The Directors have pleasure in presenting their Sixty Third Annual
Report and Audited Accounts for the year ended December 31, 2012.
(Rs in Crores)
For the year ended For the year ended
December 31, 2012 December 31, 2011
Profit before taxation 206.21 267.74
Less: Provision for tax
- Current tax 61.20 104.80
- Deferred tax 7.60 (17.80)
- Fringe benefit tax - (3.80)
Profit after tax 137.41 184.54
Balance brought forward from last year 85.51 54.69
Amount available for appropriation 222.92 239.23
General reserve 64.00 80.00
Proposed dividend 63.57 63.57
Corporate dividend tax 10.31 10.31
Corporate dividend tax (previous years) - (0.16)
Balance carried forward 85.04 85.51
Your Directors recommend payment of a dividend at the rate of Rs 3/-
(Rupees Three only) per share for the year ended December 31, 2012 on
211,908,375 equity shares of Rs 2/- each.
The Company secured orders valued Rs 6,966 crore in 2012 as against Rs
8,189 crore in the previous year. The decline in orders in the current
year was mainly attributable to delayed decisions on a few large
projects unlike in the last year wherein the Company had secured couple
of landmark large orders like HVDC project from Power Grid Corporation
of India Limited for nearly Rs 600 crore and 765 kV substation order
from Isolux for nearly Rs 800 crore. The base orders continued to be
stable in a challenging market environment. The order backlog at the
end of the year stood at Rs 8,672 crore which continued to give more
visibility to the future revenue streams. The revenues for the Company
for the year 2012 stood at Rs 7,565 crore as against Rs 7,449 crore in
the previous year, refecting stability of operations in an uncertain
market situation. Proft before tax was at Rs 206 crore in 2012 as
compared to Rs 268 crore in the previous year. Additional costs
required executing the orders due to inordinate time delays in the
infrastructure projects, unfavorable foreign exchange impact due to
rupee volatility and higher interest costs resulted in lower
proftability for the Company. Net proft after tax stood at Rs 137 crore
for the current year as compared to Rs 185 crore in the previous year.
Consequently the earnings per share for 2012 stood at Rs 6.48 per share
as compared to Rs 8.71 in 2011.
For detailed analysis of the performance, please refer to the
Management-s Discussion and Analysis Section of the Annual Report.
During the year under review, your Company acquired 18,45,763 Non-
Participating Redeemable Preference Shares of Rs 10/- each of Baldor
Electric India Private Limited, for a consideration of Rs 1.85 crore.
The Consolidated Accounts have been prepared in accordance with the
prescribed Accounting Standards and in line with the general exemption
granted by Ministry of Corporate Affairs.
As prescribed in the Circular issued by Ministry of Corporate Affairs,
the Board of Directors has, at its meeting held on February 21, 2013,
passed a resolution giving consent for not attaching the Balance Sheet
of the Subsidiary Company. The Audited consolidated Accounts, Auditors-
Report thereon and Cash Flow Statement, comprising your Company and its
Subsidiary Company, form part of this Annual Report. Shareholders who
wish to have a copy of the annual report and accounts of the Subsidiary
will be provided on receipt of a written request from them. The above
documents will also be available for inspection by any share holder at
the registered offce of the Company as well as registered offce of the
Subsidiary Company, on any working day during the business hours.
Amalgamation of Subsidiary Company
The Board at its meeting held on September 26, 2012, approved the
proposal of amalgamation of Baldor Electric India Private Limited with
your Company. Accordingly, Scheme of Amalgamation has been fled before
the Hon-ble High Court of Bombay which is pending for approval of the
Transfer to Investor Education and Protection Fund
In terms of Section 205C of the Companies Act, 1956, the unclaimed
dividend amount aggregating to Rs 11,29,485/- lying with the Company
for a period of seven years pertaining to year ended on December 31,
2004, was transferred during the year 2012, to the Investor Education
and Protection Fund established by the Central Government.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The particulars as prescribed under sub-section (1) (e) of Section 217
of the Companies Act, 1956, read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, are given
in Annexure – A, forming part of this Report.
Environment, Health and Safety
The Company stays committed to the principles of Environmental
stewardship & Safety in every aspect of its business. This is achieved
by embedding the practices for environmental sustainability and safety
in the way of doing its daily businesses. Efforts are made to create
consistent awareness and training on relevant issues in that regard. In
this direction, the Company has identifed projects ranging from energy
effciency, waste management and disposal, looking for alternative
chemicals to reduce negative impacts on the environment. Most of the
locations of the Company are ISO 14001 & OHSAS 18001 certifed and few
locations are in the process of getting certifed.
Particulars of Employees
The statement under sub-section (2A) of Section 217 of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended and forming part of this report is given in Annexure -
B. The said Annexure - B shall, however, be provided to the Members on
request made in writing to the Company Secretary.
Directors- Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
i. in the preparation of the annual accounts, the applicable accounting
standards have been followed by the Company;
ii. appropriate accounting policies have been selected and applied
consistently and such judgements and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at December 31, 2012 and of the proft of
the Company for the year ended on that date;
iii. proper and suffcient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
iv. the annual accounts have been prepared on a going concern basis.
As required under Clause 49 of the Listing Agreement of Stock
Exchanges, a report on Corporate Governance and a Certifcate from M/s.
D. R. Shressha & Associates , Practicing Company Secretaries, confrming
compliance with the requirements of Corporate Governance are given in
Annexure – C and Annexure – D respectively, which form part of this
Business Responsibility Report
As required under Clause 55 of the Listing Agreement of Stock Exchanges
Business Responsibility Report is provided in the Annual Report.
Board of Directors
Mr. Darius E. Udwadia and Mr. N. S. Raghavan, Directors of the Company
are due to retire by rotation at this Annual General Meeting and are
eligible for re-appointment.
As stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges, brief profle of the Directors proposed to be re-appointed,
nature of their expertise in specifc functional areas, names of
companies in which they hold directorships and memberships /
chairmanships of Board Committees and shareholding are provided in the
Report on Corporate Governance forming part of the Annual Report.
Change of Name
The Board at its meeting held on February 21, 2013, accorded its
approval to change the name of the Company from the existing -ABB
Limited- to -ABB India Limited-. However the said change is subject to
the approval of shareholders, Registrar of Companies, Karnataka, and
any other concerned authorities.
The Company-s Auditors, M/s. S.R. BATLIBOI & CO., Chartered Accountants
(Firm Registration No 301003E), hold offce upto the conclusion of the
ensuing Annual General Meeting. The Company has received the requisite
certifcate from them pursuant to Section 224(1B) of the Companies Act,
1956, confrming their eligibility for re-appointment as Auditors of the
The Board of Directors of the Company has appointed M/s. Ashwin Solanki
& Associates, Cost Accountants, for conducting the Cost Audit in
respect of Electric Motors and Mr. T. L. Sangameswaran, Cost Accountant
for Cost Audit of Electrical Grade Insulation Paper and Paper Boards
for the year 2012. Cost Audit reports for Electric Motors and
Electrical Grade Insulation Paper and Paper Boards for the year 2011
were fled on March 16, 2012 and March 28, 2012 respectively, within the
time limit as prescribed in the Cost Audit Report Rules, 2001.
The Board of Directors take this opportunity to thank its parent
company, customers, members, suppliers, bankers, associates, Central
and State Governments and employees for their support and co-operation
extended to the Company during the year.
For and on behalf of the Board
Place : Bengaluru
Date : February 21, 2013