1.  Nature of Operations
 
 ABB Limited (''the Company'') has served utility and industry
 customers for over 60 years with the complete range of engineering,
 products, solutions and services in areas of Automation and Power
 technology. The Company has extensive installed base for manufacturing
 and a countrywide marketing and service presence. Besides catering to
 Indian domestic market, the Company is also playing an increasing role
 in the global market.
 
 2.  Significant Accounting Policies
 
 2.1 Basis of Preparation of Financial Statements
 
 The financial statements have been prepared to comply in all material
 respects with the notified accounting standards by Companies Accounting
 Standards Rules, 2006 (as amended) and the relevant provisions of the
 Companies Act, 1956. The financial statements have been prepared under
 the historical cost convention on an accrual basis in accordance with
 the accounting principles generally accepted in India. The accounting
 policies have been consistently applied by the Company, except for the
 change in accounting policy discussed more fully below, and are
 consistent with those used in the previous year.
 
 2.2 Change in Accounting Policy
 
 The Company has revised its accounting policy for goodwill arising on
 acquisition of businesses effective January 1, 2011 from amortisation
 to testing for impairment. Management believes this change in
 accounting policy aligns with leading international practices and
 reflects enduring benefits to be derived from goodwill arising on
 acquisitions. Consequent to this change in accounting policy, the
 profit for the year is higher by Rs 81,629 thousand.
 
 2.3 Use of Estimates
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles (GAAP) requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities and the disclosure of contingent liabilities as at the
 date of the financial statements and reported amounts of revenues and
 expenses during the reporting period. Actual results could differ from
 these estimates. Any revision to accounting estimates is recognized
 prospectively in current and future periods.
 
 2.4 Fixed Assets (Tangible and Intangible)
 
 Fixed assets are stated at the cost of acquisition, less accumulated
 depreciation / amortization and impairment losses, if any. Cost of
 fixed assets comprises purchase price, duties, levies and any directly
 attributable cost of bringing the asset to its working condition for
 the intended use. Own manufactured assets are capitalized at cost
 including an appropriate share of overheads. Borrowing costs related to
 the acquisition or construction of the qualifying fixed assets for the
 period up to the completion of their acquisition or construction are
 capitalized. Advances paid towards the acquisition of fixed assets
 outstanding at each balance sheet date and the cost of fixed assets not
 ready for their intended use before such date are disclosed under
 capital work in progress.
 
 Capitalized software includes costs on Enterprise Resource Planning
 (ERP) Project and other costs relating to software, which provide
 significant future economic benefits. ERP Project costs comprise
 license fees and cost of system integration services. All costs
 relating to up gradations / enhancements are generally charged off as
 revenue expenditure unless they bring significant additional benefits
 of lasting nature.
 
 Assets acquired under finance lease are capitalized at the lower of
 their fair value and the present value of the minimum lease payments.
 
 2.5 Depreciation / Amortization
 
 Depreciation on assets (except those described below) is provided on
 the straight-line method at the rates and in the manner prescribed in
 Schedule XIV of the Companies Act, 1956, which management considers as
 being representative of the useful economic lives of such assets.
 Depreciation is provided from the date of capitalization till the date
 of sale of assets.
 
 The following assets are depreciated / amortized on the straight line
 method over a period of their estimated useful lives:
 
 Leasehold land and leasehold improvements over the period of the lease.
 
 Technical know-how fees over a period of six years.
 
 Capitalized software costs over a period of five years.
 
 Goodwill on acquisition is not amortized but tested for impairment.
 
 Assets individually costing Rs 5,000 or less are depreciated fully in
 the year of purchase.
 
 Assets under finance lease are depreciated over the lower of the lease
 term or the useful life of the asset unless there is reasonable
 certainty that the Company will obtain ownership, wherein such assets
 are depreciated on the straight-line method at the rates prescribed in
 Schedule XIV of the Companies Act, 1956.
 
 2.6 Impairment of assets
 
 The carrying amounts of assets are reviewed at each balance sheet date
 if there is any indication of impairment based on internal / external
 factors. An impairment loss is recognized wherever the carrying amount
 of an asset exceeds its recoverable amount. The recoverable amount is
 the greater of the asset''s net selling price and value in use. In
 assessing value in use, the estimated future cash flows are discounted
 to their present value using a pre-tax discount rate that reflects
 current market assessments of the time value of money and risks
 specific to the assets. After impairment, depreciation is provided on
 the revised carrying amount of the assets over its remaining useful
 life.
 
 2.7 Investments
 
 Investments that are readily realizable and intended to be held for not
 more than a year are classified as current investments. All other
 investments are classified as long-term investments. Current
 investments are carried at lower of cost and fair value. Long-term
 investments are carried at cost. However, provision for diminution in
 value is made to recognize a decline other than temporary in the value
 of the investments.
 
 2.8 Inventories
 
 Inventories are stated at the lower of cost and net realizable value.
 The cost of various categories of inventories is arrived at as follows:
 
 Stores, spares, raw materials and components - at rates determined on
 the moving weighted average method.
 
 Goods in Transit - at actual cost.
 
 Work-in-progress and finished goods - at full absorption cost method
 based on annual average cost of production which includes direct
 materials, direct labour and manufacturing overheads. Excise duty is
 included in the value of finished goods inventory.
 
 Provision for obsolescence is made wherever necessary.
 
 2.9 Employee Benefits
 
 Contribution to Superannuation Fund, a defined contribution scheme, is
 made at pre-determined rates to the Superannuation Fund Trust and is
 charged to the profit and loss account. There are no other obligations
 other than the contribution payable to the Superannuation Fund Trust.
 
 Contributions to the recognized Provident Fund / Gratuity Fund and
 provision for other long term employee benefits - leave, defined
 benefit schemes, are made on the basis of actuarial valuations using
 the projected unit credit method made at the end of each financial year
 and are charged to the profit and loss account during the year.
 
 Actuarial gains and losses are recognized immediately in the profit and
 loss account.
 
 2.10 Revenue Recognition
 
 Sales of products and services are recognized when significant risks
 and rewards of ownership of products are passed on to customers or when
 the service has been provided. In case of large transformers, revenue
 is recognized on achievement of contractual milestone. Revenue
 recognized in excess of billing has been reflected under Other
 Current Assets as Unbilled Revenue. Net sales are stated at
 contractual realizable values, net of excise duty, sales tax, service
 tax, value added tax and trade discounts.
 
 Revenues from long-term contracts are recognized on the percentage of
 completion method, in proportion that the contract costs incurred for
 work performed up to the reporting date bear to the estimated total
 contract costs. Contract revenue earned in excess of billing has been
 reflected under Other Current Assets and billing in excess of
 contract revenue has been reflected under Current Liabilities in
 the balance sheet.
 
 Full provision is made for any loss in the year in which it is first
 foreseen.
 
 Liquidated damages / penalties are provided for as per the contract
 terms wherever there is a delayed delivery attributable to the Company.
 
 Commission income is recognized as per contracts / receipt of credit
 note. Dividend income is recognized when the right to receive
 dividend is established.
 
 Interest income is recognized on the time proportion method.
 
 2.11 Provisions
 
 A provision is recognized when the Company has a present obligation as
 a result of past event and it is probable that an outflow of resources
 will be required to settle the obligation, in respect of which a
 reliable estimate can be made based on technical evaluation and past
 experience. Provisions are not discounted to its present value and are
 determined based on management estimate required to settle the
 obligation at the balance sheet date. These are reviewed at each
 balance sheet date and adjusted to reflect the current management
 estimates.
 
 Disclosures for contingent liability are made when there is a possible
 or present obligation for which it is not probable that there will be
 an outflow of resources. When there is a possible or present obligation
 in respect of which the likelihood of outflow of resources is remote,
 no disclosure is made. Contingent assets are neither recognized nor
 disclosed in the financial statements.
 
 2.12 Research and Development
 
 All revenue expenditure pertaining to research are charged to the
 profit and loss account in the year in which they are incurred and
 development expenditure of capital nature is capitalized as fixed
 assets, and depreciated as per the Company''s policy.
 
 2.13 Foreign Currency Transactions
 
 Foreign currency transactions are recorded by applying the daily
 exchange rates. Exchange differences arising on foreign currency
 transactions settled during the year are recognized in the profit and
 loss account for the year.
 
 All foreign currency denominated monetary assets and liabilities are
 translated at the exchange rates prevailing on the balance sheet date.
 The resultant exchange differences are recognized in the profit and
 loss account for the year.
 
 The Company uses derivative financial instruments such as forward
 exchange contracts to hedge its risks associated with foreign currency
 fluctuations.
 
 Gain or loss on restatement of forward exchange contracts for hedging
 underlying outstanding at the balance sheet date are in the recognized
 in the profit and loss account for the year in which it occurs. The
 premium or discount on such contracts is recognised in the profit and
 loss account over the period of the contract.
 
 Gain or loss on fair valuation of forward exchange contracts for
 hedging highly forecasted transactions and embedded derivative
 contracts are recognized in the profit and loss account for the year in
 which it occurs.
 
 2.14 Taxation
 
 The current charge for income tax is measured at the amount expected to
 be paid to the tax authorities in accordance with the Indian Income Tax
 Act including probable adjustments, if any, for international
 transactions with associated enterprises. Provision for current income
 tax is made on the basis of the results of the year although the actual
 liability will be computed and paid on the basis of the results for the
 year ending March 31, 2012.
 
 The deferred tax for timing differences between the book and tax
 profits for the year is accounted for using the tax rates and laws that
 have been enacted or substantively enacted as of the balance sheet
 date. Deferred tax assets arising from timing differences are
 recognized to the extent there is reasonable certainty that the assets
 can be realized in future. Deferred tax assets are reviewed at each
 balance sheet date for its reliability.
 
 2.15 Operating Leases
 
 Leases, where the lesser effectively retains substantially all the
 risks and benefits of ownership of the leased item, are classified as
 operating leases. Operating lease payments are recognized as an expense
 in the profit and loss account on a straight-line basis over the lease
 term.
 
 3.  Acquisitions
 
 a) The Company has acquired with effect from April 1, 2011 three
 businesses; (a) Transformer Insulation - Boards and Components, (b) Low
 Voltage Breakers and Switches and (c) Vacuum Interrupters from M/s ABB
 Global Industries and Services Limited, for an aggregate consideration
 of Rs 4,000,000 thousand on a slump sale basis. Net Assets acquired is
 Rs 3,535,797 thousand and goodwill capitalized on acquisition is Rs
 464,203 thousand.
 
 b) During the year the Company has acquired 100% equity shares of
 Baldur Electric India Private Limited, Pane (Baldur) from Baldur
 Holdings Inc., USA and Baldur Electric Switzerland AG, Switzerland, for
 a total consideration of Rs 339,000 thousand. Baldur became a wholly
 owned subsidiary of the Company effective December 1, 2011. The Company
 is in the process of acquiring the preference shares in Baldur at
 consideration of Rs 18,458 thousand from Baldur Holdings Inc., USA.
 
 5.  Segment Reporting A) Primary Segment Reporting (by Business
 Segments) i) Composition of Business Segments
 
 The Company''s business segments are organized around products and
 system solutions provided to its customers, which include utilities,
 industries, channel partners and original equipment manufacturers.
 
 Power Systems Segment (PS) offers turnkey systems and services for
 transmission and distributions for power grid and power plants.  The
 segment offers the instrumentation, control and the entire balance of
 power plants, which improve performance and energy efficiency through
 flexible alternating current transmission systems, high voltage direct
 current systems, network management systems and utility communications.
 
 Power Products Segment (PP) manufactures, engineers, supplies key
 components to transmit and distribute electricity, improving power
 supply and energy efficiency. The segment produces transformers, high
 and medium voltage switchgears, circuit breakers, capacitors,
 distribution relays, insulation paper and paper board components etc.
 
 Process Automation Segment (PA) provides customers with integrated
 solutions for control, plant optimization and industry specific
 application knowledge. The industries served include oil and gas,
 power, chemicals and pharmaceuticals, pulps and paper, metals and
 minerals, marine and turbo charging.
 
 Discrete Automation and Motion Segment (DM) provides products, with
 related services, that are used as components in machinery and
 automation systems. The segment covers a wide range of products and
 services including power electronics systems, motors and generators,
 drives, robots etc.
 
 Low Voltage Products Segment (LP) manufactures products and systems
 that provide protection, control and measurement for electrical
 installations, enclosures, switchboards, electronics and
 electromechanical devices for industrial machines, plants and related
 service.
 
 ii) The accounting policies used in the preparation of the financial
 statements of the Company are also applied for segment reporting.
 
 iii) Segment revenues, expenses, assets and liabilities are those,
 which are directly attributable to the segment or are allocated on an
 appropriate basis. Corporate and other revenues, expenses, assets and
 liabilities to the extent not allocable to segments are disclosed in
 the reconciliation of reportable segments with the financial
 statements.
 
 iv) Inter Segment Transfer Pricing
 
 Inter segment prices are normally negotiated amongst the segments with
 reference to the costs, market prices and business risks, within an
 overall optimization objective for the Company.
 
 v) Figures in brackets are in respect of the previous year.
 
 9.  The Company has taken several premises and equipments under
 cancellable and non-cancellable operating leases. These lease 
 agreements are normally for one to ten years and have option of
 renewal on expiry of lease period based on mutual agreement. The
 Company has non-cancellable operating lease obligations of Rs 42,560
 thousand (Previous year Rs 48,448 thousand) payable within one year
 and Rs 83,119 thousand (Previous Year Rs 104,802 thousand) payable
 later than one year but not later than five years and Rs 34,447
 thousand (Previous Year Rs 55,325 thousand) payable later than five
 years as on December 31, 2011. Rental expenses towards cancellable
 and non- cancellable operating lease charged to the profit and loss
 account amounts of Rs 295,558 thousand (Previous Year Rs 298,413 
 thousand).
 
 There are no assets given on operating leases.
 
 Some of the lease agreements have escalation clause ranging from 5% to
 15%. There are no exceptional / restrictive covenants in the lease
 agreements.
 
 10.  Deferred Tax
 
 The breakup of net deferred tax assets / liability as at December 31,
 2011 is as follows: (Figures in brackets are in respect of the previous
 year):
 
 11.  Capacities, Production, Stock and Turnover (Refer Schedule 12)
 
 11.1 Capacities
 
 a) Installed capacities are as certified by the Management, but not
 verified by the auditors, being a technical matter.
 
 11.2 Production
 
 a) Production of finished goods is inclusive of production for captive
 use.
 
 b)there represent internally manufactured components, sold during the
 year. The Company considers these ''meant for sale''
 
 when actually sold. Since the quantitative denominations of these items
 are dissimilar, it is impracticable to disclose the quantitative
 information in respect of production and turnover.
 
 11.3 Project items
 
 a) These comprise sale of equipment and miscellaneous items meant for
 execution of projects and trading items. Since the quantitative
 denominations of these items are dissimilar, it is impracticable to
 disclose the quantitative information in respect thereof.
 
 b) Purchases of these items during the year aggregated to Rs 22,298,357
 thousand (Previous Year Rs 20,958,914 thousand) Individual items of
 purchases are not more than 10% of the total purchases.
 
 11.4 Work-in-Progress
 
 a) The Work-in-Progress at the beginning of the year amounted to Rs
 2,278,992 thousand (Previous Year Rs 2,219,033 thousand).