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Accounting Policies of MPF Systems Ltd. Company

Dec 31, 2014

2.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting and comply with the Accounting Standards notified under the Companies Act, 1956 (''the Act''), read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

2.2 Use of estimates

The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Any difference between the actual results and estimates are recognised in the period in which the results are known/ materialize. Any revision to accounting estimates is recognised prospectively in the current and future periods.

2.3 Current-non current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a. it is expected to be realised in, or is intended for sale or consumption in, the Company''s normal operating cycle;

b. it is held for the purpose of being traded;

c. it is expected to be realised within 12 months after the reporting date; or

d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. it is expected to be settled in the Company''s normal operating cycle;

b. it is held primarily for the purposes of being traded;

c. it is expected to be settled within 12 months after the reporting date; or

d. the Company does not have any unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Current liabilities include the current portion of non-current financial liabilities.

for the year ended 31st December 2014

(Currency - Indian Rupees)

All other liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalent.

The operating cycle of the Company is less than 12 months.

2.4 Intangible fixed asset and amortisation

Intangible fixed assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at cost less any accumulated amortisation and any accumulated impairment loss.

Subsequent expenditure is capitalised only when it increases the future economic benefits from the specific asset to which it relates. Intangible assets are amortised in the Statement of Profit and Loss over their useful lives, from the date that they are available for use based on the expected pattern of consumption of economic benefits of the assets. Accordingly, at present, these are being amortised on straight line basis over a period of 3 years.

Amortisation method and useful lives are reviewed at each reporting date. If the useful life of an asset is estimated to be significantly different from the previous estimates, the amortisation period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortisation method is changed to reflect the changed pattern.

An intangible asset is derecognized on disposal or when no future economic benefits are expected from its use and disposal. Losses arising from retirement and gains or losses arising from disposal of intangible assets which are measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognised in the Statement of Profit and Loss.

2.5 Impairment of assets

In accordance with Accounting Standard 28 - Impairment of Assets (AS 28), the carrying amounts of the Company''s assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indications exist, the assets'' recoverable amount is estimated, as the higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. If at the Balance Sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of depreciable historical cost.

2.6 Investments

Investments that are not readily realisable and intended to be held for more than a year from the date of acquisition are classified as non-current investments.

Long term investments are carried forward at cost less other-than-temporary diminution in value, determined separately for each individual investment.

2.7 Revenue recognition

a) Product sales

Revenue from sale of goods is recognised when all significant risks and rewards of their ownership are passed onto the customers. The amount recognised as revenue is exclusive of sales tax/ value added tax and is net of returns, trade discounts, quantity discounts and rebates.

b) Interest income

Interest income is recognised on a time proportionate basis taking into account the amount invested and the rate applicable.

c) Other

Dividend income is recognised when the right to receive payment is established. Other items of income are accounted as and when the right to receive arises.

2.8 Foreign exchange transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the respective transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currency at the Balance Sheet date are translated at the year end exchange rate and the resultant exchange differences are recognized in the Statement of Profit and Loss.

2.9 Taxation

Income-tax comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation and carried forward losses under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed at each Balance Sheet date and written down or written-up to reflect the amount that is reasonable/ virtually certain (as the case may be) to be realised.

Minimum Alternate Tax (MAT) under the provisions of the Income Tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Act, in respect of MAT paid is recognised as asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set- off against the normal tax liability. MAT credit recognised as an asset is reviewed at each Balance Sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

2.10Earnings per share

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and equivalent dilutive equity shares outstanding during the year, except where the results would be anti-dilutive.

2.11Provisions and contingencies

A provision is recognised in the Balance Sheet when the Company has a present obligation as a result of a past event and it is probable that an outflow of economic resources will be required to settle the obligation, in respect of which a reliable estimate of the amount of the obligation can be made. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

A disclosure by way of a contingent liability is made when there is a possible obligation or present obligation that may, but probably will not; require an outflow of economic resources. Where there is a possible obligation in respect of which the likelihood of outflow of economic resources is remote, no provision or disclosure is made.

Accruals have been made in respect of warranties, contractual obligations and liquidated damages for sales of its products, based on past experience. The timing and amount of the cash flows that arise from these matters are determined at the time of receipt of claims from customers.

2.12Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.


Dec 31, 2013

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting and comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 (''the Act''), to the extent applicable.

1.2 Use of estimates

The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Any difference between the actual results and estimates are recognised in the period in which the results are known/materialize. Any revision to accounting estimates is recognised prospectively in the current and future periods.

1.3 Current-non current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a. it is expected to be realised in, or is intended for sale or consumption in, the Company''s normal operating cycle;

b. it is held for the purpose of being traded;

c. it is expected to be realised within 12 months after the reporting date; or

d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. it is expected to be settled in the Company''s normal operating cycle;

b. it is held primarily for the purposes of being traded;

c. it is expected to be settled within 12 months after the reporting date; or

d. the Company does not have any unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(Currency - Indian Rupees)

Current liabilities include the current portion of non-current financial liabilities.

All other liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalent. The operating cycle of the Company is less than 12 months.

1.4 Intangible fixed asset and amortisation

Intangible fixed assets that are acquired by the Company are measured initially at cost. After initial recognition, an.intangible asset is carried at cost less any accumulated amortisation and any accumulated impairment loss.

Subsequent expenditure is capitalised only when it increases the future economic benefits from the specific asset to which it relates.

Intangible assets are amortised in the Statement of Profit and Loss over their useful lives, from the date that they are available for use based on the expected pattern of consumption of economic benefits of the assets. Accordingly, at present, these are being amortised on straight line basis over a period of 3 years.

Amortisation method and useful lives are reviewed at each reporting date. If the useful life of an asset is estimated to be significantly different from the previous estimates, the amortisation period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortisation method is changed to reflect the changed pattern.

An intangible asset is derecognized on disposal or when no future economic benefits are expected from its use and disposal.

Losses arising from retirement and gains or losses arising from disposal of intangible assets which are measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognised in the Statement of Profit and Loss.

1.5 Impairment of assets

In accordance with Accounting Standard 28 - Impairment of Assets (AS 28), the carrying amounts of the Company''s assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indications exist, the assets'' recoverable amount is estimated, as the higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. If at the Balance Sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of depreciable historical cost.

1.6 Investments

Investments that are not readily realisable and intended to be held for more than a year from the date of acquisition are classified as non-current investments.

Long term investments are carried forward at cost less other-than-temporary diminution in value, determined separately for each individual investment.

1.7 Revenue recognition

a) Product sales

Revenue from sale of goods is recognised when all significant risks and rewards of their ownership are passed onto the customers. The amount recognised as revenue is exclusive of sales tax/ value added tax and is net of returns, trade discounts, quantity discounts and rebates.

b) Interest income

Interest income is recognised on a time proportionate basis taking into account the amount invested and the rate applicable.

c) Other

Dividend income is recognised when the right to receive payment is established. Other items of income are accounted as and when the right to receive arises.

1.8 Foreign exchange transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing at the date, of the respective transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currency at the Balance Sheet date are translated at the year end exchange rate and the resultant exchange differences are recognized in the Statement of Profit and Loss.

1.9 Taxation

Income-tax comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation and carried forward losses under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed at each Balance Sheet date and written down or written-up to reflect the amount that is reasonable/ virtually certain (as the case may be) to be realised.

Minimum Alternate Tax (MAT) under the provisions of the Income Tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Act, in respect of MAT paid is recognised as asset only when and to the extent ; there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set- off against the normal tax liability. MAT credit recognised as an asset is reviewed at each Balance Sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

1.10 Earnings per share

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and equivalent dilutive equity shares outstanding during the year, except where the results would be anti-dilutive.

1.11 Provisions and contingencies

A provision is recognised in the Balance Sheet when the Company has a present obligation as a result of a past event and it is probable that an outflow of economic resources will be required to settle the obligation, in respect''of which a reliable estimate of the amount of the obligation can be made. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

A disclosure by way of a contingent liability is made when there is a possible obligation or present obligation that may, but probably will not; require an outflow of economic resources. Where there is a possible obligation in respect of which the likelihood of outflow of economic resources is remote, no provision or disclosure is made.

Accruals have been made in respect of warranties, contractual obligations and liquidated damages for sales of its products, based on past experience. The timing and amount of the cash flows that arise from these matters are determined at the time of receipt of claims from customers.

1.12 Cash andcash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

2.1 Rights, preferences and restrictions attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10. Each holder of equity shares is entitled to one vote per share. Accordingly, all equity shares rank equally with regards to dividends and shares in the Company''s residual assets. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company after distribution of all preferential amounts in proportion to the number of equity shares held.

2.2 Shares held by holding/ultimate holding company 1,887,697 (2012: 1,887,697), equity shares are held by WILO SE, Germany, the Company''s holding .company.

Pursuant to the resolution passed by the Board of directors in their meeting held on October 26; 2013, the Company has sold its intangible fixed assets comprising copyrights, knowhow, qualification rights a.nd trademarks pertaining to Fire and Security Engineering Division of Mather and Piatt (India) Limited which were initially transferred to the Company pursuant to Scheme of Arrangement with Mather and Piatt (India) Limited as approved by the Honorable High Court of Bombay vide its order dated April 18th, 2001. These intangible assets were at Nil value in the books.


Dec 31, 2012

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting and comply witb, the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions"ofihe Companies Act, 1956 (''the Act''), to the extent applicable.

This the first year of application of revised Schedule VI to the Act for the preparation of the financial statements of the Company. The revised Schedule VI introduces some significant conceptual changes as well as new disclosures. These include classification of all assets and liabilities into current and non-current. Further, pursuant to the adoption of the revised Schedule VI, the previous year figures have undergone a major reclassification to comply with the requirements of the revised Schedule VI.

1.2 Use of estimates

The preparation of financial statement in accordance with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Any difference between the actual results and estimates are recognised in the period in which the results are known/ materialize. Any revision to accounting estimates is recognised prospectively in the current and future periods.

1.3 Current-non current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a. it is expected to be realised in, or is intended for sale or consumption in, the Company''s normal operating cycle;

b. it is held for the purpose of being traded;

c. it is expected to be realised within 12 months after the reporting date; or

d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. it is expected to be settled in the Company''s normal operating cycle;

b. it is expected to be settled within 12 months after the reporting date; or

c. the Company does not have any unconditional right to defer settlement of the liability for atleast 12 months after the, reporting date.

Current liabilities include the current portion of non-current financial liabilities.

All other liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalent. The operating cycle of the Company is less than 12 months. ,

1.4 Fixed assets and depreciation

Fixed assets are stated at cost of acquisition less accumulated depreciation. Cost includes inward freight, duties, taxes and other incidental expenses related to the acquisition, construction and installation of the fixed assets.

Depreciation on fixed assets is provided on the Straight Line Method ("SLM") pro-rata to the period of use. Depreciation is provided based on the useful life of the assets as estimated by the management as follows, or at the rates prescribed under schedule XIV of the Act, whichever is higher.

1.5 Impairment of assets

In accordance with Accounting Standard 28 - Impairment of Assets (AS 28), the carrying amounts of the Company''s assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indications exist, the assets'' recoverable amount is estimated, as the higher of the net selling price and the value in use. An impairment loss is recognised wheneverthe carrying amount of an asset or its cash generating unit exceeds its recoverable amount. If at the Balance Sheet date, there is an indication that a previously assessed impairment loss no Jonger exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of depreciable historical cost.

1.6 Investments

Investments that are not readily realisable and intended to be held for more than a year from the date of acquisition are classified as non-current investments.

Long term investments are carried forward at cost less other-than-temporary dimunition in value, determined separately for each individual investment.

1.7 Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and other costs necessary to make the sale. Cost is determined on the basis of weighted average method and includes expenditure in acquiring the.inventories and bringing them to the present location and condition. In the case of semi finished goods inventories, cost includes cost of direct materialsand labour and an appropriate share of overheads. The comparison of cost and net realisable value is made on an item-by-item basis. .

Raw materials and other supplies held for use in production of inventories are not written down below cost except in cases where material prices have declined, and it is estimated that the cost of finished products will exceed their net realisable value.

1.8 Revenue recognition

a) Product sales

Revenue from sale of goods is recognised when ail significant risks and rewards of their ownership are passed onto the customers. The amount recognised as revenue is exclusive of sales tax/ value added tax and is net of returns, trade discounts, quantity discounts and rebates.

b) Interest income

Interest income is recognised on a time proportionate basis taking into account the amount invested and the rate applicable.

c) Other

Other items of income are accounted as and when the right to receive arises.

1.9 Leases

Lease payments under operating leases are recognised as an expense in the Statement of Profit and Loss on a straight line basis over the lease term.

1.10 Foreign exchange transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the respective transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currency at the Balance Sheet date are translated at the year end exchange rate and the-resultantexchange differences are recognized in the Statement of Profit and Loss.

1.11 Taxation

Income-tax comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).

The deferred tax charg&or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation and carried forward losses under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed at each Balance Sheet date and written down or written-up to reflect the amount that is reasonable/ virtually certain (as the case may be) to be realised..

Minimum Alternate Tax (MAT) under the provisions of the Income Tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Act, in respect of MAT paid is recognised as asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set- off against the normal tax liability. MAT credit recognised as an asset is reviewed at each Balance Sheet date and written down to the extent the aforesaid convincing:evidence no longer exists.

1.12 Earnings per share

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and equivalent dilutive equity shares outstanding during the year, except where the results would be anti-dilutive.

1.13 Provisions and contingencies

A provision is recognised in the Balance Sheet when the Company has a present obligation as a result of a past event and it is probable that an outflow of economic resources will be required to settle the obligati.on, in respect of which a reliable estimate of the amount of the obligation can be made. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

A disclosure by way of a contingent liability is made when there is a possible obligation or present obligation that may, but probably will not; require an outflow of economic resources. Where there is a possible obligation in respect of which the likelihood of outflow of economic resources is remote, no provision or disclosure is made.

Accruals have been made in respect of warranties, contractual obligations and liquidated damages for sales of its products, based on past experience. The timing and amount of the cash flows that arise from these matters predetermined at the time of receipt of claims from customers.

1.14 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.


Dec 31, 2011

1.1 Background

Mather and Piatt Fire Systems Limited ('the Company') was formed as a result of a demerger of Mather and Piatt (India) Limited on 18 April 2001. Consequently the business of fire systems was transferred to the Company.

The Company is a subsidiary of WILO SE ('the Holding company' formerly known as WILO AG), a company headquartered in Dortmund, Germany.

The Company is primarily engaged in the business of design, development, installation and servicing of Fire Securities systems. The Company has its corporate office at Chinch wad, Pune. Currently there are no commercial operations carried out by the Company.

1.2 Going concern

The accumulated losses of the Company have exceeded its net worth as at 31 December 2011. However, Management believes that the Company will be able to continue operations on a going concern basis and meet all its liabilities as they fall due for payment in the foreseeable future on the basis of the financial support from the Holding Company, WILO SE, Germany. The Holding company has agreed to provide necessary financial support to meet the liabilities of the Company till 31 December 2012. In this regard, the Company has received a letter dated 4 January 2012 from the Parent Company confirming that they will provide the necessary financial support till 31 December 2012.

Accordingly, these financial statements do not include any adjustments relating to the recoverability and classification of the carrying amount of assets or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

2. Significant accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, on the accrual bastes of accounting and comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 ('the Act'), to the extent applicable.

2.2 Use of estimates

The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent Bathes on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Any difference between the actual results and estimates are recognised in the period in which the results are known/ materialize. Any revision to accounting estimates is recognised prospectively in the current and future periods.

2.3 Fixed assets and depreciation

Fixed assets are stated at cost of acquisition less accumulated depreciation. Cost includes inward freight, duties, taxes and other incidental expenses related to the acquisition, construction and installation of the fixed assets.

Depreciation on fixed assets is provided on the Straight Line Method ("SLM") pro-rata to the period of use. Depreciation is provided based on the useful life of the assets as estimated by the management as follows, or at the rates prescribed under schedule XIV of the Act, whichever is higher.

2.4 Impairment of assets

In accordance with Accounting Standard 28 - Impairment of Assets (AS 28), the carrying amounts of the Company's assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indications exist, the assets' recoverable amount is estimated, as the higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. If at the Balance Sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of depreciable historical cost.

2.5 Investments

Long-term investments are stated at cost less any other-than-temporary diminution in value, determined separately for each individual investment.

2.6 Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is-the estimated selling price - in the ordinary course of business, less the estimated costs of completion and other costs necessary to make the sale. Cost is determined on the basis of weighted average method and includes expenditure in acquiring the inventories and bringing them to the present location and condition. In the case of semi finished goods inventories, cost includes cost of direct materials and labour and an appropriate share of overheads. The comparison of cost and net realisable value is made on an item-by-item basis.

Raw materials and other supplies held for use in production of inventories are not written down below cost except in cases where material prices have declined, and it is estimated that the cost of finished products will exceed their net realisable value.

2.7 Revenue recognition

a) Product sales

Revenue from sale of goods is recognised when all significant risks and rewards of ownership of goods are passed onto the customers. Sales are recorded net of sales tax / value added tax, discounts and rebates.

b) Interest income

Interest income is recognised on a time proportionate basis taking into account the amount invested and the rate applicable.

c) Other

Other items of income are accounted as and when the right to receive arises.

2.8 Operating leases

Lease payments under operating leases are recognised as an expense in the Profit and Loss Account on a straight- line basis over the period of the lease.

2.9 Foreign exchange transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the-transaction. Exchange differences arising on foreign currency f_3nsactions settled during the year are recognised in the Profit and Loss Account of the year.

Monetary assets and liabilities denominated in foreign currency at the Balance Sheet date are translated at the year end exchange rate and the resultant exchange differences are recognized in the Profit and Loss Account.

2.10 Taxation

Income-tax comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation and carried forward losses under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed at each Balance Sheet date and written down or written-up to reflect the amount that is reasonable/ virtually certain (as the case may be) to be realised.

In accordance with the guidance note issued by Institute of Chartered Accountants of India, the Company recognizes Minimum Alternate Tax credit as an asset only to the extent the probability exists that the Company will be liable to pay normal income tax during the specified period as per provisions of the Income Tax Act, 1961.

2.11 Earnings per share ('EPS')

The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and equivalent dilutive equity shares outstanding during the year, except where the results would be anti-dilutive.

2.12 Provisions and contingencies -

A provision is recognised in the Balance Sheet when the Company has a present obligation as a result of a past event and it is probable that an outflow of economic resources will be required to settle the obligation, in respect of which a reliable estimate of the amount of the obligation can be made. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

A disclosure by way of a contingent liability is made when there is a possible obligation or present obligations that may, but probably will not, require an outflow of economic resources. Where there is a possible obligation in respect of which the likelihood of outflow of economic resources is remote, no provision or disclosure is made.

a) All the aforesaid shares were allotted for consideration other than cash pursuant to the Scheme of Arrangement between the Company and Mather and Piatt (India) Limited, sanctioned by Hon'ble High Court of Mumbai vide its Order dated 18 April 2001.

b) Of the above, 1,887,697 (2010: 1,887,697 shares) shares are held by the WILO SE ('Holding Company'). Calumny uneasy, leviratic n any un ounuiuaiun uimeniauei.


Dec 31, 2010

1.1 Background

Mather and Piatt Fire Systems Limited (the Company) was formed as a result of a demerger of Mather and Piatt (India) Limited on 18 April 2001. Consequently the business of fire systems was transferred to the Company.

The Company is a subsidiary of WILO SE (the Holding company formerly known as WILO AG), a company headquartered in Dortmund, Germany.

The Company is primarily engaged in the business of design, development, installation and servicing of Fire Securities systems. The Company has "its corporate office at Chinchwad, Pune. Currently there are no commercial operations carried out by the Company.

1.2 Going concern

The accumulated losses of the Company have exceeded its net worth as at 31 December 2010. However, Management believes that the Company will be able to continue operations on a going concern basis and meet all its liabilities as they fall due for payment in the foreseeable future on the basis of the financial support from the Holding company, WILO SE, Germany. The Holding company has agreed to provide necessary financial support to meet the liabilities of the Company till 31 December 2011. In this regard, the Company has received a letter dated 6 January 2011 from the Parent Company confirming that they will provide the necessary financial support till 31 December 2011.

Accordingly, these financial statements do not include any adjustments relating to the recoverability and classification of the carrying amount of assets or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

2. Significant accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting and comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 (the Act), to the extent applicable.

2.2 Use of estimates

The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Any difference between the actual results and estimates are. recognised in the period in which the results are known/ materialize. Any revision to accounting estimates is recognised prospectively in the current and future periods.

2.3 Fixed assets and depreciation

Fixed assets are stated at cost of acquisition less accumulated depreciation. Cost includes inward freight, duties, taxes and other incidental expenses related to the acquisition, construction and installation of the fixed assets.

2.4 Impairment of assets

In accordance with Accounting Standard 28 - Impairment of Assets (AS 28), the carrying amounts of the Companys assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indications exist, the assets recoverable amount is estimated, as the higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. If at the Balance Sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of depreciable historical cost.

2.5 Investments

Long-term investments are stated at cost less any other-than-temporary diminution in value, determined separately for each individual investment.

2.6 Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and other costs necessary to make the sale. Cost is determined on the basis of weighted average method and includes expenditure in acquiring the inventories and bringing them to the present location and condition. In the case of semi finished goods inventories, cost includes cost of direct materials and labour and an appropriate share of overheads. The comparison of cost and net realisable value is made on an item-by-item basis.

Raw materials and other supplies held for use in production of inventories are not written down below cost except in cases where material prices have declined, and it is estimated that the cost of finished products will exceed their net realisable value.

2.7 Revenue Recognition

a) Product sales

Revenue from sale of goods is recognised when all significant risks and rewards of ownership of goods are passed onto the customers. Sales are recorded net of sales tax / value added tax, discounts and rebates.

b) Interest income

Interest income is recognised on a time proportionate basis taking into account the amount invested and the rate applicable.

c) Other

Other items of income are accounted as and when the right to receive arises.

2.8 Operating leases

Lease payments under operating leases are recognised as an expense in the Profit and Loss Account on a straight- line basis over the period of the lease.

2.9 Foreign exchange transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the Profit and Loss Account of the year.

Monetary assets and liabilities denominated in foreign currency at the Balance Sheet date "are translated at the year end exchange rate and the resultant exchange differences are recognized in the Profit and Loss Account.

2.10 Taxation

Income-tax comprises current tax and fringe benefit tax (i.e. amount of tax for the year determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation and carried forward losses under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed at each Balance Sheet date and written down or written-up to reflect the amount that is reasonable/ virtually certain (as the case may be) to be realised.

In accordance with the guidance note issued by Institute of Chartered Accountants of India, the Company recognizes Minimum Alternate Tax credit as an asset only to the extent the probability exists that the Company will be liable to pay normal income tax during the specified period as per provisions of the Income Tax Act, 1961.

2.11 Earnings per share (EPS)

The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and equivalent dilutive equity shares outstanding during the year, except where the results would be anti-dilutive.

2.12 Provisions and Contingencies

A provision is recognised in the Balance Sheet when the Company has a present obligation as a result of a past event and it is probable that an outflow of economic resources will be required to settle the obligation, in respect of which a reliable estimate of the amount of the obligation can be made. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

A disclosure by way of a contingent, liability is made when there is a possible obligation or present obligations that may, but probably will not, require an outflow of economic resources. Where there is a possible obligation in respect of which the likelihood of outflow of economic resources is remote, no provision or disclosure is made.




Dec 31, 2009

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting and comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 (the Act), to the extent applicable.

1.2 Use of estimates

The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Any difference between the actual results and estimates are recognised in the period in which the results are known/ materialize. Any revision to accounting estimates is recognised prospectively in the current and future periods.

1.3 Fixed assets and depreciation

Fixed assets are stated at cost of acquisition less accumulated depreciation. Cost includes inward freight, duties. taxes and other incidental expenses related to the acquisition, construction and installation of the fixed assets.

Depreciation on fixed assets is provided on the Straight Line Method ("SLM") pro-rata to the period of use. Depreciatior is provided based on the useful life of the assets as estimated by the management, or at the rates prescribed undei schedule XIV of the Act, whichever is higher.

1.4 Impairment of assets

In accordance with Accounting Standard 28 - Impairment of Assets (AS 28), the carrying amounts of the Companys assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indications exist, the assets recoverable amount is estimated, as the higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. If at the Balance Sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of depreciable historical cost.

1.5 Investments

Long-term investments are stated at cost less any other-than-temporary diminution in value, determined separately for each individual investment.

1.6 Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and other costs necessary to make the sale. Cost is determined on the basis of weighted average method and includes expenditure in acquiring the inventories and bringing them to the present location and condition. In the case of semi finished goods inventories, cost includes cost of direct materials and labour and an appropriate share of overheads. The comparison of cost and net realisable value is made on an item-by-item basis.

Raw materials and other supplies held for use in production of inventories are not written down below cost except in cases where material prices have declined, and it is estimated that the cost of finished products will exceed their net realisable value.

1.7 Revenue Recognition

a) Product sales

Revenue from sale of goods is recognised when all significant risks and rewards of ownership of goods are passed onto the customers. Sales are recorded net of sales tax / value added tax, discounts and rebates.

b) Interest income

Interest income is recognised on a time proportionate basis taking into account the amount invested and the rate applicable.

c) Other

Other items of income are accounted as and when the right to receive arises.

1.8 Operating leases

Lease payments under operating leases are recognised as an expense in the Profit and Loss account on a straight-line basis over the period of the lease.

1.9 Foreign exchange transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the Profit and Loss account of the year.

Monetary assets and liabilities denominated in foreign currency at the Balance Sheet date are translated at the year end exchange rate and the resultant exchange differences are recognized in the Profit and Loss account.

1.10 Taxation

Income-tax comprises current tax and fringe benefit tax (i.e. amount of tax for the year determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation and carried forward losses under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed at each Balance Sheet date and written down or written-up to reflect the amount that is reasonable/ virtually certain (as the case may be) to be realised.

In accordance with the guidance note issued by Institute of Chartered Accountants of India, the Company recognizes Minimum Alternate Tax credit as an asset only to the extent the probability exists that the Company will be liable to pay normal income tax during the specified period as per provisions of the Income Tax Act, 1961.

1.11 Earnings per share (EPS)

The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and equivalent dilutive equity shares outstanding during the year, except where the results would be anti-dilutive.

1.12 Provisions and Contingencies

A provision is recognised in the Balance Sheet when the Company has a present obligation as a result of a past event and it is probable that an outflow of economic resources will be required to settle the obligation, in respect of which a reliable estimate of the amount of the obligation can be made. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

A disclosure by way of a contingent liability is made when there is a possible obligation or present obligations that may, but probably will not, require an outflow of economic resources. Where there is a possible obligation in respect of which the likelihood of outflow of economic resources is remote, no provision or disclosure is made.


Mar 31, 2003

A) GENERAL

The financial statements are prepared on historical cost basis except for revaluation of certain fixed assets, on the accounting principles of a going concern and in accordance with the applicable accounting standards. All expenses and income to the extent considered payable and receivable, respectively with reasonable certainty are accounted for on mercantile basis.

B) SALES AND LONG TERM CONTRACTS

Sales and profit on Long Term Turnkey contracts are recognised on completion of contract/identifiable stages thereof. Sales are net of credit notes issued (including for earlier years sales) for discounts, allowances, liquidated damages, etc.

C) FIXED ASSETS AND DEPRECIATION

Fixed Assets are stated at cost of acquisition less depreciation and adjusted by revaluation of certain assets. Depreciation on all assets is provided on the Straight Line Method. Assets acquired prior to 1st July, 1987 are depreciated at the rates then prevailing while assets acquired subsequent to that date till 16th December, 1993 are depreciated at the rates prescribed by Schedule XIV to the Companies Act, 1956 then prevailing. Depreciation on additions after 16th December, 1993 is being charged at the rates in the manner specified in the Schedule XIV to the Companies Act, 1956, as amended. In respect of revalued assets, the incremental depreciation attributable to the revaluation is transferred from the Revaluation Reserve.

D) INVENTORIES

Raw materials and components, stores and spares, loose tools are valued at lower of cost, computed on weighted average basis and net realisable value. Obsolete, defective and unserviceable stocks are provided for. Finished goods and work in progress are valued at lower of cost or net realisable value. Cost for this purpose includes direct materials, direct labour, excise duty and appropriate production overheads.

E) RETIREMENT BENEFITS

Liability in respect of retirement benefits is provided and/or funded and charged to Profit and Loss Account as follows:

i) Provident/Family Pension Fund: as a percentage of salary/wages for eligible employees.

ii) Gratuity: Liability in respect of Gratuity to employees is funded under Group Gratuity Scheme with Life Insurance Corporation of India (LIC), as per actuarial valuation, as at the year end.

iii) Leave Encashment: on the basis of actuarial valuation, as at the year end.

F) FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction and subsequent gains/losses are recognised on realisation. Year-end monetary assets and liabilities are translated at year-end exchange rates and the resultant

translated profits/losses are recognised in the profit and loss account, other than those relating to fixed assets. In the case of foreign currency liabilities relating to acquisition of fixed assets, the exchange difference is adjusted against the cost of such assets.

G) INVESTMENTS

Investments are stated at cost unless there is a diminution in the value of investments, other than of temporary nature; in which case, the investments are stated at their fair/ market values. Dividend on investments is recognised on receipt unless declared and receivable at the year end.

H) BORROWING COST

Borrowing costs attributable to the acquisition or construction of assets are capitalized as a part of costs of such assets upto the date when such assets are ready for its intended use. Other borrowing costs are charged to revenue.

I) INCOME TAX

Provision for current tax is estimated on the basis of tax payable in accordance with Income tax Act, 1961. Deferred tax for the timing differences between the taxable income and the accounting income for the year is accounted for using the tax rates, laws which are substantively enacted; and deferred tax assets are recognised to the extent there is reasonable certainty that these would be realised in future.

J) CONTINGENT LIABILITIES

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed in the notes to accounts.


Mar 31, 2002

A) GENERAL

The financial statements are prepared on historical cost basis except for revaluation of certain fixed assets, on the accounting principles of a going concern and in accordance with the applicable accounting standards. All expenses and income to the extent considered payable and receivable, respectively with reasonable certainty are accounted for on mercantile basis.

B) SALES AND LONG TERM CONTRACTS

Sales and profit on Long Term Turnkey contracts are recognised on completion of contract / identifiable stages thereof. Sales are net of credit notes issued (including for earlier years sales) for discounts, allowances, liquidated damages, etc.

C) FIXED ASSETS AND DEPRECIATION

Fixed Assets are stated at cost of acquisition less depreciation and adjusted by revaluation of certain assets. Depreciation on all assets is provided on the Straight Line Method. Assets acquired prior to 1st July, 1987 are depreciated at the rates then prevailing while assets acquired subsequent to that date till 16th December, 1993 are depreciated at the rates prescribed by Schedule XIV to the Companies Act, 1956 then prevailing, except in case of Motor Cars which are depreciated at 15%. Depreciation on additions after 16lh December, 1993 is being charged at the rates in the manner specified in the Schedule XIV to the Companies Act, 1956, as amended. In respect of revalued assets, the incremental depreciation attributable to the revaluation is transferred from the Revaluation Reserve.

D) INVENTORIES

Raw materials and components, stores and spares, loose tools are valued at lower of cost and net realisable value. Obsolete, defective and unserviceable stocks are provided for. Finished goods and work in progress are valued at lower of cost and net realisable value. Cost for this purpose includes direct materials, direct labour, excise duty and appropriate production overheads.

E) RETIREMENT BENEFITS

Liability in respect of retirement benefits is provided and/or funded and charged to Profit and Loss Account as follows:

i) Provident / Family Pension Fund: as a percentage of salary / wages for eligible employees

ii) Gratuity: Liability in respect of Gratuity to employees is funded under Group Gratuity Scheme with Life Insurance Corporation of India (LIC), as per actuarial valuation.

iii) Leave Encashment: on the basis of actuarial valuation.

F) FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction and subsequent gains/losses are recognised on realisation. Year-end monetary assets and liabilities are translated at year- end exchange rates and the resultant translation profits / losses are recognised in the profit and loss account, other than those relating to fixed assets. In the case of foreign currency liabilities relating to acquisition of fixed assets, the exchange difference is adjusted against the cost of such assets.

G) INVESTMENTS

Investments are stated at cost unless there is a diminution in the value of investments, other than of temporary nature; in which case, the investments are stated at their fair values. Dividend on investments is recognised on receipt unless declared and receivable at the year end.

H) BORROWING COST

Borrowing costs attributable to the acquisition or construction of assets are capitalised as a part of costs of such assets upto the date when such assets are ready for its intended use. Other borrowing costs are charged to revenue.

I) INCOME TAX

Provision for current tax is estimated on the basis of tax payable in accordance with Income tax Act, 1961. Deferred tax for the timing differences between the taxable income and the accounting income for the year is accounted for using the tax rates, laws which are substantively enacted; and deferred tax assets are recognised to the extent there is reasonable certainty that these would be realised in future.

 
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