abb india 2009 annual report

Driving sustainable growthABB India Annual Report 2009

Investing Values

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Contents

01 Board of directors and other information

02 5 year highlights

07 Corporate Management Committee

11 Notice to members

12 Directors’ report

26 Management’s discussion and analysis

31 CEO / CFO certification

32 Auditors’ report

36 Balance sheet, profit & loss account and schedules

47 Notes to accounts

65 Cash flow statement

67 Balance sheet abstract and company’s general business profile

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ABB Limited, India, Annual Report 2009 1

Board of Directors

Gary Steel, Chairman

Biplab Majumder, Vice Chairman & Managing Director

N.S. Raghavan

Nasser Munjee

D. E. Udwadia

A. K. Dasgupta

Peter Leupp

Francis Duggan (w.e.f. 26.02.2010)

Bernhard Jucker (upto 20.03.2009)

Veli-Matti Reinikkala (upto 31.03.2009)

K. Rajagopal, Whole-time Director (upto 31.07.2009)

Company Secretary

B. Gururaj

Corporate Management Committee

Biplab Majumder

Amlan Datta Majumdar

S. Ramesh Shankar

N. Venu

B. Gururaj

Prakash Nayak

Madhav Digraskar

R. Narayanan

Venkatesh Prasad

G.N.V. Subba Rao

Madhav Vemuri

Ranjan K. De

S. Karun

Bankers

Canara Bank

Citibank N.A.

DBS Bank Limited

Deutsche Bank AG

HDFC Bank Limited

ICICI Bank Limited

IDBI Bank Limited

State Bank of India

The Hongkong & Sanghai Banking Corporation Limited

The Royal Bank of Scotland N.V.

Union Bank of India

Yes Bank Limited

Auditors

S.R. BATLIBOI & CO.

Chartered Accountants

Registered Office

2nd Floor, East Wing,

Khanija Bhavan,

49, Race Course Road,

Bengaluru- 560 001.

Registrar & Share Transfer Agents

Karvy Computershare Private Limited

No. 51/2, T.K.N.Complex,

Vanivilas Road,

Opp. National College,

Basavanagudi,

Bengaluru - 560 004.

ABB Limited

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ABB Limited, India, Annual Report 20092

5 Year highlights

(Rs in Millions)

Description 2009 2008 2007 2006 2005

Sources of Funds

Share Capital 423.8 423.8 423.8 423.8 423.8

Reserves 23,673.5 20,622.9 15,694.2 11,386.5 8,466.7

Net Worth 24,097.3 21,046.7 16,118.0 11,810.3 8,890.5

Borrowings - 0.2 5.6 15.5 27.3

Funds Employed 24,097.3 21,046.9 16,123.6 11,825.8 8,917.8

Income and Profi ts

Sales & Other Income 63,097.7 69,674.5 60,013.6 43,477.0 30,141.4

Operating Profi t Before Interest and Depreciation 6,012.9 9,024.6 8,005.7 5,504.0 3,692.6

Profi t Before Tax 5,274.0 8,332.4 7,564.6 5,232.1 3,394.8

Tax 1,727.6 2,858.3 2,647.9 1,829.0 1,208.0

Profi t After Tax 3,546.4 5,474.1 4,916.7 3,403.1 2,186.8

Dividend / Dividend Tax 495.8 545.4 558.0 483.3 389.4

Retained Earnings 3,050.6 4,928.7 4,358.7 2,919.8 1,797.4

Other Data

Gross Fixed Assets 9,754.6 8,838.5 6,627.1 5,190.0 4,324.4

Debt Equity Ratio 0.00:1 0.00:1 0.00:1 0.01:1 0.01:1

Net Worth Per Equity Share - Rs 113.7 99.3 76.1 55.7 42.0

Earnings Per Equity Share - Rs 16.7 25.8 23.2 16.1 10.3

Dividend Per Equity Share - Rs 2.0 2.2 2.2 2.0 1.6

Profi t After Taxes as % to Average Net Worth 15.7 29.5 35.2 32.9 27.4

Excludes revaluation of fi xed assets and revaluation reserve.

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5 year Highlights

Return on capital employed (%)

50

40

30

20

10

0

05 06 07 08 09

Revenues (Rs in Millions)

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

05 06 07 08 09

30,141

43,477

60,014

69,675

63,098

Profit after tax (Rs in Millions)

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

05 06 07 08 09

Excludes revaluation of fixed assets and revaluation reserve.

Employees and Productivity

12,500

10,000

7,500

5,000

2,500

0

05 06 07 08 09

6,222

5,5355,187

4,052

10,141

7,439

10,000

8,000

6,000

4,000

2,000

0

Number of employees Revenue per employee (Rs in Thousands)

2,186.8

3,403.1

4,916.7

5,474.1

3,546.4

43.2

50.554.6

46.6

24.5

8,382

10,842 10,726

6,496

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ABB is one of the world’s leading power and automation engineering companies.

We provide solutions for secure, energy-efficient generation, transmission and distribution of electricity and for increasing productivity in industrial, commercial and utility operations.

Our portfolio ranges from light switches to robots and from huge electrical transformers to control systems that manage entire power networks and factories.

We help our customers meet their challenges with minimum environmental impact. That’s why ABB stands for “Power and productivity for a better world.”

This is ABB

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ABB in India

ABB operations in India are in excess of one billion US dollars and the company has 14 manufacturing facilities and over 6,000 employees in the country.

ABB has an extensive countrywide presence with around 18 marketing offices, 8 service centers, 3 logistic warehouses and a network of over 850 channel partners.

ABB continues to bring value to customers in India through leading edge technologies, domain expertise and project execution abilities. India is the largest engineering design and R&D resource base for ABB Group worldwide.

The company’s technology strengths, wide offering portfolio and unique ability to package solutions and provide a single window approach to verticals continue to be a key differentiator. While the top-line grows as we create value for customers, focus on productivity, operational efficiencies and working capital management continues to ensure profitability.

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ABB India corporate management team

Biplab MajumderVice Chairman & Managing Director

Amlan Datta MajumdarChief Financial Officer

Ramesh ShankarHead – Human Resources

N VenuHead – Sales and Marketing

B GururajHead - Legal & Compliance and Company Secretary

Prakash NayakHead – Power Systems

Madhav DigraskarHead – Power Products

R NarayananHead – Discrete Automation and Motion

Venkatesh PrasadHead – Low Voltage Products

G N V SubbaraoHead – Process Automation

Madhav VemuriHead – Corporate Research

Ranjan K DeHead – Institutional Sales

S KarunHead – Service and EHS

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Power productsPower products are the key components to transmit and distribute electricity. The division incorporates the ABB manufacturing network for transformers, switchgear, circuit breakers, cables and associated equipment. It also offers all the services needed to ensure products’ performance and extend their lifespan. The division is subdivided into three business units.

Our businessEnsuring grid reliability

Power systemsPower systems offer turnkey systems and services for power transmission and distribution grids and for power plants. Substations and substation automation systems are key areas. Additional highlights include flexible alternating current transmission systems (FACTS), high-voltage direct current (HVDC) systems and network management systems. In power generation, power systems offer instrumentation, control and electrification of power plants. The division is subdivided into four business units.

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Discrete automation and motionThis division provides products, solutions and related services that increase industrial productivity and energy effi ciency. Its motors, generators, drives, programmable logic controllers (PLCs), power electronics and robotics provide power, motion and control for a wide range of automation applications. The leading position in wind generators and a growing offering in solar complement the industrial focus, leveraging joint technology, channels and operation platforms.

Low voltage productsThe low voltage products division manufactures low-voltage circuit breakers, switches, control products, wiring accessories, enclosures and

Improving industrial productivity

cable systems to protect people, installations and electronic equipment from electrical overload. The division further makes KNX systems that integrate and automate a building‘s electrical installations, ventilation systems and security and data communication networks.

Process automationThe main focus of this business is to provide customers with products and solutions for instrumentation, automation and optimization of industrial processes. The industries served include oil and gas, power, chemicals and pharmaceuticals, pulp and paper, metals and minerals, marine and turbocharging. Key customer benefi ts include improved asset productivity and energy savings.

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ABB contributes to society through its business activities, and their social, environmental and economic impact. Social performance - both within the company and in the communities where ABB operates - is a key element of the company’s sustainability goals.

EducationABB has adopted six schools covering over 5,500 children, near its major manufacturing hubs. The support includes facility upgradation covering school buildings, classrooms, toilets, library etc. and initiatives such as teachers’ training sessions, health camps and excursions. To support improved nutrition, ABB provides mid-day meals to the students from the schools in Bengaluru with the help of Akshaya Patra Foundation. Over 90% of the cost of this program is paid for by the employees. The ABB Jürgen Dormann Foundation for Engineering Education signed partnership agreements with two more universities in India - Jadavpur University, Kolkata and MS (Maharaja Sayajirao) University, Vadodara.

Access to electricity projectMore than 7,000 people living in 1,137 homes in seven remote villages in the districts of Barmer and Jodhpur, in the desert region of Rajasthan have been given the gift of solar-powered residential lighting. In 2009, lighting facilities were extended to all schools, community centre and maternity centre. ABB constructed another water tank of capacity 30,000 litres at a village which will ease the water problem for 200 more families. With this project, in the last 3 years, income levels for families have increased by 25%,

attendance in schools has also seen a rise by 20% and new avenues for employment have been created.

Supporting the differently-abledABB has outsourced assembly of simple components to organizations, Prerana and Seva Tirth in Bengaluru and Vadodara respectively, to help over 100 colleagues live a life of dignity by facilitating a regular source of income. In 2009, ABB provided the centres with computers, extending the outsourcing initiative to making engineering drawings in AutoCAD.

EnvironmentABB in India installed and commissioned its first photovoltaic solar plant at its Nelamangala facility, to support its lighting needs. Environment initiatives include green-cover maintenance, rain water harvesting and vermiculture. In 2009, over 10 million litres of water was collected to improve the water table while supporting the greenery. For the third time in a row, the ABB greening initiatives in Bengaluru received awards for the Best Maintained Garden and Traffic Islands. ABB in India also received the CII Leadership and Excellence Award in Environment Health & Safety (EHS) for the southern region.

Support to natural calamitiesABB in India and its employees assisted the relief and rehabilitation operations for the victims of the floods in North Karnataka and Bihar with monetary contributions. This money provided essential commodities such as milk, medicines, eatables and clothes to the flood victims.

Sustainability

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Notice to Members

NOTICE is hereby given that the SIXTIETH ANNUAL GENERAL MEETING of the Members of ABB Limited will be held at The Atria Hotel, “Chancery”, No.1, Palace Road, Bengaluru – 560 001, on Tuesday, May 11, 2010 at 11.00 A.M. (IST) to transact the following business:

Ordinary Business:

1. To receive, consider and adopt the Audited Balance Sheet as at December 31, 2009 and the Audited Profit & Loss Account for the year ended on that date and the Reports of the Directors and the Auditors thereon.

2. To declare a dividend on equity shares.

3. To appoint a Director in place of Mr. D. E. Udwadia, who retires by rotation at this Annual General Meeting, and being eligible, offers himself for re-election.

4. To appoint a Director in place of Mr. N. S. Raghavan, who retires by rotation at this Annual General Meeting, and being eligible, offers himself for re-election.

5. To appoint M/s. S.R. BATLIBOI & CO., Chartered Accountants having registration number 301003E, as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to authorize the Board of Directors to fix their remuneration.

Special Business:

6. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT Mr. Francis Duggan, who was appointed as an Additional Director by the Board of Directors of the Company on February 26, 2010, pursuant to Article 152 of the Articles of Association of the Company and who holds office upto the date of this Annual General Meeting under Section 260 of the Companies Act, 1956 and in respect of whom the Company has received a notice in writing from a member proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation”.

By Order of the Board For ABB Limited

B. Gururaj Company SecretaryPlace : Bengaluru Date : February 26, 2010

Registered Office:2nd Floor, East Wing, Khanija Bhavan,49, Race Course Road, Bengaluru – 560 001.

Notes:

1. The Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956, setting out the material facts in respect of special business under item No. 6 is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT ONE OR MORE PROXY(IES) TO ATTEND AND VOTE INSTEAD OF HIMSELF / HERSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXIES IN ORDER TO BE EFFECTIVE MUST BE DULY FILLED, STAMPED, SIGNED AND SHOULD BE DEPOSITED AT THE COMPANY’S REGISTERED OFFICE NOT LATER THAN FORTY–EIGHT HOURS BEFORE THE COMMENCEMENT OF THE MEETING. PROXIES SUBMITTED ON BEHALF OF LIMITED COMPANIES, SOCIETIES, PARTNERSHIP FIRMS, ETC., MUST BE SUPPORTED BY APPROPRIATE RESOLUTION / AUTHORITY AS APPLICABLE, ISSUED ON BEHALF OF THE APPOINTING ORGANISATION.

3. Members should bring the duly filled in attendance slip sent herewith for attending the meeting.

4. The Register of Members and the Share Transfer Books of the Company will remain closed from May 5, 2010 to May 11, 2010 (both days inclusive) for the purpose of payment of dividend.

5. The dividend, as recommended by the Board of Directors of the Company, if declared at the Annual General Meeting, will be paid on or after May 13, 2010, to those Members whose names stand registered on the Company’s Register of Members:-

a) as Beneficial Owners as at the end of business hours on May 4, 2010 as per the list to be furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) in respect of shares held in dematerialized form.

b) as Members in the Register of Members of the Company after giving effect to valid share transfers lodged with the Company, on or before May 4, 2010.

6. Members are requested to note that dividends not encashed or remaining unclaimed for a period of seven (7) years from the date of transfer to the Company’s Unpaid Dividend Account, shall be transferred, under Section 205-A of the Companies Act, 1956, to the Investor Education and Protection Fund, established under Section 205C of the said Act. Members who have not yet encashed the dividend warrant(s) from the financial year ended December 31, 2002, onwards are requested to forward their claims to the Company’s Registrar and Share Transfer Agents. It may be noted that once the unclaimed dividend is transferred to the Investor Education and Protection Fund as above, no claim shall rest with the Company in respect of such amount. It may also be noted that the unclaimed dividend amounts which were lying with the Company upto the year ended on December 31, 2001, have been transferred to the Investor Education and Protection Fund.

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7. Members are requested to intimate, indicating their folio number, the changes, if any, in their registered addresses, either to the Company or to its Registrar and Share Transfer Agents, viz., Karvy Computershare Private Limited, Unit: ABB Limited, (a) No. 51/2, T.K.N.Complex, Vanivilas Road, Opp. National College, Basavanagudi, Bengaluru - 560 004. (b) Plot No. 17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081, or to their respective Depository Participant (“DP”) in case the shares are held in dematerialised form.

8. Members holding shares in physical form can avail of the nomination facility by filing Form 2B (in duplicate) with the Company or its Registrar & Share Transfer Agents which will be made available on request and in case of shares held in dematerialised form, the nomination has to be lodged with their DP.

9. As required under clause 49 (IV) (G) of the Listing Agreement of the Stock Exchanges, the relevant details of persons seeking re-appointment/ appointment as Directors are furnished in the Corporate Governance Section of this Annual Report.

10. Securities and Exchange Board of India vide its circular dated April 27, 2007 and June 25, 2007, has made it mandatory effective July 2, 2007 for every participant in the securities / capital market to furnish Income Tax Permanent Account Number (PAN No.). Accordingly all shareholders are required to submit their PAN No. along with a photocopy of both sides of the PAN card, duly attested.

Shareholders holding shares in physical form are requested to submit

the copy of the PAN card of all holders including joint holders duly attested by the Notary Public / Gazetted Officer / Bank Manager under their Official Seal and stating their full name and address, registration number to the Company’s registered office address or its Registrars & Share Transfer Agents, Karvy Computershare Private Limited, at the address mentioned above.

Shareholders holding shares in electronic form are required to furnish their PAN No to their Depository Participant with whom they maintain their account along with the documents as required by them.

11. The Company has designated an exclusive e-mail id viz.,[email protected] to enable investors to register their complaints / queries, if any.

Annexure to Notice

Explanatory Statement under Section 173(2) of the Companies Act, 1956

Item No. 6

The Board of Directors of the Company at its meeting held on February 26, 2010, appointed Mr. Francis Duggan as an Additional Director effective that date. In terms of Section 260 of the Companies Act, 1956 and Article 152 of the Articles of Association of the Company, Mr. Francis Duggan holds office as Director upto the date of the ensuing Annual General Meeting of the Company and is eligible for re-appointment as Director.

The Company has received a notice under Section 257 of the Companies Act, 1956, along with the deposit of Rs 500/- from a member proposing the candidature of Mr. Francis Duggan, for the office of Director.

The Board considers that his association as Director will be beneficial and in the interest of the Company.

The Directors recommend the passing of resolution set out at Item No.6, of the accompanying Notice.

Except Mr. Francis Duggan, none of the other Directors is, in any way, concerned or interested in the said resolution.

By Order of the Board For ABB Limited

B. Gururaj Company SecretaryPlace: BengaluruDate: February 26, 2010

Registered Office:2nd Floor, East Wing, Khanija Bhavan,49, Race Course Road, Bengaluru – 560 001.

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Directors’ Report

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

Financial Results

(Rs in Thousands)

For the year ended December 31, 2009

For the year endedDecember 31, 2008

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

Less: Provision for Tax

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

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

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

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

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

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

Appropriations

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

Proposed Dividend 423,817 466,198

Corporate Dividend Tax 72,028 79,230

Balance Carried Forward 607,178 556,632

4,103,023 6,102,060

Dividend

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

Performance Review

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

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

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

Profit after tax at Rs 3,546 million for the year has reduced by 35% compared to Rs 5,474 million in the previous year. Earning per equity share of face value of Rs 2/- correspondingly decreased to Rs 16.74 compared to Rs 25.83 in the previous year.

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

Transfer to Investor Education and Protection Fund

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

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

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

Environment, Health and Safety

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

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Particulars of Employees

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

Directors’ Responsibility Statement

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

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

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

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

Corporate Governance

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

Board of Directors

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

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

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

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

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

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

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

Auditors

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

For and on behalf of the Board

Place: Bengaluru Gary SteelDate: February 26, 2010 Chairman

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Annexure - A to Directors’ Report

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo - Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988.

1. Conservation of energy

Energy conservation continued to be priority area for the Company. Energy conservation measures taken during the year included

• Optimum utilisation of maximum demand load • HV (11kV) capacitor banks installed for HV machine testing to

improve the system power factor to 0.99 • Maximised use of sun light during day time reducing illumination

requirement. This aspect was considered while designing of new factory at Nelamangala

• Induction of a hot dip impregnation machine for two baking ovens and use of 40 kW oven for 135 kW oven at Faridabad plant

• Replacement of all incandescent lamps with CFL • Control over compressed air leakages • Use of solar powered street lights at Bangalore plant • Awareness and training programmes for employees • Energy audits and corrective actions • Switching off lights and air conditioners during breaks and when

not essential

With proper planning and awareness consumption of electricity and diesel was reduced as compared to previous year. Proposed areas of work include use of LPG and natural gas for thermic fluid heating for ovens, replacement of inefficient central air conditioned plant with efficient AC plants, installation of VFD on compressors, servo control voltage stabilisers for lighting, water saving activities, compressed air systems, selection of energy efficient plant and machineries as per BEE guidelines.

Total energy saving as a result of measures taken is estimated at2 million kWh units of energy per annum. This saving, however, has no appreciable impact on cost of goods, as the Company’s production processes are not energy intensive.

2. Technology absorption, adaptation and innovation

2.1 Technical Development

New Products Developed:

• 145 kV new design LTBD circuit breaker • 33 kV 400A centre break disconnector • 145 kV 2500A double break disconnector • 180 kVA auxiliary railway converter • Dry type transformer • New design for small frame motors for domestic and export market • 36 kV vacuum circuit breaker • 36 kV indoor switchgear type unigear ZS2 • 12 kV 630A, 20 kA frame mounted compact substation • 12 kV 800A, 13.1 kA outdoor breaker

Product Improvements:

• 400 kV circuit breaker 4000A suitable for Indian conditions • Polymer insulators for current and capacitor voltage transformers • Surge capacitor for GCB application • Development of IP 65 protection for frame size 160 and 180 • Online machine monitoring system for electrical rotating machines • New insulation scheme for motors in classified hazardous area in

line with Global Standards • Product certification for IP 55 for foot and flange motors in frame

size 280 - 355 • ACS 510 drives for general purpose industry • Global cabinet design for LV drives • Manufacturing of cabinet for ACS 5000 MV drives • Optimisation of dimensions of unigear switchgear

Technology adaptation and innovation:

• Unigear panel localisation and range expansion • Localisation of contactors, air circuit breakers, MCCBs, switches

and fuses of different ratings, components for 145 kV circuit breaker, assemblies for hybrid switchgear type PASS and double bus bar switchgear

• Local manufacturing of 615 series relays • Development of indigenous components for switching mechanism • Technology absorption for traction motors, TEFC range machines • Indicating meter with digital display for analog power line carrier

terminal type ETL4X and ETL8X • Bidding tool for Electrics for balance of plant • Design for HMI603, LCD based human machine interface for

REJ603 2.2 Benefi ts derived as a result of the R&D eff orts

Multifold benefits were accrued as a result of R&D activities. Apart from strengthening of technical base, benefits have also been reflected in terms of improvement of product reliability and quality, standardisation of design of assemblies, sub-assemblies and components of various products, improved measurement range and accuracy level, better aesthetics, cost reduction and increased acceptability of products in local and global markets. R&D also helped in adopting some of the new products with the existing legacy system installed at the customer plants, helping customer in avoiding costlier investments.

2.3 Expenditure on Research & Development

Considering nature of research and development, complexity, competency required, time frame, amount and also to optimise overall cost, all major R&D efforts are pooled centrally at the Group level. Company as a beneficiary of these developments in terms of new products, technologies and application pays to the Group companies royalties/ license fees. Total amount incurred for these fees during the year was Rs 790 million. Localisation of products manufacturing, adoption to local environment and other improvements/ cost saving actions are carried out locally. Total expenditure on such development efforts during the year is estimated to be Rs 10 million.

Investing Values



the year orders were received for the first time from new markets/countries. It continued as a global feeder factory within the group for 72.5 kV circuit breakers. Segment’s export orders received included 128 circuit breakers from a utility of Brazil, maiden order for 300 kV disconnector from Indonesia for POSO energy, a large order from Nigeria for 800, 36 kV outdoor breakers and 964 MVA of 132/33 kV of power transformers from Saudi Arabia, Malaysia, Ethiopia and other countries.

Automation product segment continued to pursue export sales promotional activities. Orders received grew by 15%. Significant orders received included supply for wind power generator motors to Denmark, high current rectifier order from Indonesia, supply of coils and rewinding of generator stators from United Kingdom and from ABB, Spain for electric motors. Machine life expectancy analysis studies earned significant revenues. Internal sourcing within group of products, components, tools and engineering services is on increase. Construction of wind power generator motor factory for export at Vadodara is in advance stage of completion.

Metals and minerals business units of process automation division are group internal centre of excellence for metals and cement businesses and have secured several orders particularly from Middle East and South Asia regions. A major order from Arcelor-Mittal for Tube Mill at Saudi Arabia was received during the year. Power system segment also received a major substation order from Bangladesh.

With management focus, strategies and increasing sourcing of components, products and services from India by the ABB Group companies, prospects for growth of exports in coming years remains high.

(b) Total foreign exchange used and earned (Rs in Millions)

i) Foreign exchange earned (including deemed exports) 8,770

ii) Foreign exchange used 22,904


Place: Bengaluru Gary SteelDate: February 26, 2010 Chairman

3. Imported Technologies

3.1 Technologies imported during last fi ve years• 'A’ range contactors up to 40A 2005 • Residual current circuit breakers 2005 • PR521 and PR512 relays 2005• SPAD 346C relays 2005• Operating mechanism- BLK 222 245 kV CB 2005• ACS 550 Drives 2005• Residual Current Device (RCD) 2007• Localisation of TMAX/EMAX MCCBs 2007• TA 25 Relays 2007• HT Motors M3BM 2007• Three phase LV induction Motors up to 7.5 kW 2007• Shunt reactors 2008• MCD-80 band pass and ETL-600 2008• 145 kV, SF6 circuit breaker LTB145D1/B 2008• REF601 relays 2008• Fuseless capacitors 2008• Unigear double bus bar switchgear 2009• TEFC range of machines (HXR range) 100 – 1400 kW 2009• Contactors size 3, 4 & 5 2009• ACS 510 drives for general purpose industry 2009• Global cabinet design LV drives and ACS 5000 MV drives 2009 • 145 kV new design LTBD circuit breaker 2009• Dry type transformer 2009• Shunt reactor 50 MVAr, 400 kV 2009

Above technologies have been fully absorbed, except for contactors size 4 & 5 and dry type transformer.

3.2 Foreign exchange earnings and outgo

(a) Activities related to Exports; initiatives taken to increase exports; development of new export markets for products and services; export plans

During the year export orders received was Rs 7,431 million, reflecting a growth of 31% over previous year. Several strategies adopted in past few years resulted in continuous growth in the export orders. Due to significant higher revenues from certain large value projects in last year, overall revenues during the year at Rs 5,021 million were lower by 4%.

Power products segment further consolidated its position in the export market and had growth in export orders of 28%. During

Investing Values



Annexure – C to Directors’ Report

Report on Corporate Governance

1. Corporate Governance Philosophy

The Company is committed to good Corporate Governance. The Company fully realises the rights of its shareholders to information on the performance of the Company and considers itself a trustee of its shareholders. The Company provides detailed information on various issues concerning the Company’s business and financial performance, to its shareholders. The basic philosophy of Corporate Governance in the Company is to achieve business excellence and dedicate itself for increasing long-term shareholder value, keeping in view the needs and interests of all its stakeholders. The Company is committed to transparency in all its dealings and places emphasis on business ethics.

2. Board of Directors

(i) Composition / Category of Directors / Attendance at Meetings / Directorships & Committee Memberships in other companies as on December 31, 2009

Attendance Directorships / Mandatory Committee Memberships in Other Companies

Name Category of Director

No.

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Mr. Gary Steel (Chairman)

Non-executive 4 3 Yes 1 - - -

Mr. Biplab Majumder(Vice Chairman & Managing Director)

Executive 4 4 Yes 1 - - 1

Mr. K. Rajagopal * Executive 4 3 Yes 2 - 1 1Mr. N. S. Raghavan Non-executive & Independent 4 3 Yes - 8 1 -Mr. Nasser Munjee Non-executive & Independent 4 3 Yes 14 1 4 3Mr. D. E. Udwadia Non-executive & Independent 4 4 Yes 12 7 7 -Mr. Bernhard Jucker** Non-executive 4 1 NA - - - -Mr. A .K. Dasgupta Non-executive & Independent 4 3 Yes 6 - 1 1Mr. Peter Leupp Non-executive 4 3 No 1 - - -Mr. Veli-Matti Reinikkala# Non-executive 4 - NA - - - -

* Mr K Rajagopal resigned as Whole-time Director of the Company with effect from July 31, 2009.

** Mr Bernhard Jucker resigned as Director of the Company with effect from March 20, 2009, but however he was appointed as an Alternate Director for Mr Peter Leupp during the period from April 30, 2009 to July 31, 2009 and he attended the Board Meeting held on April 30, 2009.

# Mr Veli-Matti Reinikkala resigned as Director of the Company with effect from March 31, 2009

None of the Non-executive Directors has any pecuniary relationship or transaction with the Company.

(ii) No. of Board Meetings held in the Financial Year 2009 and dates on which held

The Board meets at least once in a quarter to consider amongst other business, the quarterly performance of the Company and the financial results. The Board has held four meetings during the financial year 2009 i.e., on February 20, April 30, July 31 and October 30, 2009.

3. Audit Committee

(i) Terms of Reference

The Audit Committee is responsible for overseeing the Company’s financial reporting process, reviewing the quarterly/half-yearly/annual financial statements, reviewing with the management on the financial statements and adequacy of internal audit function, recommending the appointment/re-appointment of statutory auditors and fixation of audit fees, reviewing the significant internal audit findings/related party transactions, reviewing the Management Discussion and Analysis of financial condition and result of operations. The Committee acts as a link between the management, external and internal auditors and the Board of Directors of the Company.

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The Committee discussed with the external auditors their audit methodology, audit planning and significant observations/suggestions made by them. The Committee also discussed major issues related to risk management and compliances.

In addition, the Committee has discharged such other role/function as envisaged under Clause 49 of the Listing Agreement of the Stock Exchanges and the provisions of Section 292A of the Companies Act, 1956.

(ii) Composition, name of members & Chairperson, meetings held during the year and attendance at meetings

The Company has complied with the requirements of Clause 49 of the Listing Agreement of the Stock Exchanges and Section 292A of the Companies Act, 1956, as regards composition of Audit Committee.

The Audit Committee presently consists of four Non-executive Independent Directors. The Committee has held five meetings during the financial year 2009 i.e., on February 19, April 30, June 20, July 31 and October 30, 2009. The composition of the Audit Committee as on December 31, 2009 and the attendance of members at the meetings of the Audit Committee held during the financial year 2009 were as follows:

Members of Audit Committee No. of meetings attendedMr. Nasser Munjee (Chairman) 4Mr. N. S. Raghavan 4Mr. D. E. Udwadia 5Mr. A. K. Dasgupta 3

4. Remuneration Committee

(i) Terms of Reference

The role of the Remuneration Committee is to recommend to the Board, the remuneration package for the Managing / Executive Directors (s).

(ii) Composition, name of members & Chairperson, meetings held during the year and attendance at meetings

The Remuneration Committee presently consists of 3 Non-executive Directors, the Chairman being Non-executive and Independent. No meeting of the Committee was held during the financial year 2009. The composition of the Remuneration Committee as on December 31, 2009 is as under:

Members of Remuneration CommitteeMr. N. S. Raghavan (Chairman)Mr. Gary SteelMr. A. K. Dasgupta

(iii) Remuneration Policy/Criteria of payments to Non-executive Directors

The Company has a credible and transparent policy in determining and accounting for the remuneration of the Executive/Non-executive Directors. Their remuneration is governed by the external competitive environment, track record, potential, individual performance and performance of the Company as well as industry standards. The remuneration determined for the Executive/Non-executive Directors is subject to the approval of the Board of Directors and the Members.

The Non-executive Independent Directors are compensated by way of a commission and the criteria being their attendance in the Board/Committee Meetings.

As a policy, the Non-Independent Directors are not paid sitting fees.

(iv) Details of remuneration to all the Directors paid / payable for the fi nancial year 2009(Rs in Thousands)

NameSittingFees

Salary &Perquisites

CommissionPayable(*)

StockOption

Pension

Mr. Biplab Majumder Nil 13,513 3,662 Nil NilMr. K. Rajagopal** Nil 4,820 1,200 Nil NilMr. N.S. Raghavan 85 NA 400 Nil NilMr. Nasser Munjee 70 NA 400 Nil NilMr. D. E. Udwadia 110 NA 400 Nil NilMr. A. K. Dasgupta 60 NA 400 Nil Nil

(*) subject to the approval of the Board.

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

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Fixed Component / Performance Linked Incentive / Criteria

The Executive Directors of the Company are entitled to an annual performance related commission based on the results achieved against the targets fixed and determined by the Board.

Service Contract / Notice Period / Severance Fees

a) The Contract of Service entered into by the Company with Mr. Biplab Majumder, Vice Chairman & Managing Director, provides that the Company and the Vice Chairman & Managing Director shall be entitled to terminate the agreement by giving 90 days notice in writing on either side.

b) No severance fee is payable by the Company on termination of the agreement.

5. Shareholders’ Committee

The Board of Directors of the Company has set up an Investors’ Grievance Committee which has been authorised to approve the transfer / transmission /transposition of shares.

In order to expedite the process, the Board of Directors has also delegated the authority severally to the Vice Chairman & Managing Director (VC & MD) and the Company Secretary to approve the share transfers and accordingly, the VC & MD or the Company Secretary approves the transfer / transmission of shares generally at a frequency of about twice a month.

Four meetings of Investors’ Grievance Committee were held during the financial year 2009 i.e., on February 20, April 30, July 31 and October 30, 2009.

Mr. B. Gururaj, Senior Vice President - Legal & Compliance and Company Secretary is the Compliance Officer of the Company.

The composition of Investors’ Grievance Committee as at December 31, 2009 and attendance of the Committee members at these meetings were as follows:

Members of Investors’ Grievance Committee No. of meetings attendedMr. D. E. Udwadia (Chairman) 4Mr. N. S. Raghavan 3Mr. Biplab Majumder 4

The details of investors’ complaints received and resolved during the financial year 2009 is as under:

No. of investors’ complaintsreceived during 2009

No. of investors’ complaintsresolved during 2009

Investors’ complaints pendingat the end of 2009

294 294 NIL

6. General Body Meetings

(i) Location and time where last three Annual General Meetings (AGMs) held

For the Year Venue Day & Date Time

2008The Lalit Ashok, “Kalinga”, Kumara Krupa High Grounds, Bengaluru – 560 001 Tuesday,

May 19, 200911.00 a.m. (IST)

2007The Atria Hotel, “Chancery”, No.1, Palace Road, Bengaluru – 560 001 Tuesday

June 3, 200811.00 a.m. (IST)

2006The Atria Hotel, “Chancery”, No.1, Palace Road, Bengaluru – 560 001 Friday,

May 25, 20073.00 p.m. (IST)

(ii) Special Resolution passed in the previous three Annual General Meetings

No Special Resolution was passed in the last two Annual General Meetings i.e., AGM held on June 3, 2008 and May 19, 2009.

Two Special Resolutions had been passed in the Annual General Meeting of the Company held on May 25, 2007, wherein the approval of the members was obtained for (a) amendment to Articles of Association of the Company and (b) payment of Commission to Non-executive Directors.

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(iii) Postal Ballot

No postal ballot was conducted in the year 2009. As on date, the Company does not have any proposal to pass any special resolution by way of postal ballot.

7. Disclosures

(i) Disclosures on materially signifi cant related party transactions.

There was no materially significant related party transaction during the year having potential conflict with the interests of the Company.

(ii) Details of non-compliance by the Company, penalties and strictures imposed on the Company by the Stock Exchanges or SEBI or any statutory authorities or any matter related to capital markets during the last three years.

The Company has complied with all the requirements of the Listing Agreement of the Stock Exchanges as well as regulations and guidelines of SEBI. Neither any penalty nor any stricture has been passed by SEBI, Stock Exchanges or any other Statutory Authority on matters relating to capital markets, in the last three years.

(iii) Whistle Blower Policy and affi rmation that no personnel have been denied access to the Audit Committee.

The Company has adopted Whistle Blower Policy of ABB Group. The employees of the Company have access to approach the Management on any issues relating to Code of Conduct/Business Ethics. ABB Group has a business ethics hotline maintained at Group’s headquarter at Zurich for making any compliant by anyone on compliance issues.

(iv) Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause.

The Company has fully complied with the mandatory requirements of Clause 49 of the Listing Agreement of the Stock Exchanges. Further, the Company has adopted one non-mandatory requirement of clause 49 of the Listing Agreement, viz. Remuneration Committee of the Board, which has been constituted to determine the remuneration package of the Executive Director(s).

8. Means of Communication

(i) Quarterly Financial Results / Offi cial News Releases

The quarterly / half-yearly / annual financial results are published in The Economic Times / Business Standard / Financial Express (English Daily) and Samyukta Karnataka (Kannada Daily).

The financial results and the official news releases are also placed on the Company’s website www.abb.co.in. The Company has a dedicated help desk with e-mail ID: [email protected] in the Secretarial Department for providing necessary information to the investors.

9. General Shareholder Information

(i) Annual General Meeting

Day, Date, Time and Venue:

The Company will be holding its 60th Annual General Meeting on Tuesday, May 11, 2010 at 11.00 a.m. (IST) at The Atria Hotel, “Chancery”, No.1, Palace Road, Bengaluru – 560 001.

Agenda:

(a) Adoption of Audited Accounts, Directors’ and Auditors’ Report (b) Declaration of Dividend (c) Re-election of Directors retiring by rotation (d) Re-appointment of M/s. S. R. Batliboi and Co., Chartered Accountants, as Auditors (e) Appointment of Director

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(ii) Profi le of Directors seeking re-appointment/appointment

The profile of Directors who are seeking re-appointment / appointment at the Annual General Meeting is furnished below:

Brief profi le of Directors and nature of their expertise in functional areas

Directorships/CommitteeMemberships in other companies

Shareholding inABB Limited

Mr. D. E. Udwadia

Mr. Udwadia, aged 70, has obtained a Post Graduate Degree from the University of Mumbai. He has nearly five decades of active law practice and has acquired invaluable knowledge, experience and expertise in various matters viz., corporate laws, mergers / acquisitions & takeovers, corporate restructuring, foreign collaboration, joint ventures etc.

He is a solicitor by profession and is a senior partner of a law firm ‘Udwadia & Udeshi’, which is one of the leading law-firms in Mumbai. He is also the Chairman of AstraZeneca Pharma India Limited and Vice Chairman of MPS Limited.

He is also on the boards of several reputed public as well as private companies.

Directorships1. ADF Foods Ltd.2. AstraZeneca Pharma India Ltd.3. The Bombay Burmah Trading Corp. Ltd.4. Development Credit Bank Ltd.5. Eureka Forbes Ltd.6. ITD Cementation India Ltd.7. JM Financial Ltd.8. MPS Ltd.9. Mechanalysis (India) Ltd.10. WABCO-TVS (India) Ltd.11. Wyeth Ltd.12. Nitesh Estates Ltd.13. Conservation Corporation of India Pvt. Ltd.14. Habasit lakoka Pvt. Ltd.15. JM Financial & Investment Consultancy Services Pvt. Ltd.16. JM Financial Trustee Co. Pvt. Ltd.17. JM Financial Consultants Pvt. Ltd.18. Quantum Advisors Pvt. Ltd19. Rossi Gearmotors (India) Pvt. Ltd.

Committee MembershipsAudit Committee

1. AstraZeneca Pharma India Ltd.2. The Bombay Burmah Trading Corp. Ltd.3. Development Credit Bank Ltd.4. ITD Cementation India Ltd.5. MPS Ltd.6. WABCO-TVS (India) Ltd.7. Wyeth Ltd.

2600 Shares

Mr. N. S. Raghavan

Mr. Raghavan, aged 66, is a graduate in Electrical Engineering. He served in the Ministry of Defence, Government of India for 9 years handling various responsibilities in the Corps of Electrical and Mechanical Engineers. He worked as an Engineer in Andhra Pradesh State Electricity Board and as Head - Electrical Department in Kothari Sugars and Chemicals Limited, Trichy. He was the Joint Managing Director of Infosys Technologies Limited for 19 years.

Directorships

1. Flame-Tao Knoware Pvt. Ltd.2. IDFC Private Equity3. Nadathur Holdings and Investments Pvt. Ltd.4. Ojas Ventures Fund Pte. Ltd., Singapore5. Syndicated Research Worldwide Pvt. Ltd.6. Ananta Holdings Pvt. Ltd.7. Nadathur Arts Pvt. Ltd.8. Nadathur Fareast Pte. Ltd.

Committee MembershipsAudit Committee1. IDFC Private Equity

NIL

Mr. Francis Duggan

Mr. Duggan aged 50, is a graduate Engineer. He has been working with ABB for the past 25 years. Mr. Duggan has held various high-profile positions across the company, including Transmission & Distribution Manager in Poland, Country Manager of the Czech Republic, Global Business Area Manager for Oil, Gas and Petrochemicals, as well as Head of Group Account Management. Currently he is the Region Manager for India, Middle East and Africa (IMA).

NIL NIL

Investing Values



(iii) Financial Year

Indicative calendar of events for the year 2010 (January - December) excluding Extra Ordinary General Meeting(s), if any, are as under:

Fourth Quarter Financial Results (Year 2009) February, 2010

First Quarter Financial Results April, 2010

Annual General Meeting May, 2010

Second Quarter Financial Results July, 2010

Third Quarter Financial Results October, 2010

(iv) Date of Book Closure

The Company’s Register of Members and Share Transfer Books will remain closed for the purpose of payment of dividend from May 5, 2010 toMay 11, 2010 (both days inclusive).

(v) Dividend Payment Date

The dividend, as recommended by the Board of Directors, if declared at the ensuing Annual General Meeting will be paid on or after May 13, 2010, to those shareholders whose names appear on the Company’s Register of Members as on May 4, 2010.

(vi) Listing on Stock Exchanges

The equity shares of the Company are currently listed at National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). The Company has paid till date, appropriate listing fee to both the Stock Exchanges where the Company’s equity shares are listed.

(vii) Stock Code

National Stock Exchange Bombay Stock Exchange ISIN

ABB 500002 INE117A01022

(viii) Market Price Data

The market price data of the Company’s shares traded in the Bombay Stock Exchange and the National Stock Exchange, during the year 2009 was as follows:

Period 2009BSE (Rs.) BSE Sensex NSE (Rs.) NSE Nifty

High Low High Low High Low High Low

January 517.00 420.00 10469.72 8631.60 519.65 422.50 3147.20 2661.65

February 480.00 360.00 9724.87 8619.22 478.00 359.45 2969.75 2677.55

March 433.00 344.00 10127.09 8047.17 432.80 343.35 3123.35 2539.45

April 560.00 414.05 11492.10 9546.29 560.00 414.00 3517.25 2965.70

May 697.00 392.10 14930.54 11621.30 700.00 452.80 4509.40 3478.70

June 834.00 649.10 15600.30 14016.95 834.00 648.10 4693.20 4143.25

July 808.00 641.15 15732.81 13219.99 806.00 642.00 4669.75 3918.75

August 763.90 648.15 16002.46 14684.45 765.00 649.00 4743.75 4353.45

September 820.35 723.00 17142.52 15356.72 820.00 723.00 5087.60 4576.60

October 827.90 731.15 17493.17 15805.20 827.25 700.55 5181.95 4687.50

November 786.45 707.50 17290.48 15330.56 786.80 703.00 5138.00 4538.50

December 777.00 730.15 17530.94 16577.78 788.00 728.05 5221.85 4943.95

Investing Values



(ix) Performance in comparison to broad-based indices viz., BSE Sensex and NSE Nifty

Investing Values



(x) Registrar and Share Transfer Agents

Karvy Computershare Private Limited, (Unit: ABB Limited)

(1) No. 51/2, T.K.N.Complex, Vanivilas Road, Opp. National College, Basavanagudi, Bengaluru - 560 004. Tel. No.: 080-26621192 Fax No.: 080-41312645 E-mail: [email protected]

(2) Plot No. 17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081. Tel. No.: 040-23420815-28 Fax No.: 040-23420814 E-mail: [email protected]

(xi) Share Transfer System

The Company’s shares being in compulsory demat list, are transferable through the depository system. However, shares in the physical form are processed by the Registrar & Share Transfer Agents and approved by the Investors’ Grievance Committee. In order to expedite the process, the Board of Directors has also delegated the authority severally to the Vice Chairman & Managing Director (VC & MD) and the Company Secretary to approve the share transfers and accordingly, the VC & MD or the Company Secretary approve the transfer/transmission of shares generally at a frequency of about twice a month. The share transfer process is reviewed by the said Committee.

(xii) Shareholding Pattern

As on 31.12.2009 As on 31.12.2008

Shareholders No. of shares % No. of shares %

ABB Asea Brown Boveri Ltd. Zurich &ABB Norden Holdings AB, Sweden 110420285 52.11 110420285 52.11

Non-Resident Individuals / OCBs 446193 0.21 459231 0.22

Directors and their relatives 3500 0.00 5225 0.00

LIC / UTI / Other Insurance Cos. 43318448 20.44 37088502 17.50

Nationalised Banks / Other Banks 979900 0.46 584473 0.28

Mutual Funds 6030284 2.85 7848964 3.70

Foreign Institutional Investors 21308653 10.06 26215035 12.37

Bodies Corporate / Trust 5934434 2.80 5047432 2.38

General Public 23466678 11.07 24239228 11.44

Total 211908375 100.00 211908375 100.00

(xiii) Distribution of Shareholding as on December 31, 2009

Category No. of Shareholders No. of Shares held %age of equity capital

1 – 5000 111741 18676873 8.81

5001 – 10000 382 2625092 1.24

10001 – 50000 230 4644175 2.19

50001 – 100000 31 2287980 1.08

100001 and above 75 183674255 86.68

Total 112459 211908375 100.00

Investing Values



(xiv) Dematerialisation of Shares and liquidity

The equity shares of the Company are available under dematerialised form with National Securities Depository Limited (NSDL) and Central Depository Services (India) Ltd., (CDSL). The Company’s equity shares are compulsorily traded in the dematerialised form. Consequent to sub-division of the face value of equity share of the Company, the Company has been allotted with new ISIN i.e., INE117A01022.

As on December 31, 2009, 101,703,577 equity shares of the Company have been dematerialised representing 47.99% of the total shares. (101,432,487 equity shares were in dematerialised form representing 47.87% of the total shares as on December 31, 2008).

(xv) Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on equity

As on date, the Company has not issued GDRs, ADRs or any other Convertible Instruments and as such, there is no impact on the equity share capital of the Company.

(xvi) Code of Conduct

The Company has in place a Code of Conduct applicable to the Board Members as well as the Senior Management and the same has been hosted on the Company’s website. All the Board Members and the Senior Management Personnel have affirmed compliance with the Code of Conduct, as on December 31, 2009.

(xvii) Plant Locations The Company’s plants are located at Bengaluru, Faridabad, Haridwar, Mumbai, Nashik and Vadodara.

(xviii)Address for Correspondence

ABB Limited 2nd Floor, East Wing, Khanija Bhavan, 49, Race Course Road, Bengaluru - 560 001 Phone: 080-22949150 to 22949153 Fax: 080-22949148 Corporate Secretarial E-mail ID: [email protected] Corporate Website: www.abb.co.in

(xix) Non-Mandatory Requirements

Remuneration Committee of the Board to determine the remuneration package for the Executive Director(s).


Place : Bengaluru Gary Steel Date : February 26, 2010 Chairman

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Annexure - D to Directors’ ReportCorporate Governance Compliance Certificate

ToThe Members of ABB Limited.

We have examined all relevant records of ABB Limited (the Company) for the purpose of certifying compliance of the conditions of Corporate Governance under Clause 49 of the Listing Agreement with National Stock Exchange of India Limited (NSE), and Bombay Stock Exchange Limited (BSE), for the financial year ended December 31, 2009.

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of certification.

The compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination was limited to the procedure and implementation thereof. This certificate is neither an assurance as to the future viability of the Company nor the efficacy or effectiveness with which the management has conducted the affairs of the Company.

On the basis of our examination of the records produced, explanations and information furnished, we certify that the Company has complied with:

(a) all the mandatory requirements of the said Clause 49 of the Listing Agreement.

(b) the following non-mandatory requirement of the said Clause 49 – “Constitution of Remuneration Committee”.

For D.R.Shressha & AssociatesCompany Secretaries

D.R.ShresshaPlace: Bengaluru ProprietorDate: February 26, 2010 C. P. No. 6119

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Management’s Discussion and Analysis

Operating Results of the Company

During the year 2009, the Company secured orders worth Rs 86,847 million, a modest 8% higher than the previous year’s orders of Rs 80,541 million. Due to slowing down of global and Indian economy and liquidity crunch particularly in early part of the year, investment decisions by our customers, particularly industrial sector customers, were either deferred or dropped. As a result, orders for Process Automation segment were significantly lower. This had affected rate of overall growth in order receipt during the year. Central Government’s stimulus package had positive impact on investments and liquidity in the economy. Consequently, order receipt for Power Products segment had remained at the same level as achieved in last year. The Company had good inflow of orders from Power Systems and Automation Products segments. During the year, relative share of project orders were higher compared to product orders which delayed conversion of these orders into revenues. Company’s order backlog at the end of the year increased by 38% to Rs 84,787 million as compared to Rs 61,618 million at the beginning of the year.

Revenues during the year were at Rs 63,098 million, registering a decline of 9% over the previous year’s revenues of Rs 69,675 million. Slowing down of orders for products, particularly in the first two quarters of the year, increased credit risk, decision to exit from rural electrification business in Power Systems segment and requests from certain customers to defer the supplies affected overall revenue growth. Profit before tax was lower at Rs 5,274 million as compared to Rs 8,332 million in the previous year. Profit before tax for the year was lower on account of lower revenues, cost of early exit/foreclosure of certain contracts in rural electrification business, adverse impact from fair valuation of forward foreign exchange and embedded derivative contracts, building of organisation and manufacturing capacities for higher expected scale of operation and significant provision against receivables due to higher credit and other risks. During the year, management continued to pursue several cost optimisation measures, which partially helped in improving the profitability. Net profit after tax at Rs 3,546 million for the year was lower by 35% compared to the previous year. Earnings per equity share (face value Rs 2) was also lower at Rs 16.74 compared to Rs 25.83 in the previous year. Cash flow, however, from operations was significantly higher than the previous year.

In line with attractive long term returns, the Company has completed majority of manufacturing capacities expansion projects and continued to expand its range of offering and introduced several new products. Investment in fixed assets during the year was Rs 1,632 million.

Outlook for the Company

With improvement in economic scenario, better liquidity environment, recent pickup in growth rate in the manufacturing sector, continued investments in power and other infrastructure projects, the business is expected to grow. And all time high order backlog, potential for increase in exports, adequate manufacturing and engineering capacities coupled with various management strategies and access to global technologies, management is optimistic about volume growth of the Company in coming years. Profitable growth in the short term may be influenced by market competition, credit risk, successful closure of rural electrification and certain other large projects.

Business Segment Analysis

Please refer to note 4, Schedule 16, for detailed description of the Company’s business segments. The relative distribution of revenues amongst the segments is as under.

2009 2008Power Systems (PS) 26 % 31 %Power Products (PP) 29 % 28 %Process Automation (PA) 18 % 18 %Automation Products (AP) 27 % 23 %

Relative share of revenues from Power Systems segment reduced significantly during the year with corresponding increase in revenue share from Power and Automation Products segments.

Power Systems Segment (PS)

The summarised performance of the segment is as under.(Rs in Millions)

2009 2008Orders Received 33,478 25,608Order Backlog 42,653 26,131Revenues 17,192 23,054Result 65 2,028

With energy shortage increasing in the country and Central Government’s focus on power sector reforms and introduction of national electricity policy in past few years have reflected in increasing investment in capacity addition, development of transmission network and power distribution improvements. Against power generation capacity addition target of 78,700 MW during the eleventh five year plan (2007-12), actual capacity addition till year end has been rather low. However additional capacity of over 60,000 MW is under construction and for most of these projects fuel linkage has been established. National grid is being planned and it is envisaged to have 37,000 MW of inter-regional capacity comprising of high capacity HVDC and HVAC lines to be completed by the year 2011-12. Power Grid Corporation of India Limited (PGCIL) is expected to invest over Rs 500 billion on enhancing power transmission capacity in next two years. Central Government has finalised Restructured Accelerated Power Development and Reforms (R-APDRP) for augmenting and strengthening power distribution network in India. There have been significant investment plans both by public and private sectors for other infrastructure projects also in the areas of airports, metros, railways, roads, ports, water irrigation etc. Central Governments stimulus packages have helped in improving liquidity and investments in power and infrastructure sector.

Investing Values



Most utilities prefer to order substation packages on turnkey basis and power plant developers prefer to go in for procurement by splitting the packages for boilers, turbines and generator (BTG) and balance of plant (BOP). These trends are favourable to this segment. There is also increasing focus on non conventional source of energy like solar and wind due to environment considerations and global warming concerns. Several new players have entered in extra high voltage space increasing competition resulting in lower price levels for substation packages.

With favourable environment, Power Systems segment booked several large orders during the year. The major orders received during the year included 765/400 kV transmission substations at Bilaspur, Wardha and Agra from PGCIL, 220/132/33 kV transmission substations at Srinagar from Power Transmission Corporation of Uttaranchal Limited, electrical balance of plant package for 2X250 MW Chhabra – II from Indure Private Limited, electrical balance of plant for 2X800 MW thermal power plant at Krishnapatnam from TATA Projects Limited, electrical balance of plant packages for 1X500 MW Korba thermal power plant from INDU Projects Limited and supply, erection, testing and commissioning of power supply receiving/distribution system, 750V DC third rail traction electrification and SCADA system from Bangalore Metro Rail Corporation Limited. During the year several 400/220/132 kV substations were commissioned for PGCIL and other customers.

Orders received in Power Systems segment grew by 31% during the year. Revenues during the year were lower by 25% due to Company’s decision to exit from rural electrification business due to cash flow and safety concerns, deferment of deliveries by the private sector customers for electrical balance of plant, and lower order receipt/backlog for certain business units. Profit of the segment was significantly lower compared to previous year due to lower revenues, impact of exit/foreclosure of certain rural electrification projects, margin slippages in certain contracts, execution of lower margin orders and adverse impact from fair valuation of foreign exchange forward and embedded derivative contracts. Cash flow from operations was better during the year due to collection of old receivables and higher advances from customers for the large order receipt during the year.

Power Systems segment continued its focus in the area of safety, project risk reviews, increasing competency in the area of project management, project controlling and supply chain management. In complex projects we shall introduce world class systems and plan to deploy world class experts from the parent company. Internal organisation has been recently reorganised to optimise resources and bringing management focus.

Considering improving economic environment and good order backlog position, outlook for the segment is positive. However due to competitive market, exit costs of rural electrification business and successful closure of certain large projects pose a challenge towards realisation of normal profit levels in the short term.

Power Products Segment (PP)


2009 2008Orders Received 23,742 24,062Order Backlog 20,629 16,980Revenues 19,936 20,492Result 2,170 2,601

The business environment for the power transmission and distribution sector continued to be positive as detailed under Power Systems segment. Due to slow down in the Indian economy and liquidity crunch, investment by industries was lower. Central Government’s stimulus package had positive impact on the business environment. Increasing number of utilities are preferring to buy on turnkey basis from EPC contractors. This segment also witnessed increase in number of competitors from both domestic as well as overseas, particularly from China and Korea, and excess capacity for certain products, have affected the price levels. It is also to be noted that there is increasing demand for new technologies like gas insulated switchgears due to space constraint in urban areas.

Major orders received during the year included 18 number power transformers of various ratings from NTPC Limited for Mauda project, 13 number power transformers of various ratings from TATA Projects Limited for Krishnapatnam project, 15 number power transformers from NTPC Limited for Vishnugad project, 19 number power transformers of various ratings from Neyveli Lignite Corporation Limited for Tuticorin project, 6 bay of 220 kV hybrid switchgears from GMR Energy Limited for barge mounted power plant at Kakinada and an export order for supply of 36 kV OHB breakers for Rs 323 million. This segment also booked large value internal orders for transformers and HV/MV breakers from Power Systems segment.

To maintain competitive edge in the market, during the year, several new products were introduced/supplied by the segment. This included shunt reactor 50 MVAr, 400 kV, dry type transformers, 33 kV indoor switchgear type ZS2 equipped with Vacuum circuit breaker type VD4, 33 kV packaged substation, 145 kV LTB D light circuit breaker, 33 kV, 4000A centre break disconnector, 145 kV, 2500A double break disconnector and current transformers and capacitor voltage transformers with polymer insulators.

During the year new manufacturing facilities for small power transformers, bushings, shunt reactors and capacity augmentation for high voltage circuit breakers and instrument transformers were commissioned. Manufacturing capacity enhancement for power transformers and traction transformers at Vadodara, indoor unigear switchgear at Nashik and HV capacitor at Bangalore are under implementation and will be completed during 2010. Series of short circuit tests of transformers of various ratings were completed during the year.

During the year orders and revenues remained broadly at the same level as of the previous year. Profit was lower compared to last year due to lower price realisation for high and medium voltage switchgears and higher provision against receivables. Cash flows from the operation was better during the year.

Outlook for the segment continues to be positive with comfortable order backlog, higher manufacturing capacities, continuous introduction of new products and expected increase in demand for power products from utilities as well as industrial sector.

Investing Values



Process Automation Segment (PA)



The Industrial climate in the country remained buoyant for several years till middle of 2008. The global market meltdown, lower consumer spending, liquidity crunch and capacity built-up in anticipation of demand growth have adversely affected the demand for new equipment and systems provided by the segment from later part of the year 2008. Some of the proposed investments were either deferred or dropped. For improving efficiencies, industries are investing for retrofit and up gradation projects. For certain customer orders there was delay in conversion of order backlog into revenues due to delay in the projects. In the later part of the year 2009, with improvements in consumer sentiments, availability of finance and industrial growth, there were early signs of new investments in brown and green field projects. The industry has significant latent opportunities for investments from trend of increasing per capita consumptions for all metals, cement and paper. With pickup of automobile sector and investments in power generation and other infrastructure segment, demand for cement, steel and coal handling equipment is expected to increase. The global steel majors like POSCO, Arcelor-Mittal and Tata Group, Steel Authority of India Limited, Jindal group and Bhushan group have announced their plans for investment in steel sector in India.

With limited global opportunities, competition in India is increasing. Customers are splitting the packages for smaller group of products limiting the opportunities for the segment in terms of volume and margin.

Due to adverse external environment, orders received, revenues and profits during the year were lower than the previous year. Profitability of the segment was further affected due to adverse impact from fair valuation of foreign exchange derivatives. Operating cash flows were lower due to delay in payments from the customers. To minimise adverse impact of business slow down, control over expenses and new recruitments were exercised throughout the year. With slow down in investment for new capacity enhancement projects, segment focused on service opportunities and had significant growth in orders and revenues from the service business.

The segment has received several large orders for electrical and automation solutions during the year. The major orders received include Arcelor-Mittal for Tube Mill at Saudi Arabia, Tata Projects Limited for blast furnace BF5-Rourkela Steel Plant, Vedanta Aluminium Limited LT package for pot lines, Punj Lloyd Limited for LPG terminal, Prism Cements Limited and Jaiprakash Associates Limited for cement plants, Megha Engineering and Infrastructure Limited for ONGC Assam renewable project, ThyssenKrupp Industries Limited for internal coal handling plant for Mundra power plant, Bhushan Power and Steel Limited for cold rolling mill and Diesel Locomotive Works for TPR61 Turbochargers.

Major plants/systems for electrical and automation solutions commissioned during the year includes cold rolling mill for Dharampal Industries Limited, hot rolling mill – plate mill at Vasind for JSW Steels Limited, cold rolling mill at Korba for BALCO, Grasim Cements Limited cement plant at Kotputil, clinkerisation plant for Star Cement Limited, Dubai, Ariyalur cement line II for Chettinad Cements Limited, bucket wheel excavator for Neyveli Lignite Corporation Limited, SCADA systems at nine locations for ONGC and systems for paper machine, variflex winder and Janus calendar for Ballarpur Industries Limited.

Focus in the material handling sector has been increased to secure orders for coal handling plants. Newer opportunities are expected from Middle East and South East Asian markets where internal market allocation has been given to the segment for metals and minerals businesses. Safety at project sites continued as major focus area and training programmes were conducted during the year for risk reviews.

With good order backlog, increase in growth rate of industrial production and expectation of firming up of the new and deferred investment plan by the customers, outlook for the segment remains positive. The outlook for Process Automation segment shall improve gradually with additional emphasis on service business particularly with ABB Full Service Concept which is being introduced as a major revenue stream.

Automation Products Segment (AP)



Slow down in Indian economy and lower investments in industrial sector effected orders and revenues for standard products. Demand for building electrical products was lower due to slow down in the real estate segment. This was more than compensated by very good order receipt and revenues from power electronics and medium voltage drives business units. Overall growth in orders and revenues of the segment during the year was 13% and 4% respectively. Due to lower demand for standard products and lower price realisation from increased competition, adverse impact of foreign exchange rates and capacity build up cost affected the profitability of the segment. Cash flow from the operating activities was better during the year.

Active sectors during the year were capital goods, cement, non-ferrous metals, infrastructure, iron, steel, pulp, paper, automotive, chemicals, food, beverages, water, waste water and telecom. Segment was able to sustain its market position in all the product ranges. There was marketing focus on original equipment manufacturer (OEM) segment including HVAC, pumps, compressor, boiler machinery, food, beverages and wind energy. Orders were received from major

Investing Values



OEMs like Sulzer Limited, Ingersoll Rand (India) Limited, Kirloskar Brothers Limited, Thermax Limited, Atlas Copco Limited, Cethar Vessel Limited, Other European customers including Win Wind. Excess industry capacity, increase in competition and volatility of foreign exchange rates continue to be the risks for the segment.

Segment received several large orders during the year from various sectors of the industry. Major orders received includes Vedanta Aluminium Limited for supply and commissioning of high current rectifier system and associated equipments for expansion of aluminum smelter at Jharsuguda, Orissa, Bharat Aluminium Company Limited for supply and commissioning of high current rectifiers for aluminium smelter at Korba, RNS Infrastructure Limited for equipments for KNNL lift irrigation project, Megha Engineering and Infrastructure Limited for equipment for lift irrigation project at Dumagudem, Win Wind for LV drives for wind converters, other European customers for wind generators and Bombardier Transportation India Limited for traction motors as well as other low voltage products and Relays.

Execution and commissioning of large systems during the year included high current rectifiers at Vedanta Aluminium Limited and 180 kVA traction converters for Indian Railways. Segment’s new modern factory for manufacturing of breakers, drives, LV system and power electronics at Nelamangala, Bangalore and new Machine service unit at Taloja, Maharashtra were inaugurated in early part of the year. New wind generator motor factory at Vadodara is in advance stage of completion.

The channel partner network remained over 850 during the year which contributed to revenues of Rs 12 billion. ‘E-initiatives’ continued to yield good results with the B2B transactions running over Rs 5 billion.

Segment has plans to increase thrust on marketing activities in potential growth areas like railways, wind, water, ports and harbors, maintain efficient distribution network and continuous range expansion to secure fair share of the market. With improvement in industrial production in the later part of the year, comfortable order backlog and capacities available for faster deliveries, overall outlook for the segment remains positive. Finance

There was improvement in liquidity position in economy from second half of the year compared to short of crisis situation witnessed during later part of the previous year. Availability of funds from banking sector improved and rate of interest reduced during the year. Collections from industrial customers and channel partners improved in the later part of the year. Cash flow from operation during the year improved significantly. However higher investment in receivable continues to remain area of concern. Interest expenses during the year reduced to Rs 256 million compared to Rs 347 million in the previous year. Company had borrowing position in most part of the year and interest income from placement of temporary surplus funds as fixed deposits with the banks reduced to Rs 11 million compared to Rs 85 million in the previous year. Net cash position (cash and bank balances less loan fund) at the end of the year was higher at Rs 5,241 million compared to Rs 3,482 million at the end of the previous year. The Company continued to hedge all its foreign currency exposures for imports and exports to protect contract stage margins. As in the past, Company has maintained excellent relationship with major banks operating in India and was able to avail and negotiate favourable terms for various banking facilities.

Human Resources

Employee engagement remained the key focus of human resource (HR) function. New HR initiatives were aligned to support business needs. This has been achieved by continuously investing in learning and development programmes creating a positive work environment, empowering employees at all levels and launching structured reward and recognition mechanisms.

During the year goal setting exercise, followed by a mid-term performance review, of all the employees was carried out. This initiative was taken up from a feedback from an employee engagement survey in 2008. Special emphasis was laid on talent management by rolling out a new and comprehensive employee performance and development appraisal programme in the later part of the year. Action learning workshops were launched and technical skill enhancement trainings were provided to the employees across all the levels in organisation. To recognise exemplary performances, to create an employee centric reward system and to create a culture of appreciation within the Company, employee driven reward programme called ‘EMPower’ was launched. To attract and recruit bright professionals, employer branding and robust functional assessments processes were carried out.

As in the past, the industrial relations continued to remain cordial at all the locations of the Company. During the year two employee unions were merged at a location and process for management of third party service providers was streamlined. This is expected to optimise management efforts in the coming years.

The company had 6,222 (previous year 6,496) employees at the end of 2009. There were selective recruitments during the year and employee strength was rationalised in line with the business environment.

Internal Control System

The Company has in place effective systems of internal control ensuring accurate, reliable and speedy compilation of financial information, safeguarding the assets and interests of the Company and ensuring compliance with laws and regulations.

The Company has an exhaustive budgetary control system and the management regularly reviews actual performance. The Company has also put in place a well-defined organisation structure, clear authority levels and detailed internal guidelines for conducting business transactions. The Company has an internal audit department that conducts regular audits to ensure adequacy of the control system, adherence to management instructions and legal compliance. Audit plans are prepared in advance based on risk assessment. Internal audit also conducts follow up reviews to ensure implementation of its recommendations and suggestions. The Audit committee of the Board of Directors periodically reviews the audit plans, observations and recommendations of the internal and external auditors with reference to significant risk areas and adequacy of internal controls.

As per the requirements of Sarbanes Oxley Act, 2002 and clause 49 of the listing agreement with the stock exchanges, the management has established adequate internal control procedures over financial reporting.

During the year, detailed customer evaluation and credit limit fixation process were established and physical verification of all the fixed assets of the Company was carried out and these assets were bar coded to support future efficient verification process.

Investing Values



CEO / CFO Certification

ToThe Board of DirectorsABB Limited

We certify that;

1. We have reviewed the financial statements and cash flow statement of ABB Limited for the year ended December 31, 2009 and to the best of our knowledge and belief;

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) these statements together present a true and fair view of the company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.

2. To the best of our knowledge and belief, there are, no transactions entered into by the company during the year, which are fraudulent, illegal or violating the company’s code of conduct.

3. We accept responsibility for establishing and maintaining internal controls over financial reporting and we have evaluated the effectiveness of internal control systems of the company over financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of internal controls over financial reporting, if any, of which we are aware and the steps we have taken, propose to take, to rectify these deficiencies. In our opinion, there are adequate internal controls over financial reporting.

4. We have indicated to the auditors and the audit committee that there are

(i) significant improvement in internal controls over financial reporting during the year;

(ii) no significant changes in accounting policies during the year.

(iii) no instance of fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company's internal control system on financial reporting.

Biplab Majumder Amlan Datta MajumdarPlace: Bengaluru Chief Executive Officer Chief Financial Officer

Date: February 26, 2010 Vice Chairman & Managing Director Sr. Vice President-Finance

Investing Values



1. We have audited the attached balance sheet of ABB Limited (‘the Company’) as at December 31, 2009 and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account ;

iv. In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

v. On the basis of the written representations received from the directors, as on December 31, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to

the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at December 31, 2009;

b) in the case of the profit and loss account, of the profit for the year ended on that date; and

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

For S.R. BATLIBOI & CO. Chartered Accountants

per Sunil Bhumralkar Partner Membership No. 35141

Bengaluru, India February 26, 2010

Auditors’ Report To The Members of ABB Limited

Investing Values



(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, all the fixed assets were physically verified by the management during the year and we are informed that no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) As informed to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) As informed to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

(v) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered. None of the transactions made in pursuance of such contracts or arrangements exceed the value of Rupees five lakh in respect of any one such party in the financial year.

(vi) The Company has not accepted any deposits from the public. (vii) In our opinion, the Company has an internal audit system commensurate

with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty, cess and other material statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty, cess and other material statutory dues on account of any dispute, are as follows:

Annexure referred to in paragraph 3 of our report of even dateRe: ABB Limited (‘the Company’)

Investing Values



Name of the statute Nature of dues Amount *(Rs in Thousands)

Period to which the amount relates

Forum where dispute is pending

Customs Act Tariff classification 534,183 2002-07 Customs Excise and Service Tax Appellate Tribunal (CESTAT)

15,150 2008-09 Additional Commissioner of Customs

194 2008-09 Joint Commissioner of Customs

Finance Act,1994 (Service Tax Provisions)

Tax on freight charges and erection services

Tax on foreign payments

Tax on freight charges and erection services

13,426

17,011

17,547

2,516

3,998

3,422

1997-06

2003-06

2003-07

2003-06

2004-05

2005-06

CESTAT

Commissioner, Central Excise and Service Tax

Commissioner, Central Excise and Service Tax

Commissioner (Appeals)

CESTAT

High Court

Sales Tax Act Works contract tax charged

Differential tax charged

Submission of statutory forms

2,450

35,325

14,692

13,571

947

50,235

284,213

18,153

11,316

6,876

7,014

900

1995-96

2006-07

1999-01

2003-08

2006-07

2003-07

1994-07

1998-03

2003-04

2003-07

2005-06

1994-95

Deputy Commissioner (Appeals)

Joint Commissioner of Commercial Taxes (Appeals)

Sales Tax Appellate Tribunal



High Court



Joint Commissioner (Appeals)



High Court

Faridabad Development Act [Octroi]

Product classification 30,400 1986-94 High Court

* Net of Rs 633,310 paid under protest.

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

Investing Values



(xvi) The Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) The management has represented that during an internal investigation conducted by the Company, an instance of inappropriate conduct by certain employees of the Company was observed and that there are no financial implications on the Company arising out of such inappropriate conduct.

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S.R. BATLIBOI & CO.Chartered Accountants

per Sunil BhumralkarPartner Membership No. 35141

Bengaluru, IndiaFebruary 26, 2010

Investing Values



Balance Sheet

(Rs in Thousands)As at December 31, 2009 Schedule 2009 2008

Sources of FundsShareholders’ Funds

Share Capital 1 423,817 423,817Reserves and Surplus 2 23,813,515 20,765,715

24,237,332 21,189,532Loan Funds

Finance Lease Obligations 16(9) - 202Deferred Tax Liability (net) 16(10) - 38,034

24,237,332 21,227,768

Application of FundsFixed Assets 3

Gross Block 8,792,636 7,664,819Less: Depreciation and Amortisation 2,061,340 2,206,494Net Block 6,731,296 5,458,325Capital Work in Progress including Capital Advances 1,163,391 1,375,145

7,894,687 6,833,470Investments 4 168,792 611,244Deferred Tax Assets (net) 16(10) 966 -Current Assets, Loans and Advances

Inventories 5 7,294,061 6,426,534Sundry Debtors 6 28,577,298 29,758,869Cash and Bank Balances 7 5,241,405 3,482,313Other Current Assets 8 3,203,027 3,812,881Loans and Advances 9 3,176,861 3,517,663

47,492,652 46,998,260Less: Current Liabilities and Provisions

Current Liabilities 10 29,869,326 31,618,924Provisions 11 1,450,439 1,596,282

31,319,765 33,215,206Net Current Assets 16,172,887 13,783,054 24,237,332 21,227,768Notes to the Accounts 16

The Schedules referred to above form an integral part of the accounts. 0

As per our report of even dateFor S.R. BATLIBOI & CO. For and on behalf of the BoardChartered Accountants Gary Steel Chairman

Biplab Majumder Vice Chairman & Managing DirectorPeter Leupp DirectorFrancis Duggan DirectorNasser Munjee Director

per Sunil Bhumralkar D E Udwadia DirectorPartner A K Dasgupta DirectorMembership No. 35141 Amlan Datta Majumdar Chief Financial Officer

B Gururaj Company Secretary

Bengaluru, February 26, 2010 Bengaluru, February 26, 2010

Investing Values



Profit and Loss Account

(Rs in Thousands)For the year ended December 31, 2009 Schedule 2009 2008 IncomeSales and Services 64,945,710 73,402,391Less : Excise Duty on Sales 2,573,696 5,032,076Sales and Services (Net) 12 62,372,014 68,370,315Other Income 13 725,696 1,304,192

63,097,710 69,674,507ExpenditureCost of Materials and Erection Services 45,178,728 49,504,181Personnel Expenses 14 3,892,346 4,029,637Other Expenses 15 8,026,815 7,138,790Depreciation/ Amortisation 487,804 369,418Less: Transfer from Revaluation Reserve 2,746 2,613

485,058 366,805Interest Expenses 256,242 346,600

57,839,189 61,386,013Less : Expenses Capitalised 15,473 43,946

57,823,716 61,342,067Profi t Before Tax 5,273,994 8,332,440Provision for Tax:

Current Tax 1,805,255 2,858,210Deferred Tax (39,000) (90,000)Fringe Benefits Tax* (38,652) 90,100

* includes writeback of excess provision in respect of previous years Rs 57,605 thousand (Previous year - Rs Nil)Profi t After Tax 3,546,391 5,474,130Add: Balance brought forward 556,632 627,930Profi t available for appropriation 4,103,023 6,102,060AppropriationsGeneral Reserve 3,000,000 5,000,000Proposed Dividend 423,817 466,198Corporate Dividend Tax 72,028 79,230Balance carried forward 607,178 556,632 4,103,023 6,102,060

Basic and Diluted Earnings per Equity Share (in Rs) 16(3) 16.74 25.83(Face value Rs 2 per share)

Notes to the Accounts 16

The Schedules referred to above form an integral part of the accounts






Investing Values



(Rs in Thousands)

As at December 31, 2009 2009 2008

Schedule 1 - Share Capital

Authorised

212,500,000 Equity Shares of Rs 2 each 425,000 425,000

750,000 11% Redeemable 10 year, Cumulative Preference Shares of Rs 100 each 75,000 75,000

500,000 500,000

Issued, Subscribed and Paid Up

211,908,375 Equity Shares of Rs 2 each 423,817 423,817

Notes :

Share Capital includes:

a) 46,185,525 equity shares of Rs 2 each allotted as fully paid up at par, pursuant to contracts for consideration other than cash.

b) 1,000,000 equity shares of Rs 2 each issued to the holders of 40,000 - 8.57% cumulative preference shares of Rs 100 each on cancellation of the preference shares in terms of a Scheme of Compromise between the Company and its preference/equity shareholders in 1988.

c) 42,219,465 and 51,772,945 equity shares of Rs 2 each issued as fully paid up bonus shares by capitalisation of the General Reserve Account and Securities Premium Account respectively.

d) 97,879,955 equity shares of Rs 2 each are held by ABB Asea Brown Boveri Limited, Zurich, Switzerland, the ultimate holding company and 12,540,330 equity shares of Rs 2 each are held by ABB Norden Holdings AB, Sweden, a subsidiary of the ultimate holding company.

Investing Values



(Rs in Thousands)

As at December 31, 2009 2009 2008

Schedule 2 - Reserves and Surplus

Capital Reserve Account 10,971 10,971

Capital Redemption Reserve Account 75,000 75,000

Revaluation Reserve Account

As per last Balance Sheet 142,774 145,387

Transferred to Profit and Loss Account (2,746) (2,613)

140,028 142,774

Securities Premium Account 593,990 593,990

Foreign Projects Reserve Account

As per last Balance Sheet 4,000 6,500

Transferred to General Reserve Account (4,000) (2,500)

- 4,000

General Reserve Account

As per last Balance Sheet 19,382,348 14,379,848

Transferred from Foreign Projects Reserve Account 4,000 2,500

Transferred from Profit and Loss Account 3,000,000 5,000,000

22,386,348 19,382,348

Profi t and Loss Account

Balance carried forward 607,178 556,632

23,813,515 20,765,715

Investing Values



As at December 31, 2009 (Rs in Thousands)

Schedule 3 - Fixed Assets

Gross Block Depreciation/ Amortisation Net Block

Description As atJanuary 1,

2009

Additions Deductions As atDecember

31, 2009

As atJanuary 1,

2009

For the Year

Deductions As atDecember

31, 2009

As atDecember

31, 2009

As at December

31,2008

A. Tangible Assets

1. Own Assets

Freehold Land 366,885 2,105 - 368,990 - - - - 368,990 366,885

Leasehold Land 140,368 - - 140,368 1,607 2,341 - 3,948 136,420 138,761

Leasehold Improvements 169,705 70,723 26,757 213,671 47,304 21,995 18,302 50,997 162,674 122,401

Factory Buildings 1,257,441 570,998 655 1,827,784 203,568 54,502 71 257,999 1,569,785 1,053,873

Other Buildings 412,695 63,821 1,333 475,183 33,790 7,490 85 41,195 433,988 378,905

Residential Quarters 14,200 - - 14,200 5,187 232 - 5,419 8,781 9,013

Plant and Machinery 4,563,058 1,001,632 601,781 4,962,909 1,573,157 320,748 540,407 1,353,498 3,609,411 2,989,901

Furniture and Fixtures 365,897 81,924 46,739 401,082 106,274 24,135 38,531 91,878 309,204 259,623

Vehicles 26,664 6,412 11,513 21,563 14,018 4,185 8,054 10,149 11,414 12,646

7,316,913 1,797,615 688,778 8,425,750 1,984,905 435,628 605,450 1,815,083 6,610,667 5,332,008

2. Leased Assets

Plant and Machinery 83,141 - - 83,141 72,191 4,450 - 76,461 6,500 10,950

Vehicles 11,068 - - 11,068 4,218 101 - 4,319 6,749 6,850

94,209 - - 94,209 76,409 4,551 - 80,960 13,249 17,800

Total Tangible Assets 7,411,122 1,797,615 688,778 8,519,959 2,061,314 440,179 605,450 1,896,043 6,623,916 5,349,808

B. Intangible Assets

Technical Know-how Fees 155,828 41,211 15,178 181,861 96,170 28,279 15,178 109,271 72,590 59,658

Capitalised Software 97,869 5,478 12,531 90,816 49,010 19,346 12,330 56,026 34,790 48,859

Total Intangible Assets 253,697 46,689 27,709 272,677 145,180 47,625 27,508 165,297 107,380 108,517

7,664,819 1,844,304 716,487 8,792,636 2,206,494 487,804 632,958 2,061,340 6,731,296 5,458,325

Previous Year 5,769,125 2,344,391 448,697 7,664,819 2,249,827 369,418 412,751 2,206,494

Capital Work in Progress including Capital Advances 1,163,391 1,375,145

Grand Total 7,894,687 6,833,470

Notes :

1. Certain freehold and leasehold land, factory and other buildings and residential quarters were revalued during 1985, 1986 and 1996. Net block of such revalued assets as at December 31, 2009 is Rs 140,028 thousand (Previous Year Rs 142,774 thousand).

2. Residential Quarters include cost of shares in Lotus Court Private Limited Rs 56 thousand (Previous Year - Rs 56 thousand).

Investing Values



(Rs in Thousands)

As at December 31, 2009 2009 2008

Schedule 4 - Investments

Long Term (At Cost):

Non Trade:

Government Securities -

Quoted:

1,500,000 (Previous Year - 1,500,000) 6.25% Government of India Bonds of Rs 100 each 159,600 159,600

Others:

Quoted:

Nil (Previous Year - 2,386,496) 6.60% Tax Free Bonds 2009 of Rs 100 each fully paid up in Unit Trust of India - 241,617

Nil (Previous Year - 200) 5.25% 10 Year Tax Free Nuclear Power Corporation Limited Infrastructure Bonds of Rs 1,000,000 each fully paid up - 200,000

- 441,617

Unquoted:

10 (Previous Year - 10) 5.95% 15 Year Non-Cumulative Bonds of Karnataka Water & Sanitation Pooled Fund Trust of Rs 916,667 each (Previous Year Rs 1,000,000 each) 9,167 10,000

1,000 (Previous Year - 1000) Shares of Rs 25 each fully paid up in Co-operative Bank of Baroda 25 25

Nil (Previous Year - 2) 6.5% Non-Redeemable Debentures of Bengal Chamber of Commerce and Industry. - 2

9,192 10,027

168,792 611,244

Notes:

Quoted Investments aggregate 159,600 601,217

(Market value - Rs 137,520 thousand;

Previous Year - Rs 591,163 thousand)

Unquoted Investments aggregate 9,192 10,027

Investing Values



(Rs in Thousands)

As at December 31, 2009 2009 2008

Schedule 5 - Inventories

Stores and Spares 3,122 3,007

Raw Materials and Components 3,816,913 3,377,984

Goods in Transit - Raw Materials and Components 556,539 562,886

Finished Goods 698,454 583,648

Work-in-Progress 2,219,033 1,899,009

7,294,061 6,426,534

Schedule 6 - Sundry Debtors (also refer to schedule 16(5))

Unsecured :

Debts outstanding for a period exceeding six months

- Considered Good 12,587,075 11,205,113

- Considered Doubtful 1,638,026 1,180,775

14,225,101 12,385,888

Other Debts - Considered Good 15,990,223 18,553,756

30,215,324 30,939,644

Less: Provision for Doubtful Debts 1,638,026 1,180,775

28,577,298 29,758,869

Schedule 7 - Cash and Bank Balances

Cash and Cheques on hand 1,172,129 1,531,633

Balances with Scheduled Banks

- On Current Account 1,037,666 1,923,985

- On Deposit Account 3,009,016 8,554

- On Margin Account - 915

4,046,682 1,933,454

With Non Scheduled Banks - On Current Account 22,594 17,226

5,241,405 3,482,313

Current Accounts with Non Scheduled Banks include

As atDecember 31,

2009

As atDecember 31,

2008

Maximumamount

outstandingat any timeduring the

year

Maximumamount

outstandingat any timeduring the

previous year

a) Hongkong & Shanghai Banking Corporation Ltd., Sri Lanka. 5,917 4,131 8,043 5,597

b) Hongkong & Shanghai Banking Corporation Ltd., Bangladesh. 16,677 13,095 39,202 19,043

Investing Values



(Rs in Thousands)

As at December 31, 2009 2009 2008

Schedule 8 - Other Current Assets

Contract Revenue in Excess of Billing and Unbilled Revenue 3,196,673 3,795,616

Interest Accrued on Investments and Fixed Deposits 6,354 17,265

3,203,027 3,812,881

Schedule 9 - Loans and Advances (also refer to schedule 16(5))

Unsecured :

Loans, Considered Good 1,399 1,511

Advances recoverable in cash or in kind or for value to be received:

- Considered Good 1,738,655 2,769,102

- Considered Doubtful 29,356 34,309

1,768,011 2,803,411

Less: Provision for Doubtful Advances 29,356 34,309

1,738,655 2,769,102

Income Tax (net of provision) 724,661 -

Fringe Benefits Tax (net of provision) 2,742 -

Balances with Customs, Port Trusts and Excise Authorities 709,404 747,050

3,176,861 3,517,663

Schedule 10 - Current Liabilities

Acceptances 5,832,088 7,268,064

Sundry Creditors

- Dues to Micro and Small Enterprises (also refer to schedule 16(27)) 228,136 174,395

- Others 14,556,068 16,326,161

14,784,204 16,500,556

Advance Payment from Customers 6,534,048 5,777,651

Billing in Excess of Contract Revenue 2,707,965 2,062,789

Investor Protection and Education Fund shall be credited for unclaimed dividends amount when due 11,021 9,864

29,869,326 31,618,924

Schedule 11 - Provisions

Proposed Dividend 423,817 466,198

Corporate Dividend Tax 72,028 79,230

Income Tax (net of advance tax) - 149,078

Fringe Benefits Tax (net of advance tax) - 46,696

Provident Fund 38,169 53,529

Long term employee benefits 115,491 91,685

Others - (also refer to schedule 16(24)) 800,934 709,866

1,450,439 1,596,282

Investing Values



For the year ended December 31, 2009

Schedule 12 - Capacities, Production, Stock and Turnover (also refer to schedule 16(11))(Figures in brackets are in respect of previous year)

Class of goodsAnnual Capacities Opening Stock of

Finished Goods

Production of Finished

Goods

Closing Stock of Finished Goods

Turnover of Finished Goods

Quant.Denom.

Installed Quantity

Rupees in Thousands Quantity Quantity

Rupees inThousands Quantity

Rupees inThousands

Motors and Other Machines HP 3,934,000 151,035 168,572 3,177,887 106,410 131,887 3,222,512 4,062,734

(3,839,170) (96,403) (144,836) (3,427,893) (151,035) (168,572) (3,373,261) (4,482,155)

Switchgear of all types Nos. 17,098,367 121,216 178,698 7,850,767 61,864 298,610 7,904,591 13,197,663

(16,060,650) (234,740) (304,184) (7,287,452) (121,216) (178,698) (7,394,073) (16,149,505)

PLCC Equipment Nos. 3,500 33 3,571 3,183 - - 3,216 477,084

(2,850) (-) (-) (1,948) (33) (3,571) (1,915) (394,059)

Multiplexures Nos. 100 - - 31 - - 31 20,460

(100) (-) (-) (78) (-) (-) (78) (87,265)

Telemetering Equipment Nos. 150 - - 2 - - 2 2,503

(150) (-) (-) (10) (-) (-) (10) (5,397)

Turbochargers Nos. 650 - - 634 6 13,290 628 916,838

(480) (9) (8,539) (327) (-) (-) (336) (713,356)

Transformers MVA 18,375 - - 16,231 316 83,303 15,915 7,155,027

(16,875) (-) (-) (15,151) (-) (-) (15,151) (6,802,599)

Electronic Control and Supply Units for Variable Speed Drives and other applications

Nos. 100,000 129 12,110 30,211 58 29,734 30,282 6,166,447

(100,000) (9) (18,277) (28,470) (129) (12,110) (28,350) (5,250,808)

Mini Computer/Microprocessor based Systems

Value Rs inThousands

4,251,297 - 332 1,589,502 - 35,969 - 1,589,502

(3,930,000) (-) (-) (1,664,690) (-) (332) (-) (1,664,691)

Power Capacitors of all types MVAR 6,780 12 747 5,912 123 19,321 5,801 557,809

(3,700) (-) (-) (3,192) (12) (747) (3,180) (516,430)

Robotics Nos. 74 - - 47 - - 47 322,639

(74) (-) (-) (74) (-) (-) (74) (507,810)

Gas Analysers and Systems Nos. 400 - - 228 - 96 228 432,326

(300) (-) (-) (250) (-) (-) (250) (524,917)

Process Control Instruments Nos. 45,000 13 393 26,700 65 3,156 26,648 733,986

(45,000) (-) (-) (34,803) (13) (393) (34,790) (869,512)

Others - 5,071 - - - - 960,393

(-) (6,894) (-) (-) (5,071) (-) (792,037)

Project Items - 214,154 - - 83,088 - 21,503,078

(-) (-) (-) (-) (214,154) (-) (26,021,932)

Erection, Commissioning and Engineering Services

-(-)

-(-)

-(-)

-(-)

-(-)

-(-)

4,273,525 (3,587,842)

583,648 698,454 62,372,014

(482,730) (583,648) (68,370,315)

Note: The Company's products are exempt from licensing requirement under the industrial policy by virtue of notification No. 477 (E) of 25.07.91.

Investing Values



(Rs in Thousands)

For the year ended December 31, 2009 2009 2008

Schedule 13 - Other Income

Interest

Long Term Investment 16,236 38,539

Deposit with Banks 10,803 84,852

(Tax deducted at source Rs 1,389 thousand;

Previous Year Rs 18,476 thousand)

Others 156,254 17,752

183,293 141,143

Profit on Sale of Fixed Assets (net) - 46,006

Profit on Sale of Investment (net) - 23,677

Scrap Sales 172,111 137,913

Commission Income 34,122 169,450

Exchange Rate Difference - Gain (net) - 474,599

(includes gain / (loss) on fair valuation of derivative contracts)

Miscellaneous Income 336,170 311,404

725,696 1,304,192

Schedule 14 - Personnel Expenses

Salaries, Wages and Bonus 3,370,124 3,378,123

Gratuity 46,094 88,146

Provident Fund 80,992 99,018

Contribution to Superannuation and other Funds 160,332 159,231

Workmen and Staff Welfare Expenses 158,024 200,712

Other Personnel Expenses 76,780 104,407

3,892,346 4,029,637

Investing Values



(Rs in Thousands)


Schedule 15 - Other Expenses

Tools and Stores 321,283 338,595

Royalty and Technology Fees 790,339 916,402

Freight and Forwarding (net of recovery) 578,124 526,752

Postage and Telephone 94,954 131,257

Commission (to other than sole selling agent) 40,684 92,266

Discount 30,592 36,054

Power, Fuel and Water 271,616 274,312

Travelling and Conveyance 731,352 909,931

Insurance 101,993 143,272

Rates and Taxes 148,681 81,871

Rent 230,552 207,197

Repairs : Buildings 21,093 25,504

Plant and Machinery 113,623 106,036

Others 20,998 38,725

Provision for Doubtful Debts and Advances 452,298 586,784

Bad Debts / Advances Written Off 265,559 61,112

Loss on Sale of Fixed Assets (net) 70,449 -

Loss on Sale of Investment (net) 2,970 -

Printing and Stationery 54,312 70,698

Bank Charges 187,210 147,195

Legal and Professional 173,007 155,056

Trade Mark Fees 464,261 341,852

Information Technology Expenses 1,047,949 940,020

Exchange Rate Difference - Loss (net) 476,514 -

(includes gain/(loss) on fair valuation of derivative contracts)

Miscellaneous 1,336,402 1,007,899

8,026,815 7,138,790

Investing Values



Schedule 16 - Notes to the Accounts 1. Nature of Operations

ABB Limited (‘the Company’) has served utility and industry customers for over 60 years with the complete range of engineering, products, solutions and services in areas of Automation and Power technology. The Company has extensive installed base for manufacturing and a countrywide marketing and service presence. Besides catering to Indian domestic market, the Company is also playing an increasing role in the global market.

2. Signifi cant Accounting Policies

2.1. Basis of Preparation of Financial Statements

The financial statements have been prepared to comply in all material respects with the notified accounting standards by Companies Accounting Standards Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except for revaluation of certain fixed assets, in accordance with the accounting principles generally accepted in India. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

2.2. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

2.3. Fixed Assets (Tangible and Intangible)

Fixed assets are stated at the cost of acquisition, except for revaluation of certain land and building, less accumulated depreciation and impairment losses, if any. Cost of fixed assets comprises purchase price, duties, levies and any directly attributable cost of bringing the asset to its working condition for the intended use. Own manufactured assets are capitalised at cost including an appropriate share of overheads. Borrowing costs related to the acquisition or construction of the qualifying fixed assets for the period up to the completion of their acquisition or construction are capitalised. Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of fixed assets not ready for their intended use before such date are disclosed under capital work in progress.

Capitalised software includes costs on Enterprise Resource Planning (ERP) Project and other costs relating to software, which provide significant future economic benefits. ERP Project costs comprise license fees and cost of system integration services. All costs relating to upgradations/enhancements are generally charged off as revenue expenditure unless they bring significant additional benefits of lasting nature.

Assets acquired under finance lease from April 1, 2001 are capitalised at the lower of their fair value and the present value of the minimum lease payments.

The carrying amounts are reviewed at each balance sheet date when required to assess whether they are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount. The recoverable amount is the greater of the assets’ net selling price and value in use.

2.4. Depreciation/Amortisation

Depreciation on assets (except those described below) is provided on the straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956, which management considers as being representative of the useful economic lives of such assets. Depreciation is provided from the date of capitalisation till the date of sale of assets.

The following assets are depreciated / amortised on the straight line method over a period of their estimated useful lives:

• Leasehold land and leasehold improvements over the remaining period of the lease.

• Technical know-how fees over a period of six years.

• Capitalised software costs over a period of five years.

Assets individually costing Rs 5,000 or less are depreciated fully in the year of purchase.

Investing Values



Assets under finance lease are depreciated over the lower of the lease term or the useful life of the asset unless there is reasonable certainty that the Company will obtain ownership, wherein such assets are depreciated on the straight-line method at the rates prescribed in Schedule XIV to the Companies Act, 1956.

2.5. Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value. Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments.

2.6. Inventories

Inventories are stated at the lower of cost and net realisable value. The cost of various categories of inventories is arrived at as follows:

• Stores, spares, raw materials and components - at rates determined on the moving weighted average method.

• Goods in Transit – at actual cost.

• Work-in-progress and finished goods - at full absorption cost method based on annual average cost of production which includes direct materials, direct labour and manufacturing overheads. Excise duty is included in the value of finished goods inventory.

Provision for obsolescence is made wherever necessary.

2.7. Employee Benefits

Contribution to Superannuation Fund, a defined contribution scheme, is made at pre-determined rates to the Superannuation Fund Trust and is charged to the profit and loss account. There are no other obligations other than the contribution payable to the Superannuation Fund Trust.

Contributions to the recognised Provident Fund/ Gratuity Fund and provision for other long term employee benefits - leave, defined benefit schemes, are made on the basis of actuarial valuations made at the end of each financial year and are charged to the profit and loss account during the year.

Actuarial gains and losses are recognised immediately in the profit and loss account.

2.8. Revenue Recognition

• Sales of products and services are recognised when significant risks and rewards of ownership of products are passed on to customers or when the service has been provided. In case of large transformers, revenue is recognised on achievement of contractual milestone. Revenue recognised in excess of billing has been reflected under "Other Current Assets" as Unbilled Revenue. Net sales are stated at contractual realisable values, net of excise duty, sales tax, service tax, value added tax and trade discounts.

• Revenues from long-term contracts are recognised on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue earned in excess of billing has been reflected under “Other Current Assets” and billing in excess of contract revenue has been reflected under “Current Liabilities” in the balance sheet.

• Full provision is made for any loss in the year in which it is first foreseen.

• Liquidated damages/ penalties are provided for as per the contract terms wherever there is a delayed delivery attributable to the Company.

• Commission income is recognised as per contracts/receipt of credit note.

• Dividend income is recognised when the right to receive dividend is established.

• Interest income is recognised on the time proportion method.

2.9. Provisions

A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made based on technical evaluation and past experience. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

Investing Values



2.10. Research and Development

All revenue expenses pertaining to research and development are charged to the profit and loss account in the year in which they are incurred and development expenditure of capital nature is capitalised as fixed assets, and depreciated as per the Company’s policy.

2.11. Foreign Currency Transactions

Foreign currency transactions are recorded by applying the daily exchange rates. Exchange differences arising on foreign currency transactions settled during the year are recognised in the profit and loss account for the year.

All foreign currency denominated monetary assets and liabilities are translated at the exchange rates prevailing on the balance sheet date. The resultant exchange differences are recognised in the profit and loss account for the year.

The Company uses derivative financial instruments such as forward exchange contracts to hedge its risks associated with foreign currency fluctuations.

Gain or loss on restatement of forward exchange contracts for hedging underlying outstandings at the balance sheet date are recognised in the profit and loss account for the year in which it occurs. The premium or discount on such contracts is recognised in the profit and loss account over the period of the contract.

Gain or loss on fair valuation of forward exchange contracts for hedging highly forecasted transactions and embedded derivative contracts are recognised in the profit and loss account for the year in which it occurs.

2.12. Taxation

Tax expense comprises current tax, deferred tax and fringe benefits tax.

The current charge for income tax and fringe benefits tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Provision for current income tax is made on the basis of the results of the year although the actual liability will be computed and paid on the basis of the results for the year ending March 31, 2010.

The deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future. Deferred tax assets are reviewed at each balance sheet date for its realisability.

The Company provides for and discloses the fringe benefits tax (FBT) in accordance with the provisions of section 115WC of the Income Tax Act, 1961. The Finance Act, 2009 has withdrawn FBT with effect from April 1, 2009.

2.13. Operating Leases

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term.

For the year ended December 31, 2009 2008

3. Earnings Per Share

a) Weighted average number of Equity Shares of Rs 2 each outstanding during the year 211,908,375 211,908,375

b) Net profit after tax attributable to equity shareholders (Rs in thousand) 3,546,391 5,474,130

c) Basic and Diluted Earnings Per Share (in Rs) 16.74 25.83

Investing Values



4. Segment Reporting

A) Primary Segment Reporting (by Business Segments)

i) Composition of Business Segments

The Company’s business segments are organized around products and system solutions provided to its customers, which include utilities, industries, channel partners and original equipment manufacturers.

Power Systems Segment (PS) offers turnkey systems and services for transmission and distributions for power grid and power plants. The segment offers the instrumentation, control and the entire balance of power plants, which improve performance and energy efficiency through flexible alternating current transmission systems, high voltage direct current systems, network management systems and utility communications.

Power Products Segment (PP) manufactures, engineers, supplies key components to transmit and distribute electricity, improving power supply and energy efficiency. The segment produces transformers, high and medium voltage switchgears, circuit breakers, capacitors, distribution relays etc.

Process Automation Segment (PA) provides customers with integrated solutions for control, plant optimization and industry specific application knowledge. The industries served include oil and gas, power, chemicals and pharmaceuticals, pulps and paper, metals and minerals, marine and turbo charging.

Automation Products Segment (AP) provides products to improve customers’ productivity with high efficiency motors, variable speed drives, low voltage products, instrumentation and power electronics.

Others Segment consist of robotics systems.

ii) The accounting policies used in the preparation of the financial statements of the Company are also applied for segment reporting.

iii) Segment revenues, expenses, assets and liabilities are those, which are directly attributable to the segment or are allocated on an appropriate basis. Corporate and other revenues, expenses, assets and liabilities to the extent not allocable to segments are disclosed in the reconciliation of reportable segments with the financial statements.

iv) Inter Segment Transfer Pricing

Inter segment prices are normally negotiated amongst the segments with reference to the costs, market prices and business risks, within an overall optimisation objective for the Company.

v) Figures in brackets are in respect of the previous year.

Investing Values



vi) Segment Revenues, Results and Other Information

(Rs in Thousands)

Power Systems

PowerProducts

Process Automation

Automation Products

Others Segment Total

External Sales 16,885,483 16,478,555 11,900,165 16,169,921 561,597 61,995,721

(net of Excise Duty) (22,370,725) (17,146,920) (13,163,635) (14,720,275) (787,474) (68,189,029)

Inter Segment Sales 138,277 3,290,606 167,066 1,725,807 2,590 5,324,346

(193,402) (3,134,786) (229,051) (2,294,880) (14,224) (5,866,343)

Other operating Income 168,248 167,110 32,695 126,446, 4,389 498,888

(490,022) (210,446) (–58,976) (360,455) (7,814) (1,009,761)

Segment Revenues 17,192,008 19,936,271 12,099,926 18,022,174 568,576 67,818,955

(23,054,149) (20,492,152) (13,333,710) (17,375,610) (809,512) (75,065,133)

Segment Results 65,141 2,170,419 1,488,260 2,047,893 30,773 5,802,486

(2,028,431) (2,601,172) (1,847,575) (2,267,641) (59,413) (8,804,232)

Segment Assets 14,785,731 12,802,708 7,127,085 11,440,957 314,082 46,470,563

(18,865,414) (12,073,810) (7,129,380) (9,504,265) (477,567) (48,050,436)

Segment Liabilities 9,898,859 6,642,665 5,101,738 8,064,533 162,570 29,870,365

(11,379,478) (7,111,041) (5,621,631) (6,759,245) (408,331) (31,279,726)

Capital Expenditure 30,389 537,882 52,418 207,477 40 828,206

(32,675) (900,721) (98,608) (611,995) (6,879) (1,650,878)

Depreciation / Amortisation 13,349 191,045 23,747 135,326 2,345 365,812

(10,298) (151,688) (22,036) (98,941) (1,700) (284,663)

vii) Reconciliation of Reportable Segments with the Financial Statements

Revenues Results / Net Profi t

Capital Expenditure Assets Liabilities

Total Segments 67,818,955 5,802,486 828,206 46,470,563 29,870,365(75,065,133) (8,804,232) (1,650,878) (48,050,436) (31,279,726)

Corporate - Unallocated (net) 603,101 –272,250 804,344 9,086,534 1,449,400(475,717) (–125,192) (1,009,240) (6,392,538) (1,973,716)

Inter Segment Sales –5,324,346 - - - - (–5,866,343) (-) (-) (-) (-)

Interest Expense - –256,242 - - - (-) (–346,600) (-) (-) (-)

Provision for tax - –1,727,603 - - - (-) (–2,858,310) (-) (-) (-)

As per Financial Statements 63,097,710 3,546,391 1,632,550 55,557,097 31,319,765(69,674,507) (5,474,130) (2,660,118) (54,442,974) (33,253,442)

Investing Values



B) Secondary Segment Reporting (by Geographical Segments)

Secondary segment disclosures are reported on the basis of geographical location of customers.

(Rs in Thousands)

India Rest of World Total

Revenues 57,340,281 5,154,328 62,494,609

(64,074,823) (5,123,967) (69,198,790)

Total Assets 54,300,815 1,256,282 55,557,097

(52,431,965) (2,011,009) (54,442,974)

Capital Expenditure 1,628,122 4,428 1,632,550

(2,634,498) (25,620) (2,660,118)

(Rs in Thousands)

As at December 31, 2009 2008

5. Amounts due from companies under the same management as defined in sub-section (1-B) of Section 370 of the Companies Act, 1956, are as under:

a) Sundry Debtors

- ABB Global Industries and Services Limited 160,208 68,790

b) Loans and Advances

- ABB Global Industries and Services Limited (Maximum amount due during the year Rs 74,901 thousand,Previous Year Rs 134,893 thousand)

2,070 72,384

- Raman Boards Limited (Maximum amount due during the year Rs Nil, Previous Year Rs 24,984 thousand)

- -

6. Contingent Liabilities

i) Claims against the Company not acknowledged as debts in respect of sales tax, excise andother matters

1,685,368 1,307,042

ii) Bills discounted The above excludes bills co-accepted by the customers’ bankers/guaranteed by the State

Governments Rs 1,473 thousand (Previous Year Rs 17,774 thousand)

- -

iii) Income tax matters in dispute 130,379 83,637

7. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)

450,055 1,090,215

8. The Company has taken several premises under cancelable and non-cancelable operating leases. These lease agreements are normally for one to ten years and have option of renewal on expiry of lease period based on mutual agreement. The Company has non-cancelable operating lease obligations of Rs 46,533 thousand (Previous year Rs 63,296 thousand) payable within one year and Rs 131,949 thousand (Previous Year Rs 130,213 thousand) payable later than one year but not later than five years and Rs 77,941 thousand (Previous Year Rs Nil) payable later than five years as on December 31,2009. Rental expenses towards cancelable and non-cancelable oprating lease charged to the profit and loss account amounts to Rs 230,552 thou-sand (Previous Year Rs 207,197 thousand).

Investing Values



9. Finance Lease Obligations

The Company normally acquires computers and vehicles under finance lease with the respective underlying assets as security. Minimum lease pay-ments outstanding as of December 31, 2009 in respect of these assets are as follows:- (Figures in brackets are in respect of the previous year):

(Rs in Thousands)

DueTotal Minimum Lease

Payments outstanding as on December 31, 2009

Interest Not Due

Present Value of Minimum

LeasePayments

Within one year - - -

(211) (9) (202)

Later than one year and not later than five years - - -

(-)(-) (-)

Total - - -

(211) (9) (202)

10. Deferred Tax

The break up of net deferred tax assets / (liability) as at December 31, 2009 is as follows: (Figures in brackets are in respect of the previous year):

(Rs in Thousands)

Deferred Tax Asset

Deferred Tax Liability

Timing differences on account of:

Difference between book depreciation and depreciation under the Income-tax Act, 1961 617,193

(496,562)

Expenditure under Section 43B of the Income-tax Act, 1961 14,415

(9,976)

Lease Finance -

(69)

Provisions for doubtful debts and advances 566,630

(413,007)

Others 37,114

(35,476)

618,159 617,193

(458,528) (496,562)

Net Deferred Tax Assets / Liability 966 (38,034)

11. Capacities, Production, Stock and Turnover (Refer Schedule 12)

11.1 Capacities

a) Installed capacities are as certified by the Managing Director, but not verified by the auditors, being a technical matter.

11.2 Production

a) Production of finished goods is inclusive of production for captive use.

b) “Others” represent internally manufactured components, sold during the year. The Company considers these ‘meant for sale’ when actually sold. Since the quantitative denominations of these items are dissimilar, it is impracticable to disclose the quantitative information in respect of production and turnover.

Investing Values



11.3 Project items

a) These comprise sale of equipment and miscellaneous items meant for execution of projects and trading items. Since the quantitativedenominations of these items are dissimilar, it is impracticable to disclose the quantitative information in respect thereof.

b) Purchases of these items during the year aggregated to Rs 23,165,639 thousand (Previous Year Rs 26,181,596 thousand).

11.4 Work-in-Progress

a) The Work-in-Progress at the beginning of the year amounted to Rs 1,899,009 thousand (Previous Year Rs 1,262,058 thousand).

(Rs in Thousands)


12. Earnings in Foreign Exchange (on accrual basis)

i) Export of goods - Direct on FOB basis 4,594,609 4,796,844 - Deemed Exports (including local currency) 3,606,596 2,146,124

ii) Goods supplied/services rendered locally against foreign exchange remittances 8,597 1,181

iii) Erection & Other Services 427,058 295,948

iv) Other Income : a) Commission 34,122 169,450 b) Others 98,539 17,751

8,769,521 7,427,298

13. Consumption of Raw Materials and Components (Rs in Thousands)


Quantity Amount Quantity Amount

Ferrous Metals MT 1,034 62,493 717 51,842Non-Ferrous Metals MT 1,284 434,940 2,308 704,410Components * 16,236,477 * 17,704,093Others 1,928,568 2,374,665

18,662,478 20,835,010

% %Imported 39.45 7,362,727 33.73 7,026,873Indigenously acquired 60.55 11,299,751 66.27 13,808,137

100.00 18,662,478 100.00 20,835,010

For the purpose of para 4D (c) of Part II of Schedule VI to the Companies Act, 1956, components and spare parts are assumed to mean thoseincorporated in the product finally sold and not those used as spares for the repairs and maintenance of Plant and Machinery.

* Since the quantity denominations and the type of components are dissimilar in nature, it is impracticable to disclose the quantitative information in respect thereof.

Investing Values



(Rs in Thousands)


14. Value of imports on CIF basis (on accrual basis)

Raw Materials and Components including Spares 11,030,965 10,569,284

Finished Goods 2,301,267 2,603,531

Capital Goods including Technical Know-how 232,211 319,573

Project items 6,455,914 5,695,281

20,020,357 19,187,669

15. Expenditure in foreign currency (on accrual basis)

Royalty and Technology Fees 776,183 915,436

Trade Mark Fees 464,261 341,852

Commission and Discount 233 141

Professional / Project Consultancy 50,109 42,882

Others 1,349,590 843,123

2,640,376 2,143,434

16. Amount remitted during the year in foreign currency, on account of dividend

i) Number of non resident shareholders 3 3

ii) Number of equity shares held by them on which dividend was paid 110,420,990 110,420,990

iii) Year ended to which the dividend related December 31, 2008 2007

iv) Amount remitted 242,926 242,926

17. Managerial Remuneration

a) i) Directors’ fee 325 290

ii) Other remuneration

Salary 8,973 9,115

Commission to Managing Director 3,662 3,401

Commission to Whole-time Director 1,200 1,708

Commission to Independent Directors 1,600 1,275

Contribution to Provident and other funds 2,423 2,461

Other perquisites 6,937 7,563

24,795 25,523

25,120 25,813

Investing Values



(Rs in Thousands)


b) Computation of Net Profit as per Section 349 of the Companies Act, 1956

Profit Before Tax as per profit and loss account 5,273,994 8,332,440

Add: Managerial remuneration 25,120 25,813

Loss on sale of fixed assets 72,191 18,508

Loss on sale of Investment 2,970 -

Provision for doubtful debts and advances 452,298 586,784

552,579 631,105

5,826,573 8,963,545

Less: Profit on sale of fixed assets 1,742 64,514

1,742 64,514

Net Profit as per Section 349 of the Companies Act, 1956 5,824,831 8,899,031

Maximum permissible remuneration to Whole-time Directors under Section 198 of the Companies Act, 1956 @ 10% of the profits computed above

582,483 889,903

Maximum permissible remuneration to Independent Directors under Section 198 of the Companies Act, 1956 @ 1% of the profits computed above

58,248 88,990

Commission to Managing Director 3,662 3,401

Commission to Whole-time Director 1,200 1,708

Commission to Independent Directors 1,600 1,275

6,462 6,384

Remuneration to Directors does not include provision for leave encashment and gratuity as it is provided in the books on the basis of actuarial valu-ation for the Company as a whole. Commission to Managing Director and Whole-time Director is subject to further recommendation and approval of Remuneration Committee and the Board of Directors. For the year ended December 31,2008, Rs 2,336 thousand was paid as commission to Man-aging Director, Rs 1,167 thousand was paid as commission to Whole-time Director and Rs 1,200 thousand was paid as commission to Independent Directors based on recommendation and approval of Remuneration Committee and Board of Directors.

18. Auditors' Remuneration (for audit services excluding service tax)

i) Audit fee 6,000 4,300

ii) Tax Audit Fee 2,475 2,475

iii) Other Services

- SOX Fee 4,000 7,800

- Quarterly Limited Review Fee 3,900 2,625

- Group Reporting Fee 3,000 1,600

- Others 400 200

iv) Reimbursement of out of pocket expenses 650 263

20,425 19,263

19. Interest charge for the year includes Rs 9 thousand (Previous Year Rs 4,387 thousand) being interest on fixed period loans. During the year the Company has capitalised interest on borrowing cost Rs 2,395 thousand (Previous Year Rs 21,293 thousand).

20. Research and development expenditure of Rs Nil (Previous Year Rs 21,715 thousand) on revenue account has been incurred during the year.

Investing Values



(Rs in Thousands)

2009 2008

21. Construction Contracts

Contract revenue recognised as revenue for the year ended December 31, 2009 26,411,392 28,528,823Aggregate amount of contract costs incurred and recognised profits (less recognised losses)up to December 31, 2009 for all the contracts in progress 68,871,093 71,932,427

The amount of customer advances outstanding for contracts in progress as at December 31, 2009 3,623,598 3,819,331

The amount of retentions due from customers for contracts in progress as at December 31, 2009 6,234,864 7,044,982

22 Related Party Disclosures

a) List of Related Parties

Party where control exists:

ABB Asea Brown Boveri Limited, Zurich (Holding Company)

Other Related parties with whom transactions have taken place during the year:

Fellow subsidiaries:

ABB (China) Ltd., Beijing, China ABB Malaysia Sdn Bhd, Subang Jaya, Malaysia

ABB (Hong Kong) Ltd., Hong Kong, Hong Kong ABB Management Services Ltd., Zurich, Switzerland

ABB (P.J.S.C.), Teheran, Iran ABB Mexico S.A. de C.V., Tlalnepantla, Mexico

ABB (Pvt) Ltd., Lahore, Pakistan ABB N.V., Zaventem, Belgium

ABB A/S, Skovlunde, Denmark ABB Near East Trading Ltd., Amman, Jordan

ABB AB, Västerås, Sweden ABB Oy, Helsinki, Finland

ABB AG, Mannheim, Germany ABB Power Systems and Automation Techology S.A.E, Cairo, Egypt

ABB AG, Vienna, Austria ABB Qatar LLC., Doha, Qatar

ABB AS, Billingstad, Norway ABB S.A., Buenos Aires, Argentina

ABB AS, Tallinn, Estonia ABB S.A. Casablanca, Morocco

ABB Australia Pty Limited, Sydney, Australia ABB S.A. Lima, Peru

ABB Automation Co. Ltd., Riyadh, Saudi Arabia ABB S.A. Panama, Panama

ABB Automation GmbH, Mannheim, Germany ABB S.A., Rueil-Malmaison, France

ABB Automation L.L.C., Abu Dhabi, United Arab Emirates ABB S.A., Santiago, Chile

ABB Automation LLC, Moscow, Russian Federation ABB S.p.A., Milan, Italy

ABB Automation Products GmbH, Ladenburg, Germany ABB s.r.o., Praque, Czech Republic

ABB Bailey Beijing Controls Co. Ltd., Beijing, China ABB Schweiz AG, Baden, Switzerland

ABB Beijing Drive Systems Co. Ltd., Beijing, China ABB Secheron S.A., Satigny, Switzerland

ABB Bomem Inc., Quebec, Canada ABB Service Co. Ltd., Al Khobar, Saudi Arabia

ABB BV, Rotterdam, Netherlands ABB Shanghai Motors Co. Ltd., Sanghai, China

ABB Capital, B.V., Amsterdam, Netherlands ABB South Africa (Pty) Ltd, Sunninghill, South Africa

ABB Chongqing Transformer Company Ltd., Chongqing City, China ABB Sp. zo.o., Warsaw, Poland

ABB CL Logistic S.A., Montevideo, Uruguay ABB Stotz-Kontaki GmbH, Heidelberg, Germany

ABB Contracting Company. Ltd., Riyadh, Saudi Arabia ABB Technologies Ltd., Tirat Carmel, Israel

ABB d.o.o., Belgrade, Serbia ABB Technologies W.L.L., Bahrain, Bahrain

ABB Ecuador S.A., Quito, Ecuador ABB Technology AB, Västeras, Sweden

ABB Electrica SGPS, Lda., Luanda, Angola ABB Technology Ltd., Zurich, Switzerland

ABB Electrical Industries Ltd., Riyadh, Saudi Arabia ABB Technology SA, Abidjan, Cote D'Ivoire

ABB Electrical Machines Ltd., Shanghai, China ABB Ltd., Taipei, Taiwan, Province Of China

ABB Electroengineering Ltd., Moscow, Russian Federation ABB Ltd., Zagreb, Croatia

ABB Elektrik Sanayi A.S., Istanbul, Turkey ABB Ltda., Osasco, Brazil

Investing Values



ABB Engg. Technologies Co. (KSCC), Safat, Kuwait ABB Ltd., Seoul, South Korea

ABB Engineering (Shanghai) Ltd., Shanghai, China ABB LV Installation Materials Co. Lid., Beijing, China

ABB Engineering Trading and Service Ltd., Budapest, HungaryABB Transmission & Distribuition Automation Equipment (Xiamen) Co. Ltd., Fujian, China

ABB ESAP Limited, St. Peter's Port, Guernsey ABB Transmissione & Distribution Ltd., Abu Dhabi, United Arab Emirates

ABB France SAS, Rueil Malmaison cedex, France ABB Turbo Systems (Hong Kong) Limited, Hong Kong, Hong Kong

ABB Global Industries and Services Limited, Bengaluru, India ABB Turbo-Systems AG, Baden, Switzerland

ABB High Voltage Switchgear Co. Ltd., Beijing, China ABB UAB, Vilnius, Lithuania

ABB Holdings (Pty) Ltd., Sunninghill, South Africa ABB Xiamen Electrical Controlgear Co. Ltd., Fujian Province, China

ABB Holdings Sdn. Bhd., Subang Jaya, Malaysia ABB Xiamen Low Voltage Equipment Co. Ltd., Xiamen, China

ABB Inc., Norwalk, CT, United States ABB Xiamen Switchgear Co. Ltd., Xiamen, China

ABB Inc., St. Laurent, Quebec, Canada ABB, Xi'an Power Capacitor Company Limited, Xi'an, China

ABB Industries (L.L.C.), Dubai, United Arab EmiratesABB, Xinhui Low Voltage Switchgear Co, Ltd., Xinhui (Guangdong), China

ABB Industries FZ, Dubai, United Arab Emirates ABB, Inc., Paranaque, Metro Manila, Philippines

ABB Industriunderhall AB, Degerfors, Sweden ABB, s.r.o, Bratislava, Slovakia

ABB Industry Pte. Ltd., Singapore ABBNG Limited, Abuja, Nigeria

ABB Information Systems Ltd., Zurich, Switzerland Asea Brown Boveri Ltd., Port Louis, Mauritius

ABB International Marketing Ltd., Zurich, Switzerland Asea Brown Boveri Ltda., Bogotá, Columbia

ABB Jiangjin Turbo Systems Company Limited, Chongqing, China Asea Brown Boveri Ltda., La Paz, Bolivia

ABB K.K. Tokyo, Japan Asea Brown Boveri S.A., Caracas, Venezuela

ABB Limited, Auckland, New Zealand Asea Brown Boveri S.A., Madrid, Spain

ABB Limited, Bangkok, Thailand Asea Brown Boveri S.A., Metamorphossis Attica, Greece

ABB Limited, Dar Es Salaam, Tanzania Asea Brown Boveri S.A.E., Cairo, Egypt

ABB Limited, Warrington, United Kingdom Busch-Jaeger Elektro GmbH, Mannheim/Lüdenscheid, Germany

ABB Logistics Center Europe GmbH, Menden, Germany Electrical Materials Center, Riyadh, Saudi Arabia

ABB Ltd., Dublin, Ireland PT ABB Installation Materials, Jakarta, Indonesia

ABB Ltd., Jordan, Amman, Jordan PT ABB Jasa Indonesia, Jakarta, Indonesia

ABB Ltd., Hanoi, Vietnam PT ABB Sakti Industri, Jakarta, Indonesia

ABB Ltd., Kiev, Ukraine PT ABB Transmission and Distribution, Jakarta, Indonesia

ABB Ltd., Lusaka, Zambia Pucaro Elektro-Isolierstoffe GmbH, Roigheim, Germany

Associate : (erstwhile) Integra Hindustan Control Limited

(ceased to be associate from 25th April, 2008 on divestment of shares by the Company)

Key Management Personnel:

Managing Director: Mr. Biplab Majumder

Whole-time Director: Mr. K Rajagopal (ceased to be director w.e.f. August 1, 2009)

Chief Financial Offi cer: Mr. Amlan Datta Majumdar (w.e.f. September 1, 2009)

Mr. K Rajagopal (From August 1, 2009 to August 31, 2009)

Investing Values



(Rs in Thousands)

2009 2008

b) Transactions with related parties

Transaction value in excess of 10% with a fellow subsidiary has been individually disclosed below. All other cases have been grouped and disclosed as 'other fellow subsidiaries'.

i) Sales, Services and Other income

Fellow Subsidiaries

- ABB Global Industries and Services Limited, Bengaluru, India 490,844 287,269

- Other fellow subsidiaries 3,149,591 2,850,969

3,640,435 3,138,238

Integra Hindustan Control Limited (an erstwhile associate) - 1,875

ii) Purchases of Raw Materials, Components and Project items

Fellow Subsidiaries

- ABB Oy, Helsinki, Finland 4,110,039 2,984,713

- ABB Schweiz AG, Baden, Switzerland 2,394,235 1,602,689

- ABB AB, Västerås, Sweden 2,211,948 2,454,152

- ABB S.p.A., Milan, Italy 1,157,994 1,361,517


14,459,848 13,628,664

Integra Hindustan Control Limited (an associate) - 25,363

iii) Expenditure on ESAP Charges

Fellow Subsidiaries

- ABB ESAP Limited, St. Peters' Port, Guernsey 15,462 36,567

iv) Expenditure on Royalty, Trade-mark, Technical and Consultancy Services

Holding Company 464,261 341,852

Fellow Subsidiaries

- ABB Technology Ltd., Zurich, Switzerland 687,983 795,012

- Other fellow subsidiaries 63,663 101,214

751,646 896,226

v) Expenditure on Information technology, Engineering and Other Services


Fellow Subsidiaries

- ABB Information Systems Ltd., Zurich, Switzerland 472,763 323,534


- ABB Management Services Limited, Zurich, Switzerland 168,347 5,245

- ABB AB, Västerås, Sweden 164,268 155,623


1,577,881 1,010,400

Investing Values



(Rs in Thousands)

2009 2008

vi) Interest Expenses

Fellow Subsidiaries

- ABB Global Industries and Services Limited, Bengaluru, India 13,098 825

- ABB Oy, Helsinki, Finland 793 -

13,891 825

vii) Capital expenditure for Technical Know-how

Fellow Subsidiaries

- ABB Oy, Helsinki, Finland 33,297 -

- ABB France SAS, Rueil Malmaison cedex, France 8,174 12,050

- ABB AB, Västerås, Sweden - 7,528

- Other fellow subsidiaries - 4,062

41,471 23,640

viii) Capital expenditure

Fellow Subsidiaries

- ABB Turbo-System AG, Baden, Switzerland 15,096 7,084

- ABB Oy, Helsinki, Finland 10,293 -

- ABB S.p.A., Milan, Italy 9,743 6,691

- ABB AB Västerås, Sweden 7,212 25,852

- ABB AG Mannheim, Germany - 19,737

- ABB Global Industries and Services Limited, Bengaluru, India - 23,531


45,832 101,700

ix) Fixed assets (sold)

Fellow Subsidiaries

- ABB Global Industries and Services Limited, Bengaluru, India - 59,950

- ABB International Marketing Limited, Zurich, Switzerland 1,099 -

1,099 59,950

x) Outstanding balances

Debtors and Advances

Holding Company 4,121 534

Fellow Subsidiaries:


- ABB AB, Västerås, Sweden 159,808 119,024

- Other fellow subsidiaries 845,450 1,093,448

1,167,536 1,353,646

Creditors



- ABB, Oy, Helsinki, Finland 1,573,603 908,453

- ABB Schweiz AG, Baden, Switzerland 1,063,335 945,970

- ABB Västerås, Sweden 912,633 1,148,604


6,035,950 5,474,128

Investing Values



(Rs in Thousands)

2009 2008

xi) Unsecured loan taken (repaid during the year)


- ABB Global Industries and Services Limited, Bengaluru, India 2,235,000 430,000

xii) Dividend Paid during the year


Fellow Subsidiaries 27,589 27,589

xiii) Remuneration to Managing Director 17,175 15,604

xiv) Remuneration to Whole-time Director 6,020 8,643

xv) Remuneration to Chief Financial Offi cer 2,734 798

Remuneration to directors and chief financial officer does not include provision for leave encashment and gratuity as it is provided in the books on the basis of actuarial valuation for the Company as a whole. The remuneration to Whole-time Director Mr. K Rajagopal for the year ended December 31, 2009 is for the period from January 1 to July 31, 2009. The remuneration to Chief Financial Officer includes payment made to Mr. K Rajagopal for the period August 1 to August 31, 2009 and to Mr. Amlan Datta Majumdar for the period September 1 to December 31, 2009. The remuneration to Whole-time Director for 2008 to Mr. K Rajagopal is for the period February 19, 2008 to December 31, 2008. The remuneration to Chief Financial Officer Mr. K Rajagopal for 2008 is for the period upto February 18, 2008.

23. The pro rata difference between the forward contract rate and the exchange rate on the date of transaction to be charged to profit and loss account is Rs 58,223 thousand (Previous Year Rs 5,024 thousand).

24. Provisions

a) Movement in provisions: (Figures in brackets are in respect of the previous year)

(Rs in Thousands)

Class of provisions

As atJanuary 1,

2009 Additions Amounts used

Unused Amounts reversed

As atDecember 31,

2009

Warranties 630,042 244,482 122,461 65,607 686,456

(778,561) (173,930) (106,431) (216,018) (630,042)

Sales Tax 21,458 33,334 - 1,330 53,462

(58,079) (3,892) (15,513) (25,000) (21,458)

Litigations 57,160 2,650 - - 59,810

(57,160) (-) (-) (-) (57,160)

Restructuring 1,206 - - - 1,206

(66,373) (-) (39,167) (26,000) (1,206)

b) Nature of provisions:

a. Warranties: The Company provides warranties for its products, systems and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at December 31, 2009 represents the amount of the expected cost based on technical evaluation and past experience of meeting such obligations.

b. Provision for Sales Tax represents mainly the differential sales tax liability on account of non collection of declaration forms.

c. Provision for litigation represents claims against the Company not acknowledged as debts that are expected to materialise in respect of mat-ters in litigation.

d. Provision for restructuring represents the liability that is expected to materialise in respect of units hived off in past.

Investing Values



25. The employees of the Company are entitled to purchase shares of ABB Asea Brown Boveri Ltd., Zurich (the ultimate holding company) on the settlement date, at a price fixed based on the fair market price on the grant date under ABB Employee Share Acquisition Plan. During the year, the Company has been cross charged Rs 15,462 thousand (Previous Year Rs 35,567 thousand) towards the above including administrative charges and this has been charged in the profit and loss account under the head Salaries, Wages and Bonus.

The Institute of Chartered Accounants of India has issued a Guidance Note on Accounting for ‘Employee Share-based Payments’, which is applicable to employee share based payment plans. The scheme detailed above is managed and administered, compensation benefits in respect of the scheme is assessed and accounted by the ultimate holding company, except for the obligation towards expenses cross charged above. Accordingly, the company is of the opinion that there is no further accounting treatment/ disclosure required under the said Guidance Note.

26. Derivative Instruments

i) Forward cover for foreign currency debtors outstanding as of balance sheet date is Rs 1,292,530 thousand (Previous Year Rs 2,352,388 thousand).

ii) Forward cover for expected future sales or highly probable forecast transaction as of balance sheet date is Rs 2,979,301 thousand (Previous Year Rs 2,922,990 thousand).

iii) Forward cover for foreign currency creditors outstanding as of balance sheet date is Rs 6,748,480 thousand (Previous Year Rs 6,896,877 thousand).

iv) Forward cover for expected future purchases or highly probable forecast transaction as of balance sheet date is Rs 1,929,404 thousand (Previous Year Rs 6,998,974 thousand).

v) Foreign currency exposure (net) that are not hedged by derivative instruments or otherwise is Rs 668,879 thousand (Previous Year Rs 136,072 thousand).

27. The Company has amounts due to Micro and Small Enterprises under The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at December 31, 2009.

(Rs in Thousands)

2009 2008

i) The principal amount and the interest due thereon remaining unpaid to any supplier as at December 31, 2009

Principal amount 228,136 174,395 Interest 88 828ii) The amount of interest paid by the Company along with the amounts of the payment made to the sup-

plier beyond the appointed day for the year ending December 31, 2009 Principal amount 271,997 357,067 Interest 2,500 5,459iii) The amount of interest due and payable for the period of delay in making payment (beyond the appointed

day during the year) 25 828

iv) The amount of interest accrued and remaining unpaid for the year ending December 31, 2009. 113 828

v) The amount of further interest remaining due and payable for the earlier years. - -

Note: The information has been given in respect of only those suppliers who have intimated the Company that they are registered as micro and small enterprises.

28. Excise duty on sales amounting to Rs 2,573,696 thousand (Previous Year Rs 5,032,076 thousand) has been reduced from sales in profit and loss account and excise duty on increase in inventory of finished goods amounting to Rs 9,575 thousand (Previous Year Rs 453 thousand) has been accounted in the profit and loss account under the head ‘Cost of Materials and Erection Services’.

29. The Company has defined benefit gratuity plan and provident fund plan managed by trusts. The following table summarises the component of net benefit expenses recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet.

Investing Values



(Rs in Thousands)2009 2008

Gratuity Provident Fund Gratuity Provident Fundi) Change in benefi t obligations

Projected benefit obligations at beginning of the period 520,302 1,822,049 430,650 1,527,153Current service cost 48,922 129,983 46,885 93,732Contribution by plan participants (employees) - 239,210 - 247,485Interest cost 39,022 136,654 25,839 91,629Benefits paid (30,737) (203,807) (34,169) (177,572)Actuarial loss / (gain) (1,939) (37,796) 51,097 39,622Projected benefit obligations (PBO) at the end of the period 575,570 2,086,293 520,302 1,822,049

ii) Change in plan assetsPlan assets at the beginning of the period, at fair value 491,881 1,768,520 412,252 1,482,996Contributions 39,935 335,562 78,123 337,131Expected return on plan assets 40,959 146,752 38,426 132,836Actuarial (loss) / gain (1,048) 1,097 (2,751) (6,871)Benefits paid (30,737) (203,807) (34,169) (177,572)Plan assets at the end of the period, at fair value 540,990 2,048,124 419,881 1,768,520

iii) Actual return on plan assetsExpected return on plan assets 40,959 146,752 38,426 132,836Actuarial (loss) / gain on plan assets (1,048) 1,097 (2,751) (6,871)Actual return on plan assets 39,911 147,849 35,675 125,965

iv) Present value of the defined benefit obligation 575,570 2,086,293 520,302 1,822,049Plan assets at the end of the period, at fair value 540,990 2,048,124 491,881 1,768,520Liability recognised in the balance sheet 34,580 38,169 28,421 53,529

v) Cost for the periodCurrent service cost 48,922 129,983 46,885 93,732Interest cost 39,022 136,654 25,839 91,629Expected return on plan assets (40,959) (146,752) (38,426) (132,836)Actuarial loss/(gain) (891) (38,893) 53,848 46,493Expense recognised in the statement of profit & loss 46,094 80,992 88,146 99,018

vi) Investment details (% invested)GOI Securities 33.9 28.6 39.8 30.4State Government Securities 15.6 13.1 9.1 9.9PSU Securities 23.9 32.5 22.7 30.4Special Deposit Scheme 17.3 14.5 19.0 17.0Others (including bank balances) 9.3 11.3 9.4 12.3

100.0 100.0 100.0 100.0vii) Experience adjustment

Defined benefit obligation 575,570 2,086,293 520,302 1,822,049Plan assets 540,990 2,048,124 491,881 1,768,250Surplus / (Deficit) (34,580) (38,169) (28,421) (53,529)Experience adjustments on plan liabilities 8,240 35,401 51,270 1,727Experience adjustments on plan assets (1,048) 1,097 (2,751) (6,871)

viii) AssumptionsInterest rate for discount 7.50% p.a. 7.50% p.a. 6.00% p.a. 6.00% p.a.Estimated rate of return on plan assets 8.25% p.a. 8.00% p.a. 8.50% p.a. 8.50% p.a.

Investing Values



Notes :

i) Assumptions relating to future salary increases, attrition, interest rate for discount and overall expected rate of return on assets have been considered based on relevant economic factors such as inflation, market growth and other factors applicable to the period over which the obligation is expected to be settled.

ii) The Company expects to contribute Rs 50,700 thousand (Previous Year Rs 96,960 thousand) to Gratuity Fund and Rs 89,091 thousand (Previous Year Rs 108,919 thousand) to Provident Fund in 2009.

iii) The attrition rate for gratuity varies from 1% to 8% for various age groups.

30. The figures of the previous year have been regrouped / reclassified, where necessary, to conform with the current year’s classifications.






Investing Values



Cash Flow Statement

(Rs in Thousands)


A. Cash Flow from Operating Activities

Net Profit Before Tax 5,273,994 8,332,440

Adjustments for

Depreciation/ Amortisation 485,058 366,805

Unrealised Losses/ (Gains) on Restatement of Monetary Assets (net) 9,668 (104,573)

Unrealised Losses/ (Gains) on Restatement of Monetary Liabilities (net) (86,301) 329,235

Loss / (Profit) on Sale of Fixed Assets, (net) 70,449 (46,006)

Loss / (Profit) on Sale of Investments, (net) 2,970 (23,677)

Interest Income (183,293) (141,143)

Interest Expense 256,242 346,600

Operating Profit before Working Capital Changes 5,828,787 9,059,681

Movement in Working Capital

(Increase)/ Decrease in Sundry Debtors 1,172,237 (5,453,252)

(Increase)/ Decrease in Inventories (867,527) (1,539,432)

(Increase)/ Decrease in Other Current Assets 598,943 (1,193,549)

(Increase)/ Decrease in Loans and Advances 1,065,129 (1,075,383)

Increase/ (Decrease) in Current Liabilities and Provisions (1,565,655) 2,777,157

Cash Generated from Operations 6,231,914 2,575,222

Direct Taxes Paid (net of refunds) (2,687,038) (2,378,489)

Net Cash generated from Operating Activities 3,544,876 196,733

B. Cash Flow from Investing Activities

Purchase of Fixed Assets (1,632,550) (2,720,926)

Proceeds from sale of Fixed Assets 13,080 81,952

Sale/Maturity of Investments 439,482 116,979

Interest Received 194,204 275,414

Net Cash used in Investing Activities (985,784) (2,246,581)

Investing Values



(Rs in Thousands)


C. Cash Flow from Financing Activities

Proceeds from new Borrowings 28,435,000 11,960,000

Repayment of Borrowings (28,435,202) (11,965,458)

Interest Paid (255,527) (346,600)

Dividend (Including corporate Dividend Tax) paid (544,271) (544,417)

Net Cash used in Financing Activities (800,000) (896,475)

Net Increase/ (Decrease) in Cash and Cash Equivalents (A+B+C) 1,759,092 (2,946,323)

Cash and Cash Equivalents (Opening Balance) 3,482,313 6,428,636

Cash and Cash Equivalents (Closing Balance) 5,241,405 3,482,313

Components of Cash and Cash Equivalents as at December 31, 2009 2008

Cash and cheques on hand 1,172,129 1,531,633

Balances With Banks - On Current Account 1,060,260 1,941,211

- On Deposit Account 3,009,016 8,554

- On Margin Account - 915

5,241,405 3,482,313

Notes:

1) Cash and Cash Equivalents at the end of the year represent cash and cheques on hand and cash and deposits with banks. Cash and Cash Equivalents includes unclaimed dividend and margin deposit of Rs 11,021 thousand (Previous Year Rs 10,779 thousand) being restricted cash.

2) The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the classification of the current year.

3) Cash Flow Statement is made using the indirect method.






Investing Values



Balance Sheet Abstract and Company’s General Business Profile

I Registration Details

Registration No. L32202KA1949PLC032923 State Code 0 8

Balance Sheet Date 31 12 09

Date Month Year

II Capital Raised During the year (Rs In Thousands)

Public Issue Rights Issue

NIL NIL

Bonus Issue Private Placement

NIL NIL

III Position of Mobilisation and Deployment of Funds (Rs in Thousands)

Total Liabilities Total Assets

2 4 2 3 7 3 3 2 2 4 2 3 7 3 3 2

Sources of Funds Reserve and Surplus

Paid Up Capital 2 3 8 1 3 5 1 5

4 2 3 8 1 7 Unsecured Loans

Secured Loans NIL

NIL

Deferred Tax Liability

NIL

Application of Funds

Net Fixed Assets Investments

7 8 9 4 6 8 7 1 6 8 7 9 2

Net Current Assets Misc. Expenditure

1 6 1 7 2 8 8 7 NIL

Accumulated Losses Deferred Tax Assets

NIL 9 6 6

IV Performance of the Company (Rs in Thousand)

Turnover Total Expenditure

6 3 0 9 7 7 1 0 5 7 8 2 3 7 1 6

+/- Profit/Loss Before Tax +/- Profit/Loss After Tax

+ 5 2 7 3 9 9 4 + 3 5 4 6 3 9 1

Earnings per share in Rs Dividend Rate %

1 6 . 7 4 1 0 0

V Generic Names of Three Principal Products/Services of Company (as per monetary terms)

Item Code No. (ITC Code) 85.35

Product Description Switchgears of all types


Product Description Transformers


Product Description Electronic Control and Supply Units for Variable Speed Drives and other applications

Investing Values



Notes

Investing Values


ABB LimitedRegistered Offi ce : 2nd Floor, East Wing, Khanija Bhavan

49, Race Course Road, Bengaluru - 560 001.

DP. Id NAME & ADDRESS OF THE REGISTERED SHAREHOLDER

Client Id/ Folio No.

No. of Shares

I hereby record my presence at the SIXTIETH ANNUAL GENERAL MEETING of the Company at The Atria Hotel, “Chancery”,No. 1, Palace Road, Bengaluru - 560 001 on Tuesday, May 11, 2010 at 11.00 a.m.

Note: 1. A Member/Proxy holder attending the meeting must bring the Attendance Slip to the meeting and hand it over at the entrance duly signed.

2. A Member/Proxy holder attending the meeting should bring copy of the Annual Report for reference at the meeting.

ABB LimitedRegistered Offi ce : 2nd Floor, East Wing, Khanija Bhavan

49, Race Course Road, Bengaluru - 560 001.

I/We .....................................................................................................................................................................................................................................................

of.................................................................................................................. in the district of .............................................................................. being a Member/

Members of ABB Limited, hereby appoint ........................................................................................................................................................................................

of ....................................................................................... in the district of ......................................................................................................................................

or failing him/her ................................................................................................... of ........................................................................................................................

in the district of .......................................................................................................... as my/our Proxy to attend and vote for me/us and on my/our behalf at the SIXTIETH ANNUAL GENERAL MEETING of the Company at The Atria Hotel, “Chancery”, No. 1, Palace Road, Bengaluru - 560 001 on Tuesday, May 11, 2010 at 11.00 a.m. and at any adjournment thereof.

Signed this .................................................... day of ......................................................... 2010.

DP. Id

SIGNATURE OF MEMBER/S ....................................................

Affix a Re 1/-Revenue Stamp

Client Id/ Folio No.

No. of Shares

Notes: 1. The proxy must be returned so as to reach the Registered office of the Company 2nd Floor, East Wing, Khanija Bhavan,49, Race Course Road, Bengaluru – 560 001, not less than FORTY-EIGHT HOURS before the time for holding the aforesaid meeting.

2. A Proxy need not be a member of the Company.

ATTENDANCESLIP

PROXYFORM

SIGNATURE OF THE ATTENDING MEMBER / PROXY ..............................................................................................................

Investing Values


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ABB LimitedCorporate Communications 2nd Floor, East WingKhanija Bhavan 49, Race Course RoadBangalore 560 001IndiaTel: +91 80 2294 9150Fax: +91 80 2294 9148

www.abb.co.in

Investing Values


abb india 2009 annual report

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