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Directors Report of Alstom T&D India Ltd. Company
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Directors Report of Alstom T&D India Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the fifty-ninth Annual Report together with the Audited financial statements of the Company for the financial year ended March 31, 2015.

FINANCIAL RESULTS (Rupees millions) Particulars Year ended Year ended March 31, 2015 March 31, 2014

Sales and Services (Net) 37,107.2 35,235.4

Operating Profit before Finance Cost 2,427.5 2,530.0

(As a percentage of net sales) 6.5% 7.2%

Finance Cost (Net) 725.7 755.6

Profit Before Tax 1,701.8 1,774.4

Tax Expense 496.1 604.2

Profit After Tax 1,205.7 1,170.2

Balance brought forward from previous year 8,424.7 7,908.4

Profit available for appropriations 9,630.4 9,078.6

Appropriations

Proposed Dividend 460.9 460.9

Corporate Dividend Tax 93.8 75.0

General Reserve - 118.0

Others (CSR and depreciation adjustments) 20.6 -

Balance carried forward 9,055.1 8,424.7

DIVIDEND

Your Directors take pleasure in recommending a dividend of 90% (Rs. 1.80 per share) for every equity share of face value of Rs. 2/- each, for the financial year ended March 31, 2015.

ADVANTAGES OF GAS INSULATED SWITCHGEAR

- Very high reliability

- Compact and flexible

- Reduced civil works and very quick onsite assembly

- Low maintenance

- Minimised servicing during repair and extensions

- Minimised ecological impact

PERFORMANCE REVIEW

A CHALLENGING MARKET, YET ANOTHER YEAR OF MAJOR ACHIEVEMENTS

During the year under review, the country underwent a change in government amidst high expectations of key policy reforms and optimism. Against this backdrop, the growth rate of Indian economy was 7.4% [as per the new methodology of Gross Domestic Product (GDP)]. However, the deceleration in the preceding three years had severely impacted the industry and infrastructure capital expenditure.

Asset quality of public sector banks remain a concern with Non-Performing Assets (NPAs) of the banks in the country at Rs. 4.7 trillion at end of March 2015. The key factors are stalled projects, sluggish economic growth in recent past, frozen credit and highly leveraged balance sheets of corporate sector. This increase in NPAs has led to significant reduction in sectoral lending to power and infrastructure sector throughout the year.

Power Generation continues to struggle with stranded capacities and delays due to cancellation and subsequent auction of coal mines. The State Electricity Boards, Discoms are struggling with financial losses and are neither able to purchase power nor able to pay Gencos and equipment suppliers. This is impacting fresh investments in the state T&D sector.

The value of stalled projects at the end of December 2014 was Rs.8.8 trillion or 7% of GDP The private sector accounted for Rs. 1.8 trillion while public sector accounted for Rs. 7.7 trillion. Out of these infrastructure and manufacturing projects dominated the total value of stalled projects. The sector with a large number of stalled projects for both public and private sector was electricity. At the end of third quarter of 2014-15, 80 projects were stalled in this sector, of which 75 were in generation sector, thus, impacting the ordering for T&D equipment segment. Stalled projects severely affected the balance sheet of the corporate sector and public sector banks, which in turn limited private sector investments.

Amidst the challenging business environment, the Company sustained its performance with improved profitability, revenues and order backlog during the year under report, and retained its market leadership position for the seventh year in a row.

The Company''s constant focus on investments in technology, localised customer centric solutions, strategy of selective bidding for orders and timely execution of projects were key to moving ahead in a market with moderate growth opportunities.

Overall, your Company successfully achieved a balanced portfolio of orders, resulting in sustained leadership and improved performance.

YEAR OF MILESTONES:

HVDC SUPERGRID SOLUTIONS

During the year, Alstom Group was awarded Rs. 32,500 million HVDC super grid solutions order to build the Phase II of the 1,365 km long "energy highway" between Champa in central India and Kurukshetra in northern India. Your Company''s share in the said contract was Rs. 14,300 million. This project, once completed, will enable, bulk power transfer efficiently from the Chhattisgarh region - a hub of Independent Power Producers - to the load center in the northern region of the country. This new ±800 kV, 3000 MW UHVDC link will run in parallel with the first UHVDC transmission link (awarded to Alstom in 2012), increasing the total bulk power transmission capacity of the advanced UHVDC system to 6000 MW.

This contract confirms our customer''s confidence in Alstom''s expertise in HVDC solutions and adds to the list of HVDC milestones achieved by the Company. In the past, Alstom has supplied HVDC systems for Vizag (Andhra Pradesh), Chandrapur (Maharashtra) and Sasaram (Bihar) thereby developing the Supergrid highways for the Indian national grid.

MAKING GLOBAL TECHNOLOGY IN INDIA:

INDIA''S FIRST ''MAKE IN INDIA'' 800 kV HVDC TRANSFORMER

Alstom is a leading technology player in the T&D sector worldwide. Alstom''s ability to innovate its technology and localise as per the requirements of national grid has given it a competitive edge and positioned it as a technological leader in the country.

In India, your Company, which has been at the forefront of ''Making in India'' since 1957, has a strong local manufacturing base in the country. It has world-class manufacturing facilities for products like switchgears, power transformers, instrument transformers, automation products etc., which uses the same processes and technologies as used by the parent Company.

In 2014-15, a historical milestone was achieved with the flag-off of India''s first locally manufactured 800 kV HVDC convertor transformer from the world-class power transformer manufacturing facility at Vadodara, in Gujarat. The transformer was flagged-off by Hon''ble Chief Minister of Gujarat, Smt. Anandiben Patel, in the presence of eminent dignitaries from Power Grid, central and state utilities and private sector customers. The convertor transformer is part of Power Grid''s 3000 MW, 800 kV Champa-Kurukshetra UHVDC Phase 1 link.

The challenging task of designing, manufacturing and testing 800 kV DC converter transformers was accomplished successfully with the transfer of complex design and manufacturing technology to the local unit at Vadodara. Also, recent investments made in expanding the manufacturing and testing facilities for the HVDC line of transformers at the unit enabled this achievement.

Alstom T&D''s transformer factory at Vadodara achieved another key milestone by supplying the 200th 765 kV product (Transformer/Reactor) within a short span of 6 years since its inception, for the first time ever in India. The 110 MVAR 765 kV 1-phase Shunt Reactor supplied to Power Grid in March 2015 marked the achievement of this record milestone.

FIRST CHOICE OF CUSTOMERS ACROSS THE ENERGY CHAIN

Your Company''s technological leadership across the energy chain was demonstrated through a diverse and balanced mix of projects across utilities, power generation, industry and infrastructure segments.

While the Indian utilities, both central and states, were the key drivers for the T&D market in 2014-15, power generation, industry and infrastructure provided limited market opportunities Power Grid, world''s second largest transmission utility awarded your Company several projects, spread across India for the development of India''s national grid infrastructure.

- Your Company secured an order worth approximately Rs. 2,000 million, to supply transformers for the upgrade and expansion of 400/220 kV grid substations across eastern India. The project is part of the Eastern Region Strengthening Scheme of Power Grid, which aims to improve the transmission infrastructure in the states of West Bengal, Odisha and Bihar in eastern India. The new equipment will strengthen power handling capacity of various substations across these states, stabilising the transmission network.

Under this contract, Alstom will upgrade existing 400/220 kV substations by installing new equipments, such as circuit breakers, instrument transformers, protection and control panels. Alstom will supply seven units of 400/220 kV, 500 MVA transformers and three units of 220/132/33 kV, 160 MVA transformers.

- The Company was also awarded a contract worth approximately Rs. 1,380 million, to supply transformers and reactors for the expansion of 400/220 kV grid substations across southern India. The project is part of Power Grid''s System Strengthening Scheme to boost power handling capacity of substations, and stabilise the transmission infrastructure in southern India.

- The Company secured a contract of Rs. 670 million to expand and upgrade the energy management system of India''s various control centers in North East India: North Eastern Regional Load Despatch Centre (NERLDC) and seven other Regional Load Despatch Centers (RLDCs).

The project includes supply, installation, testing and commissioning of 87 Remote Terminal Units (RTUs) and 9 Control Centres. RTUs are intelligent devices that collect data from remote locations to enhance network visibility for grid operators. Meanwhile, Alstom''s e-terraplatform software solution analyses the data to help grid operators take decisions in real-time, and enhance grid security. The NERLDC system operator can, thus, anticipate abnormalities and prevent electrical system anomalies.

Your Company was also chosen to supply and refurbish HVDC converter transformers for strengthening the 1000 MW HVDC station at Bhadrawati in Maharashtra which interconnects and transfers surplus power from Western India to Southern India. The turnkey contract includes designing, engineering, manufacturing, refurbishing, erection and commissioning of HVDC converter transformers (234 MVA, 400 kV).

Consequently, several state utilities took the initiative to invest in strengthening their inter and intra state transmission and distribution grid infrastructure.

During the year under report, various state utilities across India chose your Company as the preferred supplier of T&D products and solutions for their grid network.

- Maharashtra State Electricity Transmission Company

Limited (MSETCL) awarded your Company orders of around Rs. 2,462 million, to build 400/220 kV grid substations at Kudus, Alkud and Kondhwa in Maharashtra. The scope includes power transformers, substation automation system and other auxiliary equipment. For Kondhwa, Alstom will also build, on a turnkey basis, a 220/22 kV gas-insulated substation with other electrical equipment.The substations will strengthen the 400/220 kV transmission network as part of Maharashtra''s 12th Five Year plan to strengthen the transmission system and enhance the capacity of power evacuation systems.

- Southern Grid did not see much investments in the 11th plan. Tamil Nadu has now decided to strengthen its T&D grid. Your Company was awarded three substation projects aggregating approximately Rs. 2,400 million, by Tamil Nadu Transmission Corporation Limited (TANTRANSCO).

These substation projects will establish a 400/230/100 kV Air-Insulated Substation (AIS) at Rasipalayam, connecting Tamil Nadu''s transmission network to India''s national grid. It will also establish two 230/110 kV air-insulated substations in Vyasarpadi and in Omega Industrial estate, both near Chennai, the capital city of Tamil Nadu. The substations will stabilise power supply in and around Chennai to cope-up with the increasing industrialisation.

- Himachal Pradesh, a state with major hydro resources and generation potential, is expanding T&D network to transmit the power to the end-consumer. Your Company was chosen by Himachal Pradesh Power Transmission Corporation Limited (HPPTCL) to supply a 66 kV Gas-Insulated Substation (GIS) at Urni. The project scope includes design, engineering, manufacture, supply, testing, and commissioning of the 66 kV GIS, substation automation and control system. All the equipment will be produced by Company''s state-of-the-art manufacturing facility at Padappai near Chennai. This substation will transmit power from new generation sources into the Kinnaur district of Himachal Pradesh.

- Bihar, one of the rapidly growing states in India, is revamping its power sector. Your Company secured an order worth Rs. 507 million, to renovate and modernise 132/33 kV grid substations across various locations in the state for Bihar State Power Transmission Company Limited (BSPTCL) with new, advanced technology including 132 kV and 33 kV outdoor circuit breaker, isolator, lightning arrestors and relay control panels.

With Government of India''s ambitious renewable capacity addition plan, especially in solar (100 GW by year 2022), India''s energy mix is expected to become more diverse in the future. The Indian national transmission grid needs to be strengthened to handle grid instability and deliver stable power to the states and the load centers.

Your Company''s technical expertise in developing evacuation infrastructure for power generation, conventional and renewables was recognised through the award of several key projects such as:

- NTPC Limited, India''s largest energy conglomerate and a Maharatna company awarded an order worth around Rs. 1,800 million to supply a 765 kV switchyard at the 2x800 MW Darlipalli Super Thermal Power Project (STPP) in Sundergarh, Odisha. The 765 kV switchyard will facilitate evacuation of 1600 MW of power produced by the STPP to the state grid of Odisha. The scope includes design, engineering, manufacturing, installation and commissioning of eleven 765 kV bays and fourteen 132 kV bays.

- Rajasthan Rajya Vidyut Prasaran Nigam Limited (RRVPNL) chose your Company to supply a 400/220 kV substation in Bhadla, and expand the existing 400/220 kV substation in Bikaner, both situated in the state of Rajasthan. The new 400 kV grid substation at Bhadla will help evacuate power from the Bhadla solar park and other upcoming solar parks in the area, while the expansion of the 400/220 kV substation at Bikaner will facilitate the transmission of solar power generation to the national grid. Scope involves designing, engineering, manufacturing, installation and commissioning of twenty 400 kV bays and seventeen 220 kV bays at Bhadla. The Bikaner expansion project includes the supply of eight 400 kV bays, transformers, circuit breakers, control and protection relays and substation automation system.

The above projects are manifestation of your Company''s successful strategy, expertise, reputation and ability to be the first choice of customers across the entire power cycle.

AT FOREFRONT IN DEVELOPING THE SAARC GRID

South Asia is one of the fastest growing regions in the world. The economic sustainability of the SAARC region demands energy security and greater cross-border electricity trade.

At present, within SAARC, India is importing around 1,500 MW of power from Bhutan while exporting around 500 MW to Bangladesh and 150 MW to Nepal. For the cross border power exchange trade to expand, seamless flow of electricity from one grid to another and reliable grid operations is crucial.

Bangladesh is developing a comprehensive and integrated plan for power generation, transmission and distribution with an aim to achieve 100 percent access to electricity by 2021, calling for a network robust enough to integrate power generated from varied sources.

Your Company has delivered Bangladesh''s largest power transformer 520 MVA, 3 phase, 420/235/33 kV to Power Grid Company of Bangladesh Limited, the central transmission and distribution organisation of Bangladesh for the Bibiyana II 420 kV substation.

Bibiyana II substation is the first 420 kV switchyard in

Bangladesh designed to evacuate power from the nearby 340 MW power plant. The transformer for Bibiyana II was manufactured at your Company''s state-of-the-art facility at Naini, India''s first Power Transformer manufacturing plant.

Bhutan has large hydropower potential, estimated at 25,000 MW. The Government of India and Royal Government of Bhutan have agreed to develop the hydropower sector in Bhutan, targeting 10,000 MW of hydroelectric generation by 2025.

During the year, your Company was awarded a Rs. 550 million contract by Mangdechhu Hydroelectric Project Authority (MHPA) to supply power transformers for the 720 MW (4 x 180 MW) Mangdechhu Hydroelectric Project.

Scope includes supply of thirteen units of 75 MVA, 400 kV generator transformers and an 80 MVAR, 400 kV shunt reactor. Also Alstom will design, engineer, manufacture, supply, transport, erect, test and commission the generator transformers, shunt reactor and associated equipments for the project located by the river Mangdechhu in Trongsa district, Bhutan. The project is a major landmark in grid development for hydro power in Bhutan. All equipment will be supplied from Company''s world class manufacturing facility at Naini.

Sri Lanka witnessed the introduction of smart technologies in their transmission grid when your Company was awarded Sri Lanka''s first energy management system, for transmission grid monitoring, stability and control, by Ceylon Electricity Board (CEB). Alstom will supply its world-leading energy management system e-terraplatform, to enable reliable, secure and efficient operation of Sri Lanka''s hydro-thermal electricity system. Under the project, Alstom will build at Colombo, the National System Control Centre, equipped with supervisory control, data acquisition, and energy management system. It will install and integrate 34 RTUs with the new system and integrate existing substation automation systems. Equipment will be manufactured from Alstom''s manufacturing facilities in India.

SERVICES: ENHANCED CAPABILITIES FOR MANAGING AGEING GRID ASSETS

During the year, Service business continued on the double digit growth path, registering an increase of 19% in sales as compared to financial year 2013-14. To ensure long term sustainability of this growth, Service business continue to strengthen its team of service engineers not only through additional resources but also by ensuring that existing team members are continuously trained to increase their level of competencies, and thereby serving new demand of esteemed customers.

With over 300 trainees during the year, your Company''s Technical Institute at Padappai continues to upgrade the skill of the technicians and engineers of our customers, as part of service mission to develop and expand the servicing scope across its products and offerings to old as well as new customers.

Service business has been offering life cycle extension support services on power transformers, which are being produced by Alstom since many decades. This year, additional capability has been established for transformer repairs by dedicating an existing production line at transformer factory at Naini for transformer repairs. Equipped with its own winding machines, VPD, high capacity cranes and a fully equipped testing bay, it has capability to handle transformers of upto 400 kV class of any make.

OPERATIONAL EXCELLENCE

Continuing its efforts to create differentiation through Operational Excellence, your Company has once again reached major landmarks in execution of product and project portfolio in 2014-15.

During the year, your Company demonstrated its expertise in execution of turnkey projects by commissioning 51 AIS and GIS substations. The first 765 kV substation of Rajasthan at Anta was commissioned by your Company during the year. Apart from this, turnkey projects were also executed and commissioned for Company''s major customers: PGCIL, MSETCL, WBSETCL, GETCO, CSPTCL and APTRANSCO.

Service business commissioned 11 substations and under took more than 100 major retrofit jobs of circuit breakers, disconnectors and current transformers. It also continued to execute five major Annual Maintenance Contracts including Delhi and Chennai Airport''s power distribution systems.

Your Company''s transformer factory in Vadodara commissioned 40 units of 765 kV ICT/GTs along with 72 units of 765 kV Shunt Reactors. The transformer factory at Naini delivered the largest 400 kV, 520 MVA transformer for Bangladesh apart from delivering on time transformers and reactors to more than 30 customers.

Your Company''s Network Management Services unit commissioned world''s first-of-its-kind National Transmission Asset Management Centre at Manesar for Power Grid. Throughout the year, your Automation unit at Pallavaram has commissioned 740 bays of new and retrofit Automation Substation systems from 66 kV to 765 kV.

All your operations in India, be it in manufacturing, projects, services and automation, continue to be certified for IMS (ISO 9000, ISO 14000 and OHSAS 1800). This reinforces the quality of the processes of the Company and compliance to the same.

TECHNOLOGY DEVELOPMENT THROUGH VOICE OF CUSTOMERS

In December 2014, your Company organised ''Technical Days 2014'' - a two day annual technical event on the current and future technological evolution of the electrical grid in the country. This was the 5th edition of the event and it enhances the dialogue between developers, customers and planners on the latest technologies and trends in the power sector. This also helps Alstom Grid to understand customer''s technical expectations and partner with them in strengthening the country''s grid network. The event was attended by more than 180 customers from various organisations across India. It was inaugurated by Dr Arup Roy Choudhury, Chairman & Managing Director, NTPC Limited along with Mr R. P Sasmal, Director (Operations) Power Grid and other dignitaries.

This year''s conference was themed ''Challenges and solutions of the future transmission grid'' enabling discussions on the future grid challenges like management & monitoring of renewable energy in the grid, asset management, digitisation of networks, storage solutions for smart grid and bringing power to metros and integrating renewables through HVDC links.

In addition to the technical event, your Company showcased a number of technologies and innovations at GRIDTECH 2015 India''s largest exhibition on new technologies in power transmission, distribution, smart grid and communications. The event was organised by state-owned transmission giant, Power Grid.

At the event, Alstom showcased its latest innovations which included 765 kV GIS Switchgear Disconnector Component (manufactured at its Padappai factory at Chennai), Asset condition monitoring and asset management - MS3000 & e-terra asset care, RPH3 controlled switching device for circuit - breakers, Smart grid solutions, Digital substations and eco efficient green transformers. The highlight of the event was Alstom winning the award for the ''Best Stall'' in the category of ''National Companies''.

Hon''ble Minister of Power and Energy, Mr. Piyush Goyal inaugurated Alstom''s booth in presence of Mr. R.N. Nayak, Chairman and Managing Director, Power Grid, Mr. I. S. Jha, Director (Projects), Power Grid and Mr. Devendra Chaudhary Special Secretary Ministry of Power.

ENVIRONMENT, HEALTH AND SAFETY

For your Company, the absolute respect of Environment, Health and Safety (EHS) is a priority.

Safety, health and well-being of its employees and all the people working for the Company is of the utmost importance. When it comes to occupational safety, your Company is working to reduce the number of severe accidents to ''Zero''. This is the aim of the Alstom''s Zero Deviation Plan which remains the backbone of safety attitude of every Alstom employee. The Company encourages and ensures not only its employees but also its sub contractors working on Company''s sites as well as its customers to adhere to its EHS policy.

Alstom Zero Deviation Plan

A single and stringent approach to safety for the entire Alstom Group has been developed to focus on high-risk activities and protect all employees and contractors from the risks they may face when working for Alstom in a factory, at a workshop, at a project and/or construction site. This approach, in short, is the Alstom Zero Deviation Plan. It is made up of three priority actions:

Action 1: In-depth analysis of Severe Accidents

Your Company adopts the "Lesson learnt" Process known as Prevention Notice. It is a visual description, with pictures and drawings to explain the accident, the causes and corrective actions to be implemented across all units and customer sites. Action 2: Implementation and audit of the Alstom Safety Directives

Contractor EHS Audits: Performed on each Alstom critical contractor by the site EHS representative to check that contractors are complying with Alstom requirements.

Alstom Zero Deviation Plan (AZDP) Audits: AZDP Audits are done by internally qualified auditors.

General Planned Inspections (GPIs): GPIs are performed by the work area supervisor, supported by the site EHS manager.

Action 3: A stronger control of contractors

A clear set of Alstom EHS requirements for contractors have been defined. These requirements must be applied by all contractors across region when working on Alstom sites or under Alstom''s responsibility. An Alstom Safety Directive - Control of Contractors, focuses on ensuring its implementation. Compliance with this Directive is audited Your Company''s thrust on EHS continued with greater focus on spreading awareness and education amongst its employees and external contractors about safety aspects and enabling them to run smooth and safe operations at project sites.

Your Company also strives to take care of the environment and as such, is committed to full compliance of its operations with all applicable regulations. Beyond regulatory requirements, it also strives for continuous improvement of its processes with clear objectives, to reduce the environmental footprint of its operations.

Your Company is playing a lead role in improving EHS standard in India, by using advance equipment to reduce the risk at work. Several customers have recognised Alstom''s efforts in improving EHS practices, by awarding of ''Best EHS Performance certificates.

HUMAN RESOURCES

Human Resource (HR) Governance of your Company continues to be the foundation for improved employee performance and job satisfaction. Yojna, the annual strategic workshop was organised to deliberate and strategise on the future challenges and keep the HR team ready in its pursuit. Through Samvad, the dialogue forum, review of HR actions and programs continue throughout the year.

Integrated Talent Management, which is aligned to the dynamic business context continues to be a strategic priority for your Company. Talent issues are deliberated on quarterly basis at the country level Talent Governance Council.

Improving female gender diversity, to 8% of its workforce from the current level of around 6.5%, is one of the new priorities identified during the year. Under the Performance Management Cycle (PMC) and through People Review (PR) mechanism, high potential managers and leaders are identified for shaping their skills and capabilities for a growth oriented career in the organisation. Project Shikhar, the project management competency programme, enriched around 200 managers all over the country. Your Company continues to nurture talent through technical trainings and global Technical Experts Certification programme. Various other technical and behavioral, including leadership programmes were conducted with special focus on business communication, effective team management and self-improvement programmes. The Company continued its learning innovations like learning @ 70 mm and actively followed the lean development strategy. Your Company also focused on localisation of programmes to remain cost effective.

To keep its employees highly engaged towards the goals of the Company, many activities like blood donation camps, vaccination for swine flu, social extension activities like plantations, community cleaning etc., were carried out at all its locations under the ENGAGE banner. Your Company also undertook several social activities like Knowledge Race quiz competition, Winter Games etc. Under the Health and wellness initiative, your Company stressed upon the periodic health check-up under its Annual Health Check-up programme. A Health Run was also organised at all its site locations. It also recogniesd the long service of 10 and 25 years employees through long service awards.

With its comprehensive HR programmes and actions, your Company keeps its talent pool well poised for new business goals and challenges.

INFORMATION SYSTEMS AND TECHNOLOGY

Being technology driven, your Company uses latest Information Systems and Technology to enhance its business performance and improve the operational excellence. The Company has in place state-of-the-art IT infrastructure and implements effective IT policies, supported by tools like Smart Cards, Single Sign-On, My IT Portal, Managed File Transfer etc. It is ensured that IT environment continuously improves, to meet ever growing business needs, by investing in technology upgrades in Hardware, Software, and Network e.g. up gradation of PC models, operating system upgrades from Windows XP to Windows 7, etc.

Collaborative solutions like Unified Communication have been implemented, to enhance the employees'' efficiency and business productivity. The Company has ERP system in place, which improves performance of the business through information sharing and integration. In addition, best-in-class information systems are used in the areas of Sales and Marketing, Human Resources, Design and Engineering and Project Management.

DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance with section 134(5) of the Companies Act, 2013, the Directors of your Company confirm:

- that the applicable Accounting Standards have been followed in the preparation of annual accounts and that there are no material departures;

- that such accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2015 and of the profit of your Company for the year ended on that date;

- that 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 your Company and for preventing and detecting fraud and other irregularities;

- that the annual accounts have been prepared on a going concern basis;

- that the internal financial controls to be followed by the Company have been laid down and such internal financial controls are adequate and were operating effectively; and

- that proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively.

DIRECTORS

During the year under review, your Company appointed Mr. Bhanu Bhushan as Independent Director with effect from July 23, 2014 for a period of five years.

During the year under review, the Board of Directors of your Company also co-opted Ms. Isabelle Compain-Gerlier as additional director liable to retire by rotation and Dr. Kirit S. Parikh as additional director in independent category with effect from March 28, 2015. The Board of Directors of your Company at their meeting held on May 29, 2015 co-opted Mr. Rakesh Nath as additional director in independent category with effect from June 1, 2015.

It is proposed to re-appoint Mr. Rathindra Nath Basu as Managing Director at the forthcoming Annual General Meeting (AGM) for a further term of two years with effect from February 1, 2016, following the conclusion of his present tenure on January 31, 2016. It is also proposed to re-appoint Mr. S.M. Momaya as Whole-time Director & Chief Financial Officer at the forthcoming AGM for a further term of two years with effect from September 1, 2015, following the conclusion of his present tenure on August 31, 2015.

Mr. Ravi Kumar Krishnamurthy who was earlier an alternate director to Mr. Pierre Laporte was appointed as alternate director to Mr. Michel Augonnet with effect from March 28, 2015. Due to Mr. Laporte''s presence in India at various times, Mr. Krishnamurthy ceased to be an alternate director for short spells of time and was intermittently re-appointed as an alternate director to Mr. Pierre Laporte from time to time.

In terms of section 152 of the Companies Act, 2013 and Articles 104 and 105 of Articles of Association of the Company, Mr. Michel Augonnet and Mr. Pierre Laporte, Directors of the Company retire by rotation at the ensuing AGM. Mr. Michel Augonnet, being eligible, offers himself for re-appointment. With a view to make composition of the Board of Directors compliant with listing agreement, the Board recommends that the vacancy created by Mr. Pierre Laporte''s retirement shall not be filled.

Necessary resolutions for the appointment/re-appointment, etc. of the aforesaid directors have been included in the notice convening the ensuing AGM. Your directors commend their appointment/re-appointment.

During the year under review Mr. T.S. Vishwanath, independent non-executive Chairman, stepped down as Chairman/ Director of the Company with effect from July 1, 2014 and Mr. Michel Augonnet was appointed as Chairman of the Company with effect from July 1, 2014.

Declaration by Independent Directors

All the Independent Directors of your Company have made declaration to the Company that they meet all the criteria of independence laid down under section 149(6) of Companies Act, 2013 and clause 49 of Listing Agreement with the Stock Exchanges.

Familarisation Programme for Independent Directors

Your Company has adopted a ''Familarisation Programme for Independent Directors'' to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. Your Company aims to provide its Independent Directors, insight into the Company enabling them to contribute effectively.

The details of familiarisation programs may be accessed at the web-link http://www.alstom.com/countries/india/investor-relations/ alstom-td-india-limited/corporate-governance/

As part of its familiarisation program of Independent Directors, the Company also organized a formal training for its Independent Directors conducted by Indian Institute of Corporate Affairs, covering subjects, What Boards Do, Audit committee and Accountability and Liability of independent directors.

AUDIT COMMITTEE

The audit committee of your Company comprises of Mr. Chandan Roy as the Chairman and Mr. Bhanu Bhushan and Ms. Isabelle Compain-Gerlier as other members. Details in respect of the audit committee are provided in Corporate Governance Report forming part of the Directors'' Report.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

Your Company has formulated an "Alert Procedure" to ensure the establishment of vigil mechanism, to provide an avenue to all stakeholders (including employees and directors) to report concerns about unethical behaviour, actual or suspected fraud or violation of the ALSTOM''s code of conduct or ethics policy. The said policy may be accessed at the web-link http://www.alstom.com/countries/india/investor-relations/alsto m-td-india-limited/corporate-governance/

NOMINATION AND REMUNERATION POLICY

The Board of Directors of your Company in terms of the section 178 of the Companies Act, 2013 and clause 49 of the Listing Agreement with Stock Exchanges has on recommendation of Nomination and Remuneration Committee, approved a Nomination and Remuneration Policy. The aforesaid policy of the Company on director''s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of directors and other matters is annexed as "Annexure B".

PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of the Directors individually including Independent Directors, Board as a whole and of its various committees, on parameters such as skills, knowledge, participation in meetings, contribution towards corporate governance practices, compliance with code of ethics, etc.

Independent Directors in terms of Companies Act, 2013 and clause 49 of Listing Agreement, carried out performance evaluation of non-independent directors, Chairman of the Board and Board as a whole with respect to knowledge to perform the role, time and level of participation, performance of duties and level of oversight and professional conduct and independence.

The Directors expressed their satisfaction with the evaluation process.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Details as required under section 197(12) read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as "Annexure C".

A statement showing the names of employees drawing remuneration in excess of the limits as set out in section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as "Annexure D".

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return is detailed in form MGT.9 annexed as "Annexure E".

NUMBER OF MEETINGS OF THE BOARD

During the year under review, nine meetings of the Board of Directors were held, details of which are provided in Corporate Governance Report forming part of the Directors'' Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of investment made are detailed in Note 12 to the financial statements forming part of the Annual Report. Your Company has not provided any loan, guarantee or securities under section 186 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

In terms clause 49 of the Listing Agreement, Board of Directors of your Company has approved Related Party Transactions Policy on dealing with Related Party Transactions. The policy may be accessed at the web-link

http://www.alstom.com/countries/india/investor-relations/alsto

m-td-india-limited/corporate-governance/

All related party transactions during the year under review were on arm''s length basis and in the ordinary course of business. There were no material related party transactions made by the Company which could be considered material in accordance with Related Party Transactions Policy of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars, as prescribed under sub-section 3(m) of section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are provided in "Annexure F", which forms part of this report.

RISK MANAGEMENT

The Board of Directors of your Company has laid down a Risk Management Policy for the Company. It identifies elements of risks inherent to the business pertaining to tender and contract execution, operational and financial, environment, health and safety, reputation and image, currency fluctuation, compliance, etc. It also contains a control matrix in respect of sources and consequences of above risks and control measures to help manage them. Every unit and function is required to deploy the control measures and ensure timely reporting.

In the opinion of the Board, none of the above mentioned risks threaten the existence of the Company.

INTERNAL FINANCIAL CONTROL

The Board of Directors of your Company is satisfied with the Internal Finance Control process. Internal control environment of the Company is reliable with well documented framework to mitigate risks. A detailed analysis is provided in the Management Discussion and Analysis Report forming part of Directors'' Report.

CORPORATE GOVERNANCE

The Company is committed to maintain and adhere to the highest standards of Corporate Governance practices.

Pursuant to clause 49 of the Listing Agreement with Stock Exchanges, Reports on Management Discussion and Analysis and on Corporate Governance have been included elsewhere in this Report as separate sections. A certificate from M/s S. N. Dhawan & Co, Chartered Accountants regarding compliance of conditions of Corporate Governance as stipulated in clause 49 of the Listing Agreement has also been included in the Annual Report.

Members attention is invited to the observation made by M/s S. N. Dhawan & Co, Chartered Accountants regarding requirement of appointing requisite Independent Directors on the Board. Post resignation of the non-executive independent chairman effective from July 1, 2014 and simultaneous appointment of a non-executive director as the chairman, who is in employment with promoter group company, the Company is required to have minimum fifty percent members of the Board as independent directors (as against one third required earlier). In this respect, the Board of Directors has appointed three additional independent directors and has taken steps to be compliant with clause 49 II A of the listing agreement with stock exchanges by forthcoming Annual General Meeting.

OPEN OFFER BY GENERAL ELECTRIC

GE Energy Europe B.V. ("Acquirer") along with General Electric Company ("GE" ) and GE Industrial France SAS has made a Public Announcement on May 5, 2014 under regulations 3, 4 and 5(l) read with regulation 15(1) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 for the Open offer (the "Offer") for acquisition of up to 64,011,639 shares in the Company from public shareholders representing 25% of the total paid-up equity share capital of the Company at an offer price of Rs. 261.25 per share. As per Announcement, the Acquirer will proceed with Offer, only if the underlying transaction to the Offer is consummated. For the underlying transaction, the French Foreign Investment authorisation has been obtained and Competition and regulatory authorisations processes are underway in a number of jurisdictions. The promoter company, ALSTOM Holdings has informed the Company that Competition Commission of India has approved the proposed combination under section 31(1) of Competition Act, 2002 on May 5, 2015.

STATUTORY AUDITORS

M/s. S.N. Dhawan & Co., Chartered Accountants, were appointed as statutory auditors at previous AGM to hold office till the conclusion of 62nd AGM subject to ratification of the appointment by the members at every AGM. In terms of Section 139 of the Companies Act, 2013, appointment of M/s S. N. Dhawan & Co. as Auditors of the Company is recommended for ratification at ensuing AGM.

COST AUDITORS

M/s. Shome & Banerjee, Cost Accountants and M/s. Jugal K Puri & Associates, Cost Accountants, were appointed as cost auditors of your Company for the financial year ended March 31, 2015 with M/s. Shome & Banerjee, Cost Accountants being the Lead Cost Auditor.

The Cost Audit Report for financial year ended March 31, 2014, of the Company was filed on September 9, 2014, well within the specified time under aplicable Companies (Cost Audit Report) Rules, 2011.

In terms of the Companies (Cost Records and Audit) Rules, 2014, as amended, your Company has appointed M/s. Shome & Banerjee, Cost Accountants and M/s. Jugal K Puri & Associates, Cost Accountants, as cost auditors of the Company for the financial year ending March 31, 2016 to audit the cost records of the Company related to the applicable products manufactured at its manufacturing facilities. M/s. Shome & Banerjee, Cost Accountants shall be the Lead Cost Auditor. Their remuneration approved by the Board, is recommended for ratification by the members at the ensuing AGM.

SECRETARIAL AUDITORS

As per section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company appointed M/s. V. K. Chaudhary & Co., Company Secretaries, as Secretarial Auditor of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed as "Annexure G".

In respect of observation made by the secretarial auditors regarding requirement of appointing requisite Independent Directors on the Board, please refer Corporate Governance section of this report for explanation.

ACKNOWLEDGMENTS

The Board of Directors express their sincere thanks to the various Government/ Regulatory authorities, Company''s valued customers, suppliers, vendors, investors, bankers and shareholders for their continued co-operation, trust and support. The Board also expresses its gratitude and deepest sense of appreciation to all the employees, whose professional and committed initiatives and dedicated support in furthering Company''s objectives.

For and on behalf of the Board

Rathindra Nath Basu Managing Director

S. M. Momaya Whole-time Director & Chief Financial Officer

Place : New Delhi Date : May 29, 2015


Mar 31, 2014

Dear Members,

The Directors take pleasure in presenting the Fifty-eighth Annual Report together with the Audited financial statements of the Company for the financial year ended March 31, 2014.

FINANCIAL RESULTS (Rupees millions)

Particulars Year ended Year ended March 31, 2014 March 31, 2013

Sales and Services (Net) 35,235.4 31,518.7

Operating Profit before Finance Cost 2,530.0 1,815.7

(As percentage of net sales) 7.2% 5.8%

Finance Cost (Net) 755.6 759.6

Operating Profit after Finance Cost 1,774.4 1,056.0

Exceptional Items (Profit on Sale of Property) Nil 170.2

Profit Before Tax 1,774.4 1,226.2

Tax Expense 604.2 385.1

Profit After Tax 1,170.2 841.1

Balance brought forward from previous year 7,908.4 7,655.9

Profit available for appropriations 9,078.6 8,497.0 Appropriations

Proposed Dividend 460.9 430.4

Corporate Dividend Tax 75.0 73.2

General Reserve 118.0 85.0

Balance carried forward 8,424.7 7,908.4

DIVIDEND

Your Directors take pleasure in recommending a dividend of 90% (Rs. 1.80 per share) for every Equity Share of face value of Rs. 2/- each, for the financial year ended March 31, 2014. This will absorb Rs. 535.9 million (inclusive of tax).

HUMAN RESOURCES

The talent management and development practices of your Company continuously align with Company''s business priorities. Towards this endeavour, all the Human Resource (HR) action plans were consistently reviewed under its institutionalised HR Governance framework.

In order to create and sustain effective employee engagement, diversified set of employee oriented activities like cultural events, blood donation camps, sports meets, etc., were conducted under the `ENGAGE'' initiative. In all, 84 employees at different sites were given long service awards for their dedicated service of 10 or 25 years to the Company.

Capability building thrust has been maintained through our flagship programmes like Project Shikhar (project management competency), Learning @ 70mm (speed learning in behavioural and functional areas through creative videos), Pocket Trainer (innovative knowledge dissemination) and various other technical and non-technical programmes. The pool of internal trainers has also been leveraged to augment our learning initiatives. Under the global initiative of Technical Certification, 87 people from grid got certified as senior experts, experts and specialists, which is a significant recognition of Company''s people credentials.

Keeping employee interest a priority, the Company also rolled out scheme for subscription to National Pension System (NPS) for its employees.

The Company also showed a greater resilience and readiness in addressing location-specific business challenges and priorities, whether about consolidation or implementation of new initiatives. During the year under review, the industrial relations (IR) scenario was peaceful and conducive to the business changes. Your Company''s HR practices, namely, HR Governance, Work-Knowledge Transition, Learning @70mm and Pocket Trainer have been considered as best practices for group level roll- out in India. This is indicative of Company''s continuous thrust on improving its HR quality.

PARTICULARS OF EMPLOYEES

A statement, as required under section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this report. In accordance with the provisions of section 219(1)(b)(iv) of the said Act, the report and accounts are being sent to the shareholders of the Company, save the statement of the particulars of employees, under section 217(2A) of the Act, which is available for inspection at the Registered Office, during working hours up to the date of the Annual General Meeting. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company and the same will be sent by post.

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 the Board of Directors) Rules, 1988 are given in the Annexure, which forms part of this report.

INFORMATION SYSTEMS AND TECHNOLOGY

The Company uses latest Information Systems and Technology to enhance its business performance and improve the operational excellence. The Company has in place state-of-the-art IT infrastructure and implements effective IT policies, supported by tools like Smart Cards, Single Sign-On, Identity Manager, etc. It is ensured that the IT environment is continuously improving, to meet ever growing business needs, by investing in Hardware, Software, and Network upgrades. To enhance the employees'' efficiency and business productivity, collaborative solutions like Telepresence and BYOD have been implemented. The Company has ERP system in place, which improves performance of the business through information sharing and integration. In addition, best-in-class information systems are used in the areas of Sales Marketing, Human Resources, Design & Engineering and Project Management.

DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance of applicable section 217(2AA) of the Companies Act, 1956, the Directors of your Company confirm:

That the applicable Accounting Standards have been followed in the preparation of final accounts and that there are no material departures;

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

That 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 your Company and for preventing and detecting fraud and other irregularities; and

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

DIRECTORS

In the course of the year under review, Mr. Rathindra Nath Basu, Managing Director was re-appointed for a further period of two years with effect from February 01, 2014.

Mr. S.M. Momaya (whole-time Director & Chief Financial Officer appointed for a term of two years with effect from September 01, 2013), was co-opted as Director in the casual vacancy caused by the resignation of Mr. Michel Serra at the board meeting held on August 19, 2013 and accordingly he holds office of Director upto the date of Annual General Meeting. The Company has received requisite notice from a member proposing his name for appointment as Director. Considering expertise, rich experience and profile of Mr. Momaya, the Board is of the opinion that his appointment will immensely benefit the Company and would be in interests of the Company.

Mr. Chandan Roy, Non-executive independent director, retires by rotation in terms of the erstwhile provisions of the Companies Act, 1956. It is proposed to appoint him in terms of section 149 of the Companies Act, 2013 as an independent director, not liable to retire by rotation, for a period of five years following the conclusion of the Annual General Meeting. The Company has received declaration from Mr. Chandan Roy confirming that he meets with the criteria of independence as prescribed both under sub-section (6) of section 149 of the Companies Act, 2013, and under clause 49 of the Listing Agreement with the Stock Exchanges.

Necessary resolutions for the appointment/re-appointment of the aforesaid directors have been included in the notice convening the ensuing annual general meeting.

Your directors commend their appointment/re-appointment.

Mr. T.S. Vishwanath, independent non-executive Chairman, having expressed his wish, will step down as Chairman/Director of the Company with effect from July 1, 2014 and Mr. Michel Augonnet, Chairman- designate, will assume office with effect from July 1, 2014.

CORPORATE GOVERNANCE

The Company is committed to maintain and adhere to the highest standards of Corporate Governance practices.

Pursuant to clause 49 of the Listing Agreement with Stock Exchanges, Reports on Management Discussion and Analysis and on Corporate Governance have been included elsewhere in this Report as separate sections. A certificate from M/s S. N. Dhawan & Co, Chartered Accountants confirming compliance with clause 49 of the Listing Agreement has also been included in the Annual Report.

In accordance with clause 49 of the Listing Agreement with Stock Exchanges, your Company has adopted a ''Code of Conduct and Ethics for its Directors and Senior Executives''. This Code is in addition to the ALSTOM Code of Ethics, which is applicable to all employees of the ALSTOM Group.

INCREASE IN SHARE CAPITAL PURSUANT TO INSTITUTIONAL PLACEMENT PROGRAMME

In the course of the year under report, your company issued and allotted 16,942,500 equity shares of Rs.2/- each at a premium of Rs.163 per equity share, aggregating to Rs.2,795.5 million, to eligible qualified institutional buyers pursuant to an Institutional Placement Programme ("IPP") in terms of Chapter VIII-A of the Securities and Exchange Board of India (issue of Capital and Disclosure Requirements) Regulations, 2009, as amended. The public shareholding in your company, has increased to 25% of its issued and paid up equity share capital pursuant to the IPP. The equity shares allotted pursuant to the IPP were admitted for listing and trading on Stock Exchanges, where the company''s equity shares are listed. The net issue proceeds have been utilised for repayment of loan (including interest) - Rs.2,493.2 million and the balance towards meeting for the working capital requirements.

OPEN OFFER BY GENERAL ELECTRIC

GE Energy Europe B.V. ("Acquirer") along with General Electric Company ("GE"), GE Industrial France SAS ("Persons Acting in Concert") has made a Public Announcement on May 5, 2014 under regulations 3, 4 and 5(1) read with regulation 15(1) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("Takeover Regulations") for the Open offer (the "Offer") for acquisition of up to 64,011,639 Shares in the Company representing 25% of the total paid-up equity share capital of the Company at an offer price of Rs. 261.25 per offer share.

As per announcement, GE and Alstom on April 30, 2014 have announced that the entities mentioned above have made a binding offer to acquire the thermal power, renewable power and grid businesses of Alstom (the "Power and Grid Business") subject to review and approvals (regulatory or otherwise) mentioned therein; and has also mentioned that the detailed public statement shall be issued and the Offer proceeded with, only if the underlying transaction described here in before is consummated as provided for in the proviso to regulation 13(4) of the Takeover Regulations. Accordingly, if the underlying transaction is not consummated for any reason, the Acquirer and Persons Acting in Concert shall not proceed with the Offer.

The Board took note of above and decided to take any consequential steps only upon the consummation of aforesaid underlying transaction.

COST AUDITORS

With the approval of the Central Government, your Company has re- appointed M/s. Shome and Banerjee as Cost Auditors of the Company for the financial year ended March 31, 2014, to audit the cost records of the Company related to the applicable products manufactured at its manufacturing facilities. The Cost Audit Report for financial year ended March 31, 2013, of the Company was filed on July 31, 2013, well within the specified time under Companies (Cost Audit Report) Rules, 2011.

M/s. Shome & Banerjee, Cost Accountants, 5A Nurulla Doctor Lane, 2nd Floor, Kolkata - 700017 and M/s. Jugal K Puri & Associates, Cost Accountants, Plot No. 3, Sector 22, Gurgaon - 122015 have been appointed as Cost Auditors of the Company for the financial year ending March 31, 2015 with M/s. Shome & Banerjee, Cost Accountants being the Lead Cost Auditor. Their remuneration approved by the Board, is recommended for ratification by the members at the ensuing Annual General Meeting.

AUDITORS

M/s. S.N. Dhawan & Co., Chartered Accountants, the retiring Auditors have given their consent for appointment, are proposed to be appointed statutory Auditors from conclusion of ensuing 58th Annual General Meeting till the conclusion of 62nd Annual General Meeting in terms of section 139 of the Companies Act, 2013.

The retiring auditors have confirmed in writing that their re-appointment, if made, would be within the limits prescribed under section 141 of the Companies Act, 2013 and that they are not disqualified for re-appointment.

ACKNOWLEDGMENTS

The Board of Directors express their sincere thanks to the various Government/ Regulatory authorities, Company''s valued customers, suppliers, vendors, investors, bankers and shareholders for their continued co-operation, trust and support. The Board also expresses its gratitude and deepest sense of appreciation to all the employees, whose professional and committed initiatives and dedication support in furthering Company''s objectives.

For and on behalf of the Board

New Delhi T.S. Vishwanath

June 16, 2014 Chairman


Mar 31, 2013

The Directors take pleasure in presenting the Fifty-seventh Annual Report and Audited Accounts of the Company for the financial year ended March 31, 2013.

The performance of the Company (hereinafter also referred to as "the Company or ALSTOM T&D India") for the financial year under report is not comparable with the previous period, which was for fifteen months period and also for the reason that the Scheme of arrangement for Demerger of Company''s ''Distribution Business'' was effectuated in accordance with law from April 1, 2011. The financial results of the Company for the previous period thus reflect the pre-demerger business upto March 31, 2011 and thereafter the business relating to products, solutions and automation for electricity transmission and the related. The financial results may be viewed accordingly.

FINANCIAL RESULTS (Rupees millions)

Year ended Period ended Particulars March 31, 2013 March 31, 2012 (12 months period) (15 months period)

Sales and Services (Net) 31,518.77 41,390.70

Operating Profit before Finance Cost 1,815.70 3,286.72

(As percentage of net sales) 5.8% 7.9%

Finance Cost (Net) 759.64 1,056.04

Operating Profit after Finance Cost 1,056.06 2,230.68

Exceptional Items (Profit on Sale of Property) 170.15 145.02

Profit Before Tax 1,226.21 2,375.70

Tax Expense 385.13 751.65

Profit After Tax 841.08 1,624.05

Balance brought forward from previous year 7,655.85 6,697.01

Profit available for appropriations 8,496.93 8,321.06

Appropriations

Proposed Dividend 430.39 430.39

Corporate Dividend Tax 73.15 69.82

General Reserve 85.00 165.00

Balance carried forward 7,908.39 7,655.85

DIVIDEND

Your Directors take pleasure in recommending a dividend of 90% (Rs. 1.80 per share) for every Equity Share of face value of Rs. 2/- each, for the financial year ended March 31, 2013. This will absorb Rs. 503.54 million (inclusive of tax) based on existing capital.

PERFORMANCE REVIEW

YEAR OF CONSOLIDATION AND RETAINING MARKET LEADERSHIP

The Indian economy continued to face challenges in the year gone by. The economic headwinds, delays with reforms, mounting SEB losses, hurdles in clearance of power projects and lack of investments had dampened optimism in the Industry thus negatively impacting the overall Transmission and Distribution market in India. The performance of the Company may be considered satisfactory during the year under report and seen in the face of difficult and trying conditions in a contracted market for Company''s products and services, given the overall slowdown of the economy. Notwithstanding, your Company performed rather well and achieved its highest ever order book while retaining its market leadership for the fifth year in a row.

During the year 2012-13, your Company significantly improved its market position in the Utility Segment and consolidated its position in Industry and Infrastructure Segments. Overall, your Company could achieve a balanced portfolio of orders from all the key segments of the market.

During the year 2012-13, your Company has been conscious of margins, while selecting on orders so as to improve the level of profitability. Due to poor levels of margins, your Company did not pick-up orders worth over Rs. 11 billion that was available in the market.

STRONG GROWTH IN HV AND UHV, CONTINUOUS GROWTH IN UTILITY, COME BACK IN HVDC

Your Company has been at the forefront in making significant contribution towards building and expansion of India''s Transmission Infrastructure. While our Country has achieved new heights by introducing 765 kV EHV technology in the Indian electrical grid and making it as the backbone of power transmission, your Company, ALSTOM T&D India, actually delivered and commissioned several of these products and solutions. The Company introduced global technology in India by localising the complete range of HV and UHV products, way back in 2009, by building world class factories to deliver complete products and solutions for customers in India. It will not be out of place to mention that out of fifty 765 kV substations in India, twenty nine of such substations will have products with Alstom Technology.

Power Grid Corporation of India Limited (Power Grid), world''s second largest transmission utility, took initiative to introduce 800 kV HVDC to strengthen the electrical grid''s stability as well as to improve the power flow. By design HVDC, is the technology to transfer bulk power over long distances.

Your Company has a noteworthy presence in the country in HVDC technology having supplied three back to back HVDC projects, which helped interconnection of India''s regional grids of East, West, North and South.

ALSTOM T&D UK, in association with your Company, has been awarded a prestigious 800 kV UHVDC contract worth 370 MEuro or approximately Rs. 26 billion by Power Grid, to connect Champa (Chhattisgarh), Central India, to Kurukshetra (Haryana) in Northern India, to manage bulk power transfer of 3,000 MW.

About 40% value of the contract will be performed by ALSTOM T&D India, in manufacturing some of the critical products such as converter transformers, 400/ 220 kV gas and air-insulated switchgear and substation equipment, communication and Supervisory Control And Data Acquisition systems (SCADA).

In the Network Management Segment, your Company secured a large and prestigious order from Power Grid known as NTAMC Project which shall supervise, manage and control the entire National Transmission and Asset Management of Power Grid''s 192 Transmission substations ranging from 220 kV to 765 kV voltage level.

ALSTOM T&D India also secured an up-gradation contract for the Load Dispatch Centre of Tamil Nadu from TANTRANSCO (Tamil Nadu Transmission Co.).

Your Company also secured the up- gradation contract for Power Grid''s South Regional Load Dispatch Centre confirming Alstom''s leadership position in the Network Management System in India.

The Transmission Grid is increasingly witnessing the emergence of BOOT (Build, Own, Operate and Transfer) based projects. Your Company has successfully won two contracts for UP''s Transmission System at 765 kV level, from the developer M/s MEIL, Hyderabad. The scope of these contracts include 765 kV turnkey AIS substation as well as 400 kV GIS products with associated Substation Automation and Network Management products and solutions.

North-East part of India is also enhancing the Transmission Grid in the Region. AEGCL, Utility of North- East, placed a large turnkey 132 kV substation contract on your Company.

This project is being funded by Asian Development Bank (ADB).

CONSOLIDATION IN POWER GENERATION, INDUSTRY AND INFRASTRUCTURE

The Transmission & Distribution market for Power Generation, Industry and Infrastructure was subdued in 2012-13. Thanks to good position in these segments of the market, your Company could win several orders.

- Bajaj Hindustan selected your Company for the supply of eBoP (Electrical Balance of Plants) for its Super Critical Power project 3x660MW at Lalitpur.

- Reliance Power selected your Company for eBoP solution for their Solar project in Doorsar.

- In Hydro, your Company won the contracts for supply of GIS and Generating Transformers for the Tehri Hydro Power Plant.

- NTPC''s Nabinagar JV has selected your Company for Power Transformers and Reactors for its 3x660MW Power Project.

- In addition, your Company also won several medium and small size orders from its customers in Industry and Infrastructure Segments.

HV AND EHV PRODUCTS ACROSS ALL MARKET SEGMENTS

Your Company continued its success in winning orders for solutions and products ranging from 66 kV to 765 kV from Power Grid and other leading customers. Your Company won orders from Power Grid for supply, erection, testing and commissioning of 20 Nos. of 80 MVAR Reactors for 765 kV substations located at Raichur, Meerut, Kurnool and Varanasi.

The Company also won another large contract for 20 Nos. of 80 MVAR 765 kV Reactors from L&T for the 765 kV AIS substation at Phagi in Rajasthan. The Transmission Utility of Maharashtra MSETCL awarded a large contract for 7 Nos. of 500 MVA Transformers and 4 Nos. of 80 MVAR 765 kV Reactors for their 765 kV substation at Aurangabad, Maharashtra.

Your Company has advanced technology shunt reactor products, with air-gap cores and magnetic shield that ensure low vibration and minimal noise levels. These reactors, once installed in the grid, will strengthen the power transmission networks in Eastern, Northern and Western regions of India. Apart from HVDC and 765 kV AC domain, your Company also maintained its leadership in the conventional transmission market i.e. 400 kV air insulated substations and won several prestigious contracts.

ATTAINING TECHNOLOGICAL LEADERSHIP

Alstom is a technology leader in the T&D domain. For the Indian market, Alstom has always made advance moves, most of the times as the first supplier to do so, to localise advance technology products, automation and solutions for its customers.

ALSTOM T&D India continues to focus on developing innovative solutions like 1200 kV optical current transformer, 1200 CVT, 1200 DSC and digital substation for the Indian Transmission market. These are the future drivers of Transmission Grid and your Company is well poised for rapid growth in this segment.

DIGITAL INSTRUMENT TRANSFORMERS AND FUTURE DIGITAL SUBSTATION

Your Company continued the trend of being the first mover by successfully commissioning one bay of a 220 kV substation with its patented optical instrument transformer, as the step towards India''s first digital substation. The contract for this substation, which is located at Jambuva, Gujarat, was awarded by the state transmission utility - Gujarat Electric Transmission Corporation (GETCO). This is the first of its kind installation in India that uses Alstom''s range of Compact Optical Sensor Intelligence (COSI) products manufactured at Phoenix, USA. This product is locally supported by Alstom''s Instrument Transformer manufacturing unit in Hosur and Substation Automation manufacturing unit located at Pallavaram, Chennai.

The COSI range enables the digitalisation of current and voltage signals through Optical Ethernet Connectivity, enhancing accuracy, significantly reducing the use of copper cables and strengthening the reliability of the system. It also facilitates current transformer sizing calculations. Being SCADA ready, it brings Smart Grid Intelligence to the Substation by allowing operational data exchange with the load dispatch centre. The installation is simplified due to its light weight. It is operationally safe, and the absence of oil and SF6 ensures no adverse environmental impact on end-of-life disposal.

Your Company is leading the efforts in India in delivering digital substation solutions to all its Customers. ALSTOM T&D India''s Digital technology solutions got off to an excellent start with the successful delivery of the 1200 kV digital instrument transformer and 1200 kV disconnector for the 1200 kV Bina Test substation being built by Power Grid.

IMPROVING GRID STABILITY AND EFFICIENCY

In another significant achievement, Alstom Grid Finland, in association with your Company, was awarded a turnkey contract by Power Grid, for providing Fixed Series Compensation (FSC) package for 400 kV Wardha - Aurangabad Transmission Network. Thus, your Company is well positioned to meet the emerging demand of upgradation of the existing transmission infrastructure in the country.

MAKING GRID SMARTER AND INTELLIGENT

Post the Indian grid failure in July 2012, which affected over 620 million people, the Ministry of Power, in association with Power System Operations Corporation Limited (POSOCO) and Power Grid, have introduced the ''Islanding Scheme'' for Delhi. The main objective of the initiative is to isolate the generating stations so that supply of power does not get affected in case of grid collapses.

The prestigious project for Grid Islanding of Delhi was awarded to your Company. Some of the major features of this project are:

- Isolate Delhi''s Power system from the regional grid in case of grid disturbance, continue to meet emergency loads.

- Perform extension of power supply for the startup of generating stations.

- Load shedding to be achieved with fast response Numerical Relays.

- Availability of Real Time data for the proposed SCADA system.

Your Company is in advance stage of successfully commissioning this prestigious project. Several grid islanding projects are expected to be awarded in the next 2-3 years.

ENGAGING CUSTOMERS IN ALSTOM''S TECHNOLOGY DEVELOPMENT PROCESS

As a technology leader, Alstom, always shares its future technological development plans with the thought leaders of India. Your Company organises ''Technical Days'' as an annual event, which brings together, technical experts from Customers in the field of power transmission as well as specialists from Alstom Grid''s global pool of Experts. The theme for this year''s ''Technical Days'' was - ''Future Super Grid: Handling complex Grid''. ''Technical Days'' was attended by more than 130 Technical Specialists from 44 customer organisations across India and neighbouring countries, making this event a grand success.

Customers like Power Grid, NTPC, GETCO, Reliance Power, Reliance Industries, TATA Power, etc. nominated a number of technical experts for this Conference.

ENHANCED CUSTOMER ENGAGEMENT AND CUSTOMER CONNECT

In addition to the technical seminar, a series of customer centric events known as ''GridNXT'' were organised across the country with the aim to communicate with customers about ALSTOM T&D India''s future action plans towards building India''s Electrical Grid infrastructure over the next 10 years for the 12th and 13th plan periods. ''GridNXT'' was also used as a platform to ensure seamless transfer of information and knowledge about your Company, thus resulting in enhanced customer confidence in your Company.

Power Grid takes the leadership role for the Gridtech event to showcase advance technological solutions for the transmission grid. In ''Gridtech 2013'' exhibition your Company showcased the unique "Smart Grid concept" model that depicted the emerging challenges in the grid with increased Renewable generation, Automation of power distribution and Concern on cyber security covering both AC/DC solutions. The model, unique of its kind for ''Gridtech 2013'', was highly appreciated by all customers and participants of ''Gridtech 2013''. As the world''s leading supplier of network management and substation solutions, Alstom views Smart Grid technologies as an absolute priority, that combines key technologies to provide immediate benefits to energy producers, Transmission & Distribution utilities, industries and end-users.

ALSTOM T&D India also showcased other key products and solutions, such as complete digital substation with Grid boxes and process bus operation, dynamic line rating and new generation P60 single management box Relays for feeders (MiCOM Agile). ALSTOM T&D India bagged the coveted award for the "Best International Exhibitor" in the International category owing to its world-class display of wide range of high technology products and solutions at ''Gridtech 2013''.

CUSTOMER SERVICE AT THE CORE

Service Business Group of ALSTOM T&D India makes sure that the Customer relationship is carried forward much beyond the time when the product is supplied and commissioned at Customers'' sites. By providing service support through the lifetime of the supplied products and systems, the Service business ensures that the Customers continue to reap benefits from their capital investments in the Company''s products and systems.

The Service Group covers all the aspects of product support during its lifecycle through Services such as Network Consulting, Supervision of Erection and Commissioning,

Customer Training and, Spare Parts.

In addition, Field Services like testing, troubleshooting, maintenance and overhauling are also part of the service offering. The Service business also has a specialised team equipped with the expertise of Renovation and Modernisation of ageing products with minimal downtime.

The Service Group also provides valuable feedback to the Product Units with regard to the long term field performance and customer experiences of the supplied products and systems which helps the product development team towards customer valued innovation.

OPERATIONAL EXCELLENCE

In today''s competitive business scenario, differentiation through Operational excellence is the best way to gain and retain Customer confidence. Through continuous and dedicated efforts, your Company has commissioned a record number of 88 substations across India at various voltage levels ranging from 66 kV to 765 kV during the year under report, thereby making significant contribution to the strengthening of India''s Transmission and Distribution networks. Customers appreciated this extra-ordinary performance of your Company. Gujarat Energy Transmission Company has selected your Company as the best EPC Contractor for the year 2012-13.

The Company has delivered and commissioned a significant number of Substations for utilities such as Power Grid, MSETCL and WBSETCL. Your Company has also commissioned India''s largest EBoP project at 2X600 MW Mahan for Essar Power, the largest Conversion station for Hindalco at Mahan and 220 kV Substation for Reliance Doorsar Solar Power Plant.

In the area of Network Management System ALSTOM T&D India also commissioned the state-of-the-art Load Dispatch Center for Uttrakhand, covering the entire state transmission network from 132 kV to 400 kV.

During the year under report, your Company has successfully installed and commissioned the Power Distribution System for the newly inaugurated Terminal at Chennai International Airport. This state-of- the-art Power System comprises of 132 kV GIS, Medium Voltage Switchgear and advanced automation control system. In recognition of the good work done, the Annual Maintenance contract of the Power Distribution System has also been awarded to your Company by AAI.

ALSTOM T&D India has successfully installed and commissioned the Power Distribution System linked to modernisation of the SAIL-IISCO Steel plant in West Bengal. Eight nos. of Load Break Distribution Stations (LBDS) comprising 700 nos. of Medium Voltage Switchgear, 21 nos. of Transformers, 300 kms of HV cables and advanced SCADA system including all civil works were commissioned, during the course of the year under report.

Apart from delivering and commissioning a large number of substations, the Company also supplied significant number of HV and EHV AIS products such as Transformers, Instrument Transformers, Circuit Breakers, Disconnectors, GIS Substations, Automation products, Automation solutions, Network Management Systems and Asset Management and after Sales Services to our Customers in Utility, Power Generation, Industry and Infrastructure segments.

Your Company also met delivery requirement of fast track projects, such as Power Grid''s Myanmar 220 kV substations, by manufacturing and testing a record number of 20 Transformers within a short period of 8 weeks. The Transformer factories in Naini and Vadodara have manufactured and commissioned a significant number of Power Transformers and Reactors ranging from 132 kV to 765 kV voltage levels. The Company received appreciation letters from customers such as NTPC, Power Grid and Reliance for timely and safe installation, testing and commissioning of Transformers, which is noteworthy.

Your Company''s world class switchgear factory at Padappai produced a record number of Circuit Breakers ranging from 66 kV to 765 kV voltage levels and Disconnectors from 400 kV to 765 kV voltage levels. During the year 2012-13, the Padappai factory also produced the UHV 1200 kV Disconnector for Power Grid''s Bina 1200 kV test substation.

The Company''s world-class GIS factory at Padappai has, till date, manufactured and delivered more than 200 Bays of GIS and have commissioned over 85 GIS Bays at various voltage levels ranging from 66 kV to 400 kV.

World-class Instrument Transformer factory at Hosur also produced a record number of Instrument

Transformers from 66 kV to 765 kV voltage levels. During the year 2012-13, this factory also produced World''s first 1200 kV Optical Current Transformer for Power Grid''s 1200 kV Test substation at Bina.

The manufacturing capacity at your Company''s world-class Substation Automation and Digital Relay MiCOM Px40 facility located at Pallavaram, Chennai, has been doubled since November 2012 through the addition of Lean manufacturing lines with indigenously developed Test equipments.

Technology absorption from ALSTOM''s Centre of Excellence in Stafford, UK has been completed for Numerical Busbar Protection (MiCOM P74x), Numerical Differential Protection (MiCOM P64x) and Numerical Generator protection (MiCOM P345) in our manufacturing lines at Pallavaram Plant.

The Harsh Environment Coating (HEC) equipment for Electronic boards used in MiCOM Numerical protection has also been added to make your Company Relays compatible with Harsh Environment.

The Pallavaram Automation manufacturing unit also successfully completed ISO 9001 surveillance audit, Recertification audit for ISO 14001 and OHSAS 18001 and was Certified by CFE LAPEM for product qualification in Mexico.

As a significant commercial success, your Company has sold over 400 MiCOM P40 AGILE relays to multiple market segments including Oil and Gas sector.

The Substation Automation R&D facility at Noida has been substantially expanded with a dedicated team of over 30 Experts working on new features of Digital Control System "DS AGILE". This includes validation of the application, Testing of Automation Scripts and validation of New HMI. These activities are being performed under state-of-the-art Test automation environment using latest hardware and software viz, Protocol Simulators, IED Simulators, Injection Kits, etc.

The scale of manufacturing operations at our factories at Pallavaram, Padappai, Hosur, Vadodara, Naini and Noida remained at high throughput level, all through the year leading to significant contribution in delivering products to our Customers for India''s T&D network.

SERVICES

Service business activity continues to grow in double digits, despite the economic slowdown. Continuing with the focus on securing long term maintenance contracts, Service group mobilised the teams on two more such contracts - one for power distribution system at Chennai airport and the other for a 400 kV switchyard associated with an IPP.

The Technical Institute in Padappai continues to provide high quality services and training to our esteemed customers. During the year under review, your Company achieved a major milestone by receiving an order to train over 400 staff of a large Customer on the aspects of Electrical Safety. Since 2007 ALSTOM T&D India has taken significant initiatives in spreading and practicing EHS with its employees, contractors and Customers. ALSTOM T&D India is ready to offer this EHS expertise and experience to the Customers through such programmes.

Another major achievement was the successful site repair of a 70 MVA, 400 kV generator transformers at a Hydro Power station of NHPC. Due to the remote location of the site, the transport of the transformer for repair to the factory was not feasible. ALSTOM T&D India Service team took up the challenge and organised complete technical resources at site, to carry out the repair of the transformer, involving complete dismantling and re-assembly of the full transformer assembly, at the site itself.

The Service team also delivered and commissioned the first HYPACT (compact switchgear) unit on turnkey basis for MSETCL.

Service business also forayed into the R&M activity related to the e-BoP of a power plant by winning the contract for Renovation and Modernisation of electrical systems for 210 MW Unit of Bandel TPP of WBPDCL.

QUALITY AND INDUSTRIAL EXCELLENCE

Your Company strives to be the best in the class and continue to achieve industry excellence to maintain its role as a leader in the industry. The Company has deployed Alstom Production System (APS), the global Industrial excellence model of ALSTOM Grid. APS provides the necessary road maps and standards to improve and sustain Safety, Quality, Cost and Delivery (SQCD) performance and measure progress towards industrial excellence in all our manufacturing plants.

Following are some of the major achievements:

- The innovation project titled "Cutting Schedule optimisation" from turnkey Solutions Unit has won the GOLD Award under the category ''Small but Smart'' in the year 2012-13 ALSTOM Innovation Awards.

- 38 Lean 6 Sigma improvement projects contributing to significant operational performance improvement, were successfully executed.

- Turnkey Solution unit received award for ''Excellent Project Execution'' from Reliance for Doosar solar Project.

- All manufacturing units have achieved certified Management systems for Quality and EHS.

- Substation Automation manufacturing unit at Pallavaram was approved by CFE-LAPEM for supply of Protection Relays family (MiCOM PX4X) and Legacy Relays family (HA MiDOS Range) to Mexico region.

- The transformer manufacturing unit at Naini was awarded ''Greentech Gold Environment and Safety Awards - 2012''. This unit also successfully completed NABL reassessment with enhanced scope including new scope for oil and CRGO testing.

- 315 MVA 400 kV auto transformer was successfully tested for dynamic short circuit at KEMA Netherland during April-Jul 2012.

The Annual Quality and Industrial Excellence (Q&IE) conference 2013, held in April 2013, provided a platform for networking and sharing best practices among the Q&IE Community of ALSTOM T&D India. Thirty nine best practices posters covering lean manufacturing, Lean 6 Sigma and EHS process improvement actions were showcased.

COMMITTED TO ENVIRONMENTAL HEALTH AND SAFETY (EHS)

ALSTOM T&D India is committed to improve the Environment, Health and Safety (EHS) of its work environment by continuous training and coaching of its employees, contractors, customers and other stake holders.

To educate employees who work in high risk activity, your Company deployed the ''Alstom Zero Deviation'' Plan in June 2012. The objective of this initiative was to sensitise employees towards the practical and sustainable processes to manage risks and also aims to bring in the behavioural change necessary to achieve ''Zero Tolerance to deviation'' for high risk activities. Specially designed E-Learning modules for ''High Risk Activity'' training were made available to the employees. In addition the training was further rolled out to factories and sites in local languages, to train all workmen, using technique such as Flip Charts with pictures of safe practices guided by supervisors conducted in the local language.

Unit Management Committee Members were also specially trained for "EHS Senior Leadership Programme and Managing EHS" programmes.

Alstom''s global EHS Sr. Vice President and Alstom''s Group Sr. Vice President of HR led a one day EHS programme in February 2013 across all Alstom businesses and functions to stress on the deployment and practice of Zero Deviation Plan of EHS.

To promote the awareness of EHS across all sections of the employees, your Company celebrated World Environment Day on June 5, 2012 to promote green technology, reduce waste generation, improve energy efficiency, and reduce water consumption. ALSTOM T&D India celebrated the National Safety week, in the 1st week of March 2013, by a week long safety campaign. During this period, special training for workmen and employee engagement programmes were conducted at manufacturing units, business units and project sites through contest on safety, slogan, EHS poster design etc.

All the manufacturing facilities of your Company and project sites are maintaining Integrated Management System Certification (ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007). Your company has installed pollution control measures at all facilities to minimise the impact on environment. The instrument transformer unit at Hosur had taken up the project of Waste Hunting to minimise the generation of paper scrap in Current Transformer taping which is one of the major raw material used in the manufacturing process. Consequently, the scrap generation got reduced from 11% to less than 5%. At Padappai, the Chennai manufacturing unit, the reduction of water consumption was achieved by using specially designed washers installed in all taps, to reduce the flow rate of water resulting in substantial saving of water consumption (50-55%).

Some of the good practices adopted at various units were:

- Health Awareness camps for Asthma and Dengue to generate awareness amongst all employees.

- EHS Training of workmen in the sites using Pictorial Flip charts.

- Unique identification and tagging using nylon tag and ferule for scaffolds, electrical power tools, lifting devices etc.

- Bio-composting pilot project successfully run to convert dry leaves into organic manure.

- Lifesaving rules communicated widely across organisation.

HUMAN RESOURCES

In the course of the year under report, your Company continued to maintain its strong focus on employee engagement to help ALSTOM T&D India retain the skills and resources needed to fulfil its commitments to customers.

Identifying employees with high potential to grow and grooming them for competitive positions have been a constant effort to ramp up the Leadership Development Process.

Your Company aims to be the most preferred employer in the industry and remains committed to developing its employees to meet the current and future challenges of the business. The Country Recruitment Team successfully recruited around 300 professionals spread across various functions and businesses to support the growth of the business.

Significant initiatives were taken in improving employee engagement and motivation through programmes such as lets chat, Leader Speak, AMP- Accelerated Management Programme, IMPACT-Business Communication, PACE-Powering Alstom''s Competitive Edge, helped your Company to increase employee engagement to achieve its goals. The entire HR management team, with the support of Business and Functional leaders constantly watch and monitor to ensure that the behaviour of the employees is guided by the essence of the Company''s core values i.e. Trust, Team and Action on a sustainable basis. Charter of Sustainability Development has also been incorporated to reinforce ethics and compliance for all the employees. HR governance is exercised through on an annual, quarterly and monthly basis, respectively, where the focus is on HR Strategy and actions to effectively support businesses.

Thanks to all these HR initiatives, your Company is proud to have won the ''Innovation Gold'' Award for two consecutive years in the Green Innovation and Small but Smart Categories, respectively, within ALSTOM Group Companies at the global level. 58 experts and specialists were identified and recognised under the GRID Technical Expert Community, leading to a more refined approach towards R&D.

RESEARCH AND DEVELOPMENT

Research and Development (R&D) forms an important part in Company''s leadership strategy. The Company makes investments in several R&D programmes across the product categories from time to time. ALSTOM T&D India benefits from Global R&D effort of Alstom worldwide. The Company derives the benefit of global value engineering efforts, which among others helps in reduced lead time and is adaptive of specific customer requirement.

The Company has set up a Global R&D centre at Vadodara and Hosur. These centres help in evolving appropriate technology for the market environment.

CORPORATE SOCIAL RESPONSIBILITY (CSR)/ SUSTAINABLE DEVELOPMENT

Through sustainable initiatives, your Company manages the business of today with the future in mind. The Company''s Corporate Social Responsibility (CSR) activities, reflect its philosophy of helping to build a better, more sustainable society by taking into account the societal needs of the community. Across all sites, your Company is engaged in several initiatives such as Environment, Right to Education and Healthy Life. Assessing the needs of community, the Company supported the Panchayath Union middle school, Athanancheri by providing the school children with uniforms, shoes and identity cards.

Plantation initiatives are a regular feature at most of Company''s facilities and their neighbourhood under Company''s Green Initiative for sustainable development programme.

Community welfare initiatives, conducted throughout the year 2012-13, helped appreciation and involvement of employees in social activities.

PARTICULARS OF EMPLOYEES

A statement, as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time, forms part of this report. In accordance with the provisions of Section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company save the statement of the particulars of employees under Section 217(2A) of the Act, which statement is available for inspection at the Registered Office, during working hours up to the date of the Annual General Meeting. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company and the same will be sent by post.

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 the Board of Directors) Rules, 1988 are given in the Annexure which forms part of this report.

INFORMATION SYSTEMS AND TECHNOLOGY

The Company uses Information Systems and Technology to enhance business performance and improve operational excellence. The Company has deployed various tools and policies for its IT infrastructure and IT security. The Company takes care to ensure that the business needs are supported by investing in Network Upgrades, Mobility Solutions and various audio visual devices. The Company has ERP system in place which improves performance of the business via information sharing and integration.

DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance of Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors of your Company confirm:

- that the applicable Accounting Standards have been followed in the preparation of final accounts and that there are no material departures;

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

- that 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 your Company and for preventing and detecting fraud and other irregularities; and

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

DIRECTORS

In terms of Section 256 of the Companies Act, 1956 and Articles 104 and 105 of Articles of Association of the Company, Mr. Michel Augonnet and Mr. Pierre Laporte, Directors of the Company retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-election. The Board commends re-appointment of Mr. Michel Augonnet and Mr. Pierre Laporte as Directors.

Mr. Ravi Kumar Krishnamurthy is an Alternate Director to Mr. Pierre Laporte. Due to Mr. Laporte''s presence in India at various times,

Mr. Krishnamurthy ceased to be an Alternate Director for short spells of time and was intermittently re- appointed as an Alternate Director to Mr. Pierre Laporte from time to time.

It is proposed to re-appoint Mr. Rathindra Nath Basu, Managing Director at the forthcoming Annual General Meeting for a further term of two years with effect from February 1, 2014, following the conclusion of his present tenure on January 31, 2014. The Board commends his re- appointment.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, Reports on Management Discussion and Analysis and on Corporate Governance have been included elsewhere in this Report as separate sections. A certificate from M/s Price Waterhouse confirming compliance with Clause 49 of the Listing Agreement has also been included in the Annual Report.

Further, as required under the Clause 49, your Company has adopted a ''Code of Conduct and Ethics for its Directors and Senior Executives''. We wish to record here that this is in addition to the ALSTOM Code of Ethics which is applicable to all employees of the ALSTOM Group.

PROMOTERS

In the course of the year under report, M/s Alstom Holdings, France (Acquirer), Company''s penultimate holding Company, which held 70%, entered into an agreement inter-alia for acquisition of balance 30% of the issued and paid-up share capital of Alstom Grid Finance BV, rendering the Acquirer holding 100% of the issued and paid up share capital of the said Alstom Grid Finance BV, which Company, along with its nominees owns 100% of the issued and paid up share capital of Grid Equipments Limited, which in turn owns 73.40% of the Company''s voting share capital. This indirect acquisition by Alstom

Holdings, France, being deemed as ''direct acquisition'', in terms of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (''Takeover Regulations'') required making an ''open offer'' to the public shareholders of the Company. Accordingly, Alstom Holdings, France, made an ''open offer'' in accordance with the ''Takeover Regulations'' which was concluded in February, 2013.

In terms, it acquired 1,65,42,372 Equity Shares resulting in the Shareholding in the Company of the Acquirer/ Promoter Group increasing to 80.31% from 73.40% as hitherto. Alstom Holdings, France, have committed themselves to reduce Promoters'' Shareholding in the Company, within the regulatory time frame, such that the minimum public shareholding of the voting share capital of the Company is maintained, to enable the Company''s Shares continuing to be listed.

COST AUDITORS

For the financial year ended March 31, 2013, the Company has re-appointed M/s Shome and Banerjee as Cost Auditors, to audit the cost records of the Company related to the applicable products manufactured at Pallavaram, Hosur, Naini, Vadodara, Noida and Padappai for the financial year under report with the approval of the Central Government. The Cost Audit Report for fifteen month period ended March 31, 2012, related to Power Transformers manufactured at Naini and Vadodara Units and Instrument Transformers at Hosur Unit of the Company was filed on January 8, 2013, within the time limit allowed under Cost Audit Report Rules, 2011.

AUDITORS

The Company has received a letter from M/s. Price Waterhouse, Chartered Accountants, the retiring Auditors, that they do not wish to offer themselves for re-appointment as Auditors at the ensuing Annual General Meeting. M/s. S.N. Dhawan & Co., Chartered Accountants, who have indicated their willingness to be appointed, are proposed to be appointed statutory Auditors from conclusion of ensuing Annual General Meeting till the conclusion of following Annual General Meeting.

ACKNOWLEDGMENTS

The Director''s express their gratitude to the employees of the Company for their commitment, dedication and support in fulfilling Company''s commitments to its customers and thereby contributing to the performance of the Company. They would also like to express their gratitude to various Government/ Regulatory authorities, customers, vendors, Banks, and members for their continued understanding and support during the financial year ended march 31, 2013 and look forward for the same in the years to come.

For and on behalf of the Board

New Delhi T.S. Vishwanath

May 27, 2013 Chairman


Mar 31, 2012

The Directors take pleasure in presenting the Fifty-sixth Annual Report and Audited Accounts of the Company for the fifteen months period ended March 31, 2012.

The Performance of the Company (hereinafter also referred to as the 'Company' or 'ALSTOM T&D India') for the period under report is not comparable with the previous year for the reasons of change in the financial year resulting in a fifteen months reporting period and the Scheme of arrangement for Demerger of Company's 'Distribution Business' having been effectuated in accordance with law from April l, 2011. The financial results of the Company for the period under report thus reflect the pre-demerger business upto March 31, 2011 and thereafter the business relating to products, projects and systems for electricity transmission and the related. The financial results may be viewed accordingly.

FINANCIAL RESULTS

(Rupees Thousands)

Period ended Year ended Particulars March 31, 2012 December 31, 2010

(15 months period) (12 months period)

Sales and Services (Net) 41,291,890 40,200,358

Operating Profit before interest 2,882,776 3,471,235

(As percentage of net sales) 7.0% 8.6%

Interest (Net) 652,035 655,011

Operating Profit after Interest 2,230,741 2,816,224

Exceptional Items (Profit on Sale of Property) 145,018 -

Profit Before Tax 2,375,759 2,816,224

Tax Expense (751,654) (948,811)

Profit After Tax 1,624,105 1,867,413

Balance brought forward from previous year 6,696,949 5,518,405

Profit available for appropriations 8,321,054 7,385,818 Appropriations

Proposed Dividend 430,387 430,387

Corporate Dividend Tax 69,820 71,482

General Reserve 165,000 187,000

Balance carried forward 7,655,847 6,696,949

The Company transferred the relevant assets and liabilities of the demerged business and vested unto the transferee Company with an equivalent withdrawal from the reserves of Rs. 2383.32 million, the details whereof are given elsewhere in this report.

DIVIDEND

Your Directors take pleasure in recommending a dividend of 90% (Rs,1.80 per share) for the fifteen months period ended March 31, 2012. This will absorb Rs. 500.21 million (inclusive of tax) based on existing capital.

CHANGE IN NAME

The name of your Company was changed to ALSTOM T&D India Limited from AREVA T&D India Limited, effective January 31, 2012, to reflect its name with that of Promoter group. The change of name of the Company does not change the legal status or constitution of the Company, nor does it affect any rights or obligations of the Company.

CHANGE IN FINANCIAL YEAR

Your Company changed its financial year to April 1 through the following March 31 from the Calendar Year. Accordingly, the current financial year/period is for fifteen months from January 1, 2011 till March 31, 2012.

PERFORMANCE REVIEW

MAINTAINED MARKET LEADERSHIP IN A DIFFICULT ENVIRONMENT

The period under report has been historic for the Company on many counts as it completed the carve-out of distribution business, announced the name change of the legal entity and braved many challenges in a tough market environment. Significant effort was put in maintaining continued market leadership of your Company in a very difficult environment.

Most of the Company's customers were grappling with issues related to infrastructure (delay in land clearance, coal linkages, environmental clearances, etc) resulting in postponement of capital investments. As a result, power generation segment of the market was highly impacted. Notwithstanding the adverse market conditions and demerger process, the Company performed well in the market place resulting in achieving a stronger order backlog, highest ever till date, and continued to maintain its primacy in the market place.

LEADERSHIP IN 765 kV EXTRA HIGH VOLTAGE (EHV) PRODUCTS AND SOLUTIONS, STRONG GROWTH IN UTILITY SEGMENT

You might recall that India's Power sector decided to introduce 765 kVAC EHV technology in the electrical grid in the 11th plan. Your Company closely followed this plan and invested in world class manufacturing facilities in Vadodora, Padappai/ Chennai and in Hosur to localise these high technology products. Your Company has won the highest number of EHV 765 kV substations ordered in the country. 28 out of the 40 EHV 765 kV substations ordered till date in India will be equipped with ALSTOM T&D technologies in products and solutions.

Among the notable 765 kV EHV substation orders won from Power Grid are Aurangabad, Aurangabad Extension, Vindhyachal and Bareilly.

In the SEBs Rajasthan Rajya Vidyut Prasaran Nigam Limited (RRVPNL) chose your Company for their large 765 kV Substation at Anta.

In the private sector, Sterlite Industries chose your Company to place turnkey orders for their two 765 kV substations at Bhopal and Dhule which they won on BOOT basis.

Similarly Jaypee Group also chose your Company to supply the 765 kV Generator Transformers, Interconnecting Transformers and the Reactors for their 3x660 MW Super Critical Power Project in Uttar Pradesh.

Lanco Group chose your Company to deliver the 765 kV Substation as a turnkey for their power plant at Vidarbha.

Your Company also succeeded in winning several large product orders from Power Grid such as the bulk order for 765 kV Circuit Breakers for EHV substations located at Dharamjaygarh, Jabalpur, Bhiwani, Satna (Extension), Gwalior (Extension) and Rajgarh Pooling (near Kotra). In addition, the Company won multiple orders for 765 kV Transformers and Reactors from Power Grid.

Your Company also secured several orders for 765 kV class products, such as Circuit Breakers, Instrument Transformers and Substation Automation from major Contractors/ Channel Partners for Power Grid's EHV substations at Jabalpur, Nellore, Raigarh, Bina and Piranha.

The Company, thus, is well poised to capture the growth in the 12th plan period when 765 kVAC is expected to become the transmission backbone voltage for India's electrical grid.

The Company also registered significant gains in the Utility segment by winning orders from North Eastern Electric Power Corporation Limited (NEEPCO) for the supply of a switchyard, transformers package for Pare Hydro Electric project 2x55 MW, turnkey 400 kV substation for Chattisgarh State Power Transmission Co. Ltd (CSPTCL).

PIONEER IN GAS INSULATED SWITCHGEAR (GIS) AND TURNKEY SUBSTATION

Members may be aware that your Company was the first in India to localise the manufacturing of GIS at their world-class manufacturing plant in Padappai, near Chennai. During the period under report, your Company won a GIS package of 11 bays of 420 kV GIS from BHEL for Rampur Hydro project in Himachal Pradesh which shall be delivered from the Company's factory at Padappai.

Your Company was selected by MSETCL as the winner for a large 400 kV GIS turnkey project at Hinjewadi. RKM Powergen placed the 400 kV GIS switchgear order for their power plant at Utchipinda in Chattisgarh. BGR Energy chose ALSTOM T&D India to supply the 400 kV Gas Insulated Substation for the 2x660 MW Krishnapatnam power plant. Surana Power, for their 2x210 MW power plant, chose ALSTOM T&D India to supply the 400 kV GIS on a turnkey basis.

We delivered and commissioned the 220 kV GIS turnkey substation at AIIMS Trauma Center, New Delhi for Delhi Transco Limited which was inaugurated by Smt. Sheila Dikshit, Honourable Chief Minister of Delhi in August, 2011.

In Pune, at Rastapeth, your Company delivered and commissioned a 132 kV turnkey GIS project which was inaugurated by Mr. Ajit Pawar, the Honourable Deputy Chief Minister of the Government of Maharashtra in August, 2011.

TREND SETTER IN E-BOP (ELECTRICAL BALANCE OF PLANT) FOR SUPER CRITICAL PLANTS

ALSTOM T&D India started its e-BoP activity in 2008. Since then, the Company has come a long way by winning several contracts with a leading position in the large as well as super critical segment of the power generation market. It enjoys the confidence of major power generators such as ESSAR, Reliance Power, GMR and Power EPCs such as L&T Power for delivering their turnkey e-BoP solutions.

Your Company, during the period under review, delivered and commissioned India's largest eBoP project for ESSAR (2 units of 600 MW Super Critical Plants) at Salaya. Your Company also delivered and commissioned 600 MW e-BoP project at Malwa for L&T Power.

FAST TRACK DELIVERY OF PROJECTS

ALSTOM T&D India is the market leader in delivering turnkey projects for Utilities, Power Generation and Industry/ Infra segments.

During the period under review, your Company delivered and commissioned 36 major substation projects, both AI5 and GI5, right up to 765 kV class.

Power Grid's 765 kV Bhiwani substation was commissioned, within a record time of 8 months, after allocation of land in July 2011. This was an extraordinary achievement for which your Company is thankful to Power Grid for extending their support to your Company.

Your Company was also called upon to deliver a 220 kV substation for Reliance Power for India's largest Solar power plant of 350 MW at Doorsar, Rajasthan. The project was delivered and commissioned in a record time of 129 days. We remain thankful to Reliance Power for their strong support to your Company in achieving this feat.

You might recall that your Company was selected by MSETCL, under an EPC programme, to deliver and commission 36 substations over A year period. During the period under review we delivered and commissioned 9 substations at various kV class such as 220 kV and 132 kV.

Your Company also plays a major role in building power distribution projects in Industry and Infrastructure.

The large power distribution system for Delhi's new International terminal T3 was earlier delivered and commissioned by your Company.

The Company has now delivered and commissioned 132 kV GIS based power distribution package for the new International terminal for Chennai Airport.

AUTOMATION TECHNOLGIES- MAKING THE ELECTRICAL GRID SMARTER

Network Management Systems (NMS)

Your Company is well recognized for building India's three Regional Load Dispatch centres (North, East and North East), two Data Com Networks (South and East) and the National Load Dispatch Centres. Thanks to strong initiatives taken by Power Grid, over the last decade, India's electrical Transmission Grid is embedded with smart technology. 70% of India's 200 GW power flow is managed by Alstom Grid's automation and control technology.

ALSTOM T&D India also supplied the National Load Dispatch Centre of Bangladesh which manages 100% power flow of Bangladesh's Transmission Grid.

Your Company made further progress, in this leading edge technology domain, by delivering the National Load Dispatch Center (NLDC) for Bhutan which manages 100% of the I power flow of Bhutan's Transmission Grid. This NLDC system, located in Thimpu, Bhutan, was inaugurated by | the Hon'ble Deputy Prime Minister of Bhutan, Mr Yeshey Zima, in December 2011.

You would be happy to know that your Company is providing 24x7 support for maintaining real-time software and hardware at 43 Load Dispatch Centres situated in Northern, Eastern and North-Eastern Region of India.

Your Company also bagged contract for providing 24x7 support for National and Backup control Centre at Dhaka, Bangladesh.

Substation Automation Systems (SAS)

During the year under review, your Company had a significant increase of orders in the SAS business. The gains came from almost all segments of the market such as the high end 765 kV EHV, the 400 kV Utility and Power Generation, Industry and Infrastructure and Channel Partners.

Among the leading customers who confirmed their continuous confidence in us are MSETCL, UPPTCL, RRVPNL, GETCO, Reliance Power, L&T, JSL, TECHNO etc. Our focus on power generation segment, led to receiving orders from Reliance Sasan UMPP, RKM, Rajpura Power, DB Power, Bhavnagar Energy and Hinduja National Power. Your Company has also made inroads into clean energy segment by securing orders for windmill through ENERCON, Nepal Hydro and Reliance Doorsar Solar.

These new products provide an integrated feeder management solution for a complete protection, control and monitoring of electrical power systems, serving tomorrow's digital substations.

SERVICES

The goal of the Service business of your Company is to be distinct in the market place and be the preferred partner for customers in their asset value maximization by extending product life cycle.

The portfolio of offerings of your Company include all the service support the customer would need for the product, such as technical training, maintenance including long term contracts, repair and overhauling, technical consulting, retrofit and spares.

Apart from the core service activities, Service business increased its portfolio by undertaking brown field projects in the field of Renovation, Modernization and Extension (RME) of substations.

During the period under review the Service business had a significant increase in order intake. Your Company won long term maintenance contract from RRVPNL for the Anta 765 kV substation. One of the major orders booked under RME segment was the Renovation of 220/132 kV Switchyard of NTPC Kanthi Vidyut Utpadan Nigam Limited (KBUNL).

The Company made important capital investments at its Technical Institute at Padappai to further enhance the 'hands-on' training capability for its customers on Grid products.

Your Company has also made significant progress by offering 24x7 after sales services to its major customers.

The Company's Service division has been carrying out the operations and maintenance of the main receiving substation of Terminal 3 of Indira Gandhi International Airport at Delhi. The substation was built by your Company and the customer also entrusted the operations and maintenance activity to the Company for a period of 5 years. The substation is manned on 24x7 basis and all operations, preventive and corrective maintenances, are managed by a team of skilled and dedicated experts in close coordination with DIAL.

FUTURE READY WITH NEXT GENERATION TECHNOLOGY PRODUCTS AND SOLUTIONS

1200 kV Ultra High Voltage (UHV)

Your Company is focused in following the national electricity plan in bringing new products and solutions for the ever evolving power transmission needs.

You might recall that Power Grid of India took the initiative in building world's highest 1200 kV class test substation at Bina. Your Company took the initiative to design, manufacture and type test the 1200 kV CVT, which was flagged off in August 2011 from the Hosur factory in presence of VIP customers. This has been installed in the 1200 kV Bina Subsation and has been electrically charged.

The council of Power Utilities awarded your Company with - 'India Power Award 2011' in recognition of our contribution in developing and type testing Ultra High Voltage (1200 kV) CVT.

ALSTOM T&D India has also designed and manufactured the 1200 kV Disconnect or for the 1200 kV Bina Test Station.

Smart Grid Initiatives

Your Company, as you are aware, is the leader in Network Management Systems (NMS) that make the transmission grid smart. In the entire SAARC region, your Company is the leader in this technology domain.

Your Company recently received an order from Maharashtra State Electricity Transmission Co. Ltd. (MSETCL) for a Smart Grid pilot project. As part of this pilot project, Situational Awareness Software (part of E-terra suit), shall be implemented at MSETCL's Load Dispatch Centre.

The main advantages for MSETCL, once the system is implemented, shall be:

- Mitigation and prevention of black-out or large scale incidents

- detection of instabilities (early warning)

- Assist the dispatcher in decision making including during islanded conditions

- Improve state estimator solution

- Improve security via model-based stability analysis

- Improve reliability via look-ahead analysis

- Capability to provide continuous validation of operation models

Power Grid India has taken initiatives to build a smart city pilot project in Puducherry (Pondicherry), Your Company has accepted an invitation to join Power Grid India to participate with ALSTOM T&D India's suite of products and software for this prestigious pilot project.

Digital Substations

Your Company bagged its first pilot project in the country for supply of non-conventional instrument transformers and IEC 61850 protocol relays to GETCO. This is a step towards future Digital Substations which will be operational on high technology process bus. This technology will reduce usage of copper control cables running from the switchyard to the control rooms, converting them in to very thin fiber optic cables which would improve the communication speed and the bandwidth resulting in improvement in reliability and efficiency of the substations.

During the ELECRAMA January 2012, India's largest electrical T&D exhibition, ALSTOM T&D India launched the new MiCOM P40 Agile intelligent Relays, the backbone of next generation in substation protection, and the MiCOM Si Agile - the universal PC tool suite for the entire MiCOM protection range. This product will redefine standards in feeder and motor protection industry.

BUILDING A STRONG CUSTOMER CONNECT

Customer Intimacy is one of your Company's strategic priorities to reach its ambition of being the leading reference in Grid Performance. Your Company has focused on building a strong customer engagement rigour through events like "GridNxt" held across all major metros in India as well as in Thimphu, Bhutan, Technical Days - two day seminar focused on emerging technologies in Grid Management, and Automation Day to showcase our Smart Grid technology. These events were an opportunity to position "ALSTOM T&D India" brand and to further strengthen the Company's commitment to superior customer intimacy.

The Company connected well with customers during these flagship events to strengthen our reach and to build awareness on our contribution tc India's emerging super-highways for efficient transmission flow in the country. The events were well represented by the Company's key customers and highly appreciated by leading technical experts.

ALSTOM T&D India is a leading reference in transmission business am I has been prominently present in I various industry forums, seminars anc exhibitions. The Company made a grand presence at the world's largest electrical Transmission and Distribution (T&D) exhibition - ELECRAMA, held in Mumbai, India, between 18 and 22 January 2012.

Mr. Gregoire Poux-Guillaume, President-Alstom Grid, was appointed as global Brand Ambassador for Elecrama 2012. He was felicitated at the ceremony and participated in special events like "CEO Nite", to debate opportunities in the power industry sector, among key players.

GridTech 2011 was another big industry event where your Company participated to show its manufacturing capability in India and establish itself as a leading solution provider in transmission sector.

RESEARCH AND DEVELOPMENT

Research and Development (R&D) plays an important part in your Company's leadership strategy. The Company continued to invest in several R&D programmes across the product categories from time to time. ALSTOM T&D India benefits from Global R&D effort of Alstom worldwide. The Company derives the benefit of global value engineering efforts, which among others helps in reduced lead time and is adaptive of specific customer requirement.

Your Company has set up a global R&D centre at Vadodara and Hosur. The centres help in evolving appropriate technology for the market environment.

CORPORATE SOCIAL RESPONSIBILITY (CSR) / SUSTAINABLE DEVELOPMENT

Your Company is committed to providing products and solutions that combine economic development, social progress and respect for the environment. CSR is at the heart of your Company's business imperatives. Leveraging the Alstom Foundation, an Alstom Group's effort, your Company is driving sustainable community development initiatives.

With eight manufacturing units spread across the country, your Company is able to support local communities through social and cultural projects with participation from employees. Automation Unit at Pallavaram organized training on road and domestic safety for the local community. Plantation initiatives are regular feature at most of Company's facilities and their neighborhoods under Company's Green Initiative for sustainable development.

The Company remains committed to welfare of people in the areas where it operates and is demonstrative of its responsible Corporate citizenry. ALSTOM T&D India organized free eye checking camps. A blood donation drive was conducted at various units through the year. Padappai unit supported the infrastructure development of Salamangalam village public school with donations of computers for all class rooms thereby enabling the learning of 250 school children through e-learning module.

COMMITTED TO ENVIRONMENTAL HEALTH AND SAFETY (EHS)

Your Company is environmentally conscious in shaping a sustainable future for the planet. The Company has designed reliable solutions through innovation and excellence in project execution with commitment to maintain high standards of Environmental Health and Safety. All industrial units of the Company have achieved accreditation for Occupational Health and Safety Management System (OHSAS 18001) and Environmental management System (ISO 14001) from renowned international certification bodies.

The Company adheres to practice of EHS communication prior to all business meetings and activities and all employees are encouraged to participate and commit to EHS and sustainable development programs.

Your Company has process and a protocol in ensuring environmental safeguard measures in all its business units. As part of EHS initiatives, high level management visits are made, aimed towards audit of EHS standards to ensure that employees are aware and updated of EHS standards and these are adhered by all employees.

E-training is used to train employees for safe use of electrical equipments. The Company has an Event Reporting Management System to capture vital EHS statistics related to near misses or incidents. This has helped in achieving zero environmental incidents and zero fatalities across all business units. During the period under report, Weeklong EHS Campaign was held on the occasion of National Safety Week and included workshops at Company's offices and customer sites on various issues like road safety, work at height, lifting tools and tackles, housekeeping/ material storage etc.

QUALITY AND INDUSTRIAL EXCELLENCE

Alstom Production System (APS) the global model of Alstom Grid that drives the units towards Industrial Excellence was deployed in all manufacturing units of the Company. APS model provides the necessary road maps and standards to improve and sustain Safety, Quality, Costand Delivery (SQCD) performance and measures progress towards industrial excellence.

Your Company is committed to continuous improvement towards industrial excellence, such as:

- Improvement in 36 Lean 6 Sigma projects contributing to significant operational performance.

- Test labs in PTI (Naini) and RMK Unit Hosur received NABL accreditation.

- All manufacturing units have certified Management systems for Quality and EHS.

- Suggestion Scheme - "Ideas to Win" at our Automation Pallavaram Site continue to receive good response with total of 159 suggestions received, several of which were accepted for implementation. Such suggestions were selected for Motivational Awards.

- Annual Q&IE conference 2011 held in April 2011 provided a platform for networking and sharing best practices among the Q&IE Community of ALSTOM T&D India. Thirty five best practices posters covering lean, Lean 6 sigma, EHS process improvement actions were displayed.

The Company during the period under review received Awards for excellence. For its innovation project titled "Unique Civil Foundation Technique for building a Switchyard" from ALSTOM T&D India (Solutions unit), the Company won the GOLD Award under the category "Green Innovation" in this year's Alstom's Global Innovation Awards.

HUMAN RESOURCE

During the period under report, your Company continued its focus on effective talent management for successful business partnership. Resource ramp-up by continuous hiring to meet the growth in demand and people engagement have been the highlights. The Country Recruitment Team at ALSTOM T&D India enabled successful on-boarding of 531 engineers, managers, professionals and workmen-technicians for different production and business units.

Different strategies including Alstom Strategic Talent Acquisition Programme (ASAP) have helped in attracting best of the talents from industry. Your Company has also done strategic hiring in the areas of Project Engineering Management and Construction Management by visiting the reputed institutes and campuses.

The Company aims to be 'the employer of choice' in the Industry.

The Company has series of communication sessions like round table meetings with senior management and business leaders, reward and recognition initiatives, employee integration program like Grid Connect and business facilitation workshops like PACE - Powering Alstom's Competitive Edge to perpetually engage these resources towards achieving the goals of the Company. Persistent efforts have been made during the year to familiarize employees with the Group's core values of Trust, Team and Action alongside ethics and compliance.

Team encouragement by celebrating project successes, connecting with people at remote work-sites, social and sports activities at different locations have been done to maintain employee connect and increase motivation. Community welfare programs conducted through the year helped create appreciation and involvement of employees in social activities.

PARTICULARS OF EMPLOYEES

A statement, as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time is attached as Annexure and forms part of this Report.

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 the Board of Directors) Rules, 1988 are given in the Annexure which forms part of this report.

INFORMATION SYSTEMS AND TECHNOLOGY

Information Systems and Technology is used by your Company to enhance business performance and improve operational excellence. The Company has deployed various tools and policies for its IT infrastructure and IT security. The Company also ensures that the business needs are supported by investing in Network Upgrades, Mobility Solutions and various audio visual devices. The Company has ERP system in place which improves performance of the business via information sharing and integration.

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance of Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors of your Company confirm:

- that the applicable Accounting Standards have been followed in the preparation of final accounts and that there are no material departures;

- that such accounting policies have been selected and applied consistently and the judgments arid estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2012 and of the profit of your Company for the fifteen months period ended on that date;

- that 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 your Company and for preventing and detecting fraud and other irregularities; and

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

DIRECTORS

In the course of financial period under report, Mr. T.5. Vishwanath, was co- opted as Director and non-executive Chairman in the Casual Vacancy caused by the resignation of Dr. Ajay Dua at the Board Meeting held on February 4, 2011. Mr. Chandan Roy was appointed as Additional Director at the Board Meeting held on August 6, 2011. They hold office upto the date of ensuing Annual General Meeting. The Company has received requisite notices from the members u/s 257 of the Companies Act, 1956, proposing their names for appointment as Directors. Considering expertise, rich experience and profile of Mr. Vishwanath and Mr. Roy, the Board is of the opinion that appointment of these Directors will immensely benefit the Company and would be in interest of the Company and commends their appointment.

Mr. Rathindra Nath Basu was re- appointed as Managing Director of the Company by the Board of Directors for a period of two years with effect from February l, 2012 and his re- appointment was approved by the Shareholders at an Extra-ordinary General Meeting held on January 23, 2012.

In terms of Section 256 of the Companies Act, 1956 and Articles 104 and 105 of Articles of Association of the Company, Mr. Michel Serra, Director, retires by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re- election. The Board commends re- appointment of Mr. Serra as a Director.

Mr. Arvind Pachauri resigned as Alternate Director to Mr. Pierre Laporte with effect from August 6, 2011, following which Mr. Ravi Kumar Krishnamurthy was appointed as an Alternate Director to Mr. Pierre Laporte on August 6, 2011. Further due to Mr. Laborite's presence in India at various times, Mr. Krishnamurthy ceased to be an Alternate Director for short spells of time and was intermittently re-appointed as an alternate Director to Mr. Pierre Laporte from time to time.

Mr. C M A Nayar resigned as Director with effect from February 25, 2011. Mr. Alexandre Tagger, Mr. Vinod Kumar Dhall and Mr. Anil Chaudhry who were co-opted on the Board as Additional Directors at the Board meeting held on February 4, 2011, following demerger of the Distribution Undertaking of the Company, resigned as Directors at the Board Meeting held on December 12, 2011 as part of the re-constitution of the Board. The Board places on record its deep appreciation for the services rendered by these Directors during their tenure and particularly their immense contribution in the context of reorganization.

The Board, at a meeting (at which non-executive Directors resident in India - Mr. T. S. Vishwanath and Mr. Chandan Roy - did not attend and recued themselves from any discussion in the matter), decided to recommend payment of remuneration by way of commission to such of the non-executive directors, resident in India, of such amount and proportion, as it may determine, from time to time, within the overall limit not exceeding one per cent of the net profits of the Company in aggregate in any financial year/ period, in accordance with law, subject to the approval of the members. In such determination, Board shall have regard to the time spent by such non- executive directors and, in the case of non-executive Chairman, to the time to be spent in discharging such role, over and above the time spent normally by other non-executive directors. The Board has recommended that, for the financial period ended March 31, 2012, a provision in this regard of Rs. 4 million be made in the financial statements. The approval of members in the matter is being sought at the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, Reports on Management Discussion and Analysis and on Corporate Governance have been included elsewhere in this Report as separate sections. A certificate from M/s. Price Waterhouse confirming compliance with Clause 49 of the Listing Agreement has also been included in the Annual Report.

Further, as required under Clause 49, your Company has adopted a 'Code of Conduct and Ethics for its Directors and Senior Executives'. We wish to record here that this is in addition to the Alstom Code of Ethics which is applicable to all employees of the Alstom Group.

BUSINESS REORGANISATION - DEMERGER

Members are aware, as reported last, pursuant to the 'consortium agreement' between Alstom Holdings and Schneider Electric Industries SAS in respect of the global T&D business of Areva SA, the distribution business was agreed to be allocated to the Schneider Group of Companies. The shareholders of the Company were appropriately informed in the past about the intention of proposed transfer of 'distribution business' in India.

In the course of the financial period under report, the Company decided and gave effect to the transfer of 'distribution business' through a Scheme of Arrangement for demerger. Accordingly, the Company's 'distribution business' was demerged as per the Court approved Scheme of Arrangement (the Scheme) into the then Smart grid Automation Distribution and Switchgear Limited (now called Schneider Electric Infrastructure Limited) - the (Transferee Company) being sanctioned by the Hon'ble High Courts of Gujarat and Delhi, respectively on September 19, 2011 and October 24, 2011 with the appointed date of April l, 2011. The Scheme was given effect to on November 26, 2011 (effective date) with the filing of certified true copies of orders of Hon'ble High Courts with the respective Registrars of Companies, Gujarat, Dadra and Nagar Haveli and NCT of Delhi and Haryana. The above transfer of demerged business undertaking has been accounted for by the Company as of the effective date in terms of the approved Scheme by recording the transfer of relevant assets and liabilities of the 'demerged business' at their book values as on the appointed date (April l, 2011) with an equivalent withdrawal from the Company's reserves of Rs. 2,383,318,000 as under resulting in no net gain or loss to the Company:

Adjustment/Withdrawal from Reserves Amount in Rupees

Share premium 812,729,200

Capital reserve 47,165,739

Capital Redemption reserve 60,000

Amalgamation reserve 28,500,000

General reserve 1,494,863,061

2,383,318,000

In consideration of the demerger as above of the 'distribution business', the transferee company has issued and allotted one equity share of Rs. 2 (Rupees Two) each fully paid up to the members of the Company for every equity share of Rs. 2 (Rupees Two) each held by them in the Company as on the record date of December 15, 2011.

Subsidiary Companies

Your Company did not have any subsidiary company as at the end of the period under report. In the context of re-organization the three enabling wholly owned subsidiary companies incorporated were suitably divested/ transferred with requisite approvals in the course of the period under report. Also, there were no effective transactions with the subsidiaries save in the context of divestiture/ transfer.

PROMOTERS

The shares held by the Promoters, as intimated to the Company, have undergone inter-se transfer within the promoter group, without any change in the extent of Promoters' shareholding among the qualified persons in terms of Regulation lO(l)(a)(iii) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

COST AUDITORS

The Company has re-appointed M/s Shome and Banerjee as Cost Auditors, to audit the cost accounts of the Company related to the manufacturing of Transformers at its units at Naini and Vadodara for the period under report with the approval of the Central Government. The Cost Audit Report for Financial Year ended December 31, 2010, related to the above products for both the Units was filed on June 29, 2011, within the time limit prescribed under Cost Audit Report Rules, 2001.

AUDITORS

M/s Price Waterhouse, Chartered Accountants, the retiring Auditors, have indicated their willingness to be re-appointed.

The Company's units relating to the then 'Distribution business', for which the Branch Auditors were appointed, have ceased to be units of the Company following the demerger with the appointed day of April l, 2011 and accordingly no Branch Auditors are being proposed for appointment. The Branch Auditors, M/s S.R. Batliboi & Co., have also communicated that they do not wish to offer themselves for reappointment.

ACKNOWLEDGMENTS

The Directors sincerely appreciate the commitment, dedication, devotion and unstinted services rendered by the Employees who have contributed significantly in the performance of the Company. Their grateful thanks are due for the co-operation extended by the various Government authorities, customers, vendors, Banks and Members during the period under review and look forward to their continued support.

For and on behalf of the Board

New Delhi T.S. Vishwanath

May 25, 2012 Chairman


Dec 31, 2010

The Directors take pleasure in presenting herewith the Fifty-fifth Annual Report and Audited Accounts for the year ended December 31,2010.

FINANCIAL RESULTS

(Rupees Thousands) Year ended Year ended 31.12.2010 31.12.2009

Sales and Services (Net) 40,200,358 35,658,766 Operating Profit before interest 3,471,235 3,576,638 (As percentage of net sales) 9.0% 10.0% Interest, net 655,011 578,598 Operating Profit after Interest 2,816,224 2,998,040 Restructuring and relocation costs - (83,286) Profit on Sale of Property - 15,500 Profit Before Tax 2,816,224 2,930,254 Taxation (948,811) (1,010,228) Profit After Tax 1,867,413 1,920,026 Balance brought forward from previous year 5,518,405 4,293,913 Profit available for appropriations 7,385,818 6,213,939

Appropriations Proposed Dividend 430,387 430,387 Corporate Dividend Tax 71,482 73,144 General Reserve 187,000 192,003 Balance carried forward 6,696,949 5,518,405

Dividend

Your Directors take pleasure in recommending a dividend of 90% (Rs. 1.80 per share) for the year ended December 31, 2010. This will absorb Rs. 502 million (inclusive of tax) based on existing capital.

Performance Review

The global financial crisis hit the market in 2008 impacting growth worldwide, including India. The industry and infrastructure sectors of the economy continued to be adversely impacted in 2010, as in 2009. To add to it, the Utility segment of the market was also impacted due to delay in power plant execution at customers end, as well as delay in land acquisition and securing coal linkages. As a result, the T&D market in India shrank in 2010.

Despite such adverse market conditions, your Company fared well in securing a good level of orders in 2010, with orders in hand up by 2%, over 2009. Order intake in 2010 was marginally lower by 1% than what your Company achieved in 2009. During 2010, your Company won several orders with new customers as well as in new market segments and maintained market leadership, in T&D domain, for the third year in succession.

Delivering sales in 2010 was not easy as some of the orders won in late 2008 as well as in 2009, were delayed at customers end due to non availability of land or lack of coal /fuel linkages. Consistent follow- up, supported by other mitigation efforts, led to improvement in sales in the second semester of 2010. Overall sales in 2010 were up by 12.7%, over 2009, mainly due to ramp-up of sales from the new green-field manufacturing sites, as well as improved execution of contracts.

The operating profit and profit after tax were lower by 3% due to impact of severe price fall and ramp up cost of the three green-field sites, which came into production in late 2009 and early 2010.

Transmission & Distribution

Transmission

AREVA T&D India made significant progress in the EHV 765 kV segment of the market by localizing all its products. World class factories set up in three green-field sites at Vadodara, Padappai (Chennai) and Hosur started production for 765 kV and other kV class of product ranges in 2010. In April 2010 Indias first indigenously developed 1000 MVA, 765 kV class UHV Inter-connecting transformer was manufactured and tested at the Vadodara factory. This was subsequently commissioned at Lancos Anpara C Power Plant in February 2011. You would recall that AREVA T&D India had already localized the EHV 765 kV range of Circuit breakers and Instrument transformers, while executing Indias 1st 765 kV Substation at NTPCs Sipat site in 2006-07.

Your Company, thus, continued its strong leadership position in the EHV 765 kV domain by winning 12 out of 22 Substations ordered in the Country till December 2010.

Power Transformers business received several major orders, such as;

765 kV Transformers for UPPCL, Anpara D

330 MVA/ 400 kV Power Transformers for India Bulls

500 MVA/ 400 kV Transformers for Power Grid

125 MVAR Shunt Reactors for Power Grid

400 kV Power Transformers for Vadodara Vidyut

Furnace Transformers for Monnet lspat

370 MVA Transformers for CESC/Dhariwal

475 MVA Transformers for GVK

During this year your Companys Circuit Breaker (CBR), Gas Insulated Substation (GIS), Instrument Transformer (ITR) and Disconnector businesses received several major orders, such as:

Sasan Ultra Mega for Reliance Power (for 765 kV CBR/DSC)

Parabati Hydro III for BHEL (for GIS)

Anpara C for UPPCL (for 765 kV CBR, ITR &DSC)

400 kV Kondapally for LANCO (for GIS)

Sasaram 765 kV Transformers for Power Grid (for CBR, ITR and DSC)

Your Company launched the Disconnector business in 2009-10 and had a start up in 2010 by winning several Disconnector orders for 765 kV and 400 kV. The new world class Disconnector factory at Padappai, ramped up its production line in the first semester of 2010 as per schedule.

During 2010, your Companys world class GIS factory, Indias first local manufacturing facility, started production activity at Padappai, near Chennai. More than 18 engineers/ technicians were trained in European factories to master the technology and production processes, so as to accelerate localization of this high technology product. As India is likely to install more and more GIS systems (which have smaller footprint, about 20% of a typical AIS substation and therefore an ideal solution for substations around cities with high land prices), your Company expects to achieve early leadership in this domain.

Systems business also made good progress by acquiring several new clients and new line of business. Some of the major orders received were:

765 kV Turnkey Substation for UPPCL Anpara D

765 kV Turnkey Substation for Power Grid at Sasaram

400 kV Turnkey Substation for Power Grid at Jatpur

132 kV Turnkey Substation for Power Grid at North East

Several Substation packages for MSETCL (multiple sites)

Smelter Electrical package for Hindalco

400 kV Substation for Essar

400 kV Substation for Prakash Industries

400 kV Substation for Shandong Electric for GMR Kamalaganga

eBoP (Electrical Balance of Plant) for GMR for Warora 2x300 MW

eBoP (Electrical Balance of Plant) for Essar for Tori 2x600 MW & Paradeep

eBoP (Electrical Balance of Plant) for L&T for Visa Power 2x600 MW

Your Company made significant progress in the emerging eBoP activity in 2010 by winning several large contracts and achieving market leadership.

During the year, your Company commissioned the prestigious 66 kV Power Distribution package for GMR for Terminal 3 of Delhi International Airport. Your Company is also executing a similar type of Contract for Chennai Airport, which comprises a Power Distribution package with 110 kV GIS Substation. This is to be commissioned in 2011. With these two systems, your Company has established itself in a leading position in the emerging Airport infrastructure segment.

Your Company also commissioned 12 Substations in Kenya and 4 Substations in Qatar.

A 400 kV GIS Substation at Kondapally for Lanco Infratech, was also commissioned during the year.

Several 400 kV Substations were also commissioned for Power Grid Corporation at Rourkela, Raigarh, Raipur, Hissar, Ludhiana and Amritsar.

During the year, several Substations were commissioned for various customers across the country such as 400 kV in Hissar for HVPNL, 220 kV for ESSAR Oil at Vadinar Phase 1,400 kV at Angul for JSPL, 220 kV at Subhasgram for WBSEB as well as several 132 kV Substations for WBSEB, JSEB, CSEB, Bengal Energy and Power Grid.

Network Management Systems (NMS)

During the year, your Company won major orders from Jharkhand State Load Despatch Center, Tata Power SCADA Systems at Bhira/ Bhivpuri and Maintenance Contract from Power Grid for Eastern Region Control Centers. Your Company improved its market share in the Telecom activity by doubling its order intake, over 2009. Key orders for supply of telecom equipment were booked from State Utilities and EPC contractors.

Major Projects delivered consisted of PTCUL Load Despatch Center and Supply of Dispatcher Training Simulator for the Power System Training Institute (PSTI). The NMS business also successfully handed over the Meghalayas DMS System to the customer (MeECL).

The AREVA Automation Technical Day during June, 2010, was a major success, with participation of over 90 representatives from various utilities and private customers.

Substation Automation Systems (Transmission Business)

Substation Automation Solution (SAS) Business Unit continues to retain its leadership position in the Indian market. 2010 was a strong year with good growth in orders vis-a-vis 2009.

Your Company received orders for Substation Automation for 16 Nos of Substations of Power Grid from several EPC Contractors. Your Company also received order for Substation Automation for UPPTCL Unnao 765 kV Substation from EPC Contractor. The Substation Automation Unit has also achieved significant success in IPPs, Central & State utilities. It won a prestigious order to retrofit various 220 kV and 132 kV Substations of RRVPNL with its latest protection technology. In addition, the Unit also received Substation Automation orders from Power Grid for Sasaram 765 kV and UPPCL for Anpara D Substation through the Companys Systems business.

The Protection Products business from various Channels and OEMs grew, thus reinforcing our customers preference for the MiCOM range. Your Company also continued to enjoy the confidence of BHEL, winning major orders for Protection Products and SAS Systems.

Your Company delivered several SAS solutions during the year. Some of the major projects delivered were Power Grid (Balia & Lucknow), MSETCL (12 Substations), DTL Mundka 400 kV, Power Grid Pirhana 400 kV, Namrup and North Chennai for BHEL etc.

During the year, your Company significantly increased the production capacity of its Protection Panel line.

Services for Transmission Business

Service business continued, in 2010, to provide to customers single point support for various Transmission products through the product life cycle. The portfolio included all service support the customer would need with the product, such as E&C supervision services, warranty support, technical training, maintenance including long term contracts, repair and overhauling, technical consulting, retrofit and spares. An extensive network of service engineers is deployed across the country to quickly respond to customers calls.

The Service businesss goal is to be a clear differentiator in the market place and to become the preferred partner of T&D customers. Its business focus is to support T&D customers with its offerings, and to maximize their asset value throughout the product life cycle.

The GIS service team, setup for the GIS factory at Padappai, started with their first project at Bhavini site in this year. 2 High Voltage Test Kits were purchased and commissioned in the year. These are being used for site testing of GIS substations up to 400 kV. Your Company is the first in the country to have invested in such advance test facilities.

Among the key orders won by Service in 2010 is a contract for 5 years Operation and Maintenance of the main 66 kV Substation at the new Terminal 3 of Delhi International Airport. This Substation was built by AREVA T&D Indias Systems business group and Service took over the 24x7 services from the first day of its operationalisation.

Distribution Business

The three businesses namely Power Distribution (PDS), Secondary Distribution (SDS) and Distribution Transformers (DTR) launched their world class manufacturing facilities at Vadodara green-field sites mainly to expand the manufacturing capacities and to introduce new products. The ramp up of the manufacturing facilities contributed to the sales growth of the distribution businesses in 2010.

The Proximity arm of Systems Business (which focuses on turnkey solutions for Distribution Substations and on small sized industrial projects), won orders for Turnkey Substation from Bajaj Hindustan, eBOP for 4x15MW Biomass based power plants at Fazilka, Nakodar & Kanpur, and a Power Distribution package at Azure for 5 MW solar power. With these projects, your Company also expanded its reach to the renewable sector, which is expected to be a high growth area. The Proximity Solutions business also delivered several Switchyard projects during the year, which include Shri Prabhulingeshwar Power Gen, Vayunandan Power and 33/11 kV Substation for Adani Group.

In the Distribution product range, Medium Voltage Switchgears, Distribution Transformers & Substation Automation for Distribution segment expanded their business volume. The Distribution Transformers business won a large order from Enercon for Slim Transformers, which are used for wind-mill applications and special light weight transformers. AREVA T&D India is a technology leader in these type of transformers. Your Companys PDS business won large orders from Jindal Steel and Lanco for supply of medium voltage switchgears. The Ecofit workshop at Vadodara plant which was inaugurated in 2009, continued to produce quality products and won several orders during the year.

Distribution business also remained focused in life cycle management of products supplied to the customers. Key orders won in 2010 include supply of spares and overhauling of 50 year old MV Switchgear (70 nos.) which were relocated from Germany to India by our customer. The project involves support, technical training, maintenance including long term contracts, repair and overhauling, ecofit (retrofit) and supply of spares.

AREVA T&D India continues to be committed to servicing the products supplied to customer, through the product life cycle.

Substation Automation Systems (Distribution Business)

Automation Business Unit had a good year and maintained its leadership position in the Indian Substation Automation market, winning key orders such as:

Power management system for lOCLs greenfield refinery at Paradip. A PACIS solution with latest technology was offered for fast load shedding application, as part of Power Management System on fibre optic network compliant to IED 61850 standards. This solution will also help the customer for efficient monitoring and control of overall electrical network of Paradip refinery.

In addition, the Substation Automation Business Unit also achieved significant success with orders in the private sector, industry and utility segments.

Research and Development

Research and Development is an important element of your Companys leadership strategy. Your Company continues to invest in several R&D programmes, including redesign to cost, across all product categories. AREVA T&D India also benefits from the global R&D efforts of the mother Company which operates across various countries. This helps in shorter lead time to launch latest products catering to customer requirements. AREVA T&D India has opened a global R&D center in Vadodara, in addition to its existing global R&D centre at Hosur, to provide appropriate technology to the market place.

Corporate Social Responsibility (GSR)

In pursuit of its Sustainable Development goals, your Company is committed to Corporate Social Responsibility (CSR). Business Units of your Company provide pro-active support for local projects of social and cultural interest, with continued active participation from the employees. The Units of the Company are committed to develop harmonious relations with the stakeholders. These include long term projects, which are initiated with the financial and organization support from AREVA Foundation. (The Foundation is an extension of the initiative undertaken in the past several years to optimize, promote and draw attention to the patronage programs of the AREVA group). Here is a review of some of our CSR initiatives:

Support for social and cultural development

The Units of your Company support local initiatives for development and social-cultural integration, for example:

Automation Pallavaram Unit organised a health awareness camp for 400 participants comprising of Unit employees and their family members.

National safety week was celebrated at all the Units of AREVA T&D India with training on accident prevention, housekeeping, PPE demonstration, safety quiz, etc.

Community Involvement

RMK Hosur Unit conducted a free eye camp at Hosur in association with Narayana Netralaya - Bangalore. Eye check up was conducted for 462 people out of which 206 people were offered free spectacles. Eye surgeries were also conducted on 51 people.

Padappai Unit organised Blood donation camp in association with Apollo Hospitals during which 69 employees donated blood.

Educational Outreach

The Units of the Company organise special initiatives for students and educational establishments, for example:

Padappai Unit supported the infrastructure development of Salamangalam Village public school with construction of toilet facility for girl students and also provided lighting and fans to all class rooms.

Environment Health and Safety (EHS)

Your Company made significant efforts in improving the EHS culture across all lines of Business. There has been reduction in green house gas emission, waste control and paper consumption. The accident frequency rate "FR-1" has improved over the years. Your Company made good progress in "Health and Safety" awareness, in implementation of EHS Standards, Operation Instructions and Statutory compliances. The level of compliance has also improved as EHS becomes an integral part of your Companys everyday work culture.

Your Companys EHS initiatives, methods and processes at customer project sites have been appreciated by several customers such as NTPC, Tata Motors, ECI Engineering, etc. Some of the factories such as the Transformer Unit at Naini won "Greentech Golden Safety Award" for second consecutive year as well as the "Commendation Safety Award 2010".

EHS Initiatives

All Units of your Company comply with essential environmental requirements. There has been a considerable reduction in Water and Energy consumption. Air emissions, Greenhouse gas emissions, Liquid effluents and Conventional waste generation also showed reduction in 2010. All new Units are 100 % asbestos free. Health awareness camps were organized at Pallavaram and Hosur. Employment medical checkup for all employees and health checks for specific employees who work at height and in confined space were initiated.

In 2010, eight Business Units accomplished more than one million man-hours of work without any lost time injury while eleven Units achieved zero FR-1. Mock drills such as fire fighting, emergency evacuation, electric shock treatment, chemical spillage and other emergencies are frequently performed across all the manufacturing and project sites. EHS reporting tools and event database are used to record all accidents and near-misses. Use of seat belts in cars and helmets on two wheelers have been made compulsory for all AREVA T&D India employees at all locations.

External awards received by AREVA T&D India for good EHS performance includes:

GREENTECH Foundation (of USA) Safety Award 2010 was delivered to AREVA T&D India Naini Works by Director General Factory Advice Service & Labour Institute, Govt, of India.

Appreciation letter and awards were received from many customers like NTPC, ECI Engineering, Tata Motors, etc for following and practicing good EHS techniques at the customers project sites.

Sustainable Development & Continuous Improvement (SDCI)

During the year under review, the Companys units continued to progress with the implementation of the global sustainable development (SD) model "AREVA WAY", with enhanced involvement of employees. The sustainable development concept recognizes the interdependence of economic, environmental and social systems as well as the performance factors.

Several AREVA T&D India Units like HVM Padappai, PDS (Salt Lake and Vadodara Units), Hosur and Padappai were certified for Integrated Management Systems (ISO 9001, IS014001 & OHSAS18001).

Automation Pallavaram Unit shifted 3 Lean Lines from HA Local to HA Midos, resulting in a capacity increase of 30% in HA Midos. 28 more Lean 6 sigma projects aimed at operational performance improvement were successfully completed and certified. Automation Unit achieved 99% FTPR set by Automation Center of Excellence (COE), resulting in elimination of additional Inspection and Logistics in SMS Unit and reduction of lead time by 38% for our UK customers.

PTI Naini Unit successfully implemented AREVA Production System (APS) Project in the NPT Shop. This has resulted in lead time reduction of NPT transformer line by 40% and has improved MVA output of the production line by 20%. The concept of Sustainable Development was introduced to all sections of employees at the Naini Site. About 60 employees were trained on various processes.

For the first time, PDS Unit introduced Neoprene Gaskets in AIS Panels, as per IS11149, resulting in enhanced IP54 protection. These were also successfully introduced in several projects . With the introduction of Trivalent Chromium, PDS unit also eliminated the usage of hazardous hexavalent chromium in all types of plating and powder coating processes.

The SDCI Conference, held on 18th & 19th February 2010, provided a platform for networking and sharing best practices among the SDCI Community of AREVA T&D India.

Particulars of Employees

A statement, as required under Section 217(2A) of the Companies Act, 1956, read with The Companies (Particulars of Employees) Rules, 1975, is given in the Annexure which forms part of this report.

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 the Board of Directors) Rules, 1988 are given in the Annexure which forms part of this report.

Human Resources

Recruitment and Retention of Talent

2010 was an year full of challenges both on recruitment and retention.

Our Recruitment Team successfully brought on Board 500+ Engineers, Managers and Professionals, especially for green-field sites like GIS at Padappai, Instrument Transformers at Hosur as well as for Primary and Secondary Distribution businesses at Vadodara. Your Company also inducted a significant number of professionals in Systems and Automation businesses. In addition, 200+ workmen and trainees also joined our Company during the year. Your Company continued to promote the AREVA Strategic Talent Acquisition Programme for employee referrals, to attract new talent to the organization.

Your Company made efforts to keep the employees engaged during this phase of transition by launching a "Recognition and Reward" (R&R) scheme, so as to strengthen the motivation levels. Several engagement activities were also promoted. Country Integration Program were conducted for new recruits. Regular communication meetings organized at unit levels helped retention of talent in a year of transition.

Training and Development

During the year, as in the past, need based training programmes were organized towards development of competencies and building a leadership pipeline in the organization. An average of 4 man-days of training was maintained per employee for professionals/ engineers and managers during this year. 22 Young Managers attended Fast Track Business Management Course at IIM, Bangalore. Till date, 147 Young Managers have undergone this customized to company need training, aimed at creating leadership talent pool. Based on 360 degree feedback, the Corporate programme was launched for Senior Executives with training on Strategic Thinking and Leadership. This was conducted in April, 2010 at the Indian School of Business (ISB), Hyderabad. In addition, 28 Diploma Engineers were enrolled to participate in the AREVA Continuing Education programme at I IT Campus in Chennai; Project Management Fundamentals and Contract Management Programs were conducted for identified professionals in Systems and Sales. HR Managers were trained in a new global tool - Personality and Preference Inventory (PAPI) for talent acquisition.

In order to enhance engagement and motivation levels amongst operatives and supervisors at the manufacturing sites, "Let Us Talk" project was launched. For this mission, HR Managers were specifically trained by an international faculty to roll out training to al! Line Managers to effectively deploy and administer performance and development oriented dialogues with employees and for supervisors.

Information Systems and Technology

Your Company continued to invest in Information Systems and Technology to enhance business performance and improve operational excellence.

The Company further strengthened its IT infrastructure and IT security through deployment of various tools and enforcement of various policies. The Company also ensured that the business needs are supported by investing in Network Upgrades, Mobility Solutions and various audio visual devices.

The upgrade of the ERP system to the Global ERP was progressed with the Units. This is aimed towards improvement in business performance via information sharing and integration.

Directors Responsibility Statement

In compliance of Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors of your Company confirm:

that the applicable Accounting Standards have been followed in the preparation of final accounts and that there are no material departures;

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

that 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 your Company and for preventing and detecting fraud and other irregularities; and

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

Directors

At the Board Meeting held on February 4, 2011, Mr. T.S. Vishwanath and Mr. Vinod Kumar Dhall were appointed as Directors in the casual vacancies caused due to the resignations of Dr. Ajay Dua and Mr. Karim Vissandjee respectively. In the same Board Meeting Mr. T.S. Vishwanath was elected as a Non Executive Chairman of the Board.

Dr. Ajay Dua served as the Chairman of the Company from July 2009. He had successfully steered your Company to its current leadership position in the Indian T&D Industry. Your Directors place on record their deep sense of appreciation for the valuable services rendered by Dr. Ajay Dua. The Board also wishes to place on record the support given by Mr. Karim Vissandjee for introduction of various financial tools and establishment of the financial shared service centre. At the Board Meeting held on February 25, 2011, Mr. CM.A. Nayar, an independent Director, resigned from the Board. The Board places on record its deep appreciation for the valuable contribution made by Mr. Nayar, during his association with the Company.

Mr. Michel Serra, Mr. Alexandre Tagger and Mr. Anil Chaudhry have been co-opted as Additional Directors and Mr. Arvind Pachauri was appointed as an Alternate Director to Mr. Michel Serra on 04.02.2011 and due to Mr. Serras presence in India on 25.02.2011, Mr. Pachauri ceased to be an Alternate Director. On 25.02.2011, Mr. Pachauri was appointed as alternate to Mr. Pierre Laporte.

Brief Particulars of these Directors are given elsewhere in this report.

Considering the background and experience of the above Directors, the Board is of the opinion that the appointment of Directors as above, will benefit your Company and recommends the same.

Mr. Pierre Joseph Jean Marie Laporte and Mr. Michel Augonnet retire by rotation and being eligible, offer themselves for re-appointment. The Board recommends the re-appointment of both Mr. Laporte and Mr Augonnet as Directors.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, Reports on Management Discussion and Analysis and on Corporate Governance have been included elsewhere in this Report as separate sections.

Further, as required under the amended said Clause 49, your Company has adopted a Code of Conduct and Ethics for its Directors and Senior Executives. We wish to record here that this is in addition to the AREVA Values Charter which is applicable to all employees of the AREVA Group.

AREVA Global Transmission and Distribution Business Sale

During the year 2009 AREVA SA, the ultimate Holding Company of AREVA T&D India Limited had conducted a competitive open bidding process for the transfer of its global transmission and distribution electrical business (the "Global Business"). ALSTOM Holdings, a Company incorporated in accordance with the laws of France ("ALSTOM") and Schneider Electric Industries SAS, a Company incorporated in accordance with the laws of France ("Schneider") entered into a Consortium Agreement dated November 09, 2009 ("Consortium Agreement") whereby they agreed on the general principles regarding the offer to acquire the Global T&D Business of AREVA SA, funding of the acquisition, management of the Global T&D Business and separation of the same such that the transmission business will be allocated to the ALSTOM Group of Companies and the distribution business will be allocated to the Schneider Group of Companies.

Pursuant to the Consortium Agreement, a Share Purchase Agreement dated January 20, 2010 ("Share Purchase Agreement") was entered into between ALSTOM, Schneider and AREVA SA, to acquire 100% (one hundred percent) of the issued share capital and voting rights of T&D Holding (earlier known as AREVA T&D India Holding SA), a Company incorporated in accordance with the laws of France. T&D Holding directly along with its subsidiaries namely AREVA T&D India SAS and Long & Crawford Ltd, was holding 72.18% paid-up share capital of AREVA T&D India Ltd. (AREVA T&D India).

Pursuant to the said Share Purchase Agreement and subsequent amendments thereto, on June 7, 2010, ALSTOM and Schneider through ALSTOM Sextant 5 SAS, a special purpose vehicle in which ALSTOM Holdings and Schneider Electric Services International hold approximately 70% and 30% respectively, of the equity share capital and incorporated in accordance with the laws of France, acquired the Global T&D Business of AREVA SA after obtaining necessary approvals of the relevant authorities. Consequent to the acquisition of AREVAs Global T&D Business, ALSTOM Sextant 5 SAS has indirectly acquired 72.18% of the paid up share capital of AREVA T&D India.

Further, in terms of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto (the "SEBI (SAST) Regulations") ALSTOM Sextant 5 SAS, along with ALSTOM and others have, vide Public Announcement on 28th May 2010 to the equity shareholders of AREVA T&D India Limited made a cash offer to acquire up to 20% of the issued share capital of AREVA T&D India. Pursuant to the Public Announcement, ALSTOM Sextant 5 SAS, along with ALSTOM and others made an open offer to acquire up to 20% of the issued share capital of AREVA T&D India. Further to the Public Announcement made in May 2010, the Acquirer (ALSTOM Sextants SAS and others) had published the revised schedule of the open offer on 30th October, 2010 giving the date of opening of offer as November 6, 2010 and close of offer as November 25, 2010. Thereafter, on December 3, 2010 on behalf of Acquirer, the Managers to the open offer, DSP Merrill Lynch (DSP), had published the post offer Public Announcement in the Financial Express. The Acquirer had informed the Company vide their letter dated December 3, 2010, confirming the completion of the open offer formalities and enclosed the acknowledged copy of the post offer report filed by them with SEBI confirming that all other open offer obligations have been completed. The acquirers had acquired 2,906,624 (1.22%) equity shares tendered by the aforesaid erstwhile shareholders. These shares were held in Trust by the Registrar to the Offer, though not formally transferred in the Companys records. Consequently, on completion of formalities, the Promoters holdings stand increased to 175,492,524 (73.40%) equity shares.

The Company is in the process of studying the manner for carrying out the allocation in India as envisaged in the Consortium Agreement referred to above and upon firming up, necessary further steps will be taken. In the context, three enabling wholly owned subsidiaries (including one formed after the balance sheet date) have been incorporated as on the date of this report and included as members of the group, which may be appropriately purchase with a view to giving effect to any detailed plan that may finally be approved.

Auditors

The Company has received a letter from M/s. Deloitte Haskins & Sells, the retiring Auditors, that they do not wish to offer themselves for re-appointment as Auditors at the ensuing Annual General Meeting.

For and on behalf of the Board

T.S. Vishwanath Chairman

New Delhi March 16,2011


Dec 31, 2009

The Directors take pleasure in presenting herewith the Fifty-fourth Annual Report and Audited Accounts for the year ended December31,2009.

FINANCIAL RESULTS

(Rupees Thousands)

Year ended Year ended 31.12.2009 31.12.2008

Sales and Services (Net) 35,658,766 26,412,143

Operating Profit before interest 3,576,638 4,049,462

(As percentage of net sales) 10.0% 15.3%

lnterest.net 578,598 298,054

Operating Profit after Interest 2,998,040 3,751,408

Restructuring and relocation costs (83,286) (396,167)

Profit on Sale of Property 15,500 115,021

Profit Before Tax 2,930,254 3,470,262

Taxation (1,010,228) (1,207,031)

Profit After Tax 1,920,026 2,263,231

Balance brought forward from previous year 4,293,913 2,760,536

Profit available for appropriations 6,213,939 5,023,767

Appropriations

Proposed Dividend 430,387 430,387

Corporate Dividend Tax 73,144 73,144

General Reserve 192,003 226,323

Balance carried forward 5,518,405 4,293,913

Dividend

Your Directors take pleasure in recommending a dividend of 90 % (Rs. 1.80 per share) for the year ended December 31, 2009. This will absorb Rs.504 million (inclusive of tax) based on existing capital.

AREVA T&D India

Performance Review

The year 2009 was indeed difficult for the Indian economy. The signals of a financial crisis were noticed around September 2008. Your Company read these signals seriously and put in place a Crisis Management Plan to counter the negative impacts of this fiscal crisis.

Throughout 2009, the Industry and Infrastructure segments of the economy were badly impacted. Most of the projects were delayed and new investments were postponed. Consequently these segments had a negative growth in 2009.

The Power generation segment was also impacted due to delay in financial closure of projects, in addition to other issues like lack of progress in land acquisition and lack of allocation of coal linkages. The number of power projects that actually ordered electrical equipments were few.

However the T&D Utilities were active with their new projects and made several major investment decisions. Power Grid Corporation of India Ltd. (Power Grid) in the Central Transmission Utility, along with SEBs like MSETCL, HVPNL, RRVPNL, WBSTCEL, CSEB etc., scaled up their investments in 2009. Power Grid, in particular, launched a huge 765 kV programme and ordered several substations and transformers in 2009.

On the whole, the Utility segment of the T&D market was better than expected and largely compensated the negative growth of the Industry and Infrastructure segments. According to IEEMA, the growth of the entire electricity market was only 2%, though the T&D part reported somewhat better growth.

The export market did not fare better either. Both Middle East and Africa suffered badly due to the financial crisis.

Thanks to early launch of the Crisis Management Plan, your Company mitigated this difficult period quite well and reported an increase in Order intake, over 2008. The Order backlog (order in hand) grew significantly and was up by 17% over 2008, securing most of the volume for 2010 sales. In 2009, AREVAT&D India consolidated its market leadership position and also reported the highest sales growth, about 35%, among competition.

The year 2009 also witnessed a severe price pressure due to the low growth of the market. On an average the price fall, witnessed by the market, was of the order of 15% to 20%. It was even worse for certain segments of the distribution market.

Your Company made special efforts and launched several actions to improve operational savings supported by cost cutting measures to counter the price fall.

AREVA T&D India also successfully completed its new investment programme which had been launched in 2007. Eight new factories were built in the three new green field sites at Vadodora, Hosur and Padappai (Chennai). With these new investments your Company has not only expanded its manufacturing capacities, but has also built the facilities to manufacture 765 kV Extra High Voltage (EHV) equipments. These factories can further be upgraded to manufacture 1200 kV Ultra High Voltage (UHV) equipments without any major additional investment. The market for 1200 kV UHV is expected to open up 2012 onwards.

Products Business

The Power Transformers business continued to grow in 2009. A new world class manufacturing factory was commissioned at Vadodara in April 2009.

AREVA T&D India won several orders in the public utility as well as in the private segments. Power Grid Corporation of India Limited, the countrys largest transmission utility company, placed a large order for Transformer Package at Neemrana, Kotputli and Dehradun, including the first 500 MVA Transformer order to be finalised by Power Grid. Orders were received from Rajasthan Rajya Vidyut Prasaran Nigam Limited (RRVPNL) for 4x315 MVA Auto Power Transformers and 3x100 MVA 220/132 kV Auto Power Transformers.

The Distribution Transformer business also grew in 2009. Several major orders were won including, NTPC Order for Outdoor Transformer Packages at their Rihand and Mauda projects. Your Company also received significant orders for Distribution Transformers in MSETCL (via Contractor) and in the Wind segment.

AREVA T&D India successfully won several orders in the GIS segment, underscoring the success of its localization strategy. You may recall that AREVA T&D

India was the first amongst competition to launch its local GIS manufacturing plant in 2009. Your Company received a 420/245 kV GIS order from BHEL for its North Chennai Project. It also received orders for 400 kV GIS at Chamera II for NHPC. Other GIS orders received as turnkey orders are reported under Systems business in this Annual Report.

In 2009, your Company commissioned a new world-class EHV (765 kV) and HV (66 to 400 kV) Circuit Breaker manufacturing plant at Padappai (Chennai, Tamil Nadu). The old manufacturing facility at Perungudi was shifted to this new location with the dual objectives of expanding the manufacturing capacity, as well as upgrading the facility to manufacture Circuit Breakers upto the UHV (1200 kV) range in the future. The site is manufacturing Live Tank Circuit Breakers and localisation of Dead Tank Circuit Breaker is in progress. This site will also manufacture Dead Tank Circuit Breakers ranging from 66 kV to 145 kV Through the Systems business, the new site has received the highest number of 765 kV as well as 400 kV Circuit Breakers ordered, by Power Grid, in 2009. Several orders for Circuit Breakers, ranging from 66 kV to 400 kV, were also received from Utility segments (SEBs), Private sectors and other Contractors.

The Instrument Transformer factory at Bangalore was shifted to Hosur in 2009, where a new world class factory has been built, with the dual objective of expanding the manufacturing capacity as well as upgrading the facility to manufacture Instrument Transformers upto the UHV (1200 kV) range. Through the Systems business, this site has also received, like the new Circuit Breakers site at Padappai, the highest number of orders for 765 kV as well as 400 kV class of Instrument Transformers, ordered by Power Grid, in 2009. Several orders for Instrument Transformers, ranging from 132 kV to 400 kV, were also received from Utility segments (SEBs), Private sectors and other Contractors.

In 2009, AREVA T&D India commissioned a new world class Disconnector factory (for 765 kV and 400 kV class) at Padappai (Chennai, Tamil Nadu) and introduced state-of the-art Disconnector technology in India. Your Company has launched an action plan to improve the awareness for high quality Disconnectors in the Indian Power Grid system. Your Company is hopeful that the Indian Utilities would soon welcome the use of high quality Disconnectors to be used in the Indian Grid. The new plant has already received orders for 765 kV and 400 kV Disconnectors, through Systems Business, from Power Grid.

During 2009, your Company shifted the Medium Voltage manufacturing plant from Taratala, Kolkata to the newly built state-of the-art world class facility at Vadodora. The medium voltage segment also reported growth, despite downturn in the industry and infrastructure segments. New orders were won through Systems business, Contractors and direct Customers. The Secondary distribution did not grow much due to poor market conditions in the infrastructure segment of the market.

Overall, 2009 was an important year for the Products business of your Company, with all the new world- class factories coming on stream and reporting good performance across all Product categories.

Systems Business

The Systems business of AREVA T&D India, which delivers turnkey solutions in Utility, Industry and Infrastructure segments, had good success in 2009. While the industry and infrastructure market were negative, the overall market reported positive growth driven mainly by the Utility segment. The Systems division maintained its leadership position in the market and grasped the market growth which is increasingly demanding turnkey solutions.

Your Company strengthened its leadership position in 765 kV turnkey substation market with some major successes during the year and gained more than 50% market share in this segment. During the year, your Company won 7 out of 8 numbers of 765 kV Substation projects tendered and ordered in 2009. You may recall that your Company won the first 765 kV Substation (NTPCs Sipat Plant) in India. Your Company, amongst the competition, led initiatives in localising the 765 kV products manufactured at its Indian plants.

AREVA T&D India successfully executed the 400/230 kV Air Insulated Substation at Pugalur for Power Grid, which has been termed as the most modern substation. Conceived by Power Grid under the grid strengthening programme for Southern Region, the Pugalur Substation would supply power to the Southern part of India. AREVA T&D Indias products installed at the site include 315 MVA 400 kV Transformers, 63 MVA Reactors, 400 and 220 kV Circuit Breakers, Instrument Transformers, Surge Arrestors, Protection panels, Substation Automation system (PACIS on IEC 61850 protocol). This is a first of its kind project where latest products, technologies of AREVA T&D India are installed.

Considering the rocky terrain and space constraint your Company was able to deliver an innovative design, satisfying the challenging need of the project site.

Out of the very few Industry orders decided in 2009 your Company won the largest Industry order from Hindalco for a 220 kV Conversion Substation, for their Aluminium Smelter at Lapanga and Mahan. With this major success, after past orders won from NALCO, AREVA T&D India has consolidated its leading position in the aluminium electrolysis segment in India and is looking forward to the future growth of the electrolysis industry in the country.

During the year 2009, AREVA T&D India continued to receive 400 kV and 220 kV turnkey substation orders from major Private sector investors such as JSPL, Adani Group, Lanco Infratech, Jaiprakash Group etc.

In the Infrastructure segment, your Company received an order for turnkey supply of Secondary Power Distribution System for the Chennai Airport modernization project.

During the year AREVA T&D India achieved significant progress in the Utility segment. Amongst the major orders, your Company has signed a breakthrough Engineering Procurement and Construction (EPC) alliance agreement worth

approximately Rs.9,000 Million with Maharashtra State Electricity Transmission Co. Ltd (MSETCL), for the turnkey design and construction of 220 kV and 132 kV substations. The scope of this agreement includes a total of 36 substations, to be provided at various locations across the State of Maharashtra, over a period of three years. Orders for the first 18 substations, worth Rs.3,600 Million, have already been booked in 2009.

Another landmark success was achieved with Delhi Transco Ltd., where your Company has been engaged to supply two numbers of 220 kV Gas

Insulated Substations, on turnkey basis, to augment the transmission network in and around Delhi, for the upcoming Commonwealth games in 2010.

In addition, your Company successfully won orders with several other Utilities such as WBSETCL, HVPNL, APTRANSCO, CSPTCEL etc., to build their T&D network for 132 kV, 220 kV and 400 kV substations.

Building upon its experience of executing 600 MW Electrical Balance of Plant (E-BOP) projects for Essar group, the Systems Business bagged another major E-BOP order for 2X600 MW Malwa Power Plant from L&T Power. This further consolidates the position in the 600 MW E-BOP market segment.

Your Company initiated special focus in the small and medium turnkey systems market for Utilities, Industries and Infrastructure. This sub-segment of the business made good progress in 2009, registering order growth over80%.

During the year, AREVA T&D India delivered and commissioned several projects in the Utility, Industry and Infrastructure segments. Several large projects with Power Grid, WBSETCL, Jindal Group, Adani Group were commissioned. In the infrastructure segment your Company delivered a very challenging Power Distribution project, with GMR Group, for the Delhi International Airport. With these projects, AREVA T&D India has once again demonstrated that it is on the front-line when it comes to execution of projects with emerging technology and innovation.

Automation Business

Your Company is a global leader in the Energy management business, which is backed by its expertise in Network Management Services (NMS) and in delivering technologies like Energy Management Systems, SCADA and telecom backbone networks. Major highlights during the year included a prestigious order for the National Load Despatch Centre of Bhutan and successful empanelment as a SCADA/DMS implementation Agency and Consultant for R-APDRP Projects. The Load Despatch centre of Tata Power was successfully delivered on turnkey basis.

The Automation manufacturing facility at Pallavaram completed 50 years. It has been upgraded to a world class manufacturing facility, by implementing Lean Manufacturing processes. The Unit is rapidly moving towards creating a digital centre in India for MiCOM range of relays and becoming a centre of excellence innearfuture.

Service Business

Your Companys Service business provides single point services through the product life cycle for various T&D products to the customers. The scope of offering includes all service support the customer would need once products are in their premises- such as E&C services including supervision, warranty support, technical training, maintenance including long term contracts, repair and overhauling, ecofit (retrofit) and spares.

Your Companys customers are supported by 100 field service engineers deployed across the country to quickly respond to customer calls. Its brand new Ecofit workshop at Vadodara plant started production in 2009, providing customers with top class medium voltage retrofit solutions. During the year, the Technical Institute at Padappai also became operational for customers and delivered training for several customers such as DIAL, Jindal Power, CEA, Oil India Limited, IPGCL, etc. In a first of its kind offering, Service business also launched E-learning training modules, which are accessible over the internet. This unique offering has attracted considerable customer interest.

During the year, Service business commissioned a comprehensive online transformer monitoring system against the first ever order of its type received

from Power Grid. The key orders won in 2009 include turnkey supply and commissioning of one bay extension of Gas Insulated Switchgear from NHPC and complete erection and commissioning of 400/220 kV switchyard from Reliance Infrastructure Ltd, involving AREVAT&D products.

As part of its growth strategy, the Service business is increasingly focusing on securing long term maintenance contracts for carrying out maintenance activities (including operation also in some cases) at customer sites. This is in line with the market trend, where the customers are looking for long term service support.



Research and Development is an important element of your Companys leadership strategy and it continues to invest in R&D program including redesign to reduce cost across all product categories. Important technical developments and new products during the year in the Products business were:

O Successful localization of Dead Tank Circuit Breakers from 66 kV to 145 kV achieved in the High Voltage Switchgear business. The HV business also took a lead in developing a 72.5 kV Live Tank Circuit Breaker.

O The new Instrument Transformer factory at Hosur successfully developed 765 kV Current and Capacity Voltage transformers and 550 kV Current transformers. The Unit is developing a new range of Top Core Current Transformers in the 145kV and 245kV ratings.

O Significant R&D actions in the Secondary Distribution business at Vadodara led to development of Ring Main Unit with integrated metering, outdoor RMU, Auto changeover systems for RMUs with multiple incomers and SCADA ready RMU with motorization and viewing window for protective relay.

O In the Primary Distribution business, a completely new series of indoor and outdoor Circuit Breakers were launched to customers, the new PCOB-15 and PCOB-36 (outdoor circuit breakers), HVX- (Indoor circuit breakers), PIXMV (Panels for Indoor), HWX - Circuit Breakers and panels (Indoor circuit breakers) will significantly meet customer expectations at different price levels.

O Power Transformers made significant breakthroughs with the development and launch of 250 MVA Single Phase 400 kV GT Transformer. The first 220 kV 160 MVA and the first 400 kV 250 MVA transformers were successfully completed and dispatched. Manufacturing activity for 765 kV Transformer also was commenced during the year.

O The Distribution Transformers business developed a 14 MVA Buck boost furnace transformer for the Railwheel project and 75 x 950 KVA compact corrugated, energy efficient GSP transformers for the ENERCON Wind mill green energy projects.

Corporate Social Responsibility ¦

Key CSR initiatives undertaken by the Units:

Medinipur is a district on the South Western side of West Bengal, bordering Orissa. The AREVA Foundation is supporting a programme targeting orphans and vulnerable children (OVCs) in the village, in collaboration with FXB Suraksha - a leading NGO. The AREVA - FXB Suraksha programme is currently covering four villages of Chaipat gram panchayat.

Around 70 HIV affected families in these villages have been identified on the basis of a need gap survey for a basic package of health, education, psychosocial support and income-generating services. The objective of the programme is to help target recipients become self sufficient after 3 years and replicate the programme in other parts. In a short span of less than a year since inception, the programme has yielded visible results in terms of regular school attendance among children and mainstreaming the HIV affected children and adults in the village community.

Naini Unit, Uttar Pradesh

O Supported local Administration in organizing District level Vegetable and Flower show, supported "ECTA" (An all India Social, Literary and Cultural Organization) in organizing their special programme dedicated to the poor, handicapped students and widows. Supported Allahabad Consumer protection society in organising drive for poor patients, free education for poor children.

O Supported Kasam 20-20 Yatra for Child Rights Protection.

Hosur Unit, Tamil Nadu

O Major Greening initiative undertaken at the new site

O Rain water harvesting has been implemented at the factory.

Padappai Unit, Tamil Nadu

O Donation of Chairs to Salamangalam village school and sponsorship of its Childrens day celebrations.

O Disposal of 1.5 MT of e-Waste through authorised recycler (ECORECO, Mumbai) in line with-waste notification issued by Central PCB.

Vadodara Unit, Gujarat

In line with your Companys CSR philosophy of engaging with communities at a local level, the Vadodara Unit has adopted village Alamgarh located near the factory, at Baroda-Halol Road. Your Company has worked with the local village Gram Panchayat and District Authority to build basic amenities like roads, school, temple, milk collection centre etc., in the village.



By deploying safety procedures, training programmes, EHS Policy and communication systems, AREVAT&D India are deeply committed to improve the EHS performance.

EHS statistics for AREVA T&D India:

Frequency Rate-1

The EHS focus is on safeguarding employees by mitigating accidents in work operations and to attain zero Loss Time Injury Frequency Rate (FR-1). In 2009, Loss Time Injury Frequency Rate came down to 0.66.

Key highlights of the Year

O Seven manufacturing units recorded more than 1 million man hours of operation without lost time injury.

O Seven manufacturing units received ISO 9000, IS014000 and OSHAS18000 certifications.

O Several manufacturing units received prestigious Awards for good EHS practices.

O These include:

(i) Safety Innovation Award 2009 for Naini Unit given by Chairman, Railway Board.

(ii) "GREENTECH Safety Award-2009" to Naini Unit - for outstanding achievement in Safety management in the manufacturing sector, from Greentech Foundation of USA.

(iii) Several customers such as Steel Authority of India Ltd. (SAIL), LANCO, Banaras Hindu University and TATA Motors, gave appreciation letters to your Companys teams for following and practicing good EHS systems at the project sites.

AREVA T&D has a strong global policy on Environment management. Some of the key achievements are:

O 7 manufacturing units certified for ISO 14001 Environment Management System.

O Significant reduction in Water and Energy consumption.

O Air emission, Greenhouse gas emission, Liquid effluent, Conventional waste generation were also reduced at all the locations.

Several country level new EHS initiatives were undertaken during the year across multiple manufacturing locations. Some of the key achievements were:

O A simplified version of EHS Safety handbook cascaded to all sites.

O E-learning EHS module was developed for new employees.

O Contractor/ Vendor Training initiated as part of EHS training School.

O Safety Marshals deployed at units and major sites.

Sustainable Development & Continuous Improvement

During the year under review, the manufacturing units of the Company continued to progress, with the implementation of the global Sustainable Development (SD) model "AREVA WAY" that recognizes the interdependence of economic, environmental and social systems and performance factors. The success of any Sustainable Development initiative is dependent on the involvement of employees. The whole-hearted participation of AREVA T&D Indias employees at all levels is notable in this regard. To quote a few achievements in line with the sustainable development commitments:

O A Gallery Walk was organized by Country SDCI, during the ExCom (AREVA T&D global management team) visit to India in April 2009. Five galleries depicting Lean Six Sigma projects, Continuous Improvement projects and Country SDCI initiatives were presented to the Executive Committee of AREVA T&D global (ExCom), who commended effective deployment of SDCI initiatives in India.

O 21 more Lean Six Sigma projects contributing to operational performance improvement were successfully completed and certified.

O Systems business was certified for Integrated Management System (ISO 9001, IS014001 and OHSAS18001).

Unit level actions:

Naini

O Commendation Certificate by Safety & Quality Forum of Institute of Engineers, India, for commendable performance in safety.

O Golden Jubilee Award 2009 by Eastern UP Chamber of Commerce and Industry, Allahabad, in recognition of extraordinary accomplishment and contribution to the nation.

O HR Excellence award for Talent Management in 2009 received from Amity International Business School, Noida.

O Distribution Transformers Unit at Naini (DTI) was re-certified for Integrated Management System (ISO9001, IS014001 and OHSAS 18001).

O DTI Unit implemented AD3D software for transformers upto 5MVA leading to reduction of Mechanical design Cycle time from 16 hrs to 3hrs.

Pallavaram

O Automation - Pallavaram Site certified for Integrated Management System (ISO 9001, ISO 14001 and OHSAS 18001).

O Implementation of Eco-friendly design in packing of panels, leading to reduction of wood content by 95% in packing boxes.

O All product lines transformed to Lean lines and all conventional relay lines relocated in existing two blocks, resulting in space optimisation and reduction in energy consumption.

O The unit crossed 2.35 Million Man-hours without Loss Time Accidents (LTA) and Automation (Noida) unit crossed 1.23 Million Man-hours without LTA.

Hosur

O Hosur site certified for Integrated Management System (ISO 9001, ISO 14001 and OHSAS 18001) and Laboratory Management System (IS017025:2005).

O First commercial dispatch of 765 kV Current Transformer and Capacity Voltage Transformers.

O Sustainable Development (SD) project with the aim of deploying the concept of Sustainable Development to all employees was deployed at RMK Hosur. 87 employees were trained on Sustainable Development. Nine projects were shortlisted from 78 suggestions received from employees. Out of these shortlisted projects, one has been selected as SD Focus project, encompassing all the three pillars of Sustainable Development.

Padappai

O HVM Padappai unit certified for ISO 9001:2008 Quality Management System.

O Usage of hazardous Trichloro ethylene eliminated fully from production process by installing ultrasonic Aqueos Washing Machine.

Vadodara

O Medium Voltage unit was certified for ISO 9001:2008 - Quality Management System.

O First combined Customer day for Medium Voltage Switchgear, Secondary Distribution and Distribution Transformers was organized during the year as a platform to showcase your Companys abilities to the customers, understanding their needs and for improving the customer relationship.

Salt Lake Works

O The QMS unit which includes Air Insulated Switchgear, Vacuum Circuit Breaker, Vacuum Interrupter was certified to ISO 9001:2008.

Noida

O Automation and ISN units received AREVA T&D Excellence Award 2009 for Completion of Highest percentage of AREVA T&D Electrical Risk Prevention training.

Particulars of Employees

A statement, as required under Section 217(2A) of the Companies Act, 1956, read with The Companies (Particulars of Employees) Rules, 1975, is given in the Annexure which forms part ofthis report.



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 the Board of Directors) Rules, 1988 are given in the Annexure which forms part of this report.

Human Resources

Training and Development

In the year under review, the focus of training was on Competency building across various levels. Some of the key programmes for 2009 were Strategic Leadership for Senior Management Team, Fast Track Business Management with MM Bangalore for High Potential Managers, Finance for Non-Finance with Faculty from IIM Bangalore. A unique program called Celemi Decision Base was also undertaken for building overall business perspectives into the

Managers. During the year, AREVA University conducted Cycle 3 program in India. Another new initiative undertaken was towards building the leadership pipeline. With the help of Unit Managers, people with leadership potential were identified and have also completed succession planning. For senior managers, a 360 degree feedback program was also launched. An average of 4 man days of training for all employees was maintained.

In May 2009, training of the second batch for AREVA T&D Finance Institute Module 1 was conducted at The Indian School of Business (ISB, Hyderabad) - Indias leading business school, as training ground for its global finance executives. This training program has been conceptualized by AREVA T&D finance department, implemented with the support of AREVA University, and supported by ISB, Hyderabad and its professors in collaboration with AREVA T&D managers and CEOs of leading Indian companies.

The second batch of AREVA Continuing Education Program for Diploma Engineers was initiated in November, 2009 through a tie up with NT, Chennai at their campus. 29 Engineers were enrolled for this program.

Recruitment and Retention of Talent

AREVA T&D India has a policy of bringing young talent into the organisation and nurturing them for its future growth. 167 Graduate Engineers and 33 Diploma Engineers joined the organization in 2009. They have been put through intensive training priorto placement at various units. Over the last four years, your Company has achieved high retention

percentage of Graduate Engineers and Managers. The attrition rate amongst Managers and Professionals was around 4%.

Relocation program for employees in all three Greenfield sites ensured its successful start up and smooth talent transition. Your Companys current employees continue to support the efforts to attract talent through the Employee Referral Scheme, which contributes nearly 29% to the lateral recruitments.

Infromation System and Technology

Your Company continued to invest in Information Systems and Technology to support its business activities.

The overall IT infrastructure was further strengthened to support existing manufacturing units and the new sites. The Country WAN (Wide Area Network) was upgraded to meet business needs. The Company strengthened collaborative tools like IP telephony and Video conference facilities in all major sites and also provided its employees enhanced mobility tools (wireless devices) to access data remotely and be able to meet new challenges of business.

AREVA T&D India continued to reinforce the IT security aspect and enforced an IT security policy in the country. All systems and antivirus softwares were upgraded to keep the IT systems secure.

A significant step was taken to upgrade the ERP system for several businesses such as Systems, Service, Automation and Country Shared Services at NOIDA and Chennai, including the Unit at Pallavaram. The existing SAP software has been upgraded to the latest ECC 6.0 version, and the system has been aligned to the AREVA T&D Global ERP model. These changes will enable the Company to follow the Global best practices and facilitate world wide information sharing and consolidation. It is planned to upgrade the ERP for remaining units in the next two years.

Directors Responsibility

In compliance of Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors of your Company confirm:

O that the applicable Accounting Standards have been followed in the preparation of final accounts and that there are no material departures;

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

O that 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 your Company and for preventing and detecting fraud and other irregularities; and

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

Directors

At the Board Meeting held on July 27, 2009, Mr. Saroj Kumar Poddar stepped down as Chairman of the Company. Mr. S.K.Poddar had a long and illustrious association with the Company. His father, Late Badri Prasad Poddar, was among the first Directors to be appointed in The English Electric Company of India Private Limited (the Companys name at the time of its incorporation in India). Mr.Poddar has successfully steered your Company to its current leadership position in the Indian T&D Industry. Your Directors place on record their deep sense of appreciation for the valuable services rendered by Mr. S.K.Poddar.

During the year, Dr. Ajay Dua was co-opted as Additional Director and Chairman of the Company, effective July 27, 2009. Brief particulars of Dr. Ajay Dua are as under:

Dr. Ajay Dua, a career Civil Servant till July 2008, had served in the Government of India and Government of Maharashtra in several senior capacities. He brings in significant experience of the electricity industry having worked as a Joint Secretary in the Union Ministry of Power and as Chairman cum Managing Director of National Hydro Electric Power Corporation and the Rural Electrification Corporation of India. He has also served on the Board of Directors of NTPC Limited, Power Grid, Power Finance Corporation, North Eastern Electric Power Corporation, Nathpa Jhakri Power Corporation and

Tehri Hydro Development Corporation. He was an initiator of the policy of Power Sector Reforms in India. As Secretary in the Ministry of Industry and Commerce, he had spearheaded the formulation of policy for industrial development, intellectual property and promotion of domestic and foreign investments. Currently he is on the Board of several Indian Firms and also works as a Senior Advisor to many foreign companies.

Considering his background and experience, the Board is of the opinion that the appointment of Dr. Ajay Dua, as Director and Chairman, will be beneficial to your Company.

Your Directors regret to report the sad demise of Mr. Subir Raha, a Director, who passed away on February 1, 2010 after prolonged illness. Mr. Subir Raha was appointed on the Board of the Company on February 28, 2008. Mr. Raha had served with distinction in various senior positions in the Indian Oil and Gas Industry including as the Head of the Oil Co- ordination Committee (OCC). After his retirement from the Public Sector, he served on the Board of Directors of several Indian Public and Private Limited Companies. Your Directors place on record their deep appreciation for the contributions made by him as an Independent director on the Board and as a member of the Audit Committee.

Mr. Michel Augonnet and Mr. Karim Vissandjee retire by rotation and being eligible, offer themselves for re-appointment. The Board recommends the re-appointment of both Mr. Michel Augonnet and Mr. Karim Vissandjee as Directors.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Reports on Management Discussion and Analysis and on Corporate Governance have been included elsewhere in this Report as separate sections.

Further, as required under the amended said Clause 49, your Company has adopted a Code of Conduct and Ethics for its Directors and Senior Executives. We feel proud to record here that this is in addition to the AREVA Values Charter which is applicable to all employees of the AREVA Group.



During the year, AREVA, the ultimate holding company decided to exit T&D business and consequent to the decision, AREVA Executive Board began negotiations with the Alstom-Schneider Consortium. In January 2010, the management in India has been informed that a Share Purchase Agreement was signed between AREVA Group and Alstom-Schneider Electric and the completion of the sale transaction is subject to obtaining the merger clearances from EU Commission and other Competition authorities. When the transaction is cleared by the said authorities, the new acquirers, in connection with compliance with SEBI regulations in India, will need to communicate to the shareholders their detailed plans, wherein possible reorganization of the T&D business in Indiais expected.

[Auditors]

M/s. Deloitte Haskins & Sells, the retiring Auditors, have indicated their willingness to be reappointed.

For and on behalf of the Board

Dr. Ajay Dua Chairman New Delhi February 12, 2010



 
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