abb india ltd Management discussions

Economic and market overview

For the Indian economy, 2022 was a year of resilience and of successfully navigating a challenging external environment. The stability and growth momentum continued despite multiple global headwinds including the Omicron wave, the Ukraine-Russia offensive with subsequent elevated crude prices and persistent global supply chain disruptions. The global inflation in advanced economies was accompanied by tightening monetary policy stance, which in turn created a ripple effect in global markets. Despite inflationary pressures and global macro uncertainties, the Indian economy grew by 9.7 percent in the first half of 2022-23, and by 6.3 percent in July-September quarter spurred on by strong private consumption and investment.

Both levers of macroeconomic policy – fiscal and monetary – have played a role in managing the challenges that have emerged over the past year. The central bank of the country Reserve Bank of India (RBI) also undertook monetary and liquidity measures to rein in inflation while continuing to support economic growth. Some other measures included cutting down excise duty on fuel and supply-side measures to ease food inflation. The governments focus on bolstering capital expenditure also supported domestic demand in the first half of the financial year 2022-23. In addition, India overtook the United Kingdom to become the fifth largest economy in the world.

In the last quarter of the calendar year 2022, data indicated traction in private consumption. Some consumption indicative sectors like electricity generation and freight traffic were at pre-pandemic levels while others like passenger vehicles revived though not at pre-pandemic levels. Although industrial activity continued to expand, growth in the sector decelerated since the first quarter, influenced by supply-chain disruptions, and slowing global growth in major economies. The Index of Industrial Production (IIP), more indicative of short-term changes in production volumes grew 3.1 percent year on year in September 2022, slightly slower than same period in 2021 when it was at 4.2 percent. But as per the reports, bank credit to the private sector continued to grow firmly, with double digit growth in credit to the non-food industrial sector and services firms.

A resilient domestic inflow rendered support to the foreign institutional investment volatility in a year that was a choppy ride for the Indian stock markets. Since June 2022, stock markets bounced back, driven by better-than-expected corporate earnings in the first quarter of 2022-23. Moderation in domestic inflation and global commodity prices, and a reversal in foreign portfolio flow back into India also contributed to the growth. The appreciation of US dollar led to the depreciation of the INR and other emerging economy currencies. However as per the RBIs report despite reaching an all-time low of INR 82, the Indian Rupee has been least disruptive among peers and has appreciated against most currencies, barring a few. Indias foreign exchange reserves in excess USD 500 billion has been described in a World Bank report as one of the largest holdings of international reserves which can provide some cushion against global spillovers.

Given the macro landscape, the Company continued its focus on solid growth fundamentals whilst reinforcing the highest ESG standards with resilience. ABB India remains vigilant on risks emanating from COVID19 and its variants with a focus on employee well-being. The Companys agile business model and portfolio ensured conversion of opportunities, maximally optimizing the countrys conducive and relatively stable environment in an otherwise volatile global weather, leading to a quantum leap in performance, back to pre-pandemic and pre-portfolio realignment levels. Cost efficiency programs together with strategic investments for new facilities, product launches, and launch of online business models supported this journey of profitable growth.

Operational performance

Though the year started off with the Omicron scare, 2022 was the year that characterized true return to the normal with most sectors resuming activities full throttle. It was also the year in which, buoyed by the opening of markets, ABB India continued its journey of consistent value creation for various stakeholders. This comprised investing in state-of-the-art facilities across businesses to make in India for India and the world squarely targeting both the domestic as well as global demand. During the year, three milestone facilities were inaugurated across divisions from electrification to process automation. In 2022, the Company also achieved significant sustainability milestones as committed in the sustainability strategy 2030, across manufacturing locations.

ABBs portfolio of sustainable technology solutions was deployed across a wide range of sectors, during the year rendering efficiency & productivity. For instance:

• Rectifiers for a global diversified natural resources major

• Electrification panels and building automation for IT (Information Technology) campuses in Hyderabad

• Doubly fed induction generator for the wind sector, solar SCADA automation and switchgears for solar projects

• Automation package for cold rolling mills for continuous galvanizing line from one of the global majors in Process Industries

• Power handling systems order from paint industry for Process Automation Energy Industries division

• Traction converter orders from locomotive companies and Electric traction motors for high-capacity electric multiple unit trains

• Robotic palletizing for a paints major, robotic handling in mining and construction industry, robotic lean palletizer by an FMCG major

• System drives and motors solutions for tyre and metals (tier 1 and 2) majors

• Advanced process control solution for a large integrated pulp and paper manufacturer, for efficiency of the highly interactive lime kiln production process

• LV (Low Voltage) MNS and ArTuK boards for data centers and document management companies

• Tool design, simulation, manufacturing, installation, commissioning, cycle time prove out in ABB Robotic line for an Indian auto major

• MV and LV switchgears, UPS (Uninterruptible Power Supply), automatic transfer switching and power distribution packages for the one of the biggest data center companies in the country

• Distributed control systems (DCS) for greenfield and brownfield paints major

ABBs electrification, motion, automation, and robotics solutions continued to partner the industrial growth journey of the nation.

While serving our customers, the Company functioned tirelessly to maintain the highest level of safety and sustainability in our processes. With the focus on safer operations, the Company has improved its hazard reporting and thus have shifted focus to resolving them to the tune of 98.64 percent in 2022. To inculcate a culture of safety vigilance, Safety Observation Tours (SOTs) are encouraged as a practice by employees. The number of SOTs per employee stood at 5.6, helping the Company reduce the total incident rate. On the environment front, ABB India has been successful in recycling ~95 percent of its waste, enhanced water recyclability by ~14 percent in 2022, and achieved more than ~82 percent cumulative reduction of scope 1 and 2 GHG emissions as compared to 2019 baseline. The year was also marked by the realization of the RE100 global commitment to eliminate Scope 2 Greenhouse Gas (GHG) emissions from the operations. This was achieved with utilization of renewable electricity across all its owned manufacturing locations and included green power utilization from in-house solar installations, green power purchase from third party through power purchase agreements (PPA) and procurement of International Renewable Energy Certificates (IRECs). The Company also aims to make all its manufacturing locations water positive by 2025. Multiple stakeholder engagements with suppliers, partners and other vendors were held to build awareness and encourage active participation in the sustainability journey.

In 2022, the Company continued its journey of consistent growth, leveraging local opportunities and navigating global headwinds with orders back at pre-portfolio demerger levels – orders clocked INR 10,028 crore in 2022, a growth of 31 percent. A combination of factors contributed to this milestone achievement including proactive actions on identified growth market segments and consistent investment in manufacturing and customer experiences with the ABB Way operating model ensuring more accountability and empowerment. The Company posted a revenue of INR 8568 crore, growth of 24 percent over 2021, leveraging ABBs portfolio offerings and digital technology leadership in growth sectors like F&B, datacenters, transportation, energy efficiency, building automation, etc.

Profit after tax was at INR 1026 crores in 2022 as compared to INR 532 crores in 2021. The PAT for CY2022 includes an exceptional item of INR 339 crore from the profit on the sale of the turbocharger business. Consequently, the earnings per share for 2022 stood at INR 47.96 per share as compared to INR 24.53 per share in 2021.

Operational excellence

2022 was the year when the performance of ABB India just like India, consistently excelled with profitable growth, resilient during multiple uncertainties across the globe, and went back to pre-PG divestment levels of performance. Enriched customer experience was marked by commissioning across sectors from advanced process control for lime kiln of a paper major to AI-enabled city gas distribution networks to first of its kind paint project commissioning with holo-lens for an auto major. Energy efficiency projects were commissioned with specialized drives and motors from JW Marriott to Wonder Cement. In 2022, new products launched include specialized products like flame proof motors for explosive atmospheres and smart electric metering and energy monitoring solutions.

During the period under review, ABB Indias Smart Power division expanded its manufacturing facility with first of its kind shopfloor in the country catering to the industry 5.0 with ABB cobots. Spanning over 8,400 sqm, in Nelamangala Bengaluru, the ABB Smart Power factory links equipment such as robots, motors, and drives to the Internet of Things (IoT). The connected factory software highlights process optimization opportunities and schedules predictive maintenance to maximize productivity and efficiency. This resulted in enhanced productivity of 40 percent in the same space, with an energy efficiency of 15 percent.

ABB India also inaugurated its expanded Digital Substation Products and Digital Systems factory in Vadodara, Gujarat. Located within ABB Indias largest manufacturing campus, this new factory will meet the growing demand for a wide range of digital substation products and digital solutions in India and in more than 50 countries. In 2022, ABB Measurement & Analytics also opened its first smart instrumentation factory in Bengaluru, India, to support the regions ambition of transforming into a global design and manufacturing hub. The new plant will manufacture field devices such as pressure and temperature transmitters, IP converters and electromagnetic flowmeters for a wide variety of industries, including power, oil, and gas, pharmaceutical, water and other segments.

Outlook

Risks and concerns

The Company continues to be vigilant and watchful of various global geopolitical and macroeconomic factors. The continuing tight crude prices, supply chain issues and easing, shifting global trade balance and currency volatility and inflationary conditions especially core inflation will be closely monitored. ABB India will continue to deploy its experience of navigating such markets as earlier leveraging global parentage, diversified supply chains, early planning and hedging tools.

As the country gears up for a general election in 2024, India remains better placed to counter the global headwinds and tread the fine balance between the twin deficit targets and growth. The much talked about revival of private capex, sound balance sheets, deleveraging of assets and the likely waning of input costs might prove to be silver lining for the manufacturing sector in the country.

The government focus on capital expenditure led recovery is likely to continue. This would positively impact the job creating sectors amid global uncertainties like construction, transport, etc. The Production Linked Incentive (PLI) and other policy actions are projected to continue spurring growth in sectors which have also been identified by the Company as high potential ones in the current climate. These include datacenters, electronics, warehouse and logistics, railways, and metro, automotive, F&B, pharma and healthcare, renewables, water, and wastewater, etc. The Company has identified and worked on these areas of high growth mentioned earlier, which have paid dividends. ABB India will continue its value-based engagements with the customers, focus on order wins and seamless execution across projects while looking at modernization of existing capacities and adopting digitalization.

Electrification

Summarized performance:

Particulars*	2022	2021
Orders	3,716	2,725
Order backlog	1,583	1,316
Revenue	3,530	2,752
Results (Profit before interest & tax)	488	306

Segment performance

Electrification business witnessed significant growth and increase in market share in 2022. The growth was largely driven by stable business environment. Our focused efforts in various leading segments like Renewables, Data Centers, Buildings, Railways and Food & Beverages have also contributed to this growth. Our state-of-the-art Corporate Building in Peenya namely "Disha" has adequately demonstrated our commitment to sustainability, Energy efficiency and Wellbeing. Over 5,000 products of ABB installed in Disha Building not only save energy but help predict & simulate future performance.

While local demand continued to support our growth, exports were also at an all-time high with significant orders from Brazil, UAE, Oman, and other countries.

Major orders booked during the year:

• Bagged most prestigious Indian government building project in the capital for Low Voltage portfolio & Medium Voltage Panels including Digital offering

• Secured order for Low Voltage panels with Motor Protection Relays and Soft starters from one of the largest Steel Rolling Mill customers in North

• Bagged 33kV GIS order for supplying power to the Worlds highest rail bridge in Northern part of India for premier Rail Tunnel project

• Bagged significant GIS & CSS orders for electrifying Indias Biggest Defense Port in the southern part of country

• Supplied latest technology breakers for "Green & Smart India Development Center for one of the largest software manufacturing companies.

• Supplied Low Voltage Building Products to one of the biggest IGBC certified platinum rated Green Buildings housing approx. 25,000 workforce in Hyderabad

• ABB Make 25kV GIS became operational in 2022 for the first phase of revenue service operations of Pune Metro flagged by Honorable PM of India.

Major orders successfully commissioned/supplied during the year:

• Latest technology Breakers for "Green & Smart India Development Center for one of the Largest Software Manufacturing Companies.

• Low Voltage Building Products to one of the biggest IGBC certified platinum rated Green Buildings housing approx. 25,000 workforce in Hyderabad.

• Low voltage Electrical Switchgear & Panels to an IT Park & Low-Rise Apartment in NCR

• One of oldest universities in India chose ABB Electrical switchgear for Powering its Campus

• ABB Make 25kV GIS became operational in 2022 for first phase of revenue service operations of Pune Metro flagged by Honorable PM of India

• Installed Indias first 11kV Eco-GIS solution at premier fertilizer organization in Gujarat

• Exported 500 nos. Safelink CB RMU to Oman, installed around 100 nos. RMUs for premier colocation Data Center installer at Mumbai

• Successfully installed ABB RMUs for Indias flagship Highway, Samruddhi Project from Mumbai-Nagpur, Inaugurated by Honorable PM of India

Segment outlook

While dedicated Segment Managers continue to strongly focus on the growing segments like Renewables, Data Centers, Buildings, e-mobility, Rail, Infrastructure and Food & Beverages, ABB is also tracking the emerging segments like Green Hydrogen, etc., The dedicated end user focus & continued emphasis on customer proximity through customized webinars, industrial hubs and customer connect programs will further the business growth. The pace of capex led recovery with focus on sectors like transportation and construction will determine the growth momentum.

Motion

Summarized performance:

( in crore)

Particulars	2022	2021
Orders	3,662	2,878
Order backlog	2,106	1,785
Revenue	3,367	2,592
Results (Profits before interest and tax)	412	324

Motion business exhibited remarkable resilience amid multiple challenges and maintained financial stability in 2022. While it capitalized on new opportunities, it made concerted efforts to stay close to the customers and delivered against their needs, maintaining superior quality and on-time delivery.

Segment performance

Covid issues shadowed in the first half of the year and global and local challenges such as supply chain disruptions, energy crisis and high inflation impacted prospects. Notwithstanding the strains, Motion businesss order and revenue growth remained robust and registered a strong profitable growth. Recovery in the second half further improved the overall business KPIs. Channel Partner business registered a 27 percent order growth and the online marketplace – eMart reached 1 MUSD sale milestone. Exports remained a powerful enabler of growth with Large Motors & Generators contributions. Orders from Railways and Metro train further boosted the business performance and aided in maintaining the growth momentum.

The business also showed strong progress towards its sustainability and ESG goals; be it with its energy-efficient offerings, adopting sustainable practices in internal operations or improving safety. The global flagship Energy Efficiency Movement gained traction in India with over 90 customers and partners joining the movement and making commitments to reduce energy. As the pandemic situation eased, the business resumed its customer engagement activities and reinstated tier II, tier III reach out program in places like Rajahmundry, Miryalaguda and Madurai. Motion divisions also conducted multiple roadshows and in-house seminars at customer sites.

Major orders, key project commissioning, and milestones during the year:

• Multiple traction orders including retrofit order for 66 locomotives, order for 4 Vande Bharat trains; converter order from Chittaranjan Locomotive Works

• Order for 39 nos. of high output IE3 Motors for steel major

• Service team received its single largest order to supply of Synchronous motor from steel major

• Won an order for 416 nos. of IE3 motors for e-Vehicle Steering pump application

• Secured order to supply NEMA motors for a mining application in the eastern part of country

• Strengthened footprint in the renewables space with the achievement of a significant milestone of 1 GW SCADA commissioning covering multiple EPC accounts

• Won largest order for ULH Drives from pharma major and supplied over 90 nos. ULH Drive to My Home Cement

• Successful commissioning of first Automatic Power Factor Correction (APFC) supplied to 300MW Solar plant and PPC system for a 300MW capacity plant

Awards and recognition

Large Motors & Generators division won the coveted Gold Award at CIIs 43rd National Kaizen competition. This was another testimony to the unwavering quality commitment. Motion Indias sustainability focus was recognized by CII that conferred the IGBC Green Factory Platinum award to the Faridabad Motor factory.

Segment outlook

Forecasts suggest India to be better positioned to navigate global headwinds than other emerging economies in 2023. Governments push for infrastructure and a slew of development projects ranging from construction of highways, rail lines and airports will continue to support economic growth. Growing necessity for improvement in the infrastructure sphere - from housing, water, to digital and transportation will propel economic growth. Water & Wastewater, F&B, HVAC, Metals and Cement segments will also continue to be growth enablers. The balancing of the private and government capex along with global trade volatilities will be a key factor in steering growth.

Process Automation

Summarized performance:

( in crore)

Particulars	2022	2021
Orders	2,503	1,933
Order backlog	2,645	1,744
Revenue	1,573	1,403
Results (Profits before interest and tax)	201	128

Segment Performance

With the growing demand of digitization, advanced process controls and more sustainable solutions, Process Automation business had a strong order growth in 2022. Seamless backlog execution and higher order intake at better volumes marked 2022 for Process Automation. Investments gained traction in Steel, Cement, chemicals, Mining and Mineral Processing industries. Steel, a vibrant sector historically, witnessed a 10.8 percent rise in production during 2022. Cement sector, buoyed by a strong demand and a weak base, registered a strong growth in 2022 over last year.

The Company also opened its first smart instrumentation factory in Bangalore, India, to support the regions ambition of transforming into a global design and manufacturing hub. In line with the local governments "Make in India" program, the state-of-the-art factory aims at supporting local economy and meeting the growing demand for instrumentation devices.

Major orders, key project commissioning, and milestones during the year:

• Bagged large rectifier package for capacity expansion project of Aluminum smelter unit with a leading Aluminum manufacturer in Chhattisgarh

• Motors, Drives and Automation package for a major steel manufacturer for their Galvanizing and Annealing line in western India

• Biggest-ever automation order in the specialty chemicals segment for providing the complete suite of automation and digital solutions for decorative paint manufacturing plants

• Bagged a large order from a leading LNG supplier for deploying ABB Ability™ SCADAvantage along with technology platform ABB Ability™ Genix, RTUs and connectivity components across the gas distribution pipeline covering 28 cities in the country. ABB solutions will help in analyzing the consumption patterns for demand forecast, detect system anomalies and predict the asset conditions

• Secured a large order from Jal Jeevan Mission, Uttar Pradesh for instrumentation and analytical package helping water distribution for State Water & Sanitization Mission, Uttar Pradesh project

• An order from for Pressure, Level and Temperature measurement at energy conglomerates Flue Gas Desulphurization plant

• An order from steel major secured to supply Stressometer system in CGL and CAL Skin Pass Mills

Segment outlook

Aided by the progressive policies by the central government, India is poised to continue its growth in the coming year propelling business growth across most sectors. The increased infrastructure spending, rising exports, rapid digitization, and spill-over effects of geopolitical developments will likely aid this growth. Cement, Coal & Steel projects, and investments are on the rise. The chemical sector is also seeing good traction. Projects in downstream refinery and Water segments with EPCs will be key drivers for next couple of quarters. Renewables (will) meet more than 60 percent of the growth in demand for power, and account for 35 percent of the electricity mix by 2030. Increase in commodity prices, however, is likely to intensify the competition further.

Robotics and Discrete Automation

Summarized performance:

( in crore)

Particulars	2022	2021
Orders	320	259
Order backlog	211	132
Revenue	233	255
Results	29	20

Segment Performance

The demand for flexible robotic automation solutions remained strong during the year. Automotive manufacturers and component suppliers who account for major share of the business continued to invest in and expand manufacturing capacities. Chemicals and Petrochemicals, Food and Beverage, consumer segments, and pharmaceutical customers continued their investments during this period towards modernization of capacities for productivity and efficiency.

Major orders booked during the year:

• Capacity increase and refurbishment of existing body-in-white production line of a major Auto OEM

• Robotic automation of production sites of a large paint manufacturer

• Indirect channel involving system integrators contributed to order growth

Segment Outlook

Automotive demand from Electric vehicles will continue to remain strong. Food and Beverage, Consumer goods and Electronics segments are showing strong signs of growth. Manufacturing activity in metals and plastics segment are expected to remain stable. We also see good interest from educational universities for robotics lab and training center. The pace of private consumption will be a key risk factor along with the trajectory of supply chain constrains and subsequent easing.

Human Resources

2022 witnessed a very high demand for talent in India which resulted in a lot of pressure to retain and attract talent. Our efforts too were largely concentrated on enabling retention measures for key talent. The Company invested in building managerial skills to enable constructive conversations with employees on their performance and development/growth opportunities. The Company also focused on enabling career for better learning and growth opportunities. Overall, ABB Indias retention is better than the industry average for 2022.

To complement the growing business demands, the Human Resources team worked tirelessly to get the right talent. We hired employees in 2022 through a dynamic mix of strategies – channel partners, referrals, campus hiring, direct sourcing and usage of social media.

The Company introduced online learning platforms – Harvard Mentor and Harvard Spark. Through a gamified program, we focused on enabling employees to take ownership of their learning journey. This allows employees to learn on the go, as per their need and schedule. The online learning was complemented with in-person leadership development program, both at local and global level. LEAD and RISE programs continue to focus on developing strong leadership pipeline for both male and female colleagues.

With a strong focus on Diversity and Inclusion, the Company ran special programs to create awareness around the subject and built strong allies for LGBTQI+ and people with special abilities. We continue our inclusion focus through a mix of effort in building awareness, educating our employees, and creating allies, enabling the right policies, and continued focus on hiring. In an external forum, ABB India was recognized as the winner of the category "Best Allyship & ERG Practices".

The Company managed to get into win-win wage settlements for all our plant locations. The discussions were conducted and concluded in a very cordial environment where both parties agreed to make progressive steps to help the organization move forward. All our wage settlements are prospective and long term and designed in a way such that our shopfloor employees also gain from their efforts to improve organization productivity.

We adopted a forward-looking Flexible working guidelines framework that allows each business unit/function/location to decide the degree of flexibility that is optimal to balance their performance with employee requirements. The guidelines enable constructive conversation between the employee and the manager to arrive at the best possible option, suited to each requirement. Reward and Recognition framework was also reviewed to further strengthen the guidance on the subject.

The Company continued to drive multiple activities across business units to keep up the motivation level of employees. Our focus on engagement saw us maintain a very positive score on the annual global engagement survey. More than 91 percent percent of the employees participated in the survey and ABB India engagement score stays 4 percent ahead of the global average. Employees continue to rate ABB India very high in the areas of integrity, safety, pride, role clarity and customer focus.

Finance

Due to frequent increase in the interest rates by RBI during the year, the liquidity in the market remained tight. However, the Companys reputation in the market and long-term goodwill with leading banks ensured advantageous arrangements of various finance facilities. During all the months, the Company was able to manage positive cash position to fund its operations as well as meet the capex requirements. Further, during the year, taking into cognizance the healthy cash situation, after board approval, the Company has invested in treasury bills for better yield. As of December 31, 2022, the Company had a net cash balance (including treasury bills) of INR 3,616 crores. In terms of foreign currency exposure – for imports and exports – the Company continued to conservatively hedge at the point of commitment to protecting the contract margins.

Key Financial Ratios	2022	2021
i) Debtors Turnover	4.31	3.88
ii) Inventory Turnover	4.56	5.00
iii) Interest Coverage Ratio	-	-
iv) Current Ratio	1.82	1.66
v) Debt Equity Ratio	-	-
vi) Operating Profit Margin (%)	11.95	8.60
vii) Net Profit Margin (%)	11.86	7.50

Return on net-worth is 22.83% in 2022 vs 13.92% in 2021. This is mainly on account of increase in profitability due to increase in revenues and exceptional items as compared to previous year.

(i) Debtors Turnover

It is calculated by dividing turnover by average trade receivables.

(ii) Inventory Turnover

It is calculated by dividing turnover by average inventory

(iii) Interest Coverage Ratio

Not Applicable, as the Company did not have any borrowings in the current and previous year.

(iv) Current Ratio

It is calculated by dividing the current assets by current liabilities

(v) Debt Equity Ratio

Not Applicable, as the Company did not have any debt in the current and previous year

(vi) Operating Profit Margin (%)

It is calculated by dividing the PBIT by turnover.

(vii) Net Profit Margin (%)

It is calculated by dividing the profit for the year by turnover.

Internal control systems and Integrity

Internal Controls has been a key focus area of the Company during the year. Internal Controls in the Company has been designed to further the interest of all its stakeholders by providing an environment, which is conducive to conduct its operations and at the same time putting in the appropriate checks & balances. In doing so, the Companys Internal Control environment has evolved over a decade to take care of, inter alia, financial, and operational risks. The organization has a holistic Internal Control framework comprising of elements like Country Management Committee, Corporate, Business & Local authorization tables, Local Management Instructions, Process and Entity- Level Controls, Enterprise Risk Management, Local Direct Management Testing Programs, and a strong emphasis on integrity and ethics as a part of work culture. Aligning with the global reporting structure, the Company has implemented a related Assurance process for every business which establishes the ownership & accountability of the financial statements at every business level. An independent service provider, having expertise in the field, has performed current years Internal Financial Control effectiveness testing. Effective Statutory & Legal Compliance System is in place in the Company.

A well-organized Group level tool (GRCM) is available to handle testing, internal audit issues, deficiency tracking, etc. Further, the in-house independent Internal Audit team acts as a pillar to support our control objectives. ABB India also has a well-functioning Whistle Blower Policy in place to report any misdoing. Internal Control framework of ABB India is aligned with one of the most matured IC frameworks – COSO 1992 and then transitioned to COSO 2013. The current framework is also in line with the Internal Finance Control (IFC) requirement of The Companies Act, 2013.

Risk management

The Company has a robust Risk Management Charter and Policy, which provides an overall framework for Risk Management (RM) in the Company. The key elements of the Companys risk management framework have been captured in the risk management policy, which details the process for identifying, escalating, prioritizing, mitigating, and monitoring key risk events and action plans. The assessment of the risks covers areas of Strategy, Technology, Finance, Operations and Systems, Legal & Regulatory and Human Resources. There are appropriate assurance and monitoring mechanisms in place to monitor the effectiveness of the risk management framework including the mitigation plans identified by the management for key risks identified through the risk management exercise. In addition, the Company also has a Risk Management Committee which reviews the analysis of ERM (Enterprise Risk Management) exercise done by the Company and provides necessary guidance on its implementation and monitoring.

The Companys existing framework provides for risk reviews at various levels based on Companys organizational structure matrix. Periodic assessment of risks, potential impact relating to business growth, profitability, talent engagement, and market position are conducted. Response to key operational risks, based on inputs received from the internal and external assessment, internal audit, performance review etc. are done on a regular basis.

Board of Directors

ADRIAN GUGGISBERG

Chairperson

SANJEEV SHARMA

Managing Director

CAROLINA GRANAT

Director

V. K. VISWANATHAN	GOPIKA PANT	MONICA WIDHANI
Independent	Independent	Independent
Director	Director	Director