The Directors take pleasure in presenting herewith the Fifty-fifth
 Annual Report and Audited Accounts for the year ended December 31,2010.
 
 FINANCIAL RESULTS
 
                                                     (Rupees Thousands)
                                         Year ended         Year ended
                                         31.12.2010         31.12.2009
 
 Sales and Services (Net)                40,200,358         35,658,766
 Operating Profit before interest         3,471,235          3,576,638
 (As percentage of net sales)                  9.0%              10.0%
 Interest, net                              655,011            578,598
 Operating Profit after Interest          2,816,224          2,998,040
 Restructuring and relocation costs               -            (83,286)
 Profit on Sale of Property                       -             15,500
 Profit Before Tax                        2,816,224          2,930,254
 Taxation                                  (948,811)        (1,010,228)
 Profit After Tax                         1,867,413          1,920,026
 Balance brought forward from 
 previous year                            5,518,405          4,293,913
 Profit available for appropriations      7,385,818          6,213,939
 
 Appropriations
 Proposed Dividend                          430,387            430,387
 Corporate Dividend Tax                      71,482             73,144
 General Reserve                            187,000            192,003
 Balance carried forward                  6,696,949          5,518,405
 
 Dividend
 
 Your Directors take pleasure in recommending a dividend of 90% (Rs.
 1.80 per share) for the year ended December 31, 2010. This will absorb
 Rs. 502 million (inclusive of tax) based on existing capital.
 
 Performance Review
 
 The global financial crisis hit the market in 2008 impacting growth
 worldwide, including India. The industry and infrastructure sectors of
 the economy continued to be adversely impacted in 2010, as in 2009. To
 add to it, the Utility segment of the market was also impacted due to
 delay in power plant execution at customers end, as well as delay in
 land acquisition and securing coal linkages. As a result, the T&D
 market in India shrank in 2010.
 
 Despite such adverse market conditions, your Company fared well in
 securing a good level of orders in 2010, with orders in hand up by 2%,
 over 2009.  Order intake in 2010 was marginally lower by 1% than what
 your Company achieved in 2009. During 2010, your Company won several
 orders with new customers as well as in new market segments and
 maintained market leadership, in T&D domain, for the third year in
 succession.
 
 Delivering sales in 2010 was not easy as some of the orders won in late
 2008 as well as in 2009, were delayed at customers end due to non
 availability of land or lack of coal /fuel linkages. Consistent follow-
 up, supported by other mitigation efforts, led to improvement in sales
 in the second semester of 2010. Overall sales in 2010 were up by 12.7%,
 over 2009, mainly due to ramp-up of sales from the new green-field
 manufacturing sites, as well as improved execution of contracts.
 
 The operating profit and profit after tax were lower by 3% due to
 impact of severe price fall and ramp up cost of the three green-field
 sites, which came into production in late 2009 and early 2010.
 
 Transmission & Distribution
 
 Transmission
 
 AREVA T&D India made significant progress in the EHV 765 kV segment of
 the market by localizing all its products. World class factories set up
 in three green-field sites at Vadodara, Padappai (Chennai) and Hosur
 started production for 765 kV and other kV class of product ranges in
 2010. In April 2010 Indias first indigenously developed 1000 MVA, 765
 kV class UHV Inter-connecting transformer was manufactured and tested
 at the Vadodara factory.  This was subsequently commissioned at Lancos
 Anpara C Power Plant in February 2011. You would recall that AREVA T&D
 India had already localized the EHV 765 kV range of Circuit breakers
 and Instrument transformers, while executing Indias 1st 765 kV
 Substation at NTPCs Sipat site in 2006-07.
 
 Your Company, thus, continued its strong leadership position in the EHV
 765 kV domain by winning 12 out of 22 Substations ordered in the
 Country till December 2010.
 
 Power Transformers business received several major orders, such as;
 
 765 kV Transformers for UPPCL, Anpara D 
 
 330 MVA/ 400 kV Power Transformers for India Bulls
 
 500 MVA/ 400 kV Transformers for Power Grid
 
 125 MVAR Shunt Reactors for Power Grid
 
 400 kV Power Transformers for Vadodara Vidyut
 
 Furnace Transformers for Monnet lspat
 
 370 MVA Transformers for CESC/Dhariwal
 
 475 MVA Transformers for GVK
 
 During this year your Companys Circuit Breaker (CBR), Gas Insulated
 Substation (GIS), Instrument Transformer (ITR) and Disconnector
 businesses received several major orders, such as:
 
 Sasan Ultra Mega for Reliance Power (for 765 kV CBR/DSC)
 
 Parabati Hydro III for BHEL (for GIS)
 
 Anpara C for UPPCL (for 765 kV CBR, ITR &DSC)
 
 400 kV Kondapally for LANCO (for GIS)
 
 Sasaram 765 kV Transformers for Power Grid (for CBR, ITR and DSC)
 
 Your Company launched the Disconnector business in 2009-10 and had a
 start up in 2010 by winning several Disconnector orders for 765 kV and
 400 kV.  The new world class Disconnector factory at Padappai, ramped
 up its production line in the first semester of 2010 as per schedule.
 
 During 2010, your Companys world class GIS factory, Indias first
 local manufacturing facility, started production activity at Padappai,
 near Chennai. More than 18 engineers/ technicians were trained in
 European factories to master the technology and production processes,
 so as to accelerate localization of this high technology product. As
 India is likely to install more and more GIS systems (which have
 smaller footprint, about 20% of a typical AIS substation and therefore
 an ideal solution for substations around cities with high land prices),
 your Company expects to achieve early leadership in this domain.
 
 Systems business also made good progress by acquiring several new
 clients and new line of business. Some of the major orders received
 were:
 
 765 kV Turnkey Substation for UPPCL Anpara D
 
 765 kV Turnkey Substation for Power Grid at Sasaram
 
 400 kV Turnkey Substation for Power Grid at Jatpur
 
 132 kV Turnkey Substation for Power Grid at North East
 
 Several Substation packages for MSETCL (multiple sites)
 
 Smelter Electrical package for Hindalco
 
 400 kV Substation for Essar
 
 400 kV Substation for Prakash Industries
 
 400 kV Substation for Shandong Electric for GMR Kamalaganga
 
 eBoP (Electrical Balance of Plant) for GMR for Warora 2x300 MW
 
 eBoP (Electrical Balance of Plant) for Essar for Tori 2x600 MW &
 Paradeep
 
 eBoP (Electrical Balance of Plant) for L&T for Visa Power 2x600 MW
 
 Your Company made significant progress in the emerging eBoP activity in
 2010 by winning several large contracts and achieving market
 leadership.
 
 During the year, your Company commissioned the prestigious 66 kV Power
 Distribution package for GMR for Terminal 3 of Delhi International
 Airport. Your Company is also executing a similar type of Contract for
 Chennai Airport, which comprises a Power Distribution package with 110
 kV GIS Substation.  This is to be commissioned in 2011. With these two
 systems, your Company has established itself in a leading position in
 the emerging Airport infrastructure segment.
 
 Your Company also commissioned 12 Substations in Kenya and 4
 Substations in Qatar.
 
 A 400 kV GIS Substation at Kondapally for Lanco Infratech, was also
 commissioned during the year.
 
 Several 400 kV Substations were also commissioned for Power Grid
 Corporation at Rourkela, Raigarh, Raipur, Hissar, Ludhiana and
 Amritsar.
 
 During the year, several Substations were commissioned for various
 customers across the country such as 400 kV in Hissar for HVPNL, 220 kV
 for ESSAR Oil at Vadinar Phase 1,400 kV at Angul for JSPL, 220 kV at
 Subhasgram for WBSEB as well as several 132 kV Substations for WBSEB,
 JSEB, CSEB, Bengal Energy and Power Grid.
 
 Network Management Systems (NMS)
 
 During the year, your Company won major orders from Jharkhand State
 Load Despatch Center, Tata Power SCADA Systems at Bhira/ Bhivpuri and
 Maintenance Contract from Power Grid for Eastern Region Control
 Centers. Your Company improved its market share in the Telecom activity
 by doubling its order intake, over 2009. Key orders for supply of
 telecom equipment were booked from State Utilities and EPC contractors.
 
 Major Projects delivered consisted of PTCUL Load Despatch Center and
 Supply of Dispatcher Training Simulator for the Power System Training
 Institute (PSTI). The NMS business also successfully handed over the
 Meghalayas DMS System to the customer (MeECL).
 
 The AREVA Automation Technical Day during June, 2010, was a major
 success, with participation of over 90 representatives from various
 utilities and private customers.
 
 Substation Automation Systems (Transmission Business)
 
 Substation Automation Solution (SAS) Business Unit continues to retain
 its leadership position in the Indian market. 2010 was a strong year
 with good growth in orders vis-a-vis 2009.
 
 Your Company received orders for Substation Automation for 16 Nos of
 Substations of Power Grid from several EPC Contractors. Your Company
 also received order for Substation Automation for UPPTCL Unnao 765 kV
 Substation from EPC Contractor. The Substation Automation Unit has also
 achieved significant success in IPPs, Central & State utilities. It
 won a prestigious order to retrofit various 220 kV and 132 kV
 Substations of RRVPNL with its latest protection technology. In
 addition, the Unit also received Substation Automation orders from
 Power Grid for Sasaram 765 kV and UPPCL for Anpara D Substation through
 the Companys Systems business.
 
 The Protection Products business from various Channels and OEMs grew,
 thus reinforcing our customers preference for the MiCOM range. Your
 Company also continued to enjoy the confidence of BHEL, winning major
 orders for Protection Products and SAS Systems.
 
 Your Company delivered several SAS solutions during the year. Some of
 the major projects delivered were Power Grid (Balia & Lucknow), MSETCL
 (12 Substations), DTL Mundka 400 kV, Power Grid Pirhana 400 kV, Namrup
 and North Chennai for BHEL etc.
 
 During the year, your Company significantly increased the production
 capacity of its Protection Panel line.
 
 Services for Transmission Business
 
 Service business continued, in 2010, to provide to customers single
 point support for various Transmission products through the product
 life cycle. The portfolio included all service support the customer
 would need with the product, such as E&C supervision services, warranty
 support, technical training, maintenance including long term contracts,
 repair and overhauling, technical consulting, retrofit and spares. An
 extensive network of service engineers is deployed across the country
 to quickly respond to customers calls.
 
 The Service businesss goal is to be a clear differentiator in the
 market place and to become the preferred partner of T&D customers. Its
 business focus is to support T&D customers with its offerings, and to
 maximize their asset value throughout the product life cycle.
 
 The GIS service team, setup for the GIS factory at Padappai, started
 with their first project at Bhavini site in this year. 2 High Voltage
 Test Kits were purchased and commissioned in the year. These are being
 used for site testing of GIS substations up to 400 kV. Your Company is
 the first in the country to have invested in such advance test
 facilities.
 
 Among the key orders won by Service in 2010 is a contract for 5 years
 Operation and Maintenance of the main 66 kV Substation at the new
 Terminal 3 of Delhi International Airport. This Substation was built by
 AREVA T&D Indias Systems business group and Service took over the 24x7
 services from the first day of its operationalisation.
 
 Distribution Business
 
 The three businesses namely Power Distribution (PDS), Secondary
 Distribution (SDS) and Distribution Transformers (DTR) launched their
 world class manufacturing facilities at Vadodara green-field sites
 mainly to expand the manufacturing capacities and to introduce new
 products. The ramp up of the manufacturing facilities contributed to
 the sales growth of the distribution businesses in 2010.
 
 The Proximity arm of Systems Business (which focuses on turnkey
 solutions for Distribution Substations and on small sized industrial
 projects), won orders for Turnkey Substation from Bajaj Hindustan, eBOP
 for 4x15MW Biomass based power plants at Fazilka, Nakodar & Kanpur, and
 a Power Distribution package at Azure for 5 MW solar power. With these
 projects, your Company also expanded its reach to the renewable sector,
 which is expected to be a high growth area. The Proximity Solutions
 business also delivered several Switchyard projects during the year,
 which include Shri Prabhulingeshwar Power Gen, Vayunandan Power and
 33/11 kV Substation for Adani Group.
 
 In the Distribution product range, Medium Voltage Switchgears,
 Distribution Transformers & Substation Automation for Distribution
 segment expanded their business volume. The Distribution Transformers
 business won a large order from Enercon for Slim Transformers, which
 are used for wind-mill applications and special light weight
 transformers.  AREVA T&D India is a technology leader in these type of
 transformers. Your Companys PDS business won large orders from Jindal
 Steel and Lanco for supply of medium voltage switchgears. The Ecofit
 workshop at Vadodara plant which was inaugurated in 2009, continued to
 produce quality products and won several orders during the year.
 
 Distribution business also remained focused in life cycle management of
 products supplied to the customers. Key orders won in 2010 include
 supply of spares and overhauling of 50 year old MV Switchgear (70 nos.)
 which were relocated from Germany to India by our customer. The project
 involves support, technical training, maintenance including long term
 contracts, repair and overhauling, ecofit (retrofit) and supply of
 spares.
 
 AREVA T&D India continues to be committed to servicing the products
 supplied to customer, through the product life cycle.
 
 Substation Automation Systems (Distribution Business)
 
 Automation Business Unit had a good year and maintained its leadership
 position in the Indian Substation Automation market, winning key orders
 such as:
 
 Power management system for lOCLs greenfield refinery at Paradip. A
 PACIS solution with latest technology was offered for fast load
 shedding application, as part of Power Management System on fibre optic
 network compliant to IED 61850 standards. This solution will also help
 the customer for efficient monitoring and control of overall electrical
 network of Paradip refinery.
 
 In addition, the Substation Automation Business Unit also achieved
 significant success with orders in the private sector, industry and
 utility segments.
 
 Research and Development
 
 Research and Development is an important element of your Companys
 leadership strategy. Your Company continues to invest in several R&D
 programmes, including redesign to cost, across all product categories.
 AREVA T&D India also benefits from the global R&D efforts of the mother
 Company which operates across various countries. This helps in shorter
 lead time to launch latest products catering to customer requirements.
 AREVA T&D India has opened a global R&D center in Vadodara, in addition
 to its existing global R&D centre at Hosur, to provide appropriate
 technology to the market place.
 
 Corporate Social Responsibility (GSR)
 
 In pursuit of its Sustainable Development goals, your Company is
 committed to Corporate Social Responsibility (CSR). Business Units of
 your Company provide pro-active support for local projects of social
 and cultural interest, with continued active participation from the
 employees. The Units of the Company are committed to develop harmonious
 relations with the stakeholders. These include long term projects,
 which are initiated with the financial and organization support from
 AREVA Foundation.  (The Foundation is an extension of the initiative
 undertaken in the past several years to optimize, promote and draw
 attention to the patronage programs of the AREVA group). Here is a
 review of some of our CSR initiatives:
 
 Support for social and cultural development
 
 The Units of your Company support local initiatives for development and
 social-cultural integration, for example:
 
 Automation Pallavaram Unit organised a health awareness camp for 400
 participants comprising of Unit employees and their family members.
 
 National safety week was celebrated at all the Units of AREVA T&D India
 with training on accident prevention, housekeeping, PPE demonstration,
 safety quiz, etc.
 
 Community Involvement
 
 RMK Hosur Unit conducted a free eye camp at Hosur in association with
 Narayana Netralaya - Bangalore. Eye check up was conducted for 462
 people out of which 206 people were offered free spectacles. Eye
 surgeries were also conducted on 51 people.
 
 Padappai Unit organised Blood donation camp in association with Apollo
 Hospitals during which 69 employees donated blood.
 
 Educational Outreach
 
 The Units of the Company organise special initiatives for students and
 educational establishments, for example:
 
 Padappai Unit supported the infrastructure development of Salamangalam
 Village public school with construction of toilet facility for girl
 students and also provided lighting and fans to all class rooms.
 
 Environment Health and Safety (EHS)
 
 Your Company made significant efforts in improving the EHS culture
 across all lines of Business. There has been reduction in green house
 gas emission, waste control and paper consumption. The accident
 frequency rate FR-1 has improved over the years.  Your Company made
 good progress in Health and Safety awareness, in implementation of
 EHS Standards, Operation Instructions and Statutory compliances. The
 level of compliance has also improved as EHS becomes an integral part
 of your Companys everyday work culture.
 
 Your Companys EHS initiatives, methods and processes at customer
 project sites have been appreciated by several customers such as NTPC,
 Tata Motors, ECI Engineering, etc. Some of the factories such as the
 Transformer Unit at Naini won Greentech Golden Safety Award for
 second consecutive year as well as the Commendation Safety Award
 2010.
 
 EHS Initiatives
 
 All Units of your Company comply with essential environmental
 requirements. There has been a considerable reduction in Water and
 Energy consumption. Air emissions, Greenhouse gas emissions, Liquid
 effluents and Conventional waste generation also showed reduction in
 2010. All new Units are 100 % asbestos free. Health awareness camps
 were organized at Pallavaram and Hosur.  Employment medical checkup for
 all employees and health checks for specific employees who work at
 height and in confined space were initiated.
 
 In 2010, eight Business Units accomplished more than one million
 man-hours of work without any lost time injury while eleven Units
 achieved zero FR-1.  Mock drills such as fire fighting, emergency
 evacuation, electric shock treatment, chemical spillage and other
 emergencies are frequently performed across all the manufacturing and
 project sites. EHS reporting tools and event database are used to
 record all accidents and near-misses. Use of seat belts in cars and
 helmets on two wheelers have been made compulsory for all AREVA T&D
 India employees at all locations.
 
 External awards received by AREVA T&D India for good EHS performance
 includes:
 
 GREENTECH Foundation (of USA) Safety Award 2010 was delivered to AREVA
 T&D India Naini Works by Director General Factory Advice Service &
 Labour Institute, Govt, of India.
 
 Appreciation letter and awards were received from many customers like
 NTPC, ECI Engineering, Tata Motors, etc for following and practicing
 good EHS techniques at the customers project sites.
 
 Sustainable Development & Continuous Improvement (SDCI)
 
 During the year under review, the Companys units continued to progress
 with the implementation of the global sustainable development (SD)
 model AREVA WAY, with enhanced involvement of employees.  The
 sustainable development concept recognizes the interdependence of
 economic, environmental and social systems as well as the performance
 factors.
 
 Several AREVA T&D India Units like HVM Padappai, PDS (Salt Lake and
 Vadodara Units), Hosur and Padappai were certified for Integrated
 Management Systems (ISO 9001, IS014001 & OHSAS18001).
 
 Automation Pallavaram Unit shifted 3 Lean Lines from HA Local to HA
 Midos, resulting in a capacity increase of 30% in HA Midos. 28 more
 Lean 6 sigma projects aimed at operational performance improvement were
 successfully completed and certified. Automation Unit achieved 99% FTPR
 set by Automation Center of Excellence (COE), resulting in elimination
 of additional Inspection and Logistics in SMS Unit and reduction of
 lead time by 38% for our UK customers.
 
 PTI Naini Unit successfully implemented AREVA Production System (APS)
 Project in the NPT Shop.  This has resulted in lead time reduction of
 NPT transformer line by 40% and has improved MVA output of the
 production line by 20%. The concept of Sustainable Development was
 introduced to all sections of employees at the Naini Site. About 60
 employees were trained on various processes.
 
 For the first time, PDS Unit introduced Neoprene Gaskets in AIS Panels,
 as per IS11149, resulting in enhanced IP54 protection. These were also
 successfully introduced in several projects . With the introduction of
 Trivalent Chromium, PDS unit also eliminated the usage of hazardous
 hexavalent chromium in all types of plating and powder coating
 processes.
 
 The SDCI Conference, held on 18th & 19th February 2010, provided a
 platform for networking and sharing best practices among the SDCI
 Community of AREVA T&D India.
 
 Particulars of Employees
 
 A statement, as required under Section 217(2A) of the Companies Act,
 1956, read with The Companies (Particulars of Employees) Rules, 1975,
 is given in the Annexure which forms part of this report.
 
 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 the Board of Directors) Rules, 1988 are
 given in the Annexure which forms part of this report.
 
 Human Resources
 
 Recruitment and Retention of Talent
 
 2010 was an year full of challenges both on recruitment and retention.
 
 Our Recruitment Team successfully brought on Board 500+ Engineers,
 Managers and Professionals, especially for green-field sites like GIS
 at Padappai, Instrument Transformers at Hosur as well as for Primary
 and Secondary Distribution businesses at Vadodara. Your Company also
 inducted a significant number of professionals in Systems and
 Automation businesses. In addition, 200+ workmen and trainees also
 joined our Company during the year. Your Company continued to promote
 the AREVA Strategic Talent Acquisition Programme for employee
 referrals, to attract new talent to the organization.
 
 Your Company made efforts to keep the employees engaged during this
 phase of transition by launching a Recognition and Reward (R&R)
 scheme, so as to strengthen the motivation levels. Several engagement
 activities were also promoted. Country Integration Program were
 conducted for new recruits. Regular communication meetings organized at
 unit levels helped retention of talent in a year of transition.
 
 Training and Development
 
 During the year, as in the past, need based training programmes were
 organized towards development of competencies and building a leadership
 pipeline in the organization. An average of 4 man-days of training was
 maintained per employee for professionals/ engineers and managers
 during this year. 22 Young Managers attended Fast Track Business
 Management Course at IIM, Bangalore. Till date, 147 Young Managers have
 undergone this customized to company need training, aimed at creating
 leadership talent pool. Based on 360 degree feedback, the Corporate
 programme was launched for Senior Executives with training on Strategic
 Thinking and Leadership. This was conducted in April, 2010 at the
 Indian School of Business (ISB), Hyderabad. In addition, 28 Diploma
 Engineers were enrolled to participate in the AREVA Continuing
 Education programme at I IT Campus in Chennai; Project Management
 Fundamentals and Contract Management Programs were conducted for
 identified professionals in Systems and Sales. HR Managers were trained
 in a new global tool - Personality and Preference Inventory (PAPI) for
 talent acquisition.
 
 In order to enhance engagement and motivation levels amongst operatives
 and supervisors at the manufacturing sites, Let Us Talk project was
 launched. For this mission, HR Managers were specifically trained by an
 international faculty to roll out training to al! Line Managers to
 effectively deploy and administer performance and development oriented
 dialogues with employees and for supervisors.
 
 Information Systems and Technology
 
 Your Company continued to invest in Information Systems and Technology
 to enhance business performance and improve operational excellence.
 
 The Company further strengthened its IT infrastructure and IT security
 through deployment of various tools and enforcement of various
 policies.  The Company also ensured that the business needs are
 supported by investing in Network Upgrades, Mobility Solutions and
 various audio visual devices.
 
 The upgrade of the ERP system to the Global ERP was progressed with the
 Units. This is aimed towards improvement in business performance via
 information sharing and integration.
 
 Directors Responsibility Statement
 
 In compliance of Section 217(2AA) of the Companies Act, 1956, as
 amended by the Companies (Amendment) Act, 2000, the Directors of your
 Company confirm:
 
 that the applicable Accounting Standards have been followed in the
 preparation of final accounts and that there are no material
 departures;
 
 that such accounting policies have been selected and applied
 consistently and the judgments and estimates made are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 your Company as at December 31, 2010 and of the profit of your Company
 for the year ended on that date;
 
 that 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 your Company and for
 preventing and detecting fraud and other irregularities; and
 
 that the annual accounts have been prepared on a going concern basis.
 
 Directors
 
 At the Board Meeting held on February 4, 2011, Mr. T.S. Vishwanath and
 Mr. Vinod Kumar Dhall were appointed as Directors in the casual
 vacancies caused due to the resignations of Dr. Ajay Dua and Mr. Karim
 Vissandjee respectively. In the same Board Meeting Mr. T.S. Vishwanath
 was elected as a Non Executive Chairman of the Board.
 
 Dr. Ajay Dua served as the Chairman of the Company from July 2009. He
 had successfully steered your Company to its current leadership
 position in the Indian T&D Industry. Your Directors place on record
 their deep sense of appreciation for the valuable services rendered by
 Dr. Ajay Dua. The Board also wishes to place on record the support
 given by Mr. Karim Vissandjee for introduction of various financial
 tools and establishment of the financial shared service centre. At the
 Board Meeting held on February 25, 2011, Mr. CM.A. Nayar, an
 independent Director, resigned from the Board. The Board places on
 record its deep appreciation for the valuable contribution made by Mr.
 Nayar, during his association with the Company.
 
 Mr. Michel Serra, Mr. Alexandre Tagger and Mr. Anil Chaudhry have been
 co-opted as Additional Directors and Mr. Arvind Pachauri was appointed
 as an Alternate Director to Mr. Michel Serra on 04.02.2011 and due to
 Mr. Serras presence in India on 25.02.2011, Mr. Pachauri ceased to be
 an Alternate Director. On 25.02.2011, Mr. Pachauri was appointed as
 alternate to Mr. Pierre Laporte.
 
 Brief Particulars of these Directors are given elsewhere in this
 report.
 
 Considering the background and experience of the above Directors, the
 Board is of the opinion that the appointment of Directors as above,
 will benefit your Company and recommends the same.
 
 Mr. Pierre Joseph Jean Marie Laporte and Mr. Michel Augonnet retire by
 rotation and being eligible, offer themselves for re-appointment. The
 Board recommends the re-appointment of both Mr. Laporte and Mr Augonnet
 as Directors.
 
 Corporate Governance
 
 Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges,
 Reports on Management Discussion and Analysis and on Corporate
 Governance have been included elsewhere in this Report as separate
 sections.
 
 Further, as required under the amended said Clause 49, your Company has
 adopted a Code of Conduct and Ethics for its Directors and Senior
 Executives.  We wish to record here that this is in addition to the
 AREVA Values Charter which is applicable to all employees of the AREVA
 Group.
 
 AREVA Global Transmission and Distribution Business Sale
 
 During the year 2009 AREVA SA, the ultimate Holding Company of AREVA
 T&D India Limited had conducted a competitive open bidding process for
 the transfer of its global transmission and distribution electrical
 business (the Global Business). ALSTOM Holdings, a Company
 incorporated in accordance with the laws of France (ALSTOM) and
 Schneider Electric Industries SAS, a Company incorporated in accordance
 with the laws of France (Schneider) entered into a Consortium
 Agreement dated November 09, 2009 (Consortium Agreement) whereby they
 agreed on the general principles regarding the offer to acquire the
 Global T&D Business of AREVA SA, funding of the acquisition, management
 of the Global T&D Business and separation of the same such that the
 transmission business will be allocated to the ALSTOM Group of
 Companies and the distribution business will be allocated to the
 Schneider Group of Companies.
 
 Pursuant to the Consortium Agreement, a Share Purchase Agreement dated
 January 20, 2010 (Share Purchase Agreement) was entered into between
 ALSTOM, Schneider and AREVA SA, to acquire 100% (one hundred percent)
 of the issued share capital and voting rights of T&D Holding (earlier
 known as AREVA T&D India Holding SA), a Company incorporated in
 accordance with the laws of France.  T&D Holding directly along with
 its subsidiaries namely AREVA T&D India SAS and Long & Crawford Ltd,
 was holding 72.18% paid-up share capital of AREVA T&D India Ltd. (AREVA
 T&D India).
 
 Pursuant to the said Share Purchase Agreement and subsequent amendments
 thereto, on June 7, 2010, ALSTOM and Schneider through ALSTOM Sextant 5
 SAS, a special purpose vehicle in which ALSTOM Holdings and Schneider
 Electric Services International hold approximately 70% and 30%
 respectively, of the equity share capital and incorporated in
 accordance with the laws of France, acquired the Global T&D Business of
 AREVA SA after obtaining necessary approvals of the relevant
 authorities. Consequent to the acquisition of AREVAs Global T&D
 Business, ALSTOM Sextant 5 SAS has indirectly acquired 72.18% of the
 paid up share capital of AREVA T&D India.
 
 Further, in terms of the Securities and Exchange Board of India
 (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and
 subsequent amendments thereto (the SEBI (SAST) Regulations) ALSTOM
 Sextant 5 SAS, along with ALSTOM and others have, vide Public
 Announcement on 28th May 2010 to the equity shareholders of AREVA T&D
 India Limited made a cash offer to acquire up to 20% of the issued
 share capital of AREVA T&D India. Pursuant to the Public Announcement,
 ALSTOM Sextant 5 SAS, along with ALSTOM and others made an open offer
 to acquire up to 20% of the issued share capital of AREVA T&D India.
 Further to the Public Announcement made in May 2010, the Acquirer
 (ALSTOM Sextants SAS and others) had published the revised schedule of
 the open offer on 30th October, 2010 giving the date of opening of
 offer as November 6, 2010 and close of offer as November 25, 2010.
 Thereafter, on December 3, 2010 on behalf of Acquirer, the Managers to
 the open offer, DSP Merrill Lynch (DSP), had published the post offer
 Public Announcement in the Financial Express. The Acquirer had informed
 the Company vide their letter dated December 3, 2010, confirming the
 completion of the open offer formalities and enclosed the acknowledged
 copy of the post offer report filed by them with SEBI confirming that
 all other open offer obligations have been completed. The acquirers had
 acquired 2,906,624 (1.22%) equity shares tendered by the aforesaid
 erstwhile shareholders. These shares were held in Trust by the
 Registrar to the Offer, though not formally transferred in the
 Companys records.  Consequently, on completion of formalities, the
 Promoters holdings stand increased to 175,492,524 (73.40%) equity
 shares.
 
 The Company is in the process of studying the manner for carrying out
 the allocation in India as envisaged in the Consortium Agreement
 referred to above and upon firming up, necessary further steps will be
 taken. In the context, three enabling wholly owned subsidiaries
 (including one formed after the balance sheet date) have been
 incorporated as on the date of this report and included as members of
 the group, which may be appropriately purchase with a view to giving
 effect to any detailed plan that may finally be approved.
 
 Auditors
 
 The Company has received a letter from M/s. Deloitte Haskins & Sells,
 the retiring Auditors, that they do not wish to offer themselves for
 re-appointment as Auditors at the ensuing Annual General Meeting.
 
 
                                        For and on behalf of the Board
 
                                                       T.S. Vishwanath
                                                              Chairman
 
 New Delhi
 March 16,2011