rs 2/- correspondingly increased to Rs 8.71 compared to Rs 2.98 in the previous year.

For detailed analysis of the performance, please refer to the Management's Discussion and Analysis Section of the Annual Report.

Acquisitions a) Acquisition of Operating Businesses

With effect from April 1, 2011, the Company has acquired three businesses (a) Transformer Insulation - Boards and Components,

(b) Low Voltage Breakers and Switches and (c) Vacuum Interrupters from ABB Global Industries and Services Limited for an aggregate consideration of Rs 4,000 million on slump sale basis with the object of bringing business synergies.

b) Acquisition of company

The Company acquired 100% of equity shares in Baldur Electric India Private Limited (Baldur), for a total consideration of Rs 339 million. Baldur is a private limited company based in Pane which provides sales and service assistance to its customers including support for the products viz., electric motors, power transmission products, drives, generators and other accessory products. Baldur became a wholly owned subsidiary of your company effective December 1, 2011. The Company is in the process of acquiring the preference shares in Baldur at a consideration of Rs 18.5 million.

The consolidated Accounts have been prepared in accordance with the prescribed Accounting Standards and in line with the general exemption granted by Ministry of Corporate Affairs.

As prescribed in the circular issued by Ministry of Corporate Affairs, the Board of Directors has, at its meeting held on February 23, 2012, passed a resolution giving consent for not attaching the Balance Sheet of the subsidiary company. The Audited Consolidated Accounts, Auditors' Report thereon and Cash Flow Statement, comprising of your Company and its subsidiary company, form a part of this Annual Report. Shareholders who wish to have a copy of the full report and accounts of the subsidiary will be provided on receipt of a written request from them. The above documents will also be available for inspection by any shareholder at the registered office of the Company as well as registered office of the subsidiary company, on any working day during the business hours.

Transfer to Investor Education and Protection Fund

In terms of Section 205C of the Companies Act, 1956, the unclaimed dividend amount aggregating to Rs 1,047,695/- lying with the Company for a period of seven years pertaining to year ended on December 31, 2003, was transferred during the year 2011, to the Investor Education and Protection Fund established by the Central Government.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure - A, forming part of this Report.

Environment, Health and Safety

The Company has in place a system for controlling and monitoring pollutants at all its factories complying with environmental standards and legislation. All the manufacturing units of the Company have received certificates for ISO 14001 (EMS). Environment, health and safety are given high priority. All the units of the Company have been awarded OHSAS18001 certification for the health and safety system. Several environmental management projects are underway across the locations. Some of these include energy conservation, waste management, rain water harvesting and greening initiatives.

Particulars of employees

The statement under sub-section (2A) of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of this report is given in Annexure - B. The said Annexure - B shall, however, be provided to the Members on request made in writing to the Company Secretary.

Directors Responsibility Statement

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

i. in the preparation of the annual accounts, the applicable accounting standards have been followed by the Company;

ii. appropriate accounting policies have been selected and applied consistently and such judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at December 31, 2011 and of the profit of the Company for the year ended on that date;

iii. 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; and

iv. the annual accounts have been prepared on a going concern basis.

Corporate Governance

As required under Clause 49 of the Listing Agreement of Stock Exchanges, a report on Corporate Governance and a Certificate from M/s D. R. Suresh & Associates, Practicing Company Secretaries, confirming compliance with the requirements of Corporate Governance are given in Annexure - C and Annexure - D respectively, which form part of this Report.

Board of Directors

Mr. Peter Leupp and Mr. Maser Munsee, Directors of the Company are due to retire by rotation at this Annual General Meeting and are eligible for re-appointment.

Mr. Biplab Maunder did not seek re-appointment at the Annual General Meeting held on May 10, 2011 and hence ceased to be Director of the Company with effect from May 10, 2011.

As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, brief profile of the Directors proposed to be re-appointed, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board Committees and shareholding are provided in the Report on Corporate Governance forming part of the Annual Report.

Auditors

The Company's Auditors, M/s S.R. BATLIBOI & CO., Chartered Accountants (Firm Registration No. 301003E), hold office up to the conclusion of the ensuing Annual General Meeting. The Company has received the requisite certificate from them pursuant to Section 224(1B) of the Companies Act, 1956, confirming their eligibility for re-appointment as Auditors of the Company.

Cost Auditors

The Board of Directors of the Company have appointed M/s Ashwini Slinky & Associates, Cost Accountants, for conducting the Cost Audit for the product Electric Motors for the year 2011. Cost Audit report for the year 2010 was filed on June 1, 2011, within the time limit prescribed by the Cost Audit Report Rules, 2001. Further, Mr. T. L. Sangameswaran, Cost Accountant, is appointed to conduct Cost Audit for the Electrical Grade Insulation Paper and Paper Boards. These products are part of the businesses which the Company acquired during the year 2011 from ABB Global Industries and Services Limited.

Acknowledgements

The Board of Directors take this opportunity to thank the parent company, customers, members, suppliers, bankers, associates, Central and State Governments and employees for their support and co-operation extended to the Company during the year.

For and on behalf of the Board

Gary Steel Chairman

Place : Bengaluru

Date : February 23, 2012


Dec 31, 2010

The Directors have pleasure in presenting their Sixty First Annual Report and Audited Accounts for the year ended December 31,2010.

Financial Results

(Rs in Thousands)

For the year ended For the year ended December 31,2010 December 31,2009

Profit Before Taxation 1,002,303 5,273,994

Less: Provision for Tax

-Current Tax 415,000 1,805,255

-Deferred Tax (45,000) (39,000)

-Fringe Benefit Tax - (38,652)

Profit After Tax 632,303 3,546,391

Balance Brought Forward from last year 607,178 556,632

Amount available for Appropriation 1,239,481 4,103,023

Appropriations

General Reserve 200,000 3,000,000

Proposed Dividend 423,817 423,817

Corporate Dividend Tax 70,391 72,028

Corporate Dividend Tax (2009) (1,637)

Balance Carried Forward 546,910 607,178

1,239,481 4,103,023

Dividend

Your Directors recommend payment of a dividend at the rate of Rs 21- (Rupees Two only) per share for the year ended December 31, 2010 on 211,908,375 equity shares of Rs 21- each.

Performance Review

Orders received during the year at Rs 63,496 million were 27% lower as compared to Rs 86,847 million in the previous year. Order backlog at the end of 2010 was at the same level of Rs 84,362 million compared to Rs 84,787 million at the end of the previous year.

Sales and other income for the year were marginally higher by 1 % at Rs 63,726 million compared to Rs 63,098 million in the previous year. Revenues of all the segments were higher than the previous year except Power Products and Process Automation which saw a negative growth of 9% and 8% respectively.

Profit before tax for the year was lower at Rs 1,002 million as compared to Rs 5,274 million in the previous year, mainly on account of exit costs of rural electrification business, strategic orders with lower margin, higher input costs witnessed by the industry and adverse impact from fair valuation of forward foreign exchange and embedded derivative contracts.

Profit after tax at Rs 632 million for the year has reduced by 82% compared to Rs 3,546 million in the previous year. Earning per equity share of face value of Rs 21- correspondingly decreased to Rs 2.98 compared to Rs 16.74 in the previous year.

For detailed analysis of the performance, please refer to the Managements Discussion and Analysis Section of the Annual Report.

Acquisition

The Company acquired the business of Metsys Engineering and Consultancy Private Limited (Metsys), based in Bangalore, a private limited company engaged in providing engineering services/consultancy and optimized solutions to OEMs/End customers mainly in Metal industry, for a total consideration of Rs 84.6 million.

Open Offer

The promoter company ABB Asea Brown Boveri Limited, Zurich along with ABB Norden Holding AB, Sweden was holding 52.11% of the total share capital of the Company. ABB Asea Brown Boveri Limited, Zurich, has increased its stake in the Company from 46.19% to 69.08% by way of an Open Offer during 2010. Subsequent to the Open Offer the total shareholding of ABB Asea Brown Boveri Limited, Zurich, in the company along with ABB Norden Holding AB, Sweden is 75%.

Transferto Investor Education and Protection Fund

In terms of Section 205C of the Companies Act, 1956, the unclaimed dividend amount aggregating to Rs 1,018,692/- lying with the Company for a period of seven years pertaining to year ended on December 31, 2002, was transferred during the year 2010, to the Investor Education and Protection Fund established by the Central Government.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure - A, forming part of this Report.

Environment, Health and Safety

The Company has in place a system for controlling and monitoring pollutants at all its factories complying with environmental standards and legislation. All the manufacturing units of the Company have received certificates for ISO 14001 (EMS). Environment, health and safety are given high priority. All the units of the Company have been awarded OHSAS18001 certification for the health and safety system. Several environmental management projects are underway across the locations. Some of these include energy conservation, waste management, rain water harvesting and greening initiatives.

Particulars of Employees

The statement under sub-section (2A) of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of this report is given in Annexure - B. The said Annexure - B shall, however, be provided to the Members on request made in writing to the Company Secretary.

DirectorsResponsibility Statement

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

i. in the preparation of the annual accounts, the applicable accounting standards have been followed by the Company;

ii. appropriate accounting policies have been selected and applied consistently and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at December 31, 2010 and of the profit of the Company for the year ended on that date;

iii. 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; and

iv. the annual accounts have been prepared on a going concern basis.

Corporate Governance

As required under Clause 49 of the Listing Agreement of Stock Exchanges, a report on Corporate Governance and a Certificate from M/s D. R. Shressha & Associates, Practicing Company Secretaries, confirming compliance with the requirements of Corporate Governance are given in Annexure - C and Annexure - D respectively, which form part of this Report.

Board of Directors

Mr. Bernhard Jucker was appointed as an Alternate Director for Mr. Peter Leupp during the period from April 30, 2010 to July 29, 2010 when Mr. Leupp was a Director.

Mr. Biplab Majumder, Vice Chairman & Managing Director of the Company resigned and his resignation was accepted by the Board from the close of office hours on December 31,2010.

Your Directors place on record their appreciation of the valuable services rendered by the above Directors during their tenure as Alternate Director and Managing Director of the Company respectively.

Mr. Majumder was appointed as an Additional Director effective January 1, 2011. He holds office upto the date of this Annual General Meeting. He does not wish to seek reappointment.

Mr. Bazmi R. Husain was appointed as an Additional Director. He was also appointed as the Managing Director of the Company with effect from January 1,2011, subject to approval of the share holders in general meeting.

Mr. Arun Kanti Dasgupta, Director of the Company is due to retire by rotation at this Annual General Meeting and is eligible for re-appointment.

Mr. Gary Steel was appointed as a Director of the Company with effect from February 20,2009, in the casual vacancy caused by the resignation of Mr. Ravi Uppal. Since Mr. Ravi Uppal would have retired by rotation at this Annual General Meeting had he not resigned, Mr. Gary Steel would also cease to hold the office of Director at this Annual General Meeting, pursuant to Section 262 of the Companies Act, 1956 and is eligible for reappointment as a Director.

As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, brief profile of the Directors proposed to be re-appointed / appointed, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board Committees, shareholding are provided in the Report on Corporate Governance forming part ofthe Annual Report.

Auditors

The Companys Auditors, M/s S.R. BATLIBOI & CO., Chartered Accountants, (Registration Number 301003E), hold office upto the conclusion ofthe ensuing Annual General Meeting. The Company has received the requisite certificate from them pursuant to Section 224(1 B) of the Companies Act, 1956, confirming their eligibility for re-appointment as Auditors ofthe Company.

For and on behalf of the Board

Place: Bengaluru Gary Steel

Date : February 23,2011 Chairman




Dec 31, 2009

The Directors have pleasure in presenting their Sixtieth Annual Report and Audited Accounts for the year ended December 31, 2009.

Financial Results

(Rs in Thousands)

For the year ended For the year ended December 31, 2009 December 31, 2008

Profit Before Taxation 5,273,994 8,332,440

Less: Provision for Tax

-Current Tax 1,805,255 2,858,210

- Deferred Tax (39,000) (90,000)

- Fringe Benefit Tax (38,652) 90,100

Profit After Tax 3,546,391 5,474,130

Balance Brought Forward from last year 556,632 627,930

Amount available for Appropriation 4,103,023 6,102,060

Appropriations

General Reserve 3,000,000 5,000,000

Proposed Dividend 423,817 466,198

Corporate Dividend Tax 72,028 79,230

Balance Carried Forward 607,178 556,632

4,103,023 6,102,060

Dividend

Your Directors recommend payment of a dividend at the rate of Rs 21- (Rupees Two only) per share for the year ended December 31, 2009 on 211,908,375 equity shares of Rs 2/- each.

Performance Review

Orders received during the year at Rs 86,847 million were 8% higher compared to Rs 80,541 million in the previous year. Order backlog at the end of 2009 was healthy at Rs 84,787 million compared to Rs 61,618 million at the end of the previous year.

Sales and other income for the year were lower by 9% at Rs 63,098 million compared to Rs 69,675 million in the previous year. Revenues of all the segments were lower than the previous year except Automation Products which saw a moderate growth of 4%.

Profit before tax was lower at Rs 5,274 million compared to Rs 8,332 million in the previous year. Reduction in profit was mainly attributable to lower sales, adverse impact from fair valuations of forward foreign exchange and embedded derivative contracts and additional cost incurred for exit/ foreclosure of rural electrification business.

Profit after tax at Rs 3,546 million for the year has reduced by 35% compared to Rs 5,474 million in the previous year. Earning per equity share of face value of Rs 21- correspondingly decreased to Rs 16.74 compared to Rs 25.83 in the previous year.

For detailed analysis of the performance, please refer to the managements discussion and analysis section of the annual report.

Transfer to Investor Education and Protection Fund

In terms of Section 205C of the Companies Act, 1956, the unclaimed dividend amount aggregating to Rs 899,063/- lying with the Company for a period of seven years pertaining to year ended on December 31, 2001, was transferred during the year 2009, to the Investor Education and Protection Fund established by the Central Government.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure - A, forming part of this report. *

Environment, Health and Safety

The Company has in place a system for controlling and monitoring pollutants at all factories complying with environmental standards and legislation. All the manufacturing units of the Company have received certificates for ISO 14001 (EMS). Environment, health and safety are given high priority. All the units of the Company have been awarded OHSAS18001 certification for the health and safety system. Several environmental management projects are underway across the locations. Some of these include energy conservation, waste management, rain water harvesting and greening initiatives.

Particulars of Employees

The statement under sub-section (2A) of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of this report is given in Annexure - B. The said Annexure - B shall, however, be provided to the Members on request made to the Company Secretary.

Directors Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed by the Company;

ii. appropriate accounting policies have been selected and applied consistently and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at December 31, 2009 and of the profit of the Company for the year ended on that date;

iii. 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; and

iv. the annual accounts have been prepared on a going concern basis.

Corporate Governance

As required under Clause 49 of the Listing Agreement of Stock Exchanges, a report on Corporate Governance and a Certificate from M/s D. R. Shressha & Associates, Practicing Company Secretaries, confirming compliance with the requirements of Corporate Governance are given in Annexure - C and Annexure - D respectively, which forms part of this report.

Board of Directors

Mr. Bernhard Jucker and Mr. Veli-Matti Reinikkala, Directors of the Company resigned effective March 20, 2009 and March 31, 2009 respectively.

Mr. Bernhard Jucker was appointed as an Alternate Director for Mr. Peter Leupp during the period from April 30, 2009 to July 31, 2009.

Mr. K Rajagopal, Whole-time Director of the Company resigned effective July 31, 2009.

Your Directors place on record their appreciation of the valuable services rendered by the above Directors during their tenure as Directors / Alternate Director of the Company.

Mr. Francis Duggan was appointed as an Additional Director of the Company with effect from February 26, 2010.

Mr. D. E. Udwadia and Mr, N. S. Raghavan, Directors of the Company are due for retirement by rotation and are eligible for re-appointment.

As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, brief profile of the Directors proposed to be re-appointed / appointed, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board Committees, shareholding are provided in the Report on Corporate Governance forming part of the Annual Report.

Auditors

The Companys Auditors, M/s. S.R. BATLIBOI &CO., Chartered Accountants, hold office upto the conclusion of the ensuing Annual General Meeting. The Company has received a requisite certificate from them pursuant to Section 224(1 B) of the Companies Act, 1956, confirming their eligibility for re- appointment as Auditors of the Company.

For and on behalf of the Board

Place: Bengaluru Gary Steel

Date: February 26, 2010 Chairman



 
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