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.
 
                                                    (Rs in Thousands) 
 As at December 31,                           2010           2009
 
 2.  Contingent Liabilities
 
 i) Claims against the Company not 
 acknowledged as debts in respect of
 sales tax, excise and other matters       2,956,464      1,685,368
 
 ii)  Bills discounted                         -            -
 
 The above excludes bills co-accepted by 
 the customers bankers/guaranteed by the
 State Governments Rs 51 thousand 
 (Previous Year Rs 1,473 thousand)
 
 iii) Income tax matters in dispute          110,936        130,379
 
 The Company does not expect any reimbursements in respect of the above
 contingent liabilities and it is not practicable to estimate the
 timings of cash outflows, if any, in respect of matters above pending
 resolution of the arbitration / appellate proceedings.
 
 3.  Estimated amount of contracts remaining to be executed on capita!
 account and not provided for (net of advances) 627,364 450,055
 
 4.  The Company has taken several premises under cancelable and
 non-cancelable 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-cancelable
 operating lease obligations of Rs 48,448 thousand (Previous year Rs
 46,533 thousand) payable within one year and Rs 104,802 thousand
 (Previous Year Rs 131,949 thousand) payable later than one year but not
 later than five years and Rs 55,325 thousand (Previous Year Rs 77,941
 thousand) payable later than five years as on December 31, 2010. Rental
 expenses towards cancelable and non-cancelable operating lease charged
 to the profit and loss account amounts to Rs 191,653 thousand (Previous
 Year Rs 230,552 thousand).
 
 Some of the lease agreements have escalation clause ranging from 5% to
 15%. There are no exceptional / restrictive covenants in the lease
 agreement.
 
 5.  Capacities, Production, Stock and Turnover (Refer Schedule 12)
 
 5.1 Capacities
 
 a) Installed capacities are as certified by the Managing Director, but
 not verified by the auditors, being a technical matter.
 
 5.2 Production
 
 a) Production of finished goods is inclusive of production for captive
 use.
 
 b) Others 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.
 
 5.3 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 20,958,914
 thousand (Previous Year Rs 23,165,639 thousand).
 
 5.4 Work-in-Progress
 
 a) The Work-in-Progress at the beginning of the year amounted to Rs
 2,219,033 thousand (Previous Year Rs 1,899,009 thousand).
 
 6.  Interest charge for the year includes Rs Nil (Previous Year Rs 9
 thousand) being interest on fixed period loans. During the year the
 Company has capitalised interest on borrowing cost Rs Nil (Previous
 Year Rs 2,395 thousand).
 
 7.  Research and development expenditure of Rs 110,161 thousand
 (Previous Year Rs Nil) on revenue account has been incurred during the
 year.
 
 8.  Related Party Disclosures
 
 a) List of Related Parties
 
 Party where control exists:
 
 ABB Limited, Zurich, Switzerland (Ultimate Holding Company)
 
 ABB Asea Brown Boveri Limited, Zurich, Switzerland (Holding Company)
 
 Other Related parties with whom transactions have taken place during
 the year:
 
 Fellow subsidiaries:
 
 ABB (China) Ltd., Beijing, China
 
 ABB (Hong Kong) Ltd., Hong Kong
 
 ABB (Pty) Ltd., Gaborone, Botswana
 
 ABB A/S, Skovlunde, Denmark
 
 ABB AB, Vasteras, Sweden
 
 ABB AG, Mannheim, Germany
 
 ABB AS, Billingstad, Norway
 
 ABB AS, Tallinn, Estonia
 
 ABB Australia Pty Limited, Sydney, Australia
 
 ABB Automation GmbH, Mannheim, Germany
 
 ABB Automation Products GmbH, Ladenburg, Germany
 
 ABB Azerbaijan LLC, Baku, Azerbaijan
 
 ABB Bailey Beijing Engineering Co. Ltd., Beijing, China
 
 ABB Beijing Drive Systems Co. Ltd., Beijing, China
 
 ABB Bomem Inc., Quebec, Canada
 
 ABB BV, Rotterdam, Netherlands
 
 ABB Capital, B.V., Amsterdam, Netherlands
 
 ABB Chongqing Transformer Company Ltd., Chongqing, China
 
 ABB CL Logistic S.A., Montevideo, Uruguay
 
 ABB Contracting Company Ltd., Riyadh, Saudi Arabia
 
 ABB d.o.o., Belgrade, Serbia
 
 ABB D.o.o., Ljubljana, Slovenia
 
 ABB Electrical Industries Ltd., Riyadh, Saudi Arabia
 
 ABB Electrical Machines Ltd., Shanghai, China
 
 ABB Electroengineering Ltd., Moscow, Russian Federation
 
 ABB Elektrik Sanayi A.S., Istanbul, Turkey
 
 ABB Engg. Technologies Co. (KSCC), Safat, Kuwait
 
 ABB Engineering (Shanghai) Ltd., Shanghai, China
 
 ABB Engineering Trading and Service Ltd., Budapest, Hungary
 
 ABB ESAP Limited, St. Peters Port, Guernsey
 
 ABB France SAS, Rueil Malmaison cedex, France
 
 ABB FZ-LLC, Dubai, United Arab Emirates
 
 ABB Global Industries and Services Limited, Bangalore, India
 
 ABB Global Marketing FZ LLC, Dubai, United Arab Emirates
 
 ABB High Voltage Switchgear (Xiamen) Company Ltd., Xiamen, China
 
 ABB High Voltage Switchgear Co. Ltd., Beijing, China
 
 ABB Holding AS, Billingstad, Norway
 
 ABB Holdings (Pty) Ltd., Sunninghill, South Africa
 
 ABB Holdings Sdn. Bhd., Subang Jaya, Malaysia
 
 ABB Inc., Norwalk CT, United States of America
 
 ABB Inc., St. Laurent, Quebec, Canada
 
 ABB Industries (L.L.C.), Dubai, United Arab Emirates
 
 ABB Industries FZ, Dubai, United Arab Emirates
 
 ABB LV Installation Materials Co. Ltd., Beijing, China
 
 ABB Malaysia Sdn Bhd., Subang Jaya, Malaysia
 
 ABB Management Services Ltd., Zurich, Switzerland
 
 ABB Mexico S.A. de C.V., Tlalnepantla, Mexico
 
 ABB N.V., Zaventem, Belgium
 
 ABB Near East Trading Ltd., Amman, Jordan
 
 ABB Oy, Helsinki, Finland
 
 ABB Power Systems and Automation Technology S.A.E, Cairo, Egypt
 
 ABB Pte. Ltd., Singapore, Singapore
 
 ABB Qatar LLC, Doha, Qatar
 
 ABB Research Ltd., Zurich, Switzerland
 
 ABB S.A. de CV, San Salvador, El Salvador
 
 ABB S.A., Buenos Aires, Argentina
 
 ABB S.A., Casablanca, Morocco
 
 ABB S.A., Lima, Peru
 
 ABB S.A., Panama, Panama
 
 ABB S.A., Rueil-Malmaison, France
 
 ABB S.A., Santiago, Chile
 
 ABBS.p.A., Milan, Italy
 
 ABB s.r.o., Prague, Czech Republic
 
 ABB Schweiz AG, Baden, Switzerland
 
 ABB Secheron S.A., Satigny, Switzerland
 
 ABB Service (Private) Ltd., Harare, Zimbabwe
 
 ABB Service Co. Ltd., Al Khobar, Saudi Arabia
 
 ABB Shanghai Motors Co. Ltd., Shanghai, China
 
 ABB South Africa (Pty) Ltd., Modderfontein, South Africa
 
 ABB Sp. zo.o., Warsaw, Poland
 
 ABB SRL, Bucharest, Romania
 
 ABB Stotz-Kontakt GmbH, Heidelberg, Germany
 
 ABB Technologies S.A., Dakar, Senegal
 
 ABB Technologies W.L.L., Bahrain, Bahrain
 
 ABB Technology AB, Vasteras, Sweden
 
 ABB Technology Ltd., Zurich, Switzerland
 
 ABB Technology SA, Abidjan, Cote Dlvoire
 
 ABB Transmission & Distribuition Automation Equipment (Xiamen)
 
 Co. Ltd., Xiamen, China
 
 ABB Transmission & Distribution Ltd., Abu Dhabi, United Arab Emirates
 
 ABB Trasmissione & Distribuzione S.p.A., in liquidazione, Milan,Italy
 
 ABB Turbo Systems (Hong Kong) Limited, Hong Kong, Hong Kong
 
 ABB Turbochargers S.A.E., Suez, Egypt
 
 ABB Turbo-Systems AG, Baden, Switzerland
 
 ABB UAB, Vilnius, Lithuania
 
 ABB Xiamen Electrical Controlgear Co. Ltd., Xiamen, China
 
 ABB Information Systems Ltd., Zurich, Switzerland
 
 ABB Instrumentation Ltd., Warrington, United Kingdom
 
 ABB International Marketing Ltd., Zurich, Switzerland
 
 ABB Intra AG, Zurich, Switzerland
 
 ABB Jiangjin Turbo Systems Company Limited, Chongqing, China
 
 ABB K.K., Tokyo, Japan
 
 ABB Limited, Auckland, New Zealand
 
 ABB LIMITED, Bangkok, Thailand
 
 ABB Limited, Nairobi, Kenya
 
 ABB Limited, Warrington, United Kingdom
 
 ABB LLC, Al Hamriya, Oman
 
 ABB LLP., Almaty, Kazakhstan
 
 ABB Logistics Center Europe GmbH, Menden, Germany
 
 ABB Ltd, Dublin, Ireland
 
 ABB Ltd., Hanoi, Vietnam
 
 ABB Ltd., Kiev, Ukraine
 
 ABB Ltd., Lusaka, Zambia
 
 ABB Ltd., Moscow, Russian Federation
 
 ABB Ltd., Seoul, Korea, Republic Of Korea
 
 ABB Ltd., Taipei, Taiwan, Province Of China
 
 ABB Ltd., Zagreb, Croatia
 
 ABB Ltd., Osasco, Brazil
 
 ABB Xiamen Low Voltage Equipment Co. Ltd., Xiamen, China
 
 ABB Xiamen Switchgear Co. Ltd., Xiamen, China
 
 ABB Xian Power Capacitor Company Limited, Xian, China
 
 ABB Xinhui Low Voltage Switchgear Co. Ltd., Xinhui, China
 
 ABB, Inc., Paranaque, Metro Manila, Philippines
 
 ABB, s.r.o., Bratislava, Slovakia
 
 ABBNG Limited, Lagos, Nigeria
 
 Asea Brown Boveri (Pty) Ltd., Windhoek, Namibia
 
 Asea Brown Boveri Electrica SGPS (Angola) Limitada, Luanda, Angola
 
 Asea Brown Boveri Ltd., Port Louis, Mauritius
 
 Asea Brown Boveri Ltda., Bogota, Colombia
 
 Asea Brown Boveri Ltda., La Paz, Bolivia
 
 Asea Brown Boveri S.A., Madrid, Spain
 
 Asea Brown Boveri S.A., Metamorphossis Attica, Greece
 
 Asea Brown Boveri S.A.E., Cairo, Egypt
 
 Busch-Jaeger Elektro GmbH, Mannheim/Ludenscheid, Germany
 
 Electrical Materials Center, Riyadh, Saudi Arabia
 
 PT ABB Installation Materials, Jakarta, Indonesia
 
 PT ABB Jasa Indonesia, Jakarta, Indonesia
 
 PT ABB Sakti Industri, Jakarta, Indonesia
 
 PT ABB Transmission and Distribution, Jakarta, Indonesia
 
 Pucaro Elektro-lsolierstoffe GmbH, Roigheim, Germany
 
 Turbo Systems United Co. Ltd., Tokyo, Japan
 
 Remuneration to directors and chief financial officer does not include
 Provision for Leave Encashment and Gratuity as it is provided in the
 books on the basis of actuarial valuation for the Company as a whole.
 During the previous year the remuneration to Whole-time Director Mr. K
 Rajagopal for the year ended December 31,2009 is for the period from
 January 1 to July 31,2009. The remuneration to Chief Financial Officer
 includes payment made to Mr. K Rajagopal for the period August 1 to
 August 31,2009 and to Mr. Amlan Datta Majumdar for the period September
 1 to December 31,2009.
 
 9. Exchange rate variation - (Gain) / Loss (net) for the year includes
 loss on account of fair valuation of foreign exchange forward contracts
 for firm trade commitments and embedded derivative contracts amounting
 to Rs 562,025 thousand (Previous Year Rs 112,395 thousand). The pro
 rata difference between the forward contract rate and the exchange rate
 on the date of transaction to be charged to profit and loss account is
 Rs 59,625 thousand (Previous Year Rs 58,223 thousand).
 
 10. The employees of the Company are entitled to purchase shares of ABB
 Limited., Zurich (the ultimate holding company) on the settlement date,
 at a price fixed based on the fair market price on the grant date under
 ABB Employee Share Acquisition Plan. During the year, the Company has
 been cross charged Rs 3,045 thousand (Previous Year Rs 15,462 thousand)
 towards the above including administrative charges and this has been
 charged in the profit and loss account under the head Salaries, Wages
 and Bonus.
 
 The Institute of Chartered Accounants of India has issued a Guidance
 Note on Accounting for Employee Share-based Payments, which is
 applicable to employee share based payment plans. The scheme detailed
 above is managed and administered, compensation benefits in respect of
 the scheme is assessed and accounted by the ultimate holding company,
 except for the obligation towards expenses cross charged above.
 Accordingly, the Company is of the opinion that there is no further
 accounting treatment/ disclosure required under the said Guidance Note.
 
 11.  Derivative Instruments
 
 i) Forward cover for foreign currency debtors outstanding as of balance
 sheet date is Rs 2,120,925 thousand (Previous Year Rs 1,292,530
 thousand).
 
 ii) Forward cover for expected future sales or highly probable forecast
 transaction as of balance sheet date is Rs 4,044,113 thousand (Previous
 Year Rs 2,979,301 thousand).  
 
 iii) Forward cover for foreign currency creditors outstanding as of
 balance sheet date is Rs 6,440,017 thousand (Previous Year Rs 6,748,480
 thousand).
 
 iv) Forward cover for expected future purchases or highly probable
 forecast transaction as of balance sheet date is Rs 4,428,841 thousand
 (Previous Year Rs 1,929,404 thousand).
 
 v) Foreign currency exposure (net) that are not hedged by derivative
 instruments or otherwise is Rs 431,549 thousand (Previous Year Rs
 668,879 thousand).
 
 12. Sales are net of excise duty amounting to Rs 3,222,035 thousand
 (Previous Year Rs 2,573,696 thousand) and liquidated damages amounting
 to Rs 1,128,098 thousand (Previous Year Rs 173,470 thousand). Reversal
 of excise duty on increase in inventory of finished goods amounting to
 Rs 2,328 thousand (Previous Year charge of Rs 9,575 thousand) has been
 accounted in the profit and loss account under the head Cost of
 Materials and Erection Services.
 
 13.  The figures of the previous year have been regrouped/reclassified,
 where necessary, to conform with the current years classifications.