Accounting Policies of Hawa Engineers Ltd. Company

Mar 31, 2016

1. CORPORATE INFORMATION :

Hawa Engineers Limited is in business of Manufacturing of Industrial Valves, etc. The Company was incorporated in 1993 and it is situated in Ahmedabad, Gujarat.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES :

I. Basis of Preparation of Financial Statements :

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material aspects with the accounting standards notified under section 133 of the Companies Act 2013 read with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial Statements have been prepared on an accrual basis under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

II. Use of Estimates :

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the an outcome requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

Significant judgments and estimates about the carrying amount of assets and liabilities include useful lives of tangible and intangible assets, impairment of tangible assets, intangible assets including goodwill, investments, employee benefits and other provisions and recoverability of deferred tax assets.

III. Tangible Assets :

Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

Subsequent expenditures related to an item of Tangible Asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Gains or losses arising from derecognition / sale proceeds of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

IV. Depreciation :

Depreciation on fixed asset is calculated on Straight Line Method (SLM) based on the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013. Depreciation on assets purchased / sold during the period is proportionally charged.

V. Valuation of Inventories :

Raw materials and stores and spares are valued at lower of cost and net realizable value. Cost is determined on moving weighted average method and includes freight, taxes and duties net of CENVAT / VAT credits, wherever applicable.

Finished goods and work-in-process are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of overheads based on normal operating capacity.

VI. Investments :

Investments are either classified as current or long term based on Management''s intension. Current investments are carried at lower of cost and quoted / fair value, computed category-wise. Non Current investments are stated at cost. Provision for diminution in the value of Non Current investments is made only if such a decline is other than temporary.

VII. Sales :

Revenue is recognized only when risks and rewards incidental to ownership are transferred to the customer, it can be reliably measured and it is reasonable to expect ultimate collection. Sales of goods are recognized on dispatch to customer, Sales exclude excise duty and state / central sales tax recovered on sales, wherever applicable and stand net of rate differences, sales returns etc.

VIII. Impairment of Assets :

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

IX. Employee Benefits :

Short term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render the services.

Contributions towards Provident Funds are recognized as expenses. Provident Fund contributions in respect of employees are made to Central Government under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.

Liability towards gratuity, covering eligible employees, is provided on the basis of year end estimatation.

Contribution to Central Government administered Employees'' State Insurance Scheme for eligible employees are recognized as charge.

X. Taxation :

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years / period. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

XI. Provisions and Contingencies :

Provision is recognised in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

XII. Foreign Currency Transactions :

Transactions denominated in foreign currency are accounted for at the exchange rate prevailing on the date of transactions.

Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit & Loss Statement.

XIII. The cost of land has been stated as per banakhat executed and includes expenses for registration of banakhat and lawyer''s fees.

XIV. In the opinion of the Board, the current assets, loans and advances and other receivables are approximately of the value stated if realized in the ordinary course of business and all known liabilities have been adequately provided for.

XV. The disclosures as required by AS-15 (Revised) on Employees Benefits are as under :

Details of expenses incurred for defined contribution plans during the year:

In respect of employees who have completed five years continuous service as on 31^st March 2016, Provision for gratuity payable in respect of them is made on the basis of the calculation made in accordance with the provision of payment of Gratuity Act up to 31^st March 2016 Rs. 60,43,081/- (Previous year Rs. 53,06,666/-)

XVII. RELATED PARTY INFORMATION :

The Management has identified the following entities and individuals as related parties of the

Company for the year ended March 31, 2016 for the purposes of reporting as per (AS) 18 -

Related Party Transactions, which are as under:

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Mar 31, 2015

I. Basis of Preparation of Financial Statements :

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material aspects with the accounting standards notified under section 133 of the Companies Act 2013 read with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial Statements have been prepared on an accrual basis under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

II. Use of Estimates :

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the an outcome requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

Significant judgments and estimates about the carrying amount of assets and liabilities include useful lives of tangible and intangible assets, impairment of tangible assets, intangible assets including goodwill, investments, employee benefits and other provisions and recoverability of deferred tax assets.

III. Tangible Assets :

Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

Subsequent expenditures related to an item of Tangible Asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Gains or losses arising from derecognition / sale proceeds of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

IV. Depreciation :

Depreciation on fixed asset is calculated on Straight Line Method (SLM) based on the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013. Depreciation on assets purchased / sold during the period is proportionally charged.

V. Valuation of Inventories :

Raw materials and stores and spares are valued at lower of cost and net realizable value. Cost is determined on moving weighted average method and includes freight, taxes and duties net of CENVAT / VAT credits, wherever applicable.

Finished goods and work-in-process are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of overheads based on normal operating capacity.

VI. Investments :

Investments are either classified as current or long term based on Management's intension. Current investments are carried at lower of cost and quoted / fair value, computed category-wise. Non Current investments are stated at cost. Provision for diminution in the value of Non Current investments is made only if such a decline is other than temporary.

VII. Sales :

Revenue is recognized only when risks and rewards incidental to ownership are transferred to the customer, it can be reliably measured and it is reasonable to expect ultimate collection. Sales of goods are recognized on dispatch to customer, Sales exclude excise duty and state / central sales tax recovered on sales, wherever applicable and stand net of rate differences, sales returns etc.

VIII. Impairment of Assets :

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

IX. Employee Benefits :

Short term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render the services.

Contributions towards Provident Funds are recognized as expenses. Provident Fund contributions in respect of employees are made to Central Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

Liability towards gratuity, covering eligible employees, is provided on the basis of year end estimatation.

Contribution to Central Government administered Employees' State Insurance Scheme for eligible employees are recognized as charge.

X. Taxation :

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years / period. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

XI. Provisions and Contingencies :

Provision is recognised in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

XII. Foreign Currency Transactions :

Transactions denominated in foreign currency are accounted for at the exchange rate prevailing on the date of transactions.

Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit & Loss Statement.

XIII. The cost of land has been stated as per banakhat executed and includes expenses for registration of banakhat and lawyer's fees.

XIV. In the opinion of the Board, the current assets, loans and advances and other receivables are approximately of the value stated if realized in the ordinary course of business and all known liabilities have been adequately provided for.

XV. The disclosures as required by AS-15 (Revised) on Employees Benefits are as under :

Details of expenses incurred for defined contribution plans during the year:

Particulars 31.03.2015 31.03.2014

Provident Fund & Other Funds 15,91,694/- 14,91,602/-

Gratuity 7,74,250/- 9,33,315/-

In respect of employees who have completed five years continuous service as on 31st March 2015, Provision for gratuity payable in respect of them is made on the basis of the calculation made in accordance with the provision of payment of Gratuity Act up to 31st March 2015 Rs. 53,06,666/- (Previous year Rs. 45,32,416/-)

XVII. RELATED PARTY INFORMATION :

The Management has identified the following entities and individuals as related parties of the Company for the year ended March 31, 2015 for the purposes of reporting as per (AS) 18 -Related Party Transactions, which are as under:

A. Subsidiary Company : - Nil

B. Partnership Firms / Proprietary Concern /Associates Companies:

Hydint Valve Automation, Orbit Engineers, Marck & Care Engineers, Airmax Pneumatics Ltd., Hawa Control Enterprises, Hawa Control International, Hawa & Marck Engineers, Luft Techno Cast Limited, Aira Automation Engineers, Marck & Aira Engineers, Flange-N-Flange, A. S. Engineers, Aira Euro Automation Pvt. Ltd., Mark & Aira Trading LLC., Aira Electro Pneumatics, Aira Pneumatics, Aira Eurotech Automation, Airmax Engineers, Airmax & Aira Automation, Aira & Cair Engineers, Cair & Aira Automation, Marck Valves N Flanges, Marck Valves, Marck Engineers, Marck Engineers International, Marck & Suzhik Valves, Marck & Aira Valves Automation, Marck & Aira Engineering, Marck & Aira Automation, Marck & Aira Enterprises, Marck Valves Engineering & Automation, Hawa Valves Automation, Hawa Valves & Pneumatics, Hawa Automation Enterprise, Hydint Instrument, Hydint Pneumatics, Orbit & Marck Valves, Versa Industrial Valves, Utech Engineers (India), Zac Valves & Fittings, F M Infrastructure, Aim Metals Pvt. Ltd., Steelmac Controls Pvt. Ltd., Suzhik Flow Control Pvt. Ltd., Aira 4Matics Global Valve Automation Pvt. Ltd., Cair Euromatics Automation Pvt. Ltd.

C. KEY MANAGEMENT PERSONNEL :

Chairman & Managing Director : Aslam F. Kagdi

Jt. Managing Director : Asad F. Kagdi

Whole Time Director : Mohammed khan Pathan

XIX. EARNINGS PER SHARE :

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

XX. SEGMENT REPORTING :

Considering the nature of company's business & operations there are no separate reportable segments. In accordance with the Accounting Standard 17 (AS-17) 'Segment Reporting' issued by the Institute of Chartered Accountants of India.'

XXI. Under the Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is not readily available, no separate disclosures have been made in the accounts.

XXII. CONTINGENT LIABILITIES NOT PROVIDED FOR :

Counter Guarantees, against Bank Guarantees given by the bankers Rs. 2,92,56,218/- (Previous year Rs. 83,55,806/-)

XXIII. Balance of Trade receivable, Trade Payable, Deposits & Advances to Suppliers are subject to confirmation and adjustments, if any.

XXIV. Salary to Directors (including Chairman & Managing Director):

PARTICULARS 31.03.2015 31.03.2014

Salary, Allowances & Benefits 30,17,683/- 33,04,945/-

XXV. Expenditure in foreign currency (on accrual basis) :

PARTICULARS 31.03.2015 31.03.2014

A P I Expenses 8,51,460/- 12,41,843/-

Import Purchase (Advance) 11,46,715/- NIL

Machinery (PMI Gun) 11,22,930/- NIL

XXVI. Details of Auditors Remuneration :

Particulars 31.03.2015 31.03.2014

Statutory Audit Fees 50,000/- 50,000/-

Tax Audit Fees 17,000/- 17,000/-

Total Rs. 67,000/- 67,000/-

XXVII. Income earned in foreign exchange :

Particulars 31.03.2015 31.03.2014

Export of own products 4,13,22,403/- 2,65,37,679/-

XXVIII. Previous year's figures have been regrouped / reclassified wherever necessary to make them comparable with the current year's classification / disclosure.

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Mar 31, 2014

I. Basis of Preparation of Financial Statements :

These financial statements have been prepared in accordance with the generally accepted accounting principles in India (GAAP) under the historical cost convention on an accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under section 211 (3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current and non-current as per the company''s normal operating cycle and other criteria set out in the schedule VI to the Companies Act, 1956.

The Accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

II. Use of Estimates :

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

III. Tangible Assets :

Fixed assets are stated at their original cost of acquisition/revalued cost wherever applicable less accumulated depreciation and impairment losses.

Cost comprises of all costs incurred to bring the asset to their location and working condition. Net of CENVAT / VAT credit is capitalized to the cost of asset.

Exchange differences relating to acquisition of fixed assets are adjusted in the cost of assets.

IV. Depreciation :

Depreciation on fixed assets is provided on straight-line method at the rates provided by Schedule XIV to the Companies Act, 1956. Depreciation on assets disposed off during the year is charged up to the disposal.

V. Valuation of Inventories :

Raw materials and stores and spares are valued at lower of cost and net realizable value. Cost is determined on moving weighted average method and includes freight, taxes and duties net of CENVAT/VAT credits, wherever applicable.

Finished goods and work-in-process are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of overheads based on normal operating capacity. Cost of finished goods include excise duty and are determined on a weighted average basis.

VI. Investments :

Long term investments are stated at cost less permanent diminution in value, if any.

VII. Sales :

Sales of goods are recognized on dispatch to customer, Sales exclude excise duty and state / central sales tax recovered on sales, wherever applicable and stand net of rate differences, sales returns etc.

VIII. Impairment of Assets :

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Asset when at balance sheet date there are indications of impairment and the carrying amount of asset exceeds its recoverable amount. The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the statement of Profit and Loss Account.

Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased.

IX. Employee Benefits :

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

Contributions towards Provident Funds are recognized as expenses. Provident Fund contributions in respect of employees are made to Central Government under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.

Liability towards gratuity, covering eligible employees, is provided on the basis of year end estimatation.

Contribution to Central Government administered Employees'' State Insurance Scheme for eligible employees are recognized as charge.

X. Taxation :

Tax expense consists of both current as well as deferred tax. The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company.

Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax assets and liabilities are measured as per the tax rates / laws that have been enacted by or substantially enacted as on the Balance Sheet date.

XI. Cenvat Benefit :

The value of eligible cenvat benefit is being reduced from the cost of raw materials / Fixed Assets.

XII. Provisions and Contingencies :

Provisions involving a substantial degree of estimation 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 recognized but are disclosed in the accounts by way of notes.

XIII. Foreign Currency Transactions :

Transactions denominated in foreign currency are accounted for at the exchange rate prevailing on the date of transactions.

Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit & Loss Statement.

XIV. The cost of land has been stated as per banakhat executed and includes expenses for registration of banakhat and lawyer''s fees.

XV. Investments held by the Company are long-term investments.

XVI. In the opinion of the Board, the current assets, loans and advances and other receivables are approximately of the value stated if realized in the ordinary course of business and all known liabilities have been adequately provided for.

XIX. RELATED PARTY INFORMATION :

In accordance with the Accounting Standard 18 (AS-18) ''Related Party Disclosure'' issued by the Institute of Chartered Accountants of India, the disclosures are as under:

A. Subsidiary Company : - Nil

B. Partnership Firms / Proprietary Concern /Associates Companies:

Hydint Valve Automation, Orbit Engineers, Aira Controls, Marck & Care Engineers, Airmax Pneumatics Ltd., Hawa Control Enterprises, Hawa Control International, Hawa & Marck Engineers, Luft Techno Cast Limited, Aira Automation Engineers, Airmax Controls, Marck & Aira Engineers, Flange-N-Flange, A. S. Engineers, Aira Euro Automation Pvt. Ltd., Marck & Aira Trading.

XXII. SEGMENT REPORTING :

Considering the nature of company''s business & operations there are no separate reportable segments. In accordance with the Accounting Standard 17 (AS-17) ''Segment Reporting'' issued by the Institute of Chartered Accountants of India''

XXIII. Under the Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is not readily available, no separate disclosures have been made in the accounts.

XXIV. CONTINGENT LIABILITIES NOT PROVIDED FOR :

Counter Guarantees, against Bank Guarantees given by the bankers Rs. 83,55,806/- (Previous year Rs. 2,44,14,202/-)

XXV. Balance of Trade receivable, Trade Payable, Deposits & Advances to Suppliers are subject to confirmation and adjustments, if any.

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Mar 31, 2013

I. Basis of Preparation of Financial Statements :

These financial statements have been prepared in accordance with the generally accepted accounting principles in India (GAAP) under the historical cost convention on an accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under section 211 (3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current and non-current as per the company''s normal operating cycle and other criteria set out in the schedule VI to the Companies Act, 1956.

The Accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

II. Use of Estimates :

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

III. Tangible Assets :

Fixed assets are stated at their original cost of acquisition/revalued cost wherever applicable less accumulated depreciation and impairment losses.

Cost comprises of all costs incurred to bring the asset to their location and working condition. Net of CENVAT / VAT credit is capitalized to the cost of asset.

Exchange differences relating to acquisition of fixed assets are adjusted in the cost of assets.

IV. Depreciation :

Depreciation on fixed assets is provided on straight-line method at the rates provided by Schedule XIV to the Companies Act, 1956. Depreciation on assets disposed off during the year is charged up to the disposal.

V. Valuation of Inventories :

Raw materials and stores and spares are valued at lower of cost and net realizable value. Cost is determined on moving weighted average method and includes freight, taxes and duties net of CENVAT/VAT credits, wherever applicable.

Finished goods and work-in-process are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of overheads based on normal operating capacity. Cost of finished goods include excise duty and are determined on a weighted average basis.

VI. Investments :

Long term investments are stated at cost less permanent diminution in value, if any.

VII. Sales :

Sales of goods are recognized on dispatch to customer, Sales exclude excise duty and state / central sales tax recovered on sales, wherever applicable and stand net of rate differences, sales returns etc.

VIII. Impairment of Assets :

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Asset when at balance sheet date there are indications of impairment and the carrying amount of asset exceeds its recoverable amount. The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the statement of Profit and Loss Account.

Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased.

IX. Employee Benefits :

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

Contributions towards Provident Funds are recognized as expenses. Provident Fund contributions in respect of employees are made to Central Government under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.

Liability towards gratuity, covering eligible employees, is provided on the basis of year end estimatation.

Contribution to Central Government administered Employees'' State Insurance Scheme for eligible employees are recognized as charge.

X. Excise Duty :

Excise duty on the goods manufactured is accounted for at the time of their clearance. No provision is therefore made for duty on finished goods, lying unsold and not cleared from the factory at the end of the year.

XI. Taxation :

Tax expense consists of both current as well as deferred tax. The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company.

Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax assets and liabilities are measured as per the tax rates / laws that have been enacted by or substantially enacted as on the Balance Sheet date.

XII. Cenvat Benefit :

The value of eligible cenvat benefit is being reduced from the cost of raw materials / Fixed Assets.

XIII. Provisions and Contingencies :

Provisions involving a substantial degree of estimation 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 recognized but are disclosed in the accounts by way of notes.

XIV. Foreign Currency Transactions :

Transactions denominated in foreign currency are accounted for at the exchange rate prevailing on the date of transactions.

Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit & Loss Statement.

XV. The cost of land has been stated as per banakhat executed and includes expenses for registration of banakhat and lawyer''s fees.

XVI. Investments held by the Company are long-term investments.

XVII. In the opinion of the Board, the current assets, loans and advances and other receivables are approximately of the value stated if realized in the ordinary course of business and all known liabilities have been adequately provided for.

XVIII. The Company has been accounting liability for Excise Duty on finished goods as and when cleared. The liability for Excise Duty on finished goods lying in stock at the close of the year, estimated at Rs. 11,31,390/- has not been provided for in the accounts and the same has also not been included in valuation of inventory of such goods. However, the said liability if accounted would have no effect on the profit for the year.

XXI. RELATED PARTY INFORMATION :

In accordance with the Accounting Standard 18 (AS-18) ''Related Party Disclosure'' issued by the Institute of Chartered Accountants of India, the disclosures are as under :

A. Subsidiary Company : Nil

B. Partnership Firms / Proprietary Concern /Associates Companies:

Hydint Valve Automation, Orbit Engineers, Aira Controls, Marck & Care Engineers, Hawa Control Enterprises, Hawa Control International, Hawa & Marck Engineers, Steel-Mac Controls P Ltd., Care Alloy Cast, Luft Techno Cast Limited, Aira Automation Engineers, Airmax Controls, Marck & Aira Engineers, Hydint Pneumatics, Flange-N-Flange, A. S. Engineers, Aira Euro Automation Pvt. Ltd., Marck & Aira Trading, Suzhik Techno Cast Pvt. Ltd.

C. KEY MANAGEMENT PERSONNEL :

Chairman & Managing Director : Aslam F. Kagdi

Jt. Managing Director : Asad F. Kagdi

Wholte Time Director : Mohammed Khan Pathan

XXIV. SEGMENT REPORTING :

Considering the nature of company''s business & operations there are no separate reportable segments. In accordance with the Accounting Standard 17 (AS-17) ''Segment Reporting'' issued by the Institute of Chartered Accountants of India.''

XXV. Under the Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is not readily available, no separate disclosures have been made in the accounts.

XXVI. CONTINGENT LIABILITIES NOT PROVIDED FOR :

Counter Guarantees, against Bank Guarantees given by the bankers Rs.2,44,14,202/- (Rs. 3,27,07,148/- Less : 100% Margin Rs. 82,92,946/-) (Previous year Rs. 1,36,17,623/-)

XXVII. Balance of Trade receivable, Trade Payable, Deposits & Advances to Suppliers are subject to confirmation and adjustments, if any.

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Mar 31, 2012

I. Use of Estimates :

The presentation 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 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.

II. Fixed Assets :

Fixed assets are stated at cost of acquisition or construction less accumulated depreciation.

All costs relating to the acquisition and installation of fixed assets, net of CENVAT / VAT credit, are capitalized.

Exchange differences relating to acquisition of fixed assets are adjusted in the cost of assets.

III. Depreciation :

Depreciation on fixed assets is provided on straight-line method at the rates provided by Schedule XIV to the Companies Act, 1956. Depreciation on assets disposed off during the year is charged up to the disposal.

IV. Valuation of Inventories :

Raw materials and stores and spares are valued at lower of cost and net realizable value. Cost is determined on moving weighted average basis and includes freight, taxes and duties net of CENVAT/VAT credits, wherever applicable.

Finished goods and work-in-process are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of overheads based on normal operating capacity. Cost of finished goods include excise duty and is determined on a weighted average basis.

V. Investments :

Investments are stated at cost.

VI. Sales:

Sales of goods are recognized on dispatch to customer. Sales exclude excise duty and state / central sales tax recovered on sales, wherever applicable and stand net of rate differences, sales returns etc.

VII. Impairment of Assets :

The company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired. If any such indications exist, the carrying value of such assets is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to Profit and Loss Account. If at the Balance Sheet date there is an indication that previously assessed impairment losses no longer exist, than such loss is reversed and the asset is restated to that effect.

VIII. Employee Benefits :

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

Contributions towards Provident Funds are recognized as expenses. Provident Fund contributions in respect of employees are made to Central Government under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.

Liability towards gratuity, covering eligible employees, is provided on the basis of year end estimatation.

Contribution to Central Government administered Employees'' State Insurance Scheme for eligible employees are recognized as charge.

IX. Excise Duty :

Excise duty on the goods manufactured is accounted for at the time of their clearance. No provision is therefore made for duty on finished goods, lying unsold and not cleared from the factory at the close of the year.

X. Taxation:

The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company. Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax assets and liabilities are measured as per the tax rates / laws that have been enacted by or substantially enacted as on the Balance Sheet date.

XI. Cenvat Benefit:

The value of eligible cenvat benefit is being reduced from the cost of raw materials.

XII. Contingent Liabilities :

Claim against the company not acknowledged as debt are disclosed by way of notes to accounts.

XIII. Foreign Currency Transactions :

Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transactions.

XIV. The cost of land has been stated as per banakhat executed and includes expenses for registration of banakhat and lawyer''s fees.

XV. Investments held by the Company are long-term investments.

XVI. In the opinion of the Board, the current assets, loans and advances and other receivables are approximately of the value stated if realized in the ordinary course of business and all known liabilities have been adequately provided for.

XVII. The Company has been accounting liability for Excise Duty on finished goods as and when cleared. The liability for Excise Duty on finished goods lying in stock at the close of the year, estimated at Rs. 12,21,910/- has not been provided for in the accounts and the same has also not been included in valuation of inventory of such goods. However, the said liability if accounted would have no effect on the profit for the year.

XVIII. Previous year''s figures have been reclassified, rearranged and regrouped wherever considered necessary to confirm to the current year''s figures.

XXI. RELATED PARTY INFORMATION :

In accordance with the Accounting Standard 18 (AS-18) ''Related Party Disclosure'' issued by the Institute of Chartered Accountants of India, the disclosures are as under:

A. Subsidiary Company: - Nil

B. Partnership Firms / Proprietary Concern /Associates Companies:

Hydint Valve Automation, Orbit Engineers, Aira Controls, Marck 8, Care Engineers, Hawa Control Enterprises, Hawa Control International, Hawa 8. Marck Engineers, Steel-Mac Controls, Care Alloy Cast, Luft Techno Cast Limited, Aira Automation Engineers, Airmax Controls, Marck 8, Aira Engineers, Hydint Pneumatics, Flange-N-Flange, A. S. Engineers, Aira Euro Automation Pvt. Ltd. Care Engineers, Marck & Aira Trading, Suzhik Techno Cast Pvt. Ltd..

C. KEY MANAGEMENT PERSONNEL :

Chairman & Managing Director : Aslam F. Kagdi

Jt. Managing Director : Asad F. Kagdi

XXIV. SEGMENT REPORTING :

Considering the nature of company''s business & operations there are no separate reportable segments In accordance with the Accounting Standard 17 (AS-17) ''Segment Reporting'' issued by the Institute of Chartered Accountants of India.''

XXV. Under the Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is not readily available, no separate disclosures have been made in the accounts.

XXVI. CONTINGENT LIABILITIES NOT PROVIDED FOR :

Counter Guarantees, against Bank Guarantees given by the bankers Rs. 1,36,17,623/- (Previous year Rs. 1,55,77,498/-)

XXVII. Balance of Sundry Debtors, Sundry Creditors, Loans, Advances & Debit / Credit Balance are subject to confirmation and adjustments, if any.

XXXII. The Revised Schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2011

1. BASIS OF ACCOUNTING :

The financial statements are prepared under the historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles in India (Indian GAAP). The applicable mandatory Accounting Standards notified under The Companies (Accounting Standard) Rules, 2006 and the requirements of the Companies Act, 1956 of India have been followed in preparation of these financial statements.

2. USE OF ESTIMATES :

The presentation 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 reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

3. FIXED ASSETS :

Fixed assets are carried at cost less accumulated depreciation. All costs relating to the acquisition and installation of fixed assets, net of CENVAT / VAT credit, are capitalized.

Exchange differences relating to acquisition of fixed assets are adjusted in the cost of assets.

4. DEPRECIATION :

Depreciation on fixed assets is provided on straight line method at the rates provided by Schedule XIV to the Companies Act, 1956.

5. VALUATION OF INVENTORIES :

Stocks are valued at:

* Raw Materials, Packing, Stores At cost (Incl. and spares Proportionate Direct Expenses)

* Work-in-Process At cost (Incl. Proportionate Direct Expenses)

* Finished goods At cost (Incl. Proportionate Direct Expenses)

6. INVESTMENTS :

Investments are stated at cost.

7. SALES:

Sales of goods are recognized on dispatch to customer, Sales exclude excise duty and state / central sales tax recovered on sales, wherever applicable and stand net of rate differences, sales returns etc.

8. IMPAIRMENT OF ASSETS :

The company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired. If any such indications exist, the carrying value of such assets is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to Profit and Loss Account. If at the Balance Sheet date there is an indication that previously assessed impairment losses no longer exist, than such loss is reversed and the asset is restated to that effect.

9. EMPLOYEE BENEFITS :

Short-term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

Contributions towards Provident Funds are recognized as expenses. Provident Fund contributions in respect of employees are made to Central Government under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.

Liability towards gratuity, covering eligible employees, is provided on the basis of year end estimatation.

Contribution to Central Government administered Employees'' State Insurance Scheme for eligible employees are recognized as charge.

10. EXCISE DUTY :

Excise duty on the goods manufactured is accounted for at the time of their clearance. No provision is therefore made for duty on finished goods, lying unsold and not cleared from the factory at the close of the year.

11. TAXATION :

The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company. Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax assets and liabilities are measured as per the tax rates / laws that have been enacted by or substantially enacted as on the Balance Sheet date.

12. MODVAT BENEFIT:

The value of eligible modvat benefit is being reduced from the cost of raw materials.

13. CONTINGENT LIABILITIES :

Claim against the company not acknowledged as debt are disclosed by way of notes to accounts.

14. FOREIGN CURRENCY TRANSACTIONS :

Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transactions.