The Directors have pleasure in presenting their Sixty Third Annual
 Report and Audited Accounts for the year ended December 31, 2012.
 
 Financial Results
 
                                                           (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
 
 Appropriations
 
 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
 
                                           222.92            239.23
 
 Dividend
 
 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.
 
 Performance Review
 
 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.
 
 Subsidiary Company
 
 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
 Court.
 
 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
 confrm 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, 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.
 
 Corporate Governance
 
 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
 Report.
 
 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.
 
 Auditors
 
 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
 Company.
 
 Cost Auditors
 
 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.
 
 Acknowledgements
 
 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
 
                             Gary Steel
 
                             Chairman 
 
 Place : Bengaluru 
 
 Date : February 21, 2013