Alstom

CHAIRMAN’S REPORT

Participation at shareholders’ meetings
Any shareholder has the right to participate at shareholders’ meetings under the conditions set forth by law and in Article 15 of the Company’s by-laws. The provisions of Article 15 of the by-laws appear on pages 225 and 226 of the Annual Report/Registration Document for the 2008/09 fiscal year filed with the AMF (Autorité des marchésfinanciers) and posted online on the Company’s website. Generally speaking, the members of the Board of Directors are present at shareholders’ meetings.

Internal control reference framework and objectives
REFERENCE FRAMEWORK
The Group has put in place a system of internal control procedures and evaluations initially based on control guidelines prepared by a recognised body, COSO (Committee ofSponsoring Organisations of the Treadway Commission). An analysis reconciling Alstom internal control and risk management framework policies contained in particular in Corporate Instructions, the Internal Control Manual, the Internal Control Questionnaire, the Reporting and Accounting Manual and the reference framework recommended by the AMF (Autorité des marchés financiers) was performed in fiscal year2007/08. The analysis included both the reference framework and the “Application guide for internal control procedures related to the accounting and financial information published by the issuers”. The analysis outcome shows that Alstom applies the “Reference framework” on internal control recommended by the AMF.

Elements that could have an impact in the event of a tender offer
These elementsof the Board of Directors’ report to the shareholders’ meeting set forth by Article L. 225-100-3 of the French Commercial Code appear on pages 239 and 240 of the Annual Report/Registration Document for the 2008/09 fiscal year filed with the AMF.

INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES REPORT
As part of its operational activities, the ALSTOM Group is confronted by a number of risks bothexternal and internal, as stated in the Risks Factors section of the Annual Report/Registration Document 2008/09 (see page 133) filed with the AMF. It has therefore put in place an organisation, procedures and processes with the objective of identifying, quantifying and mitigating risks, and allocating resources to control risks in accordance with its business objectives both strategic andoperational. The present part of the report was prepared with the contributions from the Internal Audit and Internal Control Department, the Finance function including the Tenders & Projects Control and the Information Systems Departments, the Human Resources Department, the Legal Department, the Ethics & Compliance Department and the Environmental, Health & Safety Department.

OBJECTIVES
The system ofinternal control put in place provides reasonable assurance that: • the Group’s internal rules and instructions including applicable laws and regulations are complied with at all times; • information is complete, accurate and to the required quality, particularly financial information; • operations are completed in an optimal manner and internal control processes are effective, particularly thoseconcerning the safeguard of assets; • achievement of business objectives are reached with identification and control of risk; • the risk of fraud is minimised; • controls, including controls over risks, are widely understood at all levels within the Group and appropriate actions are taken to mitigate and minimise these risks. Internal control consists of five inter-related components, which have beenimplemented within the Group: • control environment covering integrity, ethics, competencies, authorities, responsibilities and staff development; • risk assessment including the identification, analysis and minimisation of relevant risks; • control activities, namely policies and procedures that ensure that Management’s instructions are applied; • information and reporting: information must...