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Notes to Accounts of Tata Chemicals Ltd.

Mar 31, 2015

(i) Management has identified three reportable business segments, namely :

- Inorganic chemicals: comprising soda ash, marine chemicals, caustic soda, cement, bulk chemicals and salt.

- Fertilisers: comprising fertilisers including urea and phosphatic.

- Other agri inputs: comprising traded seeds, pesticides, speciality crop nutrients

- Others: comprising pulses, spices, water purifiers and nutritional solutions

Segments have been identified and reported taking into account the nature of products, the integration of manufacturing processes, the organisation structure and the internal financial reporting systems.

(ii) Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

(iii) Related party disclosure:

(a) Related Parties and their relationship (as defined under AS-18 Related Party Disclosures)

Subsidiaries Joint Ventures Associate

Direct Rallis India Limited, India Bio Energy Venture - 1 (Mauritius) Private Limited, Mauritius

Direct EPM Mining Venture Indo Maroc Phosphore Inc., Canada S. A., Morocco

Indirect

Homefield Private UK Limited, United Kingdom Tata Chemicals Africa Holdings Limited, United Kingdom Tata Chemicals South Africa (Proprietary) Limited, South Africa Tata Chemicals Magadi Limited, United Kingdom Magadi Railway Company Limited, Kenya

Indirect

Alcad, United States of America JOil (S) Pte. Limited, Singapore The Block Salt Company Limited, United Kingdom Natronx Technologies LLC, United States of America Kemex B.V., Netherlands @ Homefield 2 UK Limited, United Kingdom

Tata Chemicals Europe Holdings Limited, United Kingdom

Cheshire Salt Holdings Limited, United Kingdom

Cheshire Salt Limited, United Kingdom

British Salt Limited, United Kingdom

Brinefield Storage Limited, United Kingdom

Cheshire Cavity Storage 2 Limited, United Kingdom

Cheshire Compressor Limited, United Kingdom

Irish Feeds Limited, United Kingdom

New Cheshire Salt Works Limited, United Kingdom

Brunner Mond Group Limited, United Kingdom

Tata Chemicals Europe Limited, United Kingdom

Winnington CHP Limited

Brunner Mond B.V., Netherlands@

Brunner Mond Generation Company Limited, United Kingdom

Brunner Mond Limited, United Kingdom

Northwich Resource Management Limited, United Kingdom

Gusiute Holdings (UK) Limited, United Kingdom

Tata Chemicals North America (UK) Limited, United Kingdom*

Valley Holdings Inc., United States of America Tata Chemicals North America Inc., United States of America General Chemical International Inc., United States of America General Chemical Great Britain Limited, United Kingdom NHO Canada Holdings Inc., United States of America General Chemical Canada Holding Inc., Canada GCSAP Canada Inc., Canada***

Tata Chemicals (Soda Ash) Partners Holdings (TCSAPH), United States of America **

TCSAP LLC, United States of America

Tata Chemicals (Soda Ash) Partners (TCSAP), United States of America **

Tata Chemicals International Pte. Limited, Singapore

Grown Energy Zambeze Holdings Private Limited, Mauritius

Grown Energy (Pty) Limited, South Africa

Grown Energy Zambeze Limitada, Mozambique

Rallis Chemistry Exports Limited, India

Metahelix Life Sciences Limited (Metahelix), India

Zero Waste Agro Organics Limited (ZWAOL), India##

Brunner Mond B.V. and Kemax B.V. ceased to exist with effect from December 11,2013.

Tata Chemicals North America (UK) Limited, a subsidiary was incorporated on 22nd August, 2014

a general partnership formed under the laws of the State of Delaware (USA).

GCSAP Canada Inc. dissolved as a subsidiary with effect from 28th May, 2014.

Rallis has acquired additional equity shares, consequent to which share has increased to 73.59% from during the year.

Key Management Personnel:

Mr. R. Mukundan, Managing Director Mr. P. K. Ghose, Executive Director & CFO Promoter Group Tata Sons Limited, India

51.02% in ZWAOL

(iv) Employee benefit obligations:

(a) The Company makes contribution towards provident fund, in substance a defined contribution retirement benefit plan and towards pension, superannuation fund, a defined contribution retirement plan for qualifying employees. The provident fund is administered by the Trustees of the Tata Chemicals Limited Provident Fund and the superannuation fund is administered by the Trustees of the Tata Chemicals Limited Superannuation Fund. Under the schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit.

On account of the above Contribution Plans, a sum of Rs 12.78 crore (previous year Rs 12.02 crore) has been charged to the Statement of Profit and Loss.

(b) The Company makes annual contributions to the Tata Chemicals Employees'' Gratuity Trust and to the Employees'' Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India, for funding the defined benefit plans for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement or death while in employment or on termination of employment. Employees, upon completion of the vesting period, are entitled to a benefit equivalent to either half month, three fourth month and full month salary last drawn for each completed year of service depending upon the completed years of continuous service in case of retirement or death while in employment. Incase of termination, the benefit is equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of continuous service.

The Company also provides post retirement medical benefits to eligible employees under which employees at Mithapur who have retired from service of the Company are entitled for free medical facility at the Company hospital during their lifetime. Other employees are entitled to domiciliary treatment exceeding the entitled limits for the treatments covered under the Health Insurance Scheme upto slabs defined in the scheme. The floater mediclaim policy also covers retired employees based on eligibility, for such benefit.

The Company provides pension, housing / house rent allowance and medical benefits to retired Managing and Executive Directors who have completed ten years of continuous service in Tata Group and three years of continuous service as Managing Director/Executive Director or five years of continuous service as Managing Director/Executive Director. The directors are entitled to seventy five percent of last drawn salary for life and on death 50% of the pension is payable to the wife for the rest of her life.

Family benefit scheme is applicable to all permanent employees in management, officers and workmen who have completed one year of continuous service. Incase of untimely death of the employee, nominated sbeneficiary is entitled to an amount equal to the last drawn salary till the normal retirement date of the deceased employee.

The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were carried out at 31st March, 2015. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

The following tables set out the funded status and amounts recognised in the Company''s financial statements as at 31st March, 2015 for the Defined Benefits Plans.

(a) Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations.

(b) Expected rate of return on plan assets is based on the average long term rate of return expected on investments of the Fund during the estimated term of the obligations.

(c) The estimates of future salary increases, considered in actuarial valuation, take into account the inflation, seniority, promotion and other relevant factors.

(vi) Disclosure as required by AS - 29 "Provisions, Contingent Liabilities and Contingent Assets" in respect of provisions as at 31st March, 2015

(a) The Company has made provision for various obligations and disputed liabilities based on its assessment of the amount it estimates to incur to meet such obligations, details of which are given below.

(b) Nature of provisions:

(i) Warranty: The Company gives warranties on certain products that fail to perform satisfactorily during the warranty period. Provision made as at March 31,2015 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of one year from the date of Balance Sheet.

(ii) Provision for site restoration expenses is in respect of afforestation and bio-diversity charges.

(iii) Other provisions represent mainly provision for litigations that are expected to materialise in respect of matters in appeal and expected tax liability in respect of indirect and other taxes.

(viii) Contingent liabilities and commitments (to the extent not provided for):

(i) Contingent liabilities:

(a) Guarantees:

(i) Bank Guarantees issued by Banks on behalf of the Company Rs 208.45 crore (previous year Rs 130.46 crore).

These are covered by the charge created in favour of the Company''s bankers by way of hypothecation of stocks and debtors.

(ii) Guarantees provided by the Company to third parties on behalf of subsidiaries aggregates USD 360.40 million and GBP 2.76 million (Rs 2,277.99 crore) (previous year USD 390.40 million (Rs 2,339.08 crore)). The purpose of the guarantees are as follows:

(a) USD 344.40 million, Rs 2,152.50 crore (previous year USD 374.40 million, Rs 2,243.21 crore) has been provided as security for the term loans from banks to Homefield Pvt. UK Limited, Tata Chemicals Magadi Limited and Tata Chemicals International Pte. Limited.

(b) USD 10 million, Rs 62.50 crore (previous year USD 10 million, Rs 59.92 crore) and USD 6 million, Rs 37.50 crore (previous year USD 6 million, Rs 35.95 crore) has been provided as security for the interest rate swap and working capital loan respectively taken by Tata Chemicals International Pte. Limited from banks.

(c) GBP 2.76 million, Rs 25.49 crore (previous year GBP Nil, '' Nil) has been provided to the Secretary of State for Business, Innovation and Skills, Department for Business, Innovation and Skills, London as parent guarantee in connection with the grant received by Tata Chemicals Europe Limited under the Industrial Development Act 1982.

(b) Claims not acknowledged by the Company relating to cases contested by the Company and which, in the opinion of the Management, are not likely to devolve on the Company relating to the following areas:

(Rsin crore) As at As at 2014-15 2013-14

(i) Excise and Customs 21.70 7.31

(ii) Sales Tax 9.75 9.47

(iii) Demand for utility charges 18.38 56.61

(iv) Labour and other claims against the Company not acknowledged as debt 8.79 5.63

(v) Income Tax (pending before Appellate authorities in respect of which the Company is in appeal) 160.29 140.60

(vi) Income Tax (decided in Company''s favour by Appellate authorities and Department is in further appeal) 46.93 35.76

(c) Various claims pending before Industrial Tribunals and Labour Courts of which amounts are indeterminate.

(ii) Commitments:

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs 77.38 crore (previous year Rs 24.47 crore).

(b) For commitments related to derivatives and leases refer note 28 (vii) and 28 (ix) respectively (ix) Operating leases:

As a lessee

(a) General description of significant leasing arrangements :

The payments made by the Company as lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. The Company has entered into operating lease arrangement for storage tank from a vendor. The leases are non cancellable and are for a period of 15 years with an option for renewal by a further period of 10 years based on mutual agreements of all the parties.

(d) The lease deposit of Rs. Nil (previous year Rs 25 crore) for plant and machinery remaining with the lessors is provided over the useful life of the asset and consequently a net amount of Rs. Nil (previous year Rs. Nil) has been charged to the Statement of Profit and Loss on the principle of matching of revenue and costs.

(xi) Details of unutilised amounts out of issue of securities for the specific purpose:

During 2010-11, the Company issued Equity shares to Tata Sons Limited amounting to Rs 363.40 crore to fund various growth plans and projects. As at 31st March, 2015, this balance of Rs 363.40 crore (previous year Rs 363.40 crore) is pending utilisation for the specified activities and this unutilised amount has been kept invested in bank fixed deposits / money market mutual funds, pending final utilisation.

Includes Rs 0.42 crore (previous year Rs (0.62) crore) pertaining to wages, salaries and other revenue account

Includes Rs. Nil crore (previous year Rs. 0.64 crore) pertaining to wages, salaries and other revenue account

Includes Rs 7.50 crore (previous year Rs 5.11 crore) pertaining to wages, salaries and other revenue account

Includes Rs 9.86 crore (previous year Rs 8.26 crore) pertaining to wages, salaries and other revenue account

(xvii) Remittances in foreign currencies for dividends:

The Company has remitted during the year Rs 0.39 crore (previous year Rs 0.01 crore) in foreign currencies on account of dividends and does not have information as to the extent to which other remittances, if any, in foreign currencies on account of dividends have been made by / on behalf of non-resident shareholders.

(xx) The figures in light print are for previous year.

(xxi) Asterisk (*) denotes figures below Rs 50,000.

(xxii) Previous year''s figures have been regrouped / reclassified wherever necessary to make them comparable with the current year''s figures.


Mar 31, 2014

NOTE 1. CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid time deposits that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

(iv) Employee benefit obligations:

(a) The Company makes contribution towards provident fund, in substance a defined contribution retirement benefit plan and towards pension, superannuation fund, a defined contribution retirement plan for qualifying employees. The provident fund is administered by the Trustees of the Tata Chemicals Limited Provident Fund and the superannuation fund is administered by the Trustees of the Tata Chemicals Limited Superannuation Fund. Under the schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit.

On account of the above Contribution Plans, a sum of Rs. 12.01 crore (previous year Rs. 11.79 crore) has been charged to the Statement of Profit and Loss.

(b) The Company makes annual contributions to the Tata Chemicals Employees'' Gratuity Trust and to the Employees'' Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India, both are funded defined benefit plans for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the Company''s Gratuity Scheme. Vesting occurs upon completion of five l years of service.

The Company is also providing post retirement medical Benefits to qualifying employees. Similarly, the Company provides pension, housing / house rent allowance and medical Benefits to retired Managing and Executive Directors.

The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were carried out at 31st March, 2014. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

The following tables set out the funded status and amounts recognised in the Company''s financial statements as at 31st March, 2014 for the Defined Benefits Plans.

(b) Expected rate of return on plan assets is based on the average long term rate of return expected on investments of the Fund during the estimated term of the obligations.

(c) The estimates of future salary increases, considered in actuarial valuation, take into account the inflation, seniority, promotion and other relevant factors.

(d) The figures in light print are for previous year.

(viii) Contingent liabilities and commitments (to the extent not provided for):

(i) Contingent liabilities:

(a) Guarantees:

(i) Bank Guarantees issued by Banks on behalf of the Company Rs. 297.93 crore (previous year Rs. 267.96 crore). These are covered by the charge created in favour of the Company''s bankers by way of hypothecation of stocks and debtors.

(ii) Guarantees provided to third parties on behalf of subsidiaries USD 390.40 million (Rs. 2,339.08 crore) (previous year USD 388.30 million (Rs.2,107.89 crore)).

(b) Claims not acknowledged by the Company relating to cases contested by the Company and which, in the opinion of the Management, are not likely devolve on the Company relating to the following areas:

(Rs. in crore)

As at As at 2013-14 2012-13

(i) Excise and Customs 7.31 3.26

(ii) Sales Tax 9.47 11.40

(iii) Demand for utility charges 56.61 56.69

(iv) Labour and other claims against the Company not acknowledged as debt 3.71 2.39

(v) Income Tax (pending before Appellate authorities in respect of which the Company is in appeal) 140.60 188.98

(vi) Income Tax (decided in Company''s favour by Appellate authorities and Department is in further appeal) 35.76 37.33

(c) Various claims pending before Industrial Tribunals and Labour Courts of which amounts are indeterminate.

(ii) Commitments:

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 24.47 crore (previous year Rs. 37.40 crore).

(b) Capital commitment towards investment in joint ventures Rs. 34.39 crore (previous year Rs. 31.15 crore).

(c) For commitments related to derivatives and leases refer note 28 (vii) and 28 (ix) respectively.

(ix) Operating leases: As a lessee

(a) General description of significant leasing arrangements:

The payments made by the Company as lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. The Company has entered into operating lease arrangement for storage tank from a vendor. The leases are non-cancellable and are for the period 15 years and may be renewed for a further period of 10 years based on mutual agreements of the parties.

(d) The lease deposit of Rs. 25 crore (previous year Rs. 25 crore) for plant and machinery remaining with the lessors is provided over the useful life of the asset and consequently a net amount of Rs. Nil (previous year Rs. 1.57 crore) has been charged to the Statement of Prof t and Loss on the principle of matching of revenue and costs.

(xi) Details of unutilised amounts out of issue of securities for the specific purpose:

During 2010-11, the Company has issued equity shares to Tata Sons Limited amounting to Rs. 363.40 crore to fund Company''s various growth projects. As at 31st March, 2014, this balance of Rs. 363.40 crore (31st March, 2013 Rs. 363.40 crore) is pending utilisation for the specified activities and this unutilised amount has been kept invested in bank fixed deposits / money market mutual funds, pending f nal utilisation.

(xx) Scheme of arrangement between erstwhile Homefield International Pvt. Ltd. "Homefield", a wholly owned subsidiary of the Company, with the Company:

(a) The scheme of arrangement (the "Scheme") between the erstwhile Homefield International Pvt. Ltd. ("Homefield"), a wholly owned subsidiary of the Company, with the Company was approved by the Honourable High Court of Judicature at Bombay (the "Hon. High Court") vide its order dated 7th March, 2014. The Scheme came into effect after the order of the Hon. High Court was f led with the Registrar of Companies, Mumbai, i.e. 29th April, 2014, (the "Effective Date") but took legal force and effect retrospectively from is 1st April, 2013 (the "Appointed Date").

(b) Thus the business of Homefield was deemed to be transferred to the Company with effect from 1st April, 2013. The transfer was recorded using the "Pooling of Interest" method as set out in the Accounting Standard (AS) 14 on accounting for amalgamations. Accordingly:

i. the assets and liabilities of Homefield as at 31st March, 2013, were transferred to the Company at their respective book values;

ii. the reserves of Homefield as on that date were recorded in the same form and at the same values as appearing in the financial statements of Homefield as at and for the year ended 31st March, 2013;

iii. the inter-company balances as on that date were cancelled; and

iv. the investments appearing in the books of account of the Company were cancelled against the share capital of Homefield with no residual surplus or def cit (as all the shares of Homefield were held by the Company).

(xxi) Asterisk (*) denotes f gures below Rs. 50,000.

(xxii) Previous year''s f gures have been regrouped / reclassif ed wherever necessary to make them comparable with the current year''s figures.


Mar 31, 2013

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid time deposits that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

(i) Contingent Liabilities and commitments (to the extent not provided for):

1. Contingent Liabilities:

(a) Guarantees:

(i) Bank Guarantees issued by Banks on behalf of the Company Rs. 267.96 crores (previous year Rs. 163.39 crores). These are covered by the charge created in favour of the Company''s bankers by way of hypothecation of stocks and debtors.

(ii) Guarantees provided to third parties on behalf of subsidiaries USD 388.30 million (Rs. 2,107.89 crores) (previous year USD 138.30 million (Rs. 703.60 crores))

(b) Claims not acknowledged by the Company relating to cases contested by the Company and which, in the opinion of the Management, are not likely to devolve on the Company relating to the following areas:

2. Commitments:

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 37.40 crores (previous year Rs. 59.67 crores).

(b) Capital commitment towards investment in joint ventures Rs. 31.15 crores (previous year Rs. 41.84 crores).

(c) For commitments related to derivatives and leases refer note 28 (vi) and 28 (viii) respectively.

(viii) Operating Leases:

As a lessee

(a) General description of significant leasing arrangements:

The payments made by the Company as lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. The Company has entered into operating lease arrangement for storage tank from a vendor. The leases are non-cancellable and are for the period 15 years and may be renewed for a further period of 10 years based on mutual agreements of the parties.

(d) The lease deposit of Rs. 25.00 crores (previous year Rs. 25.00 crores) for plant and machinery remaining with the lessors is provided over the useful life of the asset and consequently a net amount of Rs. 1.57 crores (previous year Rs. 2.20 crores) has been charged to the Statement of Profit and Loss on the principle of matching of revenue and costs.

(ii) Details of unutilised amounts out of issue of securities for the specific purpose:

During 2010-11, the Company has issued Equity shares to Tata Sons Limited amounting to Rs. 363.40 crores to fund Company''s various growth projects. As at 31st March, 2013, this balance of Rs. 363.40 crores (31st March, 2012 Rs. 363.40 crores) is pending utilisation for the specified activities and this unutilised amount has been kept invested in bank fixed deposits / money market mutual funds, pending final utilisation.

(iii) Remittances in Foreign Currencies for Dividends:

The Company has remitted during the year Rs. 41.22 crores (previous year Rs. 39.05 crores) in foreign currencies on account of dividends and does not have information as to the extent to which other remittances, if any, in foreign currencies on account of dividends have been made by / on behalf of non-resident shareholders.

(iv) The Company at its Board meeting held on 8th February, 2013, approved the Scheme of Amalgamation (''the Scheme'') of Homefield International Pvt. Ltd.(''Homefield International Pvt. Ltd.'') which is a wholly owned subsidiary of the Company with its registered office in Mauritius. No shares of the Company will be issued and allotted in lieu or exchange of the equity shares of Homefield International Pvt. Ltd. under the Scheme. The appointed date of the Scheme is 1st April, 2013. A petition is being filed with the High Court of Judicature at Bombay for approval of the Scheme. No effect has been given in the financial statements pending the High Court approval.

(v) During the year ended 31st March, 2013, the Company has recognised subsidy income of Rs. 44.91 crores on Opening stock as on 1st April, 2011 of Raw Materials for Phosphatic and Potassic Fertilisers based on communication issued by Department of Fertilizers vide letter no. 23011/1/2010 - MPR (Pt) dated 22.08.12 with respect to earlier Office Memorandum dated 11th July, 2011 on mopping up of Subsidy increase under NBS Policy.

(vi) Asterisk (*) denotes figures below Rs. 50,000.

(vii) Previous year''s figures have been regrouped / reclassified wherever necessary to make them comparable with the current year''s figures.


Mar 31, 2012

Note 1: Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid time deposits that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

Notes :

(a) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

(i) Based on approval of the members of the Company, in August 2010, the Company has issued 1,15,00,000 equity shares on a preferential basis to Tata Sons Limited (the promoter entity). (b) The equity shares of the Company have voting rights and are subject to the preferential rights as prescribed under law or those of the preference shareholders, if any. The equity shares are also subject to restrictions as prescribed under the Companies Act 1956.

Notes :

(a) Deferred tax asset of Rs. 39.27 crores (previous year Rs. 8.08 crores) have been adjusted on, exchange gain/loss on long term foreign currency monetary asset/liability have been offset against " Foreign currency monetary translation difference account".'

Notes :

(a) Provision for compensation under employee separation scheme (ESS) has been calculated on the basis of the net present value of the future monthly payments of pension.

(b) During the year, the Company entered into an agreement with Department of Science and Technology for creation of Capital Assets for Sulphate of Potash (SOP) Project. For the above Project, the Company has received its first installment of Government Grant amounting to Rs. 8.50 crores which has been retained in a separate bank account and included in "Other payables" above.

Notes :

(a) Loans from banks on cash credit are secured by hypothecation of stocks of raw materials, finished products, stores and work-in-process as well as book debts.

Notes :

(a) According to information available with the Management and relied upon by the auditors, on the basis of intimation received from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), the Company has amounts due to Micro and Small Enterprises under the said Act as at 31st March, 2012 as follows :

Notes:

(a) The external commercial borrowing is due for repayments on 4th June, 2012 and 4th December, 2012 in installments of Rs. 448.66 crores (USD 95 million) and Rs. 459.00 crores (USD 95 million) respectively.

Notes :

(a) During the year ended 31st March 2012 the Company exercised the option granted vide notification F.No.17/133/2008/CL- V dated 29th December, 2011 issued by the Ministry of Corporate Affairs and accordingly, the exchange differences arising on revaluation of long term foreign currency monetary items have been recognised over the shorter of the loan repayment period and 31st March, 2020. The unamortised balance as at 31st March 2012 of Rs. 81.72 crores (net of tax) (previous year 7 Nil (net of tax)) is presented as "Foreign Currency Monetary item Translation Difference Account" (FCMTDA).

(ii) Related Party Disclosure :

(a) Related Parties and their relationship (As identified by the Management)

Subsidiaries Joint Ventures Associates Key Management

Direct Direct EPM Mining Venture Inc, Personnel

Homefield International Pvt. Limited, Indo Maroc Phosphore S. A., Canada # Mr. R. Mukundan,

Mauritius Morocco Managing Director

Wyoming 1 (Mauritius) Pvt. Ltd., Khet-Se Agri Produce India Pvt. Ltd., Mr. P. K. Ghose,

Mauritius India Executive Director & CFO

Rallis India Limited, India *

Indirect Indirect Promoter Group

Bio Energy Venture - 1 Alcad, United State of America Tata Sons Limited

(Mauritius) Pvt. Ltd, Mauritius Kemex B.V., Netherlands

Homefield Pvt. UK Limited, Joil (S) Pte. Ltd, Singapore

United Kingdom The Block Salt Company Limited,

Tata Chemicals Africa Holdings Limited, United Kingdom

United Kingdom Natronx Technologies LLC,

Tata Chemicals South Africa Pty Limited, United States of America #

South Africa

Tata Chemicals Magadi Limited, United Kingdom

Magadi Railway Company Limited, Kenya

Homefield 2 UK Limited, United Kingdom

Tata Chemicals (Europe) Holdings Limited, United Kingdom

Cheshire Salt Holdings Limited, United Kingdom

Cheshire Salt Limited, United Kingdom

British Salt Limited, United Kingdom

Brinefield Storage Limited, United Kingdom

Broomco (4118) Limited, United Kingdom

Broomco (4119) Limited, United Kingdom

Broomco (4120) Limited, United Kingdom

Cheshire Cavity Storage 2 Limited, United Kingdom

Cheshire Compressor Limited, United Kingdom

Irish Feeds Limited, United Kingdom

New Cheshire Salt Works Limited, United Kingdom

Brunner Mond Group Limited, United Kingdom

Tata Chemicals Europe Limited, United Kingdom

Brunner Mond B.V., Netherland

Brunner Mond Generation Company Limited, United Kingdom

Brunner Mond Limited, United Kingdom

Northwich Resource Management Limited, United Kingdom

Gusiute Holdings (UK) Limited, United Kingdom

Valley Holdings Inc., United States of America

Tata Chemicals North America Inc., United States of America

General Chemical International Inc, United States of America

General Chemical Great Britain Limited, United States of America

NHO Canada Holdings Inc, United States of America

General Chemical Canada Holding Inc, Canada

TCSAP Holdings, United State of America **

TCSAP LLC, United State of America

Tata Chemicals (Soda Ash) partners (TCSAP), United State of America **

GCSAP Canada Inc, Canada

Tata Chemicals Asia Pacific Pte. Limited, Singapore

Grown Energy Zambeze Holdings Pvt. Ltd, Mauritius

Grown Energy (Proprietary) Limited, South Africa

Grown Energy Zambeze Limitada, Mozambique

Rallis Chemistry Exports Limited, India

Metahelix Life Sciences Ltd (Metahelix), India

Dhaanya Seeds Ltd, India

* Rallis India Limited is a listed company.

** a general partnership formed under the laws of the State of Delaware (USA)

# Arising out of acquisitions during the year.

Wyoming 2 (Mauritius) Pvt. Limited merged with Wyoming 1 (Mauritius) Pvt. Limited w.e.f. 4th November, 2011

Bio Energy Venture - 2 (Mauritius) Pvt. Ltd merged with Bio Energy Venture - 1 (Mauritius) Pvt. Ltd w.e.f. 21st November, 2011

Wyoming 1 (Mauritius) Pvt. Limited merged with the Company w.e.f. 1st Janurary, 2012

Rallis Australasia Pty. Limited had liquidated as at 31st December, 2011

General Chemical (Soda Ash) Inc and Bayberry Management Corporation dissolved as at 11th January, 2012

(ii) Related Party Disclosure :

(a) Related Parties and their relationship (As identified by the Management)

Subsidiaries Joint Ventures Associates Key Management

Direct Direct EPM Mining Venture Inc, Personnel

Homefield International Pvt. Limited, Indo Maroc Phosphore S. A., Canada # Mr. R. Mukundan,

Mauritius Morocco Managing Director

Wyoming 1 (Mauritius) Pvt. Ltd., Khet-Se Agri Produce India Pvt. Ltd., Mr. P. K. Ghose,

Mauritius India Executive Director & CFO

Rallis India Limited, India *

Indirect Indirect Promoter Group

Bio Energy Venture - 1 Alcad, United State of America Tata Sons Limited

(Mauritius) Pvt. Ltd, Mauritius Kemex B.V., Netherlands

Homefield Pvt. UK Limited, Joil (S) Pte. Ltd, Singapore

United Kingdom The Block Salt Company Limited,

Tata Chemicals Africa Holdings Limited, United Kingdom

United Kingdom Natronx Technologies LLC,

Tata Chemicals South Africa Pty Limited, United States of America #

South Africa

Tata Chemicals Magadi Limited, United Kingdom

Magadi Railway Company Limited, Kenya

Homefield 2 UK Limited, United Kingdom

Tata Chemicals (Europe) Holdings Limited, United Kingdom

Cheshire Salt Holdings Limited, United Kingdom

Cheshire Salt Limited, United Kingdom

British Salt Limited, United Kingdom

Brinefield Storage Limited, United Kingdom

Broomco (4118) Limited, United Kingdom

Broomco (4119) Limited, United Kingdom

Broomco (4120) Limited, United Kingdom

Cheshire Cavity Storage 2 Limited, United Kingdom

Cheshire Compressor Limited, United Kingdom

Irish Feeds Limited, United Kingdom

New Cheshire Salt Works Limited, United Kingdom

Brunner Mond Group Limited, United Kingdom

Tata Chemicals Europe Limited, United Kingdom

Brunner Mond B.V., Netherland

Brunner Mond Generation Company Limited, United Kingdom

Brunner Mond Limited, United Kingdom

Northwich Resource Management Limited, United Kingdom

Gusiute Holdings (UK) Limited, United Kingdom

Valley Holdings Inc., United States of America

Tata Chemicals North America Inc., United States of America

General Chemical International Inc, United States of America

General Chemical Great Britain Limited, United States of America

NHO Canada Holdings Inc, United States of America

General Chemical Canada Holding Inc, Canada

TCSAP Holdings, United State of America **

TCSAP LLC, United State of America

Tata Chemicals (Soda Ash) partners (TCSAP), United State of America **

GCSAP Canada Inc, Canada

Tata Chemicals Asia Pacific Pte. Limited, Singapore

Grown Energy Zambeze Holdings Pvt. Ltd, Mauritius

Grown Energy (Proprietary) Limited, South Africa

Grown Energy Zambeze Limitada, Mozambique

Rallis Chemistry Exports Limited, India

Metahelix Life Sciences Ltd (Metahelix), India

Dhaanya Seeds Ltd, India

* Rallis India Limited is a listed company.

** a general partnership formed under the laws of the State of Delaware (USA)

# Arising out of acquisitions during the year.

Wyoming 2 (Mauritius) Pvt. Limited merged with Wyoming 1 (Mauritius) Pvt. Limited w.e.f. 4th November, 2011

Bio Energy Venture - 2 (Mauritius) Pvt. Ltd merged with Bio Energy Venture - 1 (Mauritius) Pvt. Ltd w.e.f. 21st November, 2011

Wyoming 1 (Mauritius) Pvt. Limited merged with the Company w.e.f. 1st Janurary, 2012

Rallis Australasia Pty. Limited had liquidated as at 31st December, 2011

General Chemical (Soda Ash) Inc and Bayberry Management Corporation dissolved as at 11th January, 2012

(iii) Employee Benefit Obligations :

(a) The Company makes contribution towards provident fund in substance a defined contribution retirement benefit plan and towards pension, superannuation fund, a defined contribution retirement plan for qualifying employees. The provident fund is administered by the Trustees of the Tata Chemicals Limited Provident Fund and the superannuation fund is administered by the Trustees of the Tata Chemicals Limited Superannuation Fund. Under the schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit.

On account of the above Contribution Plans, a sum of Rs. 5.70 crores (previous year Rs. 4.67 crores) has been charged to the Statement of Profit and Loss.

(b) The Company makes annual contributions to the Tata Chemicals Employees' Gratuity Trust and to the Employees' Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India, both are funded defined benefit plans for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the Company's Gratuity Scheme. Vesting occurs upon completion of five years of service.

The Company is also providing post retirement medical benefits to qualifying employees. Similarly, the Company provides pension, housing / house rent allowance and medical benefits to retired Managing and Executive Directors.

The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were carried out at 31st March, 2012. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

The following tables set out the funded status and amounts recognised in the Company's financial statements as at 31st March, 2012 for the Defined Benefits Plans.

1 Changes in the defined benefit obligation: Projected defined benefit obligation

At the beginning of the year Current service cost

Interest cost

Actuarial (gain) / loss

Past service cost

Benefits paid

At the end of the year

2 Changes in the fair value of plan assets: Fair value of plan assets

At the beginning of the year

Expected return on plan assets

Employer's contributions

Actuarial gain / (loss)

Benefits paid

At the end of the year

(Asset)/Liability (net)

3 Net employee benefit expense (recognised in Employee Cost) for the year :

Current service cost

Interest defined benefit obligation

Expected return on plan assets

Net actuarial (gain) / loss recognised in the year

Past service cost

Total expenses recognised in the statement of profit and loss

Expected Employer's contribution next year

Actual Return on Plan Assets

4 Categories of plan assets as a percentage of the fair value of total plan assets :

Government of India Securities

Corporate Bonds

Equity Shares of Listed Companies

Others

Total

5 Assumptions used in accounting for gratuity and compensated absences, long service awards, post retirement medical benefits, directors' retirement obligations and family benefit scheme :

Discount rate

Expected rate of return on plan assets

Increase in Compensation cost

Increase in cost of award Healthcare cost increase rate Pension increase rate

(a) Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations.

(b) Expected rate of return on plan assets is based on the average long term rate of return expected on investments of the Fund during the estimated term of the obligations.

(c) The estimates of future salary increases, considered in actuarial valuation, take into account the inflation, seniority, promotion and other relevant factors.

(d) The figures in light print are for previous year.

6 Effect of Change in Assumed Health Care Cost Trend Rate :

Effect on the aggregate of the service cost and interest cost

Effect on defined benefit obligation

7 Experience Adjustments :

Defined Benefit Obligation

Plan Assets

Surplus / (Deficit)

Experience Adjustments on Plan Liabilities

Experience Adjustments on Plan Assets

Defined Benefit Obligation

Plan Assets

Surplus / (Deficit)

Experience Adjustments on Plan Liabilities

Experience Adjustments on Plan Assets

8 The details of the Company's post-retirement and other benefit plans for its employees given above are certified by the actuary and relied upon by the Auditors.

(iv) The proportionate share of assets, liabilities, income and expenditure, contingent liabilities and capital commitments of the Joint Ventures are as given below :

(v) Disclosure as required by AS 29 "Provisions, Contingent Liabilities and Contingent Assets" in respect of provisions as at 31st March, 2012

The company has made provision for various obligations and disputed liabilities based on its assessment of the amount it estimates to incurre to meet such obligations, details of which are given below.

(b) The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are as under:

(i) Export receivables Rs. 7.12 crores (USD 1.40 million) (previous year Rs.7.58 crores (USD 1.7 million)).

(ii) Accounts payable Rs. 49.04 crores (USD 9.64 million) (previous year Rs. 46.87 crores (USD 10.51 million)).

(iii) Liability arising out of cross currency swap Rs. 1,399.06 crores (USD 275 million) (previous year Rs.1,226.36 crores (USD 275 million)).

(iv) Contingent Liabilities and commitments (to the extent not provided for) (i) Contingent Liabilities :

(a) Guarantees:

(i) Bank Guarantees issued by Banks on behalf of the Company Rs. 163.39 crores (previous year Rs. 193.96 crores). These are covered by the charge created in favour of the Company's bankers by way of hypothecation of stocks and debtors.

(ii) Guarantees provided to third parties on behalf of subsidiaries USD 138.30 million (Rs. 703.60 crores) (previous year USD 138.30 million (Rs. 616.75 crores)).

(b) Claims not acknowledged by the Company relating to cases contested by the Company and which, in the opinion of the Management, are not likely devolve on the Company relating to the following areas :

(Rs. in crores)

As at As at 2011-12 2010-11

(i) Excise and Customs 4.21 73.92

(ii) Sales Tax 89.11 81.06

(iii) Demand for utility charges 56.86 56.83

(iv) Labour and other claims against the Company not acknowledged as debt 1.89 1.94

(v) Income Tax (Pending before Appellate authorities in respect of which the Company is in appeal) 186.72 239.23

(vi) Income Tax (Decided in Company's favour by Appellate authorities and Department is in further appeal) 37.33 37.33

(c) Various claims pending before Industrial Tribunals and Labour Courts of which amounts are indeterminate.

(ii) Commitments:

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 59.67 crores (previous year Rs. 141.87 crores).

(b) Capital commitment towards investment in joint ventures Rs. 42 crores (previous year Rs. 72 crores).

(c) For commitments related to leases and derivatives refer note 28 (viii) and 28 (vi) respectively.

(viii) Operating Leases : As a lessee

(a) General description of significant leasing arrangements :

The payments made by the Company as lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. The Company has entered into operating lease arrangement for storage tank from a vendor. The leases are non cancellable and are for the period 15 years and may be renewed for a further period of 10 years based on mutual agreements of the parties.

(b) Total of minimum lease payments

The total of future minimum lease payments under non-cancellable operating leases for a period : Not later than one year

Later than one year and not later than five years Later than five years

(c) Lease payments recognised in the Statement of Profit and Loss for the year

(d) The lease deposit of Rs. 25 crores (previous year Rs. 25 crores) for plant and machinery remaining with the lessors is provided over the useful life of the asset and consequently a net amount of Rs. 2.20 crores (previous year Rs. 2.17 crores) has been charged to the Statement of Profit and Loss on the principle of matching of revenue and costs.

(v) Details of unutilised amounts out of issue of securities for the specific purpose.

During 2010-11, the Company has issued equity shares to Tata Sons Limited amounting to Rs. 363.40 crores to fund Company's various growth projects. As at 31st March, 2012, this balance of Rs. 363.40 crores (31st March, 2011 Rs. 363.40 crores) is pending utilisation for the specified activities and this unutilised amount has been kept invested in bank fixed deposits / money market mutual funds, pending final utilisation.

(vi) Value of Imports (C.I.F. Value) :

(a) Raw Materials, fuel and traded products

(b) Stores, components and spare parts

(c) Capital goods

(vii) Expenditure in Foreign Currencies :

(a) Technical know how fees @

(b) Interest #

(c) Payments on other accounts #

@ Expenditure Rs. 0.35 crores (previous year Rs. 6.55 crores) at gross of TDS and Rs.3.34 crores (previous year Rs. 9.29 crores) net of TDS for the year 2011-12.

# Expenditure at gross of TDS for the year 2011-12 and 2010-11.

(viii) Remittances in Foreign Currencies for Dividends :

The Company has remitted during the year Rs. 39.05 crores (previous year Rs.29.85 crores) in foreign currencies on account of dividends and does not have information as to the extent to which other remittances, if any, in foreign currencies on account of dividends have been made by / on behalf of non-resident shareholders.

(a) Number of Non-Resident Shareholders

(b) Number of Ordinary Shares held by them

(c) Gross amount of dividend (Rs. in crores)

(d) Year ended to which the dividend related

(ix) Earnings in Foreign Exchange :

(a) Export of goods on F.O.B. basis

(b) Interest

(c) Miscellaneous Income

(d) Dividend

(x) Value of imported and indigenous raw materials, stores, components and spare parts consumed:

(a) Imported

(b) Indigenous #

# Includes Rs. 15.43 crores (previous year Rs. 12.03 crores) pertaining to wages, salaries and other revenue accounts.

(xi) Scheme of Arrangement between erstwhile Wyoming 1 (Mauritius) Pvt. Ltd., a wholly owned subsidiary of the Company, with the Company :

(a) The Scheme of Arrangement between erstwhile Wyoming 1 (Mauritius) Pvt. Ltd. (Wyoming 1), a wholly owned subsidiary of the Company, with the Company was approved by the Honourable High Court of Mumbai, vide its order dated 4th May, 2012. The certified copy of the said High Court order has been received and filed with the Registrar of Companies, Mumbai and the said Scheme became effective on 23rd May, 2012.

(b) Accordingly, the Scheme has been given effect in the accounts and assets and liabilities and reserves of Wyoming 1, at their respective book value are appearing in the audited financial statements as at 31st December, 2011, have been transferred to and vested in the Company, along with profit for the period from 1st January, 2012 to 31st March, 2012 recognised in the Statement of Profit and Loss for the year ended 31st March, 2012. (the appointment date "date of the Scheme being 1st January, 2012")

(c) The summarised Statement of Profit and Loss relating to Wyoming 1 operations for the period from 1st January to 31st March is as under.

Statement of Profit and Loss for the period 1st January, 2012 to 31st March, 2012

(e) As Wyoming 1 is a wholly owned subsidiary of the Company, no shares of the Company has been issued and allotted in lieu or exchange of the equity shares of Wyoming 1 under the Scheme. 720,240,000 equity shares of the Wyoming 1 held by the company stands cancelled.

(f) In view of the aforesaid amalgamation, the figures for the current year are not comparable to those of the previous year.

(xii) For the year ended 31st March, 2012, the Company has not recognised subsidy income of Rs. 44.91 crores on Opening stock as at 1st April, 2011 of Raw Materials for Phosphatic & Potassic Fertilisers, in accordance with the Office Memorandum dated 11th July, 2011 issued by the Department of Fertilisers (DOF) which provides for the Subsidy on such Opening Stocks at old rates applicable to FY. 2010-11.

Based on the legal opinion made available, the said Office Memorandum is being represented against / contested. Had the Company recognised the subsidy income from sales made from such Opening Stocks as per the prevalent Nutrient Based Subsidy (NBS) policy without giving effect to the said Office Memorandum, the Sales / Income from operations and Net Profit After Tax would have been higher by Rs. 44.91 crores and Rs. 33.64 crores respectively for the year ended 31st March, 2012.

(xiii) Asterisk (*) denotes figures below Rs. 50,000.

(xiv) During the year ended 31st March, 2012, the Revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of financial statements, hence financial statements have been prepared as per notified Schedule VI. This has significantly impacted the disclosure and presentation made in the Financial statements. previous year figures have been regrouped/reclassified wherever necessary to correspond with the year's classification/disclosure.


Mar 31, 2011

1 Segment Reporting :

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standards (AS-17) on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.

2 Related Party Disclosure :

(a) Related Parties and their relationship

Subsidiaries Direct

Homefield International Pvt. Limited,

Mauritius

Wyoming 1 (Mauritius) Pvt. Ltd.,

Mauritius

Bio Energy Venture - 1 ( Mauritius) Pvt. Ltd.,

Mauritius

Rallis India Limited, India

Joint Ventures Direct

Indo Maroc Phosphore S. A.,

Morocco

Khet-Se Agri Produce India

Pvt. Ltd., India

Key Management Personnel

Mr. R. Mukundan, Managing Director

Mr. P. K. Ghose, Executive Director & CFO

Mr. Kapil Mehan (upto 31August, 2010), Executive Director

Indirect

Tata Chemicals Asia Pacific Pte. Limited,

Singapore

Homefield Pvt. UK Limited, United Kingdom

Homefield 2 UK Limited, United Kingdom

Tata Chemicals (Europe) Holding Limited*,

United Kingdom

Brunner Mond Group Limited,

Brunner Mond (UK) Limited,

United Kingdom

Brunner Mond Limited, United Kingdom

The Magadi Soda Company Limited,

United Kingdom

Brunner Mond (South Africa) (Pty) Limited,

South Africa

Northwich Resource Management Limited,

United Kingdom

Brunner Mond Generation Company Limited,

United Kingdom

Tata Chemicals Africa Holdings Limited**,

United Kingdom

Magadi Railway Company Limited, Kenya

Brunner Mond B.V., Netherlands

Wyoming 2 (Mauritius) Pvt. Limited,

Mauritius

Gusiute Holdings (UK) Limited,

United Kingdom

Valley Holdings Inc., United States of America

General Chemical Industrial Products Inc.,

United States of America

General Chemical International Inc.,

United States of America

NHO Canada Holdings Inc.,

United States of America

General Chemical (Soda Ash) Inc.,

United States of America

Bayberry Management Corporation,

United States of America

Alcad, United State of America

Kemex B.V., Netherlands

JOil (S) Pte. Ltd, Singapore

The Block Salt Company Limited #, United Kingdom

Lake Natron Resources Limited, Tanzania (upto 15th December,

United Kingdom 2009)

Indirect

General Chemicals (Soda Ash) Partners,

United States of America

General Chemical (Great Britain) Limited,

United Kingdom

General Chemical Canada Holding Inc.,

Canada

GCSAP Canada Inc, Canada

GCSAP Holdings, United States of America

GCSAP LLC, United States of America

Bio Energy Venture - 2 ( Mauritius) Pvt. Ltd.,

Mauritius

Grown Energy Zambeze Holdings Pvt. Ltd.,

Mauritius

Grown Energy (Proprietary) Limited*,

South Africa

Grown Energy Zambeze Limitada*,

Mozambique

Rallis Australasia Pty Limited***, Australia

Rallis Chemistry Exports Limited, India

Metahelix Life Sciences Ltd*, India

Dhaanya Seeds Ltd*, India

British Salt Limited*, United Kingdom

Cheshire Salt Holdings Limited*,

United Kingdom

Cheshire Salt Limited*, United Kingdom

Brinefield Storage Limited*, United Kingdom

Broomco (4118) Limited*, United Kingdom

Broomco (4119) Limited*, United Kingdom

Broomco (4120) Limited*, United Kingdom

Cheshire Cavity Storage 2 Limited*,

United Kingdom

Cheshire Compressor Limited*, United Kingdom

Irish Feeds Limited*, United Kingdom

New Cheshire Salt Works Limited*,

United Kingdom

*Companies which became subsidiaries / incorporated during the year.

**Name of Transcontinental Holdings Limited changed to this name w.e.f. December 12, 2010.

*** Has applied for voluntary liquidation as on 31st March, 2011. The Company expects to recover amount higher than the

carrying value of the investment.

# Joint Venture arising out of acquitions during the year.

3 Employee Benefit Obligations :

(a) The Company makes contribution towards provident fund, a defined benefit retirement plan and towards pension, superannuation fund, a defined contribution retirement plan for qualifying employees. The provident fund is administered by the Trustees of the Tata Chemicals Limited Provident Fund and the superannuation fund is administered by the Trustees of the Tata Chemicals Limited Superannuation Fund. Under the schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit.

On account of Defined Contribution Plans, a sum of 7 4.67 crores (previous year Rs. 5.19 crores) has been charged to the Profit and Loss Account. On account of Provident Fund contribution, a sum of Rs. 5.51 crores (previous year Rs. 4.95 crores) has been charged to Profit and Loss Account.

(b) The Company makes annual contributions to the Tata Chemicals Employees Gratuity Trust and to the Employees Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India, both are funded defined benefit plans for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment as per the Companys Gratuity Scheme. Vesting occurs upon completion of five years of service.

The Company is also providing post retirement medical benefits to qualifying employees. Similarly, the Company provides pension, housing / house rent allowance and medical benefits to retired Managing and Executive Directors.

The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were carried out at 31 March, 2011. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

The following tables set out the funded status and amounts recognised in the Companys financial statements as at 31 March, 2011 for the Defined Benefits Plans other than Provident Fund. According to the Management, in consultation with the actuary, actuarial valuation cannot be applied to reliably measure provident fund liabilities in the absence of guidance from the Actuarial Society of India.

(a) Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations.

(b) Expected rate of return on plan assets is based on the average long term rate of return expected on investments of the Fund during the estimated term of the obligations.

(c) The estimates of future salary increases, considered in actuarial valuation, take into account the inflation, seniority, promotion and other relevant factors.

(d) The figure in light print are for previous year.

(viii) The details of the Companys post-retirement and other benefit plans for its employees are given above, which are certified by the actuary and relied upon by the Auditors.

4. During the year 2009-10, the Company got notices for conversion of USD 42.756 million FCCBs into ordinary shares at a conversion price of Rs. 230.78 per ordinary share at a fixed exchange rate of Rs. 43.65 = USD1. Pursuant to this, the Company had issued 80,86,912 Ordinary share of Face Value Rs. 10 in the year 2009-10.

5 Derivative Instruments :

(a) As on 31st March, the Company has the following derivative instruments outstanding:

(i) Forward currency exchange contracts USD-INR amounting to USD 24.67 million ( previous year USD Nil) for the purpose of hedging its exposures to foreign currency loans

(ii) Forward currency exchange contracts USD- INR amounting to USD 112.49 million (previous year USD 87.41 million) for the purpose of hedging its exposures to foreign currency acceptances

(iii) Accounts payable USD Nil, CHF Nil & EUR Nil (previous year USD 2.89 million, CHF 0.19 million & EUR 0.19 million)

(iv) Forward currency exchange contracts USD-INR 58.16 million, EUR-INR 2.6 million & EUR-USD 0.45 million (previous year USD Nil) for the purpose of hedging highly probable forcast transactions.

(v) Currency options contracts USD- INR amounting to USD 78 million (previous year USD 26 million) with an intent to hedge its exposures to foreign currency loans

(vi) Full Currency Swap to hedge against fluctuations in exchange rates USD 76 million (previous year Notional principal USD 76 million)

(vii) Cross Currency Swap to hedge against fluctuations in exchange rates and Interest rates USD 475 million (previous year Notional principal USD 475 million)

(viii) Long Term Forward Contract USD-INR 71 million (previous year USD-INR 35 million) to hedge against fluctuation in exchange rates for the purpose of hedging its exposure to foreign currency long term loans

(b) The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are as under:

(i) Export receivables USD 1.7 million (previous year USD 4.41 million )

(ii) Acceptances USD NIL million (previous year USD 8.78 million)

(iii) Accounts payable USD 10.51 million (previous year USD 28.59 million)

(iv) Liability arising out of cross currency swap USD 275 million (previous year USD 382 million).

6 (a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 141.87 crores (previous year Rs. 56.15 crores).

(b) Capital commitment towards investment in joint ventures Rs. 72 crores (previous year Rs. 85.44 crores).

7 Contingent Liabilities :

(a) Guarantees:

(i) Bank Guarantees issued by Banks on behalf of the Company Rs. 193.96 crores (previous year 5 91.85 crores). These are covered by the charge created in favour of the Companys bankers by way of hypothecation of stocks and debtors.

(ii) Guarantees provided to third parties on behalf of subsidiaries USD 138.30 million (Rs. 616.75 crores) (previous year USD 136.80 million (Rs. 614.23 crores))

(c) The lease deposit of Rs. 25 crores (previous year Rs. 25 crores) for plant and machinery remaining with the lessors is provided over the useful life of the asset and consequently a net amount of Rs. 2.17 crores (previous year Rs. 2.17 crores ) has been charged to the Profit and Loss Account on the principle of matching of revenue and costs.

(d) General description of significant leasing arrangements :

The payments made by the Company as lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. The Company has entered into operating lease arrangement for storage tank from a vendor. Till previous year the lease arrangement also included power plants.

8 (a) Provision for compensation under Employee Separation Scheme (ESS) has been calculated on the basis of the net present value of the future monthly payments of pension.

(b) An amount of (Rs. 0.56 crore) (previous year Rs. 0.27 crore) is payable under the scheme within one year.

9 Remittances in foreign currencies for Dividends :

The Company has remitted during the year Rs. 29.85 crores (previous year Rs. 21.80 crores) in foreign currencies on account of dividends and does not have information as to the extent to which other remittances, if any, in foreign currencies on account of dividends have been made by / on behalf of non-resident shareholders.

10 Sales includes subsidy income of Rs. 2,376.73 crores (previous year Rs. 2,059.69 crores)

11 During the year ended 31st March 2009 the Company had exercised the option granted vide notification F.No.17/33/ 2008/CL-V dated March 31, 2009 issued by the Ministry of Corporate Affairs and accordingly, the exchange differences arising on revaluation of long term foreign currency monetary items for the year ended 31st March, 2008, 2009 and 2010 have been recognised over the shorter of the maturity period of the loan or 31st March, 2011. The unamortised balance as at the Balance Sheet date of Rs. Nil (net of tax) (previous year Rs. 7.89 crores) is presented as "Foreign Currency Monetary item Translation Difference Account" (FCMTDA).

12 Insurance claim

(a) Insurance claim includes Rs. 36.09 crores towards estimated loss of profit for the year ended 31st March, 2011 pertaining to Companys Fertilizer Plant at Babrala (on account of temporary disruption due to fault in Synthesis Converter in the ammonia plant upto 31st August, 2010).

(b) The devastating rain fall coupled with cyclonic wind in the months of July & August 2010 in and around Mithapur plant, the stocks of salt, Soda Ash and also the salt works were damaged due to flooding of water. The Company has adequate coverage towards cost of damaged property and stock. The work for the restoration of property is in progress and Insurance claims for both the damages have been lodged. The claim for loss of stocks Rs. 2.04 crores has been recognized in the books, based on the estimates.

13 Based on approval of the members of the Company, in August 2010, the Company has issued 1,15,00,000 equity shares on a preferential basis to Tata Sons Limited (the promoter entity).

14 Asterisk (*) denotes figures below Rs. 50,000.

15 Previous years figures have been regrouped / reclassified wherever necessary to make them comparable with the current years figures.

 
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