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Notes to Accounts of KSB Pumps Ltd.

Dec 31, 2016

1. The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/-. Each shareholder of equity shares is entitled to one vote per share.

2. Aggregate number of equity shares allotted as fully paid up by way of bonus shares for the period of five years immediately preceding the Balance Sheet date - 17,403,922 (previous year - 17,403,922).

3. Number of shares held by each shareholder holding more than 5% shares in the company are as follows:

4. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amount exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

5. Principal amount payable to Micro and Small Enterprises (to the extent identified by the Company from available information and relied upon by the auditors) as at 31/12/2016 is Rs. 0.24 Million (previous year -Rs.0.47 Million) including unpaid amounts of Rs. Nil (previous year - Rs. Nil) outstanding for more than 45 days. Estimated interest due thereon is Rs. Nil (previous year - Rs. Nil).

6. Amount of payments made to suppliers beyond 45 days during the year is Rs. 2.99 Million (previous year -Rs.3.93 Million). Interest paid thereon is Rs. Nil (previous year - Rs. Nil) and the estimated interest due and payable thereon is Rs. 0.06 Million (previous year - Rs. 0.09 Million).

7. The amount of estimated interest accrued and remaining unpaid as at 31/12/2016 is Rs. 2.03 Million (previous year - Rs. 1.97 Million).

8. The amount of estimated interest due and payable for the period from 01/01/2017 to actual date of payment or 30/01/2017 (whichever is earlier) is Rs. Nil.

9. As the Company also sells as spare parts (for goods manufactured and sold by it), some of its bought-out components, the items shown above as consumption include cost of such items sold, this being an activity ancillary to its manufacturing activity.

10. The Company is of the opinion that the purchase & sale of such bought-out components is a part of its activity to manufacture and deliver a complete pump unit and, therefore, is not a trading activity as referred to in paragraph 5(ii)(b) of Part II of Schedule III to the Companies Act, 2013.

11. The consumption figures in value are balancing figures ascertained on the basis of opening stocks plus purchases less closing stocks and therefore, include adjustments for excesses and shortages ascertained on physical count, etc.

12. In addition to spares purchased for resale, the Company also sells as spares some of its bought-out components. The Company is of the opinion that the purchase and sale of such bought-out components is a part of its activity to manufacture and deliver a complete pump unit and therefore, is not a trading activity as referred to in paragraph 5(ii)(b) of Part II of Schedule III to the Companies Act, 2013.

13 - Research and Development expenditure debited to the Statement of Profit and Loss aggregating Rs. 2.93 Million (previous year - Rs. 2.94 Million) has been incurred by the Company and disclosed under Miscellaneous expenses (Refer note 25).

Note 34 - The net exchange differences arising during the year recognized appropriately in the Statement of Profit and Loss - net gain- Rs. 12.76 Million (previous year - net loss - Rs. 20.88 Million)

14. Disclosures under Accounting Standards

15. Details of Employee Benefits as required by the Accounting Standard 15 (Revised) Employee benefits are as under:

16. Defined contribution plan

Amount recognized as an expense in the Statement of Profit and Loss in respect of Defined Contribution Plan towards Provident Fund is Rs. 54.21 Million (previous year Rs. 54.61 Million).

17. Defined benefit plans

18. Actuarial gains and losses in respect of defined benefit plans are recognized in the Statement of Profit & Loss.

19. The Defined Benefit Plans comprise of Gratuity and superannuation.

Gratuity is a benefit to an employee based on 15/20/25/30 days (depending on the grade/category of the employee and the completed years of service) last drawn salary for each completed year of service.

Superannuation is a benefit to certain employees at Rs. 1000 / 500 / 250 (depending on the grade/ category of the employee and the completed years of service) per month for each completed year of service.

20. - Where a financial report contains both consolidated financial statements and separate financial statement for the parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements.

21. - Details of provisions and movements in each class of provisions as required by the Accounting Standard on ‘Provisions, Contingent liabilities and Contingent assets’ (AS-29)

22. - Earnings per Share

23. The amount used as the numerator in calculating basic and diluted earnings per share is the Profit for the year attributable to the equity shareholders disclosed in the Statement of Profit and Loss.

24. The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 34,807,844.

25. - Repairs to machinery include Rs. 37.92 Million (previous year - Rs. 36.06 Million) spares consumed.

26. - Provision for taxation for the year is an aggregate of the provision made for the year ended 31st March, 2016 as reduced by the provision for 9 months up to 31st December, 2015 and the provision based on the figures for the remaining 9 months up to 31st December, 2016. However, the ultimate tax liability for the remaining 9 months up to 31st December, 2016 will be determined based on the results for the year 1st April, 2016 to 31st March, 2017.

27. - The prescribed Corporate Social Responsibility (CSR) expenditure required to be spent in for year 2016 as per Section 135 of the Companies Act, 2013 is Rs. 19.90 Million. The Company has spent Rs. 19.90 Million towards CSR. No amount has been spent on construction/acquisition of an asset of the Company.

28. - Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/disclosure.


Dec 31, 2015

ii) The Company has only one class of shares referred to as equity shares having a par value of Rs,10/-. Each shareholder of equity shares is entitled to one vote per share.

(iii) Aggregate number of equity shares allotted as fully paid up by way of bonus shares for the period of five years immediately preceding the Balance Sheet date - 17,403,922 (previous year - 17,403,922).

v) The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amount exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

a) Principal amount payable to Micro and Small Enterprises (to the extent identified by the Company from available information) as at 31/12/2015 is Rs, 0.47 million (previous year - Rs,1.75 Million) including unpaid amounts of Rs, Nil (previous year - Rs,Nil) outstanding for more than 45 days. Estimated interest due thereon is Rs, Nil (previous year - Rs, Nil).

b) Amount of payments made to suppliers beyond 45 days during the year is Rs, 3.93 Million (previous year -Rs,5.43 Million). Interest paid thereon is Rs, Nil (Previous Year - Nil) and the estimated interest due and payable thereon is Rs, 0.09 Million (previous year - Rs, 0.15 Million).

c) The amount of estimated interest accrued and remaining unpaid as at 31/12/2015 is Rs, 1.97 Million (previous year - Rs, 1.88 Million).

d) The amount of estimated interest due and payable for the period from 01/01/2016 to actual date of payment or 30/01/2016 (whichever is earlier) is Rs, Nil.

Components and spare parts referred to in paragraph 5(viii)(c) of Part II of schedule III to the Companies Act, 2013, are interpreted to mean the components and spare parts which are incorporated in the products sold and not those used for the maintenance of plant and machinery.

1. In addition to spares purchased for re-sale, the Company also sells as spares some of its bought-out components. The Company is of the opinion that the purchase and sale of such bought-out components is a part of its activity to manufacture and deliver a complete pump unit and therefore, is not a trading activity as referred to in paragraph 5(ii)(b) of Part II of Schedule III to the Companies Act, 2013.

The above information pertains to only those nonresident shareholders where the Company has made direct remittance or has made payment into non-resident designated accounts with banks in India.

Note 1 - Research and Development expenditure debited to the Statement of Profit and Loss aggregating Rs, 2.94 Million (previous year - Rs, 4.16 Million) has been incurred by the Company and disclosed under Miscellaneous expenses (Refer Note 25).

Note 2 - The net exchange differences arising during the year recognized appropriately in the Statement of Profit and Loss - net loss- Rs, 20.88 Million (previous year - net loss - Rs, 50.71 Million).

Note 3 Disclosures under Accounting Standards

4. Details of Employee Benefits as required by the Accounting Standard 15 (Revised) Employee benefits are as under:

5.a Defined contribution Plan

Amount recognized as an expense in the Statement of Profit and Loss in respect of Defined Contribution Plan towards Provident Fund is Rs, 54.61 Million (previous year Rs, 52.48 Million).

6..b Defined benefit plans

i. Actuarial gains and losses in respect of defined benefit plans are recognized in the Statement of Profit & Loss.

ii. The Defined Benefit Plans comprise of Gratuity and superannuation.

Gratuity is a benefit to an employee based on 15/ 20/ 25/ 30 days (depending on the grade/ category of the employee and the completed years of service) last drawn salary for each completed year of service.

Superannuation is a benefit to certain employees at Rs, 1000/ 500/ 250 (depending on the grade/ category of the employee and the completed years of service) per month for each completed year of service.

The Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated terms of the obligations.

Expected Rate of Return of Plan Assets : This is based on the expectation of the average long term rate of return expected on investments of the Fund during the estimated term of obligations.

Salary Escalation Rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

(D) The related parties included in the various categories above, where transactions have taken place are given below:

Controlling Companies KSB AG

Canadian Kay Pump Ltd.

Associate Company MIL Controls Ltd.

Subsidiary Company_Pofran Sales &c Agency Ltd._

Common Control KSB S.A.

KSB Inc., USA

KSB Pumps (S.A.) (Pty.) Ltd., South Africa KSB Australia KSB Chile S.A.

KSB Singapore (Asia Pacific) PTE. Ltd. Singapore

KSB Limited, Hongkong

KSB Pumps Co. Ltd., Thailand

P.T. KSB., Indonesia

KSB Taiwan Co. Ltd.

KSB Ltd., Tokyo

KSB Brazil

KSB Korea

KSB Mexico

KSB Nederland

DP Industries B.V., Nederland

KSB Pumps Arabia Ltd.

KSB Ltd., U.K.

KSB Italia S.p.A., Italy

KSB Pompa Turkey

KSB Shanghai Pump Co. Ltd., China

KSB Valves (Shanghai) Co. Ltd., China

Mercantile-KSB Oy AB, Finland

KSB Pakistan

Delian KSB Amri Valves Co. Ltd., China

Bombas ITLTR S.A., Spain

KSB TESMA S.A., Griechenland

KSB Tech. Pvt. Ltd., India

GIW Industries Inc., LISA

KSB Middle East FZE, Dubai

KSB Pumpy Armatury spol. sr.o, Czech

KSB Service LLC KSB Pompy Armatura Poland KSB Compania Sudamericana KSB Belgium SA KSB China

KSB Pumps & Valves Malaysia

KSB Finanz SA

KSB AMV SA Spain

KSB Finland

KSB Mork AB, Sweden

KSB Lindflaten, Norway

KSB Oesterreich, Austria

KSB Pompes ET Robintteries Sari, Morocco

KSB Argentina

KSB Service GMBH

KSB Canada

KSB New Zeland

Rotary Equipment

KSB OOO, Russia

KSB Valvulas Ltda. Brazil

KSB Services Ltd., Saudi Arabia

AMRI Inc., USA

KSB Vietnam Company Ltd.

KSB Philippines KSB Colombia SAS KSB Zurich AG, Switzerland Key management personnel Mr. W. Spiegel

Individuals having significant influence over the enterprise Mr. Gaurav Swarup

Relatives of individuals having significant influence over the enterprise Mrs. Gyan M. Swarup

Mahendra Swarup & Sons HLTF Mr. Vikram Swarup Mrs. Bindu Swarup Mrs. Parul Swarup

Enterprises over which individuals having significant influence over The Industrial & Prudential Investment Co. Ltd.

the reporting enterprise exercise significant influence New Holding and Trading Company Ltd.

Paharpur Cooling Towers Ltd.

Note 7 - Where a financial report contains both consolidated financial statements and separate financial statement for the parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements.

Note 8 - Details of provisions and movements in each class of provisions as required by the Accounting Standard on ‘Provisions, Contingent liabilities and Contingent assets’ (AS-29)

Note 9 - Earnings per Share

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the Profit for the year attributable to the equity shareholders disclosed in the Statement of Profit and Loss.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 34,807,844.

Note 10 - Repairs to machinery include Rs, 36.06 Million (previous year - Rs, 36.12 Million) spares consumed.

Note 11 - Provision for taxation for the year is an aggregate of the provision made for the year ended 31st March, 2015 as reduced by the provision for 9 months up to 31st December, 2014 and the provision based on the figures for the remaining 9 months up to 31st December, 2015. However, the ultimate tax liability for the remaining 9 months up to 31st December, 2015 will be determined based on the results for the year 1st April, 2015 to 31st March, 2016.

Note 12 - The prescribed Corporate Social Responsibility (CSR) expenditure required to be spent in for year 2015 as per Section 135 of the Companies Act, 2013 is Rs, 18.30 Million. The Company has spent Rs, 18.30 million towards CSR. No amount has been spent on construction/acquisition of an asset of the Company.

Note 13 - Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/disclosure.

Signature to Notes 1 to 43

In terms of our report attached G. Swarup Chairman

For Deloitte Haskins & Sells LLP A. R. Broacha

Chartered Accountants D. N. Damania

N. N. Kampani

Hemant M. Joshi Verghese Oommen Pradip Shah Directors

(Partner) Director Finance Dr. Stephan Bross

V. K. Viswanathan S. F. Motwani

W. Stegmuller _

R. Narasimhan W. Spiegel Managing Director

Company Secretary

Pune, 18th February, 2016 Mumbai, 18th February, 2016


Dec 31, 2013

Note 1 - Research and Development expenditure debited to the Statement of Profit and Loss aggregating Rs. 2.43 Million (previous year - Rs. 2.06 Million) has been incurred by the Company and disclosed under appropriate account heads.

Note 2 - The net exchange differences arising during the year recognised appropriately in the Statement of Profit and Loss - net loss- Rs. 0.43 Million (previous year - net loss - Rs. 17.61 Million)

Note 3 Disclosures under Accounting Standards

1.1 Details of Employee Benefits as required by the Accounting Standard 15 (Revised) Employee benefits are as under:

1.2.a Defined contribution Plan Amount recognised as an expense in the Statement of Profit and Loss in respect of Defined Contribution Plan is Rs. 48.63 Million (previous year Rs. 43.72 Million). 36.1.b Defined benefit plans

i. Actuarial gains and losses in respect of defined benefit plans are recognised in the Statement of Profit & Loss.

ii. The Defined Benefit Plans comprise of Gratuity and superannuation.

Gratuity is a benefit to an employee based on 15/ 20/ 25/ 30 days (depending on the grade/ category of the employee and the completed years of service) last drawn salary for each completed year of service. Superannuation is a benefit to certain employees at Rs. 1000/ 500/ 250 (depending on the grade/ catagory of the employee and the completed years of service) per month for each completed year of service. Both the plans are funded.

Note 3 - Where a financial report contains both consolidated financial statements and separate financial statement for the parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements.

Note 4 - Earnings per Share

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the Profit for the year after tax disclosed in the Statement of Profit and Loss.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 34,807,844.

Note 5 - Repairs to machinery include Rs. 43.17 Million (previous year - Rs. 40.23 Million) spares consumed.

Note 6 - Provision for taxation for the year is an aggregate of the provision made for the year ended 31st March, 2013 as reduced by the provision for 9 months up to 31st December, 2012 and the provision based on the figures for the remaining 9 months up to 31st December, 2013. However, the ultimate tax liability for the remaining 9 months up to 31st December, 2013 will be determined based on the results for the year 1st April, 2013 to 31st March, 2014.

Note 7 - Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Dec 31, 2012

1 Company Overview

Products:

The Company is engaged in the business of manufacture of different types of power driven pumps and industrial valves. Castings are mainly produced for captive consumption.

Operations:

The Company has factories at the following places:-

A) Irrigation and Process Pumps Division (I.P.D.) at Pimpri

Manufacturing of submersible pumps, vertical and horizontal pumps, series and non-series pumps, Multistage pumps, chemical process pumps, non-clog pumps and water pumps.

B) Power Projects Division (P.P.D.) at Chinchwad

Manufacturing of primary heat transfer pumps, moderator pumps, main boiler feed pumps and multistage condense extraction pumps, re-heater drain pumps and auxiliary boiler feed pumps.

C) Foundry Division at Vambhori

Manufacturing of steel &c iron castings including for captive consumption.

D) Coimbatore Unit

Manufacturing of valves (Globe, Gate, Check, Butterfly & Ball valves).

E) Nasik Unit (Sinnar)

Established in 1995, this unit is engaged in the manufacture of high pressure and submersible pumps.

(i) The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amount exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note 2 - Contingent Liabilities and Commitments

Particulars As at 31st As at 31st December, 2012 December, 2011 Rs. in Million Rs. in Million

(i) Contingent Liabilities

(a) Claims against the Company not acknowledged as debts 7.44 5.97

(b) Taxation matters in dispute pending at various stages of appeal 50.61 63.82

(c) Bills Discounted / Cheques Purchased with banks 26.79 25.55

(d) Excise matters 70.83 58.20

(e) Guarantees given by the bankers on behalf of the Company 970.70 922.36

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for -

- Tangible Assets 83.85 73.86

Note 3

a) Principal amount payable to Micro and Small Enterprises (to the extent identified by the Company from available information) as at 31/12/2012 is Rs. Nil (Previous year - Rs. 3.29 million) including unpaid amounts of Rs. Nil (Previous year - Rs. 1.44 million) outstanding for more than 45 days. Estimated interest due thereon is Rs. Nil (Previous year - Rs. 0.05 million).

b) Amount of payments made to suppliers beyond 45 days during the year is Rs. 0.45 million (Previous year - Rs. 103.45 million). Interest paid thereon is Rs. Nil (Previous year - Rs. Nil) and the estimated interest due and payable thereon is Rs. Nil (Previous year - Rs. 1.26 million).

c) The amount of estimated interest accrued and remaining unpaid as at 31/12/2012 is Rs. 1.71 million (Previous year - Rs. 1.71 million).

d) The amount of estimated interest due and payable for the period from 01/01/2013 to actual date of payment or 08/02/2013 (whichever is earlier) is Rs. Nil

Notes:

1. As the Company also sells as spare parts (for goods manufactured and sold by it ), some of its bought-out components, the items shown above as consumption include cost of such items sold, this being an activity ancillary to its manufacturing activity.

2. The Company is of the opinion that the purchase & sale of such bought-out components is a part of its activity to manufacture and deliver a complete pump unit and, therefore, is not a trading activity as referred to in paragraph 5(ii)(b) of Part II of Revised Schedule VI to the Companies Act, 1956.

3. The consumption figures in value are balancing figures ascertained on the basis of opening stocks plus purchases less closing stocks and therefore, include adjustments for excesses and shortages ascertained on physical count, etc.

1. In addition to spares purchased for re-sale, the Company also sells as spares some of its bought-out components. The Company is of the opinion that the purchase and sale of such bought-out components is a part of its activity to manufacture and deliver a complete pump unit and therefore, is not a trading activity as referred to in paragraph 5(ii)(b) of revised Schedule VI of the Companies Act, 1956.

Note 4 - Research and Development expenditure debited to the Statement of Profit and Loss aggregating Rs. 2.06 million (previous year - Rs. 1.07 million) has been incurred by the Company and disclosed under appropriate account heads.

Note 5 - The net exchange differences arising during the year recognised appropriately in the Statement of Profit and Loss - net loss- Rs. 17.61 million (previous year - net loss- Rs. 13.27 million)

Note 6 - Particulars of assets taken on finance lease on or after 1st April, 2001:

(i) Total minimum lease payments as at the balance sheet date is Rs. 0.04 million (previous year - Rs. 0.22 million) and the present value of total minimum lease payments as at the balance sheet date is Rs. 0.02 million (previous year - Rs. 0.20 million)

Note 7 Disclosures under Accounting Standards

7.1 Details of Employee Benefits as required by the Accounting Standard 15 (Revised) Employee benefits are as under:

7.1.a Defined contribution Plan

Amount recognised as an expense in the Statement of Profit and Loss in respect of Defined Contribution Plan is Rs. 43.72 million (previous year Rs. 44.23 million)

7.1.b Defined benefit plans

i. Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit & Loss Account.

ii. The Defined Benefit Plans comprise of Gratuity and superannuation.

Gratuity is a benefit to an employee based on 15/20/25/30 days (depending on the grade/ category of the employee and the completed years of service) last drawn salary for each completed year of service.

Superannuation is a benefit to certain employees at Rs. 1000 / 500 / 250 (depending on the grade/ catagory of the employee and the completed years of service) per month for each completed year of service.

Both the plans are funded.

Note 8 - Where a financial report contains both consolidated financial statements and separate financial statement for the parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements.

Note 9 - Earnings per Share

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the Profit for the year after tax disclosed in the Statement of Profit and Loss.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 34,807,844.

Note 10 - Repairs to machinery include Rs. 40.23 million (previous year - Rs. 24.13 million) spares consumed.

Nore 11 - Income Tax

Provision for taxation for the year is an aggregate of the provision made for the year ended 31st March, 2012 as reduced by the provision for 9 months up to 31st December, 2011 and the provision based on the figures for the remaining 9 months up to 31st December, 2012. However, the ultimate tax liability for the remaining 9 months up to 31st December, 2012 will be determined based on the results for the year 1st April, 2012 to 31st March, 2013.

Note 12 - 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.


Dec 31, 2010

1. Contingent liabilities not provided in respect of:

(i) taxation matters in dispute pending at various stages of appeal Rs. 42,271,000 (previous year - Rs. 42,765,642);

(ii) claims against the Company not acknowledged as debts Rs.5,481,000 (previous year - Rs. 2,569,000);

(iii) bills discounted/cheques purchased with banks Rs. 20,281,403; (previous year - Rs. 20,824,548);

(iv) excise matters - Rs. 49,975,869 (previous year - Rs. 46,989,068);

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 54,289,595 (previous year - Rs. 70,307,175).

3. Guarantees amounting to Rs. 934,906,075 (previous year - Rs. 693,489.196) have been given by the bankers on behalf of the Company, and are secured by the hypothecation of stocks (including loose tools, stores and spares) and book debts.

4. Repairs to machinery include Rs. 25,896,138 (previous year - Rs. 17,810,796) spares consumed.

5. Research and Development expenditure debited to the Profit and Loss Account aggregating Rs. 4,748,150 (previous year - Rs. 5,669,000) has been incurred by the Company and disclosed under appropriate account heads.

6. The net exchange differences arising during the year recognised appropriately in the profit and loss account - net gain- Rs. 29,821,365 (previous year - net gain Rs. 8,228,180)

7 Related party disclosures

(A) Name of the related party and nature of relationship where control exists:

Name of the party Nature of relationship

1. KSB AG Controlling Company

2. Canadian Kay Pump Ltd. Controlling Company

3. Klein Pumpen GmbH Controlling Company

4. Pofran Sales & Agency Ltd. Subsidiary Company

2) The related parties included in the various categories above, where transactions have taken place are given below:

- Controlling Companies

KSB AG

Canadian Kay Pump Ltd.

- Associate Company

MIL Controls Ltd.

- Subsidiary Company

Pofran Sales & Agency Ltd.

- Common Control

KSB S.A.

KSB Inc., USA

KSB Pumps (S.A.) (Pty.) Ltd., South Africa

KSB Australia

KSB Chile S.A.

KSB Singapore (Asia Pacific) PTE Ltd.Singapore

KSB Limited, Hongkong

KSB Pumps Co.Ltd., Thailand

P.T. KSB., Indonesia

KSB Taiwan Co.Ltd.

KSB Ltd, Tokyo

KSB Brazil

KSB Korea

KSB Mexico

KSB Nederland

DP Industries B.V., Nederland

KSB Pumps Arabia Ltd.

KSB Ltd., U.K.

KSB Italia S.p.A., Italy

KSB Pompa Turkey

KSB Shanghai Pump Co. Ltd., China

KSB Valves (Shanghai) Co. Ltd., China

Mercantile-KSB Oy AB, Finland

KSB Pakistan

Delian KSB Amri Valves Co. Ltd., China

Bombas 1TUR S.A., Spain

KSB TESMA S.A., Griechenland

KSB Tech. Pvt. Ltd., India

G1W Industries Inc., USA

KSB Middle East FZE, Dubai

KSB Pumpy + Armatury spol. sr. o, Czech

KSB Service LLC

KSB Pompy Armatura Poland

KSB Compania Sudamericana

KSB Belgium SA

KSB China

KSB Pumps & Valves Malaysia

KSB Finanz SA

KSB AMV SA Spain

KSB Finland

KSB Work AB , Sweden

KSB Lindflaten, Norway.

KSB Ajax Pumps PTY

- Key Management Personnel

Mr. W. Spiegel

- Individuals having significant influence over the enterprise

Mr. Gaurav Swarup

- Relatives of individuals having significant influence over the enterprise

Mrs. Gyan M Swarup

Mahendra Swarup & Sons HUF

Mr. Vikram Swarup

Mrs. Bindu Swarup

Mrs. Parul Swarup

- Enterprises over which individuals having significant influence overthe reporting enterprise exercise significant influence

The Industrial & Prudential Investment Co. Ltd.

New Holdjng and Tradjng Company Ltd.

Paharpur Cooling Towers Ltd.

8. Earnings per Share

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the Net Profit for the year disclosed in the Profit and Loss Account.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 17,403,922.

9 (a) Principal amount payable to Micro and Small Enterprises (to the extent identified by the Company from available information) as at 31/12/2010 is Rs. 1,891,400 (previous year - Rs. 1,324,529) including unpaid amounts of Rs. 719,262 (previous year - Rs, 658,851) outstanding for more than 45 days. Estimated interest due thereon is Rs, 4,811 (previous year - Rs. 20,364),

(b) Amount of payments made to suppliers beyond 45 days during the year is Rs,14,586,344 (previous year - Rs. 9,366,765). Interest paid thereon is Rs. Nil (previous year - Rs. Nil) and the estimated interest due and payable thereon is Rs. 236,312 (previous year Rs, 159,107).

(c) The amount of estimated interest accrued and remaining unpaid as at 31/12/2010 is Rs. 241,123. (previous year - RS. 179,471)

(d) The amount of estimated interest due and payable for the period from 01/01/2011 to actual date of payment or 10/02/2011 (whichever is earlier) is Rs. 18,108.

10, Details of Employee Benefits as required by the Accounting Standard 15 (Revised) Employee benefits are as under:

(A) Defined Contribution Plan

Amount recognised as an expense in the Profit and loss Account in respect of Defined Contribution Plans is Rs. 35,699,623 (previous year - Rs. 34,969,368)

(B) Defined Benefit Plan

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit & Loss Account.

11. Previous years figures have been regrouped/restated wherever necessary to conform with this years classification. Signature to Schedules 1 to 19


Dec 31, 2009

1. Contingent liabilities not provided in respect of:

(i) taxation matters in dispute pending at various stages of appeal Rs. 42,765,642 (previous year - Rs. 36,193,971);

(ii) claims against the Company not acknowledged as debts Rs. 2,569,000 (previous year - Rs. 7,002,000);

(iii) bills discounted/cheques purchased with banks Rs. 20,824,548; (previous year - Rs. 12,795,088);

(iv) excise matters - Rs. 46,989,068 (previous year - Rs. 45,540,000);

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 70,307,175 (previous year - Rs. 196,470,000).

3. Guarantees amounting to Rs. 693,489,196 (previous year - Rs. 757,252,875) have been given by the bankers on behalf of the Company, and are secured by the hypothecation of stocks (including loose tools, stores and spares) and book debts.

4. Repairs to machinery include Rs.17,810,796 (previous year - Rs. 25,823,048) spares consumed.

3. Sales exclude :-

a) 28 pumps (previous year - 8 pumps) and 72 valves ( previous year - 63 valves) given as free replacement.

b) 6 pumps ( previous year - 3 pumps) lost in transit during the year.

c) 516 pumps ( previous year — 56 pumps) manufactured on behalf of the Company by a third party given as free replacement.

4. Production includes 38,256 pumps (previous year - 25,485 pumps) manufactured on behalf of the Company by a third party.

5. The Company sells as spare parts a proportion of its manufactured components.The Company considers a component as "meant for sale" only when it is actually sold or transferred to the marketing offices for sale.The manufactured components sold during the year are 179,649 numbers (previous year - 163,820 numbers ). It is not practicable to furnish quantative information in respect of stock of spares in view of considerable number of items diverse in size and nature.

6. In respect of Power Driven Pumps, whilst the components including motors are invoiced on delivery & the value reflected in the turnover of the year of delivery or in closing stock, as the case may be , for the purpose of quantitative information a Power Driven Pump is treated as having being produced / sold during the year in which the main component i.e. the pump is produced and sold respectively.

7. The quantity disclosed under production for castings is the quantity sold, as the Company considers production "meant for sale" only when it is sold.

8. Research and Development expenditure debited to the Profit and Loss Account aggregating Rs. 5,669,000 (previous year - Rs. 4,655,000) has been incurred by the Company and disclosed under appropriate account heads.

9. The net exchange differences arising during the year recognised appropriately in the profit and loss account - net gain- Rs. 8,228,180 (previous year - net gain Rs. 5,661,940)

10. Particulars of assets taken on finance lease on or after 1st April, 2001:

(i) Total minimum lease payments as at the balance sheet date is Rs. 2,213,256 (previous year - Rs. 3,767,126) and the present value of total minimum lease payments as at the balance sheet date is Rs. 1,957,080 (previous year - Rs. 3,522,436). The difference represents the finance charge payable in the future.

11 Related party disclosures

(A) Name of the related party and nature of relationship where control exists:

Name of the party Nature of relationship

1. KSB AG Controlling Company

2. Canadian Kay Pump Ltd. Controlling Company

3. Klein Pumpen GmbH Controlling Company

4. Pofran Sales & Agency Ltd. Subsidiary Company

2) The related parties included in the various categories above, where transactions have taken place are given below:

Controlling Companies KSB AG

Canadian Kay Pump Ltd.

Associate Company MIL Controls Ltd.

Subsidiary Company Pofran Sales & Agency Ltd.

Common Contrat

KSB S.A.

KSB inc., USA

KSB Pumps (S.A.) (Pry.) Ltd., South Africa

KSB Australia

KSB Chile S.A.

KSB Singapore (Asia Pacific) Pte Ltd. Singapore

KSB Limited, Hongkong

KSB Pumps Co.Ltd., Thailand

P.T. KSB., Indonesia

KSB Taiwan Co.Ltd.

KSB Ltd, Tokyo

KSB Brazil

KSB Korea

KSB Mexico

KSB Nederland

DP Industries B.V., Nederland

KSB Pumps Arabia Ltd.

KSB Ltd., U.K.

KSB Italia S.p.A., Italy

KSB Pompa Turkey

KSB Shanghai Pump Co. Ltd., China

KSB Valves (Shanghai) Co. Ltd., China

Mercantrle-KSB Oy AB, Finland

KSB Pakistan

Dalian KSB Amri Valves Co. Ltd., China

Bombas 1TUR S.A., Spain

KSB TESMA S.A., Griechenland

KSB Tech. Pvt. Ltd., India

G1W Industries Inc., USA

KSB Middle East FZE, Dubai

KSB Pumpy + Armatury spol. sr. o, Czech

KSB Service LLC

KSB Pompy Armatura Poland

KSB Compania Sudamericana

KSB Belgium SA

KSB China

KSB Pumps & Valves Malaysia

KSB Finanz SA

KSB AMV SA Spain

KSB Finland

Key management personnel Mr. W. Spiegel

Individuals having significant influence over the enterpriseMr. Gaurav Swarup

Relatives of individuals having significant influence over the enterprise

Mrs. Gyan M. Swarup

Mr. Vikram Swarup

Mr. Mahendra Swarup and his HUF

Mrs. Bindu Swarup

Mrs. Parul Swarup

Enterprises over which individuals having significant influence over the reporting enterprise exercise significant influence

The Industrial & Prudential Investment Co. Ltd. New Holding and Trading Company Ltd. Paharpur Cooling Towers Ltd.

12. (a) Provision for taxation for the year is an aggregate of the provision made for the year ended 31st March, 2009 as reduced by the provision for 9 months up to 31st December, 2008 and the provision based on the figures for the remaining 9 months up to 31s December, 2009, However, the ultimate tax liability for the remaining 9 months up to 31s1 December, 2009 will be determined based on the results for the year 1st April, 2009 to 31st March, 2010.

13. Earnings per Share

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the Net Profit for the year disclosed in the Profit and Loss Account.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 17,403,922.

14. (a) Principal amount payable to Micro and Small Enterprises (to the extent identified by the Company from available

information) as at 31/12/2009 is Rs. 1,324,529 (previous year - Rs. 363,265) including unpaid amounts of Rs. 658,851 (previous year - Rs. Nil) outstanding for more than 30/45 days, as the case may be. Interest due thereon is Rs. 20,364 (previous year - Rs. Nil).

(b) Amount of payments made to suppliers beyond 30/45 days as the case may be, during the year is Rs. 9,336,765. Interest paid thereon is Rs. Nil and the estimated interest due and payable thereon is Rs. 159,107.

(c) The amount of estimated interest accrued and remaining unpaid as at 31/12/2009 is Rs. 179,471 (previous year - Rs. Nil)

(d) The amount of estimated interest due and payable for the period from 01/01/2010 to actual date of payment or 25/02/2010 (whichever is earlier) is Rs. 37,293.

15. Details of Employee Benefits as required by the Accounting Standard 15 (Revised) Employee benefits are as under:

(A) Defined Contribution Plan

Amount recognised as an expense in the Profit and loss Account in respect of Defined Contribution Plans is Rs. 34,969,368 (previous year - Rs. 29,353,413)

(B) Defined Benefit Plan

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit & Loss Account.

ii) The Defined Benefit Plans comprise of Gratuity and superannuation.

Gratuity is a benefit to an employee based on 15/20/25/30 days (depending on the grade/ category of the employee and the completed years of service) last drawn salary for each completed year of service.

Superannuation is a benefit to certain employees at Rs. 1000 / 500 / 250 (depending on the grade / category of the employee and the completed years of service) per month for each completed year of service.

16 Payments to the auditors excludes Rs. Nil (previous year - Rs. 20,000) towards tax services paid to a firm, some of the partners whereof are also partners in the audit firm.

17 Previous years figures have been regrouped/restated wherever necessary to conform with this years classification. Signature to Schedules 1 to 19

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