Notes to Accounts of KSB Ltd.

Dec 31, 2024

r. Provisions and Contingent liabilities

Provisions are recognised when the Company has a present, legal or constructive obligation as a result of a past
event and it is probable that an outflow of resources will be required to settle the obligation, and a reliable
estimate of the amount of the obligation can be made. Provisions are determined based on the best estimate
required to settle the obligation at the Balance Sheet date. Provisions are reviewed at each Balance Sheet date
and adjusted to reflect current best estimates. Provisions are not recognised for future operating losses.
Provision for warranty is computed as a percentage of sales based on the past trends observed.

Contingent liabilities are disclosed by way of a note to the financial statements when there is a possible
obligation arising from past events, the existence of which will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events not wholly within the control of the Company or a present
obligation that arises from past events where it is either not probable that an outflow of resources will be
required to settle or a reliable estimate of the amount cannot be made.

s. Employee benefits

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees'' services up to the end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.

(ii) Other long-term employee benefit obligations

The liabilities for Other long-term employee benefits such as long service award, privileged leave and sick
leave are not expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service. They are therefore measured as the present value of expected future
payments to be made in respect of services provided by employees up to the end of the reporting period
using the projected unit credit method. The benefits are discounted using the market yields at the end of the
reporting period that have terms approximating to the terms of the related obligation. Remeasurements as
a result of experience adjustments and changes in actuarial assumptions are recognised in the Statement of
Profit and Loss. The Company does not have an unconditional right to defer settlement for any of these
obligations. However, based on the past experience, the Company does not expect payment of the entire
amount of accrued leaves or availment of the entire number of accrued leaves by employees within twelve
months and accordingly, amounts have been classified as current and non-current.

(iii) Post-employment obligations

The Company operates the following post-employment schemes:

(a) Defined benefit plans - gratuity and superannuation

(b) Defined contribution plans - provident fund

(a) Defined benefit plans - gratuity and superannuation
(i) Gratuity

The Company provides for gratuity, a defined benefit plan (the “Gratuity Plan”) covering
eligible employees in accordance with the Payment of Gratuity Act, 1972, as amended from
time to time. The Gratuity Plan provides a lump sum payment to vested employees at
retirement, death or termination of employment, of an amount based on the respective
employee''s salary and the tenure of employment.

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans
is the present value of the defined benefit obligation at the end of the reporting period less the
fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using
the projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows by reference to market yields at the end of the reporting period on
government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets. This cost is included in finance cost in the
Statement of Profit and Loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur, directly in other comprehensive
income. They are included in retained earnings in the Statement of Changes in Equity and in
the Balance Sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments
or curtailments are recognised immediately in the Statement of Profit and Loss as past service
cost.

(ii) Superannuation

Superannuation is a benefit to certain employees (depending on the grade / category of the
employee and completed years of service) per month for each completed year of service. The
accounting policy followed by the Company for Superannuation is consistent with accounting
policy followed for Gratuity [Refer note 1(s)(iii)(a)(i)].

(b) Defined Contribution Plans

The Company pays provident fund contributions for all employees to publicly administered
provident funds as per local regulations. The Company has no further payment obligations once
the contributions have been paid. The contributions are accounted for as defined contribution
plans and the contributions are recognised as employee benefits expense when they are due.

t. Dividends

The Company recognizes provision for Dividend and the tax thereupon, if any, once the Dividend is approved
by the shareholders in the annual general meeting.

u. Contributed equity

Equity shares are classified as equity.

Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax,
from the proceeds.

v. Earnings per share

i. Basic Earnings per share

Basic earnings per share is calculated by dividing:

• the net profit for the period attributable to equity shareholders

• by the weighted average number of equity shares outstanding during the financial year.

Earnings considered in ascertaining the Company''s earnings per share is the net profit for the period after
deducting any attributable tax thereto for the period. The weighted average number of equity shares
outstanding during the period and for all periods presented is adjusted for events, such as bonus shares or
share split, other than the conversion of potential equity shares that have changed the number of equity
shares outstanding, without a corresponding change in resources.

ii. Diluted Earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account:

• the after-income tax effect of interest and other financing costs associated with dilutive potential equity
shares, and

• the weighted average number of additional equity shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares.

Other accounting policies:

a. Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the
grant will be received, and the Company will comply with all attached conditions. Government grants
relating to income are recognised in the Statement of Profit and Loss. Refer note 1(e)(iii) for accounting
policy related to Duty drawback, Merchandise Export Incentive Scheme (MEIS) and Remission of Duties
and Taxes on Exported Products (RoDTEP).

When government or related institutions provide concession in interest on borrowings or loans availed by
the Company from financial institutions, such interest concession is regarded as a government grant. The
Company accounts for the interest paid at concessional rate on packing credit facility availed for export of
goods.

b. Derivatives

The Company enters into certain derivative contracts to hedge risks which are not designated as hedges.
Such contracts are accounted for at fair value through profit or loss.

c. Rounding of amounts:

Amounts disclosed in the financial statements are presented in INR in million rounded off to two decimal
places as permitted by Schedule III to the Companies Act, 2013, unless otherwise stated.

2. Significant accounting judgements, estimates and assumptions

The preparation of financial statements requires the use of accounting estimates which, by definition, will
seldom equal the actual results. Management also needs to exercise judgement in applying the company''s
accounting policies. Estimates and assumptions are continuously evaluated and are based on historical
experience and other factors including expectations of future events that are believed to be reliable and relevant
under the circumstances. This note provides an overview of the areas that involved a higher degree of
judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and
assumptions turning out to be different than those originally assessed. Management believes that the estimates
are the most likely outcome of future events. Detailed information about each of these estimates and
judgements is described below.

Judgements

In the process of applying the Company''s accounting policies, Management has made the following
judgements, which have the most significant effect on the amounts recognized in the financial statements:

i. Legal contingencies

The Company has received various orders and notices from tax authorities in respect of direct taxes and
indirect taxes. The outcome of these matters may have a material effect on the financial position, results of
operations or cash flows. Management regularly analyzes current information about these matters and
provides provisions for probable contingent losses including the estimate of legal expense to resolve the
matters. In making the decision regarding the need for loss provisions, management considers the degree
of probability of an unfavorable outcome and the ability to make a sufficiently reliable estimate of the
amount of loss. The filing of a suit or formal assertion of a claim against the Company or the disclosure of
any such suit or assertions, does not automatically indicate that a provision of a loss may be appropriate.

ii. Revenue Recognition on Contracts with Customers

Company generate revenue from sale of Pumps, valves and related support services. Company uses
judgement with respect to accounting of multiple contracts which need to be combined and considered as
single contract. The Company exercises judgement with respect to identifying contracts for which
revenue need to be recognised point in time or over time, depending upon when customer consumes the
benefit, when the control is passed to customer, whether asset created has an alternative use and whether
the Company has right to payment for performance completed till date, either contractually or legally.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and

liabilities within the next financial year, are described below. The Company based its assumptions and
estimates on parameters available when the financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes or circumstances arising
that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

i. Warranty

The Company generally offers an 18 months warranty for its products, except for certain projects where
the warranty offered may be higher to meet specific project requirements. Warranty costs are determined
as a percentage of sales based on the past trends of the costs required to be incurred for repairs,
replacements, material costs and servicing cost. Management estimates the related closing provision as at
Balance Sheet date for future warranty claims based on historical warranty claim information, as well as
recent trends that might suggest that past information may differ from future claims. The assumptions
made in current period are consistent with those in the prior year. As the time value of money is not
considered to be material, warranty provisions are not discounted. Refer note 18 for further information.

ii. Gratuity

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined
using actuarial valuation. An actuarial valuation involves making various assumptions that may differ
from actual developments in the future. These include the determination of the discount rate, future salary
increases, attrition rate, mortality rates and expected return on planned assets. Due to the complexities
involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to
changes in these assumptions. All assumptions are reviewed at the year end. The parameter most subject
to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the
management considers the interest rates of government bonds in currencies consistent with the currencies
of the post-employment benefit obligation. The mortality rate is based on Indian Assured Lives Mortality
(2012-14) Ultimate. Those mortality tables tend to change only at interval in response to demographic
changes. Future salary increases and gratuity increases are based on expected future inflation rates. For
further details about gratuity obligations are given in note 31.

iii. Recoverability of trade receivables

Judgements are required in assessing the recoverability of overdue trade receivables and determining
whether a provision against those receivables is required. Factors considered include the credit rating of
the counterparty, the amount and timing of anticipated future payments and any possible actions that can
be taken to mitigate the risk of non-payment. Refer note 35(A) for further details.

iv. Inventories

An inventory provision is recognized for cases where the realizable value is estimated to be lower than the
inventory carrying value. The inventory provision is estimated takinginto account various factors,
including prevailing sale prices of inventory item and losses associated with obsolete / slow moving /
redundant inventory items. The Company has, based on these assessments, made adequate provision in
the books.

*The Board of Directors of the Company at its meeting held on April 26, 2024 recommended the sub-division/split of
1 (One) fully paid-up equity share having a face value of '' 10 each into 5 (Five) fully paid-up equity shares having a face
value of '' 2 each by alteration of capital clause of the Memorandum of Association (MOA) subject to the approval of
Members of the Company. Further, the Board of Directors approved the Record Date for Split/Sub-division of Equity
Shares. The Members of the Company approved the sub-division/Split of 1 (One) fully paid up equity share of '' 10 each
into 5 (Five) fully paid-up equity shares of '' 2 each through an ordinary resolution passed in the Annual General Meeting
held on June 27, 2024 with the requisite majority. The voting results were declared on June 29, 2024.

Consequent to this, the authorised share capital comprises 20,00,00,000 equity shares having a face value of '' 2 each
aggregating to 40,00,00,000, and the paid-up capital comprises 17,40,39,220 equity shares having a face value of '' 2
each aggregating to 34,80,78,440. The impact of this has been considered in the financial statement.

(ii) Rights, preferences and restrictions attached to equity shares

The Company has only one class of shares referred to as equity shares having a face value of '' 2 per share.
Each equity shareholder is entitled to one vote per share. The dividend proposed by the Board of Directors
is subject to approval of the shareholders in the ensuing Annual General Meeting except in case of interim
dividend. In the event of liquidation of the Company, the equity shareholders 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.

A Defined contribution plan

Contributions are made to provident fund at a fixed percentage of employee''s salary as per the regulations. The
contributions are made to registered provident fund administered by the government. The obligation of the Company is
limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense
recognised during the year towards contribution to provident fund is '' 119.71 million (December 31, 2023 - '' 107.46
million).

B Compensated absences

The leave obligations cover the Company''s liability for privilege leave and sick leave. The amount of provision made
during the year is '' 86.98 million (December 31, 2023 - '' 32.61 million). The Company does not have an unconditional
right to defer settlement for any of these obligations. However, based on the past experience, the Company does not expect
payment of the entire amount of accrued leaves or availment of the entire number of accrued leaves by employees within
twelve months and accordingly, amounts have been classified as current and non-current.

C Long service award

The Company award all the employees who complete 25 years of service in the Company and the Workmen employees
who complete 20 or more years of service in the Company but unable to complete 25 years due to superannuation.
The amount of provision made during the year is '' 5.83 million (December 31, 2023 - '' 9.22 million).

Risk exposure for the above plans

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of
which are detailed below:

(i) Asset-liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. In managing
the plan assets, Board of Trustees reviews and manages these risks associated with the funded plan. Each
year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes asset -
liability matching strategy and investment risk management policy (which includes contributing to plans
that invest in risk averse markets).

(ii) Asset volatility

All plan assets are maintained in a trust fund managed by a public sector insurer i.e., LIC of India. LIC has
a sovereign guarantee and has been providing consistent and competitive returns over the years. The
Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets.
The Company has no control over the management of funds but this option provides a high level of safety
for the total corpus. A single account is maintained for both the investment and claim settlement and
hence, 100% liquidity is ensured.

(iii) Discount rate risk

The present value of the defined benefit obligation is calculated using discount rate based on Government
bonds. The decrease in the bond yield will increase the defined benefit obligation, however the same will
be partially offset by an increase in value of plan assets.

(iv) Future salary escalation risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan
participants. As such, an increase in salary of the plan participants will increase the defined benefit
obligation.

33 Segment reporting

As per Ind AS 108 Operating Segments, when a financial report contains both consolidated financial statements
and separate financial statements 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.

34 Fair value measurements

Except derivative instruments, all financial assets and financial liabilities are measured at amortised cost.
Derivative instruments are classified as fair value through profit or loss. The fair value is determined using
forward exchange rates at the balance sheet date. The instruments fall under level 2 of the fair value hierarchy as
per Ind AS 113 Fair Value Measurements. Level 2 fair value financial instruments are those which are not traded
in an active market, which maximise the use of observable market data and rely as little as possible on entity
specific estimates. Significant inputs required to measure a level 2 fair value are observable. The fair value of all
the instruments measured at amortised cost is not significantly different from the carrying value of such
instruments.

35 Financial risk management

The Company''s activities exposes it to credit risk, liquidity risk and market risk. In order to minimise any adverse
effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange
forward contracts are taken. This note explains the sources of risk which the entity is exposed to and how the
entity manages the risk.

The Company''s risk management is carried out by the Company''s treasury department under policies approved
by the board of directors. The board provides written principles for overall risk management, as well as policies
covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial
instruments and non-derivative financial instruments, and investment of excess liquidity.

(A) Credit risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its
financing activities, including deposits with banks and other financial instruments. For banks and other financial
institutions, only high rated banks/ financial institutions are accepted. The balances with banks, loans given to
employees, security deposits are subject to low credit risk and the risk of default is negligible or nil. The
Company has recognized provision based on assumptions about risk of default, expected loss rates and specific
identification method.

I Trade receivables

Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed.
To manage this, the Company periodically assesses the financial reliability of customers, taking into account the
financial condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and
forward looking information. Individual credit limits are set accordingly. The Company has recognized the
provision based on assumptions about risk of default, expected loss rates based on payment profile and historic
credit losses experienced.

(B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed credit facilities to meet obligations when due
and to close out market positions. Due to the dynamic nature of the underlying business, the Company''s treasury
maintains flexibility in funding by maintaining availability under committed credit lines.

The table below analyses the Company''s financial liabilities into relevant maturity groupings based on their
contractual maturities.

Maturity profile of financial liabilities based on undiscounted cash flows:

36 Capital management

a) Risk management

The Company''s objectives when managing capital are to safeguard their ability to continue as a going
concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders,
and maintain an optimal capital structure to reduce the cost of capital. For the purpose of the Company''s
capital management, capital includes issued equity capital and all other equity reserves attributable to the
equity holders of the parent. The primary objective of the Company''s capital management is to maximise
the shareholders value. The Company manages its capital structure and makes adjustments in light of
changes in economic conditions. The Company is debt-free and has net cash and bank balance as at years
ended December 31,2024 and December 31, 2023.

No changes were made in the objectives, policies or processes for managing capital during the years ended
December 31,2024 and December 31, 2023.

37 With effect from August 5, 2022, the Ministry of Corporate Affairs (MCA) has amended the Companies
(Accounts) Rules, 2014 as per which backup of books of accounts and other books and papers maintained in
electronic mode is required to be kept on servers physically located in India on a daily basis. The Company has a
process in place to take backup on a daily basis. During the year ended December 31, 2024, the Company has
taken the backup of its ERP system used for maintaining books of accounts. However, due to a technical issue,
daily backup of certain working files and papers maintained in electronic mode has not been maintained on
certain occasions on servers physically located in India.

38 The Company has complied with the requirements of The Companies (Accounts) Rules, 2014 with respect to the
usage of accounting software with a feature of recording audit trail except for matters listed below

a) Feature of recording audit trail (edit log) facility has operated throughout the year for all transactions in
respect of the core accounting software (SAP) which the company has used for maintaining its books of
accounts, except that the due to certain inherent and other technical challenges, audit trail is not maintained
for certain records and changes made.

b) Further, from the purpose of payroll processing the Company uses software of third-party service provider
for certain records. Due to certain inherent and other technical challenges, the audit trail feature was not
enabled at the database level to log any direct data changes.

(c) Borrowing secured against current assets

The Company has placed fixed deposits of INR 500.96 million (December 31, 2023: INR 988.44 million)
under lien with banks and has availed the overdraft facilities against the same. Thus, the Company is not
required to file quarterly returns or statement of current assets with the banks.

(d) Wilful defaulter

The company has not been declared wilful defaulter by any bank or financial institution or government or
any government authority.

(e) Relationship with struck off companies

Below are the details of transactions with the companies struck off under Companies Act, 2013 or
Companies Act, 1956.

(f) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(g) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact in the year
ended December 31,2024 and December 31, 2023.

(h) Utilisation of borrowed funds and share premium

The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or
any other sources or kind of funds) to any other person or entity, including foreign entity (Intermediary)
with the understanding that the Intermediary shall:

i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Company (Ultimate Beneficiaries) or

ii. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

The Company has not received any funds from any person or entity, including foreign entity (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Funding Party (Ultimate Beneficiaries) or

ii. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(i) Undisclosed income

There is no income surrendered or disclosed as income during the year ended December 31, 2024 and
December 31, 2023 in the tax assessments under the Income Tax Act, 1961, that has not been recorded in
the books of account.

(j) Details of cryptocurrency or virtual currency

The Company has not traded or invested in cryptocurrency or virtual currency during the year ended
December 31,2024 and December 31, 2023.

(k) Valuation of Property, plant and equipment, Right-of-use assets and Other intangible assets

The Company has not revalued its property, plant and equipment or right-of-use assets or intangible assets
during the year ended December 31,2024 and December 31, 2023.

40 During the year ended December 31, 2023, the Company has filed for renewal application with Income Tax
authorities for Unilateral Advance Pricing Agreement for the period from April 01, 2023 to March 31, 2028 and
is awaiting the approval. The initial application for Unilateral Advance Pricing Agreement for the period from
April 01, 2018 to March 31, 2023 was filed in the year ended December 31, 2018 and the same is under approval
with the Income Tax authorities.

41 Events occurring after the reporting period

Refer to note 36 (b) (ii) for the final dividend recommended by the directors which is subject to the approval of
shareholders in the ensuing general meeting.

In terms of our report of even date

For Price Waterhouse Chartered Accountants LLP For and on behalf of the Board of Directors

Firm Registration Number: 012754N/N500016

Vivian Pillai Gaurav Swarup Ulhas Yargop

Partner Chairman Director

Membership No.: 127791 (DIN : 00374298) (DIN : 00054530)

Rajeev Jain Mahesh Bhave

Managing Director Chief Financial Officer

(DIN :07475640)

Place : Mumbai Place : Mumbai Shraddha Kavathekar

Date : February 27, 2025 Date : February 27, 2025 Company Secretary

---

Dec 31, 2022

A Defined contribution plan

Contributions are made to provident fund at a fixed percentage of employee''s salary as per the regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards contribution to provident fund is '' 96.85 million (December 31, 2021 - '' 82.60 million).

B Compensated absences

The leave obligations cover the Company''s liability for privilege leave and sick leave. The amount of provision made during the year is '' 82.93 million (December 31, 2021 - '' 42.61 million). The Company does not have an unconditional right to defer settlement for any of these obligations. However, based on the past experience, the Company does not expect payment of the entire amount of accrued leaves or availment of the entire number of accrued leaves by employees within twelve months and accordingly, amounts have been classified as current and non-current.

C Long service award

The Company award all the employees who complete 25 years of service in the Company and the Workmen employees who complete 20 or more years of service in the Company but unable to complete 25 years due to superannuation. The amount of provision made during the year is '' 14.75 million (December 31,2021 - '' 50.74).

D Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employee''s last drawn basic salary per month computed proportionately for 15 days to one month''s salary multiplied for the number of years of service. The gratuity plan is a funded plan.

The above sensitivity analysis have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method is used to calculate the liability recognised in the Balance Sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous year.

Asset-liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. In managing the plan assets, Board of Trustees reviews and manages these risks associated with the funded plan. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes asset - liability matching strategy and investment risk management policy (which includes contributing to plans that invest in risk averse markets). The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

Asset volatility

All plan assets are maintained in a trust fund managed by a public sector insurer i.e., LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence, 100% liquidity is ensured. Also, interest rate and inflation risk are taken care of.

Discount rate risk

The present value of the defined benefit obligation is calculated using discount rate based on Government bonds. The decrease in the bond yield will increase the defined benefit obligation, however the same will be partially offset by an increase in value of plan assets.

Future salary escalation risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in salary of the plan participants will increase the defined benefit obligation.

34 Fair value measurements

Except derivative instruments, all financial assets and financial liabilities are measured at amortised cost. Derivative instruments are classified as fair value through profit or loss. The fair value is determined using forward exchange rates at the balance sheet date. The instruments fall under level 2 of the fair value hierarchy as per Ind AS 113 Fair Value Measurements. Level 2 fair value financial instruments are those which are not traded in an active market, which maximise the use of observable market data and rely as little as possible on entity specific estimates. Significant inputs required to measure a level 2 fair value are observable. The fair value of all the instruments measured at amortised cost is not significantly different from the carrying value of such instruments.

35 Financial risk management

The Company''s activities exposes it to credit risk, liquidity risk and market risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are taken. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

The Company''s risk management is carried out by the Company''s treasury department under policies approved by the board of directors. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

(A) Credit risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments. For banks and other financial institutions, only high rated banks/ financial institutions are accepted. The balances with banks, loans given to employees, security deposits are subject to low credit risk and the risk of default is negligible or nil. The Company has recognized provision based on assumptions about risk of default, expected loss rates and specific identification method.

I Trade receivables

Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and forward looking information. Individual credit limits are set accordingly. The Company has recognized the provision based on assumptions about risk of default, expected loss rates and specific identification method.

(B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying business, the Company''s treasury maintains flexibility in funding by maintaining availability under committed credit lines.

The table below analyses the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for :

1) all non-derivative financial liabilities, and

Market risk

I) Foreign currency risk

The Company is engaged in international trade and thereby exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the EUR and USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company''s functional currency ''. The Company uses foreign exchange forward contracts to hedge its exposure in foreign currency risk.

i) Foreign currency risk exposure

The Company''s exposure to foreign currency risk at the end of the reporting period expressed in '' million, are as follows :-

(C) Market risk

II) Interest rate risk

The Company''s main interest rate risk arises from short term borrowings and deposits taken / placed over a period of time on frequent basis thereby exposing the Company to interest rate risk. The Company''s policy is to have fixed interest rate at the time of deal execution.

36 Capital management

a) Risk management

The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital. For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise the shareholders value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company is debt-free and has net cash and bank balance.

No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2022 and December 31, 2021.

*Other bank balance consists of fixed deposits which are considered as short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

The amount of net cash and bank balance considering the amount of lease liability of '' 28.82 million (December 31, 2021: '' 29.89 million) is '' 2,574.10 million (December 31,2021: '' 3,508.77 million)

(b) Details of benami property held

No proceedings have been initiated on or are pending against the company under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(c) Borrowing secured against current assets

The Company has placed fixed deposits of '' 1,018.91 million (December 31, 2021: '' 1,137.88 million) under lien with banks and has availed the overdraft facilities against the same. Thus, the Company is not required to file quarterly returns or statement of current assets with the banks.

(d) Wilful defaulter

The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(e) Relationship with struck off companies

Below are the details of transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(f) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(g) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact in the year ended December 31, 2022 and December 31,2021.

(h) Utilisation of borrowed funds and share premium

The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

ii. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

The Company has not received any funds from any person or entity, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

ii. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(i) Undisclosed income

There is no income surrendered or disclosed as income during the year ended December 31, 2022 and December 31, 2021 in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(j) Details of cryptocurrency or virtual currency

The Company has not traded or invested in cryptocurrency or virtual currency during the year ended December 31, 2022 and December 31,2021.

(k) Valuation of Property, plant and equipment, Right-of-use assets and Other intangible assets

The Company has not revalued its property, plant and equipment or right-of-use assets or intangible assets during the year ended December 31, 2022 and December 31,2021.

38 Events occurring after the reporting period

Refer to note 36 (b) (ii) for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing general meeting.

39 During year ended December 31, 2022, the Company was informed by the parent entity, KSB SE & Co. KGaA, that the parent entity has encountered a cyber-attack on their IT systems in Germany. The Company''s IT systems and infrastructure is part of the aforesaid IT systems. As an immediate measure, the parent entity had temporarily shut down all actual or potentially affected IT systems in a controlled manner for security reasons which led to temporary disruption in some of the Company''s business services. The Company had put in place alternative control mechanisms in the temporary absence of the said systems. After taking all the possible necessary measures, the said systems were restored in a phased manner. Based on the assessment carried out (with the assistance of external specialist consultants) there was no impact on the financial statements of the Company for the year ended December 31, 2022.

40 The Ministry of Corporate Affairs (MCA) through a notification dated March 24, 2021, amended Schedule III of the Companies Act, 2013, applicable for financial years commencing from April 1, 2021. Pursuant to such amendments, security deposits of '' 38.70 million as at December 31, 2021 have been reclassified from ''Loans'' to ''Other financial assets’.

41 Previous year''s figures have been regrouped / reclassified wherever considered necessary to conform current year''s classification / disclosure.

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Dec 31, 2018

1. Background:

KSB Limited (formerly known as KSB Pumps Limited) (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. The registered office of the Company is 126, Maker Chambers III, Nariman Point, Mumbai -400 021. The separate financial statements have been authorized for issue by the Board of Directors on February 27, 2019.

i. Refer to note 29 (b) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

ii. The borrowing costs capitalised during the year ended December 31, 2018 under buildings and plant and machinery is Rs. Nil (December 31, 2017 : 35.49 million). The Company constructed a new manufacturing plant in the year ended December 31, 2017 and the average rate used to determine the amount of borrowing costs eligible for capitalisation is 8 %.

iii. Leasehold land mainly pertains to manufacturing plant located at Shirwal.

iv. Capital work in progress mainly includes plant and machinery in the process of installation.

v. The additions to capital work in progress are net after considering the transfers to property, plant and equipment. Gross additions to capital work in progress/ transfers to property, plant and equipment are as follows:

Transferred receivables

The carrying amounts of the trade receivables includes receivables which have been discounted with banks (with recourse). The Company has the obligation to pay to the bank in case the customer makes a default in payment. Hence, the Company has continued to recognise the transferred receivables along with a corresponding liability of equivalent amount under current borrowings.

(ii) Terms/ rights attached to equity shares

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

Nature and purpose of Other reserves:

1 These reserves pertain to reserve arising on amalgamations in the past, which is required to be statutorily maintained and cannot be distributed to the shareholders.

2 This reserve represents amounts transferred from retained earnings in earlier years as per the requirements of the erstwhile Companies Act, 1956. The reserve is a free reserve.

Notes:

1. Packing credit has been obtained by the Company at a concessional rate of interest ranging from 5 - 7% p.a.

2. Hypothecation of stocks including loose tools, stores and spares, book debts against the Working Capital Facility - 2 and 3 has been released in full w.e.f. December 17, 2018

Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Based on the information and records available with the Company, the disclosures required pursuant to the Micro, Small and Medium Enterprises Development Act,2006 (''MSMED ACT''). The Disclosure pursuant to the said MSMED Act are as follows:

Provision for employee benefits under note 17 (b) includes provision for employee bonus and incentives. For details of gratuity, superannuation and compensated absences, refer note 30.

Provision for warranty is computed as a percentage of sales based on the past trends observed. The time value of money is considered to be not material and hence the provisions are not discounted.

Goods and Service Tax (GST) has been effective from July 1, 2017 replacing excise duty. Until June 30, 2017, ''Sale of products'' included the amount of excise duty recovered on sales. With effect from July 1, 2017, ''Sale of products'' excludes the amount of GST recovered. ''Sale of products'' for the year ended December 31, 2017 includes Rs. 249.10 million of excise duty collected. Accordingly, ''Sale of products'' for the year ended December 31, 2018 and December 31, 2017 are not comparable to the extent.

Finance costs amounting to Rs.Nil (December 31, 2017 : Rs.35.49 million) is capitalised in the cost of assets during the current year. The average rate used to determine the amount of borrowing costs eligible for capitalisation is 8%.

b) Capital commitments

i) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs.60.58 million (December 31, 2017 Rs.59.81 million)

A Defined contribution plan

The Company also has certain defined contribution plans. Contributions are made to provident fund for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan is Rs.60.01 million (December 31, 2017 - Rs.54.97 million).

B Compensated absences

The leave obligations cover the Company''s liability for privilege leave and sick leave. The amount of provision made during the year is '' 52.63 million (December 31, 2017 - Rs.59.34 million).

C Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days to one month''s salary multiplied for the number of years of service. The gratuity plan is a funded plan.

The fund is subject to risks such as asset volatility, changes in bond yields and asset liability mismatch risk. In managing the plan assets, Board of Trustees reviews and manages these risks associated with the funded plan. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes asset - liability matching strategy and investment risk management policy (which includes contributing to plans that invest in risk averse markets). The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

D Superannuation

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

2 Segment reporting

Where a financial report contains both consolidated financial statements and separate financial statements 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.

3 Fair value measurements

All financial assets (except derivative instruments) and financial liabilities (except derivative liabilities) are measured at amortised cost and derivative instruments are classified as fair value through profit or loss. The fair value is determined using forward exchange rates at the balance sheet date. The instruments fall under level II of the fair value hierarchy as per Ind AS 113 Fair Value Measurements. Level II fair values maximise the use of observable market date and rely as little as possible on entity specific estimates. Significant inputs required to measure a level II fair value are observable. The fair value of all the instruments measured at amortised cost is not materially different from the carrying value of such instruments.

4 Financial risk management

The Company''s activities exposes it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are taken. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

The Company''s risk management is carried out by the Company''s treasury department under policies approved by the board of directors. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

(A) Credit risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments. For banks and other financial institutions, only high rated banks/ financial institutions are accepted. The balances with banks, loans given to employees, security deposits are subject to low credit risk and the risk of default is negligible or nil. Hence, no provision has been created for expected credit loss for credit risk arising from these financial assets.

I Trade receivables

Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and forward looking information. Individual credit limits are set accordingly.

(B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying business, the Company''s treasury maintains flexibility in funding by maintaining availability under committed credit lines.

The financial liabilities as at December 31, 2018 and December 31, 2017 mature within a period of one year.

(C) Market risk

I) Foreign currency risk

The Company is engaged in international trade and thereby exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EUR, AUD, GBP and CHF. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The Company''s risk management policy is to hedge purchases and sales separately. The Company uses foreign exchange forward contracts to hedge its exposure in foreign currency risk.

ii) Sensitivity

The sensitivity of profit and loss to changes in the exchange rates arises mainly from foreign currency denominated financials instruments:

II) Interest rate risk

The Company''s main interest rate risk arises from short term borrowings and deposits taken / placed over a period of time on frequent basis thereby exposing the Company to interest rate risk. The Company''s policy is to have fixed interest rate at the time of deal execution.

5 Capital management

a) Risk management

The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital. For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise the shareholders value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.

6 The list of standards issued but not yet effective:

Following are the pronouncements which have been issued by the Ministry of the Corporate Affairs (‘MCA’) that are effective from annual periods beginning on and after April 1, 2018 and are applicable to the Company from next year:

a) Ind AS 115 - Revenue from Contract with Customers

The standard deals with revenue recognition and establishes principles for reporting useful information to users of financials statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the Company''s contracts with customers. It defines a new five step model to recognise revenue from customer contracts.

Revenue is recognised when a customer obtains control of the goods or receive services and thus has the ability to direct the use and obtain the benefits from the goods or services. The standard supersedes Ind AS 18 ''Revenue'' and Ind AS 11 ''Construction Contracts'' and related interpretations. Adoption of Ind AS 115 is not expected to have a significant impact on the timing and measurement of revenue. Consistent with the current practice, recognition of revenue will continue to occur over time when services are provided to customers, which is also when the customers consumes the benefits of the entity''s performance as it occurs under Ind AS 115. The Company is in process of evaluating the effect of this on the financials statements and does not expect any material impact from the change.

b) Ind AS 12 - Income Taxes

The amendments clarify the accounting for deferred taxes on unrealised loss, where an asset is measured at fair value and the fair value is below assets tax base. A temporary difference exists whenever the carrying amount of an asset is less than its tax base at the end of the reporting period. The amendment will come into force from April 1, 2018. The Company is in process of evaluating the effect of this on the financials statements and does not expect any material impact from the change.

c) Ind AS 21 - Foreign currency transactions and advance consideration

The amendments clarify the date of the transaction for the purpose of determining the exchange rate to use an initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company is in process of evaluating the effect of this on the financials statements and does not expect any material impact from the change.

There is no other standards or interpretations that are not yet effective and that would be expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions.

7 Events occurring after the reporting period

Refer to note 35 (b) (ii) for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing general meeting.

8 Previous year''s figures have been regrouped / reclassified wherever considered necessary to conform to current year''s classification / disclosure.

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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.

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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

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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.

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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.

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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

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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