Board of Directors - ABB Ltd · ABB Limited, India, Annual Report 2004 1 Board of Directors Dinesh Paliwal, Chairman Ravi Uppal, Vice Chairman and Managing Director Peter Smits N.S.Raghavan

ABB Limited, India, Annual Report 2004 1

Board of Directors

Dinesh Paliwal, ChairmanRavi Uppal, Vice Chairman and Managing DirectorPeter SmitsN.S.RaghavanNasser MunjeePeter LeuppTom Eric Sjoekvist

Company Secretary

B Gururaj

Corporate Management Committee

Ravi UppalI K SadhuBiplab MajumderAmresh DhawanK RajagopalV SwamyBazmi HusainP C RajivShyam KarmarkarP P Gomes

Bankers

ICICI Bank LimitedCanara BankIDBI Bank LimitedHDFC Bank LimitedHongkong & Shanghai Banking Corporation LimitedUnion Bank of IndiaStandard Chartered Bank

Auditors

S.R.Batliboi & Company

Registered Office

2nd Floor, East WingKhanija Bhavan49, Race Course RoadBangalore - 560 001

Registrar & Share Transfer Agents

Karvy Computershare Private LimitedNo. 51/2, T.K.N.ComplexVanivilas RoadOpp. National CollegeBasavanagudiBangalore - 560 004

ABB Limited

ABB Limited, India, Annual Report 20042

(Rs in Millions)

Description 2004 2003 2002 2001 2000

Sources of Funds

Share Capital 423.8 423.8 423.8 498.8 414.2

Reserves 6,669.4 5,461.6 4,539.2 3,805.4 3,478.4

Net Worth 7,093.2 5,885.4 4,963.0 4,304.2 3,892.6

Borrowings 14.9 101.0 123.7 108.0 165.6

Funds Employed 7,108.1 5,986.4 5,086.7 4,412.2 4,058.2

Income and Profits

Sales & Other Income 23,055.7 15,030.6 12,005.7 10,557.6 8,068.5

Operating Profit Before Interestand Depreciation 2,582.3 1,722.8 1,418.9 1,105.9 911.8

Profit Before Tax 2,365.2 1,528.9 1,229.7 850.8 705.1

Tax 860.0 520.0 416.2 197.5 165.0

Profit After Tax 1,505.2 1,008.9 813.5 653.3 540.1

Dividend / Dividend Tax 335.4 319.5 259.1 228.2 253.9

Retained Earnings 1,169.8 689.4 554.4 425.1 286.2

Other Data

Gross Fixed Assets 3,428.1 3,037.9 2,707.0 2,747.9 2,442.3

Debt Equity Ratio 0.01:1 0.02:1 0.02:1 0.03:1 0.04:1

Net Worth Per Equity Share - Rs 167.4 138.9 117.1 99.8 94.0

Earnings Per Equity Share - Rs 35.5 23.8 19.1 15.5 13.0

Dividend Per Equity Share - Rs 7.0 6.0 6.0 5.0 5.0

Profit After Taxes as %to Average Net Worth 23.2 18.6 17.6 15.9 14.4

Note :1) Excludes revaluation of fixed assets, revaluation reserve and exceptional items.

5 Year Highlights


NOTICE is hereby given that the FIFTY-FIFTH ANNUAL GENERAL

MEETING of the Members of ABB Limited will be held at ITC Hotel

Windsor Sheraton & Towers, “Windsor Square”, 25, Golf Course Road,

Bangalore - 560052, on Tuesday, the 24 May, 2005 at 3.00 PM (IST)

to transact the following business:

Ordinary Business

1. To receive, consider and adopt the Balance Sheet as at

31 December, 2004 and the Profit and Loss Account for the

year 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. Dinesh Paliwal, who retires

by rotation at this Annual General Meeting, and being eligible,

offers himself for re-election.

4. To appoint a Director in place of Mr. N S Raghavan, who retires

by rotation at this Annual General Meeting, and being eligible,

offers himself for re-election.

5. To appoint M/s S.R. Batliboi & Co., Chartered Accountants, as

Auditors of the Company to hold office from the conclusion of

this Annual General Meeting until the conclusion of the next

Annual General Meeting and to fix their remuneration.

Special Business

6. To consider and if thought fit, to pass with or without

modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT in compliance with the provisions of Section

163 and all other applicable provisions, if any, of the

Companies Act, 1956 (“the Act”) the consent of the Company

be and is hereby accorded for keeping the register of

members, the index of members, register & index of debenture-

holders if any, records relating to returns of allotment from time

to time, copies of annual returns prepared under Section 159 of

the Act together with copies of certificates and documents

required to be annexed thereto under Section 161 of the Act or

any one or more of them, at the Office of Karvy Computershare

Private Limited, the Registrar and Share Transfer Agents of the

Company, situated at #51/2, T.K.N. Complex, Vanivilas Road,

Opp. National College, Basavanagudi, Bangalore 560 004 with

effect from 25 May, 2005 instead of being kept at the

Registered Office of the Company.

Notice to Members

RESOLVED FURTHER THAT the registers, indexes, returns,

books, certificates or copies of certificates and documents of

the Company required to be maintained and kept for inspection

under the provisions of the Companies Act, 1956, be kept open

for such inspection, at the above mentioned place, for persons

entitled thereto, to the extent and in the manner and on payment

of fees, if any, specified in the aforesaid Act or the Articles of

Association of the Company, between 10.30 AM and 12.30 PM

on any working day (Monday to Friday) except when the

registers and books are closed under the provisions of the said

Act or the Articles of Association of the Company.’’

By Order of the Board

For ABB Limited

B Gururaj

Assistant Vice President &

Company Secretary

Bangalore

1 February, 2005

Registered Office:

2nd Floor, East Wing,

Khanija Bhavan, 49, Race Course Road,

Bangalore – 560 001

Notes:

1. The relative Explanatory Statement pursuant to Section 173(2) of

the Companies Act, 1956, setting out the material facts in respect

of business under item No. 6 is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE

MEETING IS ENTITLED TO APPOINT ONE OR MORE

PROXY(IES) TO ATTEND AND VOTE INSTEAD OF HIMSELF/

HERSELF AND A PROXY NEED NOT BE A MEMBER OF THE

COMPANY. PROXIES IN ORDER TO BE EFFECTIVE MUST

BE RECEIVED AT THE COMPANY’S REGISTERED OFFICE

NOT LATER THAN FORTY–EIGHT HOURS BEFORE THE

COMMENCEMENT OF THE MEETING.

3. Members should bring the duly filled in attendance slips sent

herewith for attending the meeting.


4. The Register of Members and the Share Transfer Books of the

Company will remain closed from Friday, the 13 May, 2005 to

Tuesday, the 24 May, 2005 (both days inclusive) for the

purpose of payment of dividend.

5. The dividend, as recommended by the Board, if declared at the

Annual General Meeting, will be paid on or after Thursday, the

26 May, 2005 to those members whose names stand registered

on the Company’s Register of Members:-

a) as Beneficial Owners as at the end of business hours on

Thursday, the 12 May, 2005 as per the list to be furnished

by National Securities Depository Limited (NSDL) and

Central Depository Services (India) Limited (CDSL) in

respect of shares held in demat form.

b) as Members in the Register of Members of the Company

after giving effect to valid share transfers lodged with the

Company, on or before Thursday, the 12 May, 2005.

6. Members are requested to note that dividends not encashed or

remaining unclaimed within a period of seven years from the

date of transfer to the Company’s Unpaid Dividend Account, will,

be transferred, under Section 205-A of the Companies Act, 1956,

to the Investor Education and Protection Fund, established under

Section 205C of the said Act. Members, who have not yet

encashed the dividend warrant(s) are requested to forward their

claims to the Company’s Registrar and Share Transfer Agents. It

may be noted that once the unclaimed dividend is transferred to

the Investor Education and Protection Fund as above, no claim

shall lie with the Company in respect of such amount.

7. Members are requested either to intimate, indicating their folio

number, the changes, if any, in their registered addresses, either

to the Company or its Registrar and Share Transfer Agents, viz.

Karvy Computershare Private Limited, #51/2, T.K.N. Complex,

Vanivilas Road, Opp. National College, Basavanagudi,

Bangalore 560 004, Karnataka or to their respective Depository

Participant (DP) in case the shares are held in demat form.

8. Members holding shares in physical form can avail of the

nomination facility by filing Form 2B (in duplicate) with the

Company or its Registrar & Share Transfer Agents which will be

made available on request and in case of shares held in demat

form the nomination has to be lodged with their Depository

Participant.

9. The particulars of Directors retiring by rotation are given in the

Corporate Governance Section of this Annual Report.

Item No. 6

The Board of Directors at its meeting held on 1st February, 2005

has appointed Karvy Computershare Private Limited (hereinafter

referred to as “Karvy”) as the Registrar and Share Transfer Agents

of the Company in place of Tata Consultancy Services Limited who

have opted out of the registry services.

Karvy are SEBI registered Registrar and Transfer Agents. They are

equipped with the required infrastructure facilities, including V-Sat

connectivity with the National Securities Depository Limited (NSDL)

and the Central Depository Services (India) Limited (CDSL). Karvy

will act as common agency for share registry work in terms of both

physical and electronic connectivity. It is also proposed that the

statutory records like the Register of Members, Index of Members,

Annual Returns etc be kept at the office of Karvy at Bangalore.

Section 163 of the Companies Act, 1956 provides that the register

and index of members and debenture-holders, annual returns and

other statutory records may, instead of being kept at the registered

office of the Company, be kept at any other place within the city, in

which the registered office is situate, provided that the consent of

the members is obtained by way of a Special Resolution. Hence, the

approval of the Members is sought by way of a Special Resolution

pursuant to the provisions of Section 163 and other applicable

provisions, if any, of the Companies Act, 1956.

The Directors recommend passing of the Special Resolution by the

Members at item No.6 of the accompanying notice.

None of the Directors is, in any way, concerned or interested in the

said resolution.

By Order of the Board

For ABB Limited

B Gururaj

Assistant Vice President &

Company Secretary

Bangalore

1 February, 2005

Registered Office:

2nd Floor, East Wing

Khanija Bhavan, 49, Race Course Road

Bangalore – 560 001

Annexure to Notice

Explanatory Statement under Section 173(2)

of the Companies Act, 1956.


The Directors have pleasure in presenting their Fifty-fifth Annual Report and Audited Accounts for the year ended 31 December, 2004.

Financial Results(Rs in Thousands)

For the year For the year

ended 31 ended 31

December, 2004 December, 2003

Profit Before Tax and Exceptional Item 2,365,200 1,528,927

Exceptional Item – Profit on Sale of Undertaking 37,991 233,008

Profit Before Taxation 2,403,191 1,761,935

Less: Provision for Tax

- Current Tax 874,000 524,000

- Deferred Tax (14,000) (4,000)

Profit After Tax 1,543,191 1,241,935

Less: Transfer to Foreign Projects Reserve Account 4,000 2,500

Balance Brought Forward from last year 278,374 258,391

Amount available for Appropriation 1,817,565 1,497,826

Appropriations

General Reserve 1,180,000 900,000

Proposed Dividend 296,672 254,290

Corporate Dividend Tax 38,771 32,581

Corporate Dividend Tax – 2002 — 32,581

Balance Carried Forward 302,122 278,374

1,817,565 1,497,826

Directors’ Report

Dividend

The Directors recommend payment of a dividend at the rate of Rs 7.00

(Previous year Rs 6.00) per equity share for the year ended

31 December, 2004 on 42,381,675 equity shares of Rs 10 each.

Performance Review

Total orders received during the year at Rs 25,878 million were 52%

higher compared to Rs 17,054 in the previous year.

Order backlog at the end of 2004 increased to Rs 13,356 million

compared to Rs 10,710 million at the end of the previous year.

Sales and other income for the year was 53% higher at Rs 23,056

million compared to Rs 15,031 million in the previous year.

Profit before tax and exceptional item was significantly higher at

Rs 2,365 million compared to Rs 1,529 million in the previous year.

Growth in profit was mainly attributable to volume growth and focused

control over overheads.

Gain on sale of Control Valve business was Rs 38 million. In last year

gain on sale of Metering business was significantly higher at Rs. 233

million. Profit after tax was higher at Rs 1,543 million compared to

Rs 1,242 million in the previous year.

Operating performance of both the segments, power technology and

the automation technology, was significantly better than previous year.

For detailed analysis of the performance, please refer to management’s

discussion and analysis section of the annual report.

Divestment of Business

As approved by the shareholders earlier, the Company has divested its

Control Valves business to Kent Introl Private Limited on 12 July, 2004.

The gain on divestment was Rs 38 million reported as profit on sale of

undertaking in profit and loss account as an exceptional item. The

Company has invested the gain in specified assets as per the

provisions of Section 54EC of the Income Tax Act, 1961. Accordingly no

tax liability arises on this gain.


Change in Registrar and Transfer agents

The Board of Directors has appointed Karvy Computershare Private

Limited as Registrar and Share Transfer Agents of the Company in

place of Tata Consultancy Services Limited who have opted out of

Registry Services business.

Transfer to the Investor Education and Protection Fund

In terms of Section 205C of the Companies Act, 1956, the following

amounts lying with the Company as unclaimed for a period of seven

years from the date they became due for payment were transferred

during the year to the Investor Education and Protection Fund.

1. Unclaimed Fixed Deposits Rs. 6,000

2. Unclaimed Dividends Rs. 402,492

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 factories complying with environmental standards and

legislation. All the manufacturing units of the Company had received

certificates for ISO 14001 (EMS). Health and safety are also Company’s

focus areas. Most of the units of the Company had been awarded

OHSAS 18001 certification for the health and safety system.

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.

Directors’ Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the

Directors to the best of their knowledge and belief 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

31 December, 2004 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

Pursuant to clause 49 of the listing agreement, a report on corporate

governance and a certificate from the Auditors of the Company are

given in Annexure – C and Annexure – D respectively, which forms part

of this report.

Board of Directors

Mr. BoonKiat Sim and Mr. R N Bhardwaj resigned as Directors of the

Company effective 5 March, 2004 and 13 December, 2004 respectively.

Your Directors place on record their appreciation of the valuable

services rendered by Mr. BoonKiat Sim and Mr. R N Bhardwaj as

Directors of the Company.

The Board at its meeting held on 19 October, 2004 appointed Mr.Tom

Eric Sjoekvist as a Director of the Company in the casual vacancy

caused by the resignation of Mr. BoonKiat Sim.

Mr. Dinesh Paliwal and Mr. N.S. Raghavan, Directors, retire by rotation at

the ensuing Annual General Meeting and being eligible, offer

themselves for re-appointment. The particulars of the retiring Directors

are given in the Corporate Governance section annexed to this report.

Auditors

The Company’s Auditors M/s S.R. Batliboi & Company, Chartered

Accountants, hold office upto the conclusion of the ensuing Annual

General Meeting. The Company has received a requisite certificate

pursuant to Section 224(1B) of the Companies Act, 1956, regarding their

eligibility for re-appointment as Auditors of the Company.

For and on behalf of

the Board of Directors

Dinesh Paliwal

Chairman

Bangalore

1 February, 2005


Conservation of Energy, Technology Absorption, Foreign Ex-change Earnings and Outgo - Companies (Disclosure of particu-lars in the Report of Board of Directors) Rules, 1988.

(A) Conservation of energy

(a) Energy conservation measures taken during the year

Main areas of work during the year included installation of VFD

on compressor, energy savers for lighting, felt belt for blowers

and continuous monitoring of electrical energy consumption.

Energy audit was conducted at one factory of the Company.

Training programmes were conducted to have increased

awareness on energy conservation.

(b) Proposals being implemented for reduction of consumption

Proposed areas of work include power factor improvement up to

0.999, installation of capacitor banks for power factor improve-

ment. Selection of energy efficient plant and machinery,

compressed air system along with manufacturing processes.

Installation of solar heating system, energy efficient plants for

air-cooling and air conditioning is also under consideration.

(c) Impact of measures (a) and (b) above for reduction ofenergy consumption and consequent impact on cost ofproduction of goods

Total energy saving is estimated at around 360,000 kWh of

energy per annum. This savings, however, has no appreciable

impact on cost of goods, as the Company’s production

processes are not energy intensive.

(B) Technology absorption

(a) Research and Development (R&D)

(1) Specific areas in which R&D is carried out by theCompany

R&D effort is carried out in almost all the products and pro-

cesses, specifically, the major area includes standalone version

of protection coupler type NSD 50, party line system, series

capacitors, HVDC banks, special terminal connectors, tubular

conductors, corona rings, special clamps and insulators for HV

capacitors, STATCON with 1ph, 430V, 150kVAR rating, trip circuit

supervision relays, restricted earth fault relays, flag indicator for

ring main units, low cost Numerical measuring relay, RMUs for

outdoor application, 12kV air switch, 27.5 kV single phase VCB

for traction application of Indian Railways, 12kV, 1250A, 25kA

Indoor VCB, motors with vibration monitoring system, enhance-

ment of motors with different frames, 375kW/3000 RPM high

speed induction generator, disconnectors, 400kV auto

transformers, single phase generator transformer, 245kV circuit

breaker, operating rods for 420kV circuit breakers, switch

cubicle body for ELF 245kV and 420kV breakers and pole

mounted capacitor switch.

Annexure - A to Directors’ Report

(2) Benefits derived as a result of the above R&D

Multifold benefits were accrued as a result of R&D activities.

Apart from strengthening of technical base, benefits have also

been reflected in terms of

� Improvement of product reliability

� Introduction of new product ranges

� Reduction in material cost

� Adaptation of designs to suit local markets

� Increased acceptability of products in global markets

(3) Future plan of action

Continuous efforts are being made for integration of R&D

activities with business needs so as to offer better value

added products and services to our customers. The areas of

efforts include:

Universal speech interface and multiplexer for carrier communi-

cation equipment, development of new foil and film for power

capacitors, design improvements for SSX and VHXm relays, time

lag relays for diesel locomotives, 12kV auto reclosure, 36kV air

switch, forced cooling arrangement for VSD motors, oil

immersed type fuse and internal breaker for transformers, higher

ratings of STATCONs, LTB 245 E1 breaker certification for

introduction in local markets, flame proof motors in frames

JHX90, JHX80 & JHX180, 2 pole ratings of frame M2BA400L,

enhanced ratings of M3BP280 frame of M3000 series motors,

improved 12kV switchgear cubicle, numeric relay platforms,

66kV and 132kV CTs with casted terminal blocks and 145kV and

72.5 kV GOB type transformer bushing with 500 BCT.

(4) Expenditure on R&D

(Rs in Thousands)

i) Capital 860

ii) Revenue 17,909

iii) Total 18,769

iv) Total R&D expenditure as a

percentage of turnover 0.08

(b) Technology absorption, adaptation and innovation

(1) Efforts made towards technology absorption, adaptation andinnovation

Extensive training and skill building exercises were conducted

in-house and at collaborators’ end to improve design,

development, production, commissioning and servicing. Some

of the products covered were:

Fiber optic equipments type FOX515X, FOX515T, digital

protection coupler, type testing of relays, substitution of obsolete


components for FCX, UFX and PPX relays, MV switchgear

solutions, HVDC transformers, 315MVA autotransformers with

optimised material content, type testing of 245kV & 420kV

breakers, BLK 222 mechanisms, components of 245kV circuit

breaker type LTB 245 E1, development of the components for

medium voltage circuit breakers and type testing of 145kV and

72.5kV transformer type GOB bushings.

(2) Benefits derived as a result of above efforts

(i) Product improvement

As a result of the above efforts, product quality, perfor-

mance and reliability have improved.

(ii) Cost reduction

Substantial cost reduction has been achieved through de-

sign changes, standardization of components,

indigenisation of components and developments in HV

and MV breakers, disconnectors, motors, PLCC compo-

nents and EPAX, transformers, relay and switchgear cu-

bicles.

(iii) Product development

Important products developed were 145kV & 72.5kV

transformer type GOB bushings, 245kV circuit breaker

type LTB 245 E1, 375kW/3000RPM high speed induction

generator, 10P motors in frames M2BA315 and M2BA355,

retrofit product solution for 12kV & 36kV circuit breakers,

12kV air switch, 27.5 kV single phase VCB for traction

application of Indian Railways, 12kV, 1250A, 25kA Indoor

VCB, non standard variants of UVT, VHXm relays, SPAM

150 with non volatile memory, Single phase 430V, 150

kVAR STATCON and standalone version of NSD50

protection coupler.

(iv) Import substitution

Import substitution was carried out for ring main unit

components, which included coils, CTs, voltage indica-

tors, mimic stickers, aluminum profiles and structure

assembly. Operating rods used in 420kV circuit breakers

were also locally developed.

(3) Imported Technology (imported during last five years)

(i) Technology imported

� Magnetic actuator Type A2

for circuit breakers up to 36kV 2000

� Medium voltage air insulated

switchboard type UNISAFE 2000

� 400kV Power Transformer 2002

� High voltage circuit breakers

(36kV to 420kV) 2003

� Instrument transformers

(36kV to 420kV all types) 2003

� Miniature circuit breakers 2003

� Power capacitor units and Banks 2003

� HT Motors 2003

� LV Capacitors 2003

� Transformer Bushings 2004

� 3100 HP Supercharger 2004

� INDACTIC 1425

telemetering equipment 2004

� Air circuit breakers 2004

(ii) Has technology been fully absorbed?

Yes except in the case of HT Motors

(C) Foreign exchange earnings and outgo

(a) Activities related to exports; initiative taken toincrease exports; development of new export marketsfor products and services; export plans

Export orders booked during the year at Rs 3,290 million

were 13% higher compared to previous year. This

included a major turnkey substation project order valuing

Rs 1,350 million from Middle East. Revenues from

exports were Rs 2,382 million. High and medium voltage

product continued to be exported across the globe. New

countries added by this product included Bolivia,

Ecuador and Laos. During 2005 the Company is planning

to participate in large value tenders from France, Ireland,

Chile and Australia. Several orders from Malaysia, USA,

China, Japan and Dubai were secured by Company’s

automation technologies segment for drives and process

automation and engineering solutions for various

industries. Overall growth prospects for exports continues

to be promising.

(b) Total foreign exchange used and earned

(Rs in Thousands)

a) Foreign Exchange earned

(including deemed exports) 3,184,556

b) Foreign Exchange used 6,939,157

For and on behalf of the

Board of Directors

Dinesh Paliwal

Chairman

Bangalore

1 February, 2005


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 theDirectors’ Report for the year ended 31 December, 2004

Name of the Designation/Nature of Duties Remuneration Qualification Experience Date of Age Previous Employment

Employee Received (Years) Commencement (years)

(Rs.) of Employment

Name of the Company Designation

Husain Bazmi Sr. Vice President - 2,428,158 B.E. (Hons), 25 01/09/97 46 ABB Industrial Systems Vice President -

Corporate Research E.E.M.S. (Physics) Industry Segment

Hons

Majumder Biplab President - Automation 3,513,339 M. Tech. (Chem.) 35 10/02/78 56 Chemical & Metallurgical Co. Process Engineer

Technology Division Pvt. Ltd.

Rajagopal K Sr. Vice President - Finance 2,601,226 B. Com., A.C.A. 24 07/02/91 48 Gujarat Communications &

Electronics Ltd. Dy. Manager

Sadhu I.K. Executive Director - Corporate 2,996,276 B. Sc. (Engg.) 40 01/02/70 60 B.H.E.L Commercial Engineer

Affairs and Power Technology

Systems Division

Uppal Ravi Vice Chairman and 7,886,492 B. Tech. (Electrical & 30 01/10/01 52 Volvo India Pvt. Ltd. Managing Director

Managing Director Electronics), M.B.A.

Bhalerao G.K.* Supervisor 648,997 SSC 32 01/03/72 56 — —

Daraji H.M.* Accounts Assistant 671,008 B.Com. 32 02/04/82 56 Jyoti Ltd. Finance Assistant

Mali D.T.* Workman 560,103 — 36 24/09/67 56 — —

Mistry D.M.* Workman 645,093 — 25 04/09/78 56 — —

Nai S.B.* Workman 671,652 SSC 26 01/02/78 56 — —

Pathan H.H.* Workman 615,621 — 24 01/05/80 56 — —

Seshachala Meera* Supervisor 554,120 B.Sc. 23 01/09/87 55 Dasprakash Paradise Stenographer

* Voluntary Retirement Cases

Notes:

(1) Nature of employment is contractual for all employees. Other terms and conditions are as per Company’s Rules

(2) None of the above employee is related to any of the Directors of the Company

(3) Remuneration received includes Salary, Bonus, House Rent Allowance, Privilege Leave encashment, Personal Allowance, Overtime, Value

of rent free accommodation, Contribution to Provident Fund, Superannuation, Health Insurance Premium, Personal Accident Insurance,

Voluntary Retirement Compensation, Leave Travel Assistance, Medical Assistance, Income-tax liabilities borne by the Company and

Company’s Car perquisites evaluated in accordance with the Income-tax Rules as applicable.

For and on behalf of the Board of Directors

Bangalore Dinesh Paliwal

1 February, 2005 Chairman

Annexure - B to Directors’ Report


Annexure - C to Directors’ Report

Report on Corporate Governance

(A) Corporate Governance Philosophy

The Company is committed to good Corporate Governance. The Company fully realises the rights of its shareholders to information on the

performance of the Company and considers itself a trustee of its shareholders. The Company provides detailed information on various

issues concerning the Company’s business and financial performance to its shareholders. The basic philosophy of Corporate Governance

in the Company is to achieve business excellence and dedicate itself for increasing long-term shareholder value, keeping in view the

needs and interests of all its stakeholders. The Company is committed to transparency in all its dealings and places emphasis on

business ethics.

(B) Board of Directors

(i) The composition of the Board of Directors as at 31 December, 2004 is as follows:

None of the non-executive and non-independent Directors has any pecuniary relationship or transactions with ABB Group Companies

except for holding Directorship and / or employment in ABB Group Companies.

Mr. BoonKiat Sim and Mr. R N Bhardwaj have resigned as Directors w.e.f 5 March, 2004 and 13 December, 2004 respectively. Mr. Tom Eric

Sjoekvist has been appointed as Director w.e.f 19 October, 2004 in the casual vacancy caused due to the resignation of Mr. BoonKiat Sim.

No. of other

Directorships Committee

memberships

1) Mr. Dinesh Paliwal

(Chairman) Non-Executive NIL NIL

2) Mr.Ravi Uppal

(Vice Chairman & Managing Director) Executive 4 1

3) Mr.N.S.Raghavan Non-Executive & independent 1 NIL

4) Mr. Peter Smits Non-Executive 1 NIL

5) Mr.Nasser Munjee Non-Executive & independent 13 6

6) Mr.Umesh Prasad Singh Non-Executive & independent 2 NIL

7) Mr.Peter Leupp Non-Executive NIL NIL

8) Mr.Tom Eric Sjoekvist Non-Executive NIL NIL

Executive/Non-Executive

Name of DirectorSr.No.


The attendance of each Director at these meetings and at the last Annual General Meeting was as follows:

Sr.Name of Director

No. of Board Attendance

No. Meetings attended at last AGM

1) Mr. Dinesh Paliwal (Chairman) 3 Present

2) Mr.Ravi Uppal (Vice Chairman & Managing Director) 5 Present

3) Mr.N.S.Raghavan 4 Present

4) Mr. Peter Smits NIL Absent

5) Mr.Nasser Munjee 5 Present

6) Mr.Umesh Prasad Singh 5 Present

7) Mr.Peter Leupp 3 Present

8) Mr.BoonKiat Sim (upto 05/03/04) NIL N/A

9) Mr.R N Bhardwaj (upto 13/12/04) 4 Present

10) Mr.Tom Eric Sjoekvist (wef 19/10/04) NIL N/A

Members of Audit Committee No. of meetings attended

Mr.Nasser Munjee (Chairman) 4

Mr.Umesh Prasad Singh 4

Mr. N S Raghavan 3

(ii) Meetings held in financial year 2004 and attendance of Directors

The Board meets at least once in a quarter to consider amongst other business, the quarterly performance of the Company and the

financial results. The Board has held five meetings during the financial year 2004 on 27 January, 2004; 11 March, 2004; 27 April,

2004; 20 July, 2004 and 19 October, 2004.

(C) Committees of Directors

(i) Audit Committee

The Audit Committee consists of three non-executive independent Directors.

Four Audit Committee Meetings were held during the financial year 2004 on 27 January 2004; 26 April 2004; 20 July 2004 and

19 October 2004. The Composition of the Audit Committee and the attendance of each Director at these meetings were as follows:


(ii) Remuneration Committee

The Remuneration Committee of the Board comprises the following Directors:

Members of Remuneration Committee No. of meetings attended

Mr. N S Raghavan (Chairman) 1

Mr. Dinesh Paliwal 1

During the financial year 2004, the Committee met once on 26 April, 2004.

The Company does not have a scheme for stock options either for the Directors or its employees. The Vice Chairman and

Managing Director shall be entitled to an annual performance related bonus based on comparing annual targets with the results

achieved and determined by the Group. Under the best performance targets, the bonus amount shall not exceed the total annual

salary for the year.

The contract of service entered into by the Company with Mr.Ravi Uppal is valid for five years effective 1 October, 2001 and that the

Company and Mr. Uppal shall be entitled to terminate the agreement by giving to the other party 180 days notice in writing.

(iii) Remuneration paid to Directors for the financial year 2004

(Rs in Thousands)

Name Sitting Fees. Salary & Commission* Total

(includes for Perks

Committee

Meetings)

Mr.Ravi Uppal Nil 5912 3000 8912

Mr.R N Bhardwaj 20 N.A 300 320

Mr.N.S.Raghavan 50 N.A 300 350

Mr.Nasser Munjee 45 N.A 300 45

Mr.U.P.Singh 60 N.A 300 360

* subject to the approval of the Board

The Audit Committee is responsible for overseeing the Company’s financial reporting process, reviewing with the management the

financial statements and adequacy of internal audit function and to discuss significant internal audit findings and also statutory

compliance issues. The Committee acts as a link between the management, external and internal auditors and the Board of

Directors of the Company.

The Committee discussed with the external auditors their audit methodology, audit planning and significant observations/

suggestions made by them. The Audit Committee also discussed major issues related to risk management and compliances.


Members of Share Transfer and Investors’ No. of meetings

Grievance Committee attended

Mr.Umesh Prasad Singh (Chairman) 3

Mr.Ravi Uppal 3

Mr.N.S.Raghavan 3

(D) (i) Annual General Meetings

The Annual General Meetings (AGMs) of the Company have been held at the following places in last three years.....

For the Venue Day & Date Time

year

2003 Chowdiah Memorial Hall, G.D. Park Tuesday, 3.00 P.M.

Extension, Vyalikaval, Bangalore 560 003 27 April, 2004 (IST)

2002 Rama Watumul Auditorium, Kishinchand Wednesday, 3.00 P.M.

Chellaram College, Dinshaw Wacha 18 June, 2003 (IST)

Road, Churchgate, Mumbai 400 020

2001 Patkar Hall, SNDT Women’s University, Wednesday, 3.00 P.M

1, Nathibai Thackersey Road, 24 April, 2002 (IST)

Mumbai 400 020

(iv) Share Transfer and Investors’ Grievance Committee

The Board of Directors in its meeting held on 1 February, 2005 has appointed Karvy Computershare Private Limited (hereinafter referred to

as “Karvy”) as the Registrar and Share Transfer Agents of the Company in place of Tata Consultancy Services Limited who have opted out

of the registry services.

Karvy are fully equipped to carry out the transfers of shares and redress investor complaints. The Transfer and Investors’ Grievance Com-

mittee has been authorised to approve the transfer of shares. In order to expedite the process, the Board of Directors has also delegated

the authority to approve the share transfers to the Vice Chairman & Managing Director (VCMD) and accordingly, the VCMD approves the

transfer/transmission of shares at a frequency of about thrice a month.

Three meetings of Share Transfer and Investors’ Grievance Committee were held during the financial year 2004 on 3 June 2004, 26 August

2004 and 15 December 2004. Mr. B Gururaj, Asst. Vice President & Company Secretary is the Compliance Officer of the Company.

The composition of Share Transfer and Investors’ Grievance Committee and attendance of the Committee members at these meetings

were as follows:

No. of investor complaints Pending at the No. of pending

received in the year 2004 end of the year share transfers

91 NIL NIL


(ii) Postal Ballot

During the year 2004 consent of the shareholders was obtained by way of postal ballot in terms of Section 192A of the Companies

Act, 1956 read with the Companies (Passing of Resolution by Postal Ballot) Rules, 2001 for the sale of Control Valves Business of

the Company by way of Ordinary Resolution under Section 293(1)(a) of the Companies Act, 1956. Dr. S D Israni, Practising Company

Secretary was appointed as the scrutinizer for the postal ballot. Notice of Postal Ballot along with the postal ballot forms and the

prepaid business reply envelope were dispatched to the shareholders on 19 March, 2004. The last date fixed for the receipt of postal

ballot forms duly completed was 23 April, 2004. The resolution was approved by the shareholders with requisite majority.

The voting pattern was as under:

Votes in favour 99.95% - 28,290,918 votes

Votes against 0.05% - 13,182 votes

Votes invalid 0.00% - 774 votes

The result of the postal ballot was declared by the Chairman in the 54th Annual General Meeting held on 27 April, 2004.

(E) Disclosures

(i) Disclosures on materially significant related party transactions

There were no materially significant related party transactions during the year having conflict with the interests of the Company.

(ii) Details of non-compliance by the Company, penalties and strictures imposed on the Company by the Stock Exchange, SEBI

or any statutory authorities or any matter related to capital markets

The Company has complied with all the requirements of the Listing Agreement with the Stock Exchanges as well as regulations and

guidelines of SEBI. No penalties have been levied or strictures have been passed by SEBI, Stock Exchanges or any other Statutory

Authority on matters relating to capital markets, in the last three years.

However, during the year 2003, the Company had received a show-cause notice from the SEBI regarding uploading of requisite

information with the website of SEBI under EDIFAR for which the Company had responded that uploading could not be completed on

time due to network / server problem which was purely technical in nature.

(F) Means of Communication

(i) Financial Results

The quarterly unaudited financial results, the half-yearly unaudited financial results with limited review and the annual audited

financial results were published in The Economic Times (English) and the Kannada Prabha (Kannada). The half-yearly report is

however not posted to household of each shareholder. The results are also placed on the Company’s website as well as SEBI’s

website.

(ii) Other Information

The Company has its own website www.abb.com/in wherein other related information is available. The Company has a dedicated

help desk with email ID: [email protected] in the Secretarial Department for providing necessary information to the

investors. The Company also holds press meets/analysts meets to apprise and make public the information relating to the

Company’s working and future outlook.


(G) Management’s Discussion & Analysis

The Management’s Discussion & Analysis report forms part of the Annual Report.

(H) General Shareholders’ Information

(i) Annual General Meeting

Day, date and time : Tuesday, 24 May, 2005, 03-00 PM (IST)

Venue : ITC Hotel Windsor Sheraton & Towers, “Windsor Square”, 25, Golf Course Road, Bangalore – 560052

Agenda :

1) Adoption of Audited Accounts, Directors’ & Auditors’ Report

2) Declaration of Dividend

3) Re-appointment of Directors

4) Re-appointment of M/s S R Batliboi and Co., Chartered Accountants, as Auditors

5) Consent of the members under Section 163 of the Companies Act, 1956 to keep the register of members and other statutory

records at a premises other than the Registered Office.

(ii) The profile of Directors seeking re-appointment

(a) Mr. Dinesh Paliwal

Mr. Dinesh Paliwal, 47, holds a master’s in paper science and engineering from Roorkee University and Masters Degree in applied

Science and Engineering and Business Administration from Miami University, Ohio, USA. He is a Member of ABB’s Group Executive

Committee and Head of Automation Technology Division worldwide.

Mr. Paliwal has more than 27 years of experience in process industries. He began his career with Ballarpur Industries Limited and

before heading ABB’s Pulp, Paper, Metals and Minerals business in 1998, he was Head of ABB’s multi-industry business, including

several joint ventures in China. Mr. Paliwal has served in Australia, China, Singapore, Switzerland and United States in various

engineering, marketing, sales and management functions of ABB.

Mr. Paliwal does not hold any Directorship in any other Indian Company nor does he hold any equity shares in the Company.

(b) Mr. N S Raghavan

Mr. N S Raghavan, 61, is a graduate in Electrical Engineering. He served in the Ministry of Defence, Govt. of India for 9 years

handling various responsibilities in the Corps of Electrical and Mechanical Engineers.

Mr. Raghavan worked as an Engineer in Andhra Pradesh State Electricity Board and as Head, Electrical Department in Kothari

Sugars and Chemicals Limited, Trichy. He was the Joint Managing Director of Infosys Technologies Limited for 19 years.

Mr. Raghavan is also a Director on the Board of IDFC Asset Management Company Limited. He does not hold any equity shares in

the Company.


Addresses of the Stock ExchangesThe Company’s equity shares are listed on

the following Stock Exchanges located at:

(iii) Financial Calendar

Indicative calendar of events for the year 2005 (January - December) excluding Extra Ordinary General Meeting(s), if any, is as under:

Fourth Quarter Financial Results (Year 2004) 01 February, 2005

First Quarter Financial Results April, 2005

Annual General Meeting May, 2005

Second Quarter Financial Results July, 2005

Third Quarter Financial Results October, 2005

(iv) Book Closure

The Company’s Register of Members and Share Transfer Books will remain closed for the purpose of dividend from 13 May, 2005

to 24 May, 2005 (both days inclusive)

(v) Dividend

The dividend recommended by Directors, on approval by the members at the ensuing Annual General Meeting will be paid to those

shareholders whose names appear on the Company’s Register of Members as on 24 May, 2005.

(vi) Listing on Stock Exchanges

The Stock Exchange, Mumbai (BSE)

Phiroze Jeejeebhoy Towers

Dalal Street

Mumbai 400 001.

� Mumbai - (BSE and NSE)

� Ahmedabad

� New Delhi

� Kolkata

Delhi Stock Exchange Association Ltd.,

DSE House, 3/1, Asaf Ali Road

New Delhi 110 002.

The Calcutta Stock Exchange Association Ltd.,

7, Lyons Range

Kolkata-700 001.

(The Company has paid, till date, the listing

fees of all the above Stock Exchanges)

The Stock Exchange - Ahmedabad

Kamdhenu Complex

Near Polytechnic

Panjara Pole, Ahmedabad 380 015.

The National Stock Exchange of India Ltd., (NSE)

Exchange Plaza, 5th floor Plot No. C/1, G Block

Bandra-Kurla Complex

Bandra (E)

Mumbai 400 051


(vii) Market Price Data

(1) The market price and volume of the Company’s shares traded in the Stock Exchange, Mumbai and the National

Stock Exchange during the year 2004 was as follows:

BSE NSE Volume

Year 2004 High Low High Low BSE NSE

Month (Rs.) (Rs.) (Rs.) (Rs.) (Nos.) (Nos.)

January 745.00 650.00 744.90 642.00 449978 1126797

February 703.00 614.00 706.00 634.00 174146 539419

March 820.00 678.80 818.00 680.00 318379 741002

April 835.00 775.20 850.00 762.00 352766 445793

May 806.00 561.00 815.00 491.00 141558 635535

June 697.00 610.00 749.00 565.30 284778 286183

July 770.00 663.00 780.00 650.00 159078 432232

August 777.00 691.10 774.50 680.10 75767 433949

September 802.00 751.00 803.00 671.00 63314 406691

October 792.00 700.00 794.95 700.00 203469 567935

November 974.00 760.05 975.00 756.15 195163 585682

December 1,000.00 866.00 1147.00 845.00 252453 642086

The Stock Code of the Company is

Depository Connectivity:

The ISIN Nos. for Company’s Equity

Shares in Demat form

BSE - 500002

NSE - ABB

NSDL and CDSL

INE 117A 01014


(2) The market capitalisation of the Company’s shares as on 31 December, 2004, was Rs.41,114 million on The Stock Exchange,

Mumbai (BSE), and Rs.41,163 million on National Stock Exchange, Mumbai (NSE).

(3) Performance in comparison with Broad Indices

(viii) Shareholding Pattern

Equity Shares of Rs.10 each.

As on 31.12.2004 As on 31.12.2003 Variation

Shareholders No.of No.of No.of

shares % shares % shares %

ABB Asea Brown Boveri Ltd.

Zurich & ABB Technology FLB AB,

Sweden 22084057 52.11 22084057 52.11 0 0.00

Non-Resident Individuals / OCBs 3758429 8.87 834153 1.97 2924276 6.90

Directors and their relatives 172 0.00 172 0.00 0.00 0.00

LIC / UTI/ Other Insurance Cos. 7041003 16.62 7533244 17.77 (492241) (1.15)

Nationalised Banks / Other Banks 48203 0.10 76849 0.18 (28646) (0.08)

Mutual Funds 775191 1.83 1558885 3.68 (783694) (1.85)

Foreign Institutional Investors 2833329 6.69 3364370 7.94 (531041) (1.25)

General Public 5841291 13.78 6929945 16.35 (1088654) (2.57)

Total 42381675 100.00 42381675 100.00 0 0.00

ABB Share price movementwith relation to BSE Sensex January - December 2004

PERIOD

IND

EX

ED

TO

100


(x) Share Transfer Process

The Company’s shares being in compulsory demat list are transferable through the depository system. Shares in physical form are

processed by the Registrar and Transfer Agents and approved by the Share Transfer and Investors’ Grievance Committee. The share

transfer process is reviewed by the said committee.

(xi) Dematerialisation of Shares

The equity shares of the Company are available under dematerialised form with National Securities Depository Limited (NSDL) and

Central Depository Services (India) Ltd., (CDSL). Trading of the Company’s shares for all investors is compulsorily carried out only in

dematerialised form.

As on 31 December, 2004, 19,527,552 shares have been dematerialised representing 46.09 % of the total shares. ( 19,106,008 shares

were in dematerialised form representing 45.09 % of the total shares as on 31 December, 2003).

(xii) Outstanding GDR, ADR or Warrants

There are no GDR, ADR or any Convertible Instruments pending conversion or any other instrument likely to impact the equity share

capital of the Company.

(xiii) Plant Locations

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

(ix) Distribution of Shareholding (as on 31 December, 2004)

No. of Equity No. of shareholders No. of shares held %age of equity

shares held holding shares in capital held in

Physical Demat Physical Demat Physical Demat

Form Form Form Form Form Form

1-1000 15829 17443 1449057 2477280 3.42 5.85

1001-5000 95 488 160057 897395 0.38 2.12

5001-10000 3 32 18848 235754 0.04 0.56

10001-50000 0 50 0 1191218 0.00 2.81

50001-100000 1 16 97216 1100141 0.23 2.60

100001-1000000 0 27 0 9188201 0.00 21.68

1000001 and above 6 1 21120738 4437563 49.83 10.47

In Transit — 94 — 8207 — 0.01

Total 15934 18151 22845916 19535759 53.90 46.10

Physical & Demat 34085 42381675 100%


For and on behalf of the Board

Dinesh Paliwal

Chairman

Bangalore

01 February, 2005

(2) Company

(For any other matter, unresolved complaints)

ABB Limited

2nd Floor, East Wing, Khanija Bhavan,

No. 49, Race Course Road,

Bangalore 560 001.

Phone: 080-22949150 to 22949154

Fax : 080-22949148

Corporate Secretarial E-mail ID: [email protected]

Corporate Website: www.abb.com/in

(xv) Non-mandatory requirements

(1) The Company has a Remuneration Committee to determine the remuneration package of Vice Chairman & Managing Director.

(2) The Company complied with the requirement of Postal Ballot in the past and will comply with the said requirement as and when

such matters arise in future which would require the approval of the shareholders by such process

(3) The Company uploads the financial results, shareholding pattern and other information on its website.

(1) Registrar and Transfer Agents:

(For share transfer, dividend related queries)

Karvy Computershare Private Limited,

(Unit: ABB Limited)

#51/2, T.K.N. Complex, Vanivilas Road,

Opp. National College, Basavanagudi,

Bangalore 560 004.

Phone: 080-26621192

Fax : 080-22621169

Email: [email protected]

(xiv) Address for Correspondence


To The Members of ABB Limited

We have examined the compliance of conditions of corporate governance by ABB Limited, for the year ended on December 31,2004, as stipulated

in clause 49 of the Listing Agreement of the said Company with stock exchanges.

The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and

implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit

nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the

conditions of Corporate Governance as stipulated in the above mentioned Listing Agreements.

We state that no investor grievance is pending for a period exceeding one month against the Company as per the records maintained by the Share

Transfer and Investors’ Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which

the management has conducted the affairs of the Company.

For S. R. BATLIBOI & COMPANYChartered Accountants

per Sunil BhumralkarPartnerMembership No.: 35141

BangaloreFebruary 1, 2005

Annexure - D to Directors’ ReportAuditor’s Certificate - Compliance of conditions of corporate governance per clause 49 of the Listing Agreement with the stock exchanges.


Operating Results of the Company

During the year, the Company secured orders worth Rs 25,878 million, 52 per cent higher in comparison to Rs 17,054 million in the previous

year. Both core business segments of the Company i.e., Power Technologies and Automation Technologies, posted significant growth during the

year. The Company’s strategic initiatives which aimed at a more balanced portfolio yielded good results with the products and services

businesses being expanded substantially, in addition to the absolute growth in projects business. Export performance was also encouraging.

The Company received significant overseas project orders and also added several new countries to its export base, besides enhancing its

regional and global presence within the ABB Group. Power sector reforms as well as recovery in the industrial sector supported to this growth

as the Company’s order backlog was further augmented by 25 per cent to Rs 13,356 million as compared to Rs 10,710 million at the beginning

of the year.

The Company posted a strong top-line performance with revenues of Rs 23,056 million for the year, registering a growth of 53 per cent over the

year 2003. Higher revenues resulted primarily from a strong order book as well as the Company’s key strategic initiatives e.g., standard products

thrust, range expansion, exports, services and value added projects.

Profit before tax and exceptional items was Rs 2,365 million as compared to Rs 1,529 million in the previous year. Volume growth, operational

efficiencies, lower overheads and a higher operating income resulted in the profit improvement. Capital gains on the sale of the ‘Control Valves’

business was Rs 38 million and Rs 128 million was realised from the divestment. The Company has invested the capital gains amount in

specified assets as per the provisions of Section 54EC of the Income-tax Act, 1961, and accordingly no capital gains tax is payable on this

amount.

Net profit after tax at Rs 1,543 million for the year was 24 per cent higher than last year. Earnings per equity share (face value Rs 10) was also

significantly higher at Rs 36.41 compared to Rs 29.30, the previous year.

Outlook for the Company

The overall growth of the Indian economy, higher industrial growth, infrastructure investment and power sector reforms auger well for the

Company’s power and automation technologies businesses. Expected build up of power generation capacity, development of the transmission

network, distribution sector reforms and improvements as well as ongoing initiatives like APDRP (Accelerated Power Development and Reforms

Programme) should continue to drive activity in the power sector. The industrial climate is also positive as Indian industry focuses on capacity

expansions, efficiency and productivity improvements as well as an enhanced role in the global economy. On its part the Company will continue

to maximise market opportunities and focus on its strategic initiatives related to high value-added projects, standard products, service and

exports. In addition to market penetration and higher volumes, the Company will continue with range expansion and leveraging of new revenue

streams. The quest for higher operational efficiencies will help maintain bottom-line focus as the Company builds on its vision of profitable and

sustainable growth. The overall outlook for the Company continues to be positive.

Business Segment Analysis

ABB is a global leader in power and automation technologies that enable utility and industry customers to improve performance while lowering

environmental impact. The Company’s portfolio includes products, systems and service solutions offered through its two core divisions or

segments i.e., Power Technologies (PT) and Automation Technologies (AT).The distribution of revenues is as under.

2004 2003

Power Technologies 60 % 60 %

Automation Technologies 40 % 40 %

Power Technologies (PT)

The summarised performance of the segment is as under. (Rs in Millions)

Orders Received 17,119 10,022

Order Backlog 10,523 7,617

Revenues 14,008 9,604

Result 1,377 868

Management’s Discussion and Analysis


Capacity additions, development of the transmission network and power distribution improvements and reforms on the domestic front and increased

export thrust resulted in strong orders and revenues growth during the year. Orders received grew by 71 per cent and revenues were higher by 46

per cent. On the domestic front, major projects executed during the year included APDRP projects for BESCOM and HISCOM in Karnataka, the

Raipur-Rourkela FACTS (Flexible AC Transmission System) India’s first commercial TCSC solution (Thyristor Controlled Series Capacitors) for

Powergrid (PGCIL), HVDC (High Voltage Direct Current) project at Vishakapatnam for PGCIL electrification and automation solutions for the Delhi

Metro (DMRC) and distribution system improvements in Delhi and other cities. On the export front, the Company increased its volume of business

from product exports, adding several new destination countries. Key export projects included turnkey substation solutions for PEEGT, Syria.

On the order front, the segment continued with The Middle-East success . Other significant orders booked during the year include APDRP projects,

power distribution solutions for BESCOM, Reliance Energy Limited (REL) and Gujarat Electricity Board, turnkey substation solutions for 400kV and

132kV substations at Lucknow and Bihar, 400kV transmission substation at Kashipur from Uttaranchal Power Corporation Limited, Control and

Instrumentation solutions for National Thermal Power Corporation Limited (NTPC) plants at Kahalgaon and Sipat, electrification and control (SCADA)

solutions for Delhi Metro Rail Corporation Limited (DMRC), Distribution Management Solutions for Delhi from Reliance Energy Limited, 400 kV, 200

MVA GSUs from NTPC and significant distribution transformers and medium voltage technologies orders (including MV switchgear, Compact Sub

Stations, Ring Main Units etc.) from various public and private utilities.

Acceleration of power sector reforms, corporatisation and privatisation of State Electricity Boards, the Electricity Act 2003, the ongoing APDRP

programme, focus on reduction of T&D losses coupled with expected additional power generation capacity in the country continue to offer good

growth prospects, also resulting in new business opportunities like system studies, diagnostic services, system augmentation and asset

management. Other actions initiated include strengthening of the project execution process, setting up of a dedicated business group for power

plant solutions, augmentation of manufacturing capacities for products, setting up of a power transformers insulation kit manufacturing facility and a

continued focus on operational excellence, cost base optimization and exports. The market outlook and prospects for the segment continue to be

promising.

Automation Technologies (AT)

The summarised performance of the segment is as under : (Rs in Millions)

2004 2003

Orders Received 8,932 6,947

Order Backlog 2,903 3,146

Revenues 9,205 5,531

Result 957 533

Improved industrial climate combined with strategic initiatives e.g., thrust on standard products helped the segment to achieve significant growth in

orders and revenues. The segment saw a 29 per cent growth in orders received and a 66 per cent increase in revenues over the previous year.

Amongst the major projects executed during the year were electrical and process automation solutions for key customers including Tata Steel,

smelters for Bharat Aluminium Company Limited (BALCO) and Hindustan Zinc Limited (HZL) and several projects for industrial sectors like

pharmaceuticals and biotech. The segment also booked orders from the oil refining and petrochemical segment, including automation systems for

paraxylene, analyser and blending automation systems for Indian Oil’s (IOCL) Panipat refinery expansion and automation systems for Reliance

Petrochemicals. Considering the prospects for robotics and manufacturing automation, a dedicated business unit has been set up for the same.

The Company also saw increased momentum in its building solutions business, driven by heightened activity in the infrastructure and construction

sector and executed several such projects for leading corporates in sectors like pharmaceuticals, hospitals, IT parks, Biotech parks, hotels etc.

There was a significant increase in the sale of standard products in line with the Company’s strategic thrust on market penetration and range

expansion and this contributed substantially to the strong growth in revenues. The Channel partner network crossed the 450 mark during the year .

Another success area was the increase in e-commerce business which crossed the Rs. one billion mark, setting an industry benchmark. Two

additional service centres for repair of turbochargers were established during the year at New Delhi and Colombo.


The industrial sector continues to look attractive and the market environment is positive though considerably competitive. With brownfield and

greenfield capacity expansions underway and investments taking place in core sectors like steel, aluminium, other non ferrous metals, cement,

paper, oil and gas, automobiles etc. the trend is expected to remain encouraging from an automation technologies perspective in the foresee-

able future. The construction sector also looks poised for continued growth with significant demand projection for housing, infrastructure

projects, buildings, hospitals, multiplexes, IT parks, Biotech parks, malls in the coming years.

In addition to industrial automation and turnkey projects from a growing industrial sector, the segment plans to continue with its product and

services thrust with ongoing initiatives planned for market penetration and range expansion. In addition to expanding its low voltage product

portfolio further, the Company also plans to enhance its strong presence in the Drives and Power Electronics business by bringing in several

advanced technologies and building up local manufacturing capabilities. Another key focus area for the segment would be to increase its

regional and global contribution to the ABB Group in the form of projects, products and services.

New Initiatives and Range Expansion

The Company upgraded and modernized many of its manufacturing and office facilities in order to enhance efficiency and productivity and

conform to global standards. Several marketing and communication initiatives were undertaken to facilitate business performance.

In addition to significant expansion of existing capacities during the year, the Company continued aggressively with its range expansion and

several new products were added during the year.

On the power technologies front, this included Compact Secondary Substations (CSS), Ring Main Units (RMUs), Railway Circuit Breakers, a

new model of 420 kV Current Transformers, Low Voltage Capacitors and 66 & 32 kV Condensor Bushings. Adding another feather to its cap,

ABB’s power transformer manufacturing facility at Vadodara, rolled out its first HVDC Converter Transformer as part of an order for six such

400kV, 200MVA, back-to-back HVDC converter transformers to be supplied to Powergrid. A state-of-the-art Distribution Transformer factory was

commissioned during the year, further strengthening the Company’s portfolio of power technologies offering.

On the Automation front, the Company added significantly to its range and several new products were brought in as new revenue streams. ABB

made the consumer connect by launching a range of distribution electricals completing the value chain of bringing power from the point of

generation all the way home ! This encompasses a wide range of Line Protection Devices (LPDs) and Electrical Wiring Accessories (EWAs) and

includes products like MCBs, ELCBs, RCDs, Distribution Boards (DBs) as well as switches, sockets and regulators. A state-of-the-art HT

Machines plant was commisioned at Vadodara and a new assembly line set up for Air Circuit Breakers (ACBs) at Bangalore. As part of the

Company’s market penetration initiative, the Channel Partner network was strengthened to over 450 and the Company’s web-based business

touched a new high with over one billion rupees worth of orders being booked through the E channel, setting a new benchmark in the industry.

ABB also launched its 800xA Extended Automation system, a significant technology for the pharmaceuticals and biotech sector and was

successful in winning orders from Biocon, Ranbaxy and other major pharmaceutical companies.

Finance

The Company continued to focus on optimising its working capital, which resulted in a further improvement in the cash position. Net cash

position (cash and bank balances less loan fund) at the end of the year had significantly increased to Rs 4,153 million compared to Rs 3,429

million at the end of the previous year. Throughout the year, the Company maintained a cash surplus position and the same was deployed in

Government securities, tax-free bonds and short term fixed deposits with reputed banks ensuring the security and liquidity of the fund. The

entire capital expenditure of Rs 505 million, during the year on fixed assets, was financed from internal accruals. Net interest income during the

year was Rs 143 million including income from certain interest arbitrage actions. During the year, the Company also booked profit of Rs 32

million from early retirement of interest free sales tax deferral loans. As a result of sound financial management and timely hedging of foreign

exchange risks, the Company protected its margins in a volatile foreign exchange environment.

Human Resources

The Company believes that its people are a key differentiator, especially in a knowledge-driven, competitive and globalised business

environment. Adapting work culture to suit the dynamic balancing of ‘people requirements’ and ‘employee needs’ is an ongoing process.

Fundamental HR processes which enable higher performance orientation, speed, skill and competency development, talent management and

human asset refreshal are corner-stones for the success of any organisation. The Company continues to pursue ‘plural leadership’ and a

non-hierarchical structure, to foster a transparent and performance-driven culture and encourage entrepreneurial spirit across the organization.


A Company-wide human resource development initiative titled “Leadership Challenge”, has been launched. Such workshops will cover the

entire organization in 2005. Leadership Development Assessment is another initiative which enables top talent to be continually tracked for

succession planning and competence gap filling. To further leverage the integrated ERP - SAP system from an HR perspective, the Performance

Management and Training Modules have been rolled out to facilitate planned competence development. Net-based recruitment and setting up

of a separate recruitment cell enabled faster intake of new employees and a structured orientation programme has been put in place for their

smooth induction. As in the past, industrial relations continued to remain cordial at all the locations of the Company. The Company had 3,439

employees at the end of 2004.

Internal Control System

The Company is committed to maintaining an effective system of internal control for facilitating the accurate, reliable and speedy compilation of

financial information, safeguarding the assets and interests of the Company and ensuring compliance with laws and regulations. During the

year, the Company set up a separate Internal Control department to monitor, review and update internal controls on an ongoing basis. Further,

the vendor payment process for large transactions has been highly automated and centralised to ensure process efficiency with improved

internal controls.

The Company has an exhaustive budgetary control system and the management regularly reviews actual performance. The Company has also

put in place a well defined organisation structure, clear authority levels and internal guidelines for conducting business transactions. The

Company has an internal audit department that conducts regular audits to ensure adequacy of the control system, adherence to management

instructions and compliance with law.

The Company is currently in the process of evaluating and designing effective internal control procedures to meet the standards expected as

per Section 404 of the Sarbanes Oxley Act, 2002. This is expected to further enhance the internal control environment in the Company.

Audit Committee of the Board of Directors periodically reviews audit plans, observations and recommendations of the internal auditors as well

as external auditors with reference to significant risk areas and adequacy of internal controls.


1. We have audited the attached balance sheet of ABB Limited as

at December 31, 2004 and also the profit and loss account and

the cash flow statement for the year ended on that date annexed

thereto. These financial statements are the responsibility of the

Company’s management. Our responsibility is to express an

opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards

generally accepted in India. Those Standards require that we

plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the

accounting principles used and significant estimates made by

management, as well as evaluating the overall financial

statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (as

amended) issued by the Central Government of India in terms of

sub-section (4A) of Section 227 of the Companies Act, 1956, we

enclose in the Annexure a statement on the matters specified in

paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we

report that:

i. We have obtained all the information and explanations,

which to the best of our knowledge and belief were

necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law

have been kept by the Company so far as appears from

our examination of those books;

iii. The balance sheet, profit and loss account and cash flow

statement dealt with by this report are in agreement with

the books of account;

Auditors’ Report To The Members of ABB Limited

iv. In our opinion, the balance sheet, profit and loss account and

cash flow statement dealt with by this report comply with the

accounting standards referred to in sub-section (3C) of section

211 of the Companies Act, 1956;

v. On the basis of the written representations received from the

directors, as on December 31, 2004, and taken on record by the

Board of Directors, we report that none of the directors is

disqualified as on December 31, 2004 from being appointed as a

director in terms of clause (g) of sub-section (1) of section 274 of

the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to

the explanations given to us, the said accounts give the

information required by the Companies Act, 1956, in the manner

so required and give a true and fair view in conformity with the

accounting principles generally accepted in India;

a. in the case of the balance sheet, of the state of affairs of

the Company as at December 31, 2004;

b. in the case of the profit and loss account, of the profit for

the year ended on that date; and

c. in the case of cash flow statement, of the cash flows for

the year ended on that date.

For S. R. BATLIBOI & COMPANY

Chartered Accountants

Sunil Bhumralkar

Partner

Membership No.: 35141

Bangalore, India

February 01, 2005


(i) (a) The Company has maintained proper records showing full

particulars, including quantitative details and situation of

fixed assets.

(b) The Company has a regular programme of physical

verification of fixed assets which, in our opinion, is

reasonable having regard to the size of the Company and

the nature of its assets. In accordance with this

programme, certain fixed assets were physically verified

by the management during the year and we are informed

that no material discrepancies were noticed on such

verification.

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

the year.

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

inventory at reasonable intervals during the year. In

respect of stocks lying with third parties, confirmation for

most of the stocks has been received.

(b) The procedures of physical verification of inventory

followed by the management are reasonable and

adequate in relation to the size of the Company and the

nature of its business.

(c) The Company is maintaining proper records of inventory

and no material discrepancies were noticed on physical

verification.

(iii) As informed to us, the Company has neither granted nor taken

any loans, secured or unsecured to/from companies, firms or

other parties covered in the register maintained under section

301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations

given to us, there is an adequate internal control system

commensurate with the size of the Company and the nature of its

business, for the purchase of inventory and fixed assets and for

the sale of goods and services. During the course of our audit, no

major weakness has been noticed in the internal control system

in respect of these areas.

(v) According to the information and explanations given to us, there

are no transactions that need to be entered in the register

maintained under section 301 of the Companies Act, 1956.

Annexure referred to in paragraph 3 of our report of even date

(vi) In our opinion and according to the information and explanations

given to us, directives issued by the Reserve Bank of India and

the provisions of sections 58A, 58AA or any other relevant

provisions of the Companies Act, 1956 and the rules framed

there under, to the extent applicable, have been complied with.

We are informed by the management that no order has been

passed by the Company Law Board, National Company Law

Tribunal or Reserve Bank of India or any Court or any other

Tribunal under sections 58A and 58AA.

(vii) In our opinion, the Company has an internal audit system

commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by

the Company pursuant to the rules made by the Central

Government for the maintenance of cost records under section

209(1) (d) of the Companies Act, 1956, and are of the opinion that

prima facie, the prescribed accounts and records have been

made and maintained.

(ix) (a) According to the records of the Company, the Company is

regular in depositing undisputed statutory dues including

provident fund, investor education and protection fund,

employees’ state insurance, sales-tax, excise duty, wealth-

tax, service tax, custom duty and cess with the

appropriate authorities. Undisputed statutory dues

towards income-tax have generally been regularly

deposited with the appropriate authorities.

(b) According to the information and explanations given to us,

no undisputed amounts payable in respect of provident

fund, investor education and protection fund, employees’

state insurance, income-tax, wealth-tax, service tax, sales-

tax, customs duty, excise duty, cess and other undisputed

statutory dues were outstanding, at the year end, for a

period of more than six months from the date they became

payable.

(c) According to the records of the Company, the dues

outstanding of income-tax, sales-tax, wealth-tax, service

tax, custom duty, excise duty and cess on account of any

dispute, are as follows:


(x) The Company has no accumulated losses at the end of the fi-nancial year and it has not incurred cash losses in the currentand immediately preceding financial year.

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

(xii) According to the information and explanations given to us andbased on the documents and records produced to us, the Com-pany has not granted loans and advances on the basis of secu-rity 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) ofthe Companies (Auditor’s Report) Order, 2003 (as amended) arenot applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading inshares, securities, debentures and other investments. Accord-ingly, the provisions of clause 4(xiv) of the Companies (Auditor’sReport) Order, 2003 (as amended) are not applicable to theCompany.

(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 duringthe year.

(xvii) According to the information and explanations given to us andon an overall examination of the balance sheet and cash flowstatement of the Company, we report that no funds raised onshort-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment ofshares to parties or companies covered in the register main-tained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures duringthe year.

(xx) The Company has not raised any money through a public issueduring the year.

(xxi) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements andas per the information and explanations given by the manage-ment, we report that no fraud on or by the Company has beennoticed or reported during the course of our audit.

Name of the Nature of dues Amount Period to which Forum where disputeStatute (Rs in Thousands) the amount is pending

relates

Excise Act Freight charges for valuation 92 1997 - 98 Central Excise and

Modvat availment 2,648 1996 - 00 Service Tax Appellate

Product Classification 10,294 1996 - 00 Tribunal

Excise Act Export obligation 17,825 2003 - 04 Director General of

Foreign Trade (Appeals)

Sales Tax Act Sales tax rate 407 1997 - 98 Sales Tax Appellate Tribunal

Works contract tax charged 34,382 1992 - 97 Sales Tax Appellate Tribunal

3,687 1998 - 02 Deputy Commissioner (Appeal)

Submission of Statutory Forms 169,868 1993 - 01 Appellate Assistant Commissioner

31,510 1999 - 03 Additional Commissioner (Appeal)

4,396 1997 - 98 Senior Assistant Commissioner of Sales Tax

2,756 1997 - 01 Joint Excise & Taxation Commissioner (Appeal)

900 1994 - 95 High Court

458 1996 - 02 Deputy Commissioner of Sales Tax (Appeals)

355 1993 - 98 State Appellate Tribunal

Faridabad Product classification 30,400 1986 - 94 High Court

Development

Act [Octroi]

For S. R. BATLIBOI & COMPANY


Sunil Bhumralkar

Partner

Membership No.: 35141

Bangalore, India

February 01, 2005


(Rs in Thousands)

As at 31 December 2004 Schedule 2004 2003

Sources of Funds

Shareholders' Funds

Share Capital 1 423,817 423,817

Reserves and Surplus 2 6,822,800 5,617,718

7,246,617 6,041,535

Loan Funds

Finance Lease Obligations 17(10) 14,312 29,632

Unsecured Loans 3 620 71,409

14,932 101,041

Deferred Tax Liability (net) 17(12) 132,271 146,271

7,393,820 6,288,847

Application of Funds

Fixed Assets 4

Gross Block 3,580,288 3,136,554

Less: Depreciation 1,680,241 1,539,211

Net Block 1,900,047 1,597,343

Capital Work in Progress including Capital Advances 49,296 102,747

1,949,343 1,700,090

Investments 5 1,069,669 585,881

Current Assets, Loans and Advances

Inventories 6 1,682,855 1,235,099

Sundry Debtors 7 6,263,322 5,357,662

Cash and Bank Balances 8 4,167,509 3,530,316

Loans and Advances 9 1,063,106 1,237,223

Other Current Assets 10 887,033 454,901

14,063,825 11,815,201Less: Current Liabilities and Provisions

Liabilities 11 9,279,280 7,469,854

Provisions 12 409,737 342,471

9,689,017 7,812,325

Net Current Assets 4,374,808 4,002,876

7,393,820 6,288,847Notes to Accounts 17

Balance Sheet


Dinesh Paliwal ChairmanRavi Uppal Vice Chairman & Managing DirectorNasser Munjee DirectorUmesh Prasad Singh DirectorN.S. Raghavan DirectorTom Eric Sjoekvist Director

K. Rajagopal Sr. Vice President - Finance

B. Gururaj Company Secretary

Bangalore, 1 February, 2005

The schedules referred to above form an integral part of the accounts

As per our report of even date

For S. R. Batliboi & Company


Sunil BhumralkarPartnerMembership No. 35141Bangalore, 1 February, 2005


(Rs in Thousands)For the year ended31 December 2004 Schedule 2004 2003

IncomeSales and Services 24,457,977 15,767,300Less : Excise Duty 1,855,751 1,083,725Sales and Services (Net) 13 22,602,226 14,683,575Other Income 14 453,490 346,994

23,055,716 15,030,569ExpenditureCost of Materials and Erection Services 16,547,289 10,267,815Personnel Expenses 15 1,360,500 1,161,305Other Expenses 16 2,565,647 1,878,667Depreciation/ Amortisation 206,263 187,017Less: Transfer from Revaluation Reserve 2,666 2,667

203,597 184,350Interest Expenses 13,483 9,505

20,690,516 13,501,642Profit Before Tax and Exceptional Item 2,365,200 1,528,927Exceptional Item - Profit on Sale of Undertaking 17(3) 37,991 233,008Profit Before Tax 2,403,191 1,761,935Provision for Tax:

Current Tax[including Rs Nil (Previous Year - Rs 2,295 thousand)towards short provision for earlier years] 874,000 524,000Deferred Tax (14,000) (4,000)

Profit After Tax 1,543,191 1,241,935Less: Transfer to Foreign Projects Reserve Account 4,000 2,500Add: Balance Brought Forward 278,374 258,391Profit available for appropriation 1,817,565 1,497,826AppropriationsGeneral Reserve 1,180,000 900,000Proposed Dividend 296,672 254,290Corporate Dividend Tax 38,771 32,581Corporate Dividend Tax - 2002 — 32,581Balance Carried Forward 302,122 278,374

1,817,565 1,497,826

Basic and Diluted Earnings per Equity Share (in Rs) 17(4) 36.41 29.30(Face value Rs 10 per share)Basic and Diluted Earnings per Equity Share excludingExceptional Item (in Rs) 17(4) 35.52 23.81(Face value Rs 10 per share)

Notes to Accounts 17

Profit and Loss Account






The schedules referred to above form an integral part of the accounts






(Rs in Thousands)

As at 31 December 2004 2004 2003

Schedule 1 - Share Capital

Authorised

42,500,000 Equity Shares of Rs 10 each 425,000 425,000

750,000 11% Redeemable 10 year, Cumulative Preference

Shares of Rs 100 each 75,000 75,000

500,000 500,000

Issued, Subscribed and Paid Up

42,381,675 Equity Shares of Rs 10 each 423,817 423,817

Notes:

Share Capital includes:

a) 9,237,105 equity shares of Rs 10 each allotted as fully paid up at par, pursuant to contracts for consideration other than cash.

b) 200,000 equity shares of Rs 10 each issued at a premium of Rs 10 each to the holders of 40,000 - 8.57% cumulative preference shares

of Rs 100 each on cancellation of the preference shares in terms of a Scheme of Compromise between the Company and its preference/

equity shareholders in 1988.

c) 8,443,893 and 10,354,589 equity shares of Rs 10 each issued as fully paid up bonus shares by capitalisation of the General Reserve

Account and Share Premium Account respectively.

d) 19,575,991 equity shares are held by ABB Asea Brown Boveri Limited, Zurich, (Switzerland), the ultimate holding Company and 2,508,066equity shares are held by ABB Technology FLB AB, Sweden, a subsidiary of the ultimate holding Company.


(Rs in Thousands)

As at 31 December 2004 2004 2003

Schedule 2 - Reserves and Surplus

Capital Reserve Account 10,971 10,971

Capital Redemption Reserve Account 75,000 75,000

Revaluation Reserve Account

As per last Balance Sheet 156,080 158,747

Transferred to Profit and Loss Account (2,666) (2,667)

153,414 156,080

Share Premium Account 593,990 593,990

Foreign Projects Reserve Account

As per last Balance Sheet 78,400 76,500

Transferred from Profit and Loss Account 4,000 2,500

Transferred to General Reserve Account (3,000) (600)

79,400 78,400

General Reserve Account

As per last Balance Sheet 4,424,903 3,524,303

Transferred from Foreign Projects Reserve Account 3,000 600

Transferred from Profit and Loss Account 1,180,000 900,000

5,607,903 4,424,903

Profit and Loss Account

Balance Carried Forward 302,122 278,374

6,822,800 5,617,718

Schedule 3 - Unsecured Loans

Sales tax deferral loans(Due within one year Rs 310 thousand -Previous Year Rs 11,826 thousand) 620 71,409


As at 31 December 2004 (Rs in Thousands)

Schedule 4 - Fixed Assets

Gross Block Depreciation/Amortisation Net Block

Description As at 1 Additions Deductions As at 31 As at 1 For the Deductions As at 31 As at 31 As at 31January December January Year December December December

2004 2004 2004 2004 2004 2003

A. Tangible Assets

1. Own Assets

Freehold Land 137,515 — — 137,515 — — — — 137,515 137,515

Leasehold Land 2,232 — 226 2,006 193 7 — 200 1,806 2,039

Leasehold Improvements 40,685 24,253 941 63,997 11,015 8,312 941 18,386 45,611 29,670

Factory Buildings 354,638 32,571 12,490 374,719 114,402 11,476 2,837 123,041 251,678 240,236

Other Buildings 72,448 15,559 — 88,007 16,461 1,449 — 17,910 70,097 55,987

Residential Quarters 14,390 — — 14,390 3,980 255 — 4,235 10,155 10,410

Plant and Machinery 1,970,984 368,587 81,679 2,257,892 1,035,757 136,279 52,076 1,119,960 1,137,932 935,227

Furniture and Fixtures 109,475 48,497 4,393 153,579 60,541 6,005 3,054 63,492 90,087 48,934

Vehicles 9,907 481 2,642 7,746 6,337 622 1,416 5,543 2,203 3,570

2,712,274 489,948 102,371 3,099,851 1,248,686 164,405 60,324 1,352,767 1,747,084 1,463,588

2. Leased Assets

Plant and Machinery 58,019 — — 58,019 20,084 9,547 — 29,631 28,388 37,935

Vehicles 15,211 2,868 1,925 16,154 1,662 1,434 563 2,533 13,621 13,549

73,230 2,868 1,925 74,173 21,746 10,981 563 32,164 42,009 51,484

Total Tangible assets 2,785,504 492,816 104,296 3,174,024 1,270,432 175,386 60,887 1,384,931 1,789,093 1,515,072

B. Intangible Assets

Technical Know-how Fees 259,360 44,548 10,120 293,788 201,487 19,769 4,346 216,910 76,878 57,873

Capitalised Software 91,690 20,786 — 112,476 67,292 11,108 — 78,400 34,076 24,398

Total Intangible assets 351,050 65,334 10,120 406,264 268,779 30,877 4,346 295,310 110,954 82,271

3,136,554 558,150 114,416 3,580,288 1,539,211 206,263 65,233 1,680,241 1,900,047 1,597,343

Previous Year 2,866,762 378,686 108,894 3,136,554 1,428,247 187,017 76,053 1,539,211

Capital Work in Progress including Capital Advances 49,296 102,747

Grand Total 1,949,343 1,700,090

Notes :

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

2. Residential Quarters include cost of shares in Lotus Court Private Limited Rs 56 thousand.

3. Current year figures of Deductions in Gross Block and Depreciation include Rs 47,039 thousand and Rs 18,067 thousand respectively onaccount of sale of Control Valves business.

4. Previous year figures of Deductions in Gross Block and Depreciation include Rs 40,292 thousand and Rs 15,277 thousand respectively onaccount of sale of Metering business.


(Rs in Thousands)

As at 31 December 2004 2004 2003

Schedule 5 - Investments

Long Term (At Cost) :

Trade :-

Quoted :

280,500 Equity Shares of Rs 10 each fully paid up in Integra Hindustan Control Limited 2,805 2,805

Non Trade :-

Government Securities -

Quoted:

6.25% Government of India Bonds 159,600 —

Unquoted:

12 Year National Savings Certificates 6 6

12 Year National Defence Certificates 2 2

159,608 8

Others -

Quoted :

551,748 (Previous year 51,748) 6.75% Tax Free US64 bonds of 60,335 6,860

Rs 100 each fully paid up in Unit Trust of India

2,000,000 (Previous Year Nil) 5.25% 10 Year Tax Free Nuclear Power

Corporation Limited Infrastructure Bond of Rs 100 each fully paid up 200,000 —

260,335 6,860

Unquoted :

8.7% 5 Year Cumulative Non-Convertible Redeemable

Bonds of Rural Electrification Corporation Limited 52,894 52,894

5.5% National Housing Bank - Capital Gains Bonds 210,000 210,000

5.5% Small Industries Development Bank of India

- Capital Gains Bonds 100,000 100,000

7.85% / 7.10% 5 Year Non- Cumulative Non-Convertible

Redeemable Bonds of Rural Electrification Corporation Limited 215,000 215,000

5.15% 5 Year Non- Cumulative Non- Convertible Redeemable

Bonds of Rural Electrification Corporation Limited 69,000 —

1,000 Shares of Rs 25 each fully paid up in

Co-operative Bank of Baroda 25 25

6.5% Non-Redeemable Debentures of Bengal

Chamber of Commerce and Industry 2 2

646,921 577,921

1,069,669 587,594

Less: Provision for diminution in the value of Investments - 1,713

1,069,669 585,881

Notes :

Quoted Investments aggregate 422,740 9,665

(Market value Rs - 415,050 thousand;

Previous Year - Rs 17,807 thousand)

Unquoted Investments aggregate 646,929 577,929


(Rs in Thousands)

As at 31 December 2004 2004 2003

Schedule 6 - Inventories

Stores and Spares 4,838 6,348

Raw Materials 42,537 33,110

Components 873,903 609,574

Goods in Transit -Components 145,662 205,965

Finished Goods 93,194 88,536

Work-in-progress 522,721 291,566

1,682,855 1,235,099

Schedule 7 - Sundry Debtors

Unsecured :Debts outstanding for a period exceeding six months :

- Considered Good 2,130,538 2,032,562

- Considered Doubtful 276,856 263,508

2,407,394 2,296,070

Other Debts - Considered Good 4,132,784 3,325,100

6,540,178 5,621,170

Less: Provision for Doubtful Debts 276,856 263,508

6,263,322 5,357,662

Schedule 8 - Cash and Bank Balances

Cash and Cheques on hand 3,390 3,413Balances with Scheduled Banks

- On Current Account 1,158,095 1,434,195- On Deposit Account 3,001,241 2,091,820- On Margin Account 112 82

4,159,448 3,526,097

With Non Scheduled Banks - on Current Account 4,671 806

4,167,509 3,530,316

Current Accounts with Non Scheduled Banks includes

As at 31 As at 31 Maximum MaximumDecember December amount amount

2004 2003 outstanding outstandingat any time at any timeduring the during the

year previous year

a) Hongkong & Shanghai Banking Corporation Ltd., Sri Lanka 1,234 309 2,076 872

b) Hongkong & Shanghai Banking Corporation Ltd., Bangladesh 3,437 497 3,977 1,814


(Rs in Thousands)

As at 31 December 2004 2004 2003

Schedule 9 - Loans and Advances

Unsecured :

Loans, Considered Good 14,109 13,664

Advances recoverable in cash or in kind or for value to be received:

- Considered Good 855,580 953,891

- Considered Doubtful 12,138 11,640

867,718 965,531

Less: Provision for Doubtful Advances 12,138 11,640

855,580 953,891

Advance Tax (net of provision) 171,213 255,982

Balances with Customs, Port Trusts and Excise authorities 22,204 13,686

1,063,106 1,237,223

Schedule 10 - Other Current Assets

Contract Revenue in Excess of Billing 834,991 390,757

Interest Accrued on Investments and Fixed Deposits 52,042 64,144

887,033 454,901

Schedule 11 - Liabilities

Acceptances 2,262,862 1,766,124

Sundry Creditors

- Due to Small Scale Industrial Undertakings 153,095 72,906

- Others 5,391,116 4,472,536

5,544,211 4,545,442

Advance Payments from Customers 1,105,226 976,164

Billing in Excess of Contract Revenue 360,835 176,366

Investor Protection and Education Fund shall be credited by the following amounts when due:

- Unclaimed Dividends 6,146 5,752

- Unclaimed Fixed Deposits — 6

6,146 5,758

9,279,280 7,469,854

Schedule 12 - Provisions

Proposed Dividend 296,672 254,290

Corporate Dividend Tax 38,771 32,581

Leave Encashment 74,294 55,600

409,737 342,471


For the year ended 31 December 2004

Schedule 13 - Capacities, Production, Stock and Turnover (Refer Note 13 of Schedule 17)(Figures in brackets are in respect of previous year)

Annual Opening Stock of Production of Closing Stock of Turnover ofClass of goods Capacities Finished Goods Finished Goods Finished Goods Finished Goods

Quant. Rupees in Rupees in Rupees inDenom. Installed Quantity Thousands Quantity Quantity Thousands Quantity Thousands

Motors and Other Machines HP 1,325,000 56,339 52,106 1,093,152 31,936 34,216 1,095,205 995,813(750,000) (47,723) (35,301) (726,141) (56,339) (52,106) (715,942) (530,718)

Switchgear of all types Nos. 2,321,360 17,379 10,072 2,002,797 66,956 22,042 1,408,268 5,494,100(866,999) (10,216) (6,605) (672,925) (17,379) (10,072) (440,992) (4,096,830)

PLCC Equipment Nos 2,850 — — 1,530 — — 1,512 270,108(2,850) (—) (—) (1,797) (—) (—) (1,797) (207,377)

Measurand Convertors Nos. — — — — — — — —(30,000) (—) (—) (18,123) (—) (—) (17,835) (89,609)

Multiplexures Nos 50 — — 20 — — 19 9,586(50) (—) (—) (25) (—) (—) (23) (23,437)

Telemetering Equipment Nos 150 — — 19 — — 5 1,429(150) (—) (—) (102) (—) (—) (7) (2,433)

Turbochargers Nos. 200 — — 116 — — 116 464,211(150) (—) (—) (115) (—) (—) (115) (119,681)

Transformers MVA 8,000 — — 5,383 — — 5,383 1,788,600(4,100) (—) (—) (2,833) (—) (—) (2,833) (690,988)

Electronic Control and Supply Units Nos. 70,000 — — 65,039 — — 64,832 1,520,460for Variable Speed Drives and other (30,000) (—) (—) (26,822) (—) (—) (26,758) (786,757)applications

Mini Computer/Microprocessor based Value Rs.in 900,000 — — 590,259 — — — 590,259Systems Thousands (900,000) (—) (—) (941,683) (—) (—) (—) (941,683)

Non-Microprocessor Based Electronics Value Rs.in 70,000 — — 50,855 — — — 50,855(Analog and Digital) for Weighing, Thousands (70,000) (—) (—) (19,006) (—) (—) (—) (19,006)Batching and Force Measuring Systemsand Sub-Systems

Power Capacitors of all types MVAR 3,700 — — 2,399 — — 1,290 105,715(3,000) (—) (—) (2,705) (—) (—) (1,824) (101,413)

Robotics Nos. 15 — — 5 — — 5 6,552(15) (—) (—) (6) (—) (—) (6) (27,601)

Control Valves Nos. 2,750 — — 319 — — 318 21,546(2,750) (—) (—) (260) (—) (—) (256) (18,007)

Gas Analysers and Systems Nos. 300 — — 130 — — 130 108,330(300) (—) (—) (64) (—) (—) (57) (28,573)

Process Control Instruments Nos. 24,975 — — 19,380 — — 18,152 353,578(24,975) (—) (—) (14,492) (—) (—) (14,492) (310,298)

Others — — 372,428(—) (—) (653,881)

Project Items 26,358 36,936 9,291,452(42,155) (26,358) (5,093,052)

Erection and Other Services 1,157,204(942,231)

88,536 93,194 22,602,226(84,061) (88,536) (14,683,575)

Note: The Company’s products are exempt from licensing requirement under the industrial policy by virtue of notification No 477 (E) of 25.07.91


(Rs in Thousands)

For the year ended 31 December 2004 2004 2003

Schedule 14 - Other Income

DividendLong Term Investments - Trade 337 224Long Term Investments - Others 3 —Current Investments 10,796 —

11,136 224Interest

Long Term Investment 56,909 33,131Current Investment 1,011 8,080Deposit with Banks 74,973 111,956(Tax deducted at source Rs 13,338 thousandPrevious Year Rs 18,556 thousand)

Others 12,284 10,977

145,177 164,144

Profit on Sale of Long Term Investments (net) — 3,179

Miscellaneous Income 297,177 179,447

453,490 346,994Schedule 15 - Personnel Expenses

Salaries, Wages and Bonus 1,086,154 917,691Contribution to Gratuity Fund 20,740 27,050Contribution to Provident and Other Funds 68,755 66,404Workmen and Staff Welfare Expenses 137,704 116,182Other Personnel Expenses 47,147 33,978

1,360,500 1,161,305Schedule 16 - Other Expenses

Tools and Stores 214,774 166,818Royalty 24,917 22,580Freight and Forwarding 252,776 75,769Postage and Telephone 64,566 60,020Commission and Discount 175,668 173,098Power, Fuel and Water 121,780 91,404Travelling and Conveyance 338,357 282,482Insurance 95,779 72,561Rates and Taxes 31,309 25,873Rent 78,548 69,339Repairs : Buildings 27,558 15,519

Plant and Machinery 40,583 26,649Others 21,870 18,482

Provision for Doubtful Debts and Advances 13,888 9,295Bad Debts / Advances Written Off 140,015 73,644Provision for diminution in the value of Investment (1,713) —Loss on Sale of Current Investment (net) 15,544 —Loss on Sale of Fixed Assets (net) 7,412 2,265Printing and Stationery 33,482 27,732Bank Charges 56,552 43,321Legal and Professional 26,731 38,299Trade Mark Fees 113,011 73,418Miscellaneous 672,240 510,099

2,565,647 1,878,667


Schedule 17 - 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 range of engineering, products,solutions and services in areas of Automation and Power technology. The Company has extensive installed base for manufacturing and acountrywide marketing and service presence. Besides catering to Indian domestic market, the Company is also playing an increasing role inthe global market.

2. Significant Accounting Policies

2.1. Basis of Preparation of Financial Statements

These financial statements have been prepared on the accrual basis of accounting, under the historical cost convention, except forrevaluation of certain fixed assets, in accordance with the accounting principles generally accepted in India and comply with themandatory accounting standards issued by the Institute of Chartered Accountants of India, as applicable and the relevant provisions ofthe Companies Act, 1956.

2.2. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management tomake estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities asat the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results coulddiffer from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

2.3. Fixed Assets

Fixed assets are stated at the cost of acquisition, except for revaluation of certain land and building, less accumulated depreciation andimpairment losses, if any. Cost of fixed assets comprises purchase price, duties, levies and any directly attributable cost of bringing theasset to its working condition for the intended use. Borrowing costs related to the acquisition or construction of the qualifying fixedassets for the period up to the completion of their acquisition or construction are capitalised. Advances paid towards the acquisition offixed assets outstanding at each balance sheet date and the cost of fixed assets not ready for their intended use before such date aredisclosed under capital work in progress.

Capitalised software includes costs on Enterprise Resource Planning (ERP) Project and other costs relating to software, which providesignificant future economic benefits. ERP Project costs comprise licence fees and cost of system integration services.

All costs relating to upgradations/enhancements are generally charged off as revenue expenditure unless they bring significantadditional benefits of lasting nature.

Assets acquired under finance lease from 1 April 2001 are capitalised at the lower of their fair value and the present value of theminimum lease payments.

2.4. Depreciation/Amortisation

Depreciation on assets (except those described below) is provided on the straight-line method at the rates and in the manner prescribedin Schedule XIV to the Companies Act, 1956, which management considers as being representative of the useful economic lives of suchassets. Depreciation is provided from the date of capitalisation till the date of sale of assets.

The following assets are depreciated / amortised on the straight line method over a period of their estimated useful lives:

� Leasehold land and leasehold improvements over the primary period of the lease.

� Technical know-how fees over a period of six years from the year in which they become payable.

� Capitalised software costs over a period of five years.

Assets 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 asset unless there is reasonablecertainty that the Company will obtain ownership, wherein such assets are depreciated at the rates prescribed in Schedule XIV to theCompanies Act, 1956.

2.5. Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All otherinvestments are classified as long-term investments. Current investments are carried at lower of cost and fair value. Long-terminvestments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in thevalue of the investments.


2.6. Inventories

Inventories are stated at the lower of cost and net realisable value. The cost of various categories of inventories is arrivedat as follows:

� Stores, spares, raw materials and components - at rates determined on the moving weighted average method.

� Goods in Transit – at actual cost

� Work-in-progress and finished goods - at full absorption cost method based on annual average cost of production.Excise duty is included in the value of finished goods inventory.

Provision for obsolescence is made wherever necessary.

2.7. Retirement Benefits

Contributions to Provident Fund/Superannuation Fund, defined contribution schemes, are made at pre-determined ratesto the recognised Provident Fund Trust/Superannuation Fund Trust and are charged to the profit and loss account.

Contributions to the recognised Gratuity Fund and provision for leave encashment, defined benefit schemes, are madeon the basis of actuarial valuations made at the end of each financial year and are charged to the profit and lossaccount.

2.8. Revenue Recognition

� Sales of products and services are recognised when significant risks and rewards of ownership of products arepassed on to customers or when the service has been provided. Sales are stated at contractual realisable values,net of excise duty, sales tax and trade discounts.

� Revenues from long-term contracts are recognised on the percentage of completion method, in proportion that thecontract costs incurred for work performed up to the reporting date bear to the estimated total contract costs.Contract revenue earned in excess of billing has been reflected under “Other Current Assets” and billing in excessof contract revenue has been reflected under “Liabilities” in the balance sheet.

� Full provision is made for any loss in the year in which it is first foreseen.

� Liquidated damages/penalties are provided for as per the contract terms wherever there is a delayed deliveryattributable to the Company.

� Commission income is recognised as per contracts/receipt of credit note.

� Dividend income is recognised when the right to receive dividend is established.

� Interest income is recognised on the time proportion method.

2.9. Warranties

Provision for the estimated liability in respect of warranty costs is made in the year in which the revenues are recognised,based on technical evaluation and past experience.

2.10. Research and Development

All revenue expenses pertaining to research and development are charged to the profit and loss account in the year inwhich they are incurred and expenditure of capital nature is capitalised as fixed assets, and depreciated as per theCompany’s policy.

2.11. Foreign Currency Transactions

Foreign currency transactions are recorded by applying the respective monthly average rates. Exchange differencesarising on foreign currency transactions settled during the year are recognised in the profit and loss account for the year,other than exchange differences related to the liabilities for import of fixed assets that are adjusted to the cost of therelated fixed assets.

All foreign currency denominated monetary assets and liabilities are translated at the exchange rates prevailing on thebalance sheet date. The resultant exchange differences are recognised in the profit and loss account for the year, otherthan exchange differences related to the liabilities for import of fixed assets that are adjusted to the cost of fixed assets.

The premium or discount on forward exchange contracts is recognised in the profit and loss account over the period ofthe contract.


2.12. Taxation

Provision for current Income tax is made on the basis of the results of the year although the actual liability will be computed andpaid on the basis of the results for the year ending 31 March 2005.

The deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and lawsthat have been enacted or substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differencesare recognised to the extent there is reasonable certainty that the assets can be realised in future.

2.13. Operating Leases

Operating Lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term.

3. Sale of undertakings

3.1. Control Valve Business

Pursuant to the ABB Group’s decision to divest its upstream part of Oil, Gas and Petrochemical business and as approved by theshareholders, the Company has divested its Control Valve business to Kent Introl Private Limited on 12 July 2004. The totalconsideration received for sale of Control Valve business was Rs 128,102 thousand resulting in a gain to the Company ofRs 37,991 thousand, reported as profit on sale of undertaking in Profit and Loss Account as an exceptional item. The Company hasinvested the capital gain amount in specified assets as per the provisions of Section 54EC of the Income-tax Act, 1961.Accordingly no tax liability arises on this capital gain.

3.2. Metering Business

Company’s Metering business was divested to Elster Metering Private Limited on 1 April 2003. The divestment has resulted in again to the Company of Rs 233,008 thousand, reported as profit on sale of undertaking in Profit and Loss Account as anexceptional item.

2004 2003

4. Earnings Per Share

a) Weighted Average number of Equity Shares of Rs 10 each

outstanding during the year 42,381,675 42,381,675

b) Net profit after tax attributable to equity shareholders (Rs in thousand): 1,543,191 1,241,935

c) Basic and Diluted Earnings Per Share (in Rs) 36.41 29.30

d) Net profit after tax available for equity shareholders

excluding Exceptional Item (Rs in thousand)

Net profit after tax 1,543,191 1,241,935

Less: Profit on Sale of Undertaking 37,991 233,008

1,505,200 1,008,927

e) Basic and Diluted Earnings Per Share excluding Exceptional Item (in Rs) 35.52 23.81

5. Segment Reporting

A) Primary Segment Reporting (by Business Segments)

i) Composition of Business Segments

The Company’s business segments are organised around technologies it provides to its customers, which include utilities,

industries, channel partners and original equipment manufacturers.


Power Technology (PT) Segment manufactures, engineers, supplies and provides solutions for power transmission, powerdistribution and control and protection systems for power plants. The segment produces transformers, switchgears, breakers,

capacitors, power line carrier communication equipment, relay control panels etc.

Automation Technology (AT) Segment provides products, systems, software and services for the automation and

optimisation of discrete, process and batch manufacturing operations plus related business aspects. Key technologies include

measurement control, instrumentation, process analysis, drives and motors, power electronics, robots and low-voltage

products; all geared towards one common Industrial IT architecture for real-time automation and information solutions across

the business enterprise.

ii) The accounting policies used in the preparation of the financial statements of the Company are also applied for segment

reporting.

iii) Segment revenues, expenses, assets and liabilities are those, which are directly attributable to the segment or are allocated

on an appropriate basis. Corporate and other revenues, expenses, assets and liabilities to the extent not allocable to

segments are disclosed in the reconciliation of reportable segments with the financial statements.

iv) Inter Segment Transfer Pricing

Inter segment prices are normally negotiated amongst the segments with reference to the costs, market prices and business

risks, within 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

(Rs in Thousands)

Power Automation Total of

Technology Technology Reportable

Segment Segment Segments

External Sales 13,626,478 8,964,900 22,591,378

(9,209,080) (5,444,447) (14,653,527)

Inter Segment Sales 147,534 193,676 341,210

(267,007) (67,988) (334,995)

Other Income 233,853 46,218 280,071

(128,261) (18,632) (146,893)

Segment Revenues 14,007,865 9,204,794 23,212,659

(9,604,348) (5,531,067) (15,135,415)

Segment Results 1,376,691 957,408 2,334,099

(867,729) (532,804) (1,400,533)

Segment Assets 7,030,457 4,066,304 11,096,761

(6,122,647) (3,143,003) (9,265,650)

Segment Liabilities 5,426,670 3,387,870 8,814,540

(4,557,792) (2,455,358) (7,013,150)

Capital Expenditure 163,518 242,581 406,099

(261,535) (69,706) (331,241)

Depreciation/Amortisation 88,695 50,970 139,665

(77,226) (42,379) (119,605)


vii) Reconciliation of Reportable Segments with the Financial Statements(Rs in Thousands)

Revenues Results/ Assets LiabilitiesNet Profit

Total of Reportable Segments 23,212,659 2,334,099 11,096,761 8,814,540

(15,135,415) (1,400,533) (9,265,650) (7,013,150)

Corporate - Unallocated/ Others (net) 184,267 44,584 5,986,076 686,237

(230,149) (137,899) (4,835,522) (1,046,487)

Inter Segment Sales -341,210 — — —

(-334,995) (—) (—) (—)

Interest Expense — -13,483 — —

(—) (-9,505) (—) (—)

Exceptional Item – Profit on sale of Undertakings — 37,991 — —

(—) (233,008) (—) (—)

Provision for tax — -860,000 — —

(—) (-520,000) (—) (—)

As per Financial Statement 23,055,716 1,543,191 17,082,837 9,500,777

(15,030,569) (1,241,935) (14,101,172) (8,059,637)

B) Secondary Segment Reporting (by Geographical Segments)

Secondary segment disclosures are reported on the basis of geographical location of customers.(Rs in Thousands)

India Rest of World Total

Revenues 20,668,994 2,386,722 23,055,716

(12,052,801) (2,977,768) (15,030,569)

Total Assets 16,698,924 383,913 17,082,837

(13,162,651) (938,521) (14,101,172)

Capital Expenditure 503,533 1,166 504,699

(438,708) (1,372) (440,080)



2004 2003

6. Amounts due from companies under the same management as defined insub-section (1-B) of Section 370 of the Companies Act, 1956, are as under:

a) Sundry Debtors- ABB Corporate Research Center Limited (Formerly ABB 12,345 —

Industrial IT Development Center Limited)

b) Loans and Advances- Universal ABB Power Cables Limited — —

(Maximum amount due during the year Rs Nil, previous year Rs 500 thousand)- ABB Corporate Research Center Limited 8,711 728

(Formerly ABB Industrial IT Development Center Limited)(Maximum amount due during the year Rs 8,711 thousand, previous year Rs 6,436 thousand)

- ABB Holdings (South Asia) Limited 751 —(Maximum amount due during the year Rs 751 thousand, previous year Rs 233 thousand)

7. Sundry creditors include amounts due to Small Scale Industrial Undertakings (SSI’s).Names of the SSI’s to whom the Company owes any sum, which is outstanding formore than 30 days as at 31 December 2004 are as per attached Annexure. 153,095 72,906

This disclosure is on the basis of information available with the Companyregarding the status of suppliers.

8. Contingent Liabilities

i) Claims against the Company not acknowledged as debts in respect of 395,270 309,508sales tax, excise and other matters

ii) Bills discounted 291,314 173,772The above excludes bills co-accepted by the customers’ bankers/guaranteedby the State Governments Rs 438,399 thousand(previous year Rs 533,069 thousand)

iii) Income tax matters in dispute 183,220 238,380

9. Estimated amount of contracts remaining to be executed on capital accountand not provided for (net of advances) 179,875 166,647

10. Finance Lease Obligations

The Company normally acquires computers and vehicles under finance lease with the respective underlying assets as security. Minimum leasepayments outstanding as of 31 December 2004 in respect of these assets are as follows:- (Figures in brackets are in respect of the previous year):

(Rs in Thousands)

Due Total Minimum Interest Present Value of Lease Payments Not Due Minimum Lease

outstanding as on Payments31 December 2004

Within one year 8,655 1,333 7,322(19,791) (2,497) (17,294)

Later than one year and not later than five years 8,020 1,030 6,990(14,110) (1,772) (12,338)

16,675 2,363 14,312(33,901) (4,269) (29,632)

11.11.11.11.11. The Company has non-cancelable operating lease obligations of Rs Nil (previous year Rs 4,059 thousand) payable within one year as on31 December 2004. Rental expenses towards cancelable and non- cancelable operating leases charges to the profit and loss accountamounts to Rs 78,548 thousand (previous year Rs 69,339 thousand).



12. Deferred Tax

i) The break up of net deferred tax liability as at 31 December 2004 is as follows: (Figures in brackets are in respect of the previous year):

Deferred tax Deferred taxasset liability

Timing differences on account of:Difference between book depreciation and depreciation 284,851under the Income-tax Act, 1961 (260,275)

Expenditure under Section 43B of the Income-tax Act, 1961 24,614(16,562)

Lease Finance 5,237(10,630)

Provisions for doubtful debts and advances 105,895(70,528)

Others 16,834(16,284)

152,580 284,851(114,004) (260,275)

Net Deferred Tax Liability 132,271(146,271)

13. Capacities, Production, Stock and Turnover (Refer Schedule 13)

13.1 Capacities

a) Installed capacities are as certified by the Managing Director, but not verified by the Auditors, being a technical matter.

13.2 Production

a) Production of finished goods is inclusive of production for captive use.

b) “Others” represent internally manufactured components, sold during the year. The Company considers these ‘meant for sale’when actually sold. Since the quantitative denominations of these items are dissimilar, it is impracticable to disclose the quanti-tative information in respect of production and turnover.

13.3 Project items

a) These comprise sale of equipment and miscellaneous items meant for execution of projects and trading items. Since the quanti-tative denominations of these items are dissimilar, it is impracticable to disclose the quantitative information in respect thereof.

b) Purchases of these items during the year aggregated to Rs 7,787,259 thousand (previous year Rs 4,067,237 thousand).

13.4 Work -in-Progress

The Work-in-progress at the beginning of the year amounted to Rs 291,566 thousand (previous year Rs 389,298 thousand).

(Rs in Thousands)


14. Earnings in Foreign Exchange(on accrual basis)

i) Export of Goods- Direct on FOB basis 2,102,028 2,780,013- Deemed Exports 145,168 588,932

ii) Goods supplied/services rendered locallyagainst foreign exchange remittances 652,666 90,433

iii) Erection and other services 222,473 102,307

iv) Other Income:a. Commission 56,829 50,704b. Others 5,392 44,744

3,184,556 3,657,133


For the year ended 31 December 2004

2004 200315. Consumption of Raw Materials and Components

Quantity Rs. in Quantity Rs. inThousands Thousands

Ferrous Metals MT 888 39,109 2,848 160,001Non-Ferrous Metals MT 1,726 325,857 1,392 217,879Components * 5,980,294 * 4,494,311Others 849,516 406,950

7,194,776 5,279,141

% %

Imported 53.13 3,822,847 56.93 3,005,180

Indigenously acquired 46.87 3,371,929 43.07 2,273,961

100.00 7,194,776 100.00 5,279,141

For the purpose of para 4D (c) of Part II of Schedule VI to the Companies Act, 1956, components and spare parts are assumed to mean thoseincorporated in the product finally sold and not those used as spares for the repairs and maintenance of Plant and Machinery.

* Since the quantity denominations and the type of components are dissimilar in nature, it is impracticable to disclose the quantitativeinformation in respect thereof.

(Rs in Thousands)2004 2003

16. Value of imports on CIF basis(on accrual basis)

Raw Materials and Components 4,622,740 2,585,410

Finished Goods 594,513 291,382

Maintenance Spare Parts 750 611

Capital Goods including Technical Know-how 122,066 99,108

Software 11,359 14,913

Project items 844,238 607,899

6,195,666 3,599,323

17. Expenditure in foreign currency(on accrual basis)

Royalty 24,917 22,580

Trade Mark Fees 113,011 73,418

Commission and Discount 9,224 1,218

Professional / Project Consultancy 177,736 29,616

Others 286,098 147,262

610,986 274,094

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

i) Number of non resident shareholders 3 3

ii) Number of equity shares held by them on which dividend was paid 22,084,198 22,084,198

iii) Year ended to which the dividend related December 2003 December 2002

iv) Amount remitted 132,505 132,505


For the year ended 31 December 2004 (Rs. in Thousands)

2004 2003

19. Managerial Remuneration

a) i) Directors’ fee 175 170

ii) Other remunerationSalary 3,000 2,500Commission to Managing Director 3,000 2,500Commission to Non Executive Directors 1,200 900Contribution to Provident and other funds 954 799Other perquisites 1,958 1,515

10,112 8,214

10,287 8,384b) Computation of Net Profit as per Section 349 of the Companies Act, 1956

Profit Before Tax as per Profit and Loss Account 2,403,191 1,761,935

Add: Managerial Remuneration 10,287 8,384Loss on Sale of Fixed Assets 8,859 4,715Provision for doubtful debts and advances 13,888 9,295

33,034 22,394

2,436,225 1,784,329

Less: Exceptional Item – Profit on Sale of Undertaking 37,991 233,008Profit on sale of Fixed Assets 1,447 2,450

39,438 235,458

Net Profit as per Section 349 of the Companies Act, 1956 2,396,787 1,548,871

Commission to Managing Director 3,000 2,500Commission to Non Executive Directors 1,200 900

4,200 3,400

Commission to Managing Director is subject to further recommendation and approval of Remuneration Committee and the Board. For the year ended31 December 2003, Rs 2,100 thousand was paid as commission to Managing Director based on recommendation and approval of RemunerationCommittee and the Board.

20. Auditors’ Remuneration including amount paid to erstwhile auditors

i Audit Fee 3,350 3,350ii Tax Audit Fee 1,975 1,975iii Other Services (includes fees for quarterly reviews) 3,260 3,366iv Reimbursement of out of pocket expenses 1,029 948

9,614 9,639

21. Interest charge for the year includes Rs 9,308 thousand (previous year Rs 5,989 thousand) being interest on fixed period loans.

22. Net foreign exchange gain of Rs 35,360 thousand (previous year Rs 42,219 thousand) has been accounted for in the profit and loss account.

23. Research and development expenditure of Rs 17,909 thousand (previous year Rs 43,420 thousand) on revenue account has been incurredduring the year.

24. Construction Contracts

Contract revenue recognised as revenue for the year ended 31 December 2004 11,185,935 5,509,360

Aggregate amount of contract costs incurred and recognised profits (less recognised losses) up to31 December 2004 for all the contracts in progress 18,522,858 9,126,115

The amount of customer advances outstanding for contracts in progress as at 31 December 2004 576,359 516,728

The amount of retentions due from customers for contracts in progress as at 31 December 2004 1,201,026 830,889


25. 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 A/S,Frederecia, Denmark ABB (Asea Brown Boveri) S.A., Amadora, PortugalABB (China) Ltd., Beijing, China ABB (Hong Kong) Limited, Hong KongABB (P.J.S.C.), Teheran, Iran ABB (Pvt) Ltd., LahoreABB A/S, Skovlunde, Denmark ABB AB, Västerås, SwedenABB AG, Mannheim, Germany ABB AG, ViennaABB Agencies Pte. Ltd., Singapore, Singapore ABB AP Trading & Engineering AG, ZurichABB Arab S.A.E., Cairo, Egypt ABB AS, BillingstadABB AS, Divisjon Kraft,Skien,Norway ABB AS, TallinnABB Asia Pacific Ltd., Hong Kong ABB Asia Pacific Services Ltd., Hong KongABB Australia Pty Limited, Sydney, Australia ABB Automation E.C., BahrainABB Automation Ltd., Stevenage, United Kingdom ABB Automation Ltd., WarringtonABB Automation Products GmbH, Eschborn, Germany ABB Automation Products S.A., BarcelonaABB Automation SAS, Massy, France ABB Automation Systems Ltd., WarringtonABB Automation Technologies AB, Västerås, Sweden ABB Bailey Pte. Ltd., SingaporeABB BV, Rotterdam, Netherlands ABB Calor Emag Mittelspannung GmbH, Ratingen,ABB Capital, B.V., Amsterdam ABB Chongqing Transformer Company Ltd., Chongqing CityABB Control Ltd., Exhall, Coventry, United Kingdom ABB Distribution Transformer (Hefei) Limited, AnhuiABB Electrical Industries Ltd., Riyadh, Saudi Arabia ABB Electroengineering, RussiaABB Elektrik Sanayi A.S., Istanbul, Turkey ABB Elektro s.r.o., BratislavaABB Energy Automation S.p.A., Abu Dhabi, UAE ABB Energy Engineering AG, Zurich, SwitzerlandABB Engg. Technologies Co. (KSCC), Safat, Kuwait ABB Engineering (Shanghai) Ltd., Shanghai, ChinaABB Engineering Trading and Service Ltd., Budapest,Hungary ABB Entrelec SAS, VilleurbanneABB Flexible Automation Ltd., Milton Keynes, UK ABB Group Process Center S.A.E., Cairo, EgyptABB Group Services Center GmbH, Mannheim, Germany ABB Hefei Transformer Co. Ltd., Hefei, ChinaABB High Voltage Co. S.A.E., Heliopolis/Cairo, Egypt ABB Holding A.S., Istanbul, TurkeyABB Holding AS, Billingstad ABB Holdings (Pty) Ltd., Sunninghill, South AfricaABB Holdings (South Asia) Ltd., Bangalore, India ABB Holdings Inc., NorwalkABB Holdings Pte. Ltd., Singapore ABB Holdings Sdn. Bhd., Subang Jaya, MalaysiaABB Huadian High Voltage Switchgear (Xiamen) Company Ltd. ABB Inc., Raleigh, NCABB Inc., St. Laurent, Quebec, Canada ABB Industri og Offshore AS, Billingstad, NorwayABB Industria S.p.A. Milan, Italy ABB Industrial Systems Ltd., DundalkABB Industries (L.L.C), Dubai, UAE ABB Industries AB, VasterasABB Industries OY, Finland ABB Industry Pte. Ltd., SingaporeABB Information Systems Ltd., Zurich, Switzerland ABB Instrumentation Ltd., St. Neots, United KingdomABB Instrumentation Ltd., Warrington ABB Instrumentation S.p.A., Milan, ItalyABB Instrumentation, Massy, France ABB International Marketing Ltd., Zurich, SwitzerlandABB K.K., Tokyo, Japan ABB Karebo Manufacturers (Pty), MidrandABB Limited, Auckland, New Zealand ABB Limited, Bangkok, ThailandABB LLC, Al Hamriya, Oman ABB Logistics Center Europe GmbH, MendenABB Ltd, Dublin, Ireland ABB Ltd, Zurich, Switzerland


ABB Ltd., Kampala, Uganda ABB Ltd., Kiev, UkraineABB Ltd., London, United Kingdom ABB Ltd., Lusaka, ZambiaABB Ltd., Seoul, South Korea ABB Ltd., Taipei, TaiwanABB Ltd., Warrington, United Kingdom ABB Ltd., ZurichABB Lummus Heat Transfer B.V., The Hague ABB Ltd., Osasco, BrazilABB Malaysia Sdn Bhd, Subang Jaya, Malaysia ABB LV Installation Materials Co. Ltd., Beijing, ChinaABB Manufacturing Sdn. Bhd., Subang Jaya, Malaysia ABB Manufacturing & Consumer Industries AB, Västerås, SwedenABB MEA Participation Ltd., Zurich, Switzerland ABB MC, St Ouen l’Aumone, FranceABB Norden Holding AB, Stockholm ABB Mexico S.A. de C.V., Tlalnepantla, MexicoABB Payment Services B.V., Amstelveen ABB Oy, Helsinki, FinlandABB Power Technologies Management Ltd., Zurich ABB Power Technologies AB, LudvikaABB Power Technology Products AB, Ludvika ABB Power Technologies S.p.A., MilanoABB Process Analytics Ltd., St. Neots, ABB Power Technology S.A., Zaragoza, SpainABB Process Industries Division, Oslo ABB Process and Automation, SunninghillABB Progetto S.p.A., Bergamo, Italy ABB Process Industries GmbH, Eschborn, GermanyABB S.A., Panama, Panama ABB S.A., Buenos Aires, ArgentinaABB S.p.A., Milan, Italy ABB S.A., Paris La DéfenseABB SACE S.p.A., Sesto S. Giovanni (MI), Italy ABB s.r.o., PragueABB Schaltanlagentechnik GmbH, Ladenburg ABB SAE S.p.A, Milan, ItalyABB Sécheron S.A., Satigny, Switzerland ABB Schweiz AG Baden, SwitzerlandABB Service Co. Ltd., Al Khobar, Saudi Arabia ABB Service AB, Västerås, SwedenABB Shanghai Motors Co. Ltd., Shanghai ABB Servomotors S.r.l., Milan, ItalyABB South Africa (Pty) Ltd., Sunninghill, South Africa ABB Solutions S.p.A., Milano, ItalyABB Steward (PVT) Ltd., Harare, Zimbabwe ABB Sp. zo.o., Warsaw, PolandABB Stotz-Kontakt GmbH, Mannheim, Germany ABB Stotz Kontakt Eléctrica, Unipessoal, Lda., PortoABB Technologies Ltd., Tirat Carmel, Israel ABB Strömberg DO 27 Oy, Helsinki, FinlandABB Technology Ltd., Zurich, Switzerland ABB Technology FLB AB, StockholmABB Transformers Ltd., Waterford ABB Transformatoren GmbH, Bad Honnef, GermanyABB Trasmissione & Distribuzione S.p.A., Milan, Italy ABB Transmission and Distribution Sdn. BhdABB Turbo-Systems AG, Baden, Switzerland ABB Tubío S.A., San LuisABB Utilities GmbH, Mannheim, Germany ABB Utilities AB, VästeråsABB Xiamen electrical Contolgear Co Ltd. China ABB Vetco Gray U.K. Ltd., AberdeenABB Xinhui LowVoltage Switchgear Co.Ltd ABB Xiamen Switchgear Co. Ltd., Xiamen, ChinaABB Zhongshan Transformer Company Ltd ABB Zamech Marine Sp. zo.o., ElblagAsea Brown Boveri Holding Ltd., Bangkok Asea Brown Boveri (China) Investments Ltd., BeijingAsea Brown Boveri Inc., Paranaque, Metro Manila Asea Brown Boveri Inc., Norwalk, CT, United StatesAsea Brown Boveri Ltd., Nairobi, Kenya Asea Brown Boveri Jumet S.A., Jumet, BelgiumAsea Brown Boveri Ltda., Bogotá, Colombia Asea Brown Boveri Ltd., Port LouisAsea Brown Boveri S.A., Brussels, Belgium Asea Brown Boveri Ltda., La PazAsea Brown Boveri S.A., Lima, Peru Asea Brown Boveri S.A., Caracas, VenezuelaAsea Brown Boveri S.A., Santiago, Chile Asea Brown Boveri S.A., Metamorphossis AtticaElectrical Materials Center, Riyadh, Saudi Arabia Busch-Jaeger Elektro GmbH, Mannheim/LüdenscheidPT ABB Transmission and Distribution, Jakarta Modulec S.A., San Luis, ArgentinaABB Corporate Research Limited (formerly known as Universal ABB Power Cables Ltd., Satna, IndiaABB Industrial IT Development Center Limited)

Associate: Integra Hindustan Control Limited

Managing Director: Mr. Ravi Uppal


(Rs in Thousands)

2004 2003b) Transactions with related parties

i) Sales, Services and other income

Fellow Subsidiaries

- ABB (Hong Kong) Limited, Hong Kong 9,646 182,390

- Other fellow subsidiaries 1,104,500 806,798

1,114,146 989,188

Integra Hindustan Control Limited (an associate) 18,611 3,448

ii) Purchases of Raw Materials, Components and Project items

Fellow Subsidiaries

- ABB Turbo-Systems AG, Baden 554,507 336,492

- ABB Automation Technologies AB, Vasteras 613,029 342,285

- Other fellow subsidiaries 3,843,840 2,076,294

5,011,376 2,755,071

iii) Expenditure on Royalty, Trade-mark, Technical and Consultancy Services

Holding Company 113,011 79,982

Fellow Subsidiaries

- ABB Information Systems Ltd., Zurich — 34,830

- ABB Technology Ltd., Zurich, Switzerland — 25,016

- ABB Group Services Center GmbH, Mannheim, Germany — 24,648

- ABB Power Technologies AB, Ludvika — 67,704

- Other fellow subsidiaries 19,685 26,622

19,685 178,820

iv) Expenditure on Other Services

Holding Company 6,852 654

Fellow Subsidiaries

- ABB Information Systems Ltd., Zurich, Switzerland 53,993 —

- ABB Technology Ltd., Zurich, Switzerland 132,504 —

- ABB Power Technologies AB, Ludvika 164,586 10,175

- ABB Schweiz AG Baden, Switzerland — 9,431


440,189 52,832

v) Capital expenditure for Technical Know how

Fellow Subsidiaries

- ABB Turbo-Systems AG, Baden, Switzerland 11,220 —

- ABB Oy, Helsinki, Finland 4,481 12,513

- ABB SACE S.p.A., Sesto S. Giovanni (MI), Italy 11,070 —

- ABB Ltd., Zurich — 19,874

- ABB Power Technology Products AB, Ludvika — 3,542

- ABB Industries OY, Finland 13,319 —

- Other fellow subsidiaries 3,391 —

43,481 35,929


(Rs in Thousands)

2004 2003

vi) Capital expenditure

Fellow Subsidiaries

- ABB Australia Pty Limited, Sydney, Australia 26,098 —

- ABB Schweiz AG Baden, Switzerland 18,740 1,448

- ABB Transformatoren GmbH, Bad Honnef, Germany 9,362 —

- ABB Trasmissione & Distribuzione S.p.A., Milan, Italy 10,362 —

- ABB Ltd., Zurich — 2,330

- Asea Brown Boveri Jumet S.A., Jumet, Belgium — 2,254

- ABB Stotz-Kontakt GmbH, Mannheim, Germany — 5,068

- ABB Power Technology Products AB, Ludvika — 3,307

- Other fellow subsidiaries 6,988 771

71,550 15,178

vii) Outstanding balances

Debtors and Advances

Holding Company 46 —

Fellow Subsidiaries

- ABB Xiamen Electrical Contolgear Co Ltd. China 36,154 21,785

- ABB (Hong Kong) Limited, Hong Kong — 131,964


276,971 499,653

Integra Hindustan Control Limited (an associate) 3,000 262

Creditors


Fellow Subsidiaries

- ABB Oy, Helsinki, Finland 194,338 —

- ABB Power Technologies AB, Ludvika 175,600 202,882

- ABB Automation Technology AB, Västerås, Sweden 152,117 92,180

- ABB SACE S.p.A., Sesto S. Giovanni (MI), Italy 150,547 76,397

- ABB Automation Products GmbH, Eschborn, Germany 77,135 157,028


1,470,946 1,136,015

viii) Provision for doubtful debts

Fellow Subsidiaries 1,303 479

ix) Dividend Paid during the year


Fellow Subsidiaries 15,048 15,048

x) Remuneration to Managing Director 8,912 7,314

xi) Dividend received from Associate 337 224

26. The Company has entered into factorisation arrangements with certain banks on a non recourse basis whereby debtors at the year end

amounting to Rs 2,009,265 thousand (previous year Rs 1,427,135 thousand) have been transferred to these banks and has been netted off

against sundry debtors.











27. Current Investments bought and sold during the year:(Rs in Thousands)

Name No. of Units Face Value Purchase Cost

HDFC Liquid Fund - Premium Plan 29,999,263 299,992 360,000

NLFID Canliquid Fund 29,887,533 298,875 300,000

Prudential ICICI Institutional Liquid Plan 21,940,002 219,400 260,000

HDFC Cash Management Fund 23,504,193 235,042 250,000

Grindlays Cash Fund 25,000,000 250,000 250,000

Tata Gilt Securities Funds 11,762,199 117,622 200,000

Birla Gilt Plus Regular Plan 9,355,784 93,558 200,000

Templeton India Government Securities Fund 8,814,090 88,141 200,000

HSBC Cash Fund - Institutional Plan 20,067,661 200,677 200,000

TATA Liquid Super High Investment Fund 17,985,814 179,858 200,000

Templeton India Treasury Management Account 200,000 200,000 200,000

LIC Liquid Fund 9,258,059 92,581 100,000

HUDCO Bonds 50,000,000 50,000 56,235

28. The pro rata difference between the forward contract rate and the exchange rate on the date of transaction to be charged to Profit & Lossaccount is Rs 8,474 thousand (previous year to be credited Rs 12,463 thousand)

29. The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the current year’s classifications. Anotherfirm of Chartered Accountants audited the prior year financial statements.


Annexure to note 7 of Schedule 17- Notes to the Account

Names of the Small Scale Industrial Undertakings to whom the Company owes any sum which is outstanding for more than 30 days asat 31 December 2004.

A.K.Industries Matchless EngineersAbhilasha Engineers Mathura Switchgears Private LimitedAce Polybond Private Limited MB Control & Systems Private LimitedAdarsha Controls Mech Tex Manufacturing CompanyAdvance Components & Instruments Metal Craft Engineering & SpringAdvance Engineering Industries Microsign Sales & ServicesAeropack Corporation Milind Engineering WorksAgate Electro Minal Electricals & EngineeringAgro Auto Forging (Baroda) Private Limited Minal Equipment EngineersAgya Enterprises Mini Power Electronics Private LimitedAlan Electronic Systems Private Limited Mita Fasteners Private LimitedAlfeco Monal Equipment Engineers Private LimitedAmar Radio Corporation Monarch IndustriesAmba Industries Monarch Self Adhesive Tapes (I) Private LimitedAmey Innovatives MTL India Private LimitedAnil Metal Industries Myageri ElectronicsAress High Duty Forgings Private Limited Naren ElectronicsAs Foundries Private Limited Narkhede UdyogAshwin N. Desai & Company NF Private LimitedAuto Shell Casts Private Limited Nikitech ElectronicsAvn Tools & Instruments Private Limited Nootan Engineering IndustriesB.B.Electrotechnic Oblum ElectricalBajaj Insulation Okay Tools Private LimitedBaroda Bushings & Insulators Pace Exim CorporationBri Electricals Private Limited Panchal EngineersBumper India Private Limited Paramount Seals & PackingsCapso Engineers Patel Engineering WorksChemicals & Lacquer Pavan Pressure CastChetna Engineering Company Peenya Industrial GasesChoksi Heraeus Private Limited Phenoplast CorporationConmat Systems Polycab Wires Private LimitedConnectwell Industries Polyphase MotorsControl Dynamics Popular Power Controls Private LimitedCrescent Engineering Power TechnologiesDelton Control & Switchgears Pragati Electricals Private LimitedDhaval Electricals Prathoma Switchgears Private LimitedDiakem Products Bombay Private Limited Precision Spring WorksDolf Industries Press O Parts IndustriesDuflon Polymers Private Limited Priyam SwitchgearsEapen Joseph & Company Procon Instrumentation Private LimitedEastern Electricals Rajendra IndustriesEasy Pack Ramani EnterprisesEfficient Engineering Rapid ElectronicsElectrical Controls & Systems Recherche IndustriesElectronic Relays Private Limited Reliable Electronics ComponentsElmex Controls Private Limited Rescon Manufacturing Company Private LimitedEnercon Systems Resistors ManufacturingEnterprising Engineers RS ElectronicsEri Electricals Sabar Industries


Exalt Engineering Industries Sahyadri Starch & ChemicalsExcel Process Private Limited Sai InternationalFabionix Inda Private Limited Sainik Machine ToolsFiber Poly Glass Sajas ElectricalsFibertek Communication Private Limited Sam TechFluoro Plast Private Limited Samarth Metal IndustriesFortifori Plastics Samjana Rubber ProductsFutura Automation Sara EnterprisesGarda Tools Senapathy WhitelyGD India Private Limited Seva IndustriesGG Tronics Shah Electrical EngineersGlory Papers Shanmugha Precision ForgingsGoa Resistors Private Limited ShinographGoyal Electronic Industries Shivam PolymersGujarat Cables & Enamelled Products Shreyas EngineersGujarat Wire & Metal Industries Shripad AgenciesGyro Laboratories Private Limited Siddharth IndustriesHiren Industries Siemag IndustriesTrisons Corporation Somesh Forge Private LimitedID Technologies Specialised Components Private LimitedIndian Reyon Industries Sree Venkateshwara Power IndustriesIndian Technological Products Private Limited Sri Ganesh Switchgears Private LimitedIndiana Cable Trays Corpn Star Plating IndustriesIndus Marketing Stud IndiaInsta Controls Sun Precision Cast Private LimitedInsulators & Electricals Company Sungrace Electrticals Private LimitedInterface Connectronics Suprabha Protective Products Private LimitedJK Systems Supreme Steel IndustriesKedar Enterprises Swastik TechnologiesKei Industries Switron DevicesKerb Konus Fasteners Private Limited Symcom EngineersKiran Packaging Industries T&F Insulations Private LimitedKlenzaids Bioclean Private Limited Techno-Flow IndustriesKS Instruments The Motwane ManufacturingKudal Engineers Tilak & Tej IndustriesKulkarni Powder Metallurgical Tirupati Rubber ProductsKumaran Industries Transvick IndustriesLeonardo Engineering Tushar IndustryLoad Controls India Private Limited Tushar Metals Private LimitedLoius Wireless Technologies Uma EnterprisesM.G.Marketing Vaibhav Engineers Private LimitedManometer (India) Private Limited Variturn Electro Products Private LimitedMaruti Engineers Vinmech IndustriesMascasts Volco Industries


(Rs in Thousands)


A. Cash Flow from Operating Activities

Net Profit Before Tax and Exceptional Item 2,365,200 1,528,927

Exceptional Item - Profit on Sale of Undertaking 37,991 233,008

2,403,191 1,761,935

Adjustments for

Depreciation 203,597 184,350

Unrealised Losses / (Gains) on Restatement of Monetary Assets (net) 4,169 (7,487)

Unrealised Losses / (Gains) on Restatement of Monetary Liabilities (net) (8,413) 16,999

Loss / (Profit) on Sale of Fixed Assets, (net) 7,412 2,265

(Profit) / Loss on Sale of Investments, (net) 15,544 (3,179)

Write back of provision for diminution in the value of Investment (1,713) —

Interest Income (145,177) (164,144)

Dividend Income (11,136) (224)

Interest Expense 13,483 9,505

Exceptional Item - Profit on Sale of Undertaking (37,991) (233,008)

Operating Profit before Working Capital Changes 2,442,966 1,567,012

Movement in Working Capital

Decrease/(Increase) in Sundry Debtors (909,694) (654,370)

Decrease/(Increase) in Inventories (447,756) (117,109)

Decrease/(Increase) in Loans and Advances 89,213 (385,984)

Decrease/(Increase) in Other Current Assets (444,234) (390,757)

Increase/(Decrease) in Current Liabilities and Provisions 1,831,139 1,849,946

Working Capital Items Transferred on Sale of Undertakings (56,139) (89,075)

Cash Generated from Operations 2,505,495 1,779,663

Direct Taxes Paid (net of refunds) (789,231) (528,530)

Net cash generated from Operating Activities 1,716,264 1,251,133

B. Cash Flow from Investing Activities

Purchase of Fixed Assets (504,699) (440,080)

Proceeds from sale of Fixed Assets 12,799 5,212

Purchase of Investments (3,258,310) (607,026)

Sale/Maturity of Investments 2,760,691 300,076

Interest Received 157,279 125,273

Dividends Received 11,136 224

Consideration Received from Sale of Undertaking 128,102 407,447

Net cash used in Investing Activities (693,002) (208,874)

Cash Flow Statement


(Rs in Thousands)For the year ended 31 December 2004 2004 2003

C. Cash Flow from Financing ActivitiesProceeds from new Borrowings 778,440 7,838Repayment of Borrowings (864,549) (30,495)Interest Paid (13,483) (9,505)Dividend paid (286,477) (286,402)

Net Cash used in Financing Activities (386,069) (318,564)

Net Increase in Cash and Cash Equivalents (A+B+C) 637,193 723,695

Cash and Cash Equivalents (Opening Balance) 3,530,316 2,806,621

Cash and Cash Equivalents (Closing Balance) 4,167,509 3,530,316

Components of Cash and Cash Equivalents as at 31 December 2004 2003

Cash and Cheques on Hand 3,390 3,413

Balances with Banks - on Current Account 1,162,766 1,435,001

- on Deposit Account 3,001,241 2,091,820

- on Margin Account 112 82

4,167,509 3,530,316

Note: The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the classification of the current year.











I Registration Details

Registration No. 0 3 2 9 2 3 State Code 0 8

Balance Sheet Date 31 12 04

Date Month Year

II Capital Raised during the year (Rs in Thousands)

Public Issue Rights Issue

NIL NIL

Bonus Issue Private Placement

NIL NIL

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

Total Liabilities Total Assets

7 3 9 3 8 2 0 7 3 9 3 8 2 0

Sources of Funds

Paid-up Capital Reserves and Surplus

4 2 3 8 1 7 6 8 2 2 8 0 0

Secured Loans Unsecured Loans

1 4 3 1 2 6 2 0

Deferred Tax Liability

1 3 2 2 7 1

Application of Funds

Net Fixed Assets Investments

1 9 4 9 3 4 3 1 0 6 9 6 6 9

Net Current Assets Misc. Expenditure

4 3 7 4 8 0 8 N I L

Accumulated Losses

N I L

IV Performance of the Company (Rs in Thousands)

Turnover Total Expenditure

2 3 0 5 5 7 1 6 2 0 6 9 0 5 1 6

+/- Profit/Loss Before Tax +/- Profit/Loss After Tax

+ 2 4 0 3 1 9 1 + 1 5 4 3 1 9 1

Earnings per Share in Rs. Dividend Rate %

3 6. 4 1 7 0

V Generic Names of Three Principal products/Services of Company (as per monetary terms)

Item Code No. (ITC Code) 85.35

Product Description Switchgears of all types


Product Description Transformers


Product Description Electronic Control and Supply Units for VariableSpeed Drives and other applications

Balance Sheet Abstract and Company’s General Business Profile

Documents

Board of Directors - ABB Ltd · ABB Limited, India, Annual Report 2004 1 Board of Directors Dinesh Paliwal, Chairman Ravi Uppal, Vice Chairman and Managing Director Peter Smits N.S.Raghavan