Accounting Policies of Shakti Pumps (India) Ltd. Company

Mar 31, 2023

significant accounting policies

2.1 Basis of Preparation

The financial statements have been prepared in
accordance with Indian Accounting Standards (Ind AS)
as prescribed under Section 133 of the Companies
Act, 2013 read with Companies (Indian Accounting
Standards) Rules, 2015 and Companies (Indian
Accounting Standards) (Amendment) Rules, 2016 and
relevant provisions of the Companies Act, 2013.

2.2 Basis of Measurement

These financial statements have been prepared in
Indian Rupee which is the functional currency of
the Company. These financial statements have been
prepared on historical cost basis, except for certain
financial instruments which are measured at fair value or
amortised cost at the end of each reporting period, as
explained in the accounting policies below.

The statement of cash flows has been prepared under
indirect method.

2.3 Use of judgments, estimates and assumptions

The preparation of these financial statements requires
management judgments, estimates and assumptions
that affect the application of accounting policies, the
accounting disclosures made and the reported amounts
of assets, liabilities, income and expenses.

Estimates and underlying assumptions are reviewed on
a periodic basis. Revisions to accounting estimates are
made in the period, in which, the estimates are revised
and in any future periods, effected pursuant to such
revision.

2.4 Property, plant and equipment
Measurement

Freehold land is carried at historical cost. All other
items of property, plant and equipment are measured
at cost of acquisition or construction less accumulated
depreciation and accumulated impairment loss, if any.

The cost of an item of property, plant and equipment

comprises its purchase price, including import duties
and other non-refundable taxes or levies and any directly
attributable cost of bringing the asset to its working
condition for its intended use; any discounts and rebates
are deducted in arriving at the purchase price.

Borrowing costs directly attributable to the construction
or acquisition of a qualifying asset up to completion or
acquisition are capitalized as part of the cost. The present
value of the expected cost for the decommissioning of an
asset after its use is included in the cost of the respective
asset if the recognition criteria for a provision are met.

When parts of an item of property, plant and equipment
have different useful lives, they are accounted for as
separate items (major components) of property, plant
and equipment.

Property, plant and equipment under construction are
disclosed as capital work-in-progress. Advances paid
towards the acquisition of property, plant and equipment
outstanding at each reporting date are disclosed under
"Other non-current assets".

Subsequent costs

The cost of replacing a part of an item of property, plant
and equipment is recognised in the carrying amount of
the item if it is probable that the future economic benefits
embodied within the part will flow to the Company and
its cost can be measured reliably. The carrying amount of
the replaced part is derecognised. The costs of the day-
to-day servicing of property, plant and equipment are
recognised in the statement of profit and loss as incurred.

Disposal

An item of property, plant and equipment is derecognised
upon disposal or when no future benefits are expected
from its use or disposal. Gains and losses on disposal of
an item of property, plant and equipment are determined
by comparing the proceeds from disposal with the
carrying amount of property, plant and equipment, and
are recognised net within other income/expenses in the
statement of profit and loss.

Depreciation

Depreciation is calculated over the depreciable amount,
which is the cost of an asset, or other amount substituted
for cost, less its residual value. Depreciation is recognised
in the statement of profit and loss on a straight-line
basis over the estimated useful lives of each part of an
item of property, plant and equipment as prescribed in
Schedule II of the Companies Act 2013 except in the
cases mentioned below where the management based
on the technical evaluation have estimated the life to be
lower than the life prescribed in schedule II.

Depreciation is not recorded on capital work-in-progress
until construction and installation are complete and the
asset is ready for its intended use.

2.5 Intangible assets
Recognition and measurement

Intangible assets are recognised when the asset is
identifiable, is within the control of the Company, it is
probable that the future economic benefits that are
attributable to the asset will flow to the Company and
cost of the asset can be reliably measured.

Intangible assets acquired by the Company that have
finite useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses (if any).

Subsequent measurement

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

Amortisation

Amortisation is calculated over the cost of the asset, or
other amount substituted for cost, less its residual value.
Amortisation is recognised in statement of profit and loss
on a straight-line basis over the estimated useful lives
of intangible assets from the date that they are available
for use, since this most closely reflects the expected
pattern of consumption of the future economic benefits
embodied in the asset.

Amortisation is not recorded on intangible assets under
development until development is complete and the
asset is ready for its intended use.

The intangible asset are amortised over the estimated
useful lives as given below: -

- Computer Software : 15 years

2.6 Inventories

Inventories are valued at lower of cost and net realisable
value. The cost is computed on weighted average basis.
Inventories of Finished Goods and Work-In-Progress
include cost of conversion and other costs incurred in
bringing the inventories to their present location and
condition.

2.7 Research and Development Expenditure

Revenue expenditure on research & development is
charged to the Statement of Profit and Loss of the year
in which it is incurred.

Capital expenditure incurred during the period on
research & development is accounted for as an addition
to property, plant & equipment.

2.8 Foreign currencies transactions
Transactions and balances

Transactions in foreign currency are recorded at exchange
rates prevailing at the date of transactions. Exchange

differences arising on foreign exchange transactions
settled during the year are recognised in the statement
of profit and loss.

Monetary assets and liabilities denominated in foreign
currencies which are outstanding, as at the reporting
period are translated at the closing exchange rates and
the resultant exchange differences are recognised in the
statement of profit and loss.

Non-monetary assets and liabilities denominated in
foreign currencies that are measured in terms of historical
cost are translated using the exchange rate at the date of
the transaction.

2.9 Borrowing costs

Borrowing costs are interest and other costs that an
entity incurs in connection with the borrowing of funds.

Borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset are
capitalized in the cost of that asset. Qualifying assets
are those assets which necessarily takes a substantial
period of time to get ready for its intended use. All other
borrowing costs are recognised in the year in which they
are incurred.

2.10 Current and 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:

• It is expected to be realised in or is intended for sale
or consumption in the Company''s normal operating
cycle;

• It is held primarily for the purpose of being traded;

• It is expected to be realised within 12 months after
the reporting date; or

• 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:

• It is expected to be settled in the Company''s normal
operating cycle;

• It is held primarily for the purpose of being traded;

• It is due to be settled within 12 months after the
reporting date; or

• The company does not have an unconditional right
to defer settlement of the liability for at least 12

months after the reporting date. Terms of a liability
that could, at the option of the counterparty, result
in its settlement by the issue of equity instruments
do not affect its classification.

Current liabilities include current portion of non-current
financial liabilities. All other liabilities are classified as
non-current.

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

2.11 Investment

Current investments are carried at lower of cost and
fair value. Non-current investments are stated at cost.
Provision for diminution in the value of long term
investment is made only if such a decline is other than
temporary.

2.12 Employee benefits
Short-term employee benefits

All employee benefits payable wholly within twelve
months of rendering the services are classified as short
term employee benefits. Benefits such as salaries, wages,
expected cost of bonus and short term compensated
absences, leave travel allowance etc. are recognised in
the period in which the employee renders the related
service.

Defined Benefit Plans

The Company operates a gratuity plan covering qualifying
employees. The benefit payable is the greater of the
amount calculated as per the payment of Gratuity Act or
the Company scheme applicable to the employee. The
benefit vests upon completion of five years of continuous
service and once vested it is payable to employees on
retirement or on termination of employment. In case of
death while in service, the gratuity is payable irrespective
of vesting. The Company makes annual contribution
to the group gratuity scheme administered by the Life
Insurance Corporation of India through its Gratuity Trust
Fund.

Defined contribution plans

Company''s contribution to Provident Fund, ESIC scheme
for the year is charged to Profit and Loss account.
Retirement benefit, medical reimbursement and leave
payments to employees are recognise as employee
benefit expense when they are due.

2.13 Lease

The Company, as a lessee, recognises a right-of-use
asset and a lease liability for its leasing arrangements, if
the contract conveys the right to control the use of an
identified asset.

The contract conveys the right to control the use of an
identified asset, if it involves the use of an identified
asset and the Company has substantially all of the
economic benefits from use of the asset and has right

to direct the use of the identified asset. The cost of the
right-of-use asset shall comprise of the amount of the
initial measurement of the lease liability adjusted for any
lease payments made at or before the commencement
date plus any initial direct costs incurred. The right-of-
use assets is subsequently measured at cost less any
accumulated depreciation, accumulated impairment
losses, if any and adjusted for any remeasurement of
the lease liability. The right-of-use assets is depreciated
using the straight-line method from the commencement
date over the shorter of lease term or useful life of right-
of-use asset.

The Company measures the lease liability at the present
value of the lease payments that are not paid at the
commencement date of the lease. The lease payments
are discounted using the interest rate implicit in the lease
if that rate can be readily determined. If that rate cannot
be readily determined, the Company uses incremental
borrowing rate.

For short-term and low value leases, the Company
recognises the lease payments as an operating expense
on a straight-line basis over the lease term.

2.14 Income tax

Income tax expense comprises current tax and deferred
tax. Income tax expenses are recognised in statement of
profit or loss except to the extent that it relates to items
recognized in other comprehensive income (OCI).

Current tax

Current tax is the tax payable or receivable on the taxable
income or loss for the year and any adjustment to the
tax payable or receivable in respect of the previous year.
It is measured using tax rates (and tax laws) enacted or
substantially enacted by the reporting date.

Current tax assets/liabilities are offset only if there
is a legally enforceable right to set off the recognised
amounts, and it is intended to realise the asset and settle
the liability on a net basis.

Deferred tax

Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
corresponding amounts used for taxation purposes.

Deferred tax assets (if any) are recognised only to the
extent that it is probable that future taxable profits will
be available against which they can be used. Deferred
tax assets/liabilities are reviewed at each balance sheet
date and are recognised/ reduced to the extent that it
is probable / no longer probable respectively that the
related tax benefit will be realised.

Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset is realised
or the liability is settled, based on the laws that have
been enacted or substantively enacted by the reporting
date.

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Mar 31, 2018

1. Corporate Information :

Shakti Pumps India Limited (“SPIL’’ or “the Company”) is a public limited company domiciled in India and incorporated under the provisions of the Indian Companies Act. SPIL is engaged in manufacturing of Pumps, Motors & their spare parts. The core products of the Company are Engineered Pumps, Industrial Pumps, and Solar Pumps etc.

2. Basis of preparation of financial statements:

2.1 Statement of Compliance

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and relevant provisions of the Companies Act, 2013.

2.2 Basis of Preparation

These financial statements have been prepared in accordance with Ind AS 101, “First Time Adoption of Ind AS”, as these are the Company’s first Ind AS compliant financial statements for the year ended 31st March, 2018.

The financial statements correspond to the classification provisions contained in Ind AS-1 (Presentation of Financial Statements). The transition to Ind AS has been carried out from the accounting principles generally accepted in India (Indian GAAP), which is considered as the “Previous GAAP”, for purposes of Ind AS - 1.

The preparation of these financial statements resulted in changes to the Company’s accounting policies as compared to the most recent annual financial statements prepared under Previous GAAP, wherever necessary. All accounting policies and applicable Ind AS have been applied consistently and retrospectively to all periods , including the previous financial year presented and the Ind AS opening balance sheet as at 1st April, 2016 (Transition Date). The resulting difference between the carrying amounts under Ind AS and Previous GAAP as on the Transition Date has been recognized directly in Retained Earnings. An explanation of the effect of the transition from Previous GAAP to Ind AS on the Company’s equity and profit is provided in Note No. 39.

In preparing these financial statements, the Company has availed certain exemptions and exceptions from retrospective application of certain requirements under Ind AS, as explained below:

a) Exemptions from retrospective application:

- Deemed cost of property, plant and equipment: The Company has opted to continue with the carrying value for all of its property, plant and equipment as recognized in the previous GAAP financial statements as their deemed cost at the transition date to Ind AS (i.e. 1st April, 2016).

- Investment in equity shares of subsidiaries and associates: On the transition date, the Company has opted to carry investments in Equity shares of subsidiaries and associates at their deemed cost, i.e. previous GAAP carrying amount.

2.3 Basis of Measurement

The financial statements have been prepared under historical cost convention on accrual basis, except for the items that have been measured at fair value as required by relevant Ind AS.

2.4 Use of judgments, estimates and assumptions

The preparation of these financial statements requires management judgments, estimates and assumptions that affect the application of accounting policies, the accounting disclosures made and the reported amounts of assets, liabilities, income and expenses.

Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are made in the period, in which, the estimates are revised and in any future periods, effected pursuant to such revision.

SIGNIFICANT ACCOUNTING POLICIES: 2.5 Property, plant and equipment Measurement

Freehold land is carried at historical cost. All other items of property, plant and equipment are measured at cost of acquisition or construction less accumulated depreciation and accumulated impairment loss, if any.

The cost of an item of property, plant and equipment comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any discounts and rebates are deducted in arriving at the purchase price.

Borrowing costs directly attributable to the construction or acquisition of a qualifying asset up to completion or acquisition are capitalized as part of the cost. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Property, plant and equipment under construction are disclosed as capital work-in-progress. Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date are disclosed under “Other non-current assets”.

Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized . The costs of the day-to-day servicing of property, plant and equipment are recognized in the statement of profit and loss as incurred.

Disposal

An item of property, plant and equipment is derecognized upon disposal or when no future benefits are expected from its use or disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized net within other income/ expenses in the statement of profit and loss.

2.6 Intangible assets Recognition and measurement

Intangible assets are recognized when the asset is identifiable, is within the control of the Company, it is probable that the future economic benefits that are attributable to the asset will flow to the Company and cost of the asset can be reliably measured.

Intangible assets acquired by the Company that have finite useful lives are measured at cost less accumulated amortization and accumulated impairment losses (if any).

Subsequent measurement

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates.

Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. Depreciation is recognized in the statement of profit and loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment as prescribed in Schedule II of the Companies Act 2013 except in the cases mentioned below where the management based on the technical evaluation have estimated the life to be lower than the life prescribed in schedule II.

Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use.

Amortization

Amortization is calculated over the cost of the asset, or other amount substituted for cost, less its residual value. Amortization is recognized in statement of profit and loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

2.7 Foreign currencies transactions Transactions and balances

Transactions in foreign currency are recorded at exchange rates prevailing at the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the statement of profit and loss of the year.

Monetary assets and liabilities denominated in foreign currencies which are outstanding, as at the reporting period are translated at the closing exchange rates and the resultant exchange differences are recognized in the statement of profit and loss.

Non-monetary assets and liabilities denominated in foreign currencies that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction.

2.8 Inventories

Inventories are valued at lower of cost and net realizable value. The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

2.9 Borrowing costs

Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds.

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized in the cost of that asset. Qualifying assets are those assets which necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are expensed in the period in which they are incurred.

2.10 Current-Non-Current Classification

All assets and liabilities are classified into current and noncurrent.

Assets

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

- It is expected to be realized in, or is intended for sale or consumption in the Company’s normal operating cycle;

- It is held primarily for the purpose of being traded;

- It is expected to be realized within 12 months after the reporting date; or

- 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:

- It is expected to be settled in the Company’s normal operating cycle;

- It is held primarily for the purpose of being traded;

- It is due to be settled within 12 months after the reporting date; or

- The company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

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

Operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents.

2.11 Investment

Current investments are carried at lower of cost and fair value. Non-current investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other that temporary.

2.12 Employee benefits Short-term employee benefits

All employee benefits payable wholly within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, wages, expected cost of bonus and short term compensated absences, leave travel allowance etc. are recognized in the period in which the employee renders the related service.

Defined Benefit Plans

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

Defined contribution plans

Company’s contribution to Provident Fund, ESIC scheme for the year is charged to Profit and Loss account. Retirement benefit, medical reimbursement and leave payments to employees are accounted for on cash basis.

2.13 Income tax

Income tax expense comprises current tax and deferred tax charge or credit. Income tax expenses are recognized in statement of profit or loss except to the extent that it relates to items recognized in other comprehensive income (OCI) or directly in equity.

Current tax

Current tax is the tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of the previous year. It is measured using tax rates (and tax laws) enacted or substantially enacted by the reporting date.

Current tax assets/liabilities are offset only if there is a legally enforceable right to set off the recognized amounts, and it is intended to realize the asset and settle the liability on a net asset basis.

Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.

Deferred tax assets (if any) are recognized only to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets/liabilities are reviewed at each balance sheet date and are recognized / reduced to the extent that it is probable / no longer probable respectively that the related tax benefit will be realized.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax relating to items recognized outside statement of profit or loss is recognized outside statement of profit or loss (either in OCI or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.

2.14 Provisions

A Provision is recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost in the statement of Profit and Loss.

2.15 Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(a) Financial assets

Financial assets include cash and cash equivalents, trade and other receivables, investments in securities and other eligible current and non-current assets.

At initial recognition, all financial assets are measured at fair value. Such financial assets are subsequently classified under one of the following three categories according to the purpose for which they are held. The classification is reviewed at the end of each reporting period.

- Financial assets at amortized cost: At the date of initial recognition, are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates. These financial assets are intended to be held until maturity. Therefore, they are subsequently measured at amortized cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of the financial asset. The EIR Amortization is included as interest income in the profit or loss. The losses arising from impairment are recognized in the profit or loss.

- Financial assets at fair value through other comprehensive income: At the date of initial recognition, are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates, as well as held for selling. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognized in Other Comprehensive Income (OCI). Interest income calculated using the Effective Interest Rate (EIR) method, impairment gain or loss and foreign exchange gain or loss are recognized in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognized in Other Comprehensive Income is reclassified from the OCI to Statement of Profit and Loss.

- Financial assets at fair value through profit or loss: At the date of initial recognition, Financial assets are held for trading, or which are measured neither at Amortized Cost nor at Fair Value through OCI. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognized in the Statement of Profit and Loss.

Investment in Equity shares of subsidiaries and associates are valued at cost.

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109.

The company assesses impairment based on the expected credit losses (ECL) model to all its financial assets measured at amortized cost.

(b) Financial liabilities

Financial liabilities include long-term and short-term loans and borrowings, trade and other payables and other eligible current and non-current liabilities.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and other payables, net of directly attributable transaction costs. After initial recognition, financial liabilities are classified under one of the following two categories:

- Financial liabilities at amortized cost: After initial recognition, such financial liabilities are subsequently measured at amortized cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of the financial liability. The EIR Amortization is included in finance expense in the profit or loss.

- Financial liabilities at fair value through profit or loss: which are designated as such on initial recognition, or which are held for trading. Fair value gains / losses attributable to changes in own credit risk is recognized in OCI. These gains / losses are not subsequently transferred to Statement of Profit and Loss. All other changes in fair value of such liabilities are recognized in the Statement of Profit and Loss.

The Company derecognises a financial liability when the obligation specified in the contract is discharged, cancelled or expires.

2.16 Revenue Recognition

Revenue is recognized when the significant risks and rewards of ownership have been passed on to buyer. Revenue is measured at the fair value of the consideration received or receivable, including Excise Duty, but net of returns, allowances, trade discounts and volume discounts and sales tax / VAT etc.

2.17 Earnings per share

Basic earnings per share are computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The Company did not have any potentially dilutive securities in any of the periods presented.

2.18 Segment Reporting

SPIL is mainly engaged in the business of manufacturing of various types of Pumps & Motors. Operating segments are reporting in a manner consistent with the internal reporting to the Chief Operating Decision Maker (CODM).

The Board of Directors of the group assesses the financial performance and position of the group and makes strategic decisions. The Board of Directors which are identified as a CODM, consist of CMD, CFO & all other executive Directors.

Considering the nature of business & financial reporting of SPIL, the Company has only one segment as reportable segment. The

Company operates in Local & Export Segments Geographically. The sales for both are separately given, but due to the nature of business the assets/liabilities and expenses for these activities cannot be bifurcated separately

2.19 Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks, cash on hand and highly liquid short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

11.1 Terms/rights attached to the equity shares :

(i) The Company has only one class of equity shares having a par value of Rs. 10/- per share.

(ii) The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.

(iii) 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.

11.2 1,80,200 Shares out of Issued Share are forfeited by the company which has not been reissued.

11.3 Reconciliation of the no. of shares outstanding at the beginning and at the end of the year :

a) Interest rate of the above loan in range between 9.10% to 12.55%

b) Borrowings from banks are secured by way of :-

(i) First parri passu charge on both present and/or future, current assets including inventories & receivables.

(ii) Second parri passu charge on both present and/or future, movable & immoveable property.

c) Amount payable during next 12 months, disclosed under the head “Other Financial Liabilities [Current]” (Note No. 16.3)

d) Vehicle Loans are secured by respective vehicles.

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Mar 31, 2017

Significant Accounting policies & notes

A. Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, on the basis of going concern assumption in accordance with Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

B. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

C. Fixed Assets

Fixed Assets are stated at cost net recoverable taxes including any cost directly attributable for bringing the assets to its working condition for its intended use less accumulated depreciation.

Projects under which assets are not ready for their intended use are disclosed under Capital Work in Progress.

D. Depreciation

Depreciation has been charged on fixed assets on Straight-Line Method basis. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

E. Foreign Currency Transaction

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(b) Monetary items denominated in foreign currencies at the year-end are restated at the year-end rates.

(c) Non-Monetary foreign currencies Items are carried at cost.

(d) Any income or expense on account of exchange differences either on settlement or on translation is recognized in the profit & loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

F. Investments

Current Investments are carried at lower of cost and fair value. Non-Current Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other that temporary.

G. Inventories

Item of Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. The cost of work in progress and finished goods is determined on absorption cost price which comprises of cost of purchase, cost of conversion, and other manufacturing overheads incurred in bringing them to their respective present location and condition.

H. Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue on sale of goods is recognized on passes of title to customers, sales are excluding of VAT, Excise duty and adjustment for rate difference. Export sale are accounted for on the basis of dates of bill of lading.

I. Excise duty/CENVAT

Excise duty is accounted for on the basis of payment made in respect of goods cleared. CENVAT claim on purchase of raw material is reduced from the cost of raw material.

J. Employee Benefits

(a) Short Term Employee benefits are recognized as an expense at the undiscounted amount in profit & loss account of the year in which the related service is rendered.

(b) Defined benefit plans: The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

(c) Defined contribution plans: Company''s contribution to Provident Fund, ESIC scheme for the year is charged to Profit and Loss account. Retirement benefit, medical reimbursement and leave payments to employees are accounted for on cash basis.

K. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & Loss account.

L. Provision for Current & Deferred Tax

Provision for current tax is made after taking into account benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "Timing Difference" between taxable incomes & accounting income is accounted for using the tax rates and laws that are enacted or substantially enacted as on the balance sheet date.

M. Provisions, Contingent Liabilities & Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognize but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

N. Segment Reporting

The Company is mainly engaged in the business of manufacturing various types of Pumps & Motors. Considering the nature of business & financial reporting of the Company, the company has only one segment as reportable segment. The Company operates in Local & Export Segments Geographically. The sales for both are separately given, but due to the nature of business the assets/liabilities and expenses for these activities cannot be bifurcated separately.

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Mar 31, 2016

A. Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, on the basis of going concern assumption in accordance with Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

B. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

C. Fixed Assets Fixed Assets are stated at cost net recoverable taxes including any cost directly attributable for bringing

the assets to its working condition for its intended use less accumulated depreciation. Projects under which assets are not ready for their intended use are disclosed under Capital Work in Progress.

D. Depreciation

Depreciation has been charged on fixed assets on Straight-Line Method basis. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

E. Foreign Currency Transaction

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(b) Monetary items denominated in foreign currencies at the year-end are restated at the year-end rates.

(c) Non-Monetary foreign currencies Items are carried at cost.

(d) Any income or expense on account of exchange differences either on settlement or on translation is recognized in the profit & loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

F. Investments

Current Investments are carried at lower of cost and fair value. Non-Current Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

G. Inventories

Item of Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. The cost of work in progress and finished goods is determined on absorption cost price which comprises of cost of purchase, cost of conversion, and other manufacturing overheads incurred in bringing them to their respective present location and condition.

H. Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue on sale of goods is recognized on passing of title to customers, Sales are excluding of VAT, Excise duty and adjustment for rate difference. Export sale are accounted for on the basis of dates of bill of lading.

I. Excise duty/CENVAT

Excise duty is accounted for on the basis of payment made in respect of goods cleared. CENVAT claim on purchase of raw material is reduced from the cost of raw material.

J. Employee Benefits

(a) Short Term Employee benefits are recognized as an expense at the undiscounted amount in profit & loss account of the year in which the related service is rendered.

(b) Defined benefit plans: The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

(c) Defined contribution plans: Company''s contribution to Provident Fund, ESIC scheme for the year is charged to Profit and Loss account. Retirement benefit, medical reimbursement and leave payments to employees are accounted for on cash basis.

K. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & Loss account.

L. Provision for Current & Deferred Tax

Provision for current tax is made after taking into account benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "Timing Difference" between taxable incomes& accounting income is accounted for using the tax rates and laws that are enacted or substantially enacted as on the balance sheet date.

M. Provisions, Contingent Liabilities & Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

N. Segment Reporting

The Company is mainly engaged in the business of manufacturing various types of Pump & Motors. Considering the nature of business & financial reporting of the Company, the company has only one segment as reportable segment. The Company operates in Local & Export Markets Geographically. The sales for both are separately given, but due to the nature of business the assets/liabilities and expenses for these activities cannot be bifurcated separately.

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Mar 31, 2014

A. Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, on the basis of going concern assumption in accordance with the applicable accounting standards in India and the provisions of the Companies Act, 1956.

B. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

C. Fixed Assets

Fixed Assets are stated at cost net of recoverable taxes including any cost attributable for bringing the assets to its working condition for its intended use less accumulated depreciation.

D. Depreciation

Depreciation has been charged on fixed assets on straight-line basis from the month of addition and to the month of sale at the rates specified in schedule XIV of the Companies Act, 1956. 100% depreciation has been charged on assets valued up to Rs. 5000/- per item.

E. Foreign Currency Transaction

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(b) Monetary items denominated in foreign currencies at the year-end are restated at the year-end rates.

(c) Non Monetary foreign currencies items are carried at cost.

(d) Any income or expense on account of exchange differences either on settlement or on translation is recognized in the profit & loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

F. Investments

Current Investments are carried at lower of cost and fair value. Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other that temporary.

G. Inventories

Item of Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. The cost of work in progress and finished goods is determined on absorption cost price.

H. Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue on sale of goods is recognized on passes of title to customers, sales are excluding of VAT, Excise duty and adjustment for rate difference. Export sale are accounted for on the basis of dates of bill of lading.

I. Excise duty/CENVAT

Excise duty is accounted for on the basis of payment made in respect of goods cleared. CENVAT claim on purchase of raw material is reduced from the cost of raw material.

J. Employee Benefits

(a) Short Term Employee benefits are recognized as an expense at the undiscounted amount in profit & loss account of the year in which the related service is rendered.

(b) Defined benefit plans: The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

(c) Defined contribution plans: Company''s contribution to Provident Fund, ESIC scheme for the year is charged to Profit and Loss account. Retirement benefit, medical reimbursement and leave payments to employees are accounted for on cash basis.

K. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & Loss account.

L. Provision for Current & Deferred Tax

Provision for current tax is made after taking into account benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "Timing Difference" between taxable incomes & accounting income is accounted for using the tax rates and laws that are enacted or substantially enacted as on the balance sheet date.

M. Provisions , Contingent Liabilities & Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

N. Segment Reporting

The Company is mainly engaged in the business of manufacturing various types of Pump & Motors. Considering the nature of business & financial reporting of the Company, the company has only one segment as reportable segment. The Company operates in Local & Export Segments Geographically. The sales for both are separately given, but due to the nature of business the assets/liabilities and expenses for these activities cannot be bifurcated separately.

O. Share Warrant

During the Year Company has issued Rs. 15,00,000 (Fifteen Lacs) Equity Warrants on a preferential basis to promoter and promoter group relatives with each warrant convertible into equity share of nominal value of Rs. 10/- each. The warrant shall be converted into equity shares within a period of 18 Months from the date of allotment.

The share warrant are issued at Rs. 80/- per warrant i.e. the equity share of Rs. 10/- each are being offered at a premium of Rs. 70/- per share. During the year company received 25% of total consideration and the warrant holder shall on or before the date of conversion pay the balance 75% of the consideration towards conversion of equity shares.

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Mar 31, 2013

A. Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, on the basis of going concern assumption in accordance with the applicable accounting standard in India and the provisions of the Companies Act, 1956.

B. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

C. Fixed Assets

Fixed Assets are stated at cost net recoverable taxes including any cost attributable for bringing the assets to its working condition for its intended use less accumulated depreciation.

D. Depreciation

Depreciation has been charged on fixed assets on straight-line basis from the month of addition and to the month of sale at the rates specified in schedule XIV of the Companies Act, 1956. 100% depreciation has been charged on assets valued up to 5000/- per item

E. Foreign Currency Transaction

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(b) Monetary items denominated in foreign currencies at the year end are restated at the year end rates.

(c) Non Monetary foreign currencies Items are carried at cost.

(d) Any income or expense on account of exchange differences either on settlement or on translation is recognised in the profit & loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

F. Investments

Current Investments are carried at lower of cost and fair value. Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other that temporary.

G. Inventories

Item of Inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any. The cost of work in progress and finished goods is determined on absorption cost price.

H. Revenue Recognition

Revenue is recognised only when it can be reliably meas ured and it is reasonable to expect ultimate collection. Revenue on sale of goods is recognised on passes of title to customers, sales are excluding of VAT/Sales tax, Excise duty and adjustment for rate difference and discount. Export sale are accounted for on the basis of dates of bill of lading.

I. Excise duty/CENVAT

Excise duty is accounted for on the basis of payment made in respect of goods cleared. CENVAT claim on purchase of raw material is reduced from the cost of raw material.

J. Employee Benefits

(a) Short Term Employee benefits are recognised as an expense at the undiscounted amount in profit & loss account of the year in which the related service is rendered.

(b) Defined benefit plans: The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

(c) Defined contribution plans: Company''s contribution to Provident Fund, ESIC scheme for the year is charged to Profit and Loss account. Retirement benefit, medical reimbursement and leave payments to employees are accounted for on cash basis.

K. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. All other borrowing costs are charged to Profit & Loss account.

L. Provision for Current & Deferred Tax

Provision for current tax is made after taking into account benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "Timing Difference" between taxable incomes & accounting income is accounted for using the tax rates and laws that are enacted or substantially enacted as on the balance sheet date.

M. Provisions , Contingent Liabilities & Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that

there will be an outflow of resources. Contingent liabilities are not recognise but are disclosed in the notes. Contingent assets are neither recognised nor disclosed.

N. Segment Reporting

The Company is mainly engaged in the business of manufacturing of Pump & Motors. Considering the nature of business & financial reporting of the Company, the Company has only one segment as reportable segment. The Company operates in Local & Export Segments Geographically. The sales for both are separately given, but due to the nature of business the assets/liabilities and expenses for these activities cannot be bifurcated separately.

O. Optionally Convertible Debentures

During the year company has redeemed the Outstanding OCD''s.

P. Share Warrants

During the Year the Company has converted outstanding Share Warrants into 600000 Equity Shares of Face Value Rs.10/- at a premium of Rs.166/- each. And also issued 600000 Bonus Shares thereon.

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Mar 31, 2012

A. Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, on the basis of going concern assumption in accordance with the applicable accounting standard in India and the provisions of the Companies Act, 1956.

B. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

C. Fixed Assets

Fixed Assets are stated at cost net recoverable taxes including any cost attributable for bringing the assets to its working condition for its intended use less accumulated depreciation.

D. Depreciation

Depreciation has been charged on fixed assets on straightline basis from the month of addition and to the month of sale at the rates specified in schedule XIV of the Companies Act, 1956. 100% depreciation has been charged on assets valued up to 5000/- per item

E. Foreign Currency Transaction

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(b) Monetary items denominated in foreign currencies at the yearend are restated at the yearend rates.

(c) Non Monetary foreign currencies Items are carried at cost.

(d) Any income or expense on account of exchange differences either on settlement or on translation is recognized in the profit & loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

F. Investments

Current Investments are carried at lower of cost and fair value. Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other that temporary.

G. Inventories

Item of Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. The cost of work in progress and finished goods is determined on absorption cost price.

H. Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue on sale of goods is recognized on passes of title to customers, sales are excluding of VAT/ Sales tax, Excise duty and adjustment for rate difference and discount. Export sale are accounted for on the basis of dates of bill of lading.

I. Excise duty/CENVAT

Excise duty is accounted for on the basis of payment made in respect of goods cleared. CENVAT claim on purchase of raw material is reduced from the cost of raw material.

J. Employee Benefits

(a) Short Term Employee benefits are recognized as an expense at the undiscounted amount in profit & loss account of the year in which the related service is rendered.

(b) Defined benefit plans: The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

(c) Defined contribution plans: Company's contribution to Provident Fund, ESIC scheme for the year is charged to Profit and Loss account. Retirement benefit, medical reimbursement and leave payments to employees are accounted for on cash basis.

K. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized at part of such assets. All other borrowing costs are charged to Profit & Loss account.

L. Provision for Current & Deferred Tax

Provision for current tax is made after taking into account benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "Timing Difference" between taxable incomes & accounting income is accounted for using the tax rates and laws that are enacted or substantially enacted as on the balance sheet date.

M. Provisions, Contingent Liabilities & Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognize but are disclosed in the notes. Contingent assets are neither recognized nor disclosed.

N. Segment Reporting

The Company is mainly engaged in the business of manufacturing of Pump & Motors. Considering the nature of business & financial reporting of the Company, the company has only one segment as reportable segment. The Company operates in Local & Export Segments Geographically. The sales for both are separately given, but due to the nature of business the assets/ liabilities and expenses for these activities cannot be bifurcated separately.

O. Comparatives

During the Preceding Year Company had changed its Accounting Year from June to March. The Comparative Figures of Previous year belongs to nine month period ending on 31st March 2011.

P. Optionally Convertible Debentures

During the year company had issued optionally convertible debenture at the issue price of Rs.134/- per security. These OCD's are convertible into equity shares within 18 months from the date of subscription i.e. 20.04.2011.In case these OCD's doesn't get converted into equity share it will be redeemed by the company at issue price plus 20%premium compounded annually. The company has intended to redeem the OCD's by the end of July 2012. And the estimated outflow on account of redemption is calculated as follows.

(Amount in Rs.)

OCD Amount 97498400

Premium 26102860

Total 123601260

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Mar 31, 2011

1. Accounting Assumptions:

These accounts have been prepared under the historical cost convention on the basis of going concern, with revenue recognized and expenses accounted on their accrual, in accordance with the applicable accounting standard and relevant presentational requirements of the companies Act, 1956 unless otherwise stated.

2. Revenue Recognition:

Revenue on sale of goods is recognized on passes of title to the customers, sales are excluding of VAT/Sales Tax, Excise Duty and adjustment for rate difference and discount.

3. Central Value Added Tax (CENVAT):

CENVAT claim of capital goods is reduced from the cost of respective cost of plant and machinery/capital work in progress. CENVAT claimed on purchase of raw material and others is reduced from the cost of such material.

4. Employee Benefit: Retirement benefit plans

a) Defined benefit plans: The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

b) Defined contribution plans: Company’s contribution to Provident Fund, ESIC scheme for the year is charged to Profit and Loss account. Retirement benefit, medical reimbursement and leave payments to employees are accounted for on cash basis.

5. Fixed Assets:

Fixed Assets are stated at cost of acquisition including any cost attributable for bringing the assets to its working condition for its intended use less accumulated depreciation.

6. Depreciation:

Depreciation has been charged on fixed assets on straight-line basis from the month of addition and to the month of sale at the rates specified in schedule XIV of the Companies Act, 1956. 100% depreciation has been charged on assets valued up to 5000/- per item.

7. Value of Inventories:

Inventories of Raw Material, Stores and Spares, Work in Process, Finished Goods, are valued at net realizable value. The cost of Work- in- Process and Finished Goods is determined on absorption cost price, Raw Material, Stores and Spares are valued at average method.

8. Taxation:

Current Income Tax provision has been determined based on relief, deduction available under the Income Tax Act. Deferred tax is recognized for all timing difference applying the tax rates that have been substantially enacted by the Balance- Sheet date.

9. Provision, Contingent liabilities & Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

10. Foreign Currency Transactions:

i) Transaction denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

ii) Any income or expenses on account of exchange difference either on settlement or on translation are recognized in the Profit and Loss Account, except in case where they relate to acquisition of fixed assets, in such case, they are adjusted to the cost of such assets.

11. The Company has hedged interest rate of External Commercial Borrowing (ECB).

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Jun 30, 2010

1. Accounting Assumptions

These accounts have been prepared under the historical cost convention on the basis of going concern, with revenue recognized and expenses accounted on their accrual, in accordance with the applicable accounting standard and relevant presentational requirements of the companies Act, 1956 unless otherwise stated.

2. Revenue Recognition:

Revenue on sale of goods is recognized on passes of title to the customers, sales are excluding of VAT/Sales Tax, Excise Duty and adjustment for rate difference.

3. Central Value Added Tax (CENVAT):

CENVAT claim on capital goods is reduced from the cost of respective cost of plant and machinery/capital work in progress.

CENVAT claimed on purchase of raw material and others is reduced from the cost of such material.

4. Employee Benefit:

Retirement benefit plans

(a) Defined benefit plans

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

(b) Defined contribution plans

Companys contribution to Provident Fund, ESIC scheme for the year is charged to Profit and Loss account. Retirement benefit, medical reimbursement and leave payments to employees are accounted for on cash basis.

5. Fixed Assets

Fixed Assets are stated at cost of acquisition including any cost attributable for bringing the assets to its working condition for its intended use less accumulated depreciation.

6. Depreciation

Depreciation has been charged on fixed assets on straight-line basis from the month of addition and to the month of sale at the rates specified in schedule XIV of the companies Act, 1956. 100% depreciation has been charged on assets valued up to 5000/- per item.

7. Value of Inventories

Inventories of Raw Material, Stores & Spares, Work in Process, Finished Goods are valued at net realisable value. The cost of Work in Process & Finished Goods is determined on absorption cost price, Raw Material; Stores & Spares are valued at average method.

8. Taxation

Current Income Tax provision has been determined based on relief, deduction available under the Income Tax Act. Deferred tax is recognized for all timing difference applying the tax rates that have been substantially enacted by the Balance- Sheet date.

9. Provision, Contingent liabilities & Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

10. Foreign Currency Transaction:

(i) Transaction denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

(ii) Any income or expenses on account of exchange difference either on settlement or on translation are recognized in the Profit & Loss Account, except in case where they relate to acquisition of fixed assets, in such case, they are adjusted to the cost of such assets.

11. The Company has hedged interest rate on External Commercial Borrowing (ECB).