The Directors have pleasure in presenting their Sixty First Annual
 Report and Audited Accounts for the year ended December 31,2010.
 
 Financial Results
 
                                                   (Rs in Thousands)
 
                                For the year ended    For the year ended
                                December 31,2010        December 31,2009
 
 Profit Before Taxation          1,002,303              5,273,994 
 
 Less: Provision for Tax
 
 -Current Tax                      415,000              1,805,255
 
 -Deferred Tax                     (45,000)               (39,000)
 
 -Fringe Benefit Tax                  -                   (38,652)
 
 Profit After Tax                  632,303              3,546,391
 
 Balance Brought Forward from 
 last year                         607,178                556,632
 
 Amount available for 
 Appropriation                   1,239,481              4,103,023
 
 Appropriations
 
 General Reserve                   200,000              3,000,000
 
 Proposed Dividend                 423,817                423,817
 
 Corporate Dividend Tax             70,391                 72,028 
 
 Corporate Dividend Tax (2009)     (1,637)
 
 Balance Carried Forward          546,910                 607,178
 
                                1,239,481               4,103,023
 
 Dividend
 
 Your Directors recommend payment of a dividend at the rate of Rs 21-
 (Rupees Two only) per share for the year ended December 31, 2010 on
 211,908,375 equity shares of Rs 21- each.
 
 Performance Review
 
 Orders received during the year at Rs 63,496 million were 27% lower as
 compared to Rs 86,847 million in the previous year. Order backlog at
 the end of 2010 was at the same level of Rs 84,362 million compared to
 Rs 84,787 million at the end of the previous year.
 
 Sales and other income for the year were marginally higher by 1 % at Rs
 63,726 million compared to Rs 63,098 million in the previous year.
 Revenues of all the segments were higher than the previous year except
 Power Products and Process Automation which saw a negative growth of 9%
 and 8% respectively.
 
 Profit before tax for the year was lower at Rs 1,002 million as
 compared to Rs 5,274 million in the previous year, mainly on account of
 exit costs of rural electrification business, strategic orders with
 lower margin, higher input costs witnessed by the industry and adverse
 impact from fair valuation of forward foreign exchange and embedded
 derivative contracts.
 
 Profit after tax at Rs 632 million for the year has reduced by 82%
 compared to Rs 3,546 million in the previous year. Earning per equity
 share of face value of Rs 21- correspondingly decreased to Rs 2.98
 compared to Rs 16.74 in the previous year.
 
 For detailed analysis of the performance, please refer to the
 Managements Discussion and Analysis Section of the Annual Report.
 
 Acquisition
 
 The Company acquired the business of Metsys Engineering and Consultancy
 Private Limited (Metsys), based in Bangalore, a private limited company
 engaged in providing engineering services/consultancy and optimized
 solutions to OEMs/End customers mainly in Metal industry, for a total
 consideration of Rs 84.6 million.
 
 Open Offer
 
 The promoter company ABB Asea Brown Boveri Limited, Zurich along with
 ABB Norden Holding AB, Sweden was holding 52.11% of the total share
 capital of the Company. ABB Asea Brown Boveri Limited, Zurich, has
 increased its stake in the Company from 46.19% to 69.08% by way of an
 Open Offer during 2010. Subsequent to the Open Offer the total
 shareholding of ABB Asea Brown Boveri Limited, Zurich, in the company
 along with ABB Norden Holding AB, Sweden is 75%.
 
 Transferto Investor Education and Protection Fund
 
 In terms of Section 205C of the Companies Act, 1956, the unclaimed
 dividend amount aggregating to Rs 1,018,692/- lying with the Company
 for a period of seven years pertaining to year ended on December 31,
 2002, was transferred during the year 2010, to the Investor Education
 and Protection Fund established by the Central Government.
 
 Conservation of Energy, Technology Absorption, Foreign Exchange
 Earnings and Outgo
 
 The particulars as prescribed under sub-section (1)(e) of Section 217
 of the Companies Act, 1956, read with the Companies (Disclosure of
 Particulars in the Report of Board of Directors) Rules, 1988, are given
 in Annexure - A, forming part of this Report.
 
 Environment, Health and Safety
 
 The Company has in place a system for controlling and monitoring
 pollutants at all its factories complying with environmental standards
 and legislation. All the manufacturing units of the Company have
 received certificates for ISO 14001 (EMS). Environment, health and
 safety are given high priority. All the units of the Company have been
 awarded OHSAS18001 certification for the health and safety system.
 Several environmental management projects are underway across the
 locations. Some of these include energy conservation, waste management,
 rain water harvesting and greening initiatives.
 
 Particulars of Employees
 
 The statement under sub-section (2A) of Section 217 of the Companies
 Act, 1956, read with the Companies (Particulars of Employees) Rules,
 1975, as amended and forming part of this report is given in Annexure -
 B. The said Annexure - B shall, however, be provided to the Members on
 request made in writing to the Company Secretary.
 
 DirectorsResponsibility Statement
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
 confirm that:
 
 i. in the preparation of the annual accounts, the applicable accounting
 standards have been followed by the Company;
 
 ii. appropriate accounting policies have been selected and applied
 consistently and such judgements and estimates have been made that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company as at December 31, 2010 and of the profit of
 the Company for the year ended on that date;
 
 iii. proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 iv.  the annual accounts have been prepared on a going concern basis.
 
 Corporate Governance
 
 As required under Clause 49 of the Listing Agreement of Stock
 Exchanges, a report on Corporate Governance and a Certificate from M/s
 D. R. Shressha & Associates, Practicing Company Secretaries, confirming
 compliance with the requirements of Corporate Governance are given in
 Annexure - C and Annexure - D respectively, which form part of this
 Report.
 
 Board of Directors
 
 Mr. Bernhard Jucker was appointed as an Alternate Director for Mr.
 Peter Leupp during the period from April 30, 2010 to July 29, 2010 when
 Mr. Leupp was a Director.
 
 Mr. Biplab Majumder, Vice Chairman & Managing Director of the Company
 resigned and his resignation was accepted by the Board from the close
 of office hours on December 31,2010.
 
 Your Directors place on record their appreciation of the valuable
 services rendered by the above Directors during their tenure as
 Alternate Director and Managing Director of the Company respectively.
 
 Mr. Majumder was appointed as an Additional Director effective January
 1, 2011. He holds office upto the date of this Annual General Meeting.
 He does not wish to seek reappointment.
 
 Mr. Bazmi R. Husain was appointed as an Additional Director. He was
 also appointed as the Managing Director of the Company with effect from
 January 1,2011, subject to approval of the share holders in general
 meeting.
 
 Mr. Arun Kanti Dasgupta, Director of the Company is due to retire by
 rotation at this Annual General Meeting and is eligible for
 re-appointment.
 
 Mr. Gary Steel was appointed as a Director of the Company with effect
 from February 20,2009, in the casual vacancy caused by the resignation
 of Mr. Ravi Uppal. Since Mr. Ravi Uppal would have retired by rotation
 at this Annual General Meeting had he not resigned, Mr. Gary Steel
 would also cease to hold the office of Director at this Annual General
 Meeting, pursuant to Section 262 of the Companies Act, 1956 and is
 eligible for reappointment as a Director.
 
 As stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges, brief profile of the Directors proposed to be re-appointed /
 appointed, nature of their expertise in specific functional areas,
 names of companies in which they hold directorships and memberships /
 chairmanships of Board Committees, shareholding are provided in the
 Report on Corporate Governance forming part ofthe Annual Report.
 
 Auditors
 
 The Companys Auditors, M/s S.R. BATLIBOI & CO., Chartered Accountants,
 (Registration Number 301003E), hold office upto the conclusion ofthe
 ensuing Annual General Meeting. The Company has received the requisite
 certificate from them pursuant to Section 224(1 B) of the Companies
 Act, 1956, confirming their eligibility for re-appointment as Auditors
 ofthe Company.
 
                                   For and on behalf of the Board
 
 Place: Bengaluru                                      Gary Steel
 
 Date : February 23,2011                                 Chairman