ALSTOM India Ltd

Dear Shareholders,

Your Directors have pleasure in presenting the 20th Annual Report of the Company andthe Audited Accounts for the year ended 31 March 2012.

(Rupees millions)

Dividend

The Directors are pleased to recommend a dividend at the rate of Rs.10/- per equityshare of the face value of Rs.10/- each for the year ended 31 March 2012 (previous yeardividend- Rs.10/- per share) on 6,72,27,471 equity shares of Rs.10/- each (includes60,97,561 equity shares to be allotted to ALSTOM Holdings and excludes 58,94,264 equityshares to be extinguished pursuant to the Scheme of Amalgamation amongst the Company,ALSTOM Holdings (India) Limited and their respective shareholders, sanctioned byHon’ble High Courts at Delhi and Mumbai).

Operations

A detailed review of the operations, performance and outlook of the Company and itsbusiness is given in the Management Discussion and Analysis Report, which forms a part ofthis Annual Report.

In compliance with the applicable

Clauses of Listing Agreements with the Stock Exchanges, the Company has preparedConsolidated Financial Statements as per the Accounting Standard on Consolidated FinancialStatements (AS 21) issued by the Institute of Chartered Accountants of India. The AuditedConsolidated Financial Statements along with the Auditors’ Report thereon have beenannexed to this Annual Report.

Corporate Governance

Your Company has fully complied with the requirements and disclosures that have to bemade under the Code of Corporate Governance as required under Clause 49 of the ListingAgreement entered into with the National Stock Exchange of India Limited (NSE) and BSELimited (BSE) (the "Stock Exchanges"). As a listed Company, necessary measuresare taken to comply with the provisions of Listing Agreements with the Stock Exchanges. Areport on Corporate Governance forms part of this Annual Report. The Vice Chairman andManaging Director’s declaration regarding compliance with ‘ALSTOM Projects IndiaLimited Code of Conduct for Board Members and Senior Management’ is attached to theCorporate Governance Report.

Management Discussion and Analysis

The Management Discussion and Analysis is presented in a separate section, which formspart of the Annual Report.

Directors’ Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors of your Companyconfirm:

(i) that the applicable accounting standards have been followed in preparation of finalaccounts and there are no material departures;

(ii) that such accounting policies have been selected and applied consistently and suchjudgements and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31 March 2012 and of the profit of theCompany for the year ended on that date;

(iii) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(iv) that the annual accounts have been prepared on a going concern basis.

Subsidiary Company

Your Company has following two wholly owned subsidiaries in India.

(a) ALSTOM Power Boilers Services Limited, and (b) ALSTOM Boilers India Limited

The Ministry of Corporate Affairs, Government of India vide General Circular No:2 /2011dated 08 February 2011 has directed that provisions of Section 212 shall not apply inrelation to subsidiaries of those companies which fulfil the conditions contemplated inthe aforesaid circular. Your Company fulfils the conditions contemplated in the saidcircular. Therefore, the Annual Report and other particulars of the subsidiary Company arenot attached with this Annual Report. However, a statement of particulars of thesubsidiary Company has been attached along with the audited Consolidated FinancialStatements.

The Company shall provide the copy of Annual Report and other documents of itssubsidiary Company as required under Section 212 of the Act to the shareholders of theCompany and also to the shareholders of the subsidiary Company on their request, free ofcost. The Annual Report containing the annual accounts of the subsidiary Company is alsokept open for inspection by any shareholder at the Registered Office of the Company andthat of the subsidiary Company. The details of accounts of the subsidiary Company havebeen placed on the website of the Company. The Consolidated Financial Statements presentedby the Company include financial results of its subsidiary Companies.

Corporate Restructurings

Merger of ALSTOM Holdings (India) Limited in to the Company:

During the year under review, the Hon’ble High Courts of Delhi and Bombay havesanctioned the scheme of amalgamation amongst ALSTOM Projects India Limited, ALSTOMHoldings (India) Limited (a group Company) and their respective shareholders on February23, 2012 and 31 March 2012, respectively, under Sections 391 to 394 of the Companies Act,1956, hence the merger between the two companies has been completed.

ALSTOM Holdings (India) Limited (the Amalgamating Company), was a public Companylimited by shares incorporated under the Companies Act, 1956 on March 29, 1995 and havingits registered office at New Delhi. The Amalgamating Company was a part of the ALSTOMgroup of companies and a wholly owned subsidiary of ALSTOM Holdings, France. TheAmalgamating Company was registered with the Reserve Bank of India (the "RBI")as a non-deposit taking Non-Banking Financial Company ("NBFC") under Section45-IA of the Reserve Bank of India Act, 1934, and was engaged in the business of makingand holding investments in ALSTOM group companies.

The above amalgamation was carried out as a measure of group restructuring of theALSTOM group in India. It will reduce the shareholding tiers and rationalize investments.Further, the amalgamation will make the entities administratively more efficient andreduce administrative and management costs and would benefit the entities, the employees,the shareholders and other third parties related to these entities.

The effect of the amalgamation has been given in the books of accounts of the Companyfor the year ended on 31 March 2012 with effect from the Appointed Date i.e. 01 April2011.

Demerger of Boiler Business

ALSTOM Holdings had entered into a letter of binding intent with Shanghai ElectricGroup of China on 20 April 2011 to combine both partners’ activities in the boilermarket for power plants. As intimated to your Company, ALSTOM Holdings and ShanghaiElectric expect to set-up the joint Company once their agreements will be finalised andafter the completion of the social and regulatory process.

In pursuance of the above, ALSTOM Holdings (the holding Company of the ALSTOM group ofcompanies) had requested your Company to consider transfer of its boiler business to anewly incorporated wholly owned subsidiary through a scheme of demerger under Sections 391to 394 of the Companies Act, 1956.

The Board of Directors of your Company in its meeting held on 25 October 2011 hadconsidered the said request of ALSTOM Holdings and thereafter, subject to approval of theshareholders and creditors and the High Court(s), approved the demerger of the BoilerBusiness of the Company into a wholly owned subsidiary Company viz. ALSTOM Boilers IndiaLimited ("ABIL"). On the basis of the valuation undertaken by an independentvaluer, your Board had further granted its approval to the share swap ratio of 1:1,meaning that every shareholder of the Company holding 1 (one) fully paid-up equity sharesof Rs.10 (Rupees ten) each in the Company as on the record date (as may be determined interms of the Scheme of Demerger) shall, upon sanction of the Scheme of Demerger and uponits becoming effective, be entitled to receive 1 (one) fully paid-up equity shares of Rs.5(Rupees five) each in ABIL.

During the year, the Company had initiated necessary actions to implement the aforesaiddecision of the Board of Directors of your Company.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The particulars as prescribed under sub-section (1)(e) of Section 217 of the CompaniesAct, 1956, read with the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988, are given in Annexure-A which forms part of this Directors’Report.

Environment Compliance

The Company complies with all requirements regarding management of pollutants ofmanufacturing units and also conducts Environmental Audits of its units at regularintervals.

The Company has obtained all environmental consents such as air, water and hazardouswaste authorisation from respective Pollution Control Boards and are in compliance withthe present environmental legislation.

Particulars of Employees

The total number of employees of the Company as on 31 March 2012 was 4505.

Information in accordance with the provisions of Section 217(2A) of the Companies Act,1956, read with Companies (Particulars of Employees) Rules, 1975, forms part of thisDirectors’ Report. However, as per the provisions of Section 219(1)(b) (iv) of theCompanies Act, 1956, the Report and Accounts are being sent to all shareholders of theCompany excluding the Statement of Particulars of Employees under Section 217(2A) of theCompanies Act, 1956. Any Shareholder interested in obtaining a copy of the said Statementmay write to the Company Secretary at the Registered Office of the Company, and the samewill be sent by post.

Fixed Deposits

The Company has not accepted any fixed deposits during the year under review.

Board of Directors

In accordance with the Articles of Association of the Company, Dr. Uddesh Kohli and Mr.Sunand Sharma, Directors retire by rotation from the Board of Directors of the Company atthe ensuing Annual General Meeting. Both being eligible, offer themselves forre-appointment at the ensuing Annual General Meeting.

Particulars of Directors proposed to be re-appointed are given in the CorporateGovernance Report of this Annual Report.

Transfer of amounts to Investor Education and Protection Fund

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, relevantamounts which remained unpaid or unclaimed for a period of 7 years have been transferredby the Company to the Investor Education and Protection Fund.

Auditors

M/s. Price Waterhouse, Chartered Accountants, Statutory Auditors of the Company, holdoffice until the conclusion of the ensuing Annual General Meeting and are eligible forreappointment.

The Company has received the letter pursuant to Section 224(1B) of the Companies Act,1956 from Messrs. Price Waterhouse, Chartered Accountants, regarding their eligibility forre-appointment as Auditors of the Company.

The Notes to Accounts referred to in the Auditors’ Report are self-explanatory anddo not call for any further comments.

Appreciation

The Board of Directors take this opportunity to thank all its shareholders, valuedcustomers, banks, government and statutory authorities, investors and stock exchanges fortheir continued support to the Company. Your Directors also wish to place on record theirdeep sense of appreciation for the committed services by your Company’s employees.Your Directors acknowledge with gratitude the encouragement and support extended by ourvalued shareholders and the promoters (ALSTOM Group) of the Company.

For and on behalf of the Board of Directors

Francois Carpentier

Vice Chairman & Managing Director

S. M. Momaya

Whole-time Director & Chief Financial Officer

Place: Noida

Date: 23 April 2012

(A) Conservation of Energy a. Energy Conservation measures taken during 2011-12

1. Monitored Power Factor by maintaining between 0.98 - 1.0 for the whole unit atDurgapur facility and received a rebate of Rs.9,33,000/-from State Electricity Board.

2. Arrested Compressed Air Leakage at various locations to improve volumetricefficiency of compressors.

3. Installed Variable Frequency Drive on compressor thereby replacing the conventionalstar delta starter to eliminate unload power consumption of compressor at Durgapur.

4. Replaced 25 nos. of the HPMV/SV 400W and 25 nos. of 250W lamps with 165W LVD lampsin Bay-4 of the factory at Durgapur.

5. Installed Energy Meters at major electrical installation to enable monitoring &analyzing power consumption pattern for the unit at Durgapur.

6. Arrested Compressed Air Leakage at various locations to improve volumetricefficiency of compressors. Ultrasonic air leakage detector has been procured foridentifying the leakages and thus arresting them.

7. Procurement of 87 energy efficient Inverter type welding machines.

8. Installation of energy saving modules with our old Rectifier type Welding machines.

9. Solar street lights installed in front of Technology Centre and Quality Block.

10. In several offices Tube lights have been replaced with CFL.

11. 40 nos. of Turbo Ventilators were installed at Durgapur unit. 12. Additional WaterMeter installed to monitor water consumption effectively.

13. Installation of Digital A.C. VVVF Drive for WMW Vertical boring machine at machineshop, replacing the conventional power consuming star delta starter system at Shahabadunit has effectuated energy saving of 10,000 units per annum.

14. Replacement of Conventional high by 1000 watts light fittings of Air Preheater Shopwith the Energy Efficient T5 fittings at Shahabad has ensued energy saving of 71,637 unitsper annum.

15. Installation and replacement of filament lamps and fluorescent tube light fittingsof machines and Shop offices at various locations with the Energy Efficient CFL lamps andLED indicators has resulted in energy saving of 10,000 units per annum.

16. Replacement of Conventional 70 watts, plant streetlight fitting with the LED Lightfittings of 10 nos. had resulted into saving of 3,510 units of energy per annum. b.Additional investments and proposals , if any, being implemented for reduction ofconsumption of energy: Nil. c. Impact of above measures for reduction of energyconsumption and consequent impact on cost of production of goods.

Expenditure on energy forms a very small part of the cost of production. Hence,reduction of energy consumption does not have any significant impact on the cost ofproduction of goods.

(B) Technology Absorption, Adaptation and Innovation (1) Efforts made towardstechnology absorption, adaptation and innovation

The Company has been making continuous efforts towards research and development of itsproducts.

(2) Benefits derived as a result of above efforts

• Product improvement.

• Cost Reduction.

(3)Future plan of action for Company’s factory/offices are as under:

Retrofitting Energy Efficient E+ (T5-28W) in place of existing Conventionalfluorescent tube (40watts) lights.

• Replacement of 400W lamps with Metal Halide Lamps in bay#1 and bay#3.

• Replacement of existing cooling tower fan with Aero-foil design energy-efficientfan.

• Phasing out of old high energy consuming reciprocating type compressors withscrew compressors.

• Introduction of timer circuit for shop over head lights.

• Power Factor correction unit for the new transformer.

• Introduction of soft starters for compressors.

(4) Expenditure on R & D

a) Capital - Nil

b) Recurring - Nil

c) Total - Nil

d) Total R & D expenditure as a % of total turnover – N.A.

(5) In case of imported technology (import during the last 5 years reckoned from thebeginning of the financial year), following information to be furnished:

(C) Foreign Exchange Earnings and Outgo a. Activities relating to exports:

The total export earnings from Engineering and other services were Rs.738 million.

b. Total foreign exchange used and earned:

(Rupees in millions)

For and on behalf of the Board of Directors

Francois Carpentier

Vice Chairman & Managing Director

S. M. Momaya

Whole time Director & Chief Financial Officer

Place: Noida

Date: 23 April 2012