ABB India Annual Report 2007

8/6/2019 ABB India Annual Report 2007

http://slidepdf.com/reader/full/abb-india-annual-report-2007 1/72

Energy efficiency for a connected world

ABB Limited - Annual Report 2007India



Contents

1 Board of Directors and Other Information

2 5 Year Highlights

4 Corporate Management Committee

5 Welcome to ABB

11 Notice to Members

16 Directors’ Report

31 Management’s Discussion and Analysis

36 CEO/CFO Certification

37 Auditors’ Report

40 Balance Sheet, Profit & Loss Account and Schedules

51 Notes to Accounts

66 Cash Flow Statement

68 Balance Sheet Abstract and Company’s General Business Profile



ABB Limited

Board of Directors

Ravi Uppal, Chairman (w.e.f. 26.07.2007)

Biplab Majumder, Managing Director (w.e.f. 26.07.2007)K. Rajagopal, Whole-time Director (w.e.f. 19.02.2008)

Nasser Munjee

N. S. Raghavan

D. E. Udwadia

A. K. Dasgupta (w.e.f. 26.04.2007)

Bernhard Jucker

Peter Leupp (w.e.f. 26.07.2007)

Veli-Matti Reinikkala (w.e.f. 26.07.2007)Dinesh Paliwal (upto 25.05.2007)

Tom Eric Sjoekvist (upto 05.07.2007)

Company Secretary

B. Gururaj

Corporate Management Committee

Biplab Majumder

I. K. Sadhu

K. Rajagopal

Ramesh Shankar

Shyam Karmarkar

Pankaj Sachdeva

Madhav M. Digraskar

N. Ravi

Prakash Nayak

Prakash Kanagalekar

S. Karun

Ranjan De

Bankers

ICICI Bank Limited

Auditors

S. R. Batliboi & Co.

Chartered Accountants

Registered Office

2nd Floor, East Wing

Khanija Bhavan

49, Race Course Road

Bangalore - 560 001

Registrar & Share Transfer Agent

Karvy Computershare Private Limited

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

Opp. National College

Basavanagudi

Bangalore - 560 004



5 Year Highlights

Description 2007 2006 2005

Sources of Funds

Share Capital 423.8 423.8 423.8

Reserves 15,694.2 11,386.5 8,466.7

Net Worth 16,118.0 11,810.3 8,890.5

Borrowings 5.6 15.5 27.3

Funds Employed 16,123.6 11,825.8 8,917.8

Income and Profits

Sales & Other Income 60,013.6 43,477.0 30,141.4

Operating Profit Before Interest and Depreciation 7,632.7 5,504.0 3,692.6

Profit Before Tax 7,564.6 5,232.1 3,394.8

Tax 2,647.9 1,829.0 1,208.0

Profit After Tax 4,916.7 3,403.1 2,186.8

Dividend / Dividend Tax 558.0 483.3 389.4

Retained Earnings 4,358.7 2,919.8 1,797.4

Other Data

Gross Fixed Assets 6,627.1 5,190.0 4,324.4

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

Net Worth Per Equity Share - Rs 76.1 55.7 42.0

Earnings Per Equity Share - Rs 23.2 16.1 10.3

Dividend Per Equity Share - Rs 2.2 2.0 1.6

Profit After Taxes as % to Average Net Worth 35.2 32.9 27.4



5 Year Highlights

0

15000

30000

45000

60000

75000

20072006200520042003

Revenues

Rs. in Millions

15,031

23,056

30,141

43,477

60,014

0

1500

3000

4500

6000

20020042003

Profit After Tax

1008.9

1505.2

2186

45

60

Return on Capital Employed (%)

36.3

43.2

50.5

54.6

Employees & Productivity

6,704

7,4397500

10000

12500

Revenue per employee (Rs. in Tho



Corporate Management Committee

Left to right (Front row) - Shyam Karmarkar, Head - Marketing & Sales, Prakash Kanagalekar, Head -

Operational Excellence, K Rajagopal, Chief Financial Officer, Biplab Majumder, Country Manager & Head -



Welcome to the world of ABB

ABB is one of the world’s leading power and

automation engineering companies. We provide

solutions for 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 forpainting cars or packing food, 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 delivering Power and

Productivity for a better world.

Technology & Innovation

ABB’s leading position in power and automation

technologies results from strengths such as quality,

commitment to customers and above all, successful

innovation in our R&D activities. Our approach to

technology is based on our key aims of enhancing

electrical power reliability, industrial productivity and

globally on research and development (including

order-related) in 2007, and more than half of ou

efforts were aimed at improving energy efficienc

Our strategy for the future is to focus on develop

products and services that use energy more eff

and maximize returns on capital investments. W

continue to invest in existing technologies to enstheir reliability for years to come, while developin

new technologies to meet future needs for powe

automation systems.

ABB and energy efficiency

Did you know that as much as 80 percent of av

energy is lost in the process of making and distr

electricity, and in its inefficient consumption? Th

means just one-fifth of the energy we have becothe power we need.

As the global leader in power transmission and

distribution technology and one of the world’s le

automation companies, ABB has found ways to

optimize energy use at every step.



ABB in India

ABB has over 5,500 employees and 14 manufacturing

facilities across India. We serve customers through

an extensive countrywide presence of around 30

marketing offices, 8 service centers, 3 logistics

warehouses and a network of over 775 channel

partners. The ABB Group is increasingly leveraging

the Indian operations for projects, products, services,

engineering and R&D. Also, as part of ABB’s new

regional approach, India has been designated as the

hub for the South Asia region.

ABB India continues to bring value to customers

through leading-edge technologies, domain expertise

and project execution abilities. The products focus

continues in the form of range expansion and market

penetration.

To meet growing demand, capacity and range

expansion is underway across businesses and

locations. Several new products and technologies

were introduced in the Indian market during 2007. In

addition to enhancing the capacity of existing plants,

many new manufacturing units are being set up

Strong macro economic fundamentals, integration

with the world economy, industrial growth and the

significant work that still remains to be done with

reference to the power sector, continue to offer brig

prospects for power and automation technologies.

ABB is well positioned to leverage these market

opportunities based on its intrinsic technology

strengths, market presence, track record, extensive

manufacturing base and skill competence.

• ~ 5500 Employees

• ~ 775 Channel

Partners

FARIDABAD

DELHI

VADODARA

NASHIK

MUMBAI

KOLKATA

Corporate Offic

Registered Offi

HALOL

HARIDWAR



Grid Reliability

Power Systems

Our Power Systems division is a market leader in

the engineering of grid systems, power generation

systems, network management solutions and

substations. Power Systems deliverables include

network management, utility communication,

transmission and distribution substations, Flexible Alternating Current Transmission Systems (FACTS),

High-Voltage Direct Current (HVDC) systems and

automation and electrical solutions for power plants.

This division also offers automation, control and

protection systems and related services for power

transmission and distribution networks, power plants

and water pumping stations. Our FACTS and HVDC

businesses offer technologically advanced solutions

designed to increase transmission capacity andstability in power networks. ABB also delivers end-

to-end solutions for urban and rural electrification

projects. The Power Systems customer base

includes central, state and private power utilities as

well as industry clients.

Power Products

Our Power Products division is a leading supp

power transmission and distribution products a

services, serving electric, gas and water utilitie

well as industrial and commercial customers, w

a broad range of products and services across

power value chain. ABB’s offering includes a brange of indoor and outdoor circuit breakers, a

and gas insulated switchgear, including hybrid

switchgear, instrument transformers, disconne

high and low voltage capacitors, reactive powe

compensators, power and distribution transfor

and a range of distribution products including

Compact Secondary Substations (CSS) and R

Main Units (RMUs). ABB also provides a full ra

of lifecycle services from spare parts and equiprepair to training, migration, remote monitoring

technical support.



Industrial Productivity

Process Automation

Our Process Automation division’s products, systems

and services give our customers complete automation

and optimization solutions and this includes

industry-specific solutions for plant automation and

electrification, energy management, process and

asset optimization, analytical measurement andtelecommunication. Major industries served include

oil and gas, metals and minerals, pulp and paper,

chemicals and pharmaceuticals. For product life

cycle support, we offer field services, spare parts,

remote monitoring, training and upgrades. For asset

optimization we offer services for engineering, design,

consulting, compliance, validation, benchmarking,

plant performance improvement, safety and

hazardous operation analysis and reliability analysis.Using our full service program we also offer plant-

wide, performance-based maintenance contracts,

which provide customers an opportunity to outsource

their plant maintenance. The Process Automation

division also delivers specialized solutions for turbo

charging as well as propulsion and electrification

rail components, enclosures, line protection devices

wiring accessories, instrumentation, drives, motors,

generators and power electronics systems. All thes

products help customers to improve productivity,

save energy and ensure safety. The majority of thes

products are used for industrial applications, but als

in buildings, utilities and rail transportation. Channelpartners such as distributors, wholesalers, machine

builders, system integrators and electrical panel

builders form an important customer segment with

direct OEM sales comprising the rest.

Robotics

Our Robotics division offers robots, services and

modular manufacturing solutions for use in assemb

finishing and machine tending. Key markets include

the automotive and manufacturing industries, in

addition to applications in foundry, packaging and

material handling. The division develops standardize

manufacturing cells for machine tending, welding,

cutting, painting and finishing and provides packag

systems to automobile manufacturers for press



Sustainability

ABB follows a ‘triple bottom line’ approach aimed at

achieving a balance in the economic, environmental

and social impact of the company’s business to benefit

all our stakeholders.

The company has a dedicated Sustainability team, with

location-based representatives, headed by a Country

Sustainability Controller. The ABB India Foundation, aregistered charitable Trust ensures dedicated focus,

independence, regular monitoring and continuity of

social initiatives in a planned manner.

ABB in India has put in place a focused sustainability

programme with clearly defined pillars.

Education

The education pillar focuses on primary education for

economically and socially underprivileged children, by

supporting schools in the proximity of the company’s

major manufacturing locations. At the same time it also

focuses on building academia partnerships with higher

education technical universities.

As part of its primary education initiative, ABB now

Gandhi Nagar School in Bangalore. New classro

and benches, revamped facades, improved ligh

drinking water, toilet facilities and provision for p

areas have been undertaken at these schools.

The existing schools namely Nellagadaranahalli

Government (NGH) School in Peenya, Goverdha

School at Nashik and Makarpura School at Vado

saw continued support in the form of infrastructu

enhancement, provision of benches, value educat

programmes for teachers and students, educationa

painting competitions and medical camps.

On the high level education engagement, ABB in

strives to foster industry-academia relationships a

works with several renowned academic institutio

such as the RV College of Engineering, Bangalor

University, Vadodara and Indian Institute of Techn- Delhi. Besides facilitating research and develop

these relationships also encourage student interf

especially in fields related to power and automat

technologies. Scholarships, provision of lab facil

visits and placements are some of the initiatives t

d thi



working with physically and visually impaired at Prerana

in Bangalore and the mentally challenged in Prabodhini

in Nashik. The latest project added as part of this

initiative was ‘Seva Tirth’ in Vadodara. Besides the

obvious benefit of providing an honourable means of

livelihood for these differently abled people, the project

is also playing a vital role in their rehabilitation.

Access to Electricity

Access to Electricity is a global ABB programme aimed

at providing access to electricity and bringing light tothose in darkness, especially in areas not connected by

the grid. ABB India’s ‘access to electricity’ programme

has already brought light to around 900 households

and 6,500 people in the interior desert areas of

Rajasthan. Scattered dwellings across five hamlets,

have been equipped with solar panel units that help

bring light to their homes.

Besides resulting in an increase of productive hours,thereby boosting earnings and protecting traditional

trades, the simple village folk are now adopting new

livelihoods by training and maintaining the units.

Moreover, the women can cook at leisure now and the

children can study longer.

Special Projects

With special projects, ABB springs into action when

there is a ‘need for help’ from communities affected by

natural disasters, calamities or epidemics. ABB was

actively involved at the time of the Gujarat earthquake

and the more recent tsunami.

Welfare / Awareness

ABB India strongly focuses upon the welfare of its

employees and providing them a conducive work

environment. Towards this effort, the company has

appointed a dedicated Country Occupational Health

and Welfare Officer. Several training & awareness

programmes, welfare workshops and health checks are

also conducted on a regular basis for the employees

and the neighbouring communities.

Environment

ABB India’s commitment to the environment extends

by extending support to programmes such as tree

plantation, maintaining traffic islands, providing tree

guards etc.

Safety

Safety is accorded the highest priority by the compa

A clear safety policy, several training programmes

and communication tools have been put in place. A

dedicated Country Safety Controller and a nationwidnetwork of safety officers ensure that safety is never

compromised - be it the company’s own locations o

project sites. Compliance standards and certification

processes help extend this commitment beyond

employees and the strictest safety regime is followed

even with sub-contractors and business partners.

Regular audits and ongoing communications help

enforce a ‘zero-tolerance’ policy when it comes

to violating safety norms. In a unique initiative, the

company has recently set up an outdoor-cum-

indoor safety training school in Jaipur which helps

familiarize and train many of the company’s erection/

commissioning employees, contract workers and

even customer personnel actively engaged in power



Notice to Members

NOTICE is hereby given that the FIFTY-EIGHTH ANNUAL GENERALMEETING of the Members of ABB Limited will be held at The Atria Hotel,“Chancery”, No.1, Palace Road, Bangalore – 560 001, on Tuesday,

June 3, 2008 at 11.00 A.M. (IST) to transact the following business:

Ordinary Business:

1. To receive, consider and adopt the Audited Balance Sheet as atDecember 31, 2007 and the Audited Profit & Loss Account for theyear 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 byrotation at this Annual General Meeting, and being eligible, offers

himself for re-election.

4. To appoint a Director in place of Mr. Bernhard Jucker, who retiresby rotation at this Annual General Meeting, and being eligible, offershimself for re-election.

5. To appoint M/s. S.R. Batliboi & Co., Chartered Accountants, asStatutory Auditors of the Company to hold office from the conclusionof this Annual General Meeting until the conclusion of the next AnnualGeneral Meeting and to authorize the Board of Directors to fix theirremuneration.

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. Arun Kanti Dasgupta who was appointedas Director by the Board of Directors of the Company on April 26,2007, pursuant to Article 151 of the Articles of Association of theCompany to fill in the casual vacancy caused on the Board, dueto the resignation of Mr. K. Sridhar and who holds office up to thedate of this Annual General Meeting pursuant to Section 262 of theCompanies Act, 1956 and in respect of whom the Company has

received a notice in writing from a member proposing his candidaturefor the office of Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation.”

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

“RESOLVED THAT Mr. Ravi Uppal, who was appointed as an Additional Director by the Board of Directors of the Company on July

1956 and in respect of whom tin writing from a member proposDirector, be and is hereby appo

liable to retire by rotation”.

9. To consider, and if thought fit, tothe following resolution as an Or

“RESOLVED THAT pursuant provisions of Sections 198, applicable provisions, if any, of tany statutory modification(s) orbeing in force, (”Act”), read wof the Company be and is herepayment of remuneration to Mr.

Director of the Company (hereinfor a period of 3 (three) years fr(both days inclusive), on the tethe draft agreement to be enand Mr. Majumder, a copy whthe purpose of identification hawhich agreement is hereby speBoard of Directors to alter, varyterms and conditions of the saincluding review of remuneratiosuch manner as may be agreeand Mr. Majumder, and in acc

under Schedule XIII to the Comamendment(s) and modification

RESOLVED FURTHER THAT

Sections 198, 269, 309 and otthe Companies Act, 1956, the Majumder as the Managing Dircommission and other allowancprofits of the Company and if the10% for all of them together in th

RESOLVED FURTHER THAT in

of profits in any financial year of Mr. Biplab Majumder, Manaremuneration, perquisites and oby the limits prescribed in SectioCompanies Act, 1956, as amen

RESOLVED FURTHER THAT

this resolution, the Board of Dihereby authorized to do all such



“RESOLVED THAT pursuant to and in accordance with the provisionsof Sections 198, 269, 309 and other applicable provisions, if any,of the Companies Act, 1956, including any statutory modification(s)

or re-enactment thereof for the time being in force, (”Act”), readwith Schedule XIII thereto, consent of the Company be and ishereby accorded for appointment and payment of remuneration toMr. K. Rajagopal as the Whole-time Director of the Company(hereinafter referred to as ‘Mr. Rajagopal’), for a period of 3 (three) yearsfrom February 19, 2008 to February 18, 2011 (both days inclusive),on the terms and conditions as set out in the draft agreement tobe entered into between the Company and Mr. Rajagopal, a copywhereof initialed by the Chairman for the purpose of identificationhas been placed before the meeting, which agreement is herebyspecifically approved with liberty to the Board of Directors to alter, varyand modify, from time to time, the terms and conditions of the said

appointment and / or agreement including review of remunerationannually and / or otherwise, in such manner as may be agreed uponby the Board of Directors and Mr. Rajagopal, and in accordance withthe limits prescribed under Schedule XIII to the Companies Act, 1956or any statutory amendment(s) and modification(s) thereto.

RESOLVED FURTHER THAT pursuant to the provisions of Sections198, 269, 309 and other applicable provisions, if any, of theCompanies Act, 1956, the remuneration payable to Mr. Rajagopal asthe Whole-time Director by way of salary, perquisites, commissionand other allowances, shall not exceed 5% of the net profits of theCompany and if there are more than one such director, 10% for all of

them together in that financial year.

RESOLVED FURTHER THAT in the event of any loss or inadequacyof profits in any financial year of the Company during the tenure of Mr. Rajagopal, Whole-time Director of the Company, the remuneration,perquisites and other allowances shall be governed by the limitsprescribed in Section II of Part II of Schedule XIII to the Companies Act, 1956, as amended from time to t ime.

RESOLVED FURTHER THAT for the purpose of giving effect tothis resolution, the Board of Directors of the Company, be and ishereby authorized to do all such acts, deeds, matters or things andthey may take such steps necessary, expedient or desirable in thisregard.

By Order of the BoardFor ABB Limited

B. GururajSenior Vice President -

Place: Vadodara Legal & Compliance andD t A il 25 2008 C S t

NOT BE A MEMBER OF THE CBE EFFECTIVE MUST BE DULYSHOULD BE DEPOSITED AT

OFFICE NOT LATER THAN FOCOMMENCEMENT OF THE MEBEHALF OF LIMITED COMPAFIRMS, ETC., MUST BE SRESOLUTION / AUTHORITY ASOF THE APPOINTING ORGANIS

3. Members should bring the duly for attending the meeting.

4. The Register of Members andCompany will remain closed fro(both days inclusive) for the purp

5. The dividend, as recommendeCompany, if declared at the Anon or after June 6, 2008, to thregistered on the Company’s Re

a) as Beneficial Owners as a27, 2008 as per the list toDepository Limited (NSDL) aLimited (CDSL) in respect o

b) as Members in the Regist

giving effect to valid shareon or before May 27, 2008

6. Members are requested to noremaining unclaimed for a perioof transfer to the Company’s transferred, under Section 205-AInvestor Education and Protect205C of the said Act. Membedividend warrant(s) from the fin2000 onwards are requested to fRegistrar and Share Transfer Ag

unclaimed dividend is transferProtection Fund as above, no respect of such amount. It madividend amounts which were lyended on December 31, 1999, hEducation and Protection Fund.

7. Members are requested to intthe changes if any in their r



Annexure to Notice

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

Item No. 6

The Board of Directors at its meeting held on April 26, 2007, appointedMr. Arun Kanti Dasgupta as a Director pursuant to Article 151 of the Articlesof Association of the Company, to fill in the casual vacancy caused on theBoard by the resignation of Mr. K. Sridhar. Since Mr. K. Sridhar was to retireby rotation at the ensuing Annual General Meeting, Mr. Arun Kanti Dasguptawould also cease to hold the office of Director at the ensuing Annual GeneralMeeting, pursuant to Section 262 of the Companies Act, 1956.

The Members may note that Mr. Arun Kanti Dasgupta is the ManagingDirector of Life Insurance Corporation of India.

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

The Board considers that the association of Mr. Arun Kanti Dasgupta as aDirector of the Company will be beneficial and in the interest of the Company

The Directors recommend the passing of the resolution set out at ItemNo.6 of the accompanying Notice.

Except Mr. Arun Kanti Dasgupta, none of the other Directors is, in any way,concerned or interested in the said resolution.

Item No. 7 & 8

The Board of Directors of the Company at its meeting held on July 26,2007, appointed Mr. Ravi Uppal and Mr. Veli-Matti Reinikkala as AdditionalDirectors on the Board effective that date. At the same meeting, the Boardappointed Mr. Ravi Uppal as the Chairman of the Company. In terms of Section 260 of the Companies Act, 1956 and Article 152 of the Articles of

Association of the Company, Mr. Ravi Uppal and Mr. Veli-Matti Reinikkalahold office as Directors upto the date of the ensuing Annual GeneralMeeting of the Company and are eligible for re-appointment as Directors.

The Company has received notices under Section 257 of the Companies

Act, 1956, along with the deposit of Rs 500/- from members proposingthe candidature of Mr. Ravi Uppal and Mr. Veli-Matti Reinikkala, for theoffice of Director.

The Board considers that their association as Directors will be beneficialand in the interest of the Company.

The Directors recommend the passing of resolutions set out at Item Nos.7and 8, respectively, of the accompanying Notice.

2008 reviewed the current remuneand approved an increase in the totRs. 12,500,000/- to Rs.15,625,000/

The break-up of the total increased r

other terms & conditions of appointmout in the draft agreement, a copy wis placed in the meeting for the purpthe approval of the Members of the 269 read with Schedule XIII to the Co

The principal terms and conditions are as under:

1. Tenure of appointment

The appointment is for a period

July 25, 2010. Mr. Majumder wDirector of the Company is not

2. Subject to such orders and directo him by the Board of Directors o“the Board”), Mr. Majumder shaand comply with in all respectsas the Board may in its sole andtime impose on him, Mr. Majumwhole of the affairs of the Compaemployees of the Company, toCompany in the ordinary coursall other acts and things, which,may consider necessary or prop

3. During the period of his employrequired by the Company, unabroad as the Board may from or in relation to the business of

4. Remuneration and Perquisite

Mr. Majumder shall be entitledperquisites:

(a) Salary

Rs.7,030,800/- per annu

(b) Commission

Mr. Majumder shall be related commission basethe targets fixed and det



In addition to the above, Mr. Majumder is also eligible forCompany’s car(s) with chauffeur, membership / subscription feefor two clubs, personal accident insurance coverage, telephone / telefax and other suitable communication facilities at residence.

(d) Leave

Leave with full pay or encashment as per rules of theCompany.

(e) Overall Remuneration

The aggregate of salary, commission and perquisites in anyfinancial year shall not exceed the limits prescribed from timeto time under Section 198, 309 and other applicable provisionsof the Companies Act, 1956 read with Schedule XIII to the said

Act, as may for the time being be in force.

(f) Minimum Remuneration

In case of loss or inadequacy of profits in any financial yearduring the currency of tenure of his service, the payment of salary, commission and perquisites shall be governed by thelimits prescribed under Section II of Part II of Schedule XIII tothe Companies Act, 1956.

(g) Revision in Remuneration

The remuneration payable to the Managing Director shall

be subject to revision, from time to time (annually and / orotherwise), by the Board of Directors of the Company at theirdiscretion and that the next revision in remuneration shall falldue on March 1, 2009.

(h) Mr. Majumder shall be entitled to:

(i) the reimbursement of entertainment expenses actuallyand properly incurred by him in the course of thelegitimate business of the Company in accordance withthe rules and regulations of the Company in force fromtime to time or as may be approved by the Board of

Directors; and

(ii) the reimbursement of travelling, hotel and other expensesincurred by him in India and abroad exclusively on thebusiness of the Company in accordance with the rulesand regulations of the Company in force from time totime or as approved by the Board of Directors.

5 Mr Majumder shall not during the term of this Agreement with the

permissible and if deem fit, wremuneration annually and / olimits specified in the Act or an

This explanatory statement togis to be regarded as an abstmemorandum of concern or in302 of the Companies Act, 195

The Agreement referred to inaccompanying notice is open fRegistered Office of the Compaday of the Company, upto the

Mr. Majumder is interested in thappointment as the Managingremuneration payable to him a

A notice pursuant to Section 2Rs.500/- has been received frocandidature of Mr. Majumder as t

The Directors recommend theItem No.9 of the accompanying

Item No.10

At its meeting held on February 19subject to the approval of memb

Mr. K Rajagopal (hereinafter referrWhole-time Director of the CompFebruary 19, 2008 to February 18, 2meeting, the Board had also fixed a tper annum, payable to Mr. Rajagop2008 to February 29, 2008, subjecDirectors every year during the entire

Accordingly, the remuneration fixedMarch 1, 2008. Therefore, the Boa2008 reviewed the current remuneand approved an increase in the totRs. 8,000,000/- to Rs.10,000,000/-

The break-up of the total increased other terms & conditions of appointmout in the draft agreement, a copy whplaced in the meeting for the purposeapproval of the Members of the Comread with Schedule XIII to the Compand conditions as contained in the d

1 Tenure of appointment



(b) Annual Variable Pay (performance related)

Mr. Rajagopal shall be entitled to an annual performancerelated variable pay based on the results achieved against the

targets fixed and determined by the Board of Directors. Underthe best performance targets, the commission amount shallnot exceed Rs.2,000,000/- per annum at 100% achievementlevel of the performance target.

(c) Perquisites

Mr. Rajagopal shall be entitled to perquisites like furnishedaccommodation or house rent allowance in lieu thereof,re-imbursement of medical expenses incurred in India orabroad for self and family, leave travel concession, contributionto Provident Fund, Superannuation Fund and Gratuity Fundand other amenities viz., Company’s car with chauffeuretc., and all other payments in the nature of perquisites andallowances as agreed to between Mr. Rajagopal and theBoard of Directors, from time to time, subject however, thatthe aggregate monetary value of all perquisites of whatsoevernature including Retiral benefits, in any financial year shall notexceed Rs.5,300,000/- per annum.

In addition to the above, Mr. Rajagopal is also eligible formembership / subscription fee for two clubs, personal accidentinsurance coverage, telephone / telefax and other suitable

communication facilities at residence.

(d) Leave

Leave with full pay or encashment as per rules of theCompany.

(e) Overall Remuneration

The aggregate of salary, commission and perquisites in anyfinancial year shall not exceed the limits prescribed from timeto time under Section 198, 309 and other applicable provisions

of the Companies Act, 1956 read with Schedule XIII to the said Act, as may for the time being be in force.

(f) Minimum Remuneration

In case of loss or inadequacy of profits in any financial yearduring the currency of tenure of his service, the payment of salary, commission and perquisites shall be governed by thelimits prescribed under Section II of Part II of Schedule XIII to

business of the Coand regulations of thor as may be approv

(ii) the reimbursement incurred by him in business of the Coand regulations of time or as approved

4. Mr. Rajagopal shall not, duringCompany, engage himself, eithein any capacity whatsoever or reor persons whatsoever whethegoods or products which are oas those of the Company.

5. Notwithstanding anything to theeither party shall be entitled to by giving to the other party 180without the necessity of showinperiod of such notice, this Agreview thereof and as a consequMr. Rajagopal shall cease to be

6. The terms and conditions in tor varied or modified, from timpermissible and if deem fit, wremuneration annually and / or

limits specified in the Act or any

This explanatory statement togis to be regarded as an abstrmemorandum of concern or int302 of the Companies Act, 195

The Agreement referred to in accompanying notice is open fRegistered Office of the Compaday of the Company, upto the d

Mr. Rajagopal is interested in thappointment as the Whole-timeremuneration payable to him as

A notice pursuant to Section 25with a deposit of Rs.500/- has beproposing the candidature of M

The Directors recommend theItem No 10 of the accompanyin



Your Directors have pleasure in presenting their Fifty-eighth Annual Report and Audited Accounts for the year ended

Financial Results

For the year ended

December 31, 2007

Profit Before Taxation 7,564,569

Less: Provision for Tax

- Current Tax 2,563,879

- Deferred Tax (11,000)

- Fringe Benefit Tax 95,000

Profit After Tax 4,916,690Balance Brought Forward from last year 519,255

Amount available for Appropriation 5,435,945

Appropriations

General Reserve 4,250,000

Proposed Dividend 466,198

Corporate Dividend Tax 79,230

Corporate Dividend Tax – 2006 12,587

Balance Carried Forward 627,9305,435,945

Directors’ Report

Dividend

Your Directors recommend payment of a dividend at the rate of Rs.2.20(Rupees two and paise twenty only) per share (previous year Rs 10/- pershare on 42,381,675 equity shares of Rs.10/- each) for the year endedDecember 31, 2007 on 211,908,375 equity shares of Rs 2/- each.

Sub-division of the Face Value of Equity Shares

In accordance with the approval of the shareholders at the 57th AnnualGeneral Meeting of the Company held on May 25, 2007, each equity shareof the face value of Rs.10/- each was sub-divided into 5 equity sharesof the face value of Rs.2/- each, effective July 6, 2007. Consequently,the sub-divided equity shares of the face value of Rs.2/- each have beenissued to such shareholders who held the equity shares of the face valueof Rs.10/- each of the Company, as on July 6, 2007.

Operating performance of all theproducts, process automation and abetter than previous year. For detailerefer to the management’s discussioreport.

Transfer to Investor Education and

In terms of Section 205C of the Codividend amount aggregating to Rsfor a period of seven years pertaini1999, was transferred during the yeaProtection Fund established by the C

Conservation of Energy, Technolo

Earnings and Outgo



Delisting of Equity Shares

In accordance with the approval of the shareholders at the 56th AnnualGeneral Meeting of the Company held on May 26, 2006, the equity shares of

the Company have been voluntarily delisted from Calcutta Stock Exchange Association Limited with effect from August 10, 2007. The voluntarydelisting of equity shares from Ahmedabad Stock Exchange Limited andDelhi Stock Exchange Association Limited had been completed by theCompany during the year 2006.

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 to be made to the Company Secretary.

Directors’ Responsibility Statement

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

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

ii. appropriate accounting policies have been selected and appliedconsistently 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, 2007 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 theCompanies Act, 1956, for safeguarding the assets of the Companyand 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, areport on corporate governance and a certificate from M/s D. R. Shressha& Associates, Practicing Company Secretaries, confirming compliancewith the requirements of corporate governance are given in Annexure – Cand Annexure – D respectively, which forms part of this report.

Board of Directors

Mr. Tom Eric Sjoekvist resigned as July 5, 2007 and the Board of Direc2007, appointed Mr. Peter Leupp acasual vacancy caused due to the re

The Board of Directors also appoi Additional Director of the Company, e

The Board of Directors at its meeting hMr. K. Rajagopal as an Additional Direof the Company for a period of three

Your Directors place on record their rendered by Mr. K. Sridhar, Mr. Dinesduring their tenure as Directors of the

Mr. D. E. Udwadia and Mr. Bernhard

the ensuing Annual General Meeting are-appointment. The particulars of Diat the ensuing Annual General MeeGovernance section annexed to this

Auditors

The Company’s Auditors - M/s. S.R. Bholds office upto the conclusion of t

The Company has received a requisSection 224(1B) of the Companies Acre-appointment as Auditors of the Co

New Delhi February 19, 2008



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

The operations of the Company are not energy intensive. However,energy conservation is priority area for the Company. Energyconservation measures taken during the year included,

• Usage of optimise thermic fluid system, air cooling plant and airconditioning system.

• Adopting servo controlled voltage stabilizer for lighting.

• Replacement of HPMV lamps with Metal Halide Lamps and

use of CFLs.

Various training programmes were also conducted across theorganisation to increase the awareness for reduction in energyconsumption.

2. Technology absorption, adaptation and innovation

2.1 Technical Development

New Products Developed:

• Numeric relays for over current - earth fault protection -NI40/41, REF601 and REJ601.

• Self powered Numeric relay - REJ603.

• LV motors for hazardous area suitable for an ambienttemperature 50 degree Celsius.

• 250/60 kW, 4/6P wind generator.

• Energy efficient cast iron motors in frame 71 to 132 for EFF1 &EFF2 level.

• 25 kVA Natural Cooled under slung auxiliary inverter forRailways.

Product Improvements:

• Increase in voltage range of capacitor unit - 21 kV capacitorunit is developed.

Annexure - A to Directors’ Report

been reflected in terms and quality, standardizaassemblies/ componentreduction and increased

markets.

2.3 Expenditure on Researc

i) Capital

ii) Revenue

iii) Total

iv) Total R & D expendpercentage of turno

3 Imported Technology (import

3.1 Technology imported

High voltage circuit break

Instrument transformers

Miniature circuit breakers

Power capacitor units an

HT Motors

LV Capacitors

Transformer Bushings

3100 HP Supercharger

INDACTIC 1425 telemete

Air circuit breakers

‘A’ range contactors up t

Residual current circuit b

PR521 and PR512 relays

SPAD 346C relays

Operating mechanism B



3.2 Foreign exchange earnings and outgo

(a) Activities related to Exports; initiative taken to

increase exports; development of new export

markets for products and services; export plans

Revenues from exports during the year were Rs 3,630million. Power products segment consolidated itsposition in the export market with coverage of over 90countries. Significant growth in export of Disconnectorsand 72 kV circuit breakers was achieved. Few largevalue orders were booked during the year from Vietnamand Philippines for circuit breakers, disconnectors andinstrument transformers. Introduction of new range of indoor panel type unigear for primary and secondarydistribution helped in doubling the exports of indoor

panels. Markets have been developed for cougar relays;ring main units and compact secondary substations,which will help in increasing exports in South Asiancountries and other parts of the world from 2008. Strategicthrust and several sales promotional activities helped inincreasing export of automation products. Developmentof channel partners, sales and after sales service supportin Sri Lanka, Bangladesh and Mauritius helped inincreasing exports. Significant orders were received fromChina for low voltage drives for wind generator project,from Abu Dhabi for service of motors, from South Africa

for generator upgrade and static excitation system.Exports for process automation system grew over 100%.Significant orders for metals, minerals, turbo charging,cement and analytical products were received fromIndonesia, Malaysia, Singapore, Sri Lanka, Bangladeshand Middle East. A large order for Rs 933 million wasreceived for turnkey electrics and automation solution for5,000 tonnes per day for a cement plant in Jordan. Withmanagement focus, strategies and increasing sourcingof components, products and services from India by the

ABB Group companies, prospects for growth in exportvolumes in coming years are very high.

(b) Total foreign exchange used and earned

(Rs in Millions)

a) Foreign Exchange earned(including deemed exports) 4,664

b) Foreign Exchange used 15 474





(ii) No. of Board Meetings held in the Financial Year 2007 and dates on which held

The Board meets at least once in a quarter to consider amongst other business, the quarterly performanresults. The Board has held four meetings during the financial year 2007 i.e., on February 16, April 26, J

3. Audit Committee

(i) Terms of Reference

The Audit Committee is responsible for overseeing the Company’s financial reporting process, reviefinancial statements, reviewing with the management on the financial statements and adequacy of intthe appointment/re-appointment of statutory auditors and fixation of audit fees, reviewing the significantransactions, reviewing the Management Discussion and Analysis of financial condition and result of operissues. The Committee acts as a link between the management, external and internal auditors and the B

The Committee discussed with the external auditors their audit methodology, audit planning and signifi

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 ofExchange 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

The Company has complied with the requirements of Clause 49 of the Listing Agreement of the StockCompanies Act, 1956, as regards composition of Audit Committee.

The Audit Committee presently consists of four Non-executive Independent Directors. The Committefinancial year 2007 i.e. on February 15, April 26, July 25 and October 25, 2007. The Composition of the A

2007 and the attendance of members at the meetings of the Audit Committee held during the financial y

Members of Audit Committee No

Mr. Nasser Munjee (Chairman)

Mr. N. S. Raghavan

Mr. D. E. Udwadia

Mr. A. K. Dasgupta (*)

(*) Mr. A. K. Dasgupta was appointed as a Member of the Committee with effect from July 26, 2007.

4. Remuneration Committee

(i) Terms of Reference

The role of the Remuneration Committee is to recommend to the Board, the remuneration package for t

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

The Remuneration Committee presently consists of 3 Non-executive Directors, the Chairman being Nmeeting of the Committee was held during the financial year 2007 The Composition of the Remunera



The Non-executive Independent Directors are compensated by way of a commission and the criteria Committee Meetings.

As a policy, the Non-Independent Directors are neither paid sitting fee nor paid any commission.

(iv) Details of remuneration to all the Directors during the financial year 2007

Name Sitting FeesSalary &

PerquisitesCommission (*) Sto

Mr. Ravi Uppal Nil 11,467 3,033

Mr. Biplab Majumder Nil 7,254 2,080

Mr. N.S. Raghavan 110 NA 300

Mr. Nasser Munjee 50 NA 300

Mr. D. E. Udwadia 85 NA 300

Mr. A. K. Dasgupta 40 NA 300

(*) subject to the approval of the Board.

Fixed Component/ Performance Linked Incentive/ Criteria

The Managing Director is entitled to an annual performance related commission based on the results acdetermined by the Board. Under the best performance targets, the commission amount payable to the Manato exceed Rs.2,812,500/- per annum at 100% achievement level of the performance target.

Service Contract/ Notice Period/ Severance Fees

a) The Contract of Service entered into by the Company with Mr. Biplab Majumder, Managing Director, provMajumder shall be entitled to terminate the agreement by giving 180 days notice in writing to the other.

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

5. Shareholders’ Committee

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

In order to expedite the process, the Board of Directors has also delegated the authority to the Managing Directo approve the share transfers and accordingly, the MD or the Company Secretary approves the transfer/tranabout twice a month.

Six meetings of Investors’ Grievance Committee were held during the financial year 2007 i.e., on January 5, Fe25 and December 24, 2007.

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



6. General Body Meetings

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

For the Year Venue D

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

2005 ITC Hotel Windsor Sheraton & Towers, “Regency”,No.25, Golf Course Road, Bangalore – 560 052 M

2004 ITC Hotel Windsor Sheraton & Towers, “Windsor Square”,No.25, Golf Course Road, Bangalore – 560 052 M

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

Two Special Resolutions were passed in the last Annual General Meeting of the Company held on Ma

the members was obtained for (a) amendment to Articles of Association of the Company and (b) paymeDirectors.

A Special Resolution had been passed in the Annual General Meeting of the Company held on Maymembers was obtained for voluntary delisting of equity shares of the Company from Ahmedabad StExchange Association Limited and Calcutta Stock Exchange Association Limited.

A Special Resolution had been passed in the Annual General Meeting of the Company held on May members, index of members, register & index of debenture holders, records relating to annual returns of aannual returns etc., at the Office of Karvy Computershare Private Limited, the Registrar and Share Transat #51/2, TKN Complex, Vanivilas Road, Opp. National College, Basavanagudi, Bangalore – 560 004, insOffice of the Company.

(iii) Postal Ballot

No postal ballot was conducted in the year 2007. As on date, the Company does not have any proposal tof postal ballot.

7. Disclosures

(i) Disclosures on materially significant related party transactions.

There was no materially significant related party transaction during the year having potential conflict with

(ii) Details of non-compliance by the Company, penalties and strictures imposed on the Company 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 of SEBI. Neither any penalty nor any stricture has been passed by SEBI, Stock Exchanges or any other Sto capital markets, in the last three years.

(iii) Whistle Blower Policy and affirmation that no personnel have been denied access to the audit co



(ii) Official News Releases

The Company holds press analyst meets and makes necessary presentation, to apprise and make pCompany’s working and future outlook.

9. General Shareholder Information

(i) Annual General Meeting

Day, Date, Time and Venue :

The Company will be holding its 58th Annual General Meeting on Tuesday, June 3, 2008 at“Chancery”, No.1, Palace Road, Bangalore – 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 Directors

f) Consent of Members for appointment and payment of remuneration to the Managing Director

g) Consent of Members for appointment and payment of remuneration to the Whole-time Director

(ii) Profile of Directors seeking re-appointment/appointment

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

Brief resume of Directors and nature of their expertise in

functional areas

Directorships/Committee

Memberships in other compan

Mr. Bernhard Jucker

Mr Bernhard Jucker, aged 53, holds Degree in ElectricalEngineering from Swiss Federal Institute of Technology (ETH)

Zurich, Switzerland.

He has been with the ABB Group since 1980 and has held severalkey positions in various capacities. Currently, he is the Head of Power Products Division and Member of the Group ExecutiveCommittee of ABB Limited, Zurich - Switzerland.

1. ABB Global Services Limited

Mr. Arun Kanti Dasgupta 1. Life Insurance Corporation



Brief resume of Directors and nature of their expertise in

functional areas

Directorships/Committee

Memberships in other compan

Mr. D. E. Udwadia

Mr. Udwadia, aged 68, has obtained Post Graduate Degree from theUniversity of Mumbai. He has nearly 48 years of active law practiceand has acquired invaluable knowledge, experience and expertisein various matters viz., corporate laws, mergers/acquisitions &takeovers, corporate restructuring, foreign collaboration, jointventures etc.

He is a solicitor by profession and is a senior partner of a lawfirm ‘Udwadia & Udeshi’, which is one of the leading law-firms inMumbai. He is also the Chairman of AstraZeneca Pharma IndiaLimited and Vice Chairman of Macmillan India Limited.

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

1. ADF Foods Ltd.

2. AstraZeneca Pharma India 3. Bombay Burmah Trading Co4. Coromandel Fertilisers Ltd.5. Development Credit Bank L6. Eureka Forbes Ltd.7. ITD Cementation India Ltd.8. JM Financial Limited9. Macmillan India Ltd.10. Mechanalysis (India) Ltd.11. MPS Technologies Ltd.12. Sundaram-Clayton Ltd.13. Wyeth Ltd.

14. Avesta Nordic Research Pvt15. Avesthagen Limited16. Habasit Lakoka Pvt. Ltd.17. JM Financial & Inv. Consulta

Services Pvt. Ltd.18. JM Financial Trustee Co. Pv19. JM Financial Consultants Pv20. Nitesh Estates Private Ltd.21. Quantum Advisors Pvt. Ltd.22. Rossi Gearmotors (India) Pv

Committee Memberships

A) Audit Committee:1. AstraZeneca Pharma India 2. Bombay Burmah Trading Co3. Coromandel Fertilisers Ltd.4. Development Credit Bank L5. ITD Cementation India Ltd.6. Macmillan India Ltd.7. Sundaram-Clayton Ltd.8. Wyeth Ltd.

Mr. Ravi Uppal

Mr. Ravi Uppal, aged 55, is a B-Tech from Indian Institute of Technology (IIT), Delhi and did his Post Graduation Diploma inBusiness Administration from Indian Institute of Management (IIM),

Ahmedabad. He started his career with BHEL in 1975. He joined Asea Limited in 1980. In the merged entity Asea Brown BoveriLimited, he held the position of Vice President (Power Projects)and then of (Industrial Electronics and Systems Segment). Afterserving 16 years in ABB Group, in 1996, he took the assignment as

1. ABB Global Services Ltd. (C2. ST-CMS Electric Co. Pvt. Lt3. Page Industries Limited4. Asea Brown Boveri Limited5. ABB (Pvt.) Limited, Pakistan6. ABB Lummus Global Inc7. Raman Boards Limited

Committee Chairmanships:

1 Page Industries Limited (Au





(vii) Stock Code

National Stock Exchange Mumbai Stock

ABB 50000

(viii) Market Price Data

The market price data and volume of the Company’s shares traded in the Mumbai Stock Exchange and ththe year 2007 was as follows

Period 2007BSE (Rs.)

BSE Sensex

IndexNSE (Rs.)

High Low High Low High Low

January 3776.00 3440.00 14325.92 13303.22 3779.00 3420.0

February 4000.00 3455.00 14723.88 12800.91 3999.00 3500.0March 3685.00 3190.00 13386.95 12316.10 3689.90 3190.2

April 4160.00 3381.00 14383.72 12425.52 3479.95 3381.0

May 4630.00 4080.00 14576.37 13554.34 4631.05 4082.1

June 4845.00 955.00 14683.36 13946.99 4841.00 950.0

July 1175.00 1046.10 15868.85 14638.88 1174.80 1046.0

August 1158.00 981.00 15542.40 13779.88 1160.00 981.5

September 1345.00 1131.00 17361.47 15323.05 1330.00 1105.6

October 1625.00 1215.50 20238.16 17144.58 1624.00 1290.0November 1670.00 1453.00 20204.21 18182.83 1744.00 1456.6

December 1649.90 1435.00 20498.11 18886.40 1649.90 1445.0

Note: Effective July 6, 2007, each equity share of the face value of Rs.10/- each was sub-divided into Rs.2/- each. Hence, the share price statistics provided above for the period July – December 2007 is withof the face value of Rs.2/- each.

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

15000

20000

14325.92

14723.88

13386 95

14383.72

14576.37

14683.36

15868.85

15542.4017361.47

20238.16

20204.21

20

ABB SHARE PRICE MOVEMENT VS BSE SENSEXJANUARY - DECEMBER 2007



Market price of ABB’s scrip for the period July – December 2007 is based on face value of Rs 2/- each

(x) Registrar and Transfer Agents

Karvy Computershare Private Limited,(Unit: ABB Limited)17-24, Vittal Rao Nagar

MadhapurHyderabad - 560 081E-mail: [email protected]

(xi) Share Transfer System

The Company’s shares being in compulsory demat list, are transferable through the depository system. are processed by the Registrar & Transfer Agent, and approved by the Investors’ Grievance Committee.Board of Directors has also delegated the authority to the Managing Director (MD) and the Company Secand accordingly, the MD or the Company Secretary approve the transfer/transmission of shares at a freshare transfer process is reviewed by the said Committee.

(xii) Shareholding Pattern

As on 31.12.2007

Shareholders No. of shares

of Rs. 2/- each

%

ABB Asea Bro n Bo eri Ltd Z rich & 110420285 52 11

0

1000

2000

3000

4000

5000

6000

7000

NovOctSep AugJulJunMay AprMarFebJan

3779.00

4167.15 4245.303901.75

4217.90

4306.754362.95

4647.95

4532.90 5055.80

5976.00

6011.9

3999.003689.90

4631.054841.00

3479.95

1174.801160.00

1330.00

1624.00

1744.00

NSE S&P CNX Nifty Index

ABB SHARE PRICE MOVEMENT VS NSE S&P CNX NIFTY INDEXJANUARY - DECEMBER 2007

ABB



(xiii) Distribution of Shareholding as on December 31, 2007

Category No. of Shareholders No. of Shares held

1 – 5000 92309 19126377

5001 – 10000 413 2896430

10001 – 50000 262 5492964

50001 – 100000 49 3642755

100001 and above 116 180749849

Total 93149 211908375

(xiv) Dematerialisation of Shares and liquidity

The equity shares of the Company are available under dematerialised form with National Securities DeDepository Services (India) Ltd., (CDSL). The Company’s equity shares are compulsorily traded in the

sub-division of the face value of equity share of the Company, the Company has been allotted with new

As on December 31, 2007, 101071275 equity shares of the Company have been dematerialised repre(19818770 equity shares were in dematerialised form representing 46.76% of the total shares as on Dec

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

As on date, the Company has not issued GDRs, ADRs or any other Convertible Instruments and as sushare 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 been hosted on the Company’s website. All the Board Members and the Senior Management PersonnCode of Conduct, as on December 31, 2007.

(xvii) Plant Locations

The Company’s plants are located at Bangalore, Faridabad, Haridwar, Mumbai, Nashik and Vadodara.

(xviii) Address for Correspondence

ABB Limited2nd Floor, East Wing, Khanija Bhavan,49, Race Course Road,

Bangalore - 560 001.Phone: 080-22949150 to 22949154 Fax: 080-22949148Corporate Secretarial E-mail ID: [email protected] Website: www.abb.com/in

(xix) Non-Mandatory Requirements

– Remuneration Committee of the Board to determine the remuneration package for the Executive DirecM i t f th Offi f N ti Ch i



Annexure - D to Directors’ ReportCorporate Governance Compliance Certificate

To,

The Members of ABB Limited

We have examined all relevant records of ABB Limited (the Company) for the purpose of certifying compliance of the

under Clause 49 of the Listing Agreement with National Stock Exchange of India Limited (NSE) and Bombay Stock Exyear ended December 31, 2007.

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessa

The compliance of the conditions of Corporte Governance is the responsibility of the management. Our examinatiimplementation thereof. This certificate is neither an assurance as to the future viability of the Company nor the efmanagement has conducted the affairs of the Company.

On the basis of our examination of the records produced, explanations and information furnished, we certify that th

(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”

Place: Bangalore

Date: February 19, 2008



Operating Results of the Company

During the year 2007, the Company secured orders worth Rs 76,682 million, 36 percent higher than the previous yeahad been significant growth in orders across all the segments of the Company. Higher GDP growth, focussed infrast

the Government and capacity built up in various industries has given overall favourable economic environment in the strategic initiatives on market and product portfolio front adopted by the Company helped to realise this exceptional introduced during last few years have also contributed significantly towards overall business growth. As a result oforder backlog was further augmented by 49 per cent to Rs 50,260 million as compared to Rs 33,723 million at the b

The Company also achieved a significant growth in revenues at Rs 60,014 million for the year, registering a growth o Volume growth and operational efficiencies have resulted in healthy profit improvement. Profit before tax was Rs 7,5million in the previous year.

Net profit after tax at Rs 4,917 million for the year was 44 percent higher than last year. Earnings per equity share (fahigher at Rs 23.20 compared to Rs 16.06 in the previous year.

The Company has carried out and also currently executing significant manufacturing capacities expansion projects offering, introducing several new products during the year. In addition to capacity and range expansion, the Compmany of its manufacturing, office and employee welfare facilities in order to enhance efficiency and productivity.upgraded its ERP system from SAP 4.7 to mySAP Business Suite and has implemented several new modules suchCustomer Relations Management, Employee Health Services and Governance Risk and Compliance.

Outlook for the Company

India’s current state of economy and expectation of GDP growth remaining around 9%, continued investment in pand booming globalising industrial sector offers an excellent opportunity to the Company to operate. Several strproduct and range expansion, manufacturing and engineering capacity augmentation, operational excellence, focusesystem development, human resource development and retention actions are expected to further strengthen Com

Group remains committed to increasingly leverage the Indian operations for projects, products and services within thstrategy, the Company will continue to grow its core businesses, expand its portfolio and augment manufacturing an

The Company remains resolute in its objective to pursue the path of profitable and sustainable growth, maximising oattain the highest standards of quality, safety and productivity. The overall outlook for the Company continues to be poptimistic with regards to continued profitable growth.

Business Segment Analysis

Please refer to note 4, Schedule 16, for detailed description of the Company’s business segments. The relative dsegments is as under, which has broadly remained static.

Power Systems (PS)

Power Products (PP)

Process Automation (PA)

Automation Products (AP)

Power Systems Segment (PS)

Management’s Discussion and Analysis



With capacity additions in existing power plants, setting up of new power plants, realisation of the ultra mega power pnetworks and power distribution improvements and reforms on domestic front have resulted in strong orders and revreceived grew by 36% and revenues were higher by 33%. The growing domestic market and additional oversepositive signs in most areas of the segment’s operations and the future outlook of the business continuous to remain

With significant orders in the domestic market and orders from exports for the transmission and distribution subsMajor orders included the 400 kV GIS substation at Chamera and 400 kV substation in Bihar from PGCIL, 220 kV sas several orders from GETCO and private customers such as Adani Power; a major railway electrification order wdistribution orders from BESCOM, HESCOM & GESCOM under Rural Load Management Schemes (RLMS). Newly efor Balance-of-Plant) has established well for providing solution at power generation end with order booking for 1,905

Tata Projects Kota and Zawar thermal power projects, JSW Energy Limited 8 x 135 MW power plants and Endsubstation automation systems were supplied and installed based on the latest IEC 61850 protocols, where the segas various services and retrofit orders were executed. With the setting up of a regional focused factory for numerifactory in the Group for combiflex relays, the substation automation products business is set to play a greater role glsystems from KPTCL and responsibility for the South Asia region the network management business is also poised

Major projects commissioned during the year include 400 kV GIS substations at Maharani Bagh for PGCIL and the segment supplied and commissioned a number of distribution substations and APDRP projects for BESCOM, GEB, Dsubstation automation system based on REX 670 platform with IEC 61850 protocols were supplied to PGCIL for a

Strategic actions were initiated and implemented to improve operational efficiencies and excellence in project maprofitability of the business. However, areas of concern remain rising prices of raw materials such as structural steethe distribution business faced operating cash-flow problems as funding for various RGGVY Projects from REC had

Power Products Segment (PP)

The summarised performance of the segment is as under.

Orders Received

Order Backlog

Revenues

Result

Buoyancy in the transmission and distribution sector continued during the year with higher level of investment in this s

generation projects has started and it has given a boost to demand for power products manufacture by the segmenservices sector continued at a fast pace and rural electrification is a focus area of the Central and the State Governmfor the products offered by the segment. Overall environment for the segment during the year was very good.

To foster investments in power generation, transmission and distribution segments, Central Government has providefor improving power quality and energy efficient technologies is also on increase. A very high target has been set at 7

XIth five year plan (2007-12) of the country. Power generation capacity addition of 86,500 MW is expected in XIIth plandemand for power transmission and distribution systems. Increase in inter-regional capacity from 9,000 MW to 30,00



Domestic demand for power products is expected to continue on the ascent. The surge in global demand for powexports. The focus on enhancing power capacity and expanding grid networks will continue to feed the demand fotap the growing demand for new technologies with introduction of new products in all businesses. Focus area forremain capacity expansion, product range expansion, operational excellence, cost reduction and on time deliveries

in the Indian market, will cater to the growing demand for modular solutions and new technologies. A new group haaccessories business. Outlook for the segment continues to be positive.

Demand for HT capacitors continues to remain low. That remains an area of concern. Focussed efforts are being mHVDC and TCSR in the coming years to grow this business. Shortages of components including insulators for HV swtransformers are constraints on increasing capacities and providing faster deliveries. New competition from the domehas effected in short run price realisation of MV switchgears.

Process Automation Segment (PA)

The summarised performance of the segment is as under.

Orders Received 1

Order Backlog 1

Revenues 1

Result

Industrial climate in country remained buoyant with strong growth across all most all the industries. With current low cpaper and other industrial products and demand from infrastructure development gives excellent growth opporthave announced investment plans for augmentation of capacities and efficiency improvement. This environment auSegment. Growth in orders and revenues during the year was 28% and 46% respectively. Operating profits duInvestments are taking place for manufacture of all types of steels in both public and private sectors. Global steel also announced plans for setting up Greenfield steel projects in India. Construction boom in Middle East has leadgrowth in real estate and infrastructure development across the country, demand for cement has gone up leadingbrown field projects. Paper industry is investing in new machines to meet the growing demand for tissue and other tare announced also in material handling, oil and gas and marine sectors.

Segment has received several large orders for electricals and automation solutions during the year. This includes in Limited, JSW Limited, Jindal Tubes Limited, Salem and Vizag Steel plants, Tata Steel Limited and Essar Group. In corders booked includes from Grasim Industries Limited from OEMs L&T and Sandvik. In pulp and paper sector m

includes from Ballarpur Industries Limited, ITC Limited and HEC Limited. Major projects commissioned during theLimited, upgrade of NET90 system for Durgapur Steel plant, AC drive solution for Tata Steel Limited, first phase of SCCorporation, 800XA installation and safety system for Essar Group.

Exports for process automation system grew over 100%. Significant orders for metals, minerals, turbo charging, creceived from Indonesia, Malaysia, Singapore, Sri Lanka, Bangladesh and Middle East. A large order for Rs 933 milland automation solution for 5,000 tonnes per day for a cement plant in Jordan. During the year a turbochargeBangladesh.



Automation Products Segment (AP)

The summarised performance of the segment is as under:

Orders Received

Order Backlog

Revenues

Result

With significant investments taking place in industrial sector capacity augmentation and efficiency improvement, segautomation products during the year. A positive market environment coupled with a strategic thrust on product rangof business verticals and market penetration helped in registering 55% growth in orders and 45% growth in revenue

During the year several orders for automation products were received from steel, cement, paper, telecom, food anand oil and gas industries and OEMs. During the year the segment was able to sustain and consolidate its mark

There was focus on all major OEM segments including HVAC, pumps and compressor, boiler machinery manufacsector. Segment has received several large orders during the year from all sectors of the industry. This includes oKalinganagar project, JSW Steel Ltd. for their capacity expansion at Bellary and Bhusan Steel Limited for their blast forder for high current rectifiers was received from Vedanta Aluminum Limited for 2 x 250,000 TPA Greenfield aluminumfrom cement industries included Jayaprakash Industries Limited. The segment also received increased orders from bIT and SEZ parks and other infrastructure projects which resulted in over 100% growth from this sector.

Execution and commissioning of large orders during the year included high current rectifiers at Hindustan Zinc Limiteat Tata Steel Limited. A 10 MW, 40 pole compressor motor for SAIL, Bokaro was rewound and commissioned durin

Major capacity expansion projects under execution include LT motors and instrumentation at Faridabad and macExpansion and renovation of HV machines at Vadodara plant was completed during the year and plant is operating amonth. Other capacity augmentation plans includes global factory for LV breakers, LV systems, LV and MV drives anBangalore and wind generator motors factory at Vadodara. Product range expansion during the year included madrives, testing and offering of new series of EFF1 and EFF2 motors in small frames, for both domestic and export mapoles per annum capacity factory was commissioned and operating at rated capacity at Haridwar.

The channel partner network was further expanded to over 775 during the year which contributed to revenues of to yield good results with the B2B transactions crossing the Rs 4 billion mark setting an industry benchmark. To ennearer to the customers, during the year two new warehouses were established at Faridabad and Pune.

Concern areas for the segment include increase in competition, with several competitors building new capacities, anindustrial scenario continues to look buoyant with several new Greenfield and brown field capacity expansions planthrust on marketing efforts in newer areas of railways, wind, water and waste water, SEZ, ports and harbours coupleand range expansion is expected to support business growth momentum of the segment. The overall outlook for th

Finance

During the year there was higher requirement of finance due to business growth and delay in collection from cus



organisation by facilitating embedding of bench-marked world-class processes down to the grass root level. Leaddifferent levels has been in full swing covering all business and functional roles.

As in the past, industrial relation continued to remain cordial at all the locations of the Company. The Company

2007.

Internal Control Systems

The Company has in place effective systems of internal control ensuring accurate, reliable and speedy compilation 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 performplace a well-defined organisation structure, clear authority levels and detailed internal guidelines for conducting businan internal audit department that conducts regular audits to ensure adequacy of the control system, adherence tocompliance. The Audit committee of the Board of Directors periodically reviews the audit plans, observations 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 exchangadequate internal control procedures over financial reporting. Based on detailed review and testing of various pfinancial reporting, the managements has concluded that internal control over financial reporting as effective as at the Company has upgraded its ERP system from SAP 4.7 to mySAP Business Suite and has implemented several neRisk and Compliance (GRC) module to help the Company to strengthen internal control environment.

During the year, financial accounting processes such as journal entries, handling Income-tax deductions at souprocesses were centralised at the shared accounting service center. The processes of vendor bill booking, vendor pmanagement and travel management continued to be centrally managed at this centre. The master maintenance oand vendors, role based authorisation for SAP system access remained centrally controlled based on well defined ru

CEO/CFO C tifi ti



To

The Board of Directors

ABB Limited

We certify that;1. We have reviewed the financial statements and cash flow statement of ABB Limited for the year ended Dece

knowledge and belief;

(i) these statements do not contain any materially untrue statement or omit any material fact or contain sta

(ii) these statements together present a true and fair view of the Company’s affairs and are in complianceapplicable laws and regulations.

2. To the best of our knowledge and belief, there are, no transactions entered into by the Company during theviolating the Company’s code of conduct.

3. We accept responsibility for establishing and maintaining internal controls over financial reporting and we have control systems of the company over financial reporting and we have disclosed to the auditors and the audit or operation of internal controls over financial reporting, if any, of which we are aware and the steps we have tadeficiencies. 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) significant changes in accounting policies made during the year as have been disclosed in the notes to

(iii) no instances of fraud of which we have become aware and the involvement there in, if any, of the m

significant role in the Company’s internal control system on financial reporting.

Biplab Majumder New Delhi Chief Executive Officer February 19, 2008 Managing Director

CEO/CFO Certifi cation



Annexure referred to in paragraph 3 of our report of even



(i) (a) The Company has maintained proper records showing fullparticulars, including quantitative details and situation of fixedassets.

(b) The Company has a regular programme of physical verificationof fixed assets which, in our opinion, is reasonable havingregard to the size of the Company and the nature of its assets.In accordance with this programme, certain fixed assets werephysically verified by the management during the year and weare informed that no material discrepancies were noticed onsuch verification.

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

(ii) (a) The management has conducted physical verification of

inventory at reasonable intervals during the year. In respect of stocks lying with the third parties, confirmation for most of thestocks has been received.

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

(c) The Company is maintaining proper records of inventory and nomaterial 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 partiescovered in the register maintained under Section 301 of theCompanies Act, 1956.

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

(iv) In our opinion and according to the information and explanations givento us, there is an adequate internal control system commensuratewith the size of the Company and the nature of its business, for the

purchase of inventory and fixed assets and for the sale of goodsand services. During the course of our audit, no major weakness

has been noticed in the internareas.

(v) According to the informationmanagement, we are of the opor arrangements referred to inbe entered into the register maso entered. None of the transcontracts or arrangements excrespect of any one such party

(vi) The Company has not accepte

(vii) In our opinion, the Compacommensurate with the size an

(viii) We have broadly reviewed theCompany pursuant to the rulefor the maintenance of cost reCompanies Act, 1956, and areprescribed accounts and recor

(ix) (a) According to the recordregular in depositing uprovident fund, investoemployees’ state insuraduty, wealth-tax, service appropriate authorities.

(b) According to the informno undisputed amounts investor education and insurance, income-tax, customs duty, excise dutydues were outstanding, than six months from the

(c) According to the records of income-tax, sales-taxduty, excise duty and ce

follows:

Annexure referred to in paragraph 3 of our report of even Re: ABB Limited



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

Thousands)

Period to which theamount relates

Forum

Excise Act Freight charges for valuation 589 1997-98 Central Excise

Service Tax Service tax on freight chargesand erection services

2,403 1997-06 Central Excise

Sales Tax Act Works contract tax charged

Differential tax chargedSubmission of Statutory Forms

13,92911,74013,526

108,39155,461

900

1996-021992-012003-041996-052002-041994-95

Deputy CommSales Tax AppDeputy CommDeputy CommJoint CommisHigh Court

Faridabad Development Act [Octroi]

Product classification 30,400 1986-94 High Court

* - Net of Rs 67,042 thousand, paid under protest.

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

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

(xii) According to the information and explanations given to us and basedon the documents and records produced to us, the Company hasnot 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/mutualbenefit fund/society. Therefore, the provisions of clause 4(xiii) of theCompanies (Auditor’s Report) Order, 2003 (as amended) are notapplicable 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, theCompany has not given any guarantee for loans taken by othersfrom bank or financial institutions.

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

(xvii) According to the information anoverall examination of the balaof the Company, we report thathave been used for long-term i

(xviii) The Company has not made to parties or companies coverSection 301 of the Companies

(xix) The Company did not have anyear.

(xx) The Company has not raisedduring the year.

(xxi) Based upon the audit procedreporting the true and fair viewper the information and explanareport that no fraud on or by reported during the course of o

Balance Sheet



As at December 31, 2007 Schedule

Sources of Funds

Shareholders’ Funds

Share Capital 1 423,817

Reserves and Surplus 2 15,839,626

Loan Funds

Finance Lease Obligations 16(9)

Deferred Tax Liability (net) 16(10)

Application of Funds

Fixed Assets 3

Gross Block 5,769,125

Less: Depreciation and Amortisation 2,249,827

Net Block 3,519,298

Capital Work in Progress including Capital Advances 1,059,418

Investments 4

Current Assets, Loans and Advances

Inventories 5 4,887,102

Sundry Debtors 6 24,235,625Cash and Bank Balances 7 6,428,636

Other Current Assets 8 2,753,603

Loans and Advances 9 2,802,023

41,106,989

Less: Current Liabilities and Provisions

Current Liabilities 10 29,314,878

Provisions 11 678,236

29,993,114

Net Current Assets

Notes to Accounts 16

Balance Sheet

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

A t f d t

Profit and Loss Account



For the year ended December 31, 2007 Schedule

Income

Sales and Services 63,832,682

Less: Excise Duty 4,529,568

Sales and Services (Net) 12

Other Income 13

Expenditure

Cost of Materials and Erection Services 42,920,333

Personnel Expenses 14 3,060,684

Other Expenses 15 6,075,802

Depreciation/ Amortisation 326,752

Less: Transfer from Revaluation Reserve 2,695

324,057

Interest Expenses 68,123

Profit Before Tax

Provision for Tax:

Current Tax

Deferred Tax

Fringe Benefits Tax

Profit After Tax Add: Balance brought forward

Profit available for appropriation

Appropriations

General Reserve

Proposed Dividend

Corporate Dividend Tax

Corporate Dividend Tax - 2006

Balance carried forward

Basic and Diluted Earnings per Equity Share (in Rs) 16(3)

(Face value Rs 2/- per share)

Notes to Accounts 16

Profi t and Loss Account

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

A t f d t



As at December 31, 2007

Schedule 1 - Share Capital

Authorised

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

(Previous Year - 42,500,000 equity shares of Rs 10 each)

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

Issued, Subscribed and Paid Up

211,908,375 Equity Shares of Rs 2 each *(Previous Year - 42,381,675 equity shares of Rs 10 each)

Notes:

Share Capital includes:

a) 46,185,525 equity shares of Rs 2 each (Previous Year - 9,237,105 equity shares of Rs 10 each) allotte

contracts for consideration other than cash.

b) 1,000,000 equity shares of Rs 2 each (Previous Year - 200,000 equity shares of Rs 10 each) issue

cumulative preference shares of Rs 100 each on cancellation of the preference shares in terms of a S

Company and its preference/equity shareholders in 1988.

c) 42,219,465 and 51,772,945 equity shares of Rs 2 each (Previous Year - 8,443,893 and 10,354,589 eq

fully paid up bonus shares by capitalisation of the General Reserve Account and Securities Premium Acc

d) 97,879,955 equity shares of Rs 2 each (Previous Year - 19,575,991 equity shares of Rs 10 each) are held

Zurich, Switzerland, the ultimate holding company and 12,540,330 equity shares of Rs 2 each (PreviouRs 10 each) are held by ABB Norden Holdings AB, Sweden, a subsidiary of the ultimate holding compan

* During the year face value of each equity shares of Rs 10 each was sub-divided (stock split) into 5 equity sha




Schedule 2 - Reserves and Surplus

Capital Reserve Account

Capital Redemption Reserve Account

Revaluation Reserve Account

As per last Balance Sheet 148,082

Transferred to Profit and Loss Account (2,695)

Securities Premium Account

Foreign Projects Reserve Account

As per last Balance Sheet 7,500

Transferred to General Reserve Account (1,000)

General Reserve Account

As per last Balance Sheet 10,179,803

Transferred from Foreign Projects Reserve Account 1,000

Less: Charge on account of transitional provisionsunder Accounting Standard (AS) 15 (revised 2005)

- Provident Fund (27,602)

(Net of tax Rs 14,212 thousand)

- Other long term benefits - Leave (23,353)

(Net of tax Rs 12,025 thousand)

Transferred from Profit and Loss Account 4,250,000

Profit and Loss Account

Balance carried forward




Schedule 3 - Fixed Assets

Gross Block Depreciation/ Amortisatio

Description As at Additions Deductions As at As at For the Deductio

January 1, December 31, January 1, Year

2007 2007 2007

A. Tangible Assets

1. Own Assets

Freehold Land 137,515 - - 137,515 - -

Leasehold Land 9,826 - - 9,826 297 90

Leasehold Improvements 63,194 92,021 - 155,215 30,712 10,522

Factory Buildings 618,190 111,832 3,490 726,532 152,265 21,218 1,5

Other Buildings 296,325 30,440 538 326,227 20,899 4,982 2

Residential Quarters 14,390 - 190 14,200 4,745 233

Plant and Machinery 3,123,630 475,170 164,430 3,434,370 1,360,223 208,170 147,0Furniture and Fixtures 268,545 36,442 1,360 303,627 78,522 15,606 1,0

Vehicles 19,618 1,760 39920,979 7,220 5,121 3

4,551,233 747,665 170,407 5,128,491 1,654,883 265,942 150,3

2. Leased Assets

Plant and Machinery 83,141 - - 83,141 55,005 11,249

Vehicles 11,068 - -11,068 3,427 499

94,209 - - 94,209 58,432 11,748

Total Tangible Assets 4,645,442 747,665 170,407 5,222,700 1,713,315 277,690 150,3

B. Intangible Assets

Technical Know-how Fees 350,798 23,943 - 374,741 256,673 29,138

Capitalised Software 148,927 22,757 - 171,684 103,458 19,924 Total Intangible Assets 499,725 46,700 -546,425 360,131 49,062

5,145,167 794,365 170,407 5,769,125 2,073,446 326,752 150,3

Previous Year 4,141,636 1,098,468 94,937 5,145,167 1,875,025 267,341 68,9

Capital Work in Progress including Capital Advances

Grand Total

Notes:

1. Certain freehold and leasehold land, factory and other buildings and residential quarters were revalued during 1985, 1986 and 1996 respectively.

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






Schedule 5 - Inventories

Stores and Spares

Raw Materials and Components

Goods in Transit - Raw Materials and Components

Finished Goods

Work-in-progress

Schedule 6 - Sundry Debtors

Unsecured :

Debts outstanding for a period exceeding six months

- Considered Good

- Considered Doubtful

Other Debts - Considered Good

Less: Provision for Doubtful Debts

Schedule 7 - Cash and Bank Balances

Cash and Cheques on hand

Balances with Scheduled Banks

- On Current Account 4,398,307

- On Deposit Account 2,005,460

- On Margin Account 10,134

With Non-Scheduled Banks - On Current Account

Current Accounts with Non-Scheduled Banks include

As at As at

December 31, December 31,

2007 2006




Schedule 8 - Other Current Assets

Contract Revenue in Excess of Billing and Unbilled Revenue

Interest Accrued on Investments and Fixed Deposits

Schedule 9 - Loans and Advances

Unsecured :

Loans, Considered Good

Advances recoverable in cash or in kind or for value to be received:- Considered Good 2,080,595

- Considered Doubtful 39,711

2,120,306

Less: Provision for Doubtful Advances 39,711

Advance Tax (net of provision)

Balances with Customs, Port Trusts and Excise authorities

Schedule 10 - Current Liabilities

Acceptances

Sundry Creditors

- Dues to Micro and Small Enterprises 64,341

- Others 15,628,714

Advance Payment from Customers

Billing in Excess of Contract Revenue

Investor Protection and Education Fund shall be credited for unclaimed

dividends amount when due

Schedule 11 - Provisions



For the year ended December 31, 2007

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

Annual Opening Stock of Production of Closing

Class of goods Capacities Finished Goods Finished Goods Finished GoQuant. Rupees in Ru

Denom. Installed Quantity Thousands Quantity Quantity Tho

Motors and Other Machines HP 3,124,484 66,565 80,622 2,992,875 96,403

(2,527,433) (46,480) (35,590) (2,068,611) (66,565)

Switchgear of all types Nos. 15,277,350 462,107 197,561 10,188,676 234,740

(10,180,350) (189,885) (38,012) (5,541,175) (462,107) (1

PLCC Equipment Nos. 2,850 - - 1,857 -

(2,850) (-) (-) (1,443) (-)

Multiplexures Nos. 100 - - 7 -

(100) (-) (-) (38) (-)

Telemetering Equipment Nos. 150 - - 20 -

(150) (-) (-) (15) (-)

Turbochargers Nos. 200 - - 208 9

(200) (-) (-) (189) (-)

Transformers MVA 12,000 - - 8,944 -

(12,000) (-) (-) (8,127) (-)

Electronic Control and Supply Units Nos. 100,000 - - 82,416 -

for Variable Speed Drives and other (100,000) (-) (-) (78,271) (-) applications

Mini Computer/Microprocessor Value Rs in 2,300,000 - - 1,717,970

based Systems Thousands (2,300,000) (-) (-) (2,259,133) (-)

Non-Microprocessor Based Electronics Value Rs in 70,000 - - -

(Analog and Digital) for Weighing, Thousands (70,000) (-) (-) (9,823) (-) Batching and Force MeasuringSystems and Sub-Systems

Power Capacitors of all types MVAR 3,700 - - 3,724 -

(3,700) (-) (-) (2,579) (-)

Robotics Nos. 30 - - 30 -

(15) (-) (-) (5) (-)

Gas Analysers and Systems Nos. 300 - - 246 -

(300) (-) (-) (202) (-)

Process Control Instruments Nos. 30,225 - - 29,227 -

(30,225) (-) (-) (28,139) (-)

Others -

(-)

Project Items 63,046

(69,656)

Erection and Other Services

341,229

(143,258) (3



For the year ended December 31, 2007 2007

Schedule 13 - Other Income

Dividend

Long-term Investments - Trade 281

Long-term Investments - Others -

Interest

Long-term Investment 44,996

Deposit with Banks 191,051

(Tax deducted at source Rs 40,189 thousand;

Previous Year Rs 36,409 thousand)

Others (net) 40,967

Profit on Sale of Fixed Assets (net)

Scrap Sales

Commission Income

Miscellaneous Income

Schedule 14 - Personnel Expenses

Salaries, Wages and Bonus

Gratuity

Provident Fund

Contribution to Superannuation and other Funds

Workmen and Staff Welfare Expenses

Other Personnel Expenses




Schedule 15 - Other Expenses Tools and Stores

Royalty

Freight and Forwarding (net)

Postage and Telephone

Commission

Discount

Power, Fuel and Water

Travelling and ConveyanceInsurance

Rates and Taxes

Rent

Repairs: Buildings

Plant and Machinery

Others

Provision for Doubtful Debts and Advances

Bad Debts/Advances Written Off Loss on Sale of Fixed Assets (net)

Printing and Stationery

Bank Charges

Legal and Professional

Trade Mark Fees

Technology Fees

Exchange Rate Difference - Loss

Miscellaneous



Schedule 16 - Notes to the Accounts

1. Nature of Operations

ABB Limited (‘the Company’) has served utility and industry customers for over 50 years with the complete rang

and services in areas of Automation and Power technology. The Company has extensive installed base fomarketing and service presence. Besides catering to Indian domestic market, the Company is also playing an

2. Significant 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 ac Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The finanunder the historical cost convention on an accrual basis except for revaluation of certain fixed assetsprinciples generally accepted in India. The accounting policies have been consistently applied by the Comaccounting policy discussed more fully below, are consistent with those used in the previous year.

2.2. Change in Accounting Policies

The Company has changed its accounting policy for revenue recognition for large transformers from recogon achievement of contractual milestone basis, with effect from January 1, 2007. This has resulted in addprofit before tax of Rs 434,030 thousand and Rs 60,002 thousand respectively with corresponding increyear ended December 31, 2007.

In current year, the Company has adopted Accounting Standard (AS) 15 (revised 2005), “Employee Betransitional obligations as at January 1, 2007, for Provident Fund and Other long term benefits – Leave, amof tax) have been adjusted against the opening balance of General Reserves. This change is not havingcurrent year.

2.3. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAestimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of the financial statements and reported amounts of revenues and expenses during the reporting period. estimates. Any revision to accounting estimates is recognised prospectively in current and future periods

2.4. Fixed Assets

Fixed assets are stated at the cost of acquisition, except for revaluation of certain land and building,impairment losses, if any. Cost of fixed assets comprises purchase price, duties, levies and any directly att

its working condition for the intended use. Borrowing costs related to the acquisition or construction of theup to the completion of their acquisition or construction are capitalised. Advances paid towards the acat each balance sheet date and the cost of fixed assets not ready for their intended use before such datprogress.

Capitalised software includes costs on Enterprise Resource Planning (ERP) Project and other costs relatingfuture economic benefits. ERP Project costs comprise licence fees and cost of system integration service

h t ll h d ff dit l th b i i ifi t dditi l b



The following assets are depreciated/amortised on the straight line method over a period of their estimat

• Leasehold land and leasehold improvements over the primary 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.

Assets under finance lease are depreciated over the lower of the lease term or the useful life of the assethat the Company will obtain ownership, wherein such assets are depreciated on the straight-line metho

XIV to the Companies Act, 1956.

2.6. Investments

Investments that are readily realisable and intended to be held for not more than a year are classifi

investments are classified as long-term investments. Current investments are carried at lower of cost aare carried at cost. However, provision for diminution in value is made to recognise a decline otheinvestments.

2.7. Inventories

Inventories are stated at the lower of cost and net realisable value. The cost of various categories of inve

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

• Goods in Transit – at actual cost.

• Work-in-progress and finished goods - at full absorption cost method based on annual averagincluded in the value of finished goods inventory.

Provision for obsolescence is made wherever necessary.

2.8. Employee Benefits

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

Trust.

Contributions to the recognised Provident Fund/ Gratuity Fund and provision for other long term emplschemes, are made on the basis of actuarial valuations made at the end of each financial year and are cduring the year.

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

2.9. Revenue Recognition

• Sales of products and services are recognised when significant risks and rewards of ownership of



2.10. Provisions

A provision is recognised when the Company has a present obligation as a result of past event and it is pwill be required to settle the obligation, in respect of which a reliable estimate can be made based on techProvisions are not discounted to its present value and are determined based on management estimate r

balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current m

2.11. Research and Development

All revenue expenses pertaining to research and development are charged to the profit and loss account and expenditure of capital nature is capitalised as fixed assets, and depreciated as per the Company’s p

2.12. Foreign Currency Transactions

Foreign currency transactions are recorded by applying the respective monthly average rates. Exchange dtransactions 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 prevresultant 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 rifluctuations. The premium or discount on forward exchange contracts is recognised in the profit and contract.

Gain or loss on restatement of forward exchange contracts for hedging purposes are recognised in the pwhich it occurs.

2.13. 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 paidwith the Indian Income Tax Act. Provision for current income tax is made on the basis of the results of thebe computed and paid on the basis of the results for the year ending March 31, 2008.

The deferred tax for timing differences between the book and tax profits for the year is accounted for usbeen enacted or substantively enacted as of the balance sheet date. Deferred tax assets arising from timextent there is reasonable certainty that the assets can be realised in future.

2.14. Operating Leases

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the lealeases. Operating lease payments are recognised as an expense in the profit and loss account on a stra

For the year ended 31 December,

3. Earnings Per Share

a) Weighted Average number of Equity Shares of Rs 2 each outstanding during the year *



Power Systems Segment (PS) offers turnkey systems and services for transmission and distribut The segment offers the instrumentation, control and the entire balance of power plants, which improthrough flexible alternating current transmission systems (FACTS), high voltage direct current (HVsystems (SCADA) and utility communications.

Power Products Segment (PP) manufactures, engineers, supplies key components to transmpower supply and energy efficiency. The segment produces transformers, high and medium vcapacitors, distribution relays etc.

Process Automation Segment (PA) provides customers with integrated solutions for control, plaapplication knowledge. The industries served include oil and gas, power, chemicals and pharmaceminerals, marine and turbo charging.

Automation Products Segment (AP) provides products to improve customers’ productivity with hdrives, 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 als

iii) Segment revenues, expenses, assets and liabilities are those, which are directly attributable to appropriate basis. Corporate and other revenues, expenses, assets and liabilities to the extent not athe reconciliation of reportable segments with the financial statements. During the year revenues, eto heating, ventilation and air conditioning systems (HVAC) business has been reclassified from Prsegment.

iv) Inter Segment Transfer Pricing

Inter segment prices are normally negotiated amongst the segments with reference to the costs, m

an overall optimisation objective for the Company.

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

vi) Segment Revenues, Results and Other Information

Power

Systems

Power

Products

Process

Automation

Automati

Produc

External Sales (net of Excise Duty) 22,175,534 14,137,876 10,319,976 12,263,3

(16,594,192) (10,549,064) (7,065,139) (8,387,14

Inter Segment Sales 162,429 2,072,697 262,389 1,032,5

(172,473) (1,351,951) (210,380) (753,34

Other Income 176,434 115,259 83,468 36,1

(152,831) (229,325) (41,609) (38,44

Segment Revenues 22,514,397 16,325,832 10,665,833 13,332,0

(16 919 496) (12 130 340) (7 317 128) (9 178 93



vii) Reconciliation of Reportable Segments with the Financial Statements

Revenues Results/Net Profit

Total of Segments 63,182,059

(45,692,685)7,570,995

(5,149,646)3

(2

Corporate - Unallocated (net) 363,419 (272,603)

61,697 (89,669)

Inter Segment Sales -3,531,910

(-2,488,266)-

(-)

Interest Expense -

(-)-68,123

(-7,253)

Provision for tax -

(-)-2,647,879

(-1,829,000)

As per Financial Statements 60,013,568 (43,477,022)

4,916,690

(3,403,062)4

(3

B) Secondary Segment Reporting (by Geographical Segments)Secondary segment disclosures are reported on the basis of geographical location of customers.

India Rest

Revenues 56,310,304(39,106,997)

3

(4

Total Assets 45,495,315

(31,164,637)

Capital Expenditure 1,597,922

(960,072)

As at 31 December,

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

a) Sundry Debtors

- ABB Global Services Limited- Raman Boards Limited

b) Loans and Advances



As at 31 December,

6. Contingent Liabilities

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

ii) Bills discountedThe above excludes bills co-accepted by the customers’ bankers/guaranteedby the State Governments Rs 51,927 thousand

(Previous Year Rs 143,491 thousand)

iii) Income tax matters in dispute

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

8. The Company has no non-cancelable operating lease obligations as on December 31, 2007. Rental expecancelable operating leases charges to the profit and loss account amounts to Rs 131,652 thousand (Previo

9. Finance Lease Obligations

The Company normally acquires computers and vehicles under finance lease with the respective underlyingpayments outstanding as of December 31, 2007 in respect of these assets are as follows: (Figures in bracket

Due Total Minimum Lease

Payments outstanding as

on December 31, 2007

Int

Within one year 5,713

(11,296)

Later than one year and not later than five years 267

(6,036)

5,980

(17,332)

10. Deferred Tax

The break up of net deferred tax liability as at December 31, 2007 is as follows: (Figures in brackets are in resp

Deferred T

Timing differences on account of:Difference between book depreciation and depreciation under the Income-tax Act, 1961

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






14. Value of imports on CIF basis

(on accrual basis)

Raw Materials and Components including SparesFinished GoodsCapital Goods including Technical Know-howSoftwareProject items

15. Expenditure in foreign currency(on accrual basis)

RoyaltyTrade Mark FeesCommission and DiscountProfessional / Project ConsultancyOthers

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

i) Number of non resident shareholders

ii) Number of equity shares held by them on which dividend was paid

iii) Year ended to which the dividend related

iv) Amount remitted

17. Managerial Remuneration

a) i) Directors’ feeii) Other remuneration

Salary 8,875Commission to Managing Director and Executive Director 5,113

Commission to Non-executive Directors 1,200

Contribution to Provident and other funds 2,396Other perquisites 7,450




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

Profit Before Tax as per profit and loss accountAdd: Managerial Remuneration 25,319

Loss on Sale of Fixed Assets 14,453

Provision for doubtful debts and advances 252,007

Less: Profit on sale of Fixed Assets 14,246

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

Commission to Managing DirectorCommission to Executive DirectorCommission to Non-executive Directors

Commission to Managing Director and Executive Director is subject to further recommendation and approval Board. For the year ended December 31, 2006, Rs. 4,767 thousand was paid as commission to Managing Dpaid as commission to Executive Director based on recommendation and approval of Remuneration Committe

18. Auditors’ Remuneration

(excluding service tax)(i) Audit Fee(ii) Tax Audit Fee(iii) Other Services

- SOX Fee- Quarterly Limited Review Fee- Others

(iv) Reimbursement of out of pocket expenses

19. Interest charge for the year includes Rs 1,555 thousand (Previous Year Rs 2,923 thousand) being interest on

20. Research and development expenditure of Rs 43,761 thousand (Previous Year Rs 38,299 thousand) on reventhe year.

21. Construction Contracts



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 (Hong Kong) Ltd., Hong Kong ABB (P.J.S.C.), Teheran, Iran ABB (Pty) Ltd., Gaborone, Botswana ABB (Pvt.) Limited, Lahore, Pakistan ABB A/S, Skovlunde, Denmark ABB AB, Västerås, Sweden ABB AG, Mannheim, Germany ABB AG, Vienna, Austria ABB Agencies Pte. Ltd., Singapore ABB Arab S.A.E., Cairo, Egypt ABB AS Billingstad, Norway ABB Australia Pty Limited, Sydney, Australia ABB Automation GmbH, Mannheim, Germany ABB Automation L.L.C., Abu Dhabi, U.A.E ABB Automation Products GmbH, Ladenburg, Germany ABB Avangard AD, Sevlievo, Bulgaria ABB Bailley Beijing Controls Co. Ltd., Beijing, China ABB Beijing Drive Systems Co. Ltd., Beijing, China ABB Bomem Inc., Quebec, Canada

ABB BV, Rotterdam, Holland ABB Capital, B.V., Amsterdam, Holland ABB Chongqing Transformer Company Ltd.,Chongqing City, China ABB CL Logistic S.A., Montevideo, Uruguay ABB Contracting Co. Ltd., Riyadh, Saudi Arabia ABB d.o.o., Belgrade, Serbia ABB Electrica SGPS, Lda., Luanda, Angola ABB Electrical Machines Ltd., Shanghai, China ABB Electroengineering Ltd., Moscow, Russia ABB Elektrik Sanayi A.S., Istanbul, Turkey ABB Elektro s.r.o., Bratislava, Slovakia ABB Energy Automation S.p.A., Milan, Italy

ABB Engineering (Shanghai) Ltd., Shanghai, China ABB Engineering Trading and Service Ltd., Budapest, Hungary ABB France SAS, Rueil Malmaison cedex, France ABB Global Services Limited, India ABB Heifei Transformer Co. Ltd., Hefei, China ABB Holding A.S., Istanbul, Turkey ABB Holding AS, Billingstad, Norway

ABB N.V., Zaventem, Belgium ABB Near East Trading Ltd., Amman ABB Norden Holding AB, Stockholm ABB Oy, Helsinki , Finland ABB Power Technologies SpA, Hydr ABB Process Solutions & Services S ABB Participation AB, Västerås, Swe ABB Power Systems and Automatio ABB Power Technologies S.p.A., Mil ABB Qatar LLC., Doha, Qatar ABB S.A., Buenos Aires, Argentina ABB S.A., Panama, Panama ABB S.A., Rueil-Malmaison, France ABB S.A., Santiago, Chile ABB s.r.o., Prague, Czech Republic ABB SACE S.p.A., Sesto S. Giovann ABB Sanghai Motors Co. Ltd., Shan ABB Schweiz AG, Baden, Switzerlan ABB Sécheron S.A., Satigny, Switze ABB Service Co. Ltd., Al Khobar, Sa

ABB South Africa (Pty) Ltd., Sunning ABB Sp. zo.o., Warsaw, Poland ABB Stotz-Kontakt GmbH, Heidelbe ABB Turbo-Systems AG, Baden, Sw ABB Turbo Systems (Hong Kong) Lim ABB Technology AB, Västeras, Swed ABB Technologies W.L.L., Bahrain ABB Technology Ltd., Zurich, Switze ABB Training Center GmbH & Co. K ABB Transmission & Distribuition AuCo. Ltd.,China

ABB Trasmissione & Distribuzione S

ABB Turbocharger Servicios, S.A., A ABB Xiamen Electrical Controlgear C ABB Xiamen Low Voltage Equipmen ABB Xiamen Switchgear Co. Ltd., Xi ABB Xinhui Low Voltage Switchgear ABB Ltd., Seoul, South Korea ABB Ltd., Taipei, Taiwan





iv) Expenditure on Other Services

Holding Company

Fellow Subsidiaries- ABB Information Systems Ltd., Zurich, Switzerland- ABB Technology Ltd., Zurich, Switzerland- Asea Brown Boveri S.A., Madrid, Spain- ABB Global Services Limited, India- Other fellow subsidiaries

v) Capital expenditure for Technical Know how

Fellow Subsidiaries- ABB Oy, Helsinki, Finland- ABB SACE S.p.A., Sesto S.Giovanni (MI), Italy- ABB Entrelec SAS, Villeurbanne, France- Other fellow subsidiaries

vi) Capital expenditure

Fellow Subsidiaries- ABB AB, Vasteras, Sweden- ABB AS Billingstad, Norway- ABB SACE S.p.A., Sesto S.Giovanni (MI), Italy

- ABB Automation Products GmbH, Ladenburg,Germany- Other fellow subsidiaries

vii) Outstanding balances

Debtors and Advances

Holding Company

Fellow Subsidiaries- Asea Brown Boveri Inc., Norwalk, CT, United States- ABB Global Services Limited, Bangalore

- ABB Oy, Helsinki, Finland- Other fellow subsidiaries

Integra Hindustan Control Limited (an associate)

Creditors



viii) Dividend Paid during the year

Holding Company

Fellow Subsidiaries

ix) Remuneration to Managing Director*

x) Remuneration to Executive Director *

xi) Remuneration to Chief Financial Officer *

xii) Dividend received from Associate

* The above does not include Provision for Leave Encashment and Gratuity as it is provided in the books on the basis oas a whole and hence individual figures cannot be identified. The remuneration to Managing Director for 2007 compMr. Ravi Uppal and Rs 4,986 paid to Mr. Biplab Majumder, since the date of his appointment as Managing Director wto Executive Director Mr. Biplab Majumder for the year ended December 31, 2007 is for the period upto July 25, 200

23. The pro rata difference between the forward contract rate and the exchange rate on the date of transaction to bis Rs 70,942 thousand (Previous Year Rs 62,824 thousand).

24. Provisions:

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

Class of provisions

As at

January 1,

2007

Additions Amounts

used

Product Warranties 400,333

(196,904)297,733

(494,891)110,205

(291,462)

Sales Tax 46,860(16,813)

49,333(36,921)

31,587(6,874)

Litigations 62,160(57,092)

-(5,068)

4,284(-)

Restructuring 66,697(68,281)

-(-)

324(1,584)

b) Nature of provisions:

a. Product Warranties: The Company provides warranties for its products and services, undertaking to perform satisfactorily during the warranty period. Provision made as at December 31, 2007 rep



26. Derivative Instruments

i) Forward cover for export debtors outstanding as of balance sheet date is Rs 867,250 thousand (Previo

ii) Forward cover for expected future sales or highly probable forecast transaction as of balance sheet date

Year Rs 350,199 thousand).

iii) Forward cover for import creditors outstanding as of balance sheet date is Rs 4,382,756 thousand (Pre

iv) Forward cover for expected future purchases or highly probable forecast transaction as of balance sh(Previous Year Rs 2,981,428 thousand).

v) Foreign currency exposure (net) that are not hedged by derivative instruments or otherwise is Rs 116,173

thousand).

27. The Company has amounts due to Micro and Small Enterprises under The Micro, Small and Medium Enterpri Act) as at December 31, 2007.

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

Principal Amount :Interest :

ii) The amount of interest paid by the Company along with the amounts of the payment made to the suppbeyond the appointed day for the year ending December 31, 2007.

iii) The amount of interest due and payable for the period of delay in making payment (beyond the appointeiv) The amount of interest accrued and remaining unpaid for the year ending December 31, 2007.v) The amount of further interest remaining due and payable for the earlier years.

Note: The information has been given in respect of such suppliers to the extent they could be identified as “Micro ainformation available with the Company.

As at December 31, 2006 there were no suppliers who were registered under The Micro, Small and Medium Enteron the information available with the Company.

28. In accordance with ASI 14 (Revised) on ‘Disclosure of Revenue from Sales Transactions’ issued by Instituteexcise duty on sales amounting to Rs 4,529,568 thousand (Previous Year Rs 3,305,522 thousand) has beenaccount and excise duty on increase in inventory of finished goods amounting to Rs 2,985 thousand (Previousaccounted 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 tabbenefit expenses recognised in the profit and loss account and the funded status and amounts recognised in

i) Change in benefit obligations

Projected benefit obligations at beginning of the period



iii) Actual return on plan assets

Expected Return on plan assets

Actuarial gain / (loss) on plan assets Actual return on plan assets

iv) Present value of the defined benefit obligation

Plan assets at the end of the period, at fair value

Liability recognised in the balance sheet

v) Cost for the period Current Service cost Interest cost Expected return on plan assets

Actuarial (gain) / loss Expense recognised in the statement of profit & loss

vi) Investment Details (% invested)

GOI Securities State Government Securities PSU Securities Special Deposit Scheme Others (including bank balances)

vii) Assumptions

Interest rate for discount Estimated rate of return on plan assets

* since paid

** Employees’ contribution.

Notes :

i) Assumptions relating to future salary increases, attrition, interest rate for discount and overall expectedconsidered based on relevant economic factors such as inflation, market growth and other factors appobligation is expected to be settled.

ii) The Company expects to contribute Rs 49,091 thousand to Gratuity Fund and Rs 79,535 thousandimplementation, previous year figures have not been given.

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 curr

Cash Flow Statement




A. Cash Flow from Operating Activities

Net Profit Before Tax

Adjustments for

Depreciation/Amortisation

Unrealised Losses/(Gains) on Restatement of Monetary Assets (net)

Unrealised Losses/(Gains) on Restatement of Monetary Liabilities (net)

Loss/(Profit) on Sale of Fixed Assets, (net)

Interest Income

Dividend Income

Interest Expense

Operating Profit before Working Capital Changes

Movement in Working Capital

Decrease/(Increase) in Sundry Debtors

Decrease/(Increase) in Inventories

Decrease/(Increase) in Other Current Assets

Decrease/(Increase) in Loans and Advances

Increase/(Decrease) in Current Liabilities and Provisions

Cash Generated from Operations

Direct Taxes Paid (net of refunds)

Net cash generated from Operating Activities

B. Cash Flow from Investing Activities

Purchase of Fixed Assets

Proceeds from sale of Fixed Assets




C. Cash Flow from Financing Activities

Proceeds from new Borrowings

Repayment of Borrowings

Interest Paid

Dividend paid

Net cash used in Financing Activities

Net Increase/ (Decrease) in Cash and Cash Equivalents (A+B+C)

Cash and Cash Equivalents (Opening Balance)

Cash and Cash Equivalents (Closing Balance)

Components of Cash and Cash Equivalents as at December 31,

Cash and Cheques on Hand

Balances With Banks - On Current Account

- On Deposit Account

- On Margin Account

Notes:1) Cash and cash equivalents at the end of the year represent cash at bank and in hand and deposits with ba

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

As per our report of even date

For S.R. BATLIBOI & CO.

Chartered Accountants

per Sunil Bhumralkar

Partner

Membership No. 35141

For and on behalf of the Board

Ravi Uppal Chairma

Biplab Majumder Managin

K Rajagopal Whole-tPeter Leupp Director

Nasser Munjee Director

N S Raghavan Director

A K Dasgupta Dire

D E Udwadia Director

Balance Sheet Abstract and Company’s General Business



I. Registration Details

Registration No. L32202KA1949PLC032923 State C

Balance Sheet Date 31 12 07

Date Month Year

II. Capital Raised during the year (Rs in Thousands)

Public Issue Rights

NIL

Bonus Issue Private

NIL

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

Total Liabilities Total As

1 6 3 9 7 1 3 7

Sources of Funds

Paid-up Capital Reserve

4 2 3 8 1 7

Secured Loans Unsecu

5 6 6 0

Deferred Tax Liability

1 2 8 0 3 4

Application of Funds

Net Fixed Assets Investm

4 5 7 8 7 1 6

Net Current Assets Misc. E

1 1 1 1 3 8 7 5

Accumulated Losses

N I L

IV. Performance of the Company (Rs in Thousands)

Turnover Total Ex

6 0 0 1 3 5 6 8

+/- Profit/Loss Before Tax +/- Profi



© C o p y r i gh t 2 0 0 8 A B B .A l l r i gh t s r e s e r v e d .



ABB Limited2nd Floor, East Wing, Khanija Bhavan49, Race Course RoadBangalore - 560001Phone: +91-80-22949150 - 54Fax: +91-80-22949148

www.abb.co.in

P r i n t e d a t R e pr o

Date post:	07-Apr-2018
Category:	Documents
Upload:	anupama-vm
View:	221 times
Download:	0 times

ABB India Annual Report 2007

Documents