Tata Chemicals

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 Employee Benefit Obligations :
 
 (a) The Company makes contribution towards provident fund, a defined
 benefit retirement plan and towards 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 Rs. 5.63 crores
 (previous year Rs. 6.28 crores) has been charged to the Profit and Loss
 Account. On account of Provident Fund contribution, a sum of Rs. 4.50
 crores (previous year Rs. 4.40 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,
 2009. The present value of the defined benefit obligation and the
 related current service cost and past service cost, were measured using
 the Projected Unit Credit Method.
 
 3 (a) During the year 2004-05, the Company had issued Foreign Currency
 Convertible Bonds (FCCBs) of a face value of USD 1,000 each aggregating
 to USD 150 million. As per the terms of the issue, the holders have an
 option to convert the FCCB into Ordinary Shares at a conversion rate of
 Rs. 231.375 per Ordinary Share at a fixed exchange rate conversion of
 Rs. 43.65 = USD l.from 13 March, 2005 to 22 January, 2010.The
 conversion price is subject to certain adjustments for Corporate
 actions and consequently the conversion price has changed to Rs.230.78
 per ordinary share. Further, under certain conditions the Company has
 an option of early redemption in whole but not in part. Unless
 previously converted, redeemed or purchased and cancelled, the Company
 will redeem these bonds at 120.89 per cent of the principal amount on 1
 February, 2010.
 
 (b) During the year 2008-09, the Company got notices for conversion of
 USD 6.215 million (previous year USD 99.879 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 has issued 11,75,510 (previous year 1,88,91,205) Ordinary share
 of Face Value Rs.10.
 
 4 Derivative Instruments :
 
 (a) As on 31st March, 2009, the Company has the following derivative
 instruments outstanding:
 
 (i) Forward currency exchange contracts USD-INR amounting to USD 134.96
 million for the purpose of hedging its exposures to foreign currency
 loans ( previous year USD 22.42 million)
 
 (ii) Forward currency exchange contracts USD- INR amounting to USD
 40.90 million for the purpose of hedging its exposures to foreign
 currency acceptances (previous year USD 54.36 million)
 
 (iii) Accounts payable USD 80.13 million (previous year USD Nil)
 
 (iv) Currency options contracts USD- INR amounting to USD 65 million
 with an intent to hedge its exposures to foreign currency loans
 (previous year USD 65 million). FCCBs outstanding as on 31 March,09 is
 USD 43.906 million (previous year USD 50.12 million).
 
 (v) Full Currency Swap to hedge against fluctuations in exchange rates
 USD 75 million (previous year Notional principal USD 25 million)
 
 (vi) Cross Currency Swap to hedge against fluctuations in exchange
 rates and Interest rates USD 475 million (previous year Notional
 principal USD 475 million)
 
 (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 1.05 million (previous year USD 4.14
 million)
 
 (ii) Foreign Currency Loans USD 12.83 million (previous year USD Nil)
 
 (iii) Loans and Advances USD 73.43 million (previous year USD 59.24
 million)
 
 (iv) Acceptances USD 7.19 million (previous year USD 31.35 million) ,-
 
 (v) Accounts payable USD 73.504 million (previous year USD Nil)
 
 (vi) Liability arising out of cross currency swap USD 425 million
 (previous year USD 475 million).
 
 5 (a) Estimated amount of contracts remaining to be executed on
 capital account and not provided for Rs. 36.68 crores
 
 (previous year Rs.162.13 crores).
 
 (b) Capital commitment towards investment in joint venture Khet-Se Agri
 Produce India Private Limited : Rs. 43.69 crores (previous year Rs.
 48.00 crores).
 
 (c) Capital commitment towards investment in proposed project at
 Mozambique : Rs. 16.36 crores (previous year Rs. 0.40 crores).
 
 6 Contingent Liabilities :
 
 (a) Guarantees:
 
 (i) Bank Guarantees issued by Banks on behalf of the Company Rs. 212.51
 crores (previous year Rs. 69.00 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
 150 million (Rs. 760.80 crores) (previous year USD 517.5 million (Rs.
 2076.47 crores))
 
 (b) Claims not acknowledged by the Company relating to cases contested
 by the Company and which are not likely to be devolved on the Company
 relating to the following areas :
 
                                                   (Rs. in crores)
                                             As at        As at
                                          31-Mar-09     31-Mar-08
 
 (i)      Excise and Customs               84.34         112.34
 (ii)     Sales Tax                        26.49          34.86
 (iii)    Demand for utility charges       57.99          57.80
 (iv)     Labour and other claims against
          the Company not acknowledged 
          as debt                          2.64            6.21
 (v)     Income Tax (Pending before 
         Appellate authorities in 
         respect of which the Company 
         is in appeal)                    61.97           52.39
 (vi)    Income Tax (Decided in Companys
         favour by Appellate authorities 
         and
        Department is in further appeal)  64.80           41.88
 
 (c) Various claims pending before Industrial Tribunals and Labour
 Courts of which amounts are indeterminate.
 
 7 (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. 0.87 crpre (previous year Rs.1.02 crores) is
 payable under the scheme within one year.
 
 8 Sales includes subsidy income of Rs. 4,683.58 crores (previous year
 Rs. 1,240.89 crores)
 
 9 The Company has 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 and 2009 have been recognised over the shorter
 of the maturity period or 31st March, 2011. The unamortised balance is
 presented as Foreign Currency Monetary item Translation Difference
 Account (FCMTDA). Accordingly an amount of Rs. 7.58 crores (net of
 taxes) has been adjusted to the General Reserve and an aggregate amount
 of Rs. 237.39 crores (net of taxes) is deferred and recognised as an
 asset. Due to this, the profit for the current year is higher by Rs.
 244.97 crores (net of taxes).
 
 10 In the earlier year impairment was created for the Cement Cash
 Generating Unit which is reversed in the current year considering the
 improvement in margins.
 
 11 Asterisk  denotes figures below Rs.50,000.
 
 12 Previous years figures have been regrouped / reclassified wherever
 necessary to make them comparable with the current years figures.  _