Notes to Accounts of KPT Industries Ltd.

Mar 31, 2015

1. General Information about KPT

Kulkarni Power Tools Ltd. [KPT], is a Public Limited Company incorporated on 30th July,1976, under the provisions of Companies Act,1956. Its shares are listed at Bombay Stock Exchange. The Company is mainly engaged in the business of Electric Power Tools and Roots (Positive Displacement) Blowers / Exhausters for a wide variety of applications.

2. Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention except free hold land which was revalued during the financial year 2003-04.

The estimates of future salary increase, considered in actuarial valuation, taking into account of inflation, seniority, relevant factors, such as supply and demand in the employment market.

Brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits.

Product Warranty:

Accruals have been made in respect of warranties given by the Company for the sales made during the year based on past experience.

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Mar 31, 2014

1 General Information about KPT

Kulkarni Power Tools Ltd., [KPT] is a Public Limited Company incorporated on 30th July 1976 under the provisions of Companies Act, 1956. Its shares are listed at Bombay Stock Exchange. The Company is mainly engaged in the business of Electric Power Tools and Roots ( Positive Displacement) Blowers / Exhausters for a wide variety of applications.

2 Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies ( Accounting Standards ) Rules, 2006 ( as amended ) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention except free hold land which was revalued during the financial year 2003-04.

In Rs. 2014 2013

3 Contingent Liabilities and Commitments (To The Extent Not Provided For)

A) Contingent Liabilites

Sales Tax 2,325,562 233,690

Central Excise 17,405,558 459,569

19,731,120 693,259

Signifcant Accounting Policies relating to Segment Reporting

a. Business Segments are determined on the basis of the goods manufactured and in accordance with Accounting Standard 17.

b. Segment report is prepared in conformity with accounting policies adopted for preparing and presenting financial statements.

Brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits.

Product Warranty :

Accruals have been made in respect of warranties given by the Company for the sales made during the year based on past experience.

4 Previous year''s figures have been regrouped wherever necessary.

5 Figures in the brackets pertain to previous year.

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Mar 31, 2013

1 General Information about KPT

Kulkarni Power Tools Ltd., [KPT] is a Public Limited Company incorporated on 30th July,1976, under the provisions of Companies Act, 1956. Its shares are listed on the Bombay Stock Exchange. The Company is engaged in manufacturing of Electric Power Tools and Twin Lobe Blowers for a wide variety of applications. KPT exports its products to United Kingdom, Middle East, East Africa, Nigeria and South Africa, South East Asia and SAARC countries.

2 Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies ( Accounting Standards ) Rules, 2006 ( as amended ) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention except free hold land which was revalued during the financial year 2003-04.

In Rs.

2013 2012

3 Contingent Liabilities and Commitments (To The Extent Not Provided For)

A) Contingent Liabilities

Sales Tax 233,690 57,282

Central Excise 459,569 -

693,259 57,282

4 Previous year''s figures have been regrouped wherever necessary.

5 Figures in the brackets pertain to previous year.

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Mar 31, 2012

(a) Rights of equity shareholders

The Company has only one class of equity shares, having par value of Rs. 5/- per share. Each holder of equity share is entitled for one vote per share and has a right to receive dividend as recommended by the Board of Directors, subject to the necessary approval from the shareholders. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

In Rs.

2012 2011

1 Contingent Liabilities and Commitments

(To The Extent Not Provided For)

A) Contingent Liabilities

Income Tax - 42,488

Sales Tax 57,282 157,282

B) Commitments

a) Estimated amount of contracts remaining to be executed on 3,468,955 17,499,862 capital account and not provided for

b) Other Commitments :

i) Please refer Note No.43 for Lease commitments. 6,456,368 5,518,480

ii) The Company has obtained sales tax payment deferral benefit under Package Scheme of Incentive 1988 and 1993 scheme. The Company is obliged to comply the conditions specified under the said scheme. The outstanding balance payable under the said scheme is - 64,787,477 66,234,949

2 Based on available information, presently, there are no amounts payable to parties covered under the Micro, Small and Medium Enterprises Development Act, 2006.

3 Leased Assets:

Disclosure as per Accounting Standard - 19 on Leases as per Companies Accounting Standard Rules.

a) i) The Company has taken certain premises on operating lease. The Agreements entered into provide for renewal and rent escalation clause.

b) i) The Company has given Land and Building under operating lease.

ii) Particulars of future minimum lease payments in respect of the same are as mentioned below:

Brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits.

Product Warranty:

Accruals have been made in respect of warranties given by the Company for the sales made during the year based on past experience.

4 Previous year Figures

Till the year ended 31st March 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.

5 Figures in the brackets pertain to previous year.

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Mar 31, 2011

In Rs.

2011 2010

1. Contingent Liabilities not provided for

Sales Tax 157,282 157,282

Income Tax 42,488 42,488

Significant Accounting Policies relating to Segment Reporting

a. Business Segments are determined on the basis of the goods manufactured and in accordance with Accounting Standard 17.

b. Segment report is prepared in conformity with accounting policies adopted for preparing and presenting financial statements.

II. Defined Benefits Plan

Gratuity

Gratuity is payable to all eligible employee on retirement, death or termination in terms of provision of the Payment of Gratuity Act. The Company makes yearly contribution to a Gratuity Trust equal to premium of Group Gratuity Insurance with Life Insurance Corporation of India.

2. There are claims on the Company raised by an ex-dealer. The Company is advised that the claims are not tenable either on the facts or in law. The Company has not acknowledged them as debt and has already initiated legal action against the ex-dealer.

3. Leased Assets:

Disclosure as per Accounting Standard-19 on Leases as per Companies Accounting Standards Rules:

i) The Company has taken certain premises on operating lease. The Agreements entered into provide for renewal and rent escalation clause.

4. Based on available information, presently, there are no amounts payable to parties covered under the Micro, Small and Medium Enterprises Development Act, 2006.

5. Disclosure of Related Parties & Related Party Transactions :

Names of the related parties with whom transactions were carried out during the year and description of relationship :

1. Key Management Personnel (KMP) Designation

i. Shri Prakash A.Kulkarni Managing Director (M.D.)

ii. Shri Dilip B. Kulkarni Executive Director (E.D.)

2. Relatives of Key Management Personnel

Name of the transacting related party Nature of relationship

i. Late Smt. Malati A.Kulkarni Mother of M.D.

ii. Shri Ajit A. Kulkarni Brother of M.D.

iii. Shri Ashok A. Kulkarni Brother of M.D.

6. Figures of the previous year have been regrouped where necessary.

7. Figures in the brackets pertain to previous year.

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Mar 31, 2010

In Rs.

2010 2009

1. Contingent Liabilities not provided for

Sales Tax 157,282 157,282

Income Tax 42,488 --

2. Voluntary Retirement Scheme

Voluntary Retirement Scheme compensation Rs. 13,063,154 paid during 2006-07 has been treated as Deferred Revenue Expenditure to be written off over a period of four years. Amount written off during the year is Rs.3,483,513. (Previous year Rs.3,483,505).

Significant Accounting Policies relating to Segment Reporting

a. Business Segments are determined on the basis of the goods manufactured and in accordance with Accounting Standard 17.

b. Segment report is prepared in conformity with accounting policies adopted for preparing and presenting financial statements.

3. There are claims on the Company raised by an ex-dealer. The Company is advised that the claims are not tenable either on the facts or in law. The Company has not acknowledged them as debt and has already initiated legal action against the ex-dealer.

4. Leased Assets:

Disclosure as per Accounting Standard-19 on Leases issued by the Institute of Chartered Accountants of India:

i) The Company has taken certain premises on operating lease. The Agreements entered into provide for renewal clause and do not provide for escalation in rent (except in one case) and sub leasing.

5. Based on available information, presently, there are no amounts payable to parties covered under the Micro, Small and Medium Enterprises Development Act, 2006.

6. Disclosure of Related Parties & Related Party Transactions :

Names of the related parties with whom transactions were carried out during the year and description of relationship:

1. Key Management Personnel (KMP) Designation

i. Shri PrakashA.Kulkarni Managing Director (M.D.)

ii. Shri Ashok A.Kulkarni Ex-Joint Managing Director

(upto 24.06.2009) (Ex-Jt.M.D.)

iii. Shri Dilip B. Kulkami Whole Time Director (W.T.D.)

2. Relatives of Key Management Personnel

Name of the transacting related party Nature of relationship

i. Shri Sahil A.Kulkarni Son of Ex-Jt.M.D.

ii. Late Smt. Malati A.Kulkarni Mother of M.D. and Ex-Jt.M.D.

iii. Smt. Sunanda A.Kulkarni Wife of Ex-Jt.M.D.

iv. Shri Ajay A. Kulkarni Son of Ex-Jt.M.D.

v. Shri Ajit A. Kulkarni Brother of M.D. & Ex-Jt. M.D.

7. Figures of the previous year have been regrouped where necessary.

8. Figures in the brackets pertain to previous year.